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Egypt’s economy will not get affected by US aid cut: AmCham - Daily News Egypt

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Egypt’s economy will not get affected by US aid cut: AmCham

Egypt is the second largest recipient of military aid from the United States after Israel, receiving about $1.3bn annually and nearly $80bn in military and economic assistance over the past 30 years


The American administration decided to cut the financial aid for Egypt estimated at $ 95.7m and postponement of disbursement of $195m for lack of progress of human rights and democratic norms, according to Reuters.

Furthermore, the Associated Press (AP) confirmed the story, noting that the Trump administration on Tuesday cut nearly $100m in military and economic aid to Egypt and delayed almost $200m more in military financing to Egypt, pending human rights improvements and action to ease harsh restrictions on civic and other non-governmental groups.

The former dean of the Faculty of Economics and Political Science, Aliaa El-Mahdy, said the aid cut off from Egypt has little or no significance as much as strengthening the Egyptian-US relations.

El-Mahdy added that Egypt has become a big country for taking US economic aid.

She noted that she does not believe very much in the matter of cutting aid, because of the repetition of the scenario more than once, and explained the first two examples in 2008 and the American pressure for the release of Ayman Nour in former President Mubarak’s administration, the second pressure was in 2013, when former US President Barack Obama announced cutting aid from Egypt because of the ouster of President Mohamed Morsi.

El-Mahdy stressed that the aid, which will be stopped, has no value and has no economic impact on the Egyptian state budget.

She pointed out that this is very predictable in the shadow of Trump’s administration, describing it as the “troubled man”.

Executive vice president of the American Chamber of Commerce in Egypt Ahmed Abou Ali agreed with El-Mahdy, noting that the cutting of aid will not have a big significance on Egypt’s economy, as the aid amount is small.

Abou Ali explained that foreign investors are very keen to invest in the Egyptian local market.

Abou Ali told Daily News Egypt that AmCham’s board is going to hold a meeting next month to discuss the regular economic issues between the two countries, and after that announcement, the aid cut will be put on the meeting agenda.

He stressed that this issue would affect the political relations more than economic ones.

US government sources in Washington in July told Al Borsa newspaper during the international visitor programme that the US administration is following the political situation in Egypt and that democracy and respect for human rights is the basic criterion for grants and aid to Egypt in the coming period.

For its part, government sources hinted that the suspension of US aid to Egypt or even the reduction of it could negatively affect the activities of the US Agency for International Development (USAID), which has been active in Egypt since 1978.

The suspended amount of the aid, if not disbursed by the end of September, goes back to the US Treasury according to US law, especially since the US fiscal year ends at the end of September, according to USAID data.

Egypt is the second largest recipient of military aid from the United States after Israel, receiving about $1.3bn annually, and the officials noted that the US has provided nearly $80bn in military and economic assistance to Egypt over the past 30 years, according to AP.

US law requires the administration “to withhold 15%, ($195m) of the $1.3bn it gives Egypt annually” in military aid for human rights issues.

USAID’s programme in Egypt, totaling nearly $30bn since 1978, has directly and fundamentally supported its programmes in education, health, economic growth, and governance, contributing to stability and prosperity for Egyptians through accessible, effective, and accountable institutions.

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https://dailyfeed.dailynewsegypt.com/2017/08/23/egypts-economy-will-not-get-affected-us-aid-cut-amcham/
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