Egypt to agree IMF loan despite opposition

5 April 2012

Egypt’s interim military government announced in February that they expect to sign a $3.2 billion loan deal with the IMF and state-media reported that negotiations are underway for a $1 billion loan from the World Bank. IMF involvement is understood to be a precondition for European and Arab aid, according to the UK newspaper Financial Times, but comes despite continued opposition from Egypt’s largest parliamentary party and local civil society (see Update 79, 77). In a December report the Arab NGO Network for Development argued that the “continuous pursuit of completely inadequate policies over the years and the disregard of the pressing priorities facing the peoples of these countries raise fundamental questions over the role of the IMF”, while the imposition of the Bank’s priorities would “burden the political processes in Egypt and Tunisia and could close spaces for representative and democratic rethinking of economic and social policies and development visions at the national level.” It brands the IFIs’ involvement as “a clear attempt to establish new mechanisms for re-enforcing the oppression of people’s economic and social rights and demands”. In late March the IMF stated the intention of its recent mission was not to negotiate a loan, but “to consult broadly with stakeholders in Egypt”.