Egyptian army and politicians bow to demands of the IMF

The selection of Hazem el-Beblawi as the Egyptian prime minister and Mohamed ElBaradei as vice-president for foreign affairs ensures that a loan will likely be ratified with the IMF.
The transitional government will deal with the sinking economy by giving in to demands of the IMF for huge reductions in subsidies and other economic reforms that will improve investment conditions for international capital.
Beblawi has a Ph.D. in economics from the University of Paris. He has worked as an economic consultant as well as a UN official. He had criticized Mubarak's economic policies for not opening up free markets. He served as a finance minister in the transitional government before Morsi's election, He is a strong supporter of the IMF pressure to reduce subsidies:“We must create a clear understanding for the public that the level of subsidies in Egypt is unsustainable, and the situation is critical,"He blames Morsi for not communicating the gravity of the situation to the public. However, Morsi is a politician whose constituents will be hurt by reduction in subsidies and his popularity would decline even further.

However, Beblawi goes on:“The canceling of subsidies requires sacrifices from the public and therefore necessitates their acceptance. It is crucial that they understand the scope of the danger that the current size of subsidies impose on Egypt’s economy, and they must also feel that its rationing is done in a way that guarantees social justice.”Morsi's reluctance to impose the demands of the IMF because of the political backlash they would create led Morsi to move slowly and has held up the package that the IMF and foreign investors claim is necessary to keep Egypt's economy afloat. The IMF has constantly lectured Egypt on subsidies and other barriers to liberal capitalist development in the country. As the video below shows Islamists have their own objections to the IMF loan.
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