The International Monetary Fund's new loan agreement with Egypt leaves the economic rights of millions unprotected, Human Rights Watch (HRW) and DAWN have said.
The $3 billion loan is the fourth Egypt has received from the IMF since 2016 as the government grapples with surging inflation, soaring food prices and a high debt to GDP ratio.
It has been approved to help the Egyptian government meet its budget and balance of payments as the economy falls apart and goes some way towards addressing the opaque role of the military in the economy and inadequate social protection.
But the two human rights watchdogs say that several provisions in the loan, such as austerity and the sale of state assets, risk harming rights as the country grapples with spiralling costs amid the cost of living crisis.
Under the terms of the deal, the Central Bank of Egypt shifted to a flexible exchange rate in October last year, which caused the pound to depreciate by a further 23 per cent which pushed the price of imports and food up even further.
According to the press release, by October 2022 food prices had already gone up by 37 per cent from the previous year.
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As one of the world's largest wheat importers, Egypt has been hit hard by the Russian invasion of Ukraine and the coronavirus pandemic before that.
"Egyptians are facing a cost-of-living crisis that has left millions struggling to afford food and other economic rights," said Sarah Saadoun, senior researcher on poverty and inequality at HRW.
"The expansion of the cash transfer program under the new IMF program, while a positive step, does not do nearly enough to protect people from spiralling costs exacerbated by the program."
Following a 2016 loan programme Egypt was expected to use part of the fiscal savings to invest in social safety nets, but a World Bank review from 2022 showed that expenditure on health, education and scientific research are not only low by international standards, but are declining.
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The IMF's new loan agreement with Egypt includes some steps to increase transparency of state-owned assets, including military owned companies.
In Egypt, the military's role in the economy is expanding and the government does not make transparent their financial dealings, despite the fact that they produce mainly civilian goods.
Under the new IMF agreement, the government has agreed to publish all public procurement contracts above 20 million Egyptian pounds ($660,000), but implementation is key. Under previous programmes the government has failed to make the military's role in the economy transparent or accountable.
"In fact, the Fund accepted reporting from the Egyptian government on state-owned enterprises that excluded military-owned businesses as well as flawed procurement disclosures related to its Covid-19 spending," the release states.
"The Egyptian military's sprawling and unaccountable role in the economy poses serious rights risks, and it is good news that the IMF is finally seeking to shed light on them," Jon Hoffman, research director at DAWN, said.
"But large-scale sales of state assets without effective regulation and transparent oversight risk benefiting states with abusive human rights records."
Under the new loan, Egypt must raise $8 billion from the sale of state assets mainly to Gulf countries, which may benefit countries with abusive human rights records.
"Gulf countries with abusive human rights records have a history of using financial support to create pressure on these countries to support the Gulf countries' regional policy goals, including cracking down on independent groups such as the Muslim Brotherhood or supporting the Saudi- and UAE-led coalition's military operations in Yemen."