CAIRO: Egyptian economists criticized Barack Obama's announcement of U.S. economic relief to Egypt, including exemption of U.S. $1 billion of Egypt's debts and granting another billion for loan guarantees. Economists described the decision as a scheme. However, they admitted the relief will have a positive impact on the Egyptian economy, if it is an unconditional gesture. An expert in the Institute in National Planning, Mahmoud Abdel Hay, said the exemption and loan is a small, partial support with positive influence. He said the U.S. government's intention should be true and honest in order not to counteract the Egyptian Revolution's success, noting Egypt cannot be subject to any pressure under any conditions, such as stopping gas export to Israel or amending the gas price according to International markets. Abdel Hay said Egypt should consider depending on loan guarantees as a temporary proposition during this transition period. He added that Egypt has many sources that are very beneficial if well directed, unlike before, during Hosni Mubarak's regime. The advisor of the Institute of National Planning, Ibrahim al-Essawy said the U.S. administration's decision is a tactic to press on Egypt. However the gesture is considered a good indication of wanting to support the Egyptian economy. Al-Essawy said the current period could be a very dangerous turning point as it is expected that the budget deficit will increase from 10 to 11 percent at the end of this year. This step will not lead to any change in Credit Rating for Egypt, because the rating depends on economic development. The announcement of the U.S. aid to Egypt will positively affect the stock exchange and attract more foreign investors, according to stock exchange expert Ahmed Adam. Adam said Egypt's debt, currently U.S $3.6 billion, affects the budget deficit because the Egyptian government should pay the interest on the debt. The U.S. relief will only save approximately U.S. $300 million.
