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“Playing Hard to Get with the IMF” – Announcing “Transitions”, the new FP blog

January 13, 2012

I have recently joined a small team of very cool people to author a collaborative blog at Foreign Policy Magazine, which is titled “Transitions” and was lauched – yey! – yesterday. I’ll be mostly writing about the Arab Revolutions, and Egypt in particular, but will venture into completely unrelated topics, and hopefully be as insulting and use as much profanity as the nice editors allow me.

My first post is already up. I’ll try to update it frequently and will crosspost all articles – partially or in total – here.

PLAYING HARD TO GET WITH THE IMF

Egypt has kept many on their toes over the past year, but perhaps none more so than the International Monetary Fund. Egypt requested funding, got it approved, and then changed its mind, only to subsequently announce that it was reconsidering, then that it wanted to but couldn’t, then finally that it might agree.

It’s staggering how international financial diplomacy sometimes resembles a soap opera. It’s all worth keeping in mind when you read about the IMF delegation that’s set to arrive in Cairo next week.

Episode one: April 2011. Meetings between the Ministry of Finance and the IMF in Cairo take place in an optimistic climate of successful post-revolutionary transition. The IMF delegation is more than forthcoming, assuring the Egyptian government and public that no conditions will be attached to the loan besides the government’s own benchmarks. In fact, when Egypt reportedly sought a loan in the vicinity of $2 billion, the IMF approved $3.2 billion.

When, in late June, Egypt suddenly pulled the plug on the agreement, the IMF fumbled to produce a somewhat flummoxed response that can be summed up as “umm, okay, we’ll be hanging around here anyway, let us know.”

……………….Read the rest of the article on FP and come back for comments!

One Comment leave one →
  1. Sarah permalink
    January 14, 2012 5:26 pm

    Very enlightening. Excellent article, and very helpful to those of us outside of Egypt and not privy to government thinking. I can understand not wanting to be in debt to a Euro-group like IMF given the history of colonialism but fail to understand why it’s taken the government so long to read the balance sheet and reach the inevitable conclusion that a loan is a necessity. In the long run, it will stabilize the country and keep food and energy available to Egyptians, one hopes!

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