IMF team leaves Egypt without broad backing from opposition for government’s economic plan
The IMF said in a statement that its delegation met with a range of political figures and Cabinet officials during the nearly two week-long visit that ended late Monday. In previous, shorter trips, the IMF has only focused on meeting with government officials.
The country’s political polarization has further delayed reaching agreement around the deal.
Finance Minister El-Morsi Hegazi, who will meet with officials in Washington D.C. this weekend for annual IMF and World Bank meetings, said the government’s meetings with the international lender were “fruitful.”
But opposition groups including liberals, socialists and ultraconservative Islamists said the government was not being transparent about economic measures that it said could hurt Egypt’s poor. They also accused the IMF of trying to curry support for President Mohammed Morsi’s reform program.
Egypt’s economy has been hard hit by the two years of turmoil that followed the ouster of longtime President Hosni Mubarak. The government is confident that the $4.8 billion IMF loan would not only cover part of its huge deficit, but also signal to investors that Egypt is again a safe bet after two years of turmoil that started with the 2011 uprising that unseated longtime President Hosni Mubarak.
Most in Egypt appear to agree that the country needs the IMF loan to unlock around $15 billion of aid and investment. It would help prop-up foreign reserves that were at $13.4 billion last month, down more than two-thirds of what they were prior to the uprising.
But in Egypt, where half of the country’s 85 million people live at or below the poverty line of $2 a day and rely on government subsidies of wheat and fuel for survival, many are balking at the measures that might be necessary to secure the loan.
The opposition as well as bankers say measures by Egypt’s central bank to regulate the devaluation of the local currency are linked to IMF conditions. The pound has lost 11 percent of its value against the U.S. dollar since early December, sparking concerns of wider inflation.
Opposition spokesmen from several groups said that they could not approve the plan because neither the government nor the IMF would fully disclose its details.
The Nour Party, an ultraconservative Islamist group that is the second-largest force in parliament behind Morsi’s Muslim Brotherhood, said that the government has not made clear how it plans to spend the money, and criticized the IMF for “interfering” in Egypt’s internal affairs.
“It is our right to know what the international requirements are that will be imposed on the country, which is requesting a loan, and if all countries requesting loans also face such meddling in so many details,” the party said in a statement after the meeting.