IMF loan to Egypt seen as bribe, not bailout

The IMF is giving Egypt a three-billion-dollar bailout, but there are fears it will only line the pockets of former President Mubarak’s protégés who continue to run the country.

International bankers have agreed to rescue the ailing Egyptian economy, four months after blacklisting Mubarak’s regime.

Cairo is reeling from the revolution that toppled the leader, but the military that once propped up his rule is still running the country.

Some are anxious the cash will be swallowed up by the same old players.

President of the Arab Lawyers Association Sabah Al-Mukhtar believes there are certain motives behind the move.

“I think this is a bribe that the West is trying to give to the regime, lest the new one turns against the West” he told RT.  

Cairo is insisting the money will help stabilize the country’s finances, especially now with Mubarak gone and the country going through a transitional period.

But observers say it is the same spin with only slightly different marketing.

“These agreements are being made with transitional governments and these transitional governments come primarily from figures of the old regime,” says Middle East Affairs journalist Austin Mackell. “They’re composed of figures from the old regime, for example, the finance minister who has been negotiating this loan was a Mubarak appointee.”

Obama is promising Cairo a billion dollars more in loan guarantees and on top of that another billion in debt cancellation.

French President Nicolas Sarkozy has committed the G8 to providing up to 10 billion dollars in direct aid.

It is a commitment the West says it is making to help Egyptians get back on their feet.

“The United States and the West are trying to reduce the damage caused by the revolutions via considerable financial contributions to the Egyptian economy,” says Professor Eitan Gilboa, a political scientist from Bar Ilan University.

And the perfect way is through the IMF which is heavily influenced by the United States.

“For many years the IMF has been considered an arm of American foreign economic policies,” Professor Eitan Gilboa, a political scientist from Bar Ilan University continues.

“And this aid to a regime that is unstable could be considered as a waste of money on something that is very shaky and may not be enough to secure a pro-Western democracy in Egypt after the September 2011 elections”.

It also comes with particular strings attached – and the deal could spell trouble.

“The leaders of Egypt, who no longer run their country, if they accept the IMF loan and the more money they accept the worst trouble they will get themselves in,” warns radio host and author Stephen Lendman. “A country literally loses its sovereignty to Western bankers and other predatory corporations. There is no way the IMF loan could help a country,”he adds.  

What most Egyptians fear is that the money will get used up long before it reaches their pockets – believing it is likely to be only a small elite, as well as international banks, who will benefit from the loans. The last time the IMF injected a large amount of money into Egypt was 20 years ago, but since then the number of Egyptians living below just two dollars a day has doubled.

In February this year, the IMF praised the Mubarak regime’s sound fiscal management in Egypt.

As far as Libya went it said the outlook for the economy remained stable. But just days later Mubarak was ousted and Tripoli was engulfed in anti-Gaddafi demonstrations. So it is no surprise that many say the better the IMF rates a country, the closer that country is to a revolution – highlighting just how wrong the organization can be.