US pledges $121m in aid to Egypt

Egypt and the US signed eight bilateral assistance agreements amounting to some $121.6 million, aimed at promoting development in the country, the US Embassy in Egypt announced yesterday.

The agreements are intended to support the Egyptian government’s efforts at economic reforms and ensure that the country is on track to meet the requirements of the Sustainable Development Plan 2030. The funds will see increased investment in the provision of water, health, education, agriculture and trade.

“These agreements reflect our strong and enduring partnership and the impact that our joint efforts have on the people of Egypt,” said US Agency for International Development (USAID) Mission Director to Egypt and cosignatory Sherry Carlin.

“Together with the Ministry of Investment and International Cooperation, we are strengthening the cornerstones of stability and prosperity in Egypt.”

The funds are to be disbursed periodically until 2022 and will include grants for family planning projects, water and sanitation infrastructure, high education systems and initiatives to raise incomes and job opportunities for rural and urban workers.

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According to Egyptian investment minister Sahar Nasr, the agreement came as a result of the meeting between Egyptian President Abdel Fattah Al-Sisi and US President Donald Trump in New York when the UN General Assembly convened last week.

The meeting was their first since the US government decided to cut military aid to Egypt by $95.7 million over concerns of human rights abuses in the country and Egypt’s relations with North Korea.

However, Trump revealed last week that his administration would “consider” resuming the suspended aid after Egypt cut military ties with North Korea. Human rights in the country have seen no improvement, with the US government admitting that Egypt has failed to investigate incidents of state torture.

The withholding of such funds is relatively insignificant compared to US aid flows to Egypt historically; until this year the country had counted on the US for $1.3 billion worth of military aid every year since 1987, making it the second largest recipient of US funds after Israel.

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Egypt’s public debt currently stands at 98 per cent of GDP, with a budget deficit of $11 billion. The country is making numerous economic reforms as part of conditional loan agreements with the IMF and World Bank.

These have included cuts to numerous public services, including electricity and water and imposing more taxes. Last November, Al-Sisi’s government also floated the country’s currency at the request of the IMF resulting in its depreciation to half its value, causing inflation to reach its highest level since 1986, at a staggering 33 per cent.