CAIRO: A group of 17 political parties, NGOs and human rights associations in Egypt have called for loan negotiations with the International Monetary Fund (IMF) to be ended immediately, citing a lack of transparency and the undemocratic nature of the current development. They are continuing their protests of a potential $4.8 billion IMF loan to Cairo in order to allow the Egyptian government to overcome pitfalls in spending. Among the groups were the Popular Current Party, The Egyptian Current Party, The Strong Egypt Party as well as rights NGOs New Woman Foundation, Hisham Mubarak Law Center, Habi Center for Environmental Rights, Cairo Institute for Human Rights Studies, Egyptian Women Legal Aid and others. “The negotiations of the terms and conditions of the loan agreement, including the government's economic reform program, have lacked transparency on the part of both the IMF and the Government of Egypt,” said the statement sent to media outlets on Monday. “Moreover, these negotiations have continued in the absence of an elected parliament, which was dissolved on 14 June 2012, and with the president of Egypt holding full legislative authority. Any agreement under these circumstances would contravene the democratic principle of separation of powers and Egypt's longstanding constitutional requirement of parliamentary oversight over executive decisions,” the statement continued. “Furthermore, the public consultations carried out by the government to date to solicit societal feedback on the loan have been exclusionary and inaccessible. They do not fully represent Egypt's civil society and political groups.” They called for both sides to show more transparency in negotiating and demanded that social justice be addressed in the structural issues the IMF wants Egypt to deal with before the loan is approved. “With little transparency and no clear economic program, the potential loan agreement continues to lack the “critical mass" of support that the IMF requires as a necessary condition for financial assistance. For that reason, we believe that negotiations for the proposed loan should be frozen,” the groups argued. The loan deal is seen as vital to assist Egypt in being able to avoid a budget and balance of payments crisis as well as deliver more credibility to economic reforms to boost the ability to attract investors. Earlier this fall, IMF officials hinted that a loan agreement would not be made this year, sparking worries that Egypt's economic crisis could widen. According to a report by Bloomberg business news agency, “the IMF requires approval from the biggest party in parliament," the official said, speaking on the condition of anonymity because of the sensitivity of the talks. “It's disappointing, but at least it's been announced against the stabilization of reserves," Richard Fox, London- based head of Middle East and Africa Sovereigns at Fitch Ratings, said by phone to Bloomberg. “If they can maintain reserve levels and continue progress toward political transition it's not the end of the world. Still, the fact that things have been pushed back yet again isn't positive." Egypt's state-owned al-Ahram newspaper had reported that a deal was to be signed in June, but the IMF had urged certain procedures were needed in order for the loan to be granted. Masood Ahmed, IMF director for the Middle East and North Africa, said in late May that Egypt still needed to do “some technical work" to finalize its economic program. Masood has claimed there are three important steps that Egypt should take if it wants to go further in the loan procedure with the IMF, referring to the economic program, political support and alternative financial sources. “I think that process (of getting political support) is advancing but I do not think we are at the point yet where we could move forward." “There's still more work to be done to close down those three areas," he said, referring the three important steps to secure the loan.
