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Egypt’s Mursi Seeks Consensus as Talks for IMF Loan Inch Along

April 21 (Bloomberg) -- Egyptian President Mohamed Mursi sought to break a political impasse that has stymied stability efforts, pledging to reshuffle his Cabinet and stressing the government wouldn’t embrace policies that harm the poor.

The push is the Islamist leader’s latest effort to strike a balance between addressing the polarization gripping Egypt while pushing ahead with efforts to restore investor confidence tied to getting a $4.8 billion International Monetary Fund loan.

The reshuffle, which Mursi said was imminent during an interview with the Al-Jazeera satellite-television channel yesterday, was aimed at addressing criticism that his government has been incompetent. It also comes against a backdrop of weekend violence in Cairo that saw supporters of the Muslim Brotherhood organization that fielded Mursi for office clash with opponents in fighting that left more than 100 wounded.

The president said he was working to ensure the interests of Egyptians, and that the inability to get the loan was “the best proof of our refusal to give in to conditions.”

“These programs and these tools that achieve the general interests are not in accordance with what the IMF wants,” Mursi said. “I’m not subject to any conditions internally or externally. The only condition is achieving the interest of the citizen.”

Critics’ Contentions

Egypt’s challenges in the two years since the uprising that ousted former president Hosni Mubarak hinge as much on turning around the country’s faltering economy as easing political tensions. Critics contend that Mursi is ignoring the needs of the country in favor of improving the Brotherhood’s grip on power. The clashes on April 19 were tied to a Brotherhood demonstration in support of purging the judiciary, which has repeatedly blocked or appeared to undercut Mursi.

Mursi said the cabinet reshuffle would allow the “most efficient” officials to shepherd the country. The change has been a key condition of his largely secular, youth activist and minority Christian critics. Also joining in the complaints have been some fellow Islamists, indicating consensus may be elusive.

Without an IMF loan, Egypt has relied on funds from countries such as Qatar as its reserves plunged to $13.4 billion, more than 60 percent below December 2010 levels.

Funds Helpful

Central bank Governor Hisham Ramez said today in comments carried in state-media, including Al-Ahram, that funds from friendly nations are helpful in the short-term. Restoring confidence in the country’s economy and institutions, however, hinges on an IMF deal, he said.

Qatar earlier this month pledged $3 billion to Egypt, raising to $8 billion the amount it has proffered since the uprising against Mubarak. Funds from other nations, including a deposit by Libya, aren’t a substitute for an IMF deal, Ramez said.

The IMF, whose team left Cairo earlier this month without reaching an agreement on the loan, has signaled that while the government is taking positive steps, more needs to be done. Egyptian officials traveled to Washington to continue the talks.

“We will not give up, we will not leave the table,” IMF Managing Director Christine Lagarde told a news conference yesterday.

Mursi also requested a $2 billion loan from Russia during a trip there this month that was also aimed at rebuilding ties.

To contact the reporter on this story: Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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