A Historical Look
The 1970s

The United States and Egypt launched their cooperative development program in 1975, aiming initially at the most pressing challenges. The key areas of focus in these early years included physical infrastructure, technical and scientific expertise, and expanding agricultural productivity, health care, and education. By the end of the decade, in recognition of Egypt pre-eminent leadership role in the Middle East, the United States significantly expanded its assistance program, making Egypt the beneficiary of one of the largest American assistance programs worldwide.

Among the first achievements of the program were restoring and reopening the Suez Canal, one of the world's most essential commercial waterways and a major earner of foreign exchange for the Egyptian economy. At the same time, there was significant expansion of Egypt's infrastructure in electric power generation, telecommunications, port facilities, grain storage capacity, and clean water distribution. This period also saw the forging of the strong institutional and professional ties between our two countries that set the stage for our partnership in the following years.

The 1980s   

As mutual cooperation took root, the United States broadened the scope of its assistance program and shifted its focus to support the goals of Egypt's social and economic development strategy. Activities concentrated directly on improving the quality of life for Egypt's people, particularly in agriculture, health care and basic education.

Increasing emphasis was placed on furthering economic progress and Egypt's shift to a market economy. USAID programs supported the Government of Egypt's efforts for regulatory change and privatization, as well as programs facilitating market entry, promoting employment, and increasing access to credit for small businesses. Simultaneously, imports of American commodities, intermediate goods and capital equipment invigorated Egypt's industrial and commercial base and strengthened the private sector's role in the national economy.

The 1990s

With major improvements in infrastructure completed or well underway, the United States and the Government of Egypt again shifted the focus of their cooperative efforts during the early Nineties. Emphasis moved to accelerating economic growth through privatizing state-owned enterprises and increasing exports. To further improve the quality of life of Egypt's people, resources were concentrated on water use efficiency, enhancing the quality and availability of health care to women and children, expanding access across the country to the services of the growing infrastructural networks, reducing air pollution, protecting natural resouces, and improving the civil courts. Strengthening the ability of Egypt's non-governmental organizations to actively participate in the country's development was also emphasized.

The United States-Egyptian Partnership for Economic Growth and Development was established in 1994 by President Hosni Mubarak and Vice-President Al Gore. The Partnership provides a framework, not only for further development in Egypt, but also for closer cooperation between our two countries through high-level economic policy dialogue engaging the public and private sectors in both countries.

2000 and Beyond: Aid to Trade  

The relationship between the United States and Egypt continues to evolve. In the Seventies it was almost entirely based on aid, but now trade and investment are increasingly important. As this transition proceeds, Egypt is simultaneously becoming more closely integrated in the global economy.

In 1999, the United States and Egypt agreed on a ten-year plan to reduce assistance in recognition of Egypt's progress in social and economic development. The two countries will facilitate the transition to a successful, self-sustaining market economy by promoting job creation, investing in people, and optimizing use of the natural resource base.

Programs will focus on increasing mutual trade and attracting more investment to Egypt, while at the same time developing a more productive and better-trained workforce. Expanding and improving educational opportunities, enlarging the base of technical expertise, strengthening health and family planning services, protecting the environment, managing natural resources, and promoting citizen participation. All these are areas of mutual concern.

In the past 25 years, Egypt has made considerable progress in increasing economic growth, achieving macroeconomic stability and implementing structural adjustment with the help of USAID programs. Into the 21st century, the United States and Egypt share a common commitment to pursue a strategy that will continue to enhance the economic and social wellbeing of the Egyptian people. 

Impact of the Partnership Agriculture

 The development of agriculture has been a cornerstone of United States-Egyptian economic cooperation. Over the past 25 years, about $1.3 billion has been provided through USAID programs for this sector boosting productivity and increasing farmer incomes. As a result, we have seen significant increases in crop production, progress in irrigation systems and water use efficiency, and greater access to credit for 2.3 million small farmers. Activities have concentrated on policy reform, agricultural research, expanded availability of improved inputs and new technologies, farm management techniques, financial services, and the formation of local water-user associations.

In recent years, with the introduction of new technologies and export practices, Egypt's farmers have realized major increases in the exports of high-value crops such as grapes, melons, strawberries and potatoes. USAID programs have supported specialization in the agricultural sector and export expansion through technological assistance, managerial training, and the dissemination of market information to farmers. These activities have contributed significantly to increased productivity, employment generation, rural income growth and poverty alleviation.

Economic Opportunity

Economic growth in Egypt has always been fundamental to the partnership of our countries. With the goals of creating a competitive market and a thriving private sector, the United States has supported programs that provide credit to small and micro entrepreneurs. Since 1988, these programs have created over 167,000 jobs through the extension of approximately 600,000 loans amounting to approximately $600 million.

The Commodity Import Program (CIP) dates to 1975, the beginning of the USAID program in Egypt. This program accounts for almost $6.7 billion, about one fourth of American assistance to date. Originally, CIP financing covered only public sector imports of American products. However, as the private sector has grown in importance, this program is now directed exclusively to financing the private sector's needs. Through 2000, over 1,400 private companies have imported equipment and materials from more than 1,800 American suppliers using CIP financing.

Beneficiaries of CIP financing are located in all parts of the country, and include food processing companies, tourist facilities, metal-working plants, hospitals, farms, and computer companies. Repayments of CIP loans revert to the Egyptian government and are used to support numerous development projects as well as general budget expenditures.

Through numerous economic growth programs, the United States has supported the Government of Egypt's efforts to shift production from the public to the private sector. By the end of 2000, 125 companies had been majority privatized (or liquidated), with combined sales proceeds exceeding 15 billion pounds. Between 1994 and 1999, the private sector's contribution to Gross Domestic Product rose from 61 percent to 74 percent, as private economic activity grew about twice as fast as the economy as a whole.

During the same period, USAID-supported export promotion programs have helped to more than double exports in selected products in the food processing sector, from $202 million to $477 million, as the ability of Egyptian firms to compete in the global economy improved. USAID technical assistance has assisted the Government of Egypt to implement substantial economic policy reforms, encouraging and fostering free-market activity.

Infrastructure

The development of Egypt's physical infrastructure stands out as one of the greatest successes of United States-Egyptian cooperation. More than $1.8 billion has been invested in electric power generation and distribution systems with the result that more than 99 percent of all Egyptians now have access to electricity. Total installed capacity almost quadrupled between 1976 to 2001 from 3,789 megawatts to more than 15,000 megawatts and much of this gain can be traced to USAID programs. In addition, the Aswan High Dam power station was rehabilitated, substantially increasing efficiency and prolonging the station's effective lifetime.

USAID projects in the telecommunications field have led to the installation of more than 700,000 telephone lines, providing service to some 4.2 million additional citizens. The number of telephones per hundred residences grew more than seven-fold from 1.2 in the early 1980s to 9.8 by 2001. The total number of telephone lines increased from about 500,000 to more than 6.3 million. while the number of available international circuits climbed from 820 to 9,000.

American assistance has provided more than $2.8 billion for Egypt's urban water and wastewater infrastructure, resulting in improved and increased service to more than 22 million citizens. Assistance to this sector was initially targeted on an emergency basis the provision of sewerage infrastructure and the rehabilitation of water services in the Canal Zone cities. In the 1980s and the early 1990s, attention shifted to the needs of Cairo and Alexandria. Since the mid 1990s, the program has shifted its focus to smaller and under-served locations in the Delta, South Sinai, and Middle and Upper Egypt. At the same time, emphasis has been given to the institutional development of local utilities and to the sustainability of service provision.

Education and Training 

Egypt and the United States have worked together on education and training projects since 1975. During this time, almost 2,000 schools have been built, with a concentration on rural areas. These efforts have also resulted in both increased attendance and reduced dropout rates for female students. Today, thousands of Egyptian girls in low-income situations, who would not otherwise go to school or would be forced to drop out, receive scholarships to facilitate primary school attendance. USAID activities in this sector have recently concentrated on community schools, a school construction program and a literacy program, all in conjunction with the Government of Egypt.

In 2000, a major new education initiative was launched, the New Schools Program, which builds on the successes of, and the lessons learned from, earlier pilot programs. More than 800 classrooms will be constructed, strong teacher capacity will be built, new teaching methodologies will be introduced, and access to school for more than 28,000 girls annually will be provided in Upper Egypt.

Beyond these educational activities, more than 13,000 Egyptian professionals have been trained in many of the best American academic and technical institutions in areas as varied as agriculture, public health, economics and management. In addition, American and Egyptian universities have undertaken some 470 joint research activities.

Citizen Participation

An environment that encourages job creation in the private sector and greater sustainability of the national resource base requires transparent and accountable governance. Citizen participation and responsive institutions are the backbone of such governance. Here, as in other sectors, American assistance is designed to complement Egyptian efforts.

USAID programs have invested about $410 million in strengthening Egyptian non-governmental organizations (NGOs), thereby increasing the participation of local communities in the process of development. Since 1992, 92 major grants have been awarded to 40 Egyptian and 14 American NGOs for activities benefiting over 2 million citizens. In addition, Egyptian NGOs have received more than 6,000 grants for small service projects in low-income areas throughout the country. Upper Egypt has benefited from 290 community-based development projects directed by 150 NGOs.

In an effort to improve the environment for trade and investment, the United States and the Government of Egypt are cooperating in the automation of commercial and civil court operations and in the training of 6,000 judges, prosecutors, and court administrators in the civil law system.

Environment  

In the early years of the USAID program, energy and environmental activities aimed at reducing industrial pollutants and promoting energy conservation and the use of cleaner fuels. Through these efforts, many Egyptian factories introduced clean technology, pollution prevention methodologies and energy saving equipment. As a result of joint United States-Egyptian cooperation, almost all gasoline sold in the country today is lead-free.

Egypt's first major air quality program was initiated in 1997 through the United States-Egyptian partnership. This includes clean burning compressed natural gas (CNG) buses, an air quality monitoring network, and an air pollution episode forecasting system for Greater Cairo. The USAID Commodity Import Program has financed the equipment for 30 CNG fueling stations in the Cairo area to serve the growing fleet of CNG-powered vehicles now estimated to number some 40,000 buses and taxis. In addition, through the cooperative efforts of the two countries, agreements have been reached to relocate lead smelters away from populated areas.

Under the Egyptian Environmental Policy Program (EEPP), there has been progress toward developing solid waste management strategies, establishing an environmental protection fund, designing environmental management systems for hotels and resorts as well as for the 10th of Ramadhan Industrial City, and implementing public awareness campaigns. Other EEPP tourism and biodiversity-related activities include assistance to the Government of Egypt in managing the Red Sea coral reef and coastal areas and the preservation of some of the country's treasured antiquities.

Health and Population

Since 1975, there have been great improvements in the health of Egypt's population in general, and, in particular, of women, infants and children. During the 1970s and the early 1980s, USAID programs in the health sector expanded access to health services for the rural and urban poor. Substantial investments were made in training health personnel, upgrading the physical infrastructure of the sector, and improving the service delivery system. Since 1983, the program has focused on reducing infant and child illness and mortality.

Child survival programs have been remarkably successful. Infant mortality fell by 45 percent between 1983 and 1998, while the under-five mortality rate declined by 53 percent. The United States, in partnership with the Government of Egypt, non-governmental organizations and the private sector is working to reduce these mortality rates still further, to expand maternal and child health services, and to improve service sustainability.

After a quarter century of investment in family planning, Egypt and the United States can justly point to an impressive record of accomplishments. For example, as a result of a doubling in the prevalence rate of modern contraceptive methods, the total fertility rate fell from 5.3 children per woman in 1980 to 3.5 in 2000. The two countries continue to work toward Egypt's objective of achieving a stable and prosperous population.

The USAID program in this sector includes the promotion of policy reforms, advances in quality assurance, human resource and systems development, decentralization, improved resource allocation, and increased private sector and community participation.