Egypt: IMF loan not the answer
According to the analyses of the president of Canada’s International Development Research Centre (IDRC), David Malone, the 4.8 billion International Monetary Fund (IMF) loan is insufficient to end to end Egypt’s economic woes.
President Malone is in Cairo when he said that what Egypt needed is not a “western tailored” development model. Malone, a renowned development scholar, said that foreign debts were not the solution to the country’s problem despite admitting that the country needs it badly but didn’t hesitate to add that it was “not what Egypt needed at the moment.”
The Egyptian government considers the IMF loan as the springboard from its economic and financial crisis but the loan is accompanied with a series of austerity measures which includes across-the-board subsidy cuts aimed at reducing Egypt’s ever-widening budget deficit. Economic growth is a prerequisite to Egypt’s development effort but growth must be accompanied with sound governance to combat long-term structural deficiencies, such as corruption and a crumbling public sector that hinders development efforts.
He urged the country to come up with a plan which is in accordance with its social dynamics and economic potential claiming that “only Egyptians” can pave the way out because “international institutions cannot be a substitute for internal decision-making.” He cited countries like Argentina and India as examples where proposed plans of international institutions failed and continue to fail in developing countries.
As far as Malone is concerned, the problem lies within the management of the affairs of the state. “The real issue is that economic management is missing from the political discourse; day-to-day politics seems to be the current priority,” he asserted. “Egypt is in desperate need for economic management.” The IDRC is planning to finance several agricultural research programs among others in the country.