ECESR Files a Lawsuit to Disclose the Terms of the 4.8 Billion USD IMF Loan to Egypt
Within the Egyptian Center’s framework and concern for the right to knowledge and free flow of information which will enable the people to practice their right to monitor the governments performance, Khalid Ali and lawyers from the ECESR filed lawsuit number 56810 for the 66th year against the president [of Egypt], the prime minister, the president of the Shura Council, and the finance minister to obligate them to bring forward the conditions, information, and documents requested by the International Monetary Fund in preparation for the USD 4.8 billion loan.
Recently official newspapers and presidency spokesman, Yasser Ali, and Prime Minister, Hesham Qandil, came out and said that the Egyptian government had requested a USD 4.8 billion loan from the IMF. The Egyptian government justified this request as being assistance from the IMF to begin the economic reform program in light of deteriorating economic conditions because of the increased deficit in the state budget which reached EGP 150 billion (USD 25 billion), as well as the decline in exports and increase in global commodity prices which increases decline in cash reserves, leading to further reduction in Egypt’s credit rating.
The Egyptian side did not provide any details on the loan, but the IMF’s objectives indicate that the agreement will focus on increasing revenues by decreasing fuel subsidies (gas, gasoline, diesel), and decreasing the sums allocated to hiring government employees, increase taxes, and raising the prices of government goods and commodities. One of the [IMF] loan conditions is that Egypt is also required to provide “funding” from financial institution as a guarantee to repay its loans.
The Fund explicitly says “The Fund provides its financial assistance to member countries allowing them the sufficient opportunity to correct the problems related to their balance of payments. In this context, national authorities cooperate closely with the IMF to develop a policies program, with financial support from the IMF, provided that the continuation of financial support is on condition of the effectiveness of the implementation of the program, and this clarifies three important points: First: The loan will be given in stages, in the case that Egypt does not implement the conditions, then subsequent payments will stop. Second: close cooperation will allow the IMF administration to monitor the Egyptian currency closely. Third: There is a particular program with specific features to cut spending and increase resources- spending cuts means that subsidies- especially fuel subsidies- will be reduced as well as sums allocated for employment into government. Increasing resources will be by increasing taxes and raising government commodity prices. – Which will be agreed upon, but the Egyptian government has decided not to disclose.
