CAIRO: In her first address to the American Chamber of Commerce last Thursday, US Ambassador to Egypt Anne Patterson said that democratic transitions rely on economic opportunities.
“Egyptians today are engaged in a vigorous discussion over the political future of the country. This is a healthy and vitally important debate, and I am confident that it will result in a democratic Egypt that protects human rights and helps address its citizens’ needs,” she said, “However, we know from experience that successful democratic transitions not only rely on political reform, but also depend on broadening economic opportunity.”
The ambassador said that so far during her six weeks in Egypt, she has heard discussion about the political future of the country, but not enough about the critical fixes that need to accompany Egypt’s economic transformation, “delivering to the Egyptian people a strong economy to accompany its new government,” she explained.
Patterson said she finds that most bilateral discussions between the two countries are limited to debates over levels of economic assistance, the ways in which aid is managed or delivered, or talks about Egypt’s public sector finances.
“Much of this is a sterile discussion, and we should move past it,” she stated, noting that there are important issues in bilateral assistance that shouldn’t overshadow economic reform issues that will determine the success of the democratic transition and the health of Egypt’s economy in the decades to come.
“The future of Egypt lies with the private sector, with its ability to innovate, and with its commercial links to the broader world, including the US, and not with international assistance,” she said.
Patterson outlined four key areas in which the United States can work in partnership with Egypt to support the private sector, these are: access to capital, worker skills, regulatory reform and more open markets.
Regarding access to capital, she explained that the ability to borrow money to finance expansion is critical to small and medium sized businesses, but, according to the International Finance Corporation, only eight percent of these businesses in Egypt have taken out business loans.
“One tool we can use to mobilize Egyptian capital to support small business is a $250 million US Overseas Private Investment Corporation (OPIC) loan guarantee facility which, over a 10-year period, will make available up to $700 million in lending to small businesses and support over 50,000 new Egyptian jobs,” she stated.
Patterson added that the program provides a guarantee of up to 70 percent of the value of each approved SME loan, thereby reducing the risk to Egyptian banks and stimulating additional lending.
Regarding workers’ skills, the US is refocusing its sponsored education programs worldwide, Patterson said, pointing out that while there is still a desperate need for basic education, particularly for girls, this does not play to America’s comparative advantage.
“We excel in training in the sciences, business, and economics and the development of specific skills that are needed in the modern labor force,” she said.
Patterson said that Egypt is in need for more intense regulatory and legal reform. “Egypt has made remarkable advances in the World Bank’s global Doing Business index, leapfrogging past more than 70 countries in this annual benchmarking of the business environment of more than 180 countries around the world,” she explained.
On a final note, Patterson said that governments can support the private sector by assuring greater access to markets.
Following the speech, the floor was open to businessmen, government officials, lawyers and other players in the Egyptian economy to inquire about several issues.
Patterson was asked about the US’ reaction to the potential repercussions of the UN vote on Palestinian statehood.
“The position of the US government on this issue is well known. Our view is that the only sustainable peace process is direct negotiations between the parties, i.e. the Palestinians and the State of Israel,” she said, adding that she did not want to get into any speculation about what will happen after a vote either in the Security Council or in the General Assembly.
Furthermore, the US ambassador also explained the US’ position on the tensions between Egypt and Israel, particularly with regards to the deaths of Egyptian soldiers on the border.
“The United States belatedly offered condolences on the death of the Egyptian soldiers due to some procedural mistakes on our side,” she said.
“Let me also talk about the bigger issue for a moment, I think what is happening is that both Egypt and Israel are committed to regional peace. They are anxious to move past the incidents of the past weekend and restore the relationship. That was a very frightening event the other night [Sept. 9] and it wasn’t just the Israeli Embassy that was under attack. There was one other embassy and a number of domestic ministries also under attack, but I am convinced that both governments are anxious to move past this and both have a commitment to regional peace,” she explained.
On the other hand, while the US maintains that it supports emerging democracies, analysts find that US-Egyptian relations remain the same.
“The US hasn’t done anything to support democracy in Egypt,” said Abdel Aleem Mohamed, political analyst at Al-Ahram Center for Political and Strategic Studies.
The analyst noted that the democracy in Egypt has actually been a somewhat negative prospect because of the current tensions in the Egyptian-Israeli relations.
“There has been a limited effort done by the US regarding the support of the Arab Spring and the emerging democracies in the Arab world by the US, it still blindly supports Israel and their position on the state of Palestine and they’ll use their veto,” he said.
