CAIRO, Jun 30, 2011 (IPS) - Egypt has cancelled plans to borrow 3 billion dollars from the International Monetary Fund because of conditions that violated the country’s national sovereignty and a public outcry that warned against terms that were blamed for impoverishing many Egyptians.
According to several Egyptian newspapers, General Sameh Sadeq, member of the country’s ruling military council, said the country turned down the loans, and those under discussion with the World Bank, because there were "five conditions that totally went against the principles of national sovereignty." Gen. Sadeq didn’t detail what these conditions were.
The IMF loan would have made Egypt the first recipient of funding in the Middle East since the so-called Arab Spring movement against Western-backed dictatorships began late last year.
At a Group of Eight summit last month in Deauville, France, the IMF announced that it could make available as much as 35 billion dollars in loans to the countries of the Middle East over the next few years.
World Bank Group President Robert B. Zoellick in May announced 6 billion dollars in funding over the next two years for Egypt and Tunisia, the two countries where the Arab uprisings started, to help the two post-revolutionary nations modernise their economies. Egypt’s share would have been 4.5 billion dollars.
General Sadeq’s statements on Tuesday contradict statements by the government of Prime Minister Essam Sharaf and his Finance Minister Samir Radwan, who both served under ousted president Hosni Mubarak, that the new loans came with no conditions. Both officials have advocated publicly for more loans to ward off the specter of a budget deficit, a staple argument in many countries for IMF and World Bank loans.MORE
At this point, NO COUNTRY SHOULD BE BORROWING FROM THE IMF. NONE.