By Ola Galal and Vivian Salama
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Feb. 1 (Bloomberg) — Shattered glass fills the streets of Cairo as pedestrians are forced to avoid army tanks that guard banks and government buildings vulnerable to looters.
Banks are closed, making it difficult for Cairenes to get cash to buy staples. For those that have money, food prices are skyrocketing as consumers flood the few open stores.
Street demonstrations and night-time riots have left the Arab world’s biggest city largely paralyzed, as protester fill the city’s main square and looters and neighborhood groups armed with clubs take over at night.
“We have to protect our homes and children at night from the looters and in the morning we have to go to work,” said Saed Ragab, a café owner from Cairo’s Bab El Louq area. “The shops are at a standstill. It’s very difficult.”
Protesters are gathering in the city for an eighth day. Today’s march is aimed at drawing a million people onto the streets and forcing President Hosni Mubarak from power after 30 years. The military promised not to fire on marchers and said it recognized “the legitimacy of the people’s demands.”
At the same time, citizens are trying to continue their lives as best they can, faced with inflated prices since the protests started escalating on Jan. 28.
“Since Friday everything started to be expensive,” said Om Massad, a door lady handling deliveries in Bab el Louq, who said 5 piester bread is not available anymore and 50 piester bread has jumped in price to 60 piesters. One Egyptian pound is made up of 100 piesters, or about 17 U.S. cents. “Shops are taking advantage of these conditions,” she said.
Shelves at many of Cairo’s supermarkets are emptying quickly with businesses failing to keep up with demand as panicked shoppers seek to stockpile in the event of further unrest. Carrefour SA has closed all seven of its Egyptian stores after looting at an outlet in a Cairo suburb, a spokesman for the company said today.
Tourists are abandoning the country. TUI Travel Plc, Europe’s largest tour operator, said about 40 percent of planned departures from Germany to Egypt were changed or annulled yesterday after it let vacationers cancel their bookings or change destinations without paying a penalty.
“We are seeing a negative economic impact in the short term,” said Ahmed Galal, executive director of the Egyptian Center for Economic Studies in Cairo. “If the new government goes for the popular package — raising wages, increasing subsidies — it might actually appear as responding to the crowd but it will likely raise inflation and economic instability.”
Low wages and rising prices have sparked protests in Egypt since 2004. The economy in the country of 80 million people, the most populous in the Arab region, probably grew 6.2 percent in the last quarter of 2010, compared with 5.5 percent in the previous three months. The government says it needs growth of at least 7 percent to create enough jobs every year.
Economic growth was expected to accelerate to that level next year, the country’s former Finance Minister, Youssef Boutros Ghali, said on Dec. 13.
Headline inflation in urban areas, the rate that the central bank monitors, picked up to 10.3 percent in December from 10.2 percent the previous month. Core inflation, which excludes the prices of fruit and vegetables as well as regulated prices, accelerated to 9.65 percent as the costs of items such as rice, sugar and poultry increased.
Many Egyptians are fearful that food and gas shortages could lead the country into a deeper crisis.
Security continues to be a concern with young men forming groups to protect their homes and families from the widespread looting. Packs of men patrol at night, roaming the streets with weapons ranging from meat cleavers to metal pipes.
“They stopped grocery delivery services and there are long lines,” said Eman Shafik, an IT manager from Cairo, who added that she hasn’t been able to find a working ATM machine to access her latest paycheck. “There is a shortage in cigarettes, juice, mint. Every day the prices increase more and more and people have no cash to buy the things they need.”