Egypt's left-wing slam IMF deal

Published April 8th, 2013 - 11:04 GMT
The lifelong leftist stressed that Egypt's economic crisis was tied to the prevailing state of political polarisation
The lifelong leftist stressed that Egypt's economic crisis was tied to the prevailing state of political polarisation

Prominent political opposition figures and economic experts weighed in on Egypt's economic future at a Sunday conference organised by the opposition Popular Current movement in Cairo.

"This conference aims to provide effective, alternative solutions to improve Egypt's economic situation," Popular Current founder Hamdeen Sabbahi said in opening remarks at the conference, which was held under the banner 'Saving Egypt's economy: Towards an alternative programme.'

Speakers at the conference called for a larger government role in economic planning and activity and for abandoning Egypt's 'neo-liberal' agenda.

The veteran Nasserist opposition figure added that Egypt's current economic predicament, including high unemployment and public debt, were the result of erroneous policies adopted in order to meet the conditions of a proposed $4.8 billion IMF loan, which is sought by the government of President Mohamed Morsi.

Sabbahi was flanked by celebrated journalist and political commentator Mohamed Hassanein Heikal, who expressed his faith in Egypt's ability to surmount the current crisis. "Our history shows us that we can fulfil our hopes," Heikal said.

Other speakers, however, did not appear to share his optimism.

Former supply and domestic trade minister Gouda Abdel-Khaleq, for one, lamented what he sees as the absence of change in government thinking regarding the economy since the revolution.

"We are still hearing about the free market economy, which is the enemy of social justice," said Abdel-Khaleq. "This is not the economic system we want for Egypt."

The lifelong leftist stressed that Egypt's economic crisis was tied to the prevailing state of political polarisation.

"Political consensus is the only way to salvage the economy," he said. "It's impossible for one political faction to impose its policies on the rest."

Abdel-Khaleq went on to warn of a looming "revolution of the hungry" in the event that Egypt's political stalemate remained unresolved and revolutionary demands for 'bread, freedom, economic justice and dignity' went unmet.

Other experts were more specific in drawing up a roadmap out of Egypt's current economic malaise.

Nadia Ramsis, professor of political economy at the American University in Cairo, proposed a 'post-neoliberal' economic programme – based on the experiences of certain South American nations – as Egypt's best way forward.

Ramsis asserted that she was "not alarmed" by Egypt's growing budget deficit, currently nearing 10 percent of GDP, but warned that accepting the proposed IMF loan would bring about "economic collapse."

In the short term, she advocates the instatement of a minimum and maximum wage, protectionist customs on imported goods (especially textiles) and a renewed emphasis on consumer protection.

In the long term, she said, the state should preserve and support the public sector, direct private-sector investments, promote national exports, invest in building a technology industry, and focus on improving healthcare and education.

Law professor and opposition figure Hossam Eissa also called for the state to play a determining role in leading the economy.

"This has been the case with current top global economies that were late in adopting the capitalist model," he said, citing both Germany and Japan.

Eissa noted that the state had played a "historical role" in nurturing economic activity in evolving economies.

Economic expert Ahmed El-Sayed El-Naggar, for his part, qualified the current government's economic policies as "clandestine."

"Its policies, like those of the previous regime, are dictated by foreign creditor nations and institutions and their conditions, rather than being based on national interests and our national resources," he said.

El-Naggar hinted that an alternative economic programme would involve addressing the issues of minimum and maximum wages, tax reform aimed at gradual taxation, government protection of the local agriculture sector and consumer protection. 

© Copyright Al-Ahram Publishing House

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