We will focus on trade, not aid: Obama

US President stresses the need for financial stability, reform and competitive markets in Egypt during his televised address

Trade not just aid will be the backbone of new US economic policy in the Middle East, said the US president on Thursday.
"Drawing from what we've learned around the world, we think it's important to focus on trade, not just aid; and investment, not just assistance," Obama announced.
"The goal must be a model in which protectionism gives way to openness; the reigns of commerce pass from the few to the many, and the economy generates jobs for the young," he said during his live address from the State Department.
"America's support for democracy will therefore be based on ensuring financial stability; promoting reform; and integrating competitive markets with each other and the global economy – starting with Tunisia and Egypt," he added.
During the speech, broadcast in Cairo to a group of journalists and diplomats in the central Semiramis Hotel, Obama announced a list of key policies to be adopted by the US in post-revolution Arab countries.
Obama said the US has asked the World Bank and the International Monetary Fund to present a plan at next week's G-8 summit for what needs to be done to stabilise and modernise the economies of Tunisia and Egypt.
"Together, we must help them recover from the disruption of their democratic upheaval, and support the governments that will be elected later this year. And we are urging other countries to help Egypt and Tunisia meet its near-term financial needs," he said.
"We do not want a democratic Egypt to be saddled by the debts of its past. So we will relieve a democratic Egypt of up to $1 billion in debt, and work with our Egyptian partners to invest these resources to foster growth and entrepreneurship," he added.
"We will help Egypt regain access to markets by guaranteeing $1 billion in borrowing that is needed to finance infrastructure and job creation. And we will help newly democratic governments recover assets that were stolen."
Obama also announced that the US is working with Congress to create Enterprise Funds to invest in Tunisia and Egypt. These will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall.
"OPIC will soon launch a $2 billion facility to support private investment across the region. And we will work with allies to refocus the European Bank for Reconstruction and Development so that it provides the same support for democratic transitions and economic modernization in the Middle East and North Africa as it has in Europe," he said.
He added that the United States will launch a comprehensive Trade and Investment Partnership Initiative in the Middle East and North Africa.
"If you take out oil exports, this region of over 400 million people exports roughly the same amount as Switzerland," said Obama.
"We will work with the EU to facilitate more trade within the region, build on existing agreements to promote integration with U.S. and European markets, and open the door for those countries who adopt high standards of reform and trade liberalization to construct a regional trade arrangement. Just as EU membership served as an incentive for reform in Europe, so should the vision of a modern and prosperous economy create a powerful force for reform in the Middle East and North Africa"
Obama also unveiled plans to provide$1billion in loans via enterprise funds based on the model established after the fall of Communism in Eastern Europe.
He added that the US has asked the World Bank and the International Monetary Fund to present a plan at next week's G8 summit aimed at stabilising the economies of Egypt and Tunisia.