IMF to help Egypt line-up rest of funding to plug financing gap: Deputy Finance Minister Mohamed Maeet denied yesterday that the IMF is requiring Egypt to secure USD 5-6 bn in bilateral assistance during the first year of reforms before it can obtain the first tranche from the IMF, Al Ahram reported. Al Arabiya had earlier published an article (carried in Egypt by Al Borsa) suggesting that IMF head of mission in Egypt Chris Jarvis had said that Egypt “needed to obtain additional financing of between USD 5-6 bn through bilateral agreements in the first year of the reform program to be able to receive the first tranche of the facility.”

Speaking to Bloomberg, Jarvis said, “All IMF-supported programs have to be fully financed,” Chris Jarvis, the IMF’s mission chief for Egypt, said in an e-mailed response to questions. “In Egypt’s case, we would be looking for commitments of around USD 5-6 bn from bilateral creditors before the program is brought to the Board so that we can be sure that the program is fully financed. … [The IMF will be ] working together with the Egyptian authorities in the coming weeks to secure this financing.” (The Bloomberg link is also worth hitting for the autoplay video it includes. Yes, the hated autoplay is worthwhile in this case, carrying as it does commentary from Bloomberg’s Alaa Shahine on the IMF loan. runtime: 3:09)

Cabinet to double number of beneficiaries under Karama and Takaful income assistance programs? Cabinet is planning to expand the Karama and Takaful programs to 1.5 mn families by the FY2017-18 fiscal year, from a current 706K families since the program launched, a government source told Al Shorouk. The news, which followed President Abdel Fattah El Sisi’s weekend speech on the economy, is well-timed to build public support for the reform program. Thursday’s IMF statement noted that the IMF-backed reform program “also aims to strengthen the social safety net to protect the vulnerable during the process of adjustment.” As we have previously noted, Karama provides the elderly and the disabled with a cash stipend, while Takaful is a conditional cash transfer made four times a year to families with children and is conditional upon their school attendance. Families on Takaful receive a base stipend with an additional amount for each child

The IMF is stepping up its Middle East involvement with its loan to Egypt in a region “where economic reformers haven’t exactly had the most success,” Andrew Mayeda and Alaa Shahine write for Bloomberg. “The fund faces many of the challenges it encountered when it lent to Egypt and other countries decades ago, such as poor governance and public resistance to belt-tightening,” they add. AUC economics professor Ahmed Kamaly notes that the “autocratic nature” of most Arab regimes could mean that economic reforms are imposed “with relative ease,” but “once the urgency fades, officials turn away from undertaking reforms, either to appease the public or to protect the interests of cronies.” He cites Egypt’s agreement with the IMF in the 1990s as an example, when the momentum of reforms was tempered by the end of the decade after the economy stabilised.

Government on the PR offensive following IMF loan agreement: Following President Abdel Fattah El Sisi’s speech yesterday on the economy, the Ismail cabinet is preparing to launch a “national dialogue” on the economic reform program in a bid to market it to the nation, a senior government source tells AMAY. Led by Prime Minister Sherif Ismail and senior economic ministers, the government will use a series of regularly scheduled meetings to sell political parties, leading MPs, and the media on the program.