“The dollar is at now at 29.5” my brother declares, giving us the daily update on the state of our economy. He has made it his little obsession to check the rising price of the dollar each day and watch as his money decreases in value. Lately all I’ve been hearing around me is different exclamations of “El Dollar”, whatever question I ask, whatever topic I bring up, it is somehow brought back to the existing dollar crisis and the repercussions it has had or will have on our lives. Now, I’m no economist, but it feels like we are entering a very pivotal stage in our country’s history, one that is slightly reminiscent of Abdel Nasser times. My parents do not fail to bring up (daily) that all that we have known is about to change: holidays abroad, shopping at global brands, imported foods and beverages. They seek to call out our little privileged asses, and prepare us for what’s to come.
Me? I’m not really seeing the problem. I’ve always been a fan of shop local and believe that there are untapped treasures in our country that we can explore before needing to go abroad. But I think I’m only seeing the smaller picture. I don’t have a family to provide for or the cost of running a house to give me anxiety. So, I’ve brought in the experts (aka my family and friends) to see what they have to say.
“I have started looking into grocery expenses because the cash I withdraw to keep on my person is not enough. I have kicked out my “man Godfrey” so I’m not being stolen. WHERE O WHERE DID THE MONEY GO???”
“Kano mana3una men el safar w khalas! I am stopping myself from traveling effective immediately.”
“It’s created a dilemma for me as a business operator. My operating costs are going up (raw material), I can’t increase prices on my product so I’m operating at breakeven but at the same time I’m morally obliged to increase employee salaries substantially to meet the increased cost of living. So I’m losing on both ends. It caused me to rethink my career choice.”
“It’s extremely depressing to realize you’ve been working so hard for the past years to get to a place and then fag2a this mark has shifted. All of your accomplishments— in the monetary sense—are worthless.”
“Ana hatala3 3eyali men el BISC w adakhalhom Port Said School.”
“All the savings I’ve had over the past 10 years have diminished by over 60 %. The plans that I had about moving, about paying for my postgraduate degree, about investing, have been slowly ripped away from me in the span of a couple of months and I’ve been having to adjust”
“It’s bad. It’s gloomy. We’ll have to revisit our daily activities and purchases, as well as how we distribute our income. I think it has to get worse to get better. We have not yet hit rock bottom.”
The other day I was talking to my friend who lives in Brazil about the future, where we see ourselves, what we see ourselves doing…etc etc. She moved from Egypt to Germany for her studies and then to Switzerland with her husband when they got married, now she’s in Brazil for another job opportunity. In all of my years of knowing her, this is the first time she has not expressed her intense desire to move back to Egypt. “I think we’re better off where we are, for now.” She divulged that they could not go back to earning a salary in EGP and having to pay for their kids’ education in this new economy. It was quite an eye opener as to how bad our situation is perceived, especially by those who do not live here.
“In general when a currency loses value, people’s purchasing power declines as well because products— especially imported ones— cost more money. And when that causes a general rise in prices it’s called inflation.”[1]
This is our current predicament in a nutshell. It took me a while to understand the link between the devaluation and the current inflation. But it’s only gonna get worse from here.
“We’re gonna be around 25% annually soon. Which means even if you put your EGPs in CDs with 25% interest rate all that does is maintain the value of your money.”
I still vividly recall our “first” currency devaluation in 2016. I was working at RiseUp at the time—an entrepreneurship events company— and I remember one of our speakers remarking how shocked she was when she was exchanging money at the airport that the EGP was almost double the rate it had been last time she was in Cairo. She showed me the amount of money she had gotten for 100 dollars and remarked that it was like monopoly money almost. I would love to see her reaction now with the dollar almost at 30 EGP (and counting).
The real problem now, with the dollar and whatnot, at least in so far as I have come to understand, is that we—as a country— don’t manufacture anything. “Devaluing your currency is typically good if you have goods to export because then their price becomes competitive globally” but— apparently— our production doesn’t really exist, so we can’t reap that benefit of the devaluation.
The other day I was doing my usual grocery shopping on Goodsmart (get on it if you live in Cairo, it’s a game changer) and was stopped from buying 4 items of Greek yoghurt. This hadn’t been the case the last time I had been on it and so I was perplexed. Apparently, they had instituted a new limit for how much Greek yoghurt you could order— 3 pieces max. I wondered immediately if this had something to do with the dollar rise and the ensuing inflation. Were they not able to supply enough because the cost had gone up? Was it an internal problem or the start of the shortages we would come to see everywhere? I had noticed recently that rice— plain old Egyptian rice— seemed to be missing from most supermarkets. A staple in every Egyptian home could not be found no matter how hard we tried. When I inquired more about this, I was told it was because we are exporting it all.
Everyone I know is really worried about travel. With the new price of the dollar and a lack of dollars in the market, travel seems to be the thing that seems to be on everyone’s mind.
“I need to convert my Egyptian pounds to dollars if I will ever think of traveling and that’s almost impossible at the moment, because they’re not available. It’s hindering all travel plans.”
“Travel is gonna become a thing of the past. If you’re paying for it out of pocket, I can guarantee you it’s not going to happen. We’re f*cked.”
Add to that the new limits that have been put on credit cards and you’ve got yourself a real predicament. An acquaintance of mine was in Spain recently and couldn’t make the payment on the car he had rented because of the new credit card limit that has just been implemented. He was forced to borrow money from his wife—thankfully a local with a foreign account— to get out of this predicament and was stuck with next to 0 of his own money and what was still supposed to be a two-week trip. But it’s not just travel that’s been affected, it’s our lifestyle in general that has become more expensive. My friend was telling me the other day that she was getting coffee from her usual place and had noticed that the price of the coffee had gone up.
“All the outings are more expensive. I now can’t do what I used to do on weekends every weekend because it’s gonna be more costly.”
So what do we do?
We buckle down and save up. We reassess our spending habits and switch to local. We “go into beaver mode”, as a friend of mine put it, and make stashes seeing all the ways we can cut costs in our personal lives. We decrease our use of electricity. We stay put. We go camping. We do yoga at home. We carpool. We stop buying imported peanut butter. We get rid of the shower filter. We donate our unneeded meds. We convert whatever we can to dollars (if we actually manage to get our hands on some). We invest in us. In general, we learn to live a simpler life. And most importantly: we give back. We remember that there are those a lot less fortunate than us that are seriously getting screwed with this inflation, so we find our favourite charities and support in whatever way we can.
Or— if you wanna do it the other way— we get out. The amount of people I have talked to in the past week that have said they have seriously considered leaving the country is exponential. From companies that can’t make it in this climate, to individuals that can’t provide for their families, everyone I have spoken to has at least thought about relocating. Granted, we are the privileged few, relocating is an option for us, but it worries me to what extent people are scared by this crisis.
“On a more positive note, barring any major calamities— it means there’s hope that, at some point, there will be nowhere to go but up”.
I seriously hope so, Seif. I seriously do.
What are you most worried about in today’s climate?
How has the devaluation of the EGP affected your life?
Do you see our current predicament as an obstacle to be overcome or as a roadblock to the future?
Conservatively yours,
Girl With One Earring
[1] Santander.com
