São Paulo – The International Monetary Fund’s External Relations director Gerry Rice said this Thursday (28th) in Washington that a staff team will be back in Egypt “in the first days of April” to proceed with negotiations for a US$ 4.8 billion loan to the country.
The announcement was made 11 days after the Fund’s Middle East and Central Asia director Masood Ahmed travelled to Cairo aiming to resume talks with Egyptian authorities. “We are now expecting a staff team to travel to Egypt in the first days of April to continue to work with the authorities for a possible financial arrangement,” said Rice at an online press conference.
He added that the debate will be based on the “most up-to-date information,” meaning that the latest versions of the economic program devised by Egypt’s government should be taken into consideration.
The two parties reached an agreement in November last year, but the government requested its cancellation in December amidst a wave of protests. There was fear that the austerity measures that were called for, in particular raising taxes, could lead to further political and social instability.
There are doubts concerning the austerity level that Egypt and the IMF are willing to settle for. Egypt needs foreign funding, but the government resists taking unpopular economic measures.
Brics
Rice also spoke on the creation of a development bank by the Brics countries, i.e. Brazil, Russia, India and South Africa, with US$ 50 billion-plus capital for funding infrastructure projects. The bloc had a summit meeting this week in Durban, South Africa.
He added that the IMF regards the initiative “with great interest,” because it is meant to address infrastructure gaps in developing countries, whose shortcomings are usually constraints to growth. “Efforts to mobilize resources for infrastructure and sustainable development in developing countries are important steps,” he said.
*Translated by Gabriel Pomerancblum
