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09:50
rabiul islam
Egypt will not borrow from the World Bank and International Monetary Fund after revising its budget and cutting the forecast deficit, even though a loan had been agreed, Finance Minister Samir Radwan said .
The 2011/12 deficit in the first draft budget was forecast at 11 percent of gross domestic product, but was revised to 8.6 percent because of a national dialogue and the ruling army council's concerns about debt levels, the minister told .
"So we do not need to go at this stage to the Bank and the Fund," Radwan said, adding Egypt, which had borrowed from the IMF under ousted president Hosni Mubarak, still had the "best relations" with the two US-based institutions.
Despite the budget revisions, the government said it still expected growth of 3.0-3.5 percent, in line with previous forecasts, which some economists said could prove optimistic.
Egypt this month agreed on a $3-billion (1.9 billion pounds), 12-month standby loan facility from the IMF, which Cairo had said came with more lenient terms than usually associated with such lending.
The IMF and World Bank had been among a range of foreign countries and bodies to offer funds to Egypt to help cover a big budget shortfall after the economy was plunged into turmoil by the mass protests that drove Mubarak from office on February 11.
Egypt's cabinet had approved on June 1 a budget for 2011/12 that increased spending by a quarter to create jobs and help the poor. That was revised in a new draft announced on Wednesday that included raising income tax and reducing fuel subsidies.
Gulf Arab states are among those who offered support.
Radwan said Qatar had provided $500 million for budgetary support in the past week. "That is a gift," he said, when asked if there were any conditions attached to the Qatari cash.
He said Saudi Arabia had earlier offered a similar amount.
The minister said the first draft of the budget, which forecast a deficit of about 170 billion Egyptian pounds, was discussed with activists, writers, the business community, trade unions and non-government organisations.
23:12
rabiul islam
Emerging economy Indonesia threw its backing on Sunday behind France's Christine Lagarde to become head of the International Monetary Fund.
A late challenge from Israel's Stanley Fischer, announced on Saturday, faltered as fast as it emerged.
Indonesia was previously non-committal on the race for the top IMF job as Southeast Asian and other emerging market nations discussed the possibility of putting forward a candidate from their region.
Lagarde, already backed by the European Union and a handful of smaller countries, gained a personal message of approval from her opposite number in Jakarta, Finance Minister Agus Martowardojo.
Several large emerging economies have been critical of the longstanding tradition of the IMF being led by Europeans.
The French finance minister, who is on a world tour to drum up support, said during a Sunday stop in Cairo she had got "very affirmative" support there, suggesting new fans now included two of the world's most populous Muslim countries.
The United Arab Emirates declared its support for her on Sunday.
The top position at the world's main rescue-lending agency became vacant after Frenchman Dominique Strauss-Kahn resigned following his arrest by police on May 14. He has been charged with the attempted rape of a New York hotel maid, which he denies.
On Saturday Bank of Israel boss Stanley Fischer, once second-in-command at the IMF, said he was joining the race. Until then her only real challenger had been Mexican central bank chief Augustin Carstens, whose bid has been seen to be trailing badly.
Fischer's surprise move looked something of a long shot. At 67 he is two years past the maximum set for applicants.
Israeli Finance Minister Yuval Steinitz admitted on army radio hours that Fischer's "chances are not great", because of politics as well as his age.
"Were it purely professional one would be hard pressed to find a better person than Fischer," Steinitz added.
Fischer was born in Zambia but holds both Israeli and US citizenship. The former could pose a problem for Arab countries and the latter because the IMF job normally goes to a European on the grounds that a US national already gets to fill another post, the top job at the World Bank.
Fischer's IMF record may additionally be questioned in Asia, where he remains associated with harsh IMF-backed free-market policies the region was forced to adopt in the late 1990s in return for aid to counter a financial crisis.
MORE PROGRESS FOR LAGARDE
"Personally I support France," Indonesian Finance Minister Agus Martowardojo said.
"She is a very professional person. She is smart in interacting between institutions, and has high integrity and skills," the minister said in comments during an economic forum in the Indonesian capital.
Lagarde's latest campaign stops included Saudi Arabia on Saturday.
Mexico's Carstens visited New Delhi on Friday but appeared to fail to secure backing.
India and the other biggest emerging market economies China, Brazil, South Africa and Russia have called for an end to Europe's grip on the top IMF job but they have failed to put up a candidate of their own or explicitly back Carstens.
"There is not the capacity to build consensus among the emerging market nations behind one candidate, irrespective of who that person is, and besides that the Europeans feel very strongly," said Ian Bremmer, president of political risk consultancy Eurasia Group.
"I think it's virtually impossible to unseat Lagarde at this point."
