News / Middle East

Kerry: US to Release Millions in Aid to Egypt

Egyptian Foreign Minister Kamel Amr, left, sits with U.S. Secretary of State John Kerry, center, and Egyptian President Mohamed Morsi during their meeting at the Presidential Palace in Cairo, Egypt, March 3, 2013.
Egyptian Foreign Minister Kamel Amr, left, sits with U.S. Secretary of State John Kerry, center, and Egyptian President Mohamed Morsi during their meeting at the Presidential Palace in Cairo, Egypt, March 3, 2013.
Elizabeth Arrott
U.S. Secretary of State John Kerry says Washington will provide Egypt with immediate financial aid because of the nation's "extreme needs."  Kerry announced the deal after meeting Sunday with Egyptian President Mohamed Morsi.  Cairo is the first stop in the Arab world for Kerry as he makes his inaugural trip as the top American diplomat.

Secretary of State Kerry says the United States will make $190 million available immediately from a promised $450-million package for budget support.  He also pledged $60 million toward a new enterprise fund.  

Kerry, who met with President Mohamed Morsi Sunday in Cairo, said the United States made the offer after assurances from the Egyptian leader of political reform and his commitment to securing a much-delayed loan from the International Monetary Fund.

U.S. officials say the two also discussed the Syria conflict, relations with Iran, Egypt's continued support of its peace treaty with Israel and other regional concerns.

But the focus of this stop on Kerry's trip centered on Egypt's domestic concerns.  The nation is deeply divided politically, while its economy is in dire straits.  The combination has kept away foreign investors and tourists, a key source of revenue, pushing foreign reserves to dangerously low levels.  

Some Egyptian and foreign economists say without a major cash infusion, such as the $4.8 billion IMF loan, bankruptcy for Egypt is possible within months.  Yet the loans are tied to austerity measures, which political analysts predict could lead to further unrest.  Protests continued around the country during Kerry's two-day visit.  

On Saturday, Kerry said he came to Egypt not to interfere, but to listen.  Yet not everyone sees the U.S. as a neutral player. Kerry spoke with several political opponents of President Morsi, but some, including Hamden Sabahi, declined to meet with him.

Retired Egyptian general and security expert Sameh Seif al Yazal explains the view of some Egyptians.

"There is a kind of feeling internally in Egypt that the U.S. administration is supporting very much the Muslim Brotherhood and that is the feeling not only on the street level, but even to intellectuals and politicians and professionals," said al Yazal.  

That train of thought, al Yazal argues, turned even some Morsi supporters against the United States as the economy declined.

"The poorer people in the street they believed at the time, 'Yes let us vote for the Muslim Brotherhood because the Americans want them.'  They come to power that means the economy will be better and the Americans will support and it is going be a better life," said al Yazal.

It was not immediately clear what impact, if any, the money pledged Sunday would have.

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