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Egypt and the IMF – An Economic Struggle for the Future of the New Middle East

April 4, 2013 Leave a comment

Egypt and the IMF – An Economic Struggle for the Future of the New Middle East

By Younus Abdullah Muhammad

 

In the 2 years since the Arab Uprisings turned over the geopolitics of the Middle East, coherent outcomes have escaped concrete formulation. Debate amongst policymakers in the West tends to split analysis down traditional realist and liberal lines, but most insight has failed to acknowledge that political outcomes will ultimately be shaped by underlying economic decisions. Those decisions will have serious implications, not only for region, but for the future make-up of the global economy. Consequentially, the derivative political outcome may prove to determine whether the current unipolar order perpetuates or transitions into a balance of power system. In reality, the economic path chosen by Egyptians will largely determine the outcome of the Arab Spring and will resonate to affect the entire geopolitical order. imf

Egypt is the most influential country in the new Middle East. With the Arab world’s most populous nation and a political-economy in rapid deterioration, meeting the aspirations that propelled initial uprisings will depend largely on the ultimate formation of economic structures in the country. A milestone related to Egypt’s economic underbelly may have occurred recently. Almost 2 years after President Obama pledged $1 billion in debt relief and assistance, his newly appointed secretary of state, John Kerry pledged to release $250 million in aid contingent on President Morsi’s pursuit of the conditionalities necessary to secure an IMF loan. The decisions, if fulfilled, would not only cement ties between the American hegemon and the Muslim Brotherhood but would sustain and extend Egypt’s participation in an unstable and uncertain international financial order. There are substantial risks for both sides. In releasing aid now, the U.S. is essentially accepting a role for political Islam. In agreeing to IMF dictate, the Muslim Brotherhood-backed Morsi would essentially be accepting participation with an economic order many Egyptians view as contrary to their independent interests.  In reality, if economic principles endorsed by both Western and Islamic systems were advocated a great deal of cooperation and prosperity would ensue and an effective step toward an inevitable, multipolar order would be taken.  Read more…

Categories: Money, Politics Tags: , , , , ,
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