VZCZCXYZ0000
RR RUEHWEB

DE RUEHEG #0150 0291018
ZNR UUUUU ZZH
R 291018Z JAN 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 7996
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0374

UNCLAS CAIRO 000150 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA, NEA/RA 
USAID FOR ANE/MEA MCCLOUD AND DUNN 
TREASURY FOR MATHIASON AND CONNOLLY 
COMMERCE FOR 4520/ITA/ANESA/OBERG 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN ELAB EG
SUBJECT:  RISING ANXIETY ABOUT PRICE INCREASES 
 
REF:  A. 07 Cairo 2887   B. Cairo 0090 
 
------------------------------- 
Demonstrating Against Inflation 
------------------------------- 
 
¶1.  (U) In one clear manifestation of rising popular anxiety about 
price increases, large demonstrations were held recently in two Nile 
Delta cities, protesting increased prices of basic commodities such 
as bread, oil, beans and rice.  On January 18, approximately 2000 
protestors, including members of the Wafd party and the Kefaya 
("Enough") movement, demonstrated in Tanta, reportedly protesting 
price increases, as well as  corruption, "inherited power" (a veiled 
reference to Gamal Mubarak succeeding his father as president) and 
state security practices.  Demonstrators allegedly raised 
anti-American banners and vowed to "never allow" the U.S. Ambassador 
to set foot again in Tanta (Note: The Ambassador has visited Tanta 
several times to attend the famous "moulid" festival held annually 
in the city.  End note). 
 
¶2.  (U) According to press reports, on January 20, nearly 5000 
people demonstrated in Mahalla el Kubra, site of large-scale labor 
demonstrations over the last several months (Ref A).  Demonstrators 
protested high prices, chanting slogans against President Mubarak, 
his son Gamal, the government and security services.  Various 
opposition parties including the Wafd party, the Ghadd party, Labor 
and Nasserite parties, as well as Kefaya, members of the Muslim 
Brotherhood (MB) and the Aafaq Socialist Center reportedly 
coordinated the demonstration.  Initially, only some 300 people 
began the demonstration, but Mahalla residents and some textiles 
workers joined in, swelling the numbers to almost 5000, according to 
press and blog reports. 
 
¶3.  (U) The Kefaya movement also held a January 18 demonstration in 
front of Al Sayyeda Zainab mosque (in a poor neighborhood of Cairo). 
 January 18 was chosen to commemorate the so-called "bread intifada" 
of January 18-19, 1977, when mass riots broke out in response to the 
President Sadat's attempt to cut food subsidies.  Kefaya 
demonstrators reportedly protested the GOE's plans to replace 
in-kind subsidies with targeted monetary subsidies.  70-year old 
Kefaya leader Dr. Abdel Wahab El Messairy, his wife and other 
activists were detained, but later released, allegedly dropped on a 
remote roadside miles outside of Cairo. 
 
----------------------- 
Parliamentary Criticism 
----------------------- 
 
¶4.  (U) Rising prices also prompted criticism of the Nazif 
administration from parliament.  On December 31, 2007, 70 MB and 
opposition MPs called for a vote of no-confidence in Nazif's 
government for failing to control prices.  MPs demanded information 
on government measures to control prices and alleviate poverty.  On 
January 15, MB and opposition MPs accused the government of 
incompetence and bias toward the upper classes.  MB members said 
economic reforms have only benefited the rich and worsened poverty. 
They decried the "marriage" of authority and wealth, a reference to 
businessmen serving in the current government, which they claim has 
increased corruption.  Several MPs characterized the recent labor 
strikes and demonstrations as a "revolution of the starving."  MPs 
pointed to the budget deficit and public debt as examples of the 
government's incompetence, referring to a highly critical report on 
the state budget submitted to parliament by the Central Auditing 
Agency (Ref B). 
 
------- 
Comment 
------- 
 
¶5.  (SBU) Historically, food prices are one of the few issues that 
gets the infamously passive Egyptian citizenry out into the streets. 
 The government is keenly aware of the potential for widespread 
discontent with rising prices to erupt into mass street protests. 
The GOE will no doubt continue with an ongoing PR-effort asserting 
that the government and ruling party are focused on "social justice" 
and improving life for Egypt's poor.  It is difficult to gauge 
whether such a campaign will do much to quiet the concerns of 
Egyptians feeling the squeeze of food prices. 
JONES