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Egypt's army pumps $1 billion of own money into central bank, refuses foreign aid

A faltering economy prompts the ruling military to share its private revenues, rejecting overseas aid due to concerns over loan conditions

Ahram Online, Sunday 4 Dec 2011
Soldier bourse
Looking out for Egypt's economy? Soldiers protect the Bourse during its closure earlier in 2011 (Photo: AP)
Views: 4723
Views: 4723

Egypt's troubled financial picture has prompted the ruling military to redirect US$1 billion of its money into state coffers.

"The military has pumped $1 billion of revenues from its own projects into the Central Bank of Egypt," Major General Mahmoud Nasr, a member of Egypt's Supreme Council of Armed Forces (SCAF) told press late last week.
Nasr added that SCAF had refused financial aid offers from the Gulf and other foreign countries because of the political conditions attached.
"Although the most serious problem facing the Egyptian economy in the short term expected decline in foreign reserves, we still do not want to receive aid from the Gulf and other foreign countries," he said.
Egypt's total foreign reserves currently stand at $20.15 billion, with Nasr predicting their decline to $15 billion by the end of January -- a prognosis one leading financial analyst told Ahram Online was "completely realistic".
Nasr warned that Egypt's economic situation is making it vulnerable to international pressure, saying the government's budget deficit is expected to increase to 10.8 per cent by the end of the current fiscal year.
He also expects Egypt's growth rate to reach only 2 per cent, which would have a knock-on effect on unemployment.
The military has asked that Egypt's forthcoming constitution include clauses to forbid parliamentary oversight of the defence budget. It also wants the military's allocation in the budget to remain listed as a lump sum without additional spending details.
Around LE25.3 billion ($4.2bn) was assigned to defence spending in Egypt's 2011-12 state budget, according to documents on the Ministry of Finance's website. The sum is listed as 'other expenditures'.
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