Egypt’s economy will not be affected by U.S. aid cut: AmCham

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The recent cut in the U.S. aid will not have a big significance on Egypt’s economy, as the aid amount is small, said American Chamber of Commerce’s executive vice president Ahmed Abou Ali on Wednesday.

Abou Ali explained that foreign investors are very keen to invest in the Egyptian market.

Abou Ali told Daily News Egypt that AmCham’s board is going to hold a meeting next month to discuss the regular economic issues between the two countries, and after that announcement, the aid cut will be put on the meeting agenda.

He stressed that this issue would affect the political relations more than economic ones.

The U.S. administration decided Tuesday to cut nearly $100 million in military and economic aid to Egypt and delayed almost $200 million more in military financing to Egypt, pending human rights improvements and action to ease harsh restrictions on civic and other non-governmental groups.

For its part, government sources hinted that the suspension of US aid to Egypt or even the reduction of it could negatively affect the activities of the US Agency for International Development (USAID), which has been active in Egypt since 1978.

The suspended amount of the aid, if not disbursed by the end of September, goes back to the US Treasury according to US law, especially since the US fiscal year ends at the end of September, according to USAID data.

Egypt is the second largest recipient of military aid from the United States after Israel, receiving about $1.3 billion annually, and the officials noted that the U.S. has provided nearly $80 billion in military and economic assistance to Egypt over the past 30 years, according to the Associated Press.

US law requires the administration “to withhold 15%, ($195 million) of the $1.3 billion it gives Egypt annually” in military aid for human rights issues.

USAID’s programme in Egypt, totaling nearly $30 billion since 1978, has directly and fundamentally supported its programmes in education, health, economic growth, and governance, contributing to stability and prosperity for Egyptians through accessible, effective, and accountable institutions.

Source: Daily News Egypt