CAIRO: As Tahrir Square continues to play host to Egyptians seeking a forum to voice their concerns regarding the impending trajectory of their country, the economy is looking to emerge from a state of paralysis.
Lael Brainard, the US Under Secretary of the Treasury for International Affairs, on an official visit to Egypt, led a roundtable discussion at the US embassy about multilateral commitment to Egyptian progress.
Brainard met with representatives from the Ministry of Finance, young entrepreneurs and prominent members of the business community to discuss what she described as “a set of economic engagements with Egypt’s government as well as encouraging greater investment in the private sector.”
Following a spring of political and social alteration, the Egyptian economy has been rendered a subject of uncertainty. Egypt’s Ministry of Finance said 2011/12 deficit was forecast at 10 percent of gross domestic product.
While uncertainty of political outcome has impeded direct investment in several industries, Brainard was insistent in mentioning continuing US support by saying, “We are committed to working with the Egyptian government and with the private sector to help ensure that the economy grows and that the growth is much more broad-based providing new job opportunities.”
When asked specifically about the parameters of US support in an attempt to bolster financial activity in the Egyptian economy, Brainard referenced the framework mentioned by Barack Obama in his May 19 speech where the American president voiced support for the revival of a democratic Egypt and the allotment of up to $1 billion in debt relief.
Brainard added, “We are also working on setting up an enterprise fund that would make direct investments into private enterprises and a set of investment guarantees and bonds.” This extending from an additional $1 billion from the US in guaranteed loans to finance infrastructure and job creation in Egypt.
The traditional anchor to Egypt’s economic gains, tourism, has been subject to severe decline in recent months. Minister of Tourism Mounir Fakry Abdel Nour announced that nearly 1 million tourists abbreviated or canceled their stay between the latter parts of January through February.
When asked about this Brainard stressed, “It is extremely important to bring back Egypt’s expansive tourism industry to ensure a vibrant private growth, both domestic and foreign, which will allow for a clear path forward to political transition.” A revival that will be of paramount importance in the coming months to a sector that denotes 11 percent of the overall economy.
Brainard reiterated US capacity in bringing investment to Egypt, but acknowledged multilateral support is imperative. “We are continuing to engage in dialogue with our partners in the G8, the Gulf countries, and others in the region specifically in the area of trade facilitation where we think there is a lot to be done.”
When asked if US support was predicated on Egypt’s behavior toward Israel, Brainard carefully deferred any binding remark by saying, “The rationale for assistance has been made clear.”
It is yet to be seen if the coming months will usher in an environment that will be conducive to investment in order to renew cash flow, but it is certain that upcoming political developments will behest the revitalization of the Egyptian economy.
