The U.S. Economic Assistance Program for Egypt Poses a Management Challenge for AID

GAO reviewed the Agency for International Development's (AID) progress in assisting Egypt in developing its economy, including: (1) the conditions and constraints of establishing and administering the Economic Support Fund (ESF); and (2) the advantages and disadvantages of the current mode of providing ESF assistance and the possible alternative ways of disbursing this assistance.

GAO found that: (1) economic development progress has been somewhat limited by program conditions over which AID had little control; and (2) some actions taken to support the political purpose of the program may not be of optimal value in working toward the longer term economic development goal. GAO found that AID had difficulty influencinge Egypt to quicken its pace in making economic policy reforms because: (1) AID lacked overall program funding leverage; and (2) Egypt was concerned that moving too quickly might be politically destabilizing. GAO also found that the large size of the project portfolio has: (1) made it difficult to administer the program; (2) challenged Egypt's ability to effectively absorb large amounts of assistance; and (3) resulted in a large amount of obligated but undisbursed funds. GAO noted that AID could use nonproject program approaches such as cash transfers, sector grants, and commodity imports as alternative modes for some of the project assistance, but AID needed to objectively and thoroughly assess the various modes to determine the best mix for accomplishing program goals in Egypt.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Joseph E. Kelley Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 275-5790