Egypt is suffocating under the weight of massive state subsidies - $11b ($1 = 6 Egyptian pounds) per year on subsidized fuel alone, and $2.67b on subsidized wheat (totaling 6.5% of its GDP of about $200b). The problem for Mubarak is that he needs to wean the public off these subsidies because of their escalating costs. The demonstrations may have been sparked by a move to cut fuel and food subsidies.
According to Beltone, the government spent LE 63 billion on petroleum subsidies during fiscal year 2009/2010, 40 percent of which went to diesel and 22 percent to butane, and this figure is expected to rise to LE 67.7 billion by the end of the current fiscal year. |