Health emergency or economic crisis? Fail forward and de-risking opportunities in IMF COVID loans to Egypt

Multilateral development banks and international financial institutions (IFIs) were among the first responders to COVID-19 in the Global South. As early as May 2020, the International Monetary Fund (IMF) extended loans to the Egyptian government in an effort to contain the pandemic’s economic fallout. Approved on top of the Fund’s pre-existing four-year loan to Egypt since 2016, this new loan was presented as essential support for the country to balance the immediate implications of COVID-19 while maintaining its “hard-won macroeconomic stability” in the medium and long term. This chapter problematizes the narrative of a balanced Egyptian response to the crisis, supported by the IMF. Using Egypt as a case, the IFI responses to COVID-19 are within a context of underlying power relations and politics explored. It is argued that the IMF’s response to the crisis extends the same neoliberal structural reforms it encouraged before the pandemic. This chapter frames the COVID challenges in economic terms and encourages the state to increase private-sector participation, without providing adequate social protection. This is a typical neoliberal fail forward response to economic and legitimacy crises, which effectively prioritizes private gains over the public good and fails to address underlying structural challenges.