Dalibor Rohac , Cato Institute , 2013

Subsidies to consumer goods, including fuels  and food, account for almost one third of Egypt’s public spending, or 13 percent of the country’s gross domestic product (GDP). Not only are subsidies highly ineffective in helping the poor, they are also an increasingly unsus- tainable drain on the country’s public finances and its foreign reserves. Yet reform remains a thorny issue in Egypt’s unstable political en- vironment—mostly because subsidies are the main instrument of social assistance used by the government.

Related Topics