Egypt’s leader raises minimum wage by 67 per cent

El-Sissi said in televised comments the raise will be applied to all Egyptian workers. (File Photo: @AlsisiOfficial/Twitter)

CAIRO – Egypt’s President Abdel Fattah el-Sissi on Saturday announced that he has raised the minimum wage to 2,000 Egyptian pounds ($115.74) per month from 1,200 ($69.27), a 67 per cent increase.

The move came ahead of a possible national referendum on constitutional amendments that would potentially allow him to remain in power until 2034.

Egypt’s Parliament, which is packed with el-Sissi supporters, overwhelmingly approved a package of constitutional changes last month that would further enshrine the military’s role in politics. The supposed referendum is expected to be held in the coming weeks.

El-Sissi said in televised comments the raise will be applied to all Egyptian workers. The move was part of a package of measures, including a raise in pensions and bonuses, intended to ease the burdens of Egyptians hurt by painful austerity measures in recent years. Egypt’s Finance Ministry said the increase would kick in in July.

The austerity measures were part of an ambitious economic reform program intended to revive the country’s economy mauled by years of political turmoil and violence.

The reforms included floating the currency, substantial cuts in state subsidies on basic goods, and introducing a wide range of new taxes. The measures led to a significant rise in prices and services, something critics say has hurt the poor and middle class the hardest.

The reforms were agreed on with the International Monetary Fund in exchange for a $12 billion loan.

El-Sissi thanked Egyptians, especially women, for enduring the harsh measures. “Another path would have led to the collapse of the state,” he said in a ceremony honouring Egyptian women.

Removing state subsidies is something that el-Sissi’s predecessors could not do because of fears of unrest. The late President Anwar Sadat attempted in 1977 to remove subsidies on bread, a main staple for Egyptians, sparking deadly street riots. He backed down. In comparison, el-Sissi’s reforms fueled popular discontent but never boiled over onto the streets.

Demonstrations are virtually banned in Egypt under a 2013 law, with offenders facing up to five years in prison if convicted.

The economic reform program has won el-Sissi lavish praise from Egypt’s Western backers and bankers. His policies, however, have made more difficult the plight of a majority of Egyptians who are now forced to cope with steep hikes in the price of everything from utilities and fuel to food and transportation.