Egypt eyes public sector pay rise

There have been clashes at bakeries in poorer neighbourhoods

Egypt's president has proposed a pay rise of close to one-third for public sector employees - to compensate them for recent food price increases.

"It will be about 30%," Hosni Mubarak said in a May Day address.

The pay rise could defuse growing unrest, with a widespread strike threatened for next week.

Wheat prices have more than tripled on international markets since last summer, hitting poor Egyptians - many who live on subsidised bread - hard.

The government had already promised to raise salaries, though the 30% mentioned by Mr Mubarak is double the 15% allowed for in the 2008/09 budget.

Rising prices and alleged corruption have sparked clashes at bakeries in poorer neighbourhoods, leading to several deaths.

Last month Mr Mubarak ordered the army to increase the production and distribution of bread, in an attempt to cope with serious shortages.

He also told the government to use some foreign reserves to buy additional wheat from the international market.

About half of Egypt's 70m population live below the poverty line and survive on cheap bread.

Unsubsidised bread is 10-to 12 times more expensive than the subsidised five-piaster loafs (less that $0.01).