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EGYPT
>> Regional Overview >> Egypt Overview 
Introduction
Egypt plays a pivotal role in U.S. foreign policy in the Middle East. In the past year, there have been significant developments in the Peace Process and a stable Egypt continues to be vital to the advancement of U.S. goals in the region. Egypt's continued stability depends on increasing the prosperity and quality of life of its people. To accomplish this, Egypt must become a fully integrated, competitive participant in the global economy. This alone will generate sufficient jobs to employ its population and raise incomes.The Mission Performance Plan (MPP) for Egypt emphasizes economic growth and development as essential to achieving the foreign policy goal of a stable and prosperous ally in the Middle East. To contribute to this MPP goal, a major portion of USAID assistance is directed at creating an economic policy environment to foster private sector growth and investment. USAID is also working towards assuring that Egypt's population is healthy and adequately educated to become a viable workforce in the 21st century.
The Development Challenge
During the past decade, Egypt has made significant economic progress. Egypt has strengthened its macroeconomic discipline, privatized many public sector investments, and now has entered the ranks of emerging economies with annual gross domestic product (GDP) growth exceeding 5%, low inflation, high reserves, and per capita income of nearly $1300 a year. Nonetheless, challenges remain to Egypt's full participation in the global economy, an essential next step in the country's development. Despite respectable levels of growth and good performance on a number of macro indicators, Egypt has not succeeded in reducing poverty. The Government of Egypt (GOE) has recognized this issue and is giving increased attention to addressing key social development concerns. There also has been the recognition that improved service delivery of all types depends upon public-private partnerships (including those that involve non-government organizations), which will provide opportunities for enhancing citizen participation and improving the quality of governance.Over the past year, USAID/Egypt has developed a new strategy to support Egypt's development. The strategy, reviewed and approved in January 2000, will focus on creating an environment to encourage trade and investment and support Egypt's continued greater integration into the global economy. Since Egypt will need to create 700,000 jobs annually just to absorb new entrants into the labor force, USAID will support activities to enhance human resource development and create jobs. However, this growth will be unsustainable if it is at the expense of the disadvantaged and the environment. Consequently, the Mission will work to improve opportunities for the disadvantaged and continue to promote rational environmental management and programs to improve the quality of life for all Egyptians.
Last year, Egypt's growth rate of real gross domestic product (GDP) reached 6%, exceeding Mission projections (the Mission had estimated that this would be achieved by 2001). The private sector share of GDP increased from 63% in 1996 to over 70% this year. The GOE continued to privatize state-owned enterprises, privatizing over 30 firms, and completed major macro policy reforms in 1999. As a result of the GOE's continued liberalization of agriculture, cotton exports exceeded 100 million kilograms. The Mission continued its support to the horticultural exporters of Egypt, with grape exports, for example, increasing by 40% and strawberry exports doubling in the past year. Progress on many other policy fronts remained slow but steady and the Mission expects this trend to continue.
As a result of successful USAID initiatives in the power sector, more than 97% of the Egyptian population now has electricity and the Egyptian Electricity Authority has started to export a small amount of power to Jordan. USAID is helping Egypt re-engineer the telecommunications provider to prepare it for partial privatization of local telephone service in calendar year (CY) 2000. Some services are already privatized, including cellular phones and internet service providers. The challenge is to continue to encourage the trend towards privatization of infrastructure.
Egypt's economic development continues to have an impact on the environment (Cairo in particular suffers from serious air pollution), but there has been limited progress. USAID has provided assistance to implement programs to reduce air pollution. Greater Cairo's first vehicle emission testing (VET) station was constructed with USAID assistance and over 25,000 vehicles have gone through on-the-road testing. The Mission also promoted the use of Compressed Natural Gas (CNG) as a cleaner alternative to gasoline and all mini-buses in Cairo are now required to be CNG-fueled in order to renew licenses and registration. Starting this year, all imported vehicles must have catalytic converters and 85% of gasoline is now unleaded. USAID also supported activities to conserve Egypt's cultural and natural heritage, an important tourist magnet and generator of foreign exchange. As a result of our activities in coral reef conservation, over the last three year period in the most heavily dived areas of the Red Sea coast (Hurghada and Safaga), previously damaged coral is now re-growing and new damage has been significantly reduced.
Ensuring that Egypt's population is healthy, and does not exceed its scarce resource base, is an important USAID program goal. There has been substantial progress in this sector though much remains to be done. In 1998, contraceptive prevalence reached 52%, double the 1980 rate, but the average Egyptian woman in 1998 still had 3.4 children. Infant and under-five child mortality rates declined substantially and average child immunization coverage rates exceed 90%. However, maternal mortality remains unacceptably high and emerging infectious diseases are not well controlled (Egypt has the highest known prevalence of hepatitis C worldwide). Regional disparities between Upper and Lower Egypt, and rural and urban areas continue. Chronic malnutrition of children has not declined over the last decade.
Girls' access to education remains an acute problem that warrants reform of the basic education system. Female literacy, at only 40.5%, compares unfavorably to the 64.7% male literacy and an estimated 1.6 million school-aged girls are not currently enrolled in school. Beginning in CY 2000, to increase access to quality primary education, USAID will finance school construction and renovations as well as activities to improve teacher and student performance. USAID will also fund a "second chance" program to address the basic literacy needs of older girls who are illiterate. To break the cycle of illiteracy, because high dropout rates are attributable to uneducated parents and their children's inadequate school readiness, USAID has sponsored an Egyptian version of "Sesame Street," to premiere in early 2000. In fiscal year (FY) 2001 USAID expects that the GOE will request other education system interventions.
Other Donors
Egypt continues to receive large amounts of bilateral and multilateral aid. At least 38 donors work in Egypt although the United States remains the largest single donor with the most comprehensive program. Other major donors include Canada, France, Germany, the Netherlands, the Nordic countries, Japan, South Korea, the European Union, the World Bank, the United Nations Development Program, the Arab and Kuwait Funds and the African Development Bank. A very active donor assistance group meets monthly to discuss coordination and related issues.
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: November 17, 2000 |
