- Life Style
Spokesperson for the Salafi Nour Party Yousry Hammad said Saturday that the interest on the planned IMF loan to Egypt does not involve usury, but instead accounts for administrative expenses on the loan.
In a statement on his Facebook page, Hammad criticized some who have spoken out against the loan in the name of religion, calling the interest usury, which is forbidden in Islam.
"The greatest of all problems is ignorance and when non-specialists take the seats of scientists," he wrote. "If ignorant people had remained silent, most of the problems of Egypt would have been resolved."
Hammad's statements directly contradicted those of other Nour Party members.
“Borrowing from abroad is usury,” said Younis Makhyoun, a member of the Nour Party’s supreme committee said on Wednesday. “God will never bless an economy based on usury.”
Mahkyoun called on Prime Minister Hesham Qandil to find other ways to raise funds instead of “allowing foreigners to interfere in our affairs.”
Hammad, meanwhile, said a US$3.2 billion loan had been discussed by Nour Party MP and head of the People's Assembly Economic Committee Tarek Desouki before the Parliament's dissolution. On Wednesday, Prime Minister Hesham Qandil announced that Egypt and the fund would be negotiating for a $4.8 billion loan.
In his statement, Hammad explained why the loan had been increased and why interest on the loan was religiously acceptable.
"It has been determined on the basis that Egypt can borrow from the IMF double its share in the fund which is $1.6 billion, and the interest has been set at 1.16 percent. This interest is not usury as some have opined, but administrative expenses identified by the World Bank," he wrote.
Hammad said that the reason the loan negotiations could not be completed under the former cabinet headed by Kamal al-Ganzouri was because his government had not taken any steps against paying of the budget deficit or fighting corruption.
Some politicians have accused the Ganzouri cabinet of trying to use up all the financial resources to embarrass the next cabinet.
"The loan was postponed until we have an elected government which has become closer to reality now after the elected president formed the cabinet, although we believe that the best cabinet comes through an elected parliament brought by people through free elections," Hammad said.
Hammad said he discussed the details of the loan with Tarek Shaalan, chairman of the economic committee for the Nour Party, including whether the fund will subject the country to unjust conditions.
He said he believes Egypt will benefit greatly from the loan, especially as it shows the IMF's confidence in the Egyptian economy. He said the loan will attract investors, raise Egypt's credit rating, and decrease interest on the country's future loans.
Hammad said many who criticize the loan had become distracted from the dire economic situation by whether borrowing was religiously sanctioned or not. He said they should instead be considering "whether this is the only way to address Egypt's economic problems or not?"
Hammad said that Desouki asked many Muslim scholars whether the IMF interest was considered usury and they said it was considered administrative expenses.
Edited translation from Al-Masry Al-Youm