“We will not be governed by the Bank, we will
not be governed by imperialism", the people chanted, But the terms of the IMF are poverty, hunger and
rising prices, the loss of sovereignty.
Oh yes I can just see the
Egyptian people accepting even more austerity measures. Yep, sure, I can see it
right now. So Mubarak, so praised by the IMF in the past for obeying its mandates, gets off more or less scot free with gadzillions of
the peoples' wealth while they must accept even worse living conditions than they
have now? That will go over like a ton of radioactive lead. And the Egyptian
folks will be verrrra upset about it.
Maybe defaulting could be an
option? This uneducated in large scale finance woman believes everyone should
default on loans to do with the big banks. They don’t need the money. And,
heck, they can always print more, so they say. That means there really never
would be a “shortage of wealth” and the bankers’ grip upon the planet would be
negated.
Who died and gave them
control over our lives and everything we do including banking? They can only
have control if we give it to them!
It seems that this is an example of why the Zionists and the Rothschild banker cabal did not want Qaddafi to succeed with his United States of Africa unification project. The money could have come from within Africa itself and therefore "rob" the international thieves of greater profit at the expense of the Egyptian people. That may be simplistic and naive, but it only makes sense if you think about it.
By Alaa Shahine
Oct 10, 2011
Returning to the IMF
risks a backlash from the activists who led this year’s revolt and objected to
loans from the fund and the World Bank on the grounds that they endorsed
Mubarak’s policies, said Raza Agha, an economist at Royal Bank of Scotland.
Egypt,
grappling with sectarian violence, labor strikes and the highest borrowing
costs since 2008, may be forced to ask the International Monetary Fund for the
$3 billion loan it spurned in June.
The yield on the
government’s one-year treasury bills soared 328 basis points, or 3.28
percentage points, to 13.86 percent since the Jan. 25 revolt that ousted
President Hosni Mubarak, the highest since
November 2008. The extra yield investors demand to hold Egyptian debt instead
of U.S. Treasuries rose 160 basis points for the period to 421, according to
JPMorgan Chase & Co.’s data. Middle East spreads climbed 128 basis points
on average to 437, the data show.
“They must go to the IMF
and the World Bank,” Mona Mansour, co-director of research
at Cairo-based investment bank CI Capital, said in a telephone interview. “The
government will resort to foreign borrowing because this can’t continue.”
Returning to the IMF
risks a backlash from the activists who led this year’s revolt and objected to
loans from the fund and the World Bank on the grounds that they endorsed
Mubarak’s policies, said Raza Agha, an economist at Royal Bank of Scotland.
Egypt is in talks with
Saudi Arabia and the United Arab Emirates for $5
billion in loans to finance the budget
deficit, which the government aims to reduce to 8.6 percent of economic
output in the fiscal year through June 2012. The gap was 9.5 percent in the
previous 12 months.
CAIRO CLASHES
“If they can’t get the
money from the Gulf neighbors, then they could well be forced to go to the IMF
again,” London-based Agha said in an e-mailed answer to questions on Oct. 6.
“That could lead to another confrontation with pro-democracy groups.”
ED: How about just the poor
struggling to survive. democracy? More important will be food on the table and
a roof over their heads. Austerity measures upon Egypt will sit even worse with
the general populace than they have in Greece.
Egypt is also grappling
with violent public outbursts eight months after Mubarak’s Feb. 11 departure.
Coptic Christian protesters clashed with security forces in Cairo yesterday,
killing at least 24 people and injuring 272, the state-run Middle
East News Agency reported, citing the
health ministry.
Prime Minister Essam
Sharaf said in a televised speech that the clashes were “unjustified violence”
that “raised fear and concerns about the future of this homeland” and the
country’s transition to democracy. The clashes sent the benchmark EGX 30 stock
index tumbling as much as 5.2 percent. The measure lost 2.5 percent, falling to
the lowest level since March 2009, at 12:41 p.m. in Cairo.
ECONOMIC POLICIES
The government and the
military have blamed violence and labor strikes for the country’s economic
slowdown. Critics say the government hasn’t taken a “single meaningful economic
step toward meeting the demands of the revolting Egyptians,” columnist Wael
Gamal wrote in the daily Al Shorouk newspaper Oct. 2, citing the lack of
progress on removing energy subsidies for companies.
Protests against the
government’s economic policies and the planned IMF loan contributed to the
departure of Finance Minister Samir
Radwan after the interim military rulers forced him to turn down the
IMF and trim the deficit target by reducing investments. The IMF and Radwan
denied that a loan would have come with stringent conditions.
Egypt hasn’t asked the
fund for a loan, Deputy Prime Minister Hazem El Beblawi and IMF spokesman David
Hawley said last week.
‘FAIRLY EMBARRASSING’
Going to the IMF would be
“fairly embarrassing politically given that they got the agreement and turned
it down,” said Richard Fox, the London-based head of Middle East and Africa
Sovereigns at Fitch Ratings.
“There’s no shortage of
money being pledged, particularly from the Gulf Cooperation Council, and one of
the problems is that it’s quite difficult to know precisely what is likely to
materialize.”
The rating company cut
Egypt’s credit rating one level, to BB, on Feb. 3, leaving it two levels below
investment grade. Saudi Arabia has given $500 million
in budget support.
Egypt has no “inhibitions”
about IMF suggestions to aid the country, El Beblawi, who is also the finance
minister, said in Sept. 22 interview in Washington.
Public “apprehension”
about foreign borrowing is forcing the government to rely on domestic banks
instead of tapping international markets “though economically speaking it might
be wise,” he said.
The nation’s gross
external debt is equivalent to 15.2 percent of gross domestic product, while
the country’s gross domestic debt is 68 percent of GDP, according to data on
the Ministry of Finance website.
The yield on Egypt’s 5.75
percent dollar bond due April 2020 fell 2 basis points on Oct. 7 to 5.96
percent. That’s down from this year’s high of 7.07 percent on Jan. 31. Egypt’s
default risk rose 5 basis points to 465, according to data provider CMA, which
is owned by CME Group Inc. and compiles prices quoted in the privately
negotiated market.
19TH CENTURY LOANS
Some of the misgiving
from borrowing abroad can be traced to an accumulation of debt in the 19th
century to finance public spending.
According to F. Robert
Hunter in ‘The Cambridge History of Egypt,’ of the total amount
received by rulers such as Khedive Ismail, the “greater part was recycled to Europe
in the payment of principal and interest charges.”
The experience, still
taught at local schools, cost the country its stake in the Suez
Canal before the 1882 British invasion.
“It’s part of the culture
in Egypt that foreign borrowing is associated with the loss of sovereignty and
a negative impact on the economy,” Mohamed Abu Basha, Cairo-based economist at
EFG-Hermes Holding SAE, Egypt’s biggest publicly traded investment bank, said
by e-mail.
ED: And rightfully so when
the IMF or other such bloodsucking organizations come into the equation!
‘CHEAPEST SOURCES’
The argument still has
some resonance today. Repayments of $24.6 billion on external debt between 2000
to 2009 show that Western loans “act to extract wealth from Egypt’s poor and
redistribute it to the richest banks in North
America and Europe,” Adam Hanieh, lecturer at the School of Oriental
and Africa Studies at the University of London, wrote
in May in Jadaliyya, an online magazine specialized in Middle East studies.
Still, borrowing from
institutions such as the IMF “is likely to take place,” EFG-Hermes’ Abu Basha
said. “The IMF and the World Bank are among the cheapest
sources of financing and they are more reassuring. It gives a positive
message.”
ED: How can ANYONE consider
a message from the IMF to be “positive’?
Perhaps China and Russia could help out?
ReplyDelete- Aangirfan