Egypt crisis threatens food for poorest -World Food Programme

Source: Thomson Reuters Foundation - Thu, 11 Apr 2013 18:33 GMT
Author: Reuters
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* WFP official sees big risk, says must be tackled now

* Egypt's poor spend half or more of income on food

* Problem is not lack of food, but lack of money

By Emad Omar

CAIRO, April 11 (Reuters) - Egypt's economic crisis poses a threat to basic nutrition in the country of 84 million people where the poorest spend more than half their income on food, the World Food Programme (WFP) said on Thursday.

WFP country director Gian Pietro Bordignon's warning underscores one of the main challenges facing President Mohamed Mursi's government as it grapples with an economic crisis caused by two years of instability.

"The economic crises are putting more and more people in a very risky situation," Bordignon told Reuters in an interview. "The situation is deteriorating and has to be tackled right now because it's a very risky trend."

He added that the problem was not availability of food, but people's ability, especially the poor, to pay for it.

"There's no lack of food. There's lack of money for the families to buy food. It's a matter of economic access to food," Bordignon said. "One of the risks of the economic downturn is that there could be in the future less availability of food."

The poverty rate in Egypt climbed from 21 percent in 2009 to 25 percent in 2011 - the year Egyptians overthrew President Hosni Mubarak in a popular uprising that was partly fueled by economic grievances. Another 20 percent of the population lives near the poverty line, according to the World Bank.

Egypt's economic crisis has deepened as tourists and investors fled the country during the turbulent transition from Mubarak's rule. The financial squeeze has led to fuel shortages, and the government has cut back on imports of wheat used to make subsidised loaves upon which the poor depend.

Spending on food takes a bigger share of income as prices increase while incomes remain static, Bordignon said.

The government is hoping a bumper local wheat harvest will be enough to meet the country's needs. Besides wheat, Egypt also imports many other types of food and prices are being driven higher by a weakening local currency.

"On average, the Egyptian family spends 40 percent of their income for buying food. For the poorest families, about 25 percent of population, more than 50 percent of their income goes for buying food," Bordignon said.

Egypt has suffered from a series of food shocks in the last decade, starting in 2006 with the avian flu outbreak. Food prices were driven higher in 2007/08 by global price hikes, and then another shock hit in 2008/09 due to the financial crisis.

The economic situation will make it politically more difficult for Mursi to enact austerity measures that would be needed to secure a loan agreement with the International Monetary Fund seen as vital to staving off the crisis.

WFP aid programmes in Egypt include fortifying subsidised bread and cooking oil with minerals and vitamins. (Editing by Tom Perry and Michael Roddy)