News / Africa

US Nears Deal for $1 Billion in Egypt Debt Relief

An Egyptian vender adjusts her veil in front of a giant poster of a US dollar outside an exchange office in Cairo, Egypt, March 28, 2011.An Egyptian vender adjusts her veil in front of a giant poster of a US dollar outside an exchange office in Cairo, Egypt, March 28, 2011.
An Egyptian vender adjusts her veil in front of a giant poster of a US dollar outside an exchange office in Cairo, Egypt, March 28, 2011.
An Egyptian vender adjusts her veil in front of a giant poster of a US dollar outside an exchange office in Cairo, Egypt, March 28, 2011.
The United States is close to a deal with Egypt's new government for $1 billion in debt relief as part of a U.S. and international assistance package designed to prop up the country's faltering economy and aid its transition to democracy.

A team of senior U.S. diplomats has spent the last week in Cairo finalizing the agreement, which has been delayed by Egypt's political turmoil and caution in Washington about rewarding its newly elected Islamist leadership. Egypt's debt to the U.S. exceeds $3 billion.

Senior American officials said Monday a final announcement is expected later this month.

U.S. President Barack Obama first pledged economic help for Cairo last year. Obstacles remained to completing the debt relief deal - which is reported to involve a mix of debt payment waivers and complicated "debt swaps."

The negotiations come as a trade delegation with representatives from nearly 50 U.S. businesses considering investment in Egypt is set to arrive at the end of the week. Under Secretary of State Robert Hormats, a former Goldman Sachs executive, will lead the group, which includes regional directors of companies such as Google, Boeing, Xerox and General Electric.

Economic turmoil

Egypt's Muslim Brotherhood-backed president, Mohamad Morsi, has said his first priority is to create jobs and shore up the country's struggling economy, which took a huge hit following the chaos of the 2011 revolution. The once-lucrative tourism industry, a major source of foreign currency, was particularly devastated.

Egypt's Central Bank has used up nearly two-thirds of its $36 billion foreign currency reserves to prop up the Egyptian Pound, The Wall Street Journal reported.

Two weeks ago, Morsi asked the International Monetary Fund for a $4.8 billion loan package. Saudi Arabia and Qatar have provided emergency support and China offered a $200 million loan.

Beyond the debt relief and IMF assistance, U.S. officials have proposed $375 million in financing and loan guarantees for American financiers who invest in Egypt, and a $60 million investment fund for Egyptian businesses.

Mutual suspicion

Under ousted president Hosni Mubarak, Egypt was one of America's top security partners in the Arab world and received an annual $1.3 billion in military aid.

While these programs have continued, much of Washington's non-military assistance for Egypt was put on hold after the January and February 2011 uprising that toppled Mubarak.

American funding for pro-democracy civil society groups in Egypt led to a crisis at the end of last year when Egyptian security officials raided the offices of several organizations, arresting their staff and accusing them of attempting to undermine the government.

The election in June of an Islamist government - followed by political upheaval and some unsettling international moves - raised additional questions about Mr. Morsi's reliability as a U.S. ally.

An evolving relationship

But American and Israeli officials have since sought to assure U.S. congressional leaders that ensuring stability in Egypt at a time of turmoil and change across the Middle East is vital to Western interests.

They have argued that persistently high unemployment could undermine Morsi's government. With Egypt seen as hugely influential in the Arab world, its economic recovery and political stability could exert a positive influence on other countries currently in flux, officials say.

While U.S. assistance has provoked suspicion among some Egyptian Islamist groups, the Muslim Brotherhood and Morsi have made it clear that fixing the country's $25 billion budget shortfall is their most urgent priority.

Hormats has praised Mr. Morsi’s early steps. “The groundwork has been set with a new political leadership, a new level of energy and new opportunities to reform,” he said in Cairo on Wednesday.

The Egyptian leader's scathing public criticism of Syrian President Bashar al-Assad during a visit to Tehran last week, which angered Iranian leaders, has also helped ease U.S. concerns.

Mark Snowiss

Mark Snowiss is a Washington D.C.-based multimedia reporter.  He has written and edited for various media outlets including Pacifica and NPR affiliates in Los Angeles. Follow him on Twitter @msnowiss and on Google Plus

You May Like

Afghanistan, Pakistan Leaders to Hold Icebreaking Talks in Paris

Two sides are expected to discuss ways to ease bilateral tensions and jointly work for resumption of stalled peace talks between Afghan government and Taliban officials

Corruption Busting Is Her Game

South African activist is building 'international online community of thousands of corruption fighters'

Former SAF Businessman Gives Books, Love of Reading to Students

Steve Tsakaris now involved in nonprofit Read to Rise, which distributes books in Soweto, encourages lower-grade primary school students to read

This forum has been closed.
Comment Sorting
by: H. D. Schmidt from: California
September 06, 2012 2:38 PM
As a legal, yes, as a legal immigrant now going on 57 years, I am hereby "forced" to declare: More and more I find that there has never been a nation as stupid as dear old USA! Yes, handing out money like it grew on trees all over the world, while its national debt is and has been increasing by leaps and bounds under either administration. And yes while creating daily more and more enemies all over, right? You do not buy friends, it never worked and yet why in the hell is America doing it? Yes, while the Founding Fathers are and have been shacking in their graves. What I have learned about the Founding Fathers, is in reality the reason for writing the above. What is your reaction born Americans to what I said?
In Response

by: Pissed Guest from: WashingtonDC
September 11, 2012 7:13 PM
After I read how the Egyptians tore down US flag at US embassy on 9/11 just after US pledged a billion $US free money to help paying off their debt, I realize that this country is more screwed than most Americans could imagine. Total $US 2.6B going to the undeserved?
In Response

by: ali baba from: new york
September 09, 2012 12:56 AM
i agree, it is unbeliveable that us policy maker waste all this money on egypt especally it is ruled by muslim brotherhood which it is anti american ,anti western ,anti christan. 1.3 billion for militry aid.300 addition aid and now one billion relif.

by: Michael from: California
September 04, 2012 2:06 PM
The US is not giving money to Egypt, they owe us over 3 billion, the US is forgiving 1 billion of that debt. They are also sending deligations there to boost their economy and fix problems. Gee, maybe when that deligation is done over there they can come back to the US and do some work here, and how about some American worker debt relief. I went to school for almost a decade for an advanced degree, i have big debt (not that i want that debt forgiven, im a responsible financially conservative person), but i get taxed 33% or more on my paycheck, and with a loan payment of $1500 per month, and then rent, i literally make just $1,000 more per month than i did waiting tables before i went off to college.

Is there something wrong here? there is supposed to be some reward or incentive to spend a decade of your life in school to make something of yourself, but now that is all gone, how can this government expect people to make something of themselves if there is no incentive to do so from the beginning, especially when they just take so much money in taxes, keep me at a 8% student loan interest rate, and then give banks 0% interest rates (borrowing tax payer money = my tax money), and then forgive all these debts of foreign countries. I dont see any other countries or the UN for that matter forgiving US debt.

by: rd from: OCONUS
September 04, 2012 8:46 AM
That's right.... give the money to a foreign country instead of giving it to our own states relief. We give to much to foreign countries and we get NOTHING for it except loss of life and loss of respect.
In Response

by: lapazjim from: Arizona
September 05, 2012 9:44 AM
This is true!!!Our government is still giving billions in foreign aid to many other countries,but doing very little here.We need to understand that there are countries that need help feeding their population and that's fine.When we start giving them money is where the problems come in--its misused to buy weapons or other items it wasn't intended for or just flat out stolen buy that countries administration.One of the worst things that has happened to the US and helping these countries is that they turn against the US,but of course still want our money. Isn't it strange how the US helps so many countries in the world yet WE AS A COUNTRY ARE THE MOST HATED.Have the Saudi Arabs help out there brothers and with a lot of wishing and dreaming maybe Russia and China can lend in with monetary and food help to these countries.Instead of saying no to helping anyone all the time.

by: Anonymous
September 04, 2012 8:44 AM
This may be one of the dumbest things I've heard in quite some time.

by: US Citizen from: USA
September 04, 2012 8:35 AM
So one billion dollars to assist the Egyptian economy and our business working to develop jobs for Egypt. At US Citizen expense. With all the oil and money in the arab countries, why dont they take care of themselves. Why are we making the US Citizens pay for everyone's problems when we can't even take care of our own. Our economy needs a boost, we have people that need jobs. Why are we always selling out to other countries. Where does Egypt help us. Only politically does it interest us, the govenrment. A free vacation spot, a place to visit. Damn... no wonder we are struggling.....This has got to stop.
In Response

by: Joe from: Vegas
September 04, 2012 12:56 PM
How do you figure that each person in the US will get $400K by evenly dividing up $1 billion? Are you only including the 1%? 1 billion divided by a population of over 300 million is about 3 bucks each.
In Response

by: John Doe
September 04, 2012 8:45 AM
What the heck. America needs to take the Billion they want to give to Eqypt and distribute it evenly to all its citizens with a valid Social Security Card. Require bringing proof to validate citizenship at the local court house and get your money (about $400K per person). I think our economy would get spured if that happened.

by: Traveller from: Texas
September 04, 2012 8:28 AM
Is Obama borrowing the money from China?

by: Dr, Malek Towghi from: USA
September 04, 2012 7:13 AM
Two news items in today's (9.4.12) Egyptian "": *** A lawyer of the Muslim Brotherhood's ruling Freedom & Justice Party has filed a complaint to the interior ministry against the renowned Egyptian cultural center, El-Sawy Culturewheel, for hosting 'Satanist' rock bands and events. *** "Egyptian authorities have ordered the cancellation of Jewish New Year & Yom kippur celebrations at Alexandria's Eliahu Hanabi Synagogue ..." ***** Is this new $1 billion check from our tax money a reward for Egypt's Islamist rulers who are also in the process of dumping a Shariah-based constitution on the country and making Sinai Egypt's Waziristan????
In Response

by: Dr. Malek Towghi from: USA
September 04, 2012 5:48 PM
"Godwin from Nigeria", Just for the record and as a disclaimer, I don't share your reactionary Republican Tea Partyan NeoConian vulgar tone against Obama. I plan to vote for Obama-Biden as enthusiastically as I did last time. The curse of foreign aid which particularly the Muslim countries (except Jordan) consider a jizya tribute being paid to them -- Baaj-e Sebeel "moustache tribute/ blackmail money" in Iranian lingo -- Obama has inherited from the past, particularly Republican administrations. Remember Bush's largesse for Pakistan while it was protecting Bin Laden and rearming the Taliban -- which Obama is trying to make conditional. By the way, Pakistanis are openly praying for a Romney victory who has hinted to restore US largesse for the Islamic Republic.
In Response

by: Godwin from: Nigeria
September 04, 2012 12:27 PM
It is all taken care of by Obama. Why not? And he has assured Iran that USA is not going to fight alongside Israel in those areas. Just $1b reward is so that Egypt can buy enough arms in readiness to support Iran when trouble will start. Obama is a good schemer!

by: Anonymous
September 04, 2012 6:51 AM
How about some US debt relief?

By the Numbers

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continuesi
Ayesha Tanzeem
November 25, 2015 10:46 PM
One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs