A while ago, caricatures began to appear on the internet showing the Egyptian president, Mohammed Mursi, prostrating before the International Monetary Fund (IMF). The artists were inspired by his request for a $4.8 billion loan to revive the Egyptian economy, which has been in recession since the beginning of the revolution. More recently, the media has been discussing “news” of an offer by the European Union of a $1.29 billion loan, if Egypt secures the IMF loan.
These loans are usually conditional and are intrinsically tied to a series of economic policies, such as lifting state subsidies on some basic commodities and liberating the markets. In the past, implementing these policies has led to the outbreak of popular protests in Egypt as well as in other poor countries. This is why some activists in the field of social justice call the IMF the poverty, deprivation and debt makers, keeping Third World countries under the hegemony of rich countries.
The loans also come with political conditions to do with the government’s position on “Israel” and good neighborliness. Observers in the field of development are wondering whether Egypt under the Muslim Brotherhood will take the same economic path as Hosni Mubarak’s regime despite their talk of social justice and combating poverty in the latest elections.
Resorting to conditional loans may be dictated by the reality of the Egyptian economy in a world which is suffering from consecutive financial crises. It may even be marketed as political realism. But some are wondering about the limits of this realism, particularly when the Egyptian prime minister, Hisham Qandil, announced that Egypt will not cease economic and industrial cooperation with “Israel,” in reference to the qualifying industrial zones that make Israeli-Egyptian products in every corner of Egypt.