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The Egyptian Economy: Can the International Monetary Fund force Egypt to reduce the role of the army in many sectors? – Financial Times

Abdel Fattah Sisi

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Al-Sisi was defense minister when he led the army in the 2013 overthrow of Dr. Mohamed Morsi, the first democratically elected president in Egypt’s history, and was later elected president of the country.

We begin our tour of the British newspapers with the Financial newspaper and an opinion article written by Yezid Sayegh entitled, “Sisi cannot turn a blind eye to the economic role of the Egyptian army forever.”

The writer, a fellow at the Carnegie Middle East Center in Beirut, says the new loan agreement between the International Monetary Fund and Egypt, announced on January 10, appears at first sight as broad and ambitious as it is welcome.

In addition to measures to address the country’s worsening currency crisis and debt aggravation, the Egyptian government promised a major restructuring of the shares of the public and private sectors in the economy, intending to maintain – or even increase – the characteristic that the state has the lion’s share of investment, in sectors including real estate and transportation.

However, the author points out that, if the government keeps its promises, the impact will be greater than that of the privatization process that began in 1991.

The commitments made to the IMF build on the new state ownership policy that the government put in place last year. The document pledges that the state will fully exit from 79 economic sectors and partially exit from 45 other sectors within three years, in return for increasing private sector participation in public investments from 30 to 65 percent.

While the proposed changes are real gains, according to the author, they also pose a threat to powerful institutional actors and interest groups. Yet neither the government nor Egypt’s president, Abdel Fattah al-Sisi, have publicly prepared the ground to defuse the inevitable shock or win over major supporters.

The article makes it clear that the fact that Sisi formally endorsed the new state’s ownership policy does not change matters. His immediate goal was to strike an agreement with the International Monetary Fund that would allow Egypt to obtain an additional $14 billion in credit from other international and regional sources.

But the writer says that the president’s public statements and official decrees over the past few years reveal a fundamentally different purpose: to capitalize state-owned enterprises and assets such as infrastructure by injecting private funds, while leaving them in the hands of the state.

He adds that the new legislation allows state-owned service providers and utilities to “transfer their future revenues and trade them for sale to investors,” and allows the private sector to manage government-funded projects and public works.

At the same time, the president is transferring a growing list of state assets out of government hands into the control of an increasing number of newly created bodies that report directly to him. One such fund is the sovereign wealth fund, which has emerged as Sisi’s preferred tool for attracting private capital, rather than freely floating state companies on the stock exchange. Thus, his support for the policy of state ownership is a misleading that he may, however, use to hide his actual strategy, according to the author.

All of this may seem to call into question the agreed policy framework with the International Monetary Fund, but the truth is that both sides need an agreement that looks good even though they have neither the will nor the ability to enforce it.

The writer believes that the army may not have to fight hard to preserve its economic share this time: and if the past is evidence, the government will evade its obligations to the International Monetary Fund anyway. However, the tolerance of other foreign partners, particularly in the Gulf states, is uncertain.

But what is certain, in the author’s view, is that for the time being, Sisi will not allow a serious rift with the military to occur, hoping that the government can shoulder the burden of dealing with an increasingly dissatisfied Egyptian public and appealing to foreign donors. But he cannot postpone their confrontation indefinitely.

Possibility of falling into a world of crime

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Asylum-seeking children arrive in Britain by boat across the British Channel

And to the Guardian newspaper, which wrote an editorial reflecting its opinion on the disappearance of asylum-seeking children in Britain.

Recently, reports of the disappearance of unaccompanied asylum-seeking children are chilling.

While it has been known for some time that the children disappeared after being put into hotels by the Home Office, the evidence, from whistleblowers, that the children were carjacked and removed is absolutely shocking.

Last year, the heads of more than 25 organizations described the policy of staying 1,606 children in England in hotels over the past 12 months as amounting to “negligence in the duties of parenting” and “disrespect for children’s rights”.

Home Secretary Simon Murray told the House of Lords on Monday that the severity of this could be seen in the number of children missing, which stands at 200.

But the newspaper says that in May last year, two men were arrested on charges of human trafficking after police stopped their car, which was carrying three asylum-seeking children.

She adds that experts understand that the lack of care from the competent authorities for these children leads to their criminal exploitation. While teenage girls are often targeted for sexual assault, boys are recruited as drug dealers by drug dealers.

And in 2019, gang members were convicted of crimes related to modern slavery after using three children in the drug trade.

The newspaper believes that pressure must now be increased on the government to get rid of the hotel policy, and the right of children to receive the necessary attention and care must be reaffirmed, and the municipal councils must be provided with appropriate resources to implement this.

Currently, responsibility for refugee children is shared by the Ministry of the Interior, local authorities and the police. The result is that extremely vulnerable children find themselves in a difficult situation and are very likely to fall into a world of crime from which it is difficult to escape.

The newspaper concludes that a strategy must be put in place to end disappearances, and a commitment to replace illegal immigration routes with safe and legal ones.

A blow to Sunak’s reputation

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And we conclude our tour in The Independent Online newspaper and an editorial opinion article entitled “The Nazim Al-Zahawi scandal is a blow to the reputation of Rishi Sunak.”

According to British Prime Minister Sunak, there are “questions that need to be answered” about the troubled tax affairs of the Conservative Party chairman, Nazim Zahawi. But the newspaper wonders: Why did Al-Zahawi not pay, in the first place, the correct tax? Why not declare a conflict of interest? Why deny the truth? Why did he say he would sue journalists for defamation? Who is reporting it and when?

Since the newspaper published the story last July, questions about the former finance minister have grown urgent, but they have never been answered — because Zahawi has consistently refused to provide a full account of his situation. Indeed, he categorically denied allegations in the newspaper about official investigations into his tax liabilities as libel, and threatened to sue anyone who dared repeat them.

However, he has now issued a clarifying statement – which only asks more questions – and the Prime Minister has ordered his ethics adviser, Sir Laurie Magnus, to look into the issue.

In addition to providing the Prime Minister with a statement from a full report on the Zahawi tax case in all its complex details – including previous involvement by the National Crime Agency and the Serious Fraud Office – the newspaper believes that all the evidence that Sir Laurie collects must also be made public, as people need to know the quality The people who run the country.

One such claim, for example, is that Al-Zahawi was under investigation by the tax administration at the same time that he was officially in charge of the tax system and was the minister responsible for finance.

Al-Zahawi is said to have paid a total of £5m in taxes including a large fine during his tenure as Chancellor of the Exchequer – an unprecedented event. Had he been known at the time, he would have been forced to resign.

It has also been alleged that Boris Johnson, when he was prime minister, knew of the investigation by the Human Resources Management Committee when he appointed Zahawi as finance minister, and kept him in office even after he had to pay the fine. And it seems that he did not want to lose another finance minister, especially after the resignation of Sajid Javid and Rishi Sunak previously, in protest at the way he runs the government.

There are now also questions about what Sunak knew and when he did. Understandably, he only learned of the tax penalty when it appeared in the press a few days earlier. But that leaves the possibility that he was aware of the general questions about Zahawi’s tax bill, and that he certainly was aware of the allegations that appeared in The Independent Online last July.

So when he became prime minister, did he remove Zahawi from the Ministry of Finance because of what he knew about this issue? And if that was the case, why did he keep Zahawi in the cabinet and put him in another high position, as the head of the party, instead?

It was also reported that Zahawi was refused a knighthood in a recent New Year’s honour, after questions were raised about his tax affairs, and it is difficult to understand how Sunak could have been unaware at this point of how his party chief had acted.

Even after the announcement of the latest revelations, Sunak and his fellow ministers still defend Al-Zahawi, although not always with great conviction, according to the newspaper.

Whatever the conclusions of Sir Lowry’s report, Zahawi’s reputation has become, according to the newspaper, tarnished, and this case “also harms Sunak’s attempts to portray himself as morally superior to Johnson.”

Despite his young age, Sunak has been in government long enough to become acquainted with the Ministerial Code, its stress that ministers should “avoid conflicts of interest”.

After several scandals, “the Conservative Party appears to be in endemic danger and unable to rectify its behaviour”.

Whatever good intentions Sunak enjoyed “were quickly squandered, and part of the blame rests with him.” He should have “abandoned Zahawi a long time ago. Since he hasn’t, it raises embarrassing questions about the prime minister’s judgment and competence.”

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