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U.S. releases $250 million in aid to Egypt

Monday, March 4, 2013 - 1:02pm

Calling it a "good-faith effort" to help the Egyptian people, U.S. Secretary of State John Kerry released $250 million in economic aid Sunday, with a pledge of more if President Mohamed Morsy implements economic and political reforms.

Kerry's announcement came after a series of weekend meetings in Cairo with a cross-section of Egyptians and a two-hour session with Morsy on Sunday.

"When Egypt takes the difficult steps to strengthen its economy and build political unity and justice, we will work with our Congress at home on additional support," Kerry said in a written statement on the talks. But right now, Kerry said, Egypt needs help.

"In light of Egypt's extreme needs" and assurances by Morsy that he will take the steps necessary to obtain a major loan package from the International Monetary Fund, Kerry said the United States would provide the first $190 million of $450 million in already-promised support funds to the Egyptian government budget.

In addition, Kerry said, the United States will provide $60 million in direct support for an Egyptian-American Enterprise Fund geared toward Egypt's entrepreneurs, and fund a higher-education initiative to help students, especially women, earn undergraduate degrees in science, technology, engineering and business.

Kerry said he was banking on Morsy's assurances that he would implement "homegrown" reforms to help secure agreement with the IMF and "put Egypt on the path to establishing a firm economic foundation and allow it to chart its own course."

Morsy "agreed and said he plans to move quickly to do so," Kerry said.

But Kerry is not releasing all of the $1 billion the Obama adminstration pledged to Egypt in May 2011, after the democratic revolution that toppled longtime strongman Hosni Mubarak.

In addition to Sunday's $190 million, there is an additional $260 million in budget support funds still pending. And in a separate tranche of money, there is a further $550 million for scholarships and loan guarantees. Release of these funds will be conditioned on Morsy's following through on political as well as economic steps.

"The brave Egyptians who stood vigil in Tahrir Square did not risk their lives to see that opportunity for a brighter future squandered," Kerry said. "The Egyptian people must come together to address their economic challenge."

Concern still remains about free and fair elections, human rights, behavior of the police, clampdowns on nongovernmental organizations, and other problems that beset Egypt's troubled transition to democracy.

"It is clear that more hard work and compromise will be required to restore unity, political stability and economic health to Egypt," Kerry said. "The upcoming parliamentary elections are a particularly critical step in Egypt's democratic transition."


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