Protests in Port Said over housing costs

[newcastle]

Large numbers of people took to the streets of Egypt on Tuesday evening to protest against the rising cost of housing in the country.

The demonstrations took place in the north-eastern city of Port Said, with reports that thousands of people took part.

The rising cost of housing prices was the main issue driving the demonstration, with protestors reportedly chanting “house us or kill us”.

There are also reports that Egyptians were calling for the removal of the mayor as well as the military more widely.

Local news sites reported a recent increase in rent prices from 7000 Egyptian Pounds ($788) to 47,000 ($5,292).

Videos have emerged on social media showing large masses of Egyptians blocking the main streets of Port Said chanting “we want our rights” and calling for Sisi's resignation.

phpBB [video]

The protest comes amid calls for mass protests on 11 November to counter the current political system and the economic and social hardships Egyptians are facing.

Egyptian secret services have reportedly warned the Egyptian President not to take any "harsh decisions" that could further inflame the country before 11 November.

Having met with the International Monetary Fund (IMF) earlier this week, Egyptian Finance Minister Amr al-Garhy said the country would be getting an additional $6 billion in bilateral funding needed to secure a $12 billion IMF loan within a week or two. Sisi has already warned that Egyptians will face challenges - including the prospect of further price hikes and subsidy cuts - in order to secure this necessary funding for the country.

http://www.middleeasteye.net/news/prote ... -228776737

[Major Thom]

What's happening on November 11th then?

[newcastle]

What's happening on November 11th then?

Not a lot, I suspect.

http://www.al-monitor.com/pulse/origina ... ikely.html

[HEPZIBAH]

What's happening on November 11th then?

Suggest you polish your specs and read the article, or read other Egyptian new, or listen to news (as opposed to gossip).

[Major Thom]

Never listen to News about Egypt only maybe what I read on here. I will say something though, gossip can be more entertaining and amusing, whether or not you want to believe it is completely different, but amusing. Especially to those that know the real story.

[carrie]

You have constantly said that you do not partake in gossip, MT. Please make your mind up.

[newcastle]

You have constantly said that you do not partake in gossip, MT. Please make your mind up.

He's probably still jet lagged...or maybe distraught at the death of Hilda Ogden

[A-Four]

I am pleased to see that most people who either visit or are ex-pats living in Egypt on a tourist visa have given this subject a very wide berth. I notice that there are at least three people who have visited this site during this past week who know only too well how important it is NOT to write on certain subjects, or reproduce articles from publications that are Written up outside Egypt.

It is evident that Egypt soon will go through very difficult times.

[carrie]

I don't think a lot of ex pats who live here in Luxor, know very much about Port Said or the demonstrations there. Perhaps that's why there haven't been any comments.
We don't all go on about things we know nothing about.

[newcastle]

I am pleased to see that most people who either visit or are ex-pats living in Egypt on a tourist visa have given this subject a very wide berth. I notice that there are at least three people who have visited this site during this past week who know only too well how important it is NOT to write on certain subjects, or reproduce articles from publications that are Written up outside Egypt.



It is evident that Egypt soon will go through very difficult times.

Obviously A-Four doesn't take his own advice.....probably sensible on that score.

[newcastle]

It is evident that Egypt soon will go through very difficult times.

Interesting.

Presumably he thinks the last five years have been a walk in the park

[A-Four]

I am pleased to see that most people who either visit or are ex-pats living in Egypt on a tourist visa have given this subject a very wide berth. I notice that there are at least three people who have visited this site during this past week who know only too well how important it is NOT to write on certain subjects, or reproduce articles from publications that are Written up outside Egypt.



It is evident that Egypt soon will go through very difficult times.

Obviously A-Four doesn't take his own advice.....probably sensible on that score.

For myself, I do not have to be be careful about what I think or reproducing articles from newspapers or the Internet. I no longer live in Egypt, and all my belongings are now out of that country, unlike some who lost all theirs, and in two cases I know of, for producing less unacceptable written work above as you have,............but again in this matter, like many others,............you know better. .

[A-Four]

It is evident that Egypt soon will go through very difficult times.

Interesting.

Presumably he thinks the last five years have been a walk in the park

I am fully aware of how the past five years have effected the average Upper Egyptian family, but if the present day inflationary values are to be taken into account, then yes, the past five years will certainly feel like a 'walk in the park', as you call it, compared to what the next five years will bring.

I believe Egyptian history will call this The Lost Decade, let's hope that it will not develop into Egypt's Lost Generation.

[Who2]

What's happening on November 11th then?

The 4 day hangover due to my emergence from the small world to the large world of earth 68 years past...'What else ?....
Ps: That above post is a bit philosophical..are you saying 'I can lose a decade ? I lost my bike once!

[A-Four]

Ps: That above post is a bit philosophical..are you saying 'I can lose a decade ? I lost my bike once!

My dear Dr, like myself, I do not think it can ever be said that you have, or ever will be regarded as a representative of a average Upper Egyptian family. .

[newcastle]

I am fully aware of how the past five years have effected the average Upper Egyptian family, but if the present day inflationary values are to be taken into account, then yes, the past five years will certainly feel like a 'walk in the park', as you call it, compared to what the next five years will bring.

I believe Egyptian history will call this The Lost Decade, let's hope that it will not develop into Egypt's Lost Generation.

It seems Reuters share your view :

Egyptians losing patience with Sisi as economy deteriorates
l
By Lin Noueihed | CAIRO
A cartoon which appeared on social media shows a drowning Egyptian, only his hand protruding from the depths, waving for help. The next strips show President Abdel Fattah al-Sisi diving in, taking the drowning man's watch and turning away.

The cartoon captures the mood of desperation and anger among Egyptians clobbered by tax rises, soaring food price inflation and cuts in state subsidies. Some fear a repeat of the mass street protests that drove Sisi's two immediate predecessors from power.

Core inflation is at seven-year-highs, near 14 percent, as a foreign exchange shortage and a hike in customs duties bite hard in a country that imports everything from sugar to luxury cars.

The government raised electricity prices by 25-40 percent in August and is phasing in a 13 percent value-added tax approved by parliament in the same month.

As part of reforms aimed at clinching a $12 billion IMF loan needed to plug its gaping budget deficit, the government is also expected to cut petrol subsidies and devalue the Egyptian pound, prompting a further cycle of inflation in Egypt, where tens of millions rely on state-subsidized bread.

"Prices are rising daily, not monthly," said Gamal Darwish, a civil servant, as he queued to buy subsidized sugar in Cairo.

"This situation will push people to do bad things. It could slip out of hand and the government will not be able to control it because if the poorest cannot get enough to eat they will steal. If someone has children to feed, what will he do?"

The government has tried to win public support for the austerity measures with a billboard campaign and media blitz and has also sought to expand social security schemes to shield the poorest from the effects of the rising prices.

But many Egyptians who would not qualify for such schemes complain they can no longer afford meat, while sugar shortages have driven fears of an impending food crisis.

Social justice was one of the key demands made by protesters during the 2011 revolt that ended Hosni Mubarak's 30-year rule.In 2013 Egyptians again filled the streets to protest against Mohammed Mursi, the Muslim Brotherhood official who was democratically elected after the uprising but presided over a year of power cuts, petrol shortages and economic turmoil.

Three years after Sisi, an army general, ousted Mursi and seized power, his promise to restore stability is wearing thin.

The arrival of sugar in a government van caused a frenzy in the working class district of Sayyida Zeinab on Tuesday, as people jostled, 10-pound-notes in hand, for 2-kilo rations.

"After two revolutions, the Egyptian people are going backwards not forwards," said Abdel Hasib Ahmed Mohamed, a middle-aged court employee watching the sugar scrum. "We are heading for an explosion and this time it won't be peaceful."

NO EASY ANSWERS

For the government, the case for economic reforms and the need to seal a planned three-year lending program with the International Monetary Fund is clear.

Egypt's economy is likely to grow 3.5 percent in the 2016/17 fiscal year, a Reuters poll showed on Thursday, missing the government's target of about 5 percent and dipping below last year's growth rate.

The budget deficit is near 10 percent of national output. The foreign currency shortage has made it hard for firms to import and foreign investors to repatriate profit. Some have shut shop after nearly two years of capital and import controls.

Dollar rationing at banks has driven businesses toward the black market where the dollar is now selling for more than 15.5 pounds - a huge mark-up from the official rate of about 8.8.

Egypt's IMF program has yet to win the lender's final approval because the government must first muster $6 billion in bilateral financing, giving it the cash buffer it needs to devalue and ditch its fixed exchange rate. The IMF has said it is helping Egypt to secure the necessary funds.

The government said this week it had secured 60 percent of the bilateral funds, boosting foreign reserves to $19.6 billion in September.

Central Bank Governor Tarek Amer has said he would consider floating the pound once reserves hit $25 billion.

But the rising prices and periodic shortages in state-subsidized food have forced the government to increase its purchases, burning rapidly through those newfound dollars when it is meant to be cutting spending.

The pound's continued depreciation on the black market since the IMF deal was announced in August also poses a big challenge.

If the central bank makes a meager adjustment in the exchange rate, economists say, downward pressure will continue to mount on the pound. But if it makes a 6-8 pound adjustment, the political and social impact could be explosive.

Although the black market rate is already priced in across much of the private sector, a steep devaluation would prove costly for the government, which imports thousands of tonnes a month of vital commodities including wheat and oil for its food subsidy program as well as gas for its power stations.

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Rumors have spread that Nov. 11 will be a day of protest over economic conditions. Police have already detained about 70 people for inciting protests, accusing many of loyalty to the Muslim Brotherhood. Under Sisi the Islamist group has been banned as a terrorist organization - a charge it rejects.

"Food price inflation in Egypt .... fell a bit year-on-year in September, but for the poor it is still for me at a level that is politically toxic," said Angus Blair, Chief Operating Officer at Pharos Holding, a Cairo-based investment bank. "It is a worry, especially with calls for a demo on Nov. 11."

"NO VISION"

In his speeches, Sisi has sought to persuade Egyptians that a collective sacrifice is necessary to save the country from financial ruin, even urging people to donate fakka, or spare change, in comments that drew online derision.

But Sisi, who has crushed the Brotherhood and jailed secular dissenters, has also warned that the army could be deployed within six hours in case of trouble on the streets.

There has been no sign so far of the mass protests of 2011 or 2013, though anger over an increase in social housing costs turned into a street demonstration by hundreds last week in Port Said, near the mouth of the strategic Suez Canal.

Fear for the future is not limited to poorer Egyptians, and businessmen who struggle daily with the dollar crisis are among the most concerned.

"The dollar crunch is so bad that things have been piling up at the port for a long time and you cannot get them out. Dollars are not available... and the situation is deteriorating," said Ashraf Morcos, who runs an import-export company.

Some new policies seem at odds with the government's reform drive. For example, the Supply Minister said this week the state would increase, not cut, subsidies on food smart cards, which give Egyptians points to claim against bread and other items.

"This government has no vision, it is not transparent about its policies," said Morcos. "At this point, the country doesn’t need rhetoric. People need their basic necessities, to eat and drink.

http://www.reuters.com/article/us-egypt ... SKCN12N0D8

The Financial Times has weighed in with similar comments :

https://www.ft.com/content/464dde2c-91e ... 28cb934b78

The government is making no secret of the austerity to come and is exhorting the public to be patient now in facing measures for the long term benefit of Egypt.

In messages splashed across billboards lining Cairo’s streets, the government is trying to convince long-suffering Egyptians of the virtues of economic reform — and prepare them for looming price shocks.

Bold reforms shorten the route,” says one slogan. The billboards began appearing last month as the government pushes through reforms to seal a $12bn International Monetary Fund loan. Egyptians, who have already endured a recent rise in value added tax, are now bracing themselves for yet another increase in prices as analysts predict that a devaluation of the Egyptian pound is imminent and that fuel subsidies will be cut.

According to Al Ahram, even the middle class are feeling the pinch.

"High inflation takes its toll on Egypt's shrinking middle class

Large numbers of middle-income Egyptians who once lived securely above poverty levels can no longer be sure of the future as economic reforms, falling pound and out of control inflation changes life as we knew it."

http://english.ahram.org.eg/NewsContent ... king-.aspx

[Hafiz]

Newcastle quotes well and even if he doesn’t he lives on the ground, thinks clearly and reads widely. That has got to count for something.

His quote from the Financial Times must stick in his otherwise liberal craw.

The riots are about house prices, rental prices in particular.

The government’s Ramases II style investment/development proposals for the canal region were always likely to produce an increased demand for housing for workers – some of them from outside Egypt and on fat $US allowances. The government took decisions which, and bureaucrats who were at work would know, would have an inflationary effect on Port Said. Another own goal. The forward expansion proposals for the region will likely make housing costs worse.

In a system where bowel movements have a government approved/appointed Syndicate to regulate it and where nothing can move without a permit/bribe it was always government’s responsibility to release extra land and develop infrastructure ahead of time to deal with new demand for housing arising from their canal decisions. (Assuming of course that its true that new demand is driving these price hikes – what else could – it isn’t as if there is a middle class flush with money or tourists wanting to swim at putrid Port Said). The central planners whose responsibility this is are not very good (except at keeping themselves in power) – indeed they have been hopeless for 70 years. They were only ever generals – indeed generals without a victory. Ramases II might have built big but he has a few victories to celebrate.

If you construct a system of permissions, patronage and inertia these types of problems will emerge. On the other hand unrestrained capitalism reverts to boom/bust cycles.

My point is the Egyptian housing system is starved for mortgage funds, except if you are a connected developer, over regulated and subject to central planning and based on patronage/corruption. Such a system will always fail although a few will be hugely enriched along the way.

Make your money quick, pay your ‘dues’ and retire to Monaco.

Its slightly off point – who ever stuck to the point on this forum – but the general picture of property development and men without suits is “Crazy”. I’m thinking delusional, not very bright, Patsy Cline.

Who is allowed to own land and do business in Egypt?

This recent story struck me as showing the left hand right hand problem with land deals as well as how all the cozy deals are tied up for local companies and individuals:

“Egyptian President Abdulfatah al-Sisi has issued a decree allowing Bahrain’s king to purchase three villas in Sinai Peninsula’s tourist haven Sharm al-Sheikh, Middle East News Agency (MENA) reported on Sunday.

Egyptian law prohibits land and property ownership to non-Egyptians in Sinai but Sisi made an amendment, allowing Bahrain’s King Hamad bin Isa Al Khalifa to buy the villas in Sharm al-Sheikh’s Naama Bay for residential use.

Sisi, who was the defense minister, banned the ownership of land in Sinai by non-Egyptians. Before the 2012 law, Egypt allowed Arabs the right to own land in Sinai on a 99-year-lease-period basis.” https://english.alarabiya.net/en/busine ... Sinai.html

If you wanted to boost housing in Port Said you could always duplicate the outrageous deals available in Sham for non Egyptians.
• Tax breaks (no stamp duty).
• No capital gain tax on resale.
• No sales tax.
• Low death succession duty 7% (to transfer property ownership).
• Tax benefits (extremely low taxes).
• Banks: easy to open accounts and to transfer funds.
• 0% tax on bank interest.http://www.sharmelsheikhrealestate.com/legal-advice
Oh to be a non-Egyptian in Sham.

Newcastle – are such deals available elsewhere or only where connected builders are building?

Non-connected Egyptians don’t have much chance of getting a housing loan to either invest in Sham or Port Said. The Egyptian banks are fully committed to loaning to the government at outrageous rates and can’t be bothered with ordinary people. The same property developers admit this, even for rich no credit risk Europeans, and are more frank than the government and the IMF about the Egyptian banking system when they state:

“Local mortgages are almost impossible to obtain, so you will need to fund the purchases yourself or via same country mortgage.”

Returning to whether the central planners in the planned Egyptian economy know their job the Sham developers reveal the fatal flaw in their money making proposals. The current government has changed title on any purchases of dreadful apartments on polluted beaches. You may buy some gated pile but, after Sisi, if you die the government has to approve the inheritance by your heirs to that property. What an opportunity for bureaucrats and lawyers. And all this justified on the basis of special national security issues in Sinai. As if the removal of title to non-Egyptians will improve the Egyptian Army’s underwhelming performance against Sinai insurgents.

Some might think the government restrictive policy in Sinai is a mirage and that financial reality is clearer if you have money. Well you would be wrong. Here is a government extravaganza press release from the past few days which shows how reluctantly open Egypt is to business:

“Egyptian President Abdulfatah al-Sisi has issued a decree allowing Bahrain’s king to purchase three villas in Sinai Peninsula’s tourist haven Sharm al-Sheikh, Middle East News Agency (MENA) reported on Sunday.

Egyptian law prohibits land and property ownership to non-Egyptians in Sinai but Sisi made an amendment, allowing Bahrain’s King Hamad bin Isa Al Khalifa to buy the villas in Sharm al-Sheikh’s Naama Bay for residential use.

Sisi, who was the defense minister, banned the ownership of land in Sinai by non-Egyptians. Before the 2012 law, Egypt allowed Arabs the right to own land in Sinai on a 99-year-lease-period basis.” https://english.alarabiya.net/en/busine ... Sinai.html

So if you are a king you are not a security risk investor.

Bring on Patsy Cline and her nemesis in Robert Altman’s ‘Nashville’.

On a positive note the number one IMF honcho in the region thinks that all the speculation against the E pound and the pricing of current stock at replacement (post devaluation) cost means that current prices have the devaluation factored in. Maybe he is right. This is what petrol stations do every day - the bowser price (whatever the purchase price of the petrol) is based on the days replacement at future price. Can't find reference.