AFTER Abdel-Fattah al-Sisi, Egypt’s president, welcomed hundreds of foreign dignitaries to the seaside resort of Sharm el-Sheikh last year, he made them a simple pitch. The upheaval that followed the Arab spring in Egypt was over, said Mr Sisi, who had ousted his Islamist predecessor, and the country was ready for their investment. He promised stability and economic reforms. His guests, in turn, rewarded Egypt with cash, loans and new business. It was “a moment of opportunity”, said Christine Lagarde, the head of the IMF.
That opportunity has been squandered. A team from the IMF is now back in Egypt negotiating a new package of loans thought to be worth $12 billion over three years. Mr Sisi desperately needs the cash. His government faces large budget and current-account deficits (almost 12% and 7% of GDP, respectively), as Egypt’s foreign reserves run perilously low. An overvalued currency, double-digit inflation and a jobless rate of 12% complete the dismal picture. Potential investors are staying away.
Egypt’s government inspires little confidence. The new IMF package would be contingent on reforms that politicians have talked...Continue reading
Source: Middle East and Africa http://ift.tt/2b4X1Sd
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