Egypt negotiates World Bank loan
Negotiations for a loan agreement have commenced between the World Bank and the Egyptian government for the financing of the privatization and restructuring of the public sector. The government is being urged by Dr. Fakhry El-Fekky, the former International Monetary Fund’s assistant managing director to uphold the privatization process that was began by the former government and restructure tax and the salary system of the public sector. The government is already willing to revise the latter.
The Egyptian government decided to check on the World Bank because its deal with the International Monetary Fund is being delayed. A visit from the IMF to discuss the terms of a $4.8 billion loan was scheduled for the end of September, but delayed to give the government more time to write its economic reform program. IMF will be on its way to the country in late October to resume loan talks. The World Bank is willing to give Egypt a loan that will help in rectifying the mistakes committed by the previous governments when they undertook privatization policies.
There have been public concerns over such loans because Egyptians fear that it will only worsen the situation of the average citizen and contribute in deepening poverty and social inequality in the country. However, the finance minister’s assistant assured critics that development and social justice would remain the first priorities of the government’s economic reform programme despite the changes being made to adapt to IMF conditions .He added World Bank loans have better conditions than IMF loans because of a lower interest rate that could reach 0.5% with more relaxed deadlines.
The government has embarked on seeking for public support for its economic reform before presenting them to the president next week.