Military appointed Egyptian PM tells people: prepare for cuts.

According to The New York Times, the appointment of Hazem el-Beblawi as Prime Minister sends ‘a signal that the military-led transitional government intends to move forward with economic reforms and restructuring including reductions in the country’s vast public subsidies’.

el-Beblawi himself is quoted as saying that ‘We must create a clear understanding for the public that the level of subsidies in Egypt is unsustainable, and the situation is critical’, and that ‘The canceling of subsidies requires sacrifices from the public and therefore necessitates their acceptance’.

I don’t much like the sound of that ‘necessitates their acceptance’, like there isn’t a choice. What if people don’t accept them? Will the army simply start to gun them down in the street, as they have been doing to Morsi supporters over the last week or so?

The Times article then says that ‘Egypt’s taxes and subsidies are issues that have so far held up a package of reforms and a loan from the International Monetary Fund that is considered essential to keep Egypt’s economy afloat’.

The Washington Post also report how el-Beblawi believes that Egypt requires ‘urgent but painful cuts to the country’s bloated and corrupt subsidy system to secure a badly needed $4.8 billion loan from the International Monetary Fund’, and that ‘Morsi and the Brotherhood didn’t have “the guts” to take such measures’.

Members of Beblawi’s cabinet could include, according to Reuters, Mohamed ElBaradei and Ziad Bahaa el-Din, who are described as ‘outspoken supporters of a stalled $4.8 billion loan deal with the International Monetary Fund, which would require Egypt to make politically sensitive reforms to its ruinous subsidies of food and fuel’.

Which is all very similar to the analysis the BBC have been pushing: that Egypt needs an IMF loan, and the ‘free market’ reforms and austerity measures that come with it, to help the economy.

So the situation to date is: the military overthrow of an elected if imperfect government; repression and massacres of that governments supporters in the aftermath; and then the installation of a new, military backed regime promising right wing economic reforms.

Haven’t we seen this movie somewhere before?

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One Response to Military appointed Egyptian PM tells people: prepare for cuts.

  1. Good post – i found this article on the opposition opposing all Morsi’s tax increases – including opposing tax increases on cigarettes and alcohol – which he eventually dropped.

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