A group of Egyptian campaigners announced their refusal of any government plans to borrow from international financial institutions as long as there are alternatives, reports Ahmed Kotb In a conference organised earlier this week by the Popular Campaign to Drop Egypt's Debt (PCDED), experts accused major international financial institutions (IFIs) like the International Monetary Fund (IMF) of contributing to the deterioration of the Egyptian economy by supporting the Mubarak regime's economic policies that led to massive public debt. "One of the main causes of the 25 January Revolution was the economic policies adopted by Mubarak's regime, which always depended on borrowing from inside and, more dangerously, outside," said Reda Eissa, an economic expert and member of PCDED. Until now, he added, the state is spending on education and health less than what other smaller countries spend on these two vital sectors. Loans from IFIs never ensure that governments take care of education and health, thus leading to a gradual destruction of society, he said. Moreover, Eissa stated that the Egyptian citizen bears 60 piastres of every LE1 the government spends on health, while in Angola, for example, the citizen only bears the equivalent of LE0.13. In more developed countries, like France, citizens bear 20 cent of each Euro spent on health, he added. Eissa also said that the case is similar in education. "The percentage of gross national product spending on education in Egypt is less than that in countries like Cyprus, Jamaica, and Ghana." The Egyptian educational system, Eissa added, is the eighth worst ranked in a total of 139 countries listed and evaluated by several international organisations. "It is strange to follow the same policies now and expect better results." For Wael Gamal, a prominent economics journalist, the $4.8 billion loan that Egypt is negotiating with the IMF will be used to implement the same policies that the previous regime adopted and therefore must be refused. "The austerity measures dictated by the IMF are not for the benefit of the people," Gamal underlined, referring to countries with troubled economic situations caused by the measures imposed by IMF, such as Greece and Jordan. "If we have to resort to loans, they should be used for the interest of the public." "Leaders and international investment banks see the Arab Spring as the great new market of the 21st century," said Anders Lustgarten, a playwright at Bank Watch and a political activist. "Institutions like the IMF and the European Bank for Reconstruction and Development have endorsed the policies of the Mubarak regime and encouraged privatisation and public-private partnerships [PPP]," he stated, adding that examples of transferring public wealth into private hands have proved to be detrimental to development. According to Lustgarten, PPPs have many disadvantages, including long-term costs for useless facilities and increased cost to the public, but governments do it because they are unable to see alternatives. "You have to reject the idea of PPP because it is a pro-corporate mechanism. If there is no other option, let it be real partnership that shares the risks and commitment to fulfil tasks assigned to the public and the private sector," Lustgarten noted. Egypt's foreign debt is estimated at $38.8 billion, 15.1 per cent of GNP. Samer Atallah, professor of economics at the American University in Cairo, pointed out that "loans don't benefit the Egyptian economy in the long term. Instead, the government should look for alternatives, like revisiting energy subsidies that cost $5 billion annually, and adopting a new progressive tax system," he said. Egyptian Prime Minister Hisham Qandil announced earlier this week that the $4.8 billion loan negotiated between the Egyptian government and IMF is expected to be finalised within two months. Details about the economic programme that the Egyptian government has to enact before receiving the loan are yet unavailable.
