Watani responds to the economic crunch

11-12-2016 09:09 AM

Youssef Sidhom


Youssef Sidhom

 

  

 

 

Problems on hold

 

 

 

 

 

Ever since Antoun Sidhom founded Watani in December 1958, and throughout the past 58 years, the paper has acted as a platform of enlightenment for Egyptians and Copts. Watani never was a commercial business that worked according to profit and loss considerations. Rather, it strived throughout six decades to service its mission of credible, objective journalism that aimed to honour the truth and remove itself from falsities or sensationalism. Towards that end, the paper overcame many challenges through the faithfulness, confidence and support of its readers. Yet Watani always managed to follow a policy that yielded balanced revenues and expenses, and has remained solvent thus ensuring the perpetuity of its mission.

As in the case of other papers, Watani suffered owing to the economic downturns that hit the markets. The last few years especially witnessed shattering market upheavals in Egypt and led to shrinkage in the production and business sectors. It was natural that this would negatively impact Watani; it led to a decline in circulation figures, as well as in advertisements which constitute the main source of income for any paper.

Since Watani mission goes far beyond gain and loss, the corporation did not resort to layoffs in order to reduce its expenditure. Rather, Watani worked hard over the past five years to absorb deficit after deficit in its budget. Salaries and printing costs of the paper have been the two largest outlays on the successive balance sheets. 

Ever since Watani‘s inception in 1958, Al-Ahram—Egypt’s largest publishing house which also publishes the State-owned daily Al-Ahram—has been printing our weekly issues. Throughout the years, Watani has maintained strong ties with Al-Ahram. Market considerations and periodical hikes in prices of paper and printing requirements led Al-Ahram to impose a 10 to 15 per cent semi-annual increase on printing fees. Watani was able to contain these successive increases through broadening its advertiser base and raising the paper’s selling price every now and then. But the economic decline that followed the 2011 Arab Spring and that augmented over the past two years led to a gap in the Egyptian pound / US dollar exchange rate which continued to widen and impact all aspects of life in Egypt, including production, industry and services. Last November the Central Bank decided to float the Egyptian pound, which led to an unprecedented rise in the price of the dollar. At Watani, we anticipated a consequent rise in the printing cost which mainly depends on imported raw materials, machinery and systems. As I already mentioned, Al-Ahram used to impose semi annual increases of no more than 15 per cent in printing costs. But we were in for a shock.

On 24 November, we received from Al-Ahram publishing house a letter that began with a reminder of the time-honoured link between Watani and Al-Ahram which expressed pride in printing our “venerable paper” throughout 58 years. The letter went on to explain that the exchange rate of the EGP versus the USD rose from EGP7.18 per USD on 1 December 2014 to EGP17.5 per USD today, a 140 per cent increase. This constituted a huge rise in the cost of printing, the letter declared, represented in the price of imported raw materials and spare parts, in addition to yearly increases in the cost of electricity and salaries paid by Al-Ahram. The latest increase in publishing fees had taken effect on 1 April 2016 and amounted to 12 per cent, the letter pointed out. “Because all these increases represent a force majeure, we ask you to shoulder part of these additional costs, through raising the value of your contract by 80 per cent, in order to be able to honour our printing commitment with you,” the letter read. “The new prices take effect as of the issue of 18 December 2016. Kindly send us your approval before this date.”

Even though we anticipated this move and comprehended the content of Al-Ahram’s letter, we must reconsider the burden it entails, let alone the burdens Watani is already shouldering without resorting to raising the price of the paper so as not to overburden the reader. Accordingly, and in order to adapt to the new printing costs, I ask my readers’ permission to cut down the number of pages in Watani which now comes out in 16 pages. This will neither affect Watani‘s journalistic or service sections nor its international supplement, all of which serve Watani’s mission and define its special character. We aspire to go back to our original number of pages as soon as matters settle down on the economic level, which the experts expect in a few months time.

 

Watani International

11 December 2016

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