Egypt 'must do more to secure IMF aid'
Dubai, May 2, 2012
Egypt needs to do more to secure a $3.2 billion loan from the International Monetary Fund, including gathering broad political support, an IMF official said on Wednesday.
Masood Ahmed, IMF director for the Middle East, told Reuters that Egypt still needed to do "some technical work" to finalise its economic programme.
Asked whether he thought there was enough domestic political support for the programme, Ahmed said: "I think that process (of getting political support) is advancing but I do not think we are at the point yet where we could move forward."
"There's still more work to be done to close down those three areas," he said, referring to the economic programme, political support and alternative financial sources.
"We are ready as soon as pillars are there for that programme to move forward relatively quickly," Ahmed said after presenting the regional economic outlook in Dubai.
Egypt and the IMF are in discussions on a $3.2 billion loan programme, which Egypt had requested earlier this year but which had been opposed by the powerful Muslim Brotherhood's Freedom and Justice Party.
Egypt's $236 billion economy has been laid low by 18 months of political turmoil. Last week, parliament overwhelmingly rejected the army-appointed cabinet's plan to cut state spending, hampering the government's efforts to secure IMF help needed to avoid a fiscal crisis and potential currency devaluation.
"Egypt has pressing economic and financial challenges and that's why we believe it is important to move forward now to finalise the content of the programme, to get support for it and to mobilise the financing for it," Ahmed said.
The country's finance minister said last week the government expected the Fund's aid to start flowing from May. The IMF is insisting that any agreement on financing is backed by Egypt's government and political partners ahead of presidential elections later this month. This would ensure the deal would outlast the political transition following the polls. - Reuters