U.S. Near Deal to Forgive $1 Billion in Egypt Debt: ‘It’s About Growth and Business’

Egyptian President Mohammed Morsi
(Photo: AP)

The United States is finalizing a pact with Egypt’s newly-established Islamist government to forgive $1 billion in debt as part of an international assistance package intended to “bolster [the country’s] transition to democracy,” in the words of the New York Times.

Apparently the matter is becoming increasingly urgent as Egypt turns to China and the East as its major allies instead of the United States, which gives the country $1.3 billion in military aid annually.

In his first international trip outside of the Middle East, for instance, Egypt’s President Mohammed Morsi chose to visit China over the U.S.

The New York Times adds:

In addition to the debt assistance, the administration has thrown its support behind a $4.8 billion loan being negotiated between Egypt and the International Monetary Fund. Last week, it dispatched the first of two delegations to work out details of the proposed debt assistance, as well as $375 million in financing and loan guarantees for American financiers who invest in Egypt and a $60 million investment fund for Egyptian businesses.

The assistance underscores the importance of shoring up Egypt at a time of turmoil and change across the Middle East, including the relatively peaceful uprisings in Egypt and Tunisia, the still-unfinished transition in Libya, the showdown over Iran’s nuclear program and the war in Syria.

Given Egypt’s influence in the Arab world, the officials said, its economic recovery and political stability could have a profound influence on other nations in transition and ease wariness in Israel about the tumultuous political changes under way.

“It’s important for the U.S. to give Egypt a reason to look to the West, as well as the East,” Lionel Johnson, the chamber’s vice president for the Middle East and North Africa, explained.

President Obama’s administration has faced significant resistance from Republicans, however, who note that the United States is in the middle of its own debt crisis and that Egypt’s new government may not be entirely trustworthy.

But, according to the New York Times, the Muslim Brotherhood has been incredibly open with the administration.

“They sound like Republicans half the time,” one administration official inexplicably said, according to the New York Times.

Deputy Secretary of State Thomas R. Nides, who will travel with the Chamber of Commerce delegation, added: “Our goal is to send a very strong message to Egypt that the government understands it’s not just about assistance…It’s about growth and business.”

The Wall Street Journal notes Morsi’s government has assumed nearly absolute control over the country, replacing the top military leaders who once provided a balance of power, censoring the media, and failing to control the Sinai Peninsula or the diminishing rights of women and Christians.