Group items tagged

Now it seems Morsy and his new cabinet, in consultation with the IMF team, are modifying the Ganzouri’s program, according to Finance Minister Momtaz Saeed who served in both cabinets and helped draw up the original plan. Morsy’s economic advisor Abdullah Shehata has dismissed this claim, suggesting the Ganzouri proposal is not a baseline for present deliberations. But there is yet no evidence the government has produced an alternative that is genuinely different. In the absence of an elected parliament that can put the reform program up for public debate, the government may imagine it will be easier to push the reforms through.

If the government’s concern is to improve Egyptians’ productive livelihoods and their ability to meet basic needs then none of the official reform proposals so far pass muster. The loan is really about boosting investor confidence and attracting foreign capital, a top priority for the Brotherhood’s Freedom and Justice Party.

Morsi’s government is clearly aware of its lack of economic expertise, and thus has chosen to keep around some important members of Mubarak’s government, including the governor of the central bank, Farouk Al-Okdah, and others. “These are the very members of the neoliberal team once in charge under Mubarak,” Adly says. “These bureaucrats and technocrats are quite conservative, and there is the idea that they have been kept in office in order to negotiate with the IMF and the World Bank.”

On Wednesday, Lagarde said that the IMF is “responding quickly” and sending a technical team in early September. That same day, Prime Minister Hisham Qandi said he would hope for an agreement by the end of the year. If an agreement happens, Egypt would be the 20th African country to be indebted to the IMF, according to 2011 statistics. If the final agreed amount is anywhere near the request, the Egyptian loan would be by far the largest on the continent.

If the IMF leadership praised the dictatorship, insisted on austerity and advocated squeezing poor people for more taxes, what business does it have today in giving similar advice to Tunisia, or anywhere in the Middle East and North Africa, or for that matter Europe or anywhere at all? What can we learn about IMF thinking in Tunisia, Egypt and Libya, as well as Palestine?

In contrast, there was no IMF conditionality aimed at reforming the dictatorship and halting widespread corruption by Ben Ali and his wife's notorious Trabelsi family, or lessening the two families' extreme level of business concentration, or ending the regime's reliance upon murderous security forces to defend Tunisian crony capitalism, or lowering the hedonism for which Ben Ali had become famous.

In addition to expanding Public Private Partnerships (PPPs, a euphemism for services privatization and outsourcing), the IMF named its priorities: "adopting as early as possible a full-fledged VAT, complementing energy subsidy reform with better-targeted transfers to the most needy, and containing the fiscal cost of the pension and health reforms."

On the face of it, that seems like an absurd suggestion. After all, for capitalists, things couldn't be better. Corporate profits and executive pay are going gangbusters. There are few if any impediments for the business sector to getting whatever it wants, whether it's free trade deals, a free hand to bust unions, gut workplace and environmental laws, and pressure governments to do their bidding, whether it's bailing them out and never holding them to account.

in an era of globalization and free trade, the ability of capital to give workers higher wages is limited. And cracking down on dissent and becoming more authoritarian, has its limits too, as Syria and Egypt and Libya demonstrate. Capitalism might not be overthrown, but it might be facing a period where its very foundations are eaten away because it continues to exclude too many people from the opportunities they want and deserve.

It’s Davos comes to D.C. – academics and investors like Nouriel Roubini holding forth on world megatrends while Bloomberg television and the BBC stage live coverage and marquee interviews. It’s as if the actual governance of the two institutions – the purpose of the whole affair – has become an afterthought.

Outside the public eye, people like Kim, Lagarde and Lew are holding dozens of one-on-one meetings – “speed dating” is how former Treasury official Scott Morris, now an analyst at the Center for Global Development, refers to it. It’s in those sessions that Egypt tries to make progress on a hoped-for IMF loan, or Indonesian minister Mari Pangestu lobbies to become director general of the World Trade Organization, or U.S. officials get private estimates of China’s shale gas reserves.