The rejection of external loans to unburden Egypt's economy is a sound fiscal decision, said a number of economists yesterday, but national economic problems demand precise and thoughtful development policies for Egypt to raise its GDP. External loans come with punishing restrictions and mandates, said Mahmoud Abdel Hay, an economic expert. But measures like raising the minimum wage and national pensions, and expanding the health and education budgets continue to place heavy economic burdens on the Egyptian government. There are several alternatives the government has to offset the budget deficit, Hay continued, like providing income and support to small- and medium-sized businesses, and enhancing opportunities for civil society to participate in production. Egyptian Minister of Planning and International Cooperation agreed to allocate U.S. $200 million in Saudi aid to Cairo Bank to support such small projects and initiatives. Hamdy Abdel Azim, an economist at Sadat Academy for Management Sciences, agreed that accepting loans would unduly burden the already struggling Egyptian economy, due to repayment stipulations and fluctuations in foreign currency. The rejection of foreign loans will ease the balance of payments on the state budget, Azim added. At several global economic conferences – most recently in the United States – Egyptian ministers have offered a variety of sound investment opportunities in the electricity, energy and agricultural fields, Azim said. Egypt's current debt expenditures exceed the revenue of the Egyptian state budget by 25 percent, said Rashad Abdou, professor of finance at the University of Cairo, which resulted in the slowdown of development. Instead of borrowing, the Egyptian government must fill this gap by reevaluating the state budget, fostering economic investment and improving tax collection.
