Domestic Policy
The most famous example of a tough and unpopular decision
was President Sadat’s 1977 decree that the subsidies on bread
and other basic food items should be cut. Subsidies are the
monies the government pays to make items available to the
public at below-market cost. Such assistance has long been part
of the covenant between Egypt and its people. In 1977, the IMF
pressured the Egyptian government over its loan, which led
Sadat to cut the expensive subsidies. The prices of bread, rice,
cooking oil, and other staples shot up immediately by almost
40 percent. Egyptians immediately took to the streets in harsh
protest. They burned nightclubs, railway cars