Egypt divided on taking loan from IMF

Monday August 27, 2012 10:56:40 PM, Agencies

Dubai: The loan Egypt is to take from the International Monetary Fund (IMF) has been stirring controversy in the country, not only because of the negative impact it is expected to have on the Egyptian economy but also owing to the debate about its interest and how far it can be regarded as usury, a practice prohibited in Islam, a media report said.

The controversy was intensified by the fact that several Islamist leaders, especially from the Muslim Brotherhood (MB), had earlier rejected a loan from the IMF on the grounds that paying interest is a form of usury then changed their mind after MB candidate Mohammed Mursi won the presidential elections" Dubai based portal Al Arabiya reported on Monday.

Heated debate took place in social networking websites, where a video was posted of Sheikh Sayed Askar, former MP for the Freedom and Justice Party, the MB’s political wing and one of the group’s most revered religious references, stressing in a parliament session that borrowing from the IMF is against Islamic teachings, the report said.

Prominent Salafi preacher Sheikh Mohamed Hussein Yaacoub agreed with Askar and said that if a loan is necessary it should be from an Islamic nation and in accordance with Islamic laws.

“I totally reject this usury loan from the West,” he said in a statement posted online.

For Yunis Makhioun, member of the higher committee of the Salafi al-Nour Party, money borrowed through usury will never be used for development and prosperity, and an economy based on usury is bound to collapse.

“I call upon the government to reject this loan that will harm our economy and allow foreign powers to interfere in our affairs,” he was quoted as saying by the Egyptian daily independent al-Masry al-Youm.

The party’s stance took a different turn when member of its higher committee Yousri Hammad denied that the IMF loan involves usury.

“It is not usury and the money to be paid on the loan is not interest but administrative fees that the bank determines,” he said in a statement.

Askar’s stance also took the same direction as he argued that the situation has changed since the time he declared that the loan is a form of usury.

“Before that, there were intentional attempts to destroy the country but now that a proper government took over, there are needs that have to be fulfilled and the loan is the only means of doing so at the moment,” he told Al Arabiya.

Askar argued that, unlike in the past, the current government will be transparent as to how the money of the loan is to be spent.

“It will only be for the necessities and that is why it is not prohibited. Sometimes necessity allows for exceptions.”

Abdul Rahman al-Barr, the Mufti of the MB and member of its Guidance Bureau, denied that the group had issued any edicts concerning the legitimacy of the loan from the religious point of view.

“The MB neither prohibited nor sanctioned the loan,” he told Al Arabiya. “We first need to study the circumstances and conditions of the loan before making a judgment.”

Barr found the administrative fees theory adopted by several Salafis quite viable and argued that in this case the loan will not involve any kind of usury.

“It is not logical that we take out a loan from a bank and let the bank pay the fees. The borrower is the one who should pay those fees but they are not categorized as interest.”

Barr added that he and a group of Islamic scholars are willing to offer guidance to the government about the loan if asked.

“As soon as we are given all the details about the loan, we can evaluate where it stands from the Islamic point of view,” he said.
 

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