Cairo: In anticipation of protests against economic austerity measures, Egyptian security forces heavily deployed Friday on the streets of Cairo and across the country.
The government has floated the local currency and raised fuel prices in order to qualify for a $12 billion bailout loan from the International Monetary Fund. These reforms have earned praise from the IMF and the international business community, but they have also spawned rising prices and costs of living for an already frustrated Egyptian population and President Abdel-Fattah el-Sissi risks a serious political backlash.
Activists have called for nationwide protests Friday, dubbing it the “revolution of the poor.” Authorities here have banned all unauthorized demonstrations and have routinely responded to protests with lethal force.
That loan is now scheduled to be approved by the IMF on Friday. If approved, Egypt will receive the first disbursement of $2.75 billion immediately. The loan is aimed at restoring international investors’ confidence in Egypt’s economy and shoring up the country’s dwindling foreign reserves.
In recent years, Egypt’s vital tourism sector dried up over fears of terrorism, overseas remittances dropped because of low oil prices, and Suez Canal revenues diminished because of a decline in global trade. Investment and business activity stalled, with inflation hitting 14 percent and unemployment 13 percent.
Government efforts to shore up the currency generated a thriving black market where the dollar reached a rate of 19 Egyptian pounds â€” compared to 8.8 in the banks. In recent days, basic commodities like sugar have become scarce. Last Thursday, the Central Bank devalued the Egyptian pound from 8.8 to 13 to the dollar, and then floated it completely. As of Friday, the was pound trading at around 16 to the dollar.
Earlier, Christine Lagarde, the IMF chief, described Egypt’s reform program as “ambitious” and said it will put the country on a “sustainable path and achieve job-rich growth.” Political parties have distanced themselves from the call for protests on Friday, and authorities have accused Islamist groups like the banned Muslim Brotherhood of engineering the protests to cause chaos.