CAIRO - Egypt needs loans to bridge the gap in its State budget and balance of payments, as its reserves are falling, Minister of Finance Samir Radwan said Monday. "We have discussed with the World Bank the borrowing of $2.2 billion in soft loans, to meet the budget deficit and job creation, especially in the small and medium-scale enterprises (SMEs)," Radwan was quoted by the official Middel East News Agency (MENA) as saying Monday. "We are negotiating with the International Monetary Fund (IMF) to get unconditioned soft loans worth $3-$4 billion," Radwan said, making it clear that Egypt's economy was 'intact', and the loans were needed to overcome the crisis; as tourism, exports and production came to a halt after the January 25 revolution. An Egyptian delegation headed by Radwan and Fayza Abul Naga, Minister of Planning and International Co-operation, wrapped up three days of talks with officials from the Group of Eight, the Group of 20, the IMF and the World Bank, which held their annual spring meetings in Washington this week. As for his talks with US Secretary of the Treasury Timothy Geithner, Radwan said: "Talks focused on relieving Egypt from US debts worth $3.5 billion, or at least converting them into Egyptian pounds and use them to finance development projects." Meanwhile, the World Bank and IMF said that Middle East political turmoil needed to be closely watched, lest it threw the global economic recovery off track. "A worsening of conditions in the Middle East and North Africa could derail global growth," World Bank President Robert Zoellick said. "If oil prices were to rise sharply and stay high over a long period – either because of increased uncertainty or due to a significant disruption to oil supply – global growth could slow by 0.3 to 1.2 percentage points in 2011 and 2012, respectively." Meanwhile the IMF, in a statement by its main policy body, stressed the need to generate jobs, as countries recovered from the financial crisis, to ensure the revival got sustained. "Against this background, the immediate economic impacts of the tragic events in Japan and developments in some Middle Eastern and North African countries also warrant close attention," it said in a statement. IMF managing director Dominique Strauss-Kahn stated that the problem of a jobless recovery to economic growth was worrying many countries, but was more acute as turbulence spread across the Arab crescent – where unemployment among the young was particularly high. "The example of the Mena (highlights) this question. You may have good figures at the growth level without having the sustainability of growth, simply because of the political problems behind it." "We are ready to help with technical and financial assistance," he added. The revolutions that overthrew longtime regimes in Tunisia and Egypt and challenged others from Libya to Syria and Yemen grabbed the focus of the world's financial technorati, as they met in Washington to discuss the crucial challenges facing the global economy. Zoellick stressed earlier in the week that rising food prices had a great impact on political stability in poor countries. "We may be coming out of one crisis – financial and economic – but we are facing new risks and challenges," said Zoellick. French Finance Minister Christine Lagarde, who chaired a meeting of Group of 20 finance chiefs on the sidelines of the World Bank-IMF meetings, called for strong support for the North African countries from governments and multilateral agencies. She said international financial institutions needed to begin assessments "particularly of those countries that have initiated a transition towards democracy."
