Egypt throws herself into the unknown

by **rocky** Mon 06 Feb 2017, 2:54 am

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Egypt throws herself into the unknown

by rocky Mon 06 Feb 2017, 2:54 am

Egypt throws herself into the unknown

6/2/2017 0:00

[rtl]Jean-Pierre Sereni

We have read the text on the agreement between Egypt and the International Monetary Fund in August. And it seems that the loan will be able to cover almost the whole next year, but it will not cover the following two years, as Egypt is still in need of more than $ 15 billion ... which is not a modicum, in light of the reluctance of the United States and the Gulf property systems for payment .
The International Monetary Fund has published on the seventeenth of January 2017 the text of the agreement reached with Egypt last August, amid a general climate of indifference. The Al - Ahram newspaper published the official daily barely a small statement on the agreement, while not Taaraa international press almost any interest, and merely Gulf press a few articles do not mention.
However, the documentation for the "Memorandum of Understanding on economic and financial policies , " enough to see the details of the agreement: to lend the International Monetary Fund and Egypt more than $ 12 billion over three years, to be paid in six installments, that Egypt is committed to carry out deep reforms in the field of exchange rate monetary, financial and social policies and those of the business environment. Can the IMF to refrain from handing Egypt the rest of the payments that failed to meet those conditions, as happened with Ukraine in 2016.
From now on, the military regime wants its economic policy management itself cruelty which was designed by the eradication of the Muslim Brotherhood from political life .
While it was Hosni Mubarak adopts a half - solutions and pursuing a policy of containment, it seems that the current president firmer. "We are rectifying the path of the Egyptian economy by taking action puts a real basis for building the state that we want in the coming years." This is what he said Abdel Fattah al- Sisi in his meeting with editors of three national newspapers, adding: "If we had the same situation we continue for a year or two years to become more severe situation." The collapse of the Egyptian pound liberalization of the exchange rate decision, which was a stroke on the third of November last, to lower the price of the pound 100 percent so that the dollar has become, overnight, equal to 18 Egyptian pounds, after it was equal to 8.8 pounds. " The value of the pound has dropped a little more than we expected after the floating exchange rate." This was announced by British economist Chris Jarvis, head of the IMF mission to Egypt, Mtuareh Kaahdh terms, he was writing letters of Dominique Strauss - Kahn, the time that this was the last director general of the International Monetary Fund. Waiting for corrective actions anticipated, supposed that the central bank receives from the International Monetary Fund and the World Bank and a number of multilateral institutions loans worth $ 12 billion during the current year. It is an indication of the current crisis, the United States did not contribute, or any of the Gulf property systems ( with the exception of the United Arab Emirates) the loan, other than the major European capitals. But if the outcome of the foreign exchange reserves collected by the central bank, or on the way to collect, given the "new foreign exchange market" kiss of life and provide protection of the Egyptian pound, access to the rest of the loan payments in the next two years that is not certain, it is subject to the extent of respect the Egyptian government to the commitments contained in the memorandum of understanding, so that they can get the loan in full, without losing sight of the security situation in the region , of course. The Egyptian consumer, it has fully bear the cost of the losses that resulted from the collapse of the national currency, refer to the latest statistics published in December 2016 to the rising cost of living by about 30 percent and IMF experts expect lower inflation rates before the second half of this year. Despite the lifting of the state of the value of officially earmarked for the poor and disabled registered financial aid has, but there are more than 20 million citizens, or 35 percent of the population - is the poverty rate in Egypt as a gift Laithi says. They had to face a wave of price rises on their own, without any government intervention to rescue them, except a symbolic action for the benefit of the few that are subject to taxes on income. Nor was it expected that the pharmaceutical industry is witnessing a rise in prices, where drugs have been subject to pricing. However , the Minister of Health made the decision to raise the price of drugs by 50 percent on average, so pharmacists subject to threats of a strike, and wave the pharmaceutical companies to stop importing. Moreover, fuel prices rose by 35 percent, but the government continues its support by 44 percent and are expected to see the waves again rise to ease the burden on the public treasury and the only sector that is still resisting the repeated hikes is the higher education sector, it is scheduled to rise university fees, except for , of course , universities, and hopes workers at the Ministry of Higher Education. The budget deficit, and other pest there is no room for complacency in regards to reducing the budget deficit, and other crisis facing the Egyptian economy, if the government wants to meet its obligations to cut the deficit to reach its 12.1 percent of GDP in the year 2015- 2016, to 4.7 percent in the fiscal year 2020-2021, and thus reduce the public debt from 95 percent to 78 percent of GDP in the same period. To achieve that goal, the government adopts austerity measures is to reduce wages and cut energy subsidies and commodity ration pack, in addition to raising taxes. Egypt 's history may raise doubts about the financial and political will for "tuning" of government accounts, especially with the benefit of achieving the treasury bills offered by the government for three months , 19 percent rate. But, assuming that the current ruler , better off than its predecessors, remain open workout tight. Egypt must do more so that it can get hard currency, not relying on foreign loans, but the export and tourism revenues and Suez Canal. Also it will not be easy to reduce the deficit in the current account balance, which of between 6 and 7 percent of gross domestic product; where it is expected that the trade deficit remains high until 2018-2020 at the earliest. "The price factor is not the greatest master of the current account balance deficit in the current time. The crisis experienced by the tourism, which accounted for 20 percent of state revenues in 2010 sector, related mostly to security reasons, also will be affected by the Suez Canal revenues (9 percent of state revenues) violent fluctuations in global trade. It is not expected to stop the growing deficit in the energy sector ($ 3.6 billion in 2016, or 20 percent of the current account deficit, compared with a surplus estimated at $ 5 billion in 2010), but by 2018, with the entry of gas fields b natural "appeared" and the Nile Delta "into production, according to Pascal Defoe from the bank" BNP Paribas ". Confidence remains rare coin in Egyptian society, even among the elite. After the boom had not been interrupted since the decision to float on 3 November, the Egyptian Stock Exchange witnessed in January 19 last , "Khamisa Black," in which speculators have more than a billion dollars in a single session, had to be terminated quickly. Egypt is the Arab country the fifth, with Morocco, Tunisia, Jordan and Iraq, it entered into an agreement with the International Monetary Fund in 2016 worth more than $ 21 billion, which is an additional indicator of the crisis faced by those countries in the wake of the Arab spring.[/rtl]

[rtl]http://www.alsabaah.iq/ArticleShow.aspx?ID=131194[/rtl]

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Established in 2006 as a Community of Reality

Established in 2006 as a Community of Reality

Egypt throws herself into the unknown

Egypt throws herself into the unknown

Egypt throws herself into the unknown

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