- Life Style
At the dead end of a winding side street in the central Cairo neighborhood of Sayeda Zeinab, Ashraf al-Husseini sat in front of the government-subsidized bakery that his family has been operating for nearly 50 years.
In this neighborhood, he said, residents would not survive without the 5 piaster bread loaves his bakery churns out from 7 am to 5 pm daily.
"This is their one allowance," he said one afternoon this week, when there are fewer customers compared to the morning and evening rush. "If the price were to be raised, they would not be able to bear the cost."
President Mohamed Morsy has touted supposed improvements to the government subsidized bread system as one of the biggest successes of his first 100 days in office.
In a speech two weeks ago commemorating the 6th of October War, Morsy claimed to have made an 80 percent improvement in the country's subsidized bread services, without specifying how this figure was derived. Improving the quality of bread was one of the campaign promises in which he claimed to have made the most progress.
What real changes this has meant for most bakeries is unclear. Husseini says he has received no new government orders to change any of his bakery's operations.
"This talk comes from those in power, who don't ever go down to see the situation here on the ground," he said.
But in addition to Morsy's purported strides in improving flour quality, increasing nutritional value, regulating loaf size and preventing shortages, it seems the government could be poised to make greater changes to the decades-long policy of cheap bread for all Egyptians.
Though government officials have repeatedly said they will not touch the politically-sensitive policy, there are indications that in the long term, there could be a move toward lifting, or at least decreasing, bread subsidies.
It certainly is not an easy subject to broach for politicians. Egyptians rioted in 1977 when former ruler Anwar Sadat raised prices, and, as a result, his government was forced to rescind the decision. Bread riots occurred again in 2008, though on a smaller scale.
Since then, occasional shortages in supply, particularly in remote areas such as Upper Egypt, have sparked violence in bread queues.
The government's recent announcement that it will allow flour prices to rise to market levels is one indicator of a possible policy shift.
At the beginning of the month, Supply Minister Mohamed Abu Zeid confirmed official plans to liberalize the price of flour. He said doing so would save the government millions of pounds and allow it to better target those who deserve the cheaper bread, according to a 1 October release by the State Information Service.
The same committee responsible for liberalizing flour prices is also tasked with improving bread quality and preventing corruption inside the system, Zeid said.
In August, the government also announced that they would be introducing a higher-quality, larger bread loaf for 10 piasters. Though not intended to replace the 5 piaster loaf, the larger loaf could act as a test for whether the Egyptian market will pay a higher price.
With a new, more expensive loaf in place, it would be easier for the government to slowly phase out the production of the smaller, cheaper bread.
Though billed as a higher-quality product, the more expensive loaf is already unpopular.
"My customers won't buy it," said Husseini.
Experts maintain it would be highly unwise for the government to even hint at altering bread subsidies.
"It would be impossible," said Malak Reda, a senior economist at the Egyptian Center for Economic Studies, "unless they have targeted subsidies by which they know who is in need and who is not."
Facing a widening budget deficit and a sluggish economy, Morsy's cash-starved government is trying to cut spending. Officials are also trying to meet the conditions for a US$4.8 billion loan from the International Monetary Fund, which typically does not approve of heavy subsidy policies in its borrowing countries.
The 2012/13 budget lays out serious cuts for energy subsidies, but increases food subsidies to LE26.6 billion, up from LE18.9 billion last year. Subsidies make up nearly 30 percent of this year's budget, with bread comprising the most expensive of the food subsidies
An increasingly volatile global wheat market would only make it more difficult for the government to continue to subsidize bread at the rate it does. Egypt buys nearly half of the 18.8 million tons of wheat it consumes every year from abroad, making it the world's largest importer.
Figures from the 2012/13 budget show that this year will be the most expensive yet for bread subsidies in Egypt, with the government subsidizing each loaf of bread by 24.08 piasters. This is up from 19.8 piaster per loaf in 2011.
Though Morsy has yet to demonstrate exactly how his government will deal with the bread subsidy program, economists say the policy could see a change in the intermediate future, particularly if the fiscal situation gets significantly dire.
"If they're obliged to, then they will make changes to bread subsidies," said Reda. "But it's a very sensitive issue."
Whatever the future of subsidized bread, it is clear that the cheap staple will always go hand in hand with politics.
"Over time, Egypt's provision of subsidized bread in particular has become a powerful symbol of the broader social contract between the government and the population, in a political system where political participation is highly limited," wrote researcher Tammi Gutner in a 1999 paper on the political economy of food subsidies in the country.
Gutner was describing the situation under former President Hosni Mubarak, but the success of Morsy's policies will also depend on his performance on a number of other issues. Experts say that if a bread subsidy withdrawal does not accompany some incremental rise in quality of life, it could spell the end of the current government.
"That would be the most dangerous of mistakes," Husseini said.