CAIRO, 27 October 2004 — The International Monetary Fund (IMF) urged Egypt yesterday to begin implementing a series of measures it says will help economic recovery, spur growth and raise the standard of living.
IMF Managing Director Rodrigo de Rato told Egyptian President Hosni Mubarak that the main challenge for Cairo was to pay off part of its foreign debt, which hit $28.7 billion in 2003.
He also urged the government to take immediate action to reduce a $60-billion budget deficit that has been growing faster than gross domestic product, de Rato told journalists.
Egypt, said the top IMF official, should promote transparency in government spending and accelerate reforms, particularly tax reforms, and continue liberalizing the economy and privatizing state-owned enterprises.
The reform-minded government of Prime Minister Ahmed Nazif that took office in July has pledged to turn around Egypt’s ailing economy and rein in high inflation, skyrocketing unemployment and the huge debt burden.
Egypt announced in September that it was ready to allow foreign companies to manage state-owned businesses but would not give up control of those firms it sees as strategic.
Rato was in Egypt on the final leg of a Middle East tour that also took him to Lebanon and Saudi Arabia.
Rato, while in Lebanon, on Monday warned officials about Lebanon’s economic “vulnerability” given its gigantic debt and stressed the need for long overdue reforms.
Rato said Lebanon’s economic weaknesses stemmed from a public debt that has exceeded $35 billion. Of the government, Rato said “efforts have to continue on the path of reforms,” mainly with respect to long-awaited privatization projects, he told a joint news conference with outgoing Finance Minister Fouad Siniora. “The path has to continue and the first issue is the debt,” said Rato.
Faced with the economy’s “vulnerability”, Lebanese President Emile Lahoud “is convinced of the necessity of reforms,” he added, speaking in English. “He has his own opinion regarding the debt and in the way to make reforms in the public sector,” he said, following talks with the head of state.
Rato was speaking at the Beirut inauguration of an IMF regional office to help Afghanistan and countries in the Middle East reform their economic, monetary and fiscal policies.
The so-called Middle East Technical Assistance Center (METAC) will provide training in economic, monetary and fiscal policies to Afghanistan, Egypt, Iraq, Jordan, Lebanon, Libya, the Palestinian territories, Sudan, Syria and Yemen.
It is the fifth IMF center of its kind, after regional centers for East and West Africa, for the Caribbean and the Pacific.
