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Sunday, 4 September 2016

Babies in arms, mothers stage protest over lack of subsidized infant formula

A case study on the value of coherent, timely communication with the public: Dozens of angry mothers, holding their babies in their arms, (Arabic, 9:43) temporarily blocked the Nile Corniche in Shubra on Thursday in front of the state-owned Egyptian Pharmaceutical Trading Company to protest the lack of subsidized baby formula, Ahram Online reported. The company’s spokesperson blamed the shortage on a Health Ministry decision in July that required the company to distribute its products throughout the country through a smart card system. The ministry, it suggested, had not made an effort to communicate the decision to the public.

According to the Associated Press, infant formula prices increased by 40% following the decision to cut subsidies and limit the distribution of subsidized formula for those mothers who meet certain criteria, such as having “twins, working for more than seven hours a day, or having medical records that show poor health.” Riot police later moved to reopen the street without engaging with protesters. Health Ministry spokesperson Khaled Megahed (who also called in to ONTV in the preceding clip) later called-in to the television program Red Line, saying subsidized formula is disappearing from shelves because it is being sold to confectionary shops, Egypt Independent reported.

Army spokesperson Brig. Gen. Mohamed Samir gave a different explanation, saying companies importing infant formula are engaging in monopolistic practices, which in turn have driven up prices. The Armed Forces is responding by stepping in to import infant formula starting 15 September, which they will sell at pharmacies for EGP 30 per pack, versus the full price of EGP 60 per pack.

Neither the ministry nor the military pointed to the role the FX crunch may be playing in the shortage of infant formula. For the past several weeks, 100% of the FX available at the Central Bank of Egypt’s weekly auction has been provided for the import of pharmaceuticals and infant formula. Our take: The diversion of subsidized formula to confectioneries and other buyers has likely long been a “feature” of corruption in the system. The ready availability of FX provided a buffer so that the intended beneficiaries didn’t feel the full impact of corruption; full FX availability also provided a shock absorber for well-meaning experiments such as the smart card for subsidies. Take away the FX, you take away the mask over the corruption and limit the system’s ability to absorb shocks such as the smart cards.

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