Egypt’s Muslim Brotherhood group, which has formed the Freedom and Justice Party, is campaigning hard ahead of September’s elections as it hopes to win up to half the parliamentary seats. It is basing its campaign on a plan to trim the country’s deficit which would bring foreign investors back into Egypt.
Before the uprising in February, the Brotherhood was one of the largest opposition groups. Its leader, Khairat el-Shater is quoted as saying “It’s always better for any country to build on the basis of investment and not loans.”
Interest payments on public debt account for 22% of spending, up from 20% last year. It is the third largest bill, after wages and subsidies. In fact Egypt’s spending on debt costs more than the combined costs of health care, education and housing. The average yield on public debt is estimated to increase from 10.7% last year to 12.5%.
The Muslim Brotherhood was founded in 1928, and after decades of suppression is now speaking out about its views on governing the country. The group is well aware that some foreign investors may be put off by a government that has a large Muslim Brotherhood representation, and they want to reassure investors that they are business owners and professionals.
Egypt is already taking steps to cut international borrowing, and has turned down a $3 billion loan from the IMF, preferring instead to get finance from domestic borrowing and aid from Arab countries. The UAE has already pledged $3 billion of support for Egypt. The economy in Egypt is expected to expand by 3.2% this year, and although this is the lowest rate for about a decade, it is still better than many western countries.
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