In Fayoum, USAID/Egypt Mission Director spoke to Gamal Essam El-Din about the aid agency's development priorities for 2005 Two weeks ago, the US Congress endorsed $1.8 billion in military and economic aid for Egypt. How much of this amount will go to USAID/Egypt? USAID/Egypt will have $535 million at its disposal in 2005. I would [also] like to reveal that Congress has also decided that USAID money to Egypt [will] decrease by five per cent every year until the year 2010. This means that USAID will [total] $495 million in 2006, $455 million in 2007, $415 million in 2008, and so on. After 2010, Congress will again be due to decide the future of USAID to Egypt. I don't think there will be a plan in Congress to make any further reductions in USAID money to Egypt after 2010. Will this help or constrain USAID/Egypt in setting its development priorities for funding in 2005? This will help us because knowing in advance what budgets you will have at your disposal for the next few years will be great in drawing a clear-cut map of our targets and tailoring [them] to the development requirements of Egypt. So where will USAID/Egypt's $535 million budget go in 2005? The money will go as follows: $135 million for education, health and environment programmes; $200 million for the commodity import project (CIP); and $200 million for cash transfers. What do you mean by cash transfers? In the cash transfer programme, the US government and the government of Egypt jointly identify and establish the financial value of specific reforms in a range of sectors -- trade, finance, employment, balance of payments, privatisation, and financial markets. The cash transfers will be allocated according to the government's benchmark in these sectors. Egypt's parliament has always been the scene of sharp criticism of the CIP programme. MPs charge that this programme has always been monopolised by a handful of business tycoons closely connected to USAID... I would like to point out that big businessmen usually do not have an interest in this programme. Besides, the number of businessmen benefiting from this programme is now over 800, including small and medium-scale ones. In Fayoum, and since 1986, for example, seven private businesses that employ over 844 workers have financed 45 trade transactions totaling over $11 million through the private sector CIP. Commodities financed include an edible oil plant's oil extraction and bottling equipment, an irrigation system and dairy cattle. Out of an estimated $24.3 billion in US economic assistance to Egypt between 1975 and 2000, $6.7 billion was used to fund commodity imports. MPs also charge that there is a lot of corruption in the way tenders and bids are conducted, and that a handful of businessmen have found it very easy to clinch these bids... The CIP programme provides US dollars at fixed exchange rates, and short to medium credit terms with an interest free grace period, to Egyptian private sector firms to finance the importation of US-manufactured goods. This means that the USAID does not give money directly to businesses. The private sector accesses the CIP financing through 31 Egyptian commercial banks with special interest rates and soft financing terms. Businesses pay loans in local currency, which will be used by the Egyptian government to finance some of its activities. So, we do not make tenders or bids. These are business-to business deals. We are not involved in anything. We are just the source of funding. Everything is done through banks or suppliers. All the payments made by the importer are in Egyptian pounds. Individual Egyptian entrepreneurs and private sector firms are eligible to participate, whether they are importing for resale (traders) or for their own use (end-users). Companies which are established in a free trade zone or which have public sector ownership exceeding 20 per cent are excluded from the programme. I would also like to indicate that the CIP programme is very popular. The current $200 million in funding for this programme goes very fast. The rate of disbursement per week ranges from $6 million to $7 million. What about Khaled Bishara, the Egyptian businessman who is currently in major legal trouble in the US for allegedly defrauding the USAID of more than $1 million? As far as I know Bishara is not in prison now. He and his lawyer are negotiating with the prosecutor-general to settle his case. Bishara was a supplier of communication equipment to the USAID. Neither USAID nor the Egyptian government has any responsibility for the performance of a supplier, or for the quality or reliability of a supplier's products. While meeting the governor of Fayoum, you said the USAID would be re-evaluating its micro-finance projects in Egypt? Would you elaborate on this? We have hired a group of international (European and American) experts who came in and took a look at the programme as a whole, and talked to businessmen associations through which this programme's loans are provided. In the end, they made some recommendations for improving performance, and strengthening the role of business associations. We want this essential programme to be sustainable. It is not a matter of how much money you give, but how you spend it more efficiently. How do you evaluate the USAID's performance in Fayoum? The relationship between USAID and the people of Fayoum is very old, going back to as early as 1975. In Fayoum, the USAID now works on education reform, health planning, and assistance to NGOs, [as well as] water and wastewater facilities, private sector development and agricultural assistance. Do your plans for reforming education systems include requests to change curriculums? We work on this system through decentralising education management, teacher training, providing scholarships, greater community involvement, and better education support systems. In all, the education reform programme in Egypt will receive $33.7 million in 2005. [ Note: Fayoum Governor Mohamed Raafat Mahmoud, who was present during the interview, interjected at this point that by no means does the USAID have any say in education curriculums, and that this is the exclusive authority of the Egyptian Education Ministry ]. What were some of the highlights of your discussions with the Fayoum governor? I discussed Governor Mahmoud's vision and requirements for Fayoum. We agreed that there is a need for greater focus on education (with [the number of] schools to be built to increase from 38 to 50), [as well as] wastewater facilities and small-scale financing, vocational training, and recycling of solid waste. There was also a suggestion [about] helping schools for handicapped children.
