Egypt's Capacity To Absorb and Use Economic Assistance Effectively

ID-77-33: Published: Sep 15, 1977. Publicly Released: Dec 3, 1982.

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U.S. assistance to Egypt has become a political symbol of evenhanded support among the Middle East adversaries. The economic impact of U.S. assistance depends on Egypt's development of economic reforms.

The U.S. programs provide long term benefits through development projects. Short term balance-of-payment relief is provided through the Commodity Import Program and food aid. The most serious impediment to Egypt's development is its difficulty in mobilizing domestic resources. Egypt's accelerated development program will require it to stretch financial, material, and organizational resources to the limit. This could have a destabilizing effect if development is not accompanied by sound budgetary management.

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