Egypt's poor need cash replacement for subsidies - IMF
Egypt’s poor need to be compensated in cash transfers for the removal of subsidies, said an official from the International Monetary Fund (IMF) at a press conference in Washington on Tuesday.
Carlo Cotterelli, director in the fiscal affairs department of the IMF, said that although the lower-income segment of the Egyptian population benefits from subsidies, it is critical to cut subsidies as they benefit the rich more than the poor.
“You need to compensate the poor for the loss of subsidies, but at the same time, you also save money because you are not subsidising the rich. That is basically the advantage of eliminating subsidies and replacing them with cash transfers,” Cotterelli told reporters.
Cotterelli said that trimming subsidies would lead to price hikes in commodities, but said that compensation for the poor would allow them to afford the increases.
For her part, Martine Guerguil, assistant director of the fiscal affairs department, said that along with reforming subsidies, reconsidering revenue and ensuring there are no undue loopholes in the tax capacity are important elements to reduce the budget deficit.
On Wednesday, a high-level delegation of Egyptian officials left Cairo, bound for Washington DC to take part in the semi-annual meetings of the IMF and World Bank later this week.
An IMF technical team left Cairo on Tuesday after two weeks of talks with Egyptian officials yielded no conclusive outcome regarding its eluded $4.8 billion loan deal with Egypt.
- Explain this, Mr. Erdogan: income of Turkey's richest 7.7 times that of poorest
- When it comes to business, introducing yourself is an art
- Why India is likely to re-emerge as the UAE's top trade partner
- What's really attracting high net worth individuals to living in the UAE?
- Forbes Middle East reveals names region's 200 most powerful women
- Left-wingers in Egypt condem IMF loan following meeting
- Subsidies not a sustainable way of helping the poor - IMF
- Long-awaited IMF loan to Egypt should be completed by October end
- Bye bye nanny state, hello Egypt/Jordan style protests? Kuwait to possibly scratch $16 billion worth of subsidies
- Egyptian delegation head to Washington for IMF and World Bank talks