| | In May 1987, the International Monetary Fund agreed to assist Egypt to break out of the 'debt trap' in which it had become increasingly enmeshed over the preceding decade. Since the 'bread riots' of 1977 - which erupted when the price of basic goods, including bread, was increased as part of government measures to bring public expenditure under control - the Egyptian government has been extremely cautious of provoking popular protest and political unrest through the introduction of drastic austerity measures, and it approached the IMF proposals with care. The 1987 IMF agreement, which led to a rescheduling by the 'Paris Club' of creditor states of some $8 billion of government and government-guaranteed debt out of Egypt's total foreign debts of around $45 billion, provided some breathing space on the external front. But the Egyptian government proved unable to adhere to the terms of the IMF 'reform' programme laid down as a condition for the agreement, mainly out of concern for the domestic repercussions. The programme collapsed in late 1987 after half of the agreed $325 million in balance of payments support had been disbursed. Discusses International Pressure; Rescheduling Agreements; 'State of Emergency' Continues; Rise of Interest Rates; Economic Reform. |
