The Egyptian government has started negotiating loan with the World Bank to finance the privatisation and restructuring of the public sector.
The former IMF’s assistant managing director, Dr. Fakhry El-Fekky, said the government may have to continue the privatisation process started by the previous governments. He said there are indicators the government is willing to reconsider restructuring tax and public sector salary systems.El-Fekky said the World Bank loan will help to correct the mistakes of privatisation under former regimes.
The presidential economic advisor, Abdalla Shehata, said that since the IMF mission’s visit to Egypt was delayed, the government was trying to find other alternatives. A visit from the IMF to discuss the terms of a $4.8 billion loan was scheduled for the end of September, but delayed to give the government more time to write its economic reform programme.
Critics have opposed the loan saying it will only deepen poverty and social inequality in Egypt. The finance minister’s assistant assured that development and social justice would remain the first priorities of the government’s economic reform programme, despite the changes being made to adapt to IMF conditions. He added World Bank loans have better conditions than IMF loans, lower interest rate that could reach 0.5%, and more relaxed deadlines.
Source: Daily News Egypt