CAIRO — Egypt plans to start rationing subsidized bread, a minister said Tuesday, taking a politically risky step to restrict supplies of the cheap loaves upon which many Egyptians depend as the state tries to save money. Bassem Ouda, the supply minister, said the government would start implementing rationing “after two months”. Trials of a rationing system using electronic smart cards would begin in the restive Suez Canal city of Port Said and its suburb Port Fouad. The change means anyone wishing to buy subsidized loaves will need a ration card — to which all Egyptians are entitled but which the better off have typically let lapse. Ouda did not say to how many loaves citizens would be entitled. Food supply has long been an explosive issue in Egypt, which is struggling to secure an IMF loan as parliamentary elections approach. Rising prices are being passed on to struggling consumers and shortages have already provoked discontent. “Every ruler of Egypt has resisted cutting these subsidies because of fears of social unrest,” said Elijah Zarwan, a Cairo-based analyst. “It's clear that the subsidy system is sick, the economy is sick. “But the cure in this case may be as painful as the disease.” Curbs on bread subsidies provoked bread riots in 1977 and Egyptians are now angry about falling living standards as the economy has headed into crisis under new, Islamist leadership since the overthrow of president Hosni Mubarak two years ago. The cheapest subsidized loaves are sold for 5 piastres, or less than a US cent. As recently as 2008, Mubarak faced protests over bread shortages. Though Egyptians are technically each entitled to three subsidized loaves a day, according a report published by the government and the World Food Program last year, there are in practice no curbs on how much of the cheap bread people can buy. Cutting subsidies is seen as vital for Egypt to secure the $4.8 billion loan it is seeking from the International Monetary Fund (IMF), which held talks with the government this week. The government spends over $5.5 billion a year on food subsidies, which also cover items such as rice, oil and sugar. — Reuters
