Eight human rights and good governance organizations - in a letter to IMF executives - said that the fund should postpone the vote on a $ 5.2 billion loan to Egypt, scheduled for June 26, 2020, until strong anti-corruption requirements are included in the program, and publish Conditions of the loan to the public, according to a report by Human Rights Watch on Tuesday.
On June 5, the Egyptian government reached an agreement with the fund to arrange a reserve of $ 5.2 billion, which is a flexible tool that grants loans for a short period of time, and on less terms than the Fund's traditional programs.
A press release issued by the Fund indicated that the purpose of the loan is to "support health and social spending, improve fiscal transparency, and achieve greater progress in reforms aimed at stimulating growth and job creation led by the private sector."
On May 11, the Fund's Executive Board approved a separate amount of $ 2.77 billion in emergency aid for Egypt, as part of another loan facility to support the government's response to the Corona virus.
"The International Monetary Fund has repeatedly said that fighting corruption and public participation are two key elements of its strategy in the economic crisis linked to the Coronavirus, yet it lends billions of dollars to Egypt without spreading conditions to the public or taking into account," said Sarah Saadoun, a human rights and business researcher at Human Rights Watch. High risk of corruption. "
The groups that signed the letter are: "Cairo Institute for Human Rights Studies", "Community for Justice", "Egyptian Forum for Human Rights", "Euro-Mediterranean Network for Rights", "International Federation for Human Rights", and "Freedom Initiative" , Human Rights Watch, and the Middle East Democracy Project.
The International Monetary Fund has yet to publish documents describing the loan program, making it impossible for the public to assess whether the agreement includes requirements to ensure that the funds are used with transparency and adequate guarantees against corruption.
To allow informed public participation in relation to a potential loan, the fund must change its practice of issuing such documents only after a vote by the Board of Directors. The documents relating to a $ 2.77 billion loan last May were not published yet.
In recent years, the Egyptian government has undermined the independence of its anti-corruption bodies and weakened the role of the judiciary, which has greatly exacerbated the risks of corruption in the country. As noted by the US State Department country reports, the government does not effectively enforce anti-corruption laws.
The intervention of the army - which is expanding rapidly in the Egyptian economy - has increased the risks of corruption, as the companies it owns lack any independent or civil supervision, which deprives the Egyptian public of the information necessary to assess the costs and the beneficiaries of publicly funded projects.
Undermine
In March 2016, President Abdel Fattah El-Sisi, the head of the Central Auditing Organization in Egypt, sacked Hisham Geneina, an independent body designed to monitor corruption, after he stated that Egypt had lost 600 billion Egyptian pounds (about $ 76 billion at the time) between 2012 and 2015, Because of government corruption. Later, a court sentenced Genena to a year in prison for "spreading false news" about corruption in Egypt.
To ensure the independence of the agency, Egyptian law gave its president immunity from dismissal, but President Sisi issued a decree in July 2015 - in the absence of parliament - that allowed him to dismiss the head of any agency.
In October 2019, the International Monetary Fund released the final portion of a $ 12 billion loan over 3 years for Egypt, which it considered did not address serious gaps in governance in Egypt. The austerity measures taken by the government, in addition to floating the Egyptian pound, contributed to increasing inflation rates and increasing poverty, in light of the insufficient social support programs.
After approval of the loan in 2016, the IMF Executive Board adopted a new framework to improve how it tackles corruption in member countries. Recently, on June 16, the Fund's Director-General, Kristalina Georgieva, confirmed in an interview with Transparency International, an organization that monitors corruption, a continuing commitment to implementing this framework. During that interview, she stressed that "entrenched corruption undermines sustainable and inclusive economic growth," among other detrimental effects.
"Nearly 100 million Egyptians must ensure that the International Monetary Fund does not hand over their government billions of dollars without appropriate controls, to ensure that it really goes to help the most affected by the economic consequences of the epidemic. The IMF's executive board must fulfill its obligations to transparency, fight corruption, and defer Voting until the conditions are publicly published, and anti-corruption measures in place.