Egypt's food subsidy program is a 'strategic national security'

An Egyptian youth delivers fresh-baked pita bread past the Fatimid 12th century Mosque of Salih Talai in Cairo, Egypt.

TEXT OF INTERVIEW

STEVE CHIOTAKIS: Today protest organizers in Egypt say they hope to draw a million people to central Cairo to demonstrate against the government of Hosni Mubarak. They're unhappy with the country's high unemployment and high food prices. In fact, today, U.S. food trader Cargill said its seeing buying and stockpiling of food commodities in the region.

Abdolreza Abbassian is senior economist at the UN's Food and Agriculture Organization, or FAO, and he's with us now. Good morning sir.

ABDOLREZA ABBASSIAN: Good morning.

CHIOTAKIS: Without the high food prices, would these protests be going on?

ABBASSIAN: When food prices increase, you're bound to be pouring fuel on the fire. Egypt for example, prices of basic food have gone up 20 to 30 percent. However, this country also happens to have quite a strong subsidy program where they target the most vulnerable. And try to keep prices for that segment of the society rather stable. So that shouldn't spark a big problem or discontent among that section of society.

CHIOTAKIS: Is that one way the country's government has remained stable for such a long time?

ABBASSIAN: Food is an important element in this equation, but it is certainly not the only reason. Sparks like what we have seen in recent weeks have been rather unexpected, and the reasons for them I think are very complex. There can certainly not be only one or two factors.

CHIOTAKIS: If there is a change in the Mubarak government there, and if the subsidy program goes away, what kind of problems are we talking about in Egypt?

ABBASSIAN: I would be very doubtful that there would be any fundamental changes in the short run over the subsidy program. Simply too many people depend on it. It is strategic national security. Therefore whoever is in charge would have to continue this program. And I think without it, we could only see more agitation in Egypt.

CHIOTAKIS: Abdolreza Abbassian, senior economist at FAO. Thank you sir.

ABBASSIAN: Thank you.

About the author

Steve Chiotakis was the host of Marketplace Morning Report until January 2012.

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