Egypt’s Next IMF Loan: How to Avoid the Failures of the Past Six Years

Source: The Tahrir Institute for Middle East Policy

Author(s): Timothy E. Kaldas

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In 2016, the International Monetary Fund (IMF) lent Egypt $12 billion, launching a program of economic reform and austerity. Six years later, Egypt is returning to the lender of last resort for the third time, because the 2016 program failed in its primary objectives. Central to this was the failure of planners to center governance as a condition for the loan, to prevent the squandering of the funds by regime elites while the economic struggles of the rest of the population worsened. The IMF and its shareholders now have a new opportunity to correct their past mistakes. It is not too late to encourage Egypt to undertake difficult reforms; these can unleash the country’s potential, rein in the regime’s economic malpractice, and set the country on the path to sustainable and inclusive private sector-led growth and increased labor force participation. Only then will there be the macroeconomic stability that IMF planners and Egyptian officials insist they are targeting.

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