What’s Behind Egypt Receiving an Additional $5 Billion Loan? Was It Orchestrated in Secret?

-         Before noon on Wednesday, 6-3-2024, the Prime Minister of the Arab Republic of Egypt, Mr. Mustafa Madbouly, announced that his government would sign within hours "the financial loan agreement with the International Monetary Fund" after secret negotiations that, according to the Egyptian prime minister, lasted more than 5 months — (i.e., during the period of the extermination war being waged by the Israeli occupation army against the Palestinians in the Gaza Strip for more than 5 months concurrently). This is an extremely short period compared with most of the time it takes to negotiate in secret between the International Monetary Fund and the borrowing countries, and the best example of that is taking more than a year to negotiate when Egypt itself obtained a loan of only $3 billion at the end of 2022.. as will be noted below...

-        It is worth noting that Egypt had obtained at the end of 2022 — 22-12 — a loan of $3 billion, repayable over about 46 months, after secret negotiations that lasted more than a year.....and before the October 2023 war. Thus this loan had $5 billion added to it on 6-3-2024 , making the loan amount $8 billion..

-        The statements of the Egyptian prime minister came shortly after the decision of the Central Bank of Egypt to carry out a new floatation of the Egyptian pound, or to liberalize the foreign exchange rate, and to raise the deposit and lending interest rates (deposit and borrowing rates, which became between 27-28%)..

-        Then, hours after the prime minister's speech, in the afternoon of that same day, Wednesday 6-3-2024, the International Monetary Fund announced the signing of a loan agreement with Egypt for $8 billion, in line with the expectations of Egyptian Prime Minister Mr. Mustafa Madbouly.. that Cairo would expect this agreement within hours! The agreement was signed after the slaughter of the Egyptian gineh (reducing the value of the Egyptian pound to an unprecedented low of 49 Egyptian pounds per dollar from a previous level of about 30.85 pounds per dollar, a loss in value of more than 60%.. in one day!!)

-        It is worth noting that Egypt is the second largest borrower from the International Monetary Fund after Argentina, which, as hinted by press sources, the International Monetary Fund and the World Bank are the spearhead of American policy in the world, and they — especially the Fund — are considered a "crusher of national sovereignty" for borrowing countries, by imposing loan conditions on countries, which some have called the "Fund’s prescription". These conditions have reached their extreme in one African borrowing country with as many as 150 conditions. One of the avenues of these conditions, briefly, is intervening in the borrowing country by linking the Fund’s approval to grant loans to a state to restructuring the economic policies of these states, increasing taxes, and reducing or removing state subsidies for basic goods in society that affect the poor segments in every country... etc. Also, the International Monetary Fund does not require parliaments and legislative councils to ratify these agreements concerning loans granted to these countries.. Therefore, most sectors of the population in any borrowing country do not know the details and conditions of such loans; additionally, the Fund and its financing partners resort to pledging some countries’ wealth in favor of those creditors.. for periods that may continue for time spans exceeding the already long maturities of loans from this Fund!

-        In previous cases, and some of them still ongoing, the International Monetary Fund interferes in the political life of borrowing countries, as happened with countries in Latin and Central America in the past, and some scattered countries here and there.....What happened with the Argentine elections a few months ago (October 2023), whereby Argentina received indirect support in terms of facilitating the release of a tranche of funds (a tranche of $7.5 billion) from a total assistance program for Argentina worth $44 billion, reached in March 2022 with the International Monetary Fund to refinance the country's massive debts and obtain disbursements, in a country where inflation reached 143% and deposit interest rates reached 118%...!! Such a move was interpreted as supporting the chances of success of the extreme right Argentine leader Javier Milei in that election. Milei, who is called a "chaotic capitalist", is an extreme liberal economic expert and advocates non-intervention of the state in the private sector and the economy in general, which are the same foundations and principles on which the International Monetary Fund operates!

-        We know that Egypt has a major concern, namely the scarcity of hard currency (the US dollar), which is considered necessary to cover the cost of imports, with foodstuffs (such as wheat and corn) and petroleum derivatives at the top of the list of goods imported into Egypt — goods essential for human life in Egypt — in addition to importing raw materials for factories in Egypt. The scarcity of hard currency is simply an indicator that Egypt’s balance of payments is unstable..!

-        The Fund explained the reasons for granting Egypt the loan, saying that due to the accumulation of difficulties that erupted in the region, which is the Gaza Strip war, and the decline in Suez Canal revenues as a result of the Gaza Strip war, and the decrease in tourism revenues within Egypt.. all of which are among the main sources of hard currency in Egypt.., Egypt was certainly exploited in this pain, and pressure was applied to it regarding opening the Rafah crossing for Palestinians to exit to Egypt (which was intended for the displacement of the Palestinians and is an Israeli demand), and Egypt initially refused that, yet it did not yield to the world’s humanitarian appeals and the United Nations to open the Rafah crossing to deliver aid to the besieged Palestinians who are being and continue to be killed and exterminated before the world.. Egypt justified its inability to send international assistance to the Gaza Strip by Israel’s refusal, pointing to an agreement between it and Israel to consider the interests of each state, the interests of the other state..

-        And what explains the haste in granting this large loan through negotiations that did not take sufficient time to study Egypt’s economic circumstances and its ability to repay and comply with the Fund’s conditions (the Fund’s prescription), which requires the borrowing country to obey it in all matters related to this loan of dictates and conditions... In addition, not long had passed (about a year and two months) since Egypt obtained its first tranche of $3 billion after negotiations that took more than a year at the end of 2022... and they know that Egypt needs hard currency...

-        The scent of this loan, in my belief, exudes the justifications of a scheme devised overnight, and it is the price of Egypt’s silence and its refraining from acting in favor of its national Arab role, and the price did not stop at this loan alone; there are also loans Egypt will receive related to being favored by the International Monetary Fund from other development partners — foremost among them the World Bank and the European Union — and a number of other partners who will also provide concessional loans to the Egyptian state, so that we are dealing with an integrated program with large figures that will enable the Egyptian state to achieve monetary stability and continue with the structural reform program." Thus Egypt will receive under this (grace) additional loans amounting to about $2 billion.. Egypt has received and will receive funds from one of the IMF’s second financing partners, the Gulf partner, where the United Arab Emirates will pay, and the UAE will complete payment in April 2024 the full balance of the large investment transaction in which Egypt sold or leased a wide piece of land to the UAE for investment, called the Ras Al-Hekma area, a coastal region about 350 kilometers approximately northwest of the Egyptian capital Cairo. This important investment represents: "a pivotal step toward consolidating Ras Al-Hekma’s position as a unique leading holiday destination on the shores of the Mediterranean, and as a financial center and a free zone equipped with world-class infrastructure, to enhance the potential for economic and tourism growth in Egypt. The Egyptian government retains a 35 percent stake in the Ras Al-Hekma development project, which extends over an area exceeding 170 million square meters, and which is expected to welcome 8 million tourists annually in this area..!"

-        Egypt is now hostage in the gripof the experts of the IMF..and the experts of the UAE Sovereign Fund...So it is no longer surprising that this Arab state, or that one, remains silent..In the general sense, every party in the active Arab system..has interests and prices it wants to collect..I recall in this connection an Arab film I watched in 1966, when I was a secondary-school student at the Day Secondary School in Ramses, Cairo. The film was titled "A Love in August" and I do not remember the names of the film's stars...where people were on the Alexandria shore, then suddenly a fight broke out among the vacationers..there were quarrels among some of them..and everyone was busy either solving the problem, or entering into skirmishes to support one side against another..And what caught my attention was that there were two elderly men sitting on the shore..and one tried to find out what had made the people fight and grapple with one another by hand..but his colleague opposed him and said to him "What have we to do with them, let us mind our own business" meaning (leave them, let us mind our own business)...and their business was certainly nothing but watching the vacationers, drinking tea...and listening to tales of old among themselves!

-        So Egypt endured and obtained...and what does she have, and what money, the headache, and the extermination war that is taking place, and is still ongoing..with the neighbors...at the hands of other neighbors...!