'Egypt not headed for bankruptcy'

Ashraf El-Arabi said 'Egypt will not go bankrupt' Cairo – Akram Ali “Egypt will not go bankrupt,” Ashraf El-Arabi, the country’s Minister for Planning and International Cooperation told Arabstoday in an interview in which he spoke about Egypt’s economic prospects. Denying that Egypt is headed for bankruptcy, El-Arabi said “bankruptcy has conditions, terms and indicators that do not exist in the Egyptian economy at the moment.” He also said “no-one can deny” that the country is facing “economic challenges” which he said are “exacerbated by political challenges.” “The recent political situation which arose around the constitution and the upcoming elections endangers the economic situation in the absence of stability. The deficit has gone up to £167 bn ($25bn US) and the currency-exchange reserves have fallen to around $15bn at the end of 2012,” El-Arabi said, noting the Egypt is current facing “external challenges as well as the internal challenges that affect the economy as a whole.” On negotiations with the International Monetary Fund over the $4bn loan requested by Egypt, the minister said they would resume meeting in January. “Egypt’s funding gap has reached $10bn and the IMF loan would help fill this gap,” he said, also adding that Egypt was seeking to receive “$1bn from the World Bank, 500m from the African Development Bank, $500m from Turkey, $900m from the European Union and $450m from the United States, in accordance with signed agreements.” On the cash flow needed to salvage the government, El-Arabi said “There is cash flow due in January, some of it in the form of soft loans and grants, including $5bn from the EU, $246m from Germany, $500m from Saudi Arabia and $200bn from the World Bank for enterprises.” On the prime minister’s initiative for the resolution of Egypt’s economic crisis, El-Arabi said: “It falls into seven main points, the first of which is social justice and its relationship with political and economic management. The second relates to financial and monetary stability. The third is combating corruption. The fourth is investment and employment. The fifth is to do with energy. The sixth relates to tourism and the recovery of previous levels, and the last point is concerned with innovation and entrepreneurship.” “The current government has changed its approach and is now working on social reform, which will come at a price,” he said, adding “the philosophy on which the current government operates is not opposed to the thinking on which Egypt was run prior to the revolution.” “The government has set an emergency plan to face the current economic crisis concluding on June 30 2013,” the minister said, adding “there is also a short-term plan that concludes on June 30 2014.” El-Arabi also told Arabstoday that a conference for the promotion of tourism will be held in January in Sharm El-Sheikh and will be attended by all of Egypt’s religious parties and Islamist groups.