[The following press release was issued by the Popular Campaign to Drop Egypt`s Debt on 1 April, 2012]
The end of the Mubarak dictatorship left Egypt with a heavy legacy of failed economic policies and a misshaped sovereign debt management with projects not necessarily benefiting the vast majority of the Egyptian population. Today, Egypt bears the burden of a public external debt amounting to $35 billion consuming 2/5th of the national budget to service and principal repayment. In 2011, debt service amounted to more than government expenditure on health, education and housing combined. Mubarak’s failing economy, complete lack of social justice, and the extreme violations of the citizen’s social and economic rights was only complemented with an iron fist stifling the protests of a suffering but raging population. Furthermore, some of Mubarak’s debt incurred throughout the past three decades clearly promoted certain economic policies, which when combined with the corruption of a soft state par excellence, allowed for the concentration of both political and economic power in the hands of a few. Meaning that such debt and conditionality attached empowered those, who systematically marginalized, oppressed and tortured Egyptians until they revolted.
Moreover, with a severe deficit in its balance of payment and a critical decline in its foreign currency reserve levels, Egypt now needs every domestic resource available to be invested in its social infrastructure and to speed economic growth. An independent debt audit rendering some of Mubarak’s debt odious or illegitimate shall enable current and future governments to meet their obligations towards their citizens. It will constitute a means for achieving the main goals of the January 25th revolution: ‘’Bread, freedom and social justice’’, by relieving Egyptian citizens from servicing and repaying debts they had not requested nor benefited from.
Furthermore, in the light of the resolution [1] of the ACP-EU Joint Parliamentary Assembly ACP-EU/100.958/11/ fin of May 2011 specifically calling for auditing foreign debt owed by countries going though democratic transition, including Egypt, and the temporary suspension of repayment.
in view of the recent Call [2] to National and European MPs for an audit of Tunisia’s debt to the EU, the campaign urges all MPs and MEPs to adopt the same position towards Egypt’s foreign debt in order to unearth all illegal, illegitimate or odious debt incurred following the last debt restructuring process of 1991 during the dictator’s administration.
Given the above background, the Campaign believes that a portion of Egypt debt’s to Europe could very well fall under the legal definition of illegal, illegitimate, or odious debt, the identification of which is only possible though an independent citizen’s debt audit commission. The audit, to which members of civil society must be associated, as was the case in Ecuador in 2007-2008, will shed light on what the money was borrowed for, the circumstances in which loan contracts were signed, what conditions were set, and their environmental, social and economic consequences. The audit should also serve to prevent a new cycle of illegitimate and unsustainable debt while underlining the responsibility of European creditors; international financial institutions in which the European Member States are playing a preponderant role, as well as the Egyptian government.
This is why, we the undersigned, Members of different Parliaments of Europe, both at national and European levels, call for an immediate auditing of the debt.
To sign this call, please contact Noha El Shoky (nohaelshoky@yahoo.com) from the Popular Campaign to Drop Egypt’s Debt.
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[1] http://www.europarl.europa.eu/intcoop/acp/60_21/pdf/adopted_ap100.958_en.pdf