Both the United States and Egypt recognize that for regional stability to continue, Egypt must be both prosperous and stable. A large share of U.S. economic assistance to Egypt is linked to economic growth objectives and covers a broad range of activities in the areas of sector policy reforms, commodity import programs, private sector encouragement, agriculture, telecommunications, power, and education. Sector policy reform grants are used to help ease periods of difficult transition created by the reform movement. Policy reforms often involve complicated actions affecting legal, regulatory, judicial, institutional and tax structures which carry with them extraordinary costs, such as lost revenue or increased administrative burdens. Likewise, a thorough understanding of past, present and future linkages is required to ensure reforms are well thought out before adoption and implementation.
Technical analyses are the lifeblood of the reform process.
Because of the complex nature of government holdings, which have dominated the Egyptian economy since the 1952 Revolution, special efforts were needed to promote privatization. Financial support is provided when reform actions are implemented. Technical assistance is also provided to analyze policy options, introduce advisory and merchant banking services, evaluate the marketability of properties and assist in their sale, and develop an outreach campaign to encourage greater understanding of privatization issues. Privatization is seen by many as the key signal to the international business community of Egypt's commitment to the establishment of a free market economy. Other activities to strengthen the Egyptian economy include increasing access to credit for small entrepreneurs, commodity import assistance for medium to large private enterprises seeking to fill import needs with capital and non-capital goods from the United States, and assistance in public finance to promote an efficient, equitable tax base.