CAIRO: With no plans to accept any further loans from the International Monetary Fund or the World Bank, Egypt is reaching out to international investors and partnerships in order to bring its economy back on its feet.
“Till now, Egypt has no intention to revisit the idea of accepting loans from the IMF or World Bank,” an official from the finance minister’s office told Daily News Egypt.
“We do not need these kinds of loans at the time, especially since the ministry is trying to spend as less as possible, tighten the budget, and alleviate the debt for future generations.
“We do not ask for aid right now … we ask for increasing ventures, we are inviting new investments as well as asking current investors to mull doubling their business because Egypt still has a lot to offer,” he added.
The Minister of International Cooperation and Planning had previously said that Egypt now is “looking for partnerships, not aid.” But, despite the fact that the country previously turned down a $4.5 billion loan to assist with “development policy and governance reforms as well as employment generation,” the fund continues to offer external financing if needed.
“If there is a need for short-term financing, the IMF is there to provide,” Masood Ahmed, director of the fund’s Middle East and Central Asia department, told Reuters on Monday.
At the end of the Marseille summit, the Group of 8 (G8) ministers who met to discuss the economic future of the region, increased their aid to Egypt, Tunisia, Jordan, and Morocco to $38 billion, according to Reuters.
The representatives included Egypt’s finance minister, Hazem El-Beblawi. Calling it the “Deavuille Partnership,” the G8 announced the main goal was to assist the economic stability and political prosperity of the region at a time of an Arab uprising.
The IMF also promised another $35 billion to help fund the region’s countries affected by political upheaval and mass protests. With Egypt’s unemployment reaching 11.8 percent in the second quarter of 2011, growing 2.84 points higher than last year, tourism still highly affected and FDI not where it used to be, some experts argued that it could do Egypt well to revisit the idea of accepting such loans.
According to Magda Kandil, executive director of the Egyptian Center for Economic Studies, said if Egypt had accepted the loan that the IMF previously put on the table, the country would not have had to fear “interference” with its policy management.
“This is a small loan that suggests there was a compromise and reason not to load the loan with a lot of conditionality,” she pointed out. “I would be surprised at this point when Egypt is in dire demand of money that we would turn our back to it.”
Despite this advice, several activists across Egypt welcomed the idea of not “needing” such loans because of the fact that they tend to carry “obligations” for the country.
“We really have a kind of distrust with the IMF and World Bank and their dealings and their praise of the previous regime during Mubarak’s era,” activist and blogger Wael Khalil previously told DNE.
“Not only are their problems with the conditions that come with these packages, but we shouldn’t be taking loans that aren’t needed and would go to subsidies of larger business, rather than development or to individuals in need,” he said.
At the summit, El-Beblawi stressed the importance of reviving Egyptian-British business opportunities. El-Beblawi, along with his British counterpart consulted on increasing bilateral cooperation between the two countries, addressing the urgent needs of Egypt’s economy.
He added that their main goal now is not only to achieve higher growth rates for the economy and attract more investments, but to also provide ideas as to how wealth would be distributed in order to reach the majority of the Egyptian people.
The G8 meeting, which has been summoned in light of unprecedented mass protests demanding democracy, better living conditions, and job opportunities across the region, included representatives from Libya, Morocco, Jordan, Turkey, Britain, as well as heads of regional development banks and international financial institutions including the IMF.
Officials from the World Bank and the Arab Monetary Fund were also present.
El-Beblawi underlined that Egypt is facing a dual challenge due to the local economic slowdown that has imposed a temporary shortage of liquidity and curbed investments as well as the global economic slowdown, which is also affecting the flow of investments and capital.
