Egypt is seeking a new loan from the International Monetary Fund (IMF) to deal with the fallout from a sharp rise in prices that has had devastating effects on people’s economic rights.
Recent IMF loans to Egypt, worth a combined $20 billion, have introduced a number of economic policy changes that have raised the cost of living for low-income people while doing little to address structural problems, including lack of transparency, erosion of the independence of key state institutions, including the judiciary, and the brutal involvement of the military in the economy, which is under attack. from civilian oversight.
Will this time be different and prioritize the human rights of Egyptian citizens?
Last month, Egyptian President Abdel Fattah el-Sissi called on his “friends in Europe” to support him, telling international financial institutions (IFIs), including the IMF, that “the situation in our country does not tolerate the applicable standards at this stage “. The question is: what standards is al-Sissi trying to escape?
At the press conference, al-Sisi defended the scope of government subsidies and warned against leaving the public to bear the consequences of the economic crisis, saying that if prices continue to rise significantly, this “will have serious repercussions on stability”. That suggests he may resist calls to further cut the subsidies Egypt still maintains on fuel and food, which the government recently cut, partly under an IMF loan program. While al-Sisi’s apparent interest in protecting the public from crisis is at odds with his track record of implementing economic policies that primarily benefit the elite, it is never too late to oppose IMF-driven policy changes that would further burden low-income countries. people.
Reducing subsidies without first significantly extending social protection could jeopardize the economic rights of millions of people. In a positive step, on July 26, the Egyptian Ministry of Solidarity announced temporary relief measures, including cash transfers for 9.1 million low-income families, as well as an extension of the two main transfer programs. in cash, Takaful and Karama, from 4.1 million to 5 million families. However, this still leaves a huge swath of the population unprotected from the crisis and the added burden of potential additional IMF-mandated measures that raise the prices of economic necessities.
Additionally, al-Sisi could ask for help in escaping a different set of IFI standards. European governments should not help Egypt continue to evade IMF efforts to address governance issues, such as the military’s opaque economic relationship and the erosion of the rule of law, which is essential to guarantee fundamental economic rights such as the right to food. The fact that the government is once again asking for a bailout after the IMF and other institutions have been pouring money into its economy for years makes it clear that until these problems are resolved, the IMF will be pouring sand in a colander.