One of Egypt’s biggest ultra-orthodox Islamist parties signaled on Wednesday it would not oppose a loan to the government from the International Monetary Fund, even though Islamic law normally bans the paying of interest.
Cairo is seeking a $4.8 billion IMF loan to help shore up state finances, and the move has focused debate on the extent to which Islamists can reconcile their principles with their new role at the heart of public life and government in Egypt.
Some ultra-orthodox Salafi clerics have stated their objection to an IMF loan, citing Islamic laws that deem the payment of interest as impermissible and criticizing President Mohamed Mursi, himself an Islamist, for seeking it.
The Mursi administration plans to use the funds to head off a fiscal crisis and support government finances, which have come under major strain in the 19 months since a popular uprising toppled Hosni Mubarak from power.
The ultra-orthodox Nour Party believes the government can take out such loans if there is no other option, Tarek Shaalan, head of its economic committee, said in a telephone interview.
The argument hinges on the idea that Egypt is ‘mudtar’, or compelled to, he said, speaking in fluent English but using Arabic to express terms with specific meanings in Islamic codes.
“In Islam, if you are ‘mudtar,’ which means you are under severe conditions, then yes it is acceptable to do it,” said Shaalan, who has a doctorate in industrial and service engineering from the United States and three masters degrees, including one in economics.
“So if conventional banking is the only way which is available and you are ‘mudtar,’ then you can do it.”
His comments echoed remarks by Emad Abdel Ghaffour, the Nour Party leader, to the Egyptian newspaper al-Borsa on Wednesday.
Abdel Ghaffour said the “current situation in the country is in crisis and requires concessions to deliver us to safety,” adding, “Necessities permit what is banned.”
The Nour Party came second to the Muslim Brotherhood in Egypt’s first post-Mubarak legislative elections, though the results were later overturned by a court ruling that declared the election rules unconstitutional.
Brotherhood leaders have cited the need to protect the interests of society at large as one justification for accepting a role for conventional finance in the new Egypt, though they also aim to expand Islamic finance.
The IMF loan would be seen as a seal of approval for the government’s reform program and a major step in rebuilding the confidence of investors, many of whom fled after the uprising. The interest rate is expected to be around 1.1 percent.
Shaalan said his party also supported the idea of replacing some of Egypt’s existing debt with conventional loans that would pay lower interest rates to reduce debt servicing costs.