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Tuesday, February 1, 2011

Made in the U.S.A

One of the brief stories to appear on both CNN and Al Jazeera Saturday was news that the Cairo Tahrir Square demonstrators had noted that the teargas canisters being fired at the crowds were labeled, "Made in the U.S.A." And here you thought we didn't actually manufacture stuff any more! Well, thanks for focusing attention on that aspect of U.S. Aid.

Most current reports list U.S. foreign aid to Egypt as $1.3 billion annually. One thing to keep in mind when you hear about poverty in Egypt is the large amounts of direct subsidy that are contributed to the people by their government. The two most significant subsidies that come to my mind are gasoline at that $0.92 per gallon price and bread. The gasoline subsidy benefits primarily the middle class but the bread subsidy benfits everyone. Bread, in the form of a plastic bag with about ten freshly baked rounds is available for two or three pounds about everywhere you look. I'm not sure if that is the rock-bottom subsidzed price or just what I buy mine for. Reportedly, a lot of U.S. wheat goes into that bread.

It is worth reading this Wikipedia entry on the 1977 bread riots to understand what happened when Mubarak's predecessor tried to introduce economic reform. The World Bank demanded an end to some of the subsidies and efforts in this direction were not well received.

Popular rejection of the announcement was not long in coming: On January 18 and 19 (of 1977!), rioting by lower-class people who would be hardest hit by the cancellation of the subsidies erupted across the country, from Aswan in upper Egypt to Alexandria on the shores of the Mediterranean. For two days, rioters attacked targets that symbolized the prosperity of the middle class and the corruption of the regime, shouting slogans like, "Yā batl al-`ubūr, fēn al-futūr?" ("Hero of the Crossing, where is our breakfast?") and "Thieves of the Infitah, the people are famished." There were also shouts of "Nasser, Nasser." Some 79 people were killed and many more injured. The rioting ended when the state abruptly canceled the new policies.

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