Clinton Offers More U.S. Support for Egypt’s Economic Growth

15 March 2011

Secretary of State Hillary Rodham Clinton announced new U.S. support for Egypt’s economy that is designed to expand opportunities in the country and benefit all sectors of Egyptian society as the country plans its political and economic future.

Clinton arrived in Egypt March 15, becoming the first Cabinet-level U.S. official to visit the country following the peaceful protests that forced President Hosni Mubarak to relinquish power on February 11.

Speaking with Egyptian Foreign Minister Nabil Elaraby in Cairo, Clinton said she is “deeply inspired” by the actions of the Egyptian people, and said the United States is pledging $90 million in emergency economic assistance to the country, as well as additional measures to bolster the Egyptian economy.

“One of the best ways to create jobs is to support small and medium-sized enterprises, which represent 99 percent of the jobs in Egypt,” Clinton said, adding that the United States wants to “encourage foreign direct investment that will help these businesses grow.”

According to a March 15 State Department fact sheet, the $90 million will be used for “near-term economic assistance” in support of projects to generate jobs and economic growth. In addition, the U.S. Export-Import Bank has approved $80 million in insurance that will support Egypt’s economic recovery by backing letters of credit issued by Egyptian financial institutions.

The fact sheet also said the United States and Egypt are trying to work out an agreement that will expand the Qualified Investment Zone (QIZ) program. There are currently seven QIZs in Egypt hosting more than 300 facilities that export to the United States. Exports from these zones can enter the United States duty-free.

In addition, the Obama administration is working with the U.S. Congress to establish an Egypt-American enterprise fund to “stimulate private sector investment, support competitive markets, and provide business with access to low-cost capital,” the fact sheet said. If Congress approves, the United States plans to start the fund with up to $60 million in grants and will allow the Overseas Private Investment Corporation (OPIC) to partner with the fund “to offer co-financing downstream for OPIC-eligible investments.”

The fact sheet said that to support investment in Egypt and elsewhere in the Middle East and North Africa, OPIC will also be providing up to $2 billion in financial support to encourage private sector investments and build partnerships between U.S. and Arab businesses.

Following her talks with Elaraby, Clinton told Egyptians, “This moment of history belongs to you.”

“This is your achievement and you broke barriers and overcame obstacles to pursue the dream of democracy,” she said.

Although Egypt and the United States do not agree on all key issues, they “have many strategic interests in common,” and it is important to maintain lines of communication and enjoy an open relationship, she said.

Clinton also applauded the Egyptian interim government’s March 15 announcement that it is dismantling the state’s security apparatus. Clinton urged the Egyptian people to prepare for free elections that will empower “leaders that will be able to respond to [your] aspirations.”

USE OF FORCE IN BAHRAIN WILL MAKE SITUATION WORSE

Clinton also mentioned the unrest in Bahrain, which has called on its neighbors in the Gulf Cooperation Council (GCC) to send troops to confront popular protests, led by the country’s Shiite majority against the Sunni regime.

Clinton said the “use of force and violence from any sources will only worsen the situation” and urged all sides to negotiate a political solution.

At the White House, spokesman Jay Carney said March 15 that there is “no military solution” to the unrest in Bahrain or other countries in the region and urged governments to “meet peace with peace.”

Many countries in the Middle East are experiencing unrest “precisely because their populations … crave more participation in the political process. They want more freedom, they want more economic possibilities, and they want to be heard. And we support that,” Carney said.

The United States maintains close partnerships with some governments in the region, he said. “It is precisely out of friendship that we are encouraging governments in the region who are our partners to pursue political dialogue and to respond to the legitimate aspirations and grievances of their people because we believe therein lies … the positive future of the countries in the region,” he said. By undertaking reforms, Carney added, “the likelihood of further unrest is diminished because the people are feeling that their government is listening to them and responding.”