THE storming of the US embassy in Cairo has diverted attention once again from the real issues facing Egypt. It couldn’t have come at a better time for those who want to convince the Egyptian people to accept an International Monetary Fund loan, and extend former president Hosni Mubarak’s liberalisation of the economy.

While the western media and politicians seem content to view Egypt through the prism of political rights versus Islam, the economic causes of the revolution, the waves of strikes and economic demands of the activists are barely discussed.

This allows the US and European governments to portray the $4.8bn IMF loan under negotiation, the ‘assistance’ funds that will shortly start flowing into public-private ‘partnerships’ and free trade zones being planned by the EU, as ‘gifts’ to the Egyptian people. In recent days, highly critical rightwing commentaries about the US embassy incident have even suggested withdrawing such ‘gifts’ until the Egyptian government can keep its people under control.

The diversion into religious tension is also helpful to economic conservatives in the Egyptian administration, who are intent on pushing through the IMF loan, repaying Mubarak’s odious debts and opening the country to western capital. It allows President Mohammed Morsi to stand firm against the US on issues that are more symbolic, while giving way to its economic agenda.

The IMF agenda is not popular. When it tried to negotiate a loan with the unelected interim military government last year, it was turned down on the grounds that the resulting IMF interference would be unacceptable.

At the time, the opposition Muslim Brotherhood said it was firmly against the loan. Today, in government, the party hierarchy is supporting it, despite serious doubts in the wider organisation, where many are rightly concerned that an IMF agenda is incompatible with Islamic principles of finance.

The loan is also causing heated debates in Cairo’s coffee shops and on the blogosphere.

Many people remain sceptical about the IMF’s agenda — privatisation, indirect taxation, removal of subsidies (many of which are corrupt, but some of which do genuinely support the poor) and an economy based around exports. As one government insider said last week: “In Egypt, we call privatisation what it is — stealing.” Many of those who helped to organise the revolution are acutely aware of the need to focus on the economy. “The question is not whether to take a loan, but who will run this country for the next five years,” Amr Adly from the Egyptian Initiative for Personal Rights told an anti-privatisation conference in Cairo. He’s right because the IMF’s plan is to extend and promote new loans to Egypt so that it can continue to pay (rather than question) Mubarak’s debts, and use this influence to impose a whole host of liberalisation policies.

Indeed, the IMF’s plan is already moving forward. On 8 September, a team of US corporate representatives arrived in Cairo, including representatives from Boeing, Google, Exxon and Morgan Stanley. The 100-strong delegation, the largest US business mission to Egypt, urged the government to adopt more business-friendly legislation.

Billions of dollars of ‘aid’ promised by western governments are poised to flood into Egypt to begin buying the country’s resources through public-private partnerships. The European Bank for Reconstruction and Development, a public bank created to introduce the ‘free market’ into post-Soviet eastern Europe, is trying to extend its mandate to north Africa.

Certainly, Egypt’s foreign currency reserves are depleting, and problems remain with its balance of payments. But it does have real alternatives. There’s support — even from within the ruling party — for suspending payments on Mubarak-era debts and holding a public consultation to decide which debts should be repudiated.

An economy that benefits Egypt’s people depends on a national and regional development strategy similar to those that are being pursued in many Latin American countries. Countries such as Ecuador and Bolivia have shown that such policies not only create more growth, but lead to much fairer distribution of wealth in society and falling poverty. Incidentally, they are also much closer to Islamic ideas of what constitutes a “just economy” than anything being proposed by the IMF.

In Egypt, the path to genuine development is open — in many ways, it will never offer better or clearer alternatives. But all of this will be impossible if the IMF gets its way. Ironically, the supposed political challenge to the west represented by the US embassy incident might actually help deter a much greater challenge to western power in the region represented by the campaign against the IMF loan. —The Guardian, London   Note: Nick Dearden is the director of Jubilee Debt Campaign.