UPDATE Egypt & the IWF

- One packet of cigarettes, Dunnhill, the red ones.
- 12 Pounds.
- What? Last week they were ten.
- I‘m not joking! Just read the newspapers!…

No money from the IMF: On Saturday, Finance-minister Samir Radwan announced that Egypt would NOT take a loan from the International Monetary Found (IMF). This was quite a surprise: the government was in negotiations with the IMF and the deal over a 4,5-billion-Dollar loan was almost perfect. The IMF offered it to Egypt in accordance with some decisions taken by european and north-american governments and international organizations like the G8 to ‚better conditions‘ than usual to support the country after the revolution.

However, wide parts of the Egyptian society were highly concerned about taking the loan: Many activists are critical against the IMF and its history of influencing the politics of southern countries according to neoliberal ideology and the interests of transnational companies. Mubarak’s regime used to work close with the IMF, transforming the national economy according to neoliberal rules: he privatised wide parts of the education and the health sectors, cut the wages, the gap between rich and poor increased. The IMF in Egypt is not only seen as an imperialist instrument but also strongly connected to the regime protesters removed with the revolution. Additionally, the last weeks, many liberal politicians and lawyers raised concerns about such a deal that would affect the country for decades could be taken by a not-elected, transitional governent.

The decision to refuse the IMF-loan was according to AFP partly a response to the „pressure of public opinion“. The government revised the budget plans, the deficit for 2011/12 in the first forecast was at 11 percent of gross domestic product, now it was revised to 8.6 percent due to some changes in plans on spending. „So we don‘t need to go to this bank now“, said Radwan.

Instead, Egypt got money from some other Arabian countries: Quatar and Saudi-Arabia offered Egypt each 500 Million US-Dollar. Some of the changes in the budget plan already affect the daily life in Egypt: This week the tax on cigarettes was raised from 40 to 50 Percent, the prices of the packet increased in 10 Percent…

Update (July 7th): The IWF is still ready to „help“ Egypt, Ratna Sahay, the Fund’s deputy Middle East director, said on Friday. And she rejected accusations, that the plan the IWF had offered to Egypt contained secret conditions to force to privatizations and to end subsidies. Who‘d have expected something like this!…

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