Tag Archives: IMF

Experts: Poor to bear burden of Egypt’s IMF loan

July 01, 2013 12:57 AM
By Olivia Alabaster
The Daily Star
FILE - In this Thursday, June 27, 2013 file photo, Egyptians shop for food at a popular market in Cairo, Egypt.  (AP Photo/Hassan Ammar)
FILE – In this Thursday, June 27, 2013 file photo, Egyptians shop for food at a popular market in Cairo, Egypt. (AP Photo/Hassan Ammar)
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CAIRO: Experts warn any IMF loan package to Egypt will have dangerous long-term effects on the country’s most marginalized citizens, and that the secrecy surrounding the negotiations represents a threat to democracy. The government has been in talks with the International Monetary Fund for more than a year now over a $4.8 billion loan to help tackle the growing state budget deficit, which stood at $26.4 billion in May, according to the Finance Ministry.

The IMF is due to respond to the recently submitted reform program in the coming weeks, but details of the negotiations and conditions for the loan have not been made public.

At a regional conference in Cairo over the weekend, held by the New Woman Foundation in conjunction with Lebanon-based CRTD-A, a gender research NGO, delegates went into details of the 2013/2014 budget, recently passed by the Shura Council, many elements of which they said would be crippling to the poorest and most sidelined citizens, including women.

Head of the research institute at the Bank of Egypt, Salwa al-Antari documented how the economy had suffered since the January 2011 revolution that toppled Hosni Mubarak.

“After a revolution which asked for certain slogans, it has gotten worse,” she said, blaming the current situation on a failure of management and a lack of good governance.

She also blamed management of the economy under Mubarak, saying that “the majority of the population before the revolution never felt the fruits of growth rates.”

While it was natural, she said, that a period of instability and financial insecurity would follow any revolution – with $9 billion in foreign reserves leaving the country in the first six months postrevolution – people were initially optimistic that the country would soon get back on its feet.

“We had the necessary infrastructure and factories, so all they would need was good management, more efficient policies … people thought. But unfortunately what happened was the opposite.”

The growth rate before the revolution stood at 5.1 percent, but by the second half of 2012 it fell to 2.2 percent. The current Cabinet has set a target of 3.5 percent, but as Antari said, “There are no signs that the situation has improved. All indicators show that the situation is deteriorating and I believe that if we manage to maintain the 2.2 percent rate of last year that would be an achievement.”

On tourism, which has always been an important pillar of the economy, Antari said that she believed the current Muslim Brotherhood-led government was intentionally mismanaging the sector.

“Whenever there are efforts to revive tourism, we find there is something intentional to stop this,” she said, citing irresponsible statements that had been issued, including claims that “Pharaonic monuments are blasphemous, that tourists only wear bikinis and drink alcohol.”

“It became obvious that there are methodological efforts to prevent tourism,” she added, including the reduction of money allocated to boosting tourism in the latest state budget and the temporary appointment of a jihadist governor of Luxor, a crucial area for tourism.

Employment too has suffered, with unemployment increasing from 9 percent before the revolution to 13 percent today, and 27 percent for women.

Those living below the poverty line – which is defined as earning just $36 per month – account for 25 percent of the population.

Antari warned that the government of Mohammad Mursi saw borrowing as the only solution for this dire situation.

Egyptian business journalist Musbah Katub said that when Mursi assumed office exactly one year ago, foreign borrowing stood at $34 billion. In the last year alone this has increased by $11 billion.

He labeled the ongoing negotiations a “bad game being played between the IMF and Mursi’s government. …I believe the current system aims at making Egypt drown in more and more foreign indebtedness,” leaving it more susceptible to other country’s desires.

“It will be very easy after that to impose conditions on the country, and the first thing they will bargain with is the Suez Canal,” he added.

Decreasing the budget deficit through such austere measures, was not worth the costs to the people of Egypt, Katub said.

“This will have adverse effects on vulnerable groups, and women will pay high costs. The whole situation is really risky and dangerous,” he added.

The new state budget increases the sales tax on a number of goods, which speakers said would unfairly hit the poorest in society. Income tax of 10 percent will be imposed upon anyone earning $65 per month, and the maximum bracket, for those earning over $35,000 a year, is just 25 percent.

Mohammad Guad, another business journalist, slammed the sales tax as “a regressive tax with very violent social impact,” and one which would most affect women, as they generally are responsible for managing the household budget.

He also said the economic policies of the government “gave the impression that the Muslim Brotherhood are against social justice and democracy.”

“The short term impacts look easy and manageable, but it’s vital to look at the long-term impacts of the conditions for the loan,” Katub said.

Economist Ahmad al-Hajjar backed these comments, saying that the country was witnessing “the same policies as under Mubarak, but just with less efficiency.”

He also said it was shameful that while women used to account for 29 percent of the workforce, they had now fallen to 23 percent, while “in the rest of the Arab region the share of women in the workforce has gone up,” and called for recognition of women’s work within the home.

Delegates at the conference, which was funded by Oxfam NOVIB and held under the Women’s Learning Partnership international banner, came up with recommendations for fairer economic justice, including increased access to information for all citizens, in particular women, so that they were aware of their rights and responsibilities, in order to best achieve political and economic empowerment.

On the lack of transparency surrounding the negotiations, Lina Abou Habib, director of CRTD-A, also asked, “Can we talk about democracy when the fate of people’s lives is not being openly discussed?”

Read more: http://www.dailystar.com.lb/Business/Middle-East/2013/Jul-01/222081-experts-poor-to-bear-burden-of-egypts-imf-loan.ashx#ixzz2a37xvmzr
(The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)

As Instability Grows, IMF Loan Could Threaten Egypt’s Most Vulnerable

Posted on 29 June 2013 by

By Olivia Alabaster, on behalf of WLP Lebanon/CRTD.A

Saturday, June 29

CAIRO: The implications of an IMF loan package to Egypt were discussed in further detail on the second day of a regional conference on economic justice and women’s rights Saturday organised by CRTD.A/WLP-Lebanon.

Egyptian workers march to Shura Council on May Day 2013 (cc) Gigi Ibrahim

Egyptian workers march to Shura Council on May Day 2013 (cc) Gigi Ibrahim

In the first session Mohammed Guad, from Al-Shourouk newspaper, spoke of how the conditions which the IMF loan deal stipulates would most negatively affect the poor and marginalized sectors of society, including women.

He also described Egypt’s regional importance, stating that were the pound to collapse here, it would undoubtedly have knock-on effects across the Middle East, and suggested that faith in a country’s economy was closely linked to the political system.

“Trust in a country’s economy happens when democracy prevails,” he said.

Talking of the new state budget for Egypt, Guad slammed the sales tax as a “regressive tax with a very violent social impact.” He added that it would have bad consequences for women, who normally have to manage the household expenses and said in general the state budget gave the impression that the Muslim Brotherhood are “against social justice and democracy.”

He also stressed the need for civil society to increase efforts to speak out against the IMF loan and said that, “As seen by the previous parliament, members of parliament are not necessarily best representatives of the people, so civil society needs to step up. ”We should not remain subject to things imposed on us by others,” he added.

In groups, participants then discussed alternative approaches to achieving economic justice and equality for women.

Proposals focused on the need to expand access to information and knowledge for women across the board, and the need for political and economic empowerment to go hand in hand. It was also suggested that NGOs better network with each other, to share information and collaborate on advocacy efforts.

Another suggestion was better lobbying of politicians, as well as the need to submit regular reports to relevant actors in government.

A grassroots approach was stressed, including the need for education on women’s rights and duties, to better enable a politically aware society and an understanding of the long-term effects of an IMF loan, which in turn could help boost opposition to it.

In conclusion, Lina Abou-Habib, director of CRTD-A, said that while the conference had focused on Egypt, the lessons learned were relevant to countries across the region. Speakers had agreed, she said, on the dangers of the secrecy surrounding the ongoing negotiations. “Can we talk about democracy when the fate of people’s lives is not being openly discussed?” she asked. Abou-Habib also introduced the launch of the WLP global campaign entitled “Stand with Women Who Stand for Democracy” and the timeliness of the Campaign for both Egypt and other Arab countries in the throes of post revolts transformations. The New Women Foundation and the Equality without Reservation Coalition, both co-organisers of the events, will be launching the Campaign on their social media.

From : http://www.blog.learningpartnership.org/2013/06/egypt-imf/

Amidst New Waves of Protest, Activists Consider Economic Justice & Women’s Rights

Posted on 28 June 2013 by

By Olivia Alabaster, on behalf of WLP Lebanon/CRTD.A

CAIRO: On the opening day of WLP-Lebanon/CRTD.A’s regional conference on economic justice and women’s rights, delegates representing women’s organisations from Lebanon, Egypt, Palestine, Jordan, Bahrain and Morocco met in Cairo to discuss the implications of Egypt’s current IMF (International Monetary Fund) negotiations for women.

An Egyptian woman worker stacks bricks at a brickyard kiln factory near the town of Mansoura city, 210 km north of Cairo in March 30, 2008 (cc) Nasser Nouri

An Egyptian woman worker stacks bricks at a brickyard kiln factory near the town of Mansoura city, 210 km north of Cairo in March 30, 2008 (cc) Nasser Nouri

In the opening plenary, Lina Abou-Habib, director of the Lebanese NGO CRTD-A (WLP’s partner in Lebanon), said that the theme was chosen as the IMF negotiations are an urgent matter, but due to the lack of transparency surrounding the talks, “very few of us are aware of the negotiations.”

“Attention and involvement in the issue is crucial,” she added, as “it does affect all of us.”

The first speaker, Dr. Salwa al-Antari, former head of the research institute at the Bank of Egypt, laid out the economic state of the country, and detailed how the situation has deteriorated since the revolution in 2011.

“After a revolution which asked for certain slogans, it has gotten worse. Why is this?” she asked, putting the blame on a failure of management and a lack of good governance.

However she also blamed the Mubarak government for the situation today.

“The revolution was the best proof that all the policies adopted before were complete failures,” she said “the majority of population before the revolution never felt the fruits of growth rates.”

She painted a stark portrait — a country experiencing high unemployment, ever slowing growth and high poverty.

After the revolution, foreign investment left the country – some $9 billion in the first six months alone.

The tourism sector – one vital to the country – has also suffered greatly, she said, thanks to the instability and also to deliberate neglect of the sector by government officials.

“It became obvious that there are methodological efforts to prevent tourism,” she said, citing comments from politicians and the recent appointment of an Islamist governor of the Luxor region.

She criticized the current Mursi government for looking to borrowing as the only solution for a growing budget deficit, and its 2013-2014 state budget plans, which was recently passed by the Shura Council.

Sales tax increases will most seriously affect those already struggling, and income tax rules – with 25% for the highest bracket – do not go far enough, and exempt only those who earn less than 456 Egyptian pounds a month, ($65).

To summarise, she said that any “IMF loan will impact upon poor people and women will be the worst affected.”

Business journalist Musbah Katub spoke next, and was skeptical over the worth of any IMF loan.

He described the ongoing negotiations between Mursi’s government and the IMF as a “bad game,” with the latter trying to “trap countries into indebtment… when they are unable to pay it back.”

“I believe the current proposal aims at making Egypt drown in more and more foreign indebtness,” he said, adding that when Mursi assumed office there was $34 billion of debt, a figure which has increased by $11 billion in his first year of office.

He also said that the only reason Egypt has been able to ride out these economic dark days thus far is all the unpaid work that women do.

Any IMF loan, he said, would see “women paying off high costs.”

Lastly, economist Dr. Ahmad al-Hajjar slammed the current government’s policies: “we are seeing the same policies as under Mubarak, but with less efficiency.”

The government, he said, was taking out this IMF loan to manage the state budget deficit, but it is holding the next generations responsible for paying it off.

That women’s involvement in the workforce has dropped from 29% to 23%, he said, was shameful, and were this to increase it would “help the entire country have a good productive system,” rather than merely relying on foreign loans which leave the country more susceptible to external meddling.

This Conference was organised as part of a regional programme on gender equality and economic justice including Lebanon, Jordan, Morocco and Egypt and funded by Oxfam-Novib. The outcomes of this event is expected to feed into a regional policy dialogue process aiming identifying strategies to support women’s involved in economic policy formulation.

From: http://www.blog.learningpartnership.org/2013/06/egypt-imf-women-economic-justice/