Egypt has requested officially today a $4.8 billion loan from the IMF during the visit of Mrs. Christine Lagarde to Cairo today and her meeting with President Morsi and Prime minister Hisham Kandeel.
Ironically the Muslim brotherhood and its Freedom and Justice Party under the leadership of Morsi rejected the loan from the IMF from several months ago when former PM Ganzoury “Current President’s adviser” announced that his government will seek a $3.2 billion loan from the IMF. We all remember how the MB in the parliament stood against the matter just like the rest of the revolutionary forces that refused to increase the burden of the country another loan with conditions that will harm the poor in the future.
The Freedom and Justice Party “led by our current president Morsi” issued a strong short statement refusing the loan and wondering why we have to get a loan from the IMF when we have a lot of sources last February. Former FJP leader and current elected president of Egypt Mohamed Morsi told the IMF officials back that we did not need economic burdens !!
It is worth to say that in 2011 SCAF refused that loan then in early 2012 it backed Ganzoury’s government in its quest but MB refused then when MB is in charge of the country it accept it !!
It seems to me that the Muslim brotherhood and their presidential candidate did not know the trouble Egypt is suffering from when they made up their great renaissance program that their experts spent over 20 days working on it !!!!
There is no doubt that Egypt hit rock bottom thanks to the corruption and poverty spread in time of Mubarak and his economic policies , some of which were determined by IMB and International Bank. These economic policies that increased the gap between the poor and the rich in Egypt were from the main reasons of the #Jan25 revolution. We had enough from bad economic policies , from foreign economic intervention. We will not fool ourselves , the IMF and the IB are not charities.
Former presidential candidate Abdel Moneim Abu El Fotouh was the first to declare his refusal to the loan. The social democrat Islamist’s new party was also the first to issue a statement refusing the loan in a strong language demanding Morsi to hold talks with national powers in order to reach for alternatives.
Moderate Islamist Al Wasat Party also issued a statement about the loan and despite it is critical than Abu El Fotouh and his new party , it demands the President and the government to declare the conditions of such IMF.
The Salafists which are the right wing of the Islamists are also angry from the IMF loan for one reason , one religious reason : It is riba
Now to what I think.
I will quote the FJP’s words from its statement published in February 2012 and say that we got enough sources that can spare us from borrowing and aids if there is true proper use of these sources. We have to think outside the box for God sake , we have to think about the 40% of the public under the international poverty line.
Already there are certain questions in my mind :
There are other alternatives then taking a big loan from the IMF and missing around with subsidiaries that people have spoken since February 2012 . For instance The Popular campaign to drop the Egypt’s debts issued that report to the parliament in early 2012 showing the alternatives. This campaign includes economic experts not football experts for God sake.
Away from economics , as long as Egypt is still suffering economically from the burden of debts , forget any attempt to amend the Camp David treaty for real. I can not expect any political or social stability if the government starts missing with subsidiaries in this stage where people no longer fear to protest and guns are everywhere.
Ironically the Muslim brotherhood and its Freedom and Justice Party under the leadership of Morsi rejected the loan from the IMF from several months ago when former PM Ganzoury “Current President’s adviser” announced that his government will seek a $3.2 billion loan from the IMF. We all remember how the MB in the parliament stood against the matter just like the rest of the revolutionary forces that refused to increase the burden of the country another loan with conditions that will harm the poor in the future.
The Freedom and Justice Party “led by our current president Morsi” issued a strong short statement refusing the loan and wondering why we have to get a loan from the IMF when we have a lot of sources last February. Former FJP leader and current elected president of Egypt Mohamed Morsi told the IMF officials back that we did not need economic burdens !!
It is worth to say that in 2011 SCAF refused that loan then in early 2012 it backed Ganzoury’s government in its quest but MB refused then when MB is in charge of the country it accept it !!
It seems to me that the Muslim brotherhood and their presidential candidate did not know the trouble Egypt is suffering from when they made up their great renaissance program that their experts spent over 20 days working on it !!!!
There is no doubt that Egypt hit rock bottom thanks to the corruption and poverty spread in time of Mubarak and his economic policies , some of which were determined by IMB and International Bank. These economic policies that increased the gap between the poor and the rich in Egypt were from the main reasons of the #Jan25 revolution. We had enough from bad economic policies , from foreign economic intervention. We will not fool ourselves , the IMF and the IB are not charities.
Former presidential candidate Abdel Moneim Abu El Fotouh was the first to declare his refusal to the loan. The social democrat Islamist’s new party was also the first to issue a statement refusing the loan in a strong language demanding Morsi to hold talks with national powers in order to reach for alternatives.
Moderate Islamist Al Wasat Party also issued a statement about the loan and despite it is critical than Abu El Fotouh and his new party , it demands the President and the government to declare the conditions of such IMF.
The Salafists which are the right wing of the Islamists are also angry from the IMF loan for one reason , one religious reason : It is riba
Now to what I think.
I will quote the FJP’s words from its statement published in February 2012 and say that we got enough sources that can spare us from borrowing and aids if there is true proper use of these sources. We have to think outside the box for God sake , we have to think about the 40% of the public under the international poverty line.
Already there are certain questions in my mind :
- What are the conditions of the IMF ??
- Where is that plan of Morsi which he promised to adopt economically that would bring to Egypt $900 billions in 4 years ??
- What about raising the fees of Suez canal and forcing ships to pay with the Euro instead of the dollar or even the Egyptian pound ??
- What about progressive taxation ?? I think in a country like Egypt this is good and do not preach about investments to the end of that crap as people have sold their organs and babies in the last 20 years because the bloody economic plans to attract foreign investments !!!
- What about the government expenditure ?? The government’s advisors’ salaries that reach to millions per year ?? Already how much are the salaries of the president’s advisers and teams ??
- Where is our money abroad that MB promised to get ??
- What about the Gulf aids from Saudi Arabia and Qatar ??
- Why can not we stop importing useless luxurious stuff like imported ice cream , juices .. extra ??
- Why can not we have a proper real estate tax ? a real one.
- Why can not we start to reach for cheap energy renewable sources in order to save money like Solar energy and wind energy !?
- Where is the money Sheikh Hassan collected during the NGOs crisis ??
- What is the fate of Al Sokary Gold mine ??
There are other alternatives then taking a big loan from the IMF and missing around with subsidiaries that people have spoken since February 2012 . For instance The Popular campaign to drop the Egypt’s debts issued that report to the parliament in early 2012 showing the alternatives. This campaign includes economic experts not football experts for God sake.
Away from economics , as long as Egypt is still suffering economically from the burden of debts , forget any attempt to amend the Camp David treaty for real. I can not expect any political or social stability if the government starts missing with subsidiaries in this stage where people no longer fear to protest and guns are everywhere.
Why do you want to "amend the Camp David treaty for real"? The only limit on Egypt in the Camp David accords is on putting fighter planes and tanks in Sinai, to reduce the probability of future wars. How will putting fighter planes in tanks in Sinai solve your economic problems? It will actually increase the economic problems, significantly.
ReplyDeleteA loan from foreign sources is essential because:
ReplyDelete1. Egypt's reserves are going down at an alarming rate. The reserves are being used up by government spending and the Central Bank of Egypt defending the Egyptian pound.
2. The recession in Europe has caused Europeans to have less money to import or spend their holidays in Egypt.
3. Egypt has spent the last months after it turned down an IMF/WB package with interest rates of around 3.5% and borrowed from the domestic banking market at rates of up to 15%!!!!
4. A year after the uprising the government is in emergency mode, increasing spending on useless budget items such as civil service salaries but not yet thinking long-term like job creation programs.
5. Inflation is up because of hoarding behavior, supply shortages in some commodities (notably the extremely socially sensitive butane canisters), and political unrest.
Egyptians will benefit from this loan if the money is put to good use and protected from corrupt hands.
Thanks for taking the time to discuss this. I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful for me. Thanks!
ReplyDeleteLet me answer some of your questions:
ReplyDelete1. Conditions on IMF: check Greece - Austerity measures that mid and low class pay for it, Sell public treasures for nothing to foreign powers and total, official now, control of Egypt.
2. Morsi's plan: pre-election fiction to show that they know what they are doing. Everybody does that.
3. Suez canal: Do you really think you are really in control of Suez?
4. Money Abroad: pre-election promises. Nothing else.
5. Gulf Aids: Nobody will ever know since there is no transparency.
6. Stop importing: This will harm more the economy. Educate people and brand local products better.
7. Taxation: cannot implement just one policy. You need to reform the whole structure of the gov and in order to effectively tax. If you just put taxes, no one will pay and there is no way for the gov to control/check that.
8. Gov Expenditure: To be honest, they need that since they do not know, and actually no one knows beside Mubarak's Gov.
8. Real Estate Tax: Look at 7 plus most of Mid/High class will revolt since they own at least 2 houses each one (that I assume that includes lots of MBs too).
10. Renewable energy: Needs proper regulation and vision that I have not seen anywhere here.
The last two points I have no idea :)
It's always the same, whether in Egypt or the U.S.A., the Rich prosper and the poor barely get by. It's the same old story all the time. :(
ReplyDeleteBy the way, whatever happened to the Billions upon Billions the Mubareks stashed away? How about their kids? Where is all that loot?
ReplyDeleteGetting tourism back normal would certainly help the economy. Perhaps Egypt could offer some sort of incentives to the larger tour companies that have stopped offering Egypt tours.
ReplyDeleteSecurity is number 1 priority.
ReplyDeleteGod knows how we fix the police. To be honest I think the only way is to have them all re apply for their jobs and have some European police chiefs do the interviews. That way you get rid of 80-90% of them. In the meantime the universities need to be teaching International standards of law not the crap degrees that mean nothing outside of Egypt. Train proper lawyers and a lot less of them. The police academy needs to be run by European police for about 10 years to get it up to standard then hand it back to Egyptians. Form a real police force instead of the Keystone Cops Laurel and Hardy type idiots we have now.
Once you have security, and the retarded Salafists shipped to Riyadh then the tourists will come back.
Additional reason for IMF loan or any loan, read on....
ReplyDeletehttp://www.egyptindependent.com/news/egypt-struggles-buy-fuel-credit-dries
A loan by any name makes the borrower a servant of the lender. Usurers (both individuals and institutions) have worked this way since the beginning of time.
ReplyDeleteI have some interesting concerns about this invitation by the IMF of lending funds to Egypt. A representative of the IMF was interviewed on Aljazeera the other day and some very startling things were discussed. Most notable the fact that millions of Egyptians do not in any way trust or deal with established banks. Apparently only 10@ of Egyptians even have bank accounts. The rest of their citizens deal only in cash transactions, period. Now doesn't the idea of negotiating this as a condition of an IMF loan that Egyptians be first encourage to open accounts and start using banks for all their dealings and if they can't be induced then possibly stronger pressures be applied?? I am only going on the past historical practices of the IMF with other countries with financial needs.
ReplyDeletePeople in other countries are afraid of these undemocratic and corporate bilateral trade deals proliferating globally. Their main concern is that having all their money transactions through banks may make it impossible to ensure the growth of local business outside the conditions of these trade deals.
ReplyDeleteIt is worth to say that in 2011 SCAF refused that loan then in early 2012 it backed Ganzoury’s government in its quest but MB refused then when MB is in charge of the country it accept it !!loan
ReplyDelete