There's an interesting new complication in Egypt's never-ending quest to obtain IMF loans (which we aren't even sure the IMF wants to give anyway). Islamist lawmakers from the Salafist party want to add even more difficulties to the whole process as if there weren't enough. Remember, the Salafists are even more conservative than the Muslim Brotherhood-allied Freedom and Justice Party (FJP). The main bone of contention of the Salafist Islamic hardliners, as you probably know already, will surround the IMF charging interest (riba) on these emergency loans. Strictly speaking, the Quran disavows charging of interest. The famous quotation on usury is this one:
Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury - Al Baqra 2:275
It is here where the controversial new Egyptian constitution rammed through the legislature by the FJP with a little help from the Salafists has thrown a further money wrench into the bailout proceedings since it mentions consulting the clerics on matters relating to sharia law:
The Salafist Nour Party says the loan agreement, seen as vital to easing a deep economic crisis, must be approved by a body of senior scholars at Al-Azhar, a religious institution whose new role is embedded in the constitution. Such a challenge could complicate the Muslim Brotherhood-led administration's effort to finalize the International Monetary Fund deal that was tentatively agreed last year but shelved following political unrest in Cairo.A contention that erstwhile Muslim Brotherhood stalwart President Morsi has made is that the 1.1% concessional rate charged by the IMF hardly constitutes "usury," but it's certainly possible to argue that it's a rate of interest nonetheless. In other words, the interest rate doesn't matter so much as violating the principle that no interest should be charged to begin with.
Abdullah Badran, head of the Nour Party's bloc in the upper house of parliament, told Reuters the move was intended to "activate the role of the Senior Scholars' Authority in all matters pertaining to sharia (Islamic law)". He said the party was studying its legal options. The Nour Party believes the IMF agreement must be vetted by the scholars because it includes a loan on which Egypt will pay interest - something that is forbidden under Islamic law.
The constitution states that the opinion of Al-Azhar's Senior Scholars' Authority must be sought "on matters pertaining to Islamic sharia". It does not say whether their opinion is binding on government nor make clear the scope of Al-Azhar's role. The article is one of several written into the constitution by the Islamist-dominated committee that finalized the document in December, fast-tracking it into law despite the objections of liberals, leftists, feminists and Christians, among others.
And just when you thought things could not possibly get worse for Egypt, the path to an IMF bailout may have become even more torturous.
