- Middle East/North Africa
The Freedom and Justice Party has yet to announce its official stance concerning borrowing from the International Monetary Fund, said Mohamed Gouda, a member of the FJP's economic committee. He explained that the FJP’s refusal of foreign loans was limited to World Bank loans which the Ministry of International Cooperation was seeking.
Gouda told Al-Masry Al-Youm that the FJP does not favor increasing foreign loans due to their negative aspects, such as increasing the public debt burden, which currently amounts to a staggering 62 percent of budget revenues.
He added that the FJP’s refusal of the World Bank loan was based purely on economic criteria, and that it does not reflect any political stance towards cooperation with international financial institutions.
He explained that the government has yet to respond to a number of questions about the loan, including the list of reforms and political and economic requirements imposed on the government by the IMF, the cost of the loan, repayment mechanisms, and the aspects on which the loan will be spent. Without this information, the FJP cannot determine its position.
Gouda went on to say that the IMF loan was not a solution for reducing the erosion of foreign reserves, especially since Egypt loses US$2 billion in reserves each month. The loan itself is only US$3.2 billion, and therefore it is more important to take steps that would stop the reserves' depletion, he said.
Gouda criticized the performance of Prime Minister Kamal al-Ganzouri’s cabinet, describing it as shaky and having failed to exert adequate efforts to solve the budget deficit problem.
He added that instead, the government chose the easy way out by borrowing from abroad like the former regime; despite the burden such action will place on the shoulders of future generations.
Translated from Al-Masry Al-Youm