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Brotherhood's political arm backtracks; tacitly 'approves' IMF loan

Without directly saying it approves the loan, the Freedom and Justice Party issues a statement indicating it 'does not reject' borrowing from international finance organisations

Ahram Online, Monday 27 Aug 2012
The Freedom and Justice Party
Supporters of Egypt's Muslim Brotherhood 'The Freedom and Justice Party' ( photo: Reuters)
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Views: 1854

The Muslim Brotherhood's Freedom and Justice Party (FJP) issued a statement on Sunday night clarifying that it does not take a "negative" stance on an International Monetary Fund (IMF) loan to Egypt.

The statement summarised the FJP's stance towards the loan, which attracted a sizable debate in Egypt since the IMF's director, Christine Lagarde, visited Cairo on 22 August to kickstart negotiations with the Egyptian government.

The FJP did not directly say it supports the loan, but the statement indirectly implied the Islamist party's approval of the $4.8 billion facility.

"Our decision not to reject borrowing is based on Egypt's supreme economic interest," the statement reads.

FJP's backtracking on its stance against such international finance organisation loans is only a hair away from surprising, considering the Islamist party is unlikely to counter the policies of President Mohamed Morsi, the party's former leader.

FJP resistance to loans

Back in April 2012 under the interim government of prime minister Kamal El-Ganzouri, FJP MP's in the now-dissolved parliament unanimously rejected a similar IMF loan, arguing that the economic reform programme attached to the loan did not include proposals to improve public security, reduce poverty or provide the revenue to raise wages.

An FJP leader and head of the parliamentary budget committee,Saad El-Husseini, said on 9 March that the Egyptian government should seek other alternatives and keep the IMF facility a choice of last resort. These alternatives included "selling Islamic 'bonds' to foreign institutions and land to Egyptians abroad, as well as slashing subsidies to energy-intensive industries."

An IMF technical team is set to visit Cairo in early September to work with Egyptian authorities on its economic programme and finalise loan procedures.

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