(IPS) Egyptians might have cheered the news that international donors have pledged US$10.3 billion in loans and aid to their cash-strapped country. Instead, many expressed wariness and described this week's donors' meeting as a begging conference.

Some US$2.1 billion is to be disbursed this year to offset the economic aftershocks of last September's terrorist attacks in the United States. The rest, mostly pledged by the United States, European Union, World Bank, and International Monetary Fund (IMF), is to be released over the next three years.

Roughly half the money will take the form of loans and the rest, grants, officials said at the conclusion of World Bank-led donor talks in the Red Sea resort of Sharm el-Sheik recently.

"Instead of focusing on how to repair our economy and think positive, our government is borrowing more money," said Ahmed Fouad, a civil servant at the justice ministry. "They never care about us. They want to get us further into debt. Who is going to repay all this money, us or them?"

Many Egyptians share Fouad's sentiments. They have seen their lives negatively affected over the past two years despite their government's aggressive pursuit of economic reforms designed to do the opposite and prescribed by the World Bank and IMF.

Sold billions in public assets

The country has sold billions of dollars in public assets, overhauled and enforced its tax regime, and introduced a menu of foreign investment incentives. Yet, Egyptians complain they are poorer than ever.

Retail worker Mohammed Shehata, 49, put it in simple terms. "Two years ago, I used to go home with a bag of fruits every day," he said. "Now, I buy my children fruits only once a week. We used to eat meat twice a week. Now it is only once a week. This is how I have been suffering. Nobody seems to care much."

This country of 70 million people, the largest of 22 Arab nations, has suffered even more since last September, according to officials here. The government has said it anticipates the slowdown will add at least US$2 billion to this year's budget deficit.

All four major foreign revenue generators  tourism, oil, the Suez Canal, and remittances from Egyptians working in the rich Arab Gulf area  all have been battered to some degree.

Inflation is a perennial signature concern for the IMF. However, while salaries have remained stagnant in recent years, meaning that wage inflation is contained, prices of essential commodities have soared. Rice, sugar, and tea have seen price hikes of between 20 and 30 percent. The price of cooking oil is up 15 percent.

Despite many years of official public avowals that this country would never go back to international lenders, the government of Prime Minister Atef Ebeid has had to turn to them for further help.

"We are being strangled," said Abdallah al-Saeed, an employee of a textile company here. "Those foreigners have no mercy. If they give us one pound, they want it back 10 (times). We hear that we have to stock up on food and other items because prices could go up even further."

No choice but to borrow

Feeling the whispers of anger among its own people, the regime of Egyptian President Hosni Mubarak said there was no alternative but to borrow more from the Bank and IMF and keep the country's foreign reserves of US$12 billion from further dwindling. In 1997, Egypt had foreign reserves of US$22.5 billion.

To secure the new loans from the international donors, Egypt's government has promised further economic reforms. Principally, these include more foreign investment incentives, increased exports, and stepped up privatisation of state-owned firms.

The World Bank said in a statement participants in the donors' meeting endorsed the government's stabilisation efforts but "emphasised the importance of accelerating structural reforms, improving the business environment, and publishing consistent data in a timely manner''.

"We shouldn't over-borrow to be able to do so," said Hanna Kheir-el-Din, professor of economics at Cairo University. "We had a debt servicing problem in the late 1980s. It was so bad. We shouldn't go back to that time."

Kheir-el-Din referred to the country's massive debt burden, some of which Western governments wrote off after Egypt joined the US-led coalition against Iraq in the 1991 Gulf War.

Resentment of the new borrowing stems not only from the financial burden posed by debt servicing but also from the secrecy with which official loans are agreed and the perception that they pose a threat to national sovereignty.

"The government will forget to be transparent and open about the loans it will get. Neither dishonesty nor creating false propaganda on foreign loans are the solution to the crisis," said Mostapha Abdel Aziz, a prominent columnist for the liberal opposition daily al-Wafd.

Abdel Aziz said that despite extensive official pronouncements, few people are allowed to know the conditions attached to the loans and grants.

In the absence of information, ordinary Egyptians have developed their intuition about these things. "I have no reason to trust either the government or foreigners," said Fouad, the civil servant. "Borrowing is borrowing and serving interest is serving interest."