Campaign slams IMF for ‘illegitimate’ negotiations with Egypt
The International Monetary Fund (IMF) came under fire this week for negotiating a $3.2 billion loan with Egypt’s army council and interim Cabinet, seen by some activists and youth movements as “unrepresentative” of the people.
The Popular Campaign to Drop Egypt’s Debt held a conference Saturday to demand that the government leave the decision to accept the loan up to the incoming parliament, set to convene for its first session on Jan. 23.
“The IMF was involved over the past two decades in drawing and implementing the economic and financial policies of Egypt, which led to low living standards, high poverty rates, and deterioration of public services and human resources and human development,” Amr Adly, a political economist and a founding member of the campaign, said in a statement.
Labeling the loan as “odious,” the group stressed that “the current government does not represent the Egyptian people … and the donors realize that the current government is not a legitimate one.”
The IMF announced last week that finalizing the loan would take around two or three months, just days after Egypt submitted a formal request for the support package it initially rejected in June 2011.
“It was claimed that the first loan was rejected because its conditions were unacceptable, however, such conditions were never revealed to the public,” said Adly.
The Muslim Brotherhood’s Freedom and Justice Party, which won a majority in parliament, said it is open to accepting the loan as long as it comes without conditions.
The campaign, which is pushing to drop all debt acquired under the rule of ousted president Hosni Mubarak, said that the current transitional government is borrowing four times as much as the Mubarak regime. Members are currently working with a group of researchers and civil society organizers to review the country’s debt in order to substantiate claims that the money was indeed misappropriated by Mubarak’s regime.
Salma Hussein, a founding member of the campaign, proposed alternatives to accepting the loan and also stressed that the decision to accept the package is being discussed without consulting the public.
“Nobody has given us alternatives and the government has not even asked the people or discussed with the public how or where the loan would be used,” she said.
“Each Cabinet had a different vision, previous finance minister Samir Radwan said he would accept the loan to invest in local businesses and create jobs, the minister who came after him stated that they will loosen the budget — there is no economic plan or transparency,” said Hussein.
Hussein pointed to implementing a progressive tax or a property tax for “distinct” properties, such as luxurious villas or large estates, is alternatives.
“Currently, we have 20 percent of those living in old Cairo and older properties paying taxes, while the current property tax law does not affect those living in distinct properties which includes many villas in Sixth of October City or New Cairo,” she said.
Egypt had introduced a property tax law but its implementation has been repeatedly postponed.
Hussein said these tax increases would only affect the 5 percent of Egyptians who can actually afford it.