Elbaradei Says Egypt Needs Political Consensus To Heal Economy

Egypt’s government must seek political compromise to win broad support for a crucial IMF loan and revive the country’s ailing economy, senior opposition figure Mohamed ElBaradei said on Tuesday.

The former U.N. nuclear watchdog chief and Nobel Peace Prize winner accused the ruling Muslim Brotherhood of excluding other political forces from decision making, hindering recovery two years after an uprising ousted President Hosni Mubarak.

Political upheaval and a decline in security has scared tourists and foreign investors from Egypt, draining foreign currency reserves needed to fund imports of wheat and fuel for large subsidy programs.

 “Success or failure is now on the altar of political consensus, because if you don’t have consensus, you don’t have stability,” ElBaradei said in an interview with Reuters and the Associated Press at his Cairo villa.

“Without stability, you don’t have an economy going on, and without an economy going on, you will end up with hungry, angry people.”

The government is negotiating a $4.8 billion loan from the International Monetary Fund, which ElBaradei said would be vital to moving toward economic recovery.

“The economy is bust. All of the economic indicators. If you look at GDP, inflation, foreign reserves, current account, national debt, it’s all in the red. It’s a very precarious situation,” he said.

“Everyone is waiting now for the IMF. That is clear.”

There are no political conditions for an IMF deal, but the Western governments that are the biggest shareholders in the lender say political consensus would make it easier to enact economic reforms that come with an IMF loan.

ELECTIONS BOYCOTT

ElBaradei is a senior member of the National Salvation Front, an umbrella group of liberal and leftist parties which threatened to boycott parliamentary elections that were scheduled to start this month but are now delayed until autumn.

The Front has set three conditions for ending a boycott of elected Islamist President Mohamed Morsi and working for a national consensus: the appointment of a “neutral and credible” government capable of managing the country, an independent prosecutor-general and a panel to draft a new elections law.

But ElBaradei said the Brotherhood, after appearing to be ready to reach out to the opposition, had changed tack over the last couple of weeks and now appeared set on going on its own.

“They are drawing a line in the sand, which is not very helpful,” he said.

Some members of the Front have said they are opposed to the IMF loan’s conditions, such as Hamdeen Sabbahi, a leftist politician who came third in a presidential race last year.

But ElBaradei said this could change if the Brotherhood were to reach out for broader consensus around the economy.

“I think that in the end, if the different political parties feel they are partners, and if they sit around the table with the government, and there is an honest, open discussion on what are the options available … I don’t think it’s impossible that they will turn around and accept a loan,” he said.

Reuters