Re-approaching the IMF EGYPT will start tapping international donors like the International Monetary Fund (IMF) and other financial institutions to help get its economy back on track once new President Mohamed Mursi appoints a government, according to a Mursi aide. "We intend to approach the IMF again," Amr Abu Zeid, development finance adviser to the Muslim Brotherhood's Freedom and Justice Party (FJP), which Mursi led until he became head of state, told Reuters. "Give him one week or two weeks, so at least he has a Cabinet," he added. Mursi, who was sworn in Saturday as Egypt's first freely elected civilian, as well as the first Islamist, president is working on forming a government, a task that might take up to two weeks according to newspaper reports. The military council that took over power from Mubarak in February 2011 rejected an agreement that Egypt negotiated with the IMF in mid-2011, and then resumed talks for a $3.2 billion loan early this year. The economy contracted by 4.3 per cent in the first quarter of 2011 and stagnated in the following three quarters. "We are going back. We will negotiate with the IMF, with the World Bank, with the Islamic Development Bank... with anybody who wants to help. We are very open to this," Abu Zeid said. Pensions up PRESIDENT Mohamed Mursi decided to give state administrative workers a 15 per cent pay increase in addition to a similar increase for pensioners. Moreover, Mursi decided to increase the solidarity pension to LE300 compared to the current LE200, effective this month. This was followed by another decision to raise pensions of military personnel by 15 per cent instead of an earlier proposal of 10 per cent. The Finance Ministry said in an e-mailed statement that the pay increase to state administrative workers would cost the country LE3.5 billion and that it was in discussion with the Ministry of Social Affairs on how to fund the increase in solidarity pensions. Planet IB EFG-Hermes offer shelved PLANET IB, a financial consortium backed by IT tycoon Naguib Sawiris failed to buy the needed five per cent of EFG-Hermes shares to convince the latter's management to consider the consortium's offer to invest in the investment bank. Planet IB made its $1 billion approach after the Cairo-based bank announced plans to fold its main investment banking operation into a joint venture controlled by Qatar's QInvest. Sameh Mohieddin, Planet IB's executive director, said Monday that the consortium had only secured between 2.3 and 2.5 per cent of EFG because many institutional shareholders were unwilling to defy the bank's biggest owners. "The minority stake is very fragmented, so we could not reach out to as many shareholders as we wanted to," Mohieddin told Reuters. "The main institutional shareholders, although they voted against the QInvest deal, still don't want to go out of the herd." According to Reuters, the biggest shareholders in EFG are the government of Dubai, the Shobokshi family of Jeddah, Norway-based Skagen AS, Oppenheimer Funds Inc of the United States, and the government of Egypt. The Planet IB consortium said last month it was prepared to pay a minimum of LE13.50 per share for EFG, which would value the bank at $1.1 billion at least.
