Egypt to IMF purgatorium
The country is sick says the Le Monde’s editorial. President Morsi and the Muslim Brotherhood do not have any economic or social program that can go further than the social solidarity networks extremely helpful at the level of poor areas in Cairo but insufficient at the state level. The tourist industry is gravely affected by the constant political turmoil and the lack of Foreign direct investments is pushing public finance needs to deplete reserves going down from 36 to 13 billion dollars in two years. Discussions with the IMF have been initiated and a 4.8 billion dollars loan is negotiated but the conditionality of the IMF includes among other austerity measures the rising of taxes in basic goods. When one thinks that the Arab spring was partially a reaction to the combined factor of demographic expansion and the spectacular hike of the prices of basic products there is little hope of the effectiveness of such measures.