Egypt's Sisi regime has raised the price of fuel dramatically overnight, hours after a decision to let the Egyptian pound "float" (i.e. sink). Both moves are seen as preparing the way for a $12 billion loan from the International Monetary Fund.
Prices of government-subsidised diesel and gasoline are rising by between 30% and 47%. Meanwhile, the value of Egypt's currency fell yesterday by more than 40% and the Central Bank announced interest rate rises of three percentage points.
Several reports – by the Economist, Bloomberg and Reuters – discuss the economic background to these developments. The Economist sees devaluation as necessary and overdue but warns that the public's "disenchantment with the authorities is growing":
In October the video of a tuk-tuk driver fuming over the economy went viral. Mr Sisi has been mocked for imploring Egyptians to cope, while claiming that for decades there was nothing but water in his refrigerator ...
The government has tried to appease the public by setting prices, seizing goods and taking over entire industries. This has dented the confidence of some foreign investors.
The regime's own PR strategy hasn't helped matters either. "The government’s message for three years has been: We have projects and great times to come," Amr Hamzawy, a former member of parliament and a professor at the American University of Cairo told the Christian Science Monitor. "This is not enough, and now it is catching up with them. People are angry because they were promised quick improvements in living conditions, and what they get instead are cuts and the message that we all have to tighten our belts and rescue our country."
Politically, the big question is whether public disenchantment will have any serious consequences for the regime. Steep price rises have often been the cue for protest demonstrations in Arab countries. In 1977, when Egypt cut subsidies on flour and rice at the behest of the IMF, two days of rioting left 79 people dead and President Sadat was forced to reinstate the subsidies.
For several weeks now there has been talk of demonstrations planned for November 11 (a date that doesn't seem to have any particular significance) but many of those who might be expected to take part in organising them are already in jail.
The Muslim Brotherhood has been severely weakened since Sizi seized power. At present it is probably not capable of organising mass protests and, according to Al-Monitor, has been urging members not to take part in "demonstrations that are destined to fail". (It's perhaps worth mentioning, though, that intially the Brotherhood was not very enthusiastic either about the uprising that eventually toppled Mubarak.)
Al-Monitor also quotes Sherif El Roubi of the April 6 movement – a key player in the revolt against Mubarak – as saying it will be difficult to mobilise the Egyptian public at this stage:
"No matter how frustrated Egyptians are with the current conditions and in particular, the high prices of basic commodities, they are too divided and too tired to revolt."