Does Egypt have the financial resources to continue to subsidize bread prices?
No. Even before the food prices started increasing, Egypt was operating with an enormous budget deficit. This document from 2006 says the budget deficit was $1.62 billion and growing, while this Reuters article says the budget deficit was 7 percent of GDP in 2006.
(And this will tell you something about how things are done here -- they're "reining in" the deficit by... privatization. Oh, joy.)
Traditionally, the most expensive part of Egypt's extensive subsidy program has been fuel subsidies, but when grain prices started shooting up that made the bread subsidies that much more unsubstainable.
But if people aren't paid a living wage (and the vast majority here are not, not anything close to it) then they can't get rid of the subsidies without prompting either mass starvation or popular unrest or both.
Budgetarily, a lot of the problems are because of corruption -- Egypt has plenty of income, serious sources of hard currency in the form of tourism, petroleum revenues (even though it's not a truly major producer) and Suez Canal fees. (Never mind the $2 billion a year in US civilian and military aid....) So Egypt could much more easily afford to meet the needs of its people if the people who run the government weren't so busy lining their own pockets and those of their pals. But all that money goes directly into the pockets of the ruling elite, Mubarak's cronies and a handful of super-rich businessmen. People run for Parliament here to get rich, not to change things. (And to get immunity from prosecution....) This shouldn't be a poor country -- it isn't a poor country -- but 40 percent of the population are poor, living on around $2 a day or less.
So the subsidies stay. Because to fix the system so as to make the subsidies unnecessary (or at least much smaller-scale) the ruling elite would have to actually start (a) giving a damn about the people, and (b) reduce the flow of money into their own bank accounts.
you are the media you consume.
Truth is, I dunno if we will see serious unrest. This is a subject for much debate among certain of my friends. We can't tell, really, whether we're seeing just another surge of activism that will be crushed by the regime and have no real lasting effects (which has happened before -- see 1972 and 1977 and 1989...) or we're seeing the real rumblings of change (which has also happened before, but a lot longer ago -- see 1919 and 1952.) There's a lot of what-if, what-if going around.
Personally, I'm enough of an inveterate cynic to generally doubt that anything will ever really change, anywhere, so I usually lean toward the belief that the regime will find some way to defuse or crush all of this, and that far too many people here have been cowed and dispirited to the point that they don't believe things will ever really change, either, so are unwilling to risk everything (and it would be everything) in order to go out into the streets and demand change.
But a friend of mine, who's very smart about these things (although we do ideologically disagree on a lot of things, I have to concede his smartness) argues that the regime has become so calcified and so inept and so useless that it is unable to even take the required steps to protect its own interests, and is therefore more vulnerable now than it has been in a very long time. And people are hungry, that is certainly true.
Some would argue (like The New York Times in this story) that hunger fuels anger, and people who are angry and hungry enough go out into the streets, and can overthrow governments. But in Zimbabwe, it had exactly the opposite effect -- hunger weakened people, distracted them from the political. They were literally physically weakened, with less energy for organizing and agitating, and also were more likely to be preoccupied with the day-to-day struggle to feed their families, rather than the long-term struggle to change the government. And food became a weapon of the ruling party -- you had to prove your loyalty in order to get it, which works pretty well at keeping really hungry people more or less in line.
So, uh, that's a very long and rambling way of saying I just don't know, and nobody does.
From what you write, I 'get' IF things get wonky the fall of the government would create a power vacuum followed by civil disorder as various groups fight each other to become the New Boss.
? A doo run-run-run, a doo run-run
