Egypt's government will start cutting fuel subsidies before it leaves office next year, prime minister Hazem al-Beblawi said today, but the ambitious reform hinges on an end to the country's turmoil.
Beblawi's government, installed by the military after it overthrew president Mohamed Morsi in July, contends with a determined Islamist protest movement that the prime minister accused in an interview with AFP of trying to create a "crisis" in Egypt.
According to the government's timetable, a referendum is to be held on a new constitution within the next two months to be followed by parliamentary elections in mid-2014 and then presidential polls.
Although long a demand of international lenders, no Egyptian government has sought to aggressively tackle the bloated fuel subsidy programme for fear of igniting unrest.
"It is unsustainable, the kind of subsidies we are incurring," said Beblawi of the programme that eats up a fifth of the budget just on energy support.
"It is not only high but it is increasing. We have to face it squarely and make drastic decisions," he said in the interview.
"I would imagine that this government before its mandate in the last two months should arrive to a programme for the coming five or seven years and try to implement the first phase," he said.
"But this phase should be reasonably moderate, acceptable."
In a country with an unemployment rate of 13 per cent, mostly men aged between 15 and 29 years, and where 40 per cent of the population lives below the poverty line, reducing government support for basic goods could lead to further turmoil.
"You need to go very carefully, because the success of such a programme will depend to a great extent on the implementation of the first phase," said Beblawi.
"So the first phase must be real, but also acceptable. Because if it fails, no one will dare to do it again," he added.
