Impact of Spread of Diseases and Epidemics on Egyptian Economy Using Multiplier Model Case Study: COVID-19 Crisis and Its Impact on Agricultural Sector

With the spread of the COVID-19 pandemic, a trade-off has emerged between the need to contain the virus and avoid economic and food security crises that further affect the poor. Therefore, the main purpose of this study is to describe the direct effects of the COVID-19 pandemic on the situation of households in Egypt. The study also analyses the current policy measures taken by the Egyptian government by evaluating programs to support the poor and their impact on food security in Egypt. Using a SAM multiplayer model, Social Accounting Matrix (2014/15 base year), the study adopts three scenarios. The first simulates the impact of the increase in the value of vegetable and fruit exports as a result of the increase in global demand motives; the second analyses the effects of the increase in the prices of local wheat as a result of the rise in global wheat prices, while the third deals with the evaluation of the Egyptian government’s strategy to confront the COVID-19 crisis through social protection programs "Takaful & Karama". The three scenarios were formulated for the purpose of evaluating the Egyptian government’s policies in confronting the COVID-19 pandemic in anticipation of occurrence of similar diseases or epidemics in the future. The most important results of the study came to clarify the following: The first scenario, increasing the value of exports, led to an increase in total production by 2.26%, and an increase in agricultural production by 1.54%. Raising the price of local wheat increased the income of rural household. In addition, the incomes of all rural households engaged in agriculture increased at rates ranging from 182% to 226% among the highest and lowest income rural households, respectively, indicating the success of this policy in generating additional income for households. Finally, the third scenario deals with the state’s policy regarding Takaful & Karama Program, on which the state spent EGP 100 billion to improve the living conditions of the poor, as the income of all household groups increased by rates ranging from 110–230%. This is because the poor received direct support from the government, while other groups of the population had other productive activities which increased their incomes. The study recommends more support policies, social protection programs and measures commensurate with the economic situation, and avoiding lockdown policies in such critical matters.