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International Monetary Fund: Egypt pledges to reduce the role of the army in the economy – Financial Times

An Egyptian soldier in front of a picture of President Abdel Fattah El-Sisi

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The Financial Times published a report on the economic situation in Egypt and the recent agreement with the International Monetary Fund, entitled (Egypt pledges to reduce the role of the large army in the economy under a bailout plan from the International Monetary Fund), by Andrew England.

The newspaper said that Egypt has committed to reducing the role of the army in the economy as part of the $3 billion bailout package offered by the International Monetary Fund, at a time when the country is struggling to cope with a crisis of foreign currency shortage, weak pound, and high inflation rates.

The fund said in a statement on Tuesday that the “critical” structural reforms approved by Cairo include “reconciling the situation between the public and private sectors” as part of the state ownership policy endorsed by President Abdel Fattah al-Sisi.

He made clear that the policy would cover all state-owned companies including “companies owned by the army,” in a rare acknowledgment from the International Monetary Fund of how the military has expanded its influence in the Egyptian economy since 2013.

Under this policy, the government will determine which “strategic” sectors it will remain present in, while the state will gradually withdraw from “non-strategic sectors” and expand private sector participation in them, including through the sale of assets.

State-owned entities will also be required to submit financial accounts to the Ministry of Finance twice a year and provide information on any “quasi-financial” activities in an effort to improve transparency. The fund said that the ministry will ensure open access to data on its economic activities.

The newspaper said that Egyptian economists and businessmen complained that the army’s role in the economy crowds out the private sector and scares away foreign investors.

President Abdel Fattah al-Sisi considers the army the main tool to help rebuild the collapsed economy after the turmoil that erupted due to the 2011 revolution that toppled the late President Hosni Mubarak. Since then, the military has been entrusted with hundreds of infrastructure projects and has expanded its interests in many sectors, from pasta and beverage production to cement.

The International Monetary Fund predicts that Egypt, which has been hit by the global repercussions of Russia’s invasion of Ukraine, faces a financing gap of $17 billion over the next four years.

“The authorities’ reform program is based on giving a greater role to the private sector, which is urgent, and it is very important that the state’s ownership policy be endorsed at the highest levels, including by the president,” said Ivana Hollar, the International Monetary Fund’s mission chief in Egypt. “.

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The government has allowed the pound to fall in stages by 43 percent against the dollar since March 2022

The fund agreed to provide a new loan to Egypt, the fourth since 2016, after months of talks, and Cairo agreed to move to a flexible foreign exchange rate regime. The Egyptian pound recorded a record low this week, with the government allowing the Egyptian currency to decline in stages by 43 percent against the dollar since March 2022.

Economists say devaluation is necessary to balance supply and demand in the exchange markets, after the government has supported the currency for years. But the weakness of the pound added to inflationary pressures. Core inflation rose to 24.4 percent in December.

The International Monetary Fund pointed to the risks to which the reform program is exposed, including that “adjusting public finances in the context of the high cost of living may face political and social obstacles.”

“There is a need to demonstrate the continuity of the shift to a flexible exchange rate and (the central bank) may face political and social pressure to reverse course. Reforms aimed at reducing the role of the state may face resistance from the country’s vested interests,” the IMF said.

Washington’s goals in Ukraine

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Ukrainian President Zelensky with former House Speaker Nancy Pelosi during a visit to Washington

The Guardian published an article on the developments of the situation in Ukraine and the position of the United States on what is happening there, entitled (The United States must decide what “victory” means in Ukraine – otherwise more lives will be wasted there), by Frank Ledwidge.

The writer pointed out that Washington’s support is important to the conflict, but the United States fails to learn the lessons of its protracted wars in Iraq and Afghanistan, the most important of which is the need for clear goals and a clear strategy for success.

In the current situation, the United States has failed to define its war aims. We hear a lot about the US “supporting” a lot, like Ukraine’s “territorial integrity”, human rights and democratic processes and so on. These are not the same goals of war.

For example, NATO’s goals in the 1999 Kosovo war were clear: the expulsion of Serb forces from Kosovo, the deployment of an international peacekeeping force and civil administration, and the return of refugees. The goals of the 1991 Gulf War were simpler: to drive Iraqi forces out of Kuwait. It is worth remembering, and not coincidentally, that this was the last of the West’s successful military campaigns.

The Guardian indicated that the time has come for the United States (and therefore NATO and its allies) to clarify its goals and provide its support in accordance with these goals. Failure to identify this presages an aimless, protracted and indefinite conflict, leading to a heavy and needless loss of life.

There are so far three different versions of the broader US strategy for Ukraine. First, in March 2022, US President Joe Biden, in a hasty moment he backtracked, said that Russian President Vladimir Putin “cannot stay in power,” in other words, regime change. Shortly thereafter, US Secretary of Defense Lloyd Austin declared in the most persuasive statement of US policy that “we want to see Russia too weak to do what it did in invading Ukraine”. The attrition continues.”

And the latter formula was announced last month by US Secretary of State Anthony Blinken, when he said: “Our focus is on continuing to do what we have been doing, which is to make sure that Ukraine has what it needs to defend itself, and repel Russian aggression, to regain the lands that have been seized since February 24.” “.

This can be summed up in the fact that Washington will work to “give Ukraine enough to defend itself and regain some territory.” But this territory does not include Crimea or, in fact, much of the Donbass region.

This means that Washington’s approach to bleeding Moscow requires prolonging the war for as long as possible, entrapping and weakening Russia’s armed forces in depth and for as long as possible, while maintaining the fighting at a manageable level of intensity. This amounts to using Ukrainian forces as a proxy army, without losing a single American soldier.

With regard to Ukraine regaining its lands, Washington did not hand over large quantities of heavy equipment that would allow Ukraine to regain its lands, although the Ukrainian military leadership requested American-made tanks, armored fighting vehicles, and a gradual change in the amount of artillery, by hundreds, not dozens. Earlier this month, the United States announced the transfer of 50 Bradley Armored Fighting Vehicles, while the Ukrainians ordered up to 700.

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