The government has begun to restructure its foreign economic assistance programme. Mona El-Fiqi reports Egypt recently requested a resumption of negotiations with the World Bank for the disbursement of $1 billion. The sum was jointly offered by the World Bank (WB) and the African Development Bank in the WB Consultative Group meeting last February. Minister of state for foreign affairs and international co-operation, Fayza Abul- Naga, said that, in response to the government's request, the WB will be ready to provide quick disbursement funds whenever Egypt needs them. In a press conference held last week, Abul-Naga asserted that the delay in money disbursement was at the request of the government, which was optimistic about the performance of the economy. At the WB consultative group meeting held last February in Sharm El-Sheikh, it was decided that Egypt would receive some $10.3 billion of which $2.1 billion was earmarked as quick disbursement money. $8.2 billion will be provided by various donors over the next ten years. In an attempt to raise the benefits accrued from foreign economic assistance to Egypt, Abul-Naga made a visit to the US and Japan last month. Abul-Naga said the government's plans to restructure and develop economic assistance was welcomed by the US administration and Japanese officials. During her visit to Washington, Abul- Naga expressed the government's desire to create a new plan for the USAID programme in Egypt in order to maximise benefits. According to Abul-Naga, the US administration agreed that the USAID programme needs improvement to achieve its developmental goals. "We found that a large sum of USAID money ends up returning to the US as payment for American experts," Abul- Naga said. Ways to improve the USAID programme (with a total annual value of $2 billion) will be discussed with US officials according to the Egyptian government's prevailing development priorities. "The USAID programme could be directed to particular sectors such as IT, education, health and infrastructure in order to make more citizens feel its benefits," Abul-Naga added. During Abul-Naga's visit to Japan, the agenda was dominated by grants. Abul- Naga was keen to reverse the trend of diminishing assistance from the Japanese government. Grants from Japan dropped from $8.4 million in 1984 to $1.5 million in 2001. Although Japan had decided to decrease its economic assistance to developing countries by 6 per cent, Japanese officials have agreed to double annual aid to Egypt, raising it incrementally, according to Abul-Naga. Japanese economic assistance is usually directed at huge projects such as the Opera House and Suez Canal bridge. The total value of Japanese economic assistance provided to Egypt from 1977 to 2002, including grants and soft loans, is $6.7 billion. In the past, Egypt used to receive loans from Japan at 0.75 per cent interest with a 10 year grace period. The Japanese government stopped providing these loans in the aftermath of the 1991 Gulf war, when much of Egypt's foreign debt was forgiven by the Paris Club group of international creditors. However, Abul-Naga announced that she has succeeded in convincing the Japanese government to begin providing Egypt with soft loans again, to help with the financing of development projects. In addition, the Japanese government has agreed to help Egypt with the establishment of an export development organisation along the lines of the Japanese Exports Trading Organisation (JETRO). Upon her return, Abul-Naga also signed an agreement with the Japanese ambassador in Cairo, providing $4.5 million as a grant to finance the second phase of a project dealing regional environmental issues.
