Hook: Egypt debt repayments to UK and other Western governments, 29 June

Egypt pays $650m ‘dictator debt’ to West

28 June 2012 by Jubilee Debt Campaign


Campaign groups in London and Paris will protest the ongoing repayments Egypt is making to the UK and France on the basis of ‘dictator debts’ run up under the regime of Hosni Mubarak. Egypt is expected to pay around $650 million to the Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

of Western creditors on 29 June, just part of this year’s expected $3 billion repayments on interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. and debt stock Debt stock The total amount of debt . [1]

As Egypt’s new President takes office, social justice group Jubilee Debt Campaign is calling for an immediate moratorium on Egypt’s debts, while a ‘debt audit’ is carried out to assess the legitimacy of those debts. Egypt owes £100 million to the UK’s Export Finance (UKEF) department, nicknamed ‘the Department for Dodgy Deals’, because of its support for arms and fossil fuels. The department has not released information about the origins of these loans, but JDC has discovered contracts for military technology with the Mubarak regime, and that of his predecessor Sadat, in the 1980s and 1970s. [2]

JDC will hand in a petition to Deputy Prime Minister Nick Clegg to call on him to stand by Liberal Democrat party policy supporting debt audits and the cancellation of dictator debts. Despite this policy, Business Secretary Vince Cable has said he doesn’t support a debt audit. [3]

Nick Dearden of Jubilee Debt Campaign said:

As Egypt’s people are struggling for their freedom from a repressive military regime, the UK is reclaiming interest payments based on dodgy deals with that very regime. Meanwhile, new loans are being pushed on Egypt to make these payments possible.

Governments like that of the UK need to take on their historical responsibility - when they made appalling deals which helped reinforce military rule, then they should not expect to get repaid. That’s what Liberal Democrat party policy says, and today we’re telling them to stand by it.

Dina Makram-Ebeid from the Popular Campaign to Drop Egypt’s Debt said:

"We believe that Egypt’s debt is Mubarak’s debt. It is not the Egyptian people’s. Egyptians never had a say in the borrowing that was being made in their name, let alone borrowing to buy arms.

If the UK government is in earnest in its support for democracy in post-revolutionary Egypt, it should be telling the Egyptian people what they are paying for and not demanding that they carry the burden of repaying illegitimate loans. Dropping Egypt’s debt is fundamental to achieving the goals of ’bread, freedom and human dignity’ that the people revolted for last year."

ENDS

For further information contact Jubilee Debt Campaign on +44 (0)20 7324 4724 or +44(0) 7932 335 464.






Footnotes

[1For the last four years we have figures for (2007-2010) the Egyptian government has spent around $3 billion dollars on total foreign debt payments. On 29 June, Egypt will pay £7m of ‘dictator debt’ repayments to the UK and around $650 million to all Paris Club creditors. Egypt owes $15.7 billion to the Paris Club: http://www.clubdeparis.org/sections/donnees-chiffrees/encours-du-club-paris_1/downloadFile/attachedFile_3_f0/2011a.pdf?nocache=1340733711.3

[2Egypt owes UKEF (formerly the Export Credit Guarantee Department or ECGD) £100 million. The debt comes from ECGD backing loans to President Sadat (1970-1981) and his successor General Mubarak (1981-2011) in the 1970s and 1980s. Liberal Democrat Business Minister Ed Davey says the debt comes from 400 export contracts finalised before November 1986. Research by Jubilee Debt Campaign from documents uncovered in the national archives reveals that some of these export contracts were for arms sales to President Sadat and his successor Hosni Mubarak.
By 1979 £40 million of loans (20 per cent of all UK backed loans to Egypt) were for arms sales to President Sadat. In 1979 and 1980 ECGD available backing for loans that were too risky for normal cover, but in the national interest, increased from £65 million to £400 million. In 1985 and 1986 ECGD backed loans of £250 million for further arms sales. This included a tank factory near Cairo and a military city west of Alexandria. By 1986, ECGD had stopped backing loans for Egypt because of their high debt except in exceptional circumstances when British national interest required the loans to be made – such as arms deals.

[3Text of the JDC petition to the Liberal Democrat party is at: http://www.jubileedebtcampaign.org.uk/egypt.

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