Egypt signalled it was ready to resume talks with the IMF over a US$4.8 billion (Dh17.63bn) loan yesterday as its budget deficit widened and foreign investment slumped close to zero.
The planning minister Ashraf El Araby said yesterday the government planned to invite a team from the Washington-based fund within one week.
"Reaching an agreement with the IMF is a positive signal that the Egyptian economy is able to heal," he said during a news conference in Cairo.
"An agreement with [the IMF] is the key engine to get us out of this crisis."
Egypt reached an initial agreement with the IMF on the loan in November but postponed final approval a month later because of political unrest at the time.
It needs the cash to avert an impending liquidity crisis and to patch a gaping budget deficit.
But recently the country's plight has deepened. Last month, Egypt's foreign currency reserves dipped below $14bn, the IMF's recommended level that covers three months of imports.
Underscoring the depth of the crisis, Mr El Araby said foreign investment had all but ground to a halt in the six months to the end of December.
He said Egypt needed strong investment to reach 7 per cent annual economic growth, the rate economists believe is needed to lower unemployment and soak up the waves of young Egyptians entering the labour market.
However, he said growth had been just 2.2 per cent year on year in the three months to the end of December.
Other data presented similarly grim reading. Egypt's budget deficit widened to 92 billion Egyptian pounds (Dh50.17bn) in the first half of the year, compared with 73.3bn pounds a year earlier.
The budget deficit could further swell to 180bn pounds or 10 per cent of GDP in the 12 months to the end of June, he said.
Mr El Araby said the government was confident a deal could be struck with the IMF before parliamentary elections, whose date has yet to be fixed.
His comments indicated the government was in the final stages of the economic programme that it must present as part of the talks.
The challenge for officials under an IMF programme would be to control spending, while not stoking more unrest. The prime minister Hesham Kandil has said any reforms would not target the neediest, amid concern that cutting the subsidies would result in the prices of staple goods soaring.
Although an IMF deal will plug only a small portion of Egypt's budget problems, it is viewed as important to drawing in assistance from other investment sources.
In a sign of the government's eagerness to entice back investment, the government on Wednesday said it would offer arbitration to convicted investors who had fled the country.
As part of a move designed to draw a line under investments associated with the ousted president Hosni Mubarak, the new regime had announced plans for criminal action against a number of foreign individuals and companies in following his departure. In a statement, the government said such a reconciliation would lead to the cancellation of jail sentences and unlock the investors' frozen assets.
* With Bloomberg News, Dow Jones and Reuters
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Anti-semitic attacks
The annual report by the Community Security Trust, which advises the Jewish community on security , warned on Thursday that anti-Semitic incidents in Britain had reached a record high.
It found there had been 2,255 anti-Semitic incidents reported in 2021, a rise of 34 per cent from the previous year.
The report detailed the convictions of a number of people for anti-Semitic crimes, including one man who was jailed for setting up a neo-Nazi group which had encouraged “the eradication of Jewish people” and another who had posted anti-Semitic homemade videos on social media.
A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
