Tuesday, 17 May, 2022

IMF must condition Egypt loan to protect poorest: HRW warns

BEIRUT: Rights groups on Monday said an Egyptian request for a loan from the International Monetary Fund (IMF) must require Cairo to expand social protection, tackle corruption and ensure judicial independence.

Seven rights groups, including Human Rights Watch (HRW), also demanded the Washington-based crisis lender tie cash to ensure transparency on the military's powerful grip on the economy, reports AFP.

"The IMF and Egyptian authorities should not agree to any loan programme that further raises the cost of living without dramatically increasing investment in universal social protection programs," the statement read.

Since 2016, the IMF has approved three loans to Cairo totalling $20 billion, with Egyptians struggling amid soaring inflation, devaluation of the Egyptian pound by half, and tough austerity measures slashing subsidies on essential food.

Last month, after Russia's invasion of Ukraine caused inflation to surge, Cairo said it would apply for another loan.

Egypt is heavily reliant on wheat imports from Russia and Ukraine, and its inflation rate hit 10 percent in February amid a wider spike in global commodity prices caused by the war.

A third of Egypt's 103 million people live in poverty, and nearly the same number are vulnerable to falling into poverty amid soaring prices of basic food, according to the World Bank.

Last week, Qatar and Saudi Arabia pledged a combined $15 billion in investments, with Riyadh directly depositing another $5 billion in central bank.

Despite pressure following previous IMF loans, the rights groups warned that "progress on badly needed reforms remains elusive," adding that "millions of Egyptians have been left increasingly vulnerable."

Some fear a new IMF loan could make the situation worse.

In addition to boosting support for the country's poorest, the rights groups called for increased transparency on the military's "growing and unaccountable role in the economy" in recent years.

"The military's aggressive economic expansion has gone hand-in-hand with increased political repression," the statement said, calling for "robust anti-corruption requirements."

As well as HRW, the other signatories were EuroMed Rights, Civil Rights Defenders, The Freedom Initiative, The Tahrir Institute for Middle East Policy, the Project on Middle East Democracy, and the Cairo Institute for Human Rights Studies.