CAIRO: On Sunday, the International Monetary Fund (IMF) approved to loan Egypt $3 billion to help finance the country's recent economic woes following the massive street protests that ousted the government of President Hosni Mubarak. The announcement comes only days after the government outlined a draft budget that showed deficits to swell nearly 11 percent of the country's gross domestic product. Egypt's finance ministry had been looking to boost social services, health care and other sectors to meet demands of the 80 million people in the country. The 12-month standby arrangement spans fiscal year 2011-2012, which begins in July, and carries a 1.5 percent annual interest rate — a level which Finance Minister Samir Radwan said fell far below the international borrowing costs Egypt would have had to agree to had it turned to the open market for assistance. The loan, which must still be approved by the IMF's executive board in July, is to be repaid over five years, with the payments due to begin three years and three months after its disbursement. Officials said the loan was aimed at supporting Egypt's “home-grown” economic plan of supporting social justice after decades under a regime widely accused of enriching the wealthy in a nation where over 40 percent of the population lived on or below the World Bank's poverty delineation of $2 per day. “We very much welcome the authorities' plans to foster social justice” through increasing spending on health, education, housing and transportation, Ratna Sahay, the IMF's deputy director for the Middle East and Central Asia, told reporters, listing some of the government's current priority programs. “Support from the international community will greatly facilitate the realization of the authorities' economic objectives and, in this context, the IMF is committed to supporting Egypt and its people through this arrangement,” said Sahay in an earlier e-mailed statement to the Associated Press. BM
