Egypt's Economy
Bread Subsidies and the Social Contract
How Egypt subsidises bread for tens of millions of people, the 1977 bread riots, and why cutting subsidies is so politically sensitive.
Egypt sells subsidised bread to tens of millions of people.
The system
Holders of ration cards buy flatbread (aish baladi) at a tiny fixed price.
Bread riots
In 1977, the government tried to cut subsidies, sparking deadly riots; it reversed the decision.
Costs
- The subsidy costs a lot, especially when wheat prices rise.
- Egypt imports much of its wheat, so a weaker pound raises costs.
Reforms
- Smart cards to limit misuse.
- In 2024, the government raised the bread price for the first time in decades.
Social contract
Cheap bread is seen as part of an unwritten deal between the state and citizens.
The bakery queue
Families queue at a subsidised bakery each morning, using smart cards to buy their daily bread ration.
Thinking subsidies can be cut easily
The 1977 riots show how sensitive they are.
Key takeaways
- Egypt subsidises bread for tens of millions.
- 1977 subsidy cuts triggered riots.
- Wheat prices and the pound drive costs.
- The price rose in 2024 for the first time in decades.
No recording for this one yet - EconReader can read it aloud for you.