Al Nour Party Suggests Five Alternatives To Foreign Borrowing

A member of Al Nour Party said the foreign loans that that Egyptian government seeks to secure will impose great burden on the state’s budget in the coming years.

Abdel Halim Al Gammal, deputy head of the Finance and Economic Affairs Committee at Shura Council and member of Al Nour Party, suggested some alternatives to foreign borrowing as follows:

Firstly, the government shall restructure the subsidy system to ensure that they reach those who deserve the most. The country allocates EGP 145.4 billion to the unjust subsidy system which equates the poor with the rich. Reforming this system will save the country billions of pounds.

Secondly, the government has to include “special funds” to the state’s budget as their net balances reached about EGP 34 billion at the end of June 2012. “Special funds” are monies raised by state institutions through means other than customs or taxes, such as hospital fees or parking tickets.

Thirdly, dispensing with advisers appointed by the government and those appointed during Mubarak’s era will save the country about EGP 16 billion.

Fourthly, taking steps to combat favoritism and corruption will save the country a lot of money that can be used to raise the efficiency of the state’s administrative body.

Fifthly, offering sukuk, which is currently being discussed in the Shura Council, will enable the country to abandon foreign borrowing. Sukuk is said to attract US$ 15 billion of investments annually to the country as the Islamic Sharia-compliant instrument will encourage many investors inside and outside the country to invest in this instrument.

Al Nour Party had earlier announced it is against the loan agreements sought by the government in the current period because they are against Sharia and will impose great burden on the state’s budget. However, the Freedom and Justice Party, majority party in the Shura Council, insisted to seek foreign loans as an urgent solution to the current situation.

Al Nour Party called on FJP to Consult Al-Azahr Institution on the loan agreements as per the constitution which stipulates that Islamic Sharia is the main source of legislation. Al Nour Party said it may resort to the judicial system to prevent the government from asking for interest-bearing loans.