Drop Egypt’s Debt letter to IMF around Spring meetings requesting transparency!

28 April 2012 by Popular Campaign to Drop Egypt’s Debt

The Popular Campaign to Drop Egypt’s Debt demands, in an open letter, that all conditionality clauses relating to the proposed $3.2 billion IMF loan to Egypt be revealed

Dear Ms. Christine Lagarde,

The Popular Campaign to Drop Egypt’s Debt is writing you to raise concerns on the way the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

loan is being negotiated and propose actions by the IMF to correct the problems.

Unfortunately the Egyptian government continues to pursue the same style of the pre-January revolution loan handling. For example, the government continues to conceal the details of the economic program that is associated with the loan that Egypt is currently negotiating with the IMF. This approach is reflected in that:

1. The government has not disseminated the economic reform program through media outlets at any stage during its preparation. The details of the initial draft of the program were unveiled to the public only after the Campaign leaked the document to the media.

2. Until the writing of this letter, the parliament and the Ministry of Finance refuse to disclose the details of the economic reform program after it has been amended.

3. The economic reform program has not been subject to any form of public debate.

4. The economic reform program was never discussed in any public sessions in the parliament. It was only discussed behind closed doors among members of the parliament’s planning and budget committee, and representatives of the government and the IMF.

5. The parliamentary planning and budget committee had announced initially its refusal to accept the economic reform program. It then reversed its position and told the press it approves of the program, without any explanation to the public of the reasons for shifting its position.

These practices are in direct contradiction to the transparency and accountability principles of both the IMF and the Egyptian governments. The Egyptian people will bear responsibility for the obligations of this loan for years to come, and thus they must actively participate in formulating its terms.

Therefore, the Popular Campaign to Drop Egypt’s Debts urges the IMF to:

- Disclose the details of the economic reform program and the details of previous drafts of the program so that the IMF would not be complicit in sidelining the Egyptian people. Inaction from the IMF would signify its tacit approval of negotiating a loan in isolation from the Egyptian people and of continuing the non-transparent, unfair practices of the Mubarak regime.

- Cease negotiations associated with the proposed loan to Egypt, because the government engaged in these negotiations is unelected and its key figures belong to a corrupt and non-democratic old regime. The Egyptian people continue to struggle to change the old regime in order to establish a society and economy based on transparency, accountability, and citizens’ participation in decision-making affecting their lives. Egyptians are striving for a society and an economy that address the needs of the majority of the people and that distribute burdens among its members according to their respective financial capabilities and obligations.

- Finally, the Campaign believes that the persistence of secrecy surrounding the negotiations of the details of the agreement with the IMF will render the proposed loan suspect of being “odious.”

Looking forward to hearing you

Your sincerely,

The Popular Campaign to Drop Egypt’s Debts

Contact: egyptiandebtaudit at gmail.com

Other articles in English by Popular Campaign to Drop Egypt’s Debt (2)



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