Egypt Pulse

Cairo calls for austerity while ministers make money grab

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Article Summary
The Egyptian government has made more calls for austerity measures, but simultaneous proposals to raise government salaries have left citizens unmoved.

Egyptian President Abdel Fattah al-Sisi has called for austerity measures on several occasions. He made one of his key statements about the issue during a television interview in November 2015: “We are ready to go hungry to build our country.” It seems that though Sisi’s words resounded among millions of Egyptians whether they liked him or not, they fell on deaf ears in the government.

Government spending has long suffered from bloat in Egypt. A well-informed government source told Al-Bawaba News on Aug. 20 that the International Monetary Fund, in one of its reports on Egypt’s ministries and institutions prior to approving a $12 billion loan for Egypt, had lamented the excessive number of advisers in each ministry. This statement came alongside reports by the Egyptian monitoring authorities stating that there are a large number of highly paid advisers in ministries including international cooperation, supply, health, investment, health, education and industry. The reports also noted that the names of these advisers are listed on the ministries' payment statements all the time, although they work for short periods without offering the ministries any real services.

Al-Masri Al-Youm reported on July 28 that the Cabinet submitted a draft law to increase the salaries of the prime minister, his deputies, ministers, members of parliament and governors, and that the new legislation is currently under study by the state council’s legislative department to be re-drafted legally, as per the constitution. The suggested amendments to Law No. 100 of 1987, which sets the salaries of these officials, are the following:

First: The prime minister receives a salary of 42,000 Egyptian pounds ($4,730) per month, which is the legal wage cap on the public sector. Yearly, his salary amounts to 504,000 pounds ($57,000), 42 times that determined by the old law, which set the salary at 6,000 pounds ($670) yearly and another 6,000 pounds in other allowances, equivalent to 12,000 pounds ($1,350) per year in total.

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Second: The ministers and governors receive a monthly salary of 35,000 pounds ($4,000), with a yearly total of 420,000 pounds ($47,300), up from 9,000 pounds ($1,000) per year.

Third: The deputy ministers and deputy governors receive a salary of 30,000 pounds ($3,380) monthly, amounting to a yearly total of 360,000 pounds ($40,500). The salaries of this category were not included in the old law.

The same members of parliament who voted confidence in the current government criticized the draft law. Parliament member Ayman Abu al-Ala told Al-Monitor, “The Cabinet and ministers should be role models for citizens, who they are asking to reduce their spending. Otherwise, citizens won’t take the austerity calls to heart. The economic situation does not allow an increase in the salaries of key officials."

Parliamentarian Mohammad Abu Hamed, a member of the majority Support Egypt coalition, said in a press statement, “The parliament won’t approve the draft law because the economic challenges do not allow this.” Parliament member Haitham al-Hariri agreed with him and noted that the increases would not normally be an issue, but the current economic situation will not allow it.

Al-Monitor interviewed economist Medhat Nafie to discuss Egypt’s economic policy. “The state’s policies toward its citizens expressly call for rationing spending by seeking to decrease government employment through the civil service law and to increase taxes. The VAT will be used to increase subsidies gradually, as is the case with fuel and electricity. These are austerity or rationing policies. The government, which is applying an austerity plan for its citizens, must lead by example,” he said.

Economist and parliament member Bassant Fahmy told Al-Monitor, “We must stop the waste in government spending, whether on salaries, allowances, guards or excess staff. There are 34 ministers in Egypt, and this figure is not found in any other state. We must decrease the number of ministries, curb spending on advisers in each ministry, reduce the number of diplomatic missions and offices of commercial representation abroad and focus on the remaining offices.”

Meanwhile, Yusri al-Azbawi, a political researcher at Al-Ahram Center for Political and Strategic Studies, said that the actual income of ministers is different from that stated in the 1987 law due to officials’ high allowances and might even exceed the cap set in the amended law. Speaking to Al-Monitor, he said, “In general, it is assumed that officials in government ranks have higher salaries, and the proposed law will put an end to the excessive allowances that ministers receive. But the timing of demanding a salary increase is not commensurate with the economic and political situation. Politically, subsidies are being lifted, citizens have to pay more taxes and prices are increasing. Citizens hold the government accountable even if it isn’t here. Therefore, asking for a raise will worsen the government’s image in the eyes of citizens who believe it has failed to relieve them of their economic burdens. Citizens will also blame the government for not practicing what it preaches.”

Al-Bawaba News's government source also spoke about the advisers and their salaries. He said that the prime minister ordered a notice circulated to all ministries that have seven to eight advisers to reduce this number to two, and to reconsider their incentives and salaries and put them on yearly renewable contracts rather than permanent ones, as are most common.

The Al-Bawaba report also addressed the excessive appointment of advisers. The source said that the ministries are jammed with advisers who had been brought on in previous terms. There are currently 120,000 advisers in Egypt’s ministries and their salaries reach 2 billion pounds ($230,000) total, according to the report. Will the pressure posed by the IMF loan be a wake-up call for the Egyptian regime to ration its spending on advisers and ministers?

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Found in: salaries, egyptian pound, egyptian politics, egyptian parliament, egyptian government, egyptian economy, austerity, abdel fattah al-sisi

Amr Mostafa is an Egyptian journalist who has worked for several newspapers, including Youm7, and focuses on diplomatic and legal issues.

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