x Abu Dhabi, UAESaturday 22 July 2017

Generals bow to IMF

Egypt's military rulers have embarrassed themselves by accepting an IMF loan they previously rejected, an Arabic commentator says. Other topics: Lebanon and Asia's need for oil.

Egypt's army chiefs will be forced to accept IMF terms to save their currency from collapse

The Supreme Council of the Armed Forces, which has ruled Egypt since the overthrow of Hosni Mubarak, has recently brought embarrassment on itself and the entire country by requesting a huge loan from the International Monetary Fund after having rejected it earlier, columnist Mazen Hammad wrote in yesterday's edition of the Qatari newspaper Al Watan.

"By refiling a request with the IMF for a $3.2 billion (Dh11.7billion) loan, SCAF showed that it was incapable of making an accurate assessment of the situation in Egypt," he wrote. The "worsening economy inevitably pushed the army council to change its mind."

The loan in question was up for negotiations between SCAF and IMF officials last spring, but the military council suddenly decided to back out, fearing that the loan terms would constitute a threat to Egypt's sovereignty.

Later, Egypt's minister of planning and international cooperation, Faiza Abu El Naga, said in a joint press conference with an IMF representative that her country may ask for a larger sum than the one previously discussed, the writer added said.

"Egypt's economy has been affected by the collapse of the tourism industry and diminishing foreign investment amid general uncertainty surrounding SCAF taking the reins of power for the period of transition," the columnist noted.

The army council is supposed to transfer power to a civilian government after presidential elections are held in June.

According to economists, Egypt's hard currency reserves have dwindled from $36 billion before the revolution to about $10 billion. In addition to that, the Egyptian pound is currently under tremendous pressure and is likely to weaken, driving up the inflation rate and, with it, social insecurity, the writer noted.

To dissipate fears about a currency collapse, SCAF has been issuing national bonds in US dollars, not in the local currency. But that seems not to be doing so well.

"The IMF remains a critical lifeline that can reassure both Arab and Western creditors in their pledges to help Egypt," he said.

And away from big calculations and high-level negotiations, Egypt's financial hardship can be seen on the street. Motorists, for instance, are starting to feel a severe shortage of fuel.

"You'll see long queues at gas stations in different parts of the country, amid fears that prices may soar any minute," the writer went on. "This flagging economic situation leaves SCAF with the inevitable option of getting that loan from the IMF.

"Yet, as much as the loan would curb the risks of inflation and prevent the free fall of the Egyptian pound … it will also subject SCAF to the political conditions set by the real chiefs of the IMF in Washington," the writer concluded.

UN view of Hizbollah and Israel is tilted

During his visit to Beirut this week the United Nations secretary general, Ban Ki-moon, urged Lebanese officials to do "a whole lot of things" - the kind of lecturing Israel never gets no matter what mess it makes, wrote Barakat Shlatweh in his column for the Emirati newspaper Al Khaleej.

Mr Ban called on the Lebanese government to rid the country of weapons in the hands of "militias," mainly referring to Hizbollah, the Shiite armed and political group based in southern Lebanon, and which has ministers in the current Lebanese cabinet.

"Mr Ban must know that no weapons are out of state control except those owned by the Lebanese resistance and the Palestinians in the refugee camps," the columnist said.

Lebanese, Arab and Iranian sympathisers with Hizbollah refer to it as "the resistance" (against Israel). For the US, Israel and other western nations, it is a terrorist organisation.

"The reason why those weapons exist at all was made clear in the July 2006 war and on similar occasions," the writer said.

In the summer of 2006, Israel entered an armed conflict with Lebanon, which ended with a UN-brokered truce. Hizbollah played a key role in repelling Israeli forces.

Mr Ban must some day take the time to denounce the innumerable atrocities Israel is still committing against Arabs, the writer concluded.

Asia looks to Gulf as Iranian oil ban nears

Leading figures from China and Japan and other Asian nations have been touring the region this week, signing cooperation deals in Saudi Arabia and the UAE, columnist Randa Taqiy Al Din wrote in the London-based newspaper Al Hayat yesterday.

This is, the writer added, an indication that these countries - which are significant importers of Iranian oil - are looking for more stable oil suppliers in the Gulf.

Iran was Opec's second largest exporter to Asia in 2011, with an estimated 1.3 million barrels per day, routed through the Strait of Hormuz. Its shipments to Europe totalled 787,000 barrels per day last year.

But Iranian exports are at stake now. Next Monday, the European Union will make its final decision on whether to stop importing Iranian oil, the writer noted.

"Iran is really vulnerable to an economic chokehold.

"And even though China has criticised the oil embargo and is intent to continue buying Iranian oil, it is looking for additional supplies from partners that are easier to deal with, financially, than Iran."

The US has recently imposed more economic sanctions on Iran, this time to cut its central bank off from international financial markets.

 

* Digest compiled by Achraf El Bahi

aelbahi@thenational.ae