Daily News Egypt

Sabbahi opposes IMF loan - Daily News Egypt

Advertising Area

Advertising Area

Sabbahi opposes IMF loan

Opposition figures like Amr Hamzawy voice concerns about the loan

Hamdeen Sabahy meets with members of the visiting IMF team on 13 April. In a statement Sabahy rejected the loan deal saying the attached conditions would harm the poor (Photo courtesy of Al-Tayar Al-Sha’aby)
Hamdeen Sabahy meets with members of the visiting IMF team on 13 April. In a statement Sabahy rejected the loan deal saying the attached conditions would harm the poor
(Photo courtesy of Al-Tayar Al-Sha’aby)

By Nada Badawi

Opposition figure and founder of the Al-Tayar Al-Sha’aby Party Hamdeen Sabbahi has voiced his rejection of the proposed $4.8bn International Monetary Fund (IMF) loan to Egypt, after the IMF delegation met with him on Saturday.

Sabbahi said in a press release issued by his party that he “refuses the loan if eliminating subsidies and raising prices would take place, hurting the poor”.

An IMF delegation has scheduled meetings with a number of opposition figures since last week to learn more about their stance on the loan package.

The IMF has been holding talks in Cairo with the Egyptian Cabinet since 4 April concerning a revised economic programme that includes a gradual reform of costly fuel subsidies, and an extension of sales tax to fewer items than previously planned.

Heba Yassin, media spokesperson of Al-Tayar Al-Sha’aby, said that the party cannot approve the loan “due to the preconditions that the IMF set”, specifically the austerity decisions.

Sabbahi said that he would be supportive of any “unconditional support for the Egyptian economy which encourages investment and development”.

“Approving the loan could push the Egyptian economy into a series of debts that it cannot afford at this moment,” Yassin added.

Amr Hamzawy, leader of the Freedom Egypt Party, said on his Twitter account that he had discussed his concerns with the delegation on Saturday, such as the economic and financial crisis in Egypt.

Hamzawy demanded the Egyptian government “address the crisis effectively and manage its talks with the IMF transparently”.

“The fact [is] that the current political environment, in which national consensus is absent, adds to the explosive nature of the crisis,” he said via his Twitter account.

Media reports have recently published news of Egypt likely requesting an increase on the planned $4.8bn loan.

Yassin however stated that such news had not been received by the party or its members, saying: “We have no knowledge of such news, which is a clear indication of the government’s lack of transparency about the loan.”

“Our public opinion does not have real information about the talks nor the loan, therefore populism and generalisations loom large,” Hamzawy said on Twitter.

Sabbahi warned of the economic repercussions that could result from approving the loan, saying that it could lead to further harm for the economy.

“The IMF’s conditions for the loan have already started to be implemented, including price hikes and removals of subsidies,” he said.

Last month, the Egyptian government presented an economic programme to the IMF which involved measures to cut the budget deficit, including slashing subsidies and raising taxes.

Observers believe the IMF wants Egyptian authorities to put forward an economic plan that garners some level of political consensus.

Last December, President Mohamed Morsi reversed a decision to introduce tax hikes, in fear of a public outcry.

“The $4.8bn loan should not include conditions,” Sabbahi added. “The government should have the freedom to determine how the money is used.”

Sabbahi stated that loan should foster employment and investments and help young people and small farmers to establish projects.

The Al-Tayar Al-Sha’aby launched a campaign against the IMF last November, accusing the international lender of “causing Egypt poverty” and citing its perceived interference in Egyptian politics.

Earlier on Saturday, the IMF delegation met with representatives of the Salafi Al-Nour Party.

“We heard the IMF’s view, and it became clear to us that they are asking for some reforms to the tax system, and their view is that there must be a review of subsidies,” said Abdallah Badran of the Al-Nour Party to Reuters after meeting IMF negotiators.

“This, in our view, will increase the burdens on the poor.”

Meanwhile, Egypt reportedly received $5bn in aid last week from countries like Qatar and Libya in an attempt to prop up the ailing economy.

Advertising Area

Advertising Area

Breaking News

No current breaking news

Daily News Egypt Android App Available for free download on Google play
Daily News Egypt Ios App Available for free download on APP Store