Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).

EGYPT

FY 1998 Economic Support Funds . . . . . . . . . . . . . . . . . $815,000,000

Introduction

Since the Camp David Accords in 1979, Egypt has used its political leadership to foster a broader peace between Israel and the Palestinians and neighboring Arab states. Egypt has substantially achieved macroeconomic stability but has not yet reached its true potential as a national or regional economic power. Because of persistent structural problems, Egypt's rate of economic growth is only about 3-4%. This slow rate of growth, together with relatively high population growth of 2.2%, has resulted in growing unemployment which threatens Egypt's long-term stability. However, both the United States and Egypt recognize that a prosperous and stable Egypt is vital for continuing regional stability.

As a mechanism to promote stability and prosperity in Egypt, the U.S.-Egyptian Partnership for Economic Growth and Development was launched by Vice President Gore and Egypt's President Mubarak in September 1994. It deals effectively with problems hindering rapid and sustainable economic growth in Egypt by elevating the dialogue to the highest levels of decision-making and encouraging vital private sector participation.

Vice President Gore visited Egypt in January 1996 for the Partnership Initiative. This visit provided timely, positive reinforcement at a difficult juncture in Egypt's development. President Mubarak announced a new vision of Egypt's economic future: a vibrant private sector-led open market economy which would be fully integrated into the global economy. To reinforce this vision, President Mubarak appointed a new economic cabinet and a new Prime Minister and issued clear directives to accelerate economic reform, especially privatization of state-owned enterprises, streamline investment procedures and remove bureaucratic obstacles.

During 1996, the new government enacted a series of measures including: establishing a Supreme Export Council to eliminate bureaucratic obstacles to exporters; adopting reduced customs, duties and tariffs; abolishing a government office of investors' services, long seen as a bureaucratic obstacle to investment; streamlining measures governing duty free import of equipment and materials by tourism investors; and identifying more than 100 new candidates for privatization. Overall, the new cabinet has shown its commitment to liberalizing the economy by deregulating the trade sector, increasing competition in the financial sector and accelerating the pace of privatization. All of these actions demonstrate Egypt's new commitment to becoming an active participant in the world economy, which should lead to increased economic prosperity and help achieve a more stable Egypt, an important aim of U.S. foreign policy in the region.

The Development Challenge

The primary challenge facing Egypt is to accelerate reforms that will encourage private sector-led, export-oriented economic growth. Reliable infrastructure, such as telecommunications and power, will also be essential to support new private sector investments. Agriculture has considerable potential to contribute to export growth, particularly with horticultural crops, but constraints remain on agricultural policy, technology, institutions and sustainable water use. Agriculture will also have to play a greater role in meeting the country's employment needs.

The Government of Egypt (GOE) has successfully carried out a difficult first phase of economic stabilization. Today the focus is on accelerating growth to generate jobs for Egypt's 60-million strong population and reducing many of the regulatory, monopolistic and other bureaucratic obstacles. Efforts in further trade liberalization, privatization and financial sector reform continue. Even with a declining population growth rate (2.4% to 2.2% over the 1990-95 period), the government, which still dominates the economy, has been unable to provide sufficient jobs for Egypt's work force or provide adequate basic services. The private sector is currently too small and constrained to meet growing demand and, without greater private sector involvement, demand cannot be met. Egypt has experienced a gradually rising unemployment rate for years. With an economy that is growing on an average of 3% to 4% per year, low per capita GNP at $660, and weak domestic purchasing power, Egypt must look to export production for much of its growth.

Egypt continues to face serious quality of life concerns for its population. Infant and under-five child mortality rates have progressively improved, but remain too high and, although excellent progress in child spacing has contributed to a decrease in maternal mortality, more effort is required in this area. The availability of treated water, which will limit the spread of disease, has greatly increased over the past decade but demand continues to outpace supply. Egypt is facing serious environmental degradation, which not only endangers health and livelihood, but also limits sustainability and will possibly constrain Egypt's ability to meet European Union import standards. Finally, strengthened political, civil and governmental institutions are important for the country's evolution to a sustainable democracy.

Other Donors

USAID works closely with the donor community whose individual contributions to Egypt are substantial and vital to Egypt's development needs. Together, USAID and the donor community disbursed $2.3 billion in 1993 for development activities in Egypt. Complementary support for structural reforms comes from the IMF, the World Bank and the European Union (EU). Other major donors include: the African Development Bank, Germany, the Islamic Development Bank, the European Investment Bank, France, Japan and Denmark.

FY 1998 Program

The FY 1998 request, which maintains the traditional level of U.S. economic assistance for Egypt ($815,000,000), supports USAID's country-specific goal of broad-based sustainable development with increased employment and improved quality of life. This will be achieved through seven strategic objectives (SOs) and five special objectives (SpOs), which have been programmed according to the four Agency goals.

Agency Goal: Broad-based Economic Growth Achieved

The principal objective of USAID/Egypt in meeting this Agency goal is accelerated private sector-led, export-oriented economic growth to create a more competitive, outward-looking, market-based economy, in which the private sector plays the leading role in business and trade decisions. This will require a definitive shift from Egypt's historically inward-looking, protected, centrally-planned, public sector-dominated economy. The Gore-Mubarak Partnership Initiative is now spurring this shift, guided by the President's Council. Composed of major business leaders from the United States and Egypt, the Council has recommended three areas for immediate examination and improvement: trade promotion, privatization and regulatory reform. These areas figure prominently in support being provided by USAID.

Egypt's path to a market-oriented economy following 40 years of heavy state intervention in resource allocation has yielded significant macroeconomic results. The program began to take meaningful shape in 1991 with the signing of an IMF Agreement followed by a Paris Club debt forgiveness of Egypt's debt holdings by 50%. Initially, Egypt failed to meet the conditionality requirements established by the IMF and the Paris Club but, through continuing dialog between the IMF, other donors and the GOE, the debt forgiveness program was revitalized and included in IMF agreements in 1993 and October 1996. The program was further reinforced by a World Bank structural adjustment loan in 1991 and by a USAID sector policy reform program in 1992. The reform program has led to a budget deficitreduction from 21% to 1.3% of GDP, a drop in inflation from 25% to approximately 7.2%, the unification of three different exchange rates to a market-determined rate; a shift in the current account deficit from an unsustainable $3 billion equivalent per year to a slightly positive level, and an increase in foreign exchange holdings from $1 billion to $18 billion.

Substantial improvements have also been effected in the foreign trade sector, both in the reduction of tariff and non-tariff barriers and in facilitating exports. In September 1996, Egypt lowered the highest customs tariff on imports across the board by 10 to 15%. The maximum tariff on imported goods is now 55%, down from 70%. Due to liberalization of interest rates at market clearing levels, rebirth of the stock exchange and the bond market, competition and efficiency in the banking and capital markets have improved substantially. In addition, the pace of privatization picked up in 1996 after a lull of nearly two years.

One of USAID/Egypt's major objectives is to help the Egyptians develop export opportunities. To accomplish this, USAID is assisting Egypt with trade liberalization measures under the Sector Policy Reform Program (SPRP) and the Agricultural Policy Reform Program. Other activities supporting export development include agricultural research, targeting horticultural crops for the export market; the development and expansion of a modern telecommunications system to facilitate international business contacts; and technical support for private non-governmental organizations (NGOs). These organizations serve as private sector advocates to encourage removal of policy and regulatory obstacles to export expansion.

To support policy reform, USAID's SPRP makes available $200 million annually to Egypt for cash transfers. This program is complemented by technical assistance to help the GOE develop, carry out, monitor and evaluate select elements of its reform program. For example, USAID helped the GOE increase sales tax revenues, which rose from the equivalent of about $90 million to $3 billion per annum, thus helping to reduce the budget deficit. Other progress in meeting targets in 1996 included major reforms to facilitate exports and the privatization of 15 companies, five banks and one insurance company. Over the next year, SPRP will promote key GOE reforms to strengthen the financial sector, promote trade liberalization through continued reduction in tariffs and other import/export barriers, and foster growth in the Egyptian private sector.

Working with the GOE, USAID provides assistance to help Egypt carry out its privatization program through SPRP-promoted reforms. USAID has provided technical assistance to analyze policy options, marketability of properties evaluations, and sale and outreach campaigns. By 1996, the GOE had completed the sale of 28 companies, the liquidation of 11 additional firms and the partial sale of another group of 49 companies. However, these achievements remain modest compared with the magnitude of government holdings. The President's Council believes that the acceleration of privatization will be a signal to the international business community of Egypt's real commitment to the establishment of a free market economy.

Much of Egypt's legal, regulatory, judicial, institutional and tax structures are outdated but are being modernized with USAID assistance. The private investment response to Egypt's progress in macroeconomic reform and liberalization has not been substantial because so many elements that make up a conducive business environment still need to be established. USAID recently began assisting the GOE to modernize and strengthen intellectual property rights concerning patents, trademarks and industrial design. USAID is also providing assistance to help Egyptian firms increase their access to market information and technology, improve their competitiveness, strengthen advocacy groups and support an active securities market. USAID's private sector Commodity Import Program (CIP) helps Egyptian private firms establish linkages with U.S. suppliers for expanding production needs. The Partnership Initiative has encouraged private firms to introduce international quality standards into their operations to qualify for international certification known as ISO 9000. Over 30 Egyptian companies have signed up for ISO 9000 assessments, of which two have already been certified as meeting ISO standards. In FY 1996 two business technology centers (one in Alexandria and one in Cairo) were opened to support increased productivity through the upgrading of technologies. By FY 1997 the operation of a business information highway will link the major business associations in Egypt with businesses around the world, using the International Business Exchange and the U.S. Chamber of Commerce.

Through the International Executive Service Corps (IESC), USAID provides U.S. expertise to Egyptian businesses to improve their technical and managerial performance. IESC has already conducted over 1,000 technical consultancies to Egyptian firms, helping them introduce modern business practices and increase productivity, sales, investment and trade. Small and micro-enterprises also receive support through USAID's small and emerging business (SEB) sector program. USAID is working through NGOs to meet SEB needs for credit and related non-financial services. The Partnership Initiative has been instrumental in expanding the SEB support network to less popular areas in Upper and Lower Egypt to ensure that economic incentives for the private sector are regionally widespread. Since USAID began helping Egyptian small and micro-enterprises in 1988, about 60,000 jobs have been created. This was possible through 232,000 loans valued at approximately $162 million provided to more than 90,000 borrowers. These borrowers collectively have a default rate of less than 3%. In 1996, participation in USAID-sponsored micro-enterprise programs was at its highest since 1988 with 65,000 loans valued at $60 million made to approximately 20,000 borrowers.

USAID-supported policy reforms have helped to improve performance of the agricultural sector in Egypt, which accounts for approximately 40% of the country's GDP (including agricultural production, marketing and processing), 50% of overall employment and 22% of commodity exports. Reforms have resulted in increased production of major food crops, substantial increases in real farm income and removal of most direct controls and price interventions. With USAID support, equity capital for the country's major rural credit institution has risen from less than $30 million to over $250 million. New credit-worthy lending practices, directly benefitting 462,000 rural women, have also been adopted. In 1996, the GOE took a significant step forward in policy reform by allowing the importation of lower grade cotton, which has the potential of dramatically increasing the export of higher quality cotton, previously used to produce low cost products. Another liberalizing step permits the leasing of 25% of ginning capacity to the private sector, allowing private cotton traders to purchase from farmers and to gin and sell cotton to local mills. The effect has been to allow farm prices to move freely above the guaranteed minimum floor price.

In order for agriculture to add significantly more impetus to Egypt's overall economic growth, the sector must overcome the slow growth of net value added. Therefore, USAID's agricultural assistance strategy helps Egypt to focus on increasing net value added by accelerating technology transfer and overcoming remaining policy reform barriers. Although far from completion, agricultural policy reforms have helped open all major markets to private competition, except sugarcane and fertilizer, and have generated prices equal to world prices. There is no longer a bias against farmers, as there was in the period of heavy government intervention (1960-92) when agriculture suffered net taxation of over 44%. In FY 1998, technical assistance will further the adoption of technologies for the development of high value horticultural crop exports and to address critical constraints to efficient production of Egypt's staple food crops. Some recent reversals in agricultural policies have only served to emphasize the need for USAID's increased commitment to a new policy reform program. The program will target pricing, marketing and trade, water resources, private sector participation in agribusiness, and privatization of state-owned agro-processing companies.

Egypt's industry and business have benefitted from USAID's large investments in power, over $1.6 billion to date. Through the 1997 to 1998 period, this sector will face serious policy decisions. In 1996, reforms were instituted to improve management efficiency and employee productivity, measured in kilowatts per hour generated per employee. The economic pricing of power and the reduction of overdue arrears by public sector companies will be among the hardest improvements to implement. On the positive side, the sub-Cabinet group of ministers has approved the establishment of a vital regulatory board that will be responsible for pricing and collections. In addition, Egypt's Prime Ministeropenly discusses the GOE's receptiveness to proposals from private sector enterprises to build, own, operate and transfer (known as the "BOOT" approach) power to the marketplace to supplement public sector generation. In FY 1996, the GOE took steps to implement three BOOT projects. The President's Council, which receives USAID support, has urged the BOOT approach for both telecommunications and power to give the private sector a more prominent role in infrastructure.

Modern, reliable, sustainable telecommunication was an early target of USAID assistance, with assistance totaling about $387 million to date. Increasing emphasis has been placed on the sustainability of these systems. The GOE has made substantial progress on telecommunications reforms. The utility has complied with all financial benchmarks (improved services and efficiency, and adoption of business and marketing plans). The mobilization of the previously established regulatory council is projected for 1997. In addition, steps will be taken to open the telecommunications sector for private business participation, while continuing to improve the utility transformation into an autonomous, self-sufficient entity. Management training will continue to be provided to help the utility deal more efficiently with burgeoning telecommunications demands expected in the next decade.

Finally, "investing in people" through education is the latest addition to USAID's efforts to promote economic growth. These investments are also essential for improvements under other goals, e.g., promoting family planning, health and the environment. Support begun in FY 1996 will target the most disadvantaged areas of the country and the most neglected members of society, women and girls. To compete in the 21st century, Egypt must do a better job of ensuring universal primary education, a prerequisite to national economic take-off as experienced by the "tiger" nations of Asia. Egypt has one of the highest literacy gender gaps in the world and unacceptably low literacy rates for both males and females (63% and 34%, respectively). The GOE has acknowledged the problem and has allocated significant budget increases for education in recent years. In addition, the GOE has sought assistance from its development partners, including USAID and others (the EU, World Bank, UNICEF, Canada and Germany). As USAID assistance continues to help Egypt address these problems in 1998, the emphasis will be on participation, working primarily through partnerships with local communities and non-governmental organizations.

Agency Goal: Building Democracy

The subgoal improved environment for the growth of democracy builds on Egypt's strengths -- the rule of law, the relative freedom of the print media, the existence of representative groups, such as the People's Assembly and the Shura Council and the proliferation of special interest groups. With GOE support, USAID is working with local governments, civil society organizations (CSOs), the legislature and the judiciary at a pace that conforms to political sensitivities that exist in these areas.

The pace of democratic changes may be gradual, but promising signs indicate forward movement. Increased civil society participation in decision-making is a key factor. Two important components of civil society are local government and a growing sector of non-governmental organizations. Over the past three years, with the support of USAID and other donors, the number of local civil society organizations has grown and has become increasingly active. The ability of CSOs, including advocacy groups, to identify their problems and voice them in the public arena is an important focus of USAID assistance. Additionally, a stronger local government, composed of NGOs, local leaders and elected and government councils, can also play a role in improving the environment for democracy. The GOE recently initiated a nationwide participatory rural development program focussing on locally-based decision making and citizen empowerment. USAID is providing assistance to this program that will devolve authority and responsibility to local government. A major challenge to be faced in FY 1998 is the continued obstacle of Law 32, which restricts freedom of association and activity of the CSO community. In FY 1996, the GOE agreed to review and consider changes in Law 32.

Formal democratic institutions in Egypt date back to the first parliament in the 1860s. The two bodies of legislature that exist today, the People's Assembly and the Shura Council, still suffer from inadequate information services which restrict members' abilities to weigh in on legislative change. During FY 1996, USAID offered 64 in-country training programs to 475 committee staffers, researchers, librarians and computer staff in areas of economics, political science, law, research methodology, public policy formulation, budgeting and financial analysis, data gathering, access to libraries, information services and organizational behavior. In addition, several staffers participated in workshops in information technology development and library development. Two committee staffers began a two-year Master's in Public Administration Program at the State University of New York (Albany). The library and computer center received technical assistance to develop and support their role in information services delivery. In FY 1997 and FY 1998, USAID will continue to work with the legislature to develop and support its technical and institutional capacity.

The judicial system is unable to be fully supportive of the growing private sector because delivery of justice is slow and judicial personnel are not fully briefed on new laws and regulations affecting the private sector. USAID support for the justice sector, launched in FY 1996, will help improve the operation and performance of Egyptian civil courts and to enhance the quality of judicial and legal services with respect to commercial and other aspects of modern law. In FY 1997 and FY 1998, USAID will continue to support improvements in the legal system to serve the emerging private sector more effectively.

Agency Goal: Stabilizing World Population Growth and Protecting Human Health

Achieving related health and population strategic objectives will require a coordinated, inter-sectoral approach. USAID's health and population programs complement and reinforce each other in many ways. Both are supporting institutional strengthening in the Ministry of Health and Population, by expanding information, education, and communication activities; and improving management information systems; and policy reforms to ensure sustainability of important primary health care efforts. Promoting cross-referral of clients among different maternal and child health (MCH) and family planning services, improving the quality of care, expanding cost recovery, and promoting private sector and NGO services are additional areas in which USAID's health and population activities will increasingly be linked in the future.

After two decades of work strengthening the Egyptian population program, USAID's accomplishments are impressive. Contraceptive prevalence (the percentage of married women of reproductive age currently using contraception) reached 48% in 1995, almost double the 1980 rate. The total fertility rate (a measure of the average number of live births per woman during her lifetime) fell from 5.2 in 1980 to 3.6 in 1995. USAID assistance in FY 1998 will continue to support Egypt's long-term objective of achieving a contraceptive prevalence rate of around 74%, at which point fertility is expected to reach the "replacement" level of 2.1 children per family. An example of the synergy between health and population phenomena is the relationship between child spacing and infant mortality. According to Egypt's 1995 demographic and health survey (DHS) findings, infant mortality is more than twice as high -- 128.4 deaths per 1,000 births -- for children born following less than atwo- year interval between pregnancies, compared with the infant mortality -- 47.3 deaths -- for children born following an interval of more than two years.

Since 1983, the USAID health sector program has successfully helped reduce mortality and illness of infants and children. The infant mortality rate declined by 43% between 1980 and 1990; the child mortality rate declined by 55% in the same period. However, infant and under-five child mortality rates remained unacceptably high at 63 and 81 per 1,000 live births, respectively in 1993. When regional and rural disparities are taken into account, a striking gap appears. In Upper Egypt, infant and under-five child death rates for 1993 were 97.7 and 129.2 per 1,000 live births, respectively. Maternal mortality, although declining, is at 174 deaths per 100,000 live births nationwide, but again regional disparities are striking. In one Upper Egyptian governorate, Assiut, the maternal mortality ratio is 544. An urgent need exists to target resources to narrow these regional gaps and to improve the health status of the poorest Egyptians throughout the country. In FY 1997 and 1998, USAID will work to cut mortality rates further, expand and target maternal/child health services and improve their sustainability, building on a range of mechanisms including policy reforms, decentralization and increased private sector and community participation.

Agency Goal: Protecting the Environment

In Egypt, USAID's program subgoal is environment managed for long-term sustainability.

Resources support activities in the areas of water/wastewater, air pollution and eco-tourism. In 1975, population density, together with long-postponed infrastructure investments, had severely overwhelmed the water and wastewater services of urban areas throughout Egypt, creating numerous environmental health hazards. Since then, USAID has invested over $2 billion in urban water and wastewater infrastructure benefitting about 24 million Egyptians. In 1995, several of the more recent investments were completed with the following results: 700,000 residents in the poor Cairo neighborhoods of Pyramids and Embaba received sewer hook-ups; more than 500,000 residents of Suez were connected to the new wastewater treatment plant funded by USAID and, in Cairo, the three major potable water reservoirs serving the heart of the city at Darassa were put into service, providing improved water supplies to 3 million people. In 1996, approximately 600,000 residents of Ismailya were connected to a new treatment plant and, by March 1997, another 600,000 residents of Port Said will benefit from the completion of a USAID-funded treatment plant.

Institutional reforms in public water/wastewater utilities in 1995 included presidential decrees granting institutional autonomy to the utilities in seven governorates allowing them to operate as economic entities on a cost recovery basis. Tariff collection rates have increased in Cairo and Alexandria and separate bank accounts were established to give these utilities a degree of flexibility in planning their operations. In FY 1998, USAID plans to encourage utilities in Alexandria to make further progress in increasing the level of tariffs to allow for total cost recovery. In smaller urban areas, tariff reform for water/wastewater is already well advanced.

The rising level of urban air pollution is another major environmental problem which jeopardizes Egypt's economic development and its citizens' health. Many factors contribute to this continued deterioration of air quality: inappropriate economic policies, outdated technologies, untrained workforce and lack of regulatory enforcement. Levels of suspended particulate and lead pollution in Cairo are the highest among the world's mega-cities and cause an estimated 10,000 to 25,000 additional deaths per year. Children reared in the heavily polluted areas of Cairo are particularly vulnerable to higher than average lead pollution. Elevated lead levels reduce affected children's IQs by as much as four to five points, leading to educational problems. USAID industrial energy and environment activities are helping to reduce the discharge of industrial pollutants and promote energy conservation. Energy efficiency activities have eliminated the following accumulated pollutants from urban air (expressed in metric tons per year - M/Y): 8,213 M/Y of sulfur oxide, 3,189 M/Y of nitrogen oxide and 14,318 M/Y of carbon monoxide. A new Cairo air quality activity initiated in FY 1995 and in the initial stages of implementation will be working with the GOE in several areas: implementing policy reforms toward reducing lead emissions from local smelting factories and in gasoline; instituting a vehicle emissions testing and certification program; introducing natural gas-fueled buses to reduce diesel emission particulate pollution; and implementing public awareness campaigns and quality monitoring systems.

USAID/Cairo is also addressing environmental quality through improving the policy environment. In FY 1996, a third, two-year set of environmental reform measures was agreed to with the GOE under the Sector Policy Reform III program. These measures will assist the GOE to enforce regulations reducing particulate and other air emissions, fully implement lead exposure abatement programs, develop and set up stricter emissions standards for new vehicles and develop a comprehensive strategy for sustainable tourism in the Red Sea coastal area. A lead smelter action plan is nearing completion for submission by the GOE and a lead exposure abatement plan is being developed with adoption planned for June 1997.

Finally, recognizing that the protection of the environment is vital to sustaining Egypt's tourism industry, the second highest foreign exchange earner, USAID is implementing a new activity in sustainable tourism, which grew out of the Gore-Mubarak Partnership Initiative. This activity will focus on the preservation of natural (e.g., coral reefs) and cultural (e.g., antiquities) national treasures. Both of these are key to Egypt continuing to receive revenues from tourism.

Cross-Cutting Issues

In addition to the strategic objectives above, USAID supports cross-cutting assistance through special objectives and activities that encourage capacity building through development training and that provide technical and financial assistance to support development problems related to the overall program.

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Accelerated Private Sector-led, Export-oriented Economic Growth, 263-SO01

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $576,700,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To double the rate of economic growth and employment generation by increasing private sector exports, increasing the productivity of private enterprise, accelerating privatization and improving GOE support of competitive markets.

Background: The greatest threat to Egypt's stability and leadership role in the Middle East is the growing impoverishment of its people. Per capita income has been stagnant since the mid-1980s, resulting in a steady decline in living standards. An estimated 22-30% of all households live in poverty. To improve living standards, Egypt needs jobs for about 375,000 new entrants to the labor force every year as well as for the 1,500,000 to 2,000,000 Egyptians currently unemployed. The GOE realizes that these new jobs can only be generated by accelerated private sector-led, export-oriented economic growth. The GOE is committed to accelerating privatization and improving its support of competitive markets to establish the necessary environment for this growth.

With the approval of the Country Program Strategy in 1996, USAID will subsume under this economic growth objective projects and activities previously pursued as four separate programs . Policy reform, private sector, agriculture and infrastructure programs have been successful parts of the portfolio in Egypt for 20 years. These inter-related programs are now being integrated to achieve a common, higher-level objective.

USAID Role and Achievements to Date: The USAID economic growth program aims to accomplish three results that are critical to achieving accelerated growth. These are: increased private sector exports; increased productivity of private enterprise; and accelerated privatization and improved GOE support of competitive markets. The program has contributed to modest successes in all these areas. For example, private sector exports increased by 4.9% from 1992/93 to 1993/94. Agricultural productivity as measured by real value added per hectare increased by 3.9% over the same period. Since 1994, 28 state-owned enterprises (SOEs) have been sold or transferred to employees, 11 have been liquidated and an additional 49 have begun to privatize by transferring minority share holdings. Economic growth as measured by the real GDP growth rate is also up, although modestly, from 2.9% in 1993/94 to an estimated 3.2% in 1994/95 and 4.2% in 1995/96.

To ease constraints to exports, USAID programs are liberalizing trade, accelerating the adoption of improved products and technologies, increasing access to market information and increasing access to reliable power and telecommunication services. In order to improve the competitiveness of Egyptian exports on the world market, the Sector Policy Reform program has helped the Egyptians eliminate all but two tariff preferences, all special conditions for imports and all import bans except poultry and textiles. Furthermore, tariff rates have been reduced from a previous maximum of 150% to 55%, thus reducing the cost of manufacturing inputs. Port handling and quality control procedures have been simplified. USAID's agricultural research programs have resulted in the adoption of improved packaging technologies by horticultural exporters so that produce can be directly shipped to European markets. An agricultural technology program has developed a service that provides information to exporters and farmers on pricing, packaging, regulations, import rules, standards and grades. USAID power sector development programs over the past 20 years have virtually eliminated outages and provided sufficient capacity to meet demand until the year 2004. Telecommunications programs have installed 266,000 new lines, including 75,000 in 1995 alone.

USAID programs to increase productivity are liberalizing markets, accelerating the adoption of improved technologies and management practices, expanding and deepening financial services and increasing capacity to promote the growth of small and emerging businesses. USAID agricultural policy programs have created free markets for over 20 agricultural commodities, improved the performance of the agricultural development bank, eliminated most unwarranted GOE regulations in the agricultural sector, and sharply cut back GOE interventions in setting quotas, prices, planting targets and cropping patterns. Other USAID programs have developed an effective crop research system and rehabilitated irrigation systems. USAID investments in modern equipment and technical assistance to strengthen GOE capacity to manage the Nile River system have played an important role in increasing water use efficiency by 24% since 1986. The Commodity Import Program provides over $4 million a week in credit to private sector borrowers to purchase U.S. commodities. The program has expanded access to smaller businesses and businesses in disadvantaged areas such as Upper Egypt. USAID's micro-enterprise credit programs have reached some 90,000 low income entrepreneurs.

Description: Sector Policy Reform (SPR) is a policy-based cash transfer program with an annual budget of $200 million. Disbursements are based on substantive progress against a predetermined list of policy reforms. The average list contains some 20 required reforms that set the stage for a stronger, more open economy. Broadly, SPR is focused on reform in the areas of trade, regulation, privatization and the fiscal and financial sectors. Many of the measures require specific reforms such as a stipulated number of firms privatized, increased access for foreign banks, etc. In other cases, a multi-year process of studies, plans and implementation of reforms is required when the desirable improvements are not known with certainty.

Technical Support for Sector Policy Reform provides technical assistance to support and complement SPR activities. It has provided assistance to the Ministry of Economy and International Cooperation to promote trade and regulatory reform; the Ministry of Science and Technology to improve intellectual property rights; training to upgrade the regulatory capacity of the Central Bank of Egypt; support to the Capital Market Authority to improve its functioning; and assistance to the Central Agency for Public Mobilization and Statistics to produce and disseminate accurate economic data. It is also helping the Ministry of Finance to reformulate tax policy and implement tax reforms.

Privatization Support finances specific activities critical to creating a policy environment supportive of privatization and completing sales of SOEs. These activities support improvements in privatization policies, plans and processes; effective communications with key stakeholder groups to build political and technical support for privatization; and broadening of the scope of privatization to include other non-manufacturing businesses and service SOEs. In addition, the services of sales agents are provided to prepare the documentation required to offer companies for sale, and new financial instruments will be introduced to facilitate the participation of additional investors.

The Agricultural Policy Reform Program focuses on five categories of reform measures: pricing, marketing and trade; private investment and privatization; efficiency of public investment and sustainable agriculture; water use and management policies; and food security concerns. Annual disbursements are based upon GOE achievement of agreed-to reforms. Technical Assistance for Agricultural Policy Reform (TAAPR) assists USAID and the GOE to study, develop, and monitor the impact of policy reforms. TAAPR also funds research grants for special topics such as food security.

Agriculture Technology Utilization and Transfer (ATUT) assists the GOE to create a sustainable research agenda. ATUT support for broad-based agricultural research is limited to four staple food crops (wheat, rice, maize, and favabeans), whose production must increase to meet the demands of the growing population. ATUT also supports research focused on select horticultural export crops that require rapid adoption of technologies designed to enhance production and improve post-harvest handling, packing and processing. To enhance the sustainability of research efforts, ATUT places a greater emphasis on the active participation of customers (producers and exporters) in setting theresearch and technology transfer agenda, and encourages greater public/private sector collaboration in research efforts.

Small Enterprise Credit (SEC) supports activities to expand access and opportunities for Small and Emerging Businesses (SEBs). SEC assists the development and eventual sustainability of institutional mechanisms capable of effectively providing assistance to SEBs, using various NGO intermediary organizations that combine financial, technical assistance, training and other services needed by the SEBs. Sustainability is addressed on two levels: on the policy level, in the form of permanent improvements in the legal, fiscal, regulatory and financial environment within which Egypt's private sector must operate; and on the operational level, in the form of break-even, or cost coverage, which should occur during the life of the activities supported.

Growth Through Globalization (GTG) provides funding for activities to enhance the competitiveness of Egyptian firms worldwide and increase private sector exports. GTG resources are accelerating the adoption of improved products, technologies and management practices, increasing access to market information, expanding and deepening financial services and increasing private participation in policy dialogue. The private sector Commodity Import Program (CIP) complements GTG efforts by making commercial credit available to Egyptian businesses wanting to establish linkages with U.S. suppliers for expanding production needs.

Power Sector Support II and Telecommunications Sector Support II target two broad areas: policy/institutional reforms and infrastructure development. USAID conditions disbursement of funds upon GOE implementation of policy and institutional reforms. In the power sector, the reforms improve the Egyptian Electricity Authority's (EEA) financial viability, increased autonomy, planning and efficiency. EEA receives technical assistance and training support to help implement many of the agreed-to policy reforms. Once the reforms are met, disbursements are used to finance discrete, stand alone infrastructure development activities. Telecommunications sector reforms include the modernization of the Arab Republic of Egypt National Telecommunication Organization's (ARENTO) operating procedures and management policies, retention of net income and improved pricing strategies. Disbursements following the achievement of reform measures finance system expansion, replacement of inefficient equipment and management training for ARENTO staff.

Host Country and Other Donors: USAID is the largest donor with the broadest and most comprehensive program of support for economic growth in Egypt. Other principal donors include the IMF, IBRD, European Union (EU), and UNDP. USAID coordinates its policy reform efforts closely with the IMF and World Bank to maximize our collective policy impact. Key donors in agriculture include the World Bank (irrigation, technology transfer and agricultural credit); Great Britain (privatization); Germany (credit, liberalization of the seed sector, small farm machinery); Italy (dam reconstruction); Japan (retrofitting irrigation pumps, small farm machinery), the Dutch (especially in horticulture) and the EU (privatization, irrigation management). The African Development Bank and the European Investment Bank, IBRD and the Arab Fund for Economic and Social Development provide financing for power sector development. Egypt has received nearly one billion dollars in financial assistance from several other donors over the past ten years for the procurement of telecommunications switching systems, outside plants facilities, transmission equipment, etc. Much of this financial assistance has been in the form of soft loans and/or supplier credits by other countries (e.g., France, Germany, Austria, Japan, Italy and Greece) which produce telecommunication equipment.

The GOE annually contributes the local currency equivalent of between $300 and $400 million for joint programming with USAID. The actual amount corresponds to the level of USAID policy reform cash transfers and CIP disbursement. Local currency is used for general or sector budget support, project activities or USAID trust fund expenses.

Beneficiaries: The ultimate beneficiaries of these activities are the citizens of Egypt, many of whom will benefit from the jobs and income generated by accelerated economic growth. These beneficiariesinclude those mostly private sector businesses and individuals who produce goods and services for the export and domestic markets. A large portion of Egypt's poorest people, such as the approximately four million small farmers, landless laborers and women who produce and process horticultural and strategic food crops, and as many as three million non-agricultural micro-entrepreneurs in the informal sector are among these ultimate beneficiaries.

Principal Contractors, Grantees or Agencies: Nathan Associates is working on trade and regulatory reform. Chemonics International, the Center for International Private Enterprise and the International Executive Service Corps are working to strengthen private sector market institutions. Arthur Anderson is the prime institutional contractor and International Business and Technology Consultants, Inc. is the monitoring and evaluation contractor for privatization efforts. The National Cooperative Business Association, Agricultural Cooperative Development International and Environmental Quality International all assist with programs to support small and emerging businesses. General Electric, Westinghouse Electric, the International Resource Group, and Babcock and Wilcox are all involved in power sector development. General Telephone and Electrical, AT&T, and Booz, Allen and Hamilton provide equipment and services for telecommunications development.

Major Results Indicators: Baseline (1994) Target (2001)

Real GDP growth rate 2.9% 6.0%

Private Sector share of GDP 61.7% 69.8%

Private sector share of non-petrol exports 49.8% 69.8%

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Increased Participation of Girls in Quality Basic Education, 263-SO02

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $15,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To increase girls' participation in quality basic education. This strategy emphasizes areas where the gender gap in enrollment is greater than 60 girls per 100 boys.

Background: Investments in basic education will reap returns not only in a more skilled and productive labor force prepared to compete in the 21st century, but also in improved health and nutritional status, reduced population growth rates, and enhanced skills for participation in the democratic process. Most development experts agree that investments in girls' education have the highest return of all educational dollars spent, whether girls receiving that education eventually work in or outside the home. No developing nation has graduated to sustainable economic growth without educating its women, and universal primary education is a prerequisite to national economic take-off. With female illiteracy at 66% and with an estimated 1.6 million of its girls at the basic education age range out of school, the GOE has declared female education to be one of its highest investment priorities.

USAID Role and Achievements to Date: This program begins in FY 1996. A previous project in this area, Basic Education, financed the construction of almost 2,000 schools, which now enroll 900,000 students per year (360,000 of whom are girls), and provided extensive technical assistance to the Ministry of Education (MOE).

Description: USAID has defined three objectives which include the necessary conditions for increasing girls' participation in quality basic education: an appropriate supply of facilities, curriculum and teaching methodologies; an increased demand (awareness of the importance and appreciation of quality) for girls' educational services; and a broader policy environment supporting quality, flexibility and other incentives to girls' attendance. USAID will assist grassroots community organizations in targeted areas to mobilize local communities in the design and realization of the most appropriate solutions to local constraints to female education.

The strategy will build on the promising UNICEF community school program, expanding its scale and impact on the educational system. Technical assistance will support: a reformulation of the primary school curriculum for multi-grade classrooms to emphasize problem-solving and analytic skills; a training program for facilitators/teachers and school administrators on how to deliver the multigrade curriculum using interactive, student centered methodologies; a sustainable and replicable small school model that can be launched and sustained by community organizations in areas of greatest need; and a policy reform agenda. Additional technical assistance will organize a national initiative to mobilize religious, political, business, media and community leaders in support of girls' education. USAID has provided a grant to develop an Egyptian version of the "Sesame Street" educational television program to improve school readiness.

Host Country and Other Donors: The GOE will contribute a minimum of 20% of total activity costs in cash and in kind. The current five year plan of the MOE (1992-97) increased the share of total government expenditures on education from about 10% to about 14.5%, and allocates $2.06 billion annually for education, of which approximately $760 million is for basic education.

Donor coordination in education is very strong, with donors meeting monthly to discuss programs and priorities. The World Bank and the European Community have initiated with the GOE a $200 million program for teacher training, educational technology and increasing access to primary schools. USAID is the third largest donor to Egypt in basic education. The World Bank, the German Bank forReconstruction and Development and the multi-donor Social Fund are currently financing school construction. UNICEF and Canada are collaborating on an innovative and promising community school project.

Beneficiaries: The direct beneficiaries will be girls between the ages of 6 and 13 who are currently out-of-school or at risk of dropping-out in targeted (high risk) communities. Additional beneficiaries will be the other primary school students in the targeted areas. The community-based activities should increase girls' enrollment by 50% in the catchment area of USAID small schools. Other additional beneficiaries will be illiterate young women and mothers in these communities between the ages of 14 and 35, and preschoolers in the age group of 3-6.

Principal Contractors, Grantees or Agencies: To be determined.

Major Results Indicators: Baseline Target (2001)

Increased girls primary school enrollment TBD 50% increase in school in targeted areas catchment areas

Improved quality of education offered 90% pass rate on MOE

third year exams

Baselines are being collected for the targeted areas in 1996. The first schools are expected to be launched in school year 1998-1999.

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Increased Use of Egyptian Universities in Quality, Demand-driven Applied Research, 263-SpO A

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $2,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 1999

Purpose: To improve and increase the utilization of Egyptian universities in the solution of key developmental and technological problems, through engaging them in joint demand-driven applied research activities with counterparts from U.S. universities.

Background: The huge expansion of the Egyptian university system over the past 30 years consumed all university resources and left little opportunity for staff development. Most resources were allocated to university infrastructure development and salaries, thus depriving applied, community-oriented research. Little serious applied research took place during this period, and the applied research capacity of university faculty members remained undeveloped. The relationship between applied research end-users and universities was absent. As a result, Egyptian faculty members do not contribute significantly to the solution of development problems. This SpO addresses these serious constraints by encouraging applied research toward solving Egyptian developmental problems, strengthening the system of applied research that was started earlier by USAID and enhancing the capacity for doing applied research in Egyptian universities by establishing stronger institutional linkages with U.S. universities.

USAID Role and Achievements to Date: USAID's support includes the provision of technical assistance in project and financial management from a U.S. contractor, provision of technical assistance from U.S. universities to Egyptian counterpart universities in the design and conduct of applied research addressing Egyptian end-user problems in the various sectors and the procurement of needed laboratory equipment for the conduct of research programs.

Full grant awards will start in calendar year 1997. Achievements to date include the establishment of a project and financial management system for operating the grants system of the project, and award of 102 seed grants for investigating the technical feasibility of the fuller grants to be awarded in the coming months. According to an external assessment, the project has responded to end users' needs and has also resulted in new respect for, and confidence in, the ability of Egyptian university scholars to solve "real world" end-user problems.

Description: The project strengthens and institutionalizes the process of utilizing university researchers and encourages long term relationships between participating Egyptian and U.S. universities. It also develops and sustains a strong relationship between Egyptian universities and end-users by initiating and catalyzing a demand-driven research process and by actively involving these end-users in each stage of the applied research process. The project emphasizes assistance to private sector end-users and the solution of problems related to the growth and development of this sector.

Host Country and Other Donors: There are no other foreign or international donors in this area. The GOE and Egyptian end-users benefiting from the research will be contributing an average of 40% of the local currency costs of the activity.

Beneficiaries: The beneficiaries of this activity are the different end-users whose problems will be addressed by the applied research activities to be funded under the project. These are either ultimate beneficiaries as in the case of individual beneficiaries in a health or education research activity or intermediate beneficiaries representing the ultimate beneficiaries and disseminating and implementingthe results and recommendations of the research. Secondary beneficiaries of the SpO include the implementing agency of the grant system since its capacity to implement a research grant system will be enhanced by the implementation of this activity. The Egyptian researchers participating in the applied research are also secondary beneficiaries, as their applied research capacity will be raised through the joint applied research activities of the activity.

Principal Contractors, Grantees or Agencies: The main contractor providing TA under this project is Mendez-England and Associates (ME&A), an 8 (a) firm, which provides assistance in financial and project management to the principal implementing agency, which is the Foreign Relations Coordination Unit of the Egyptian Supreme Council of Universities. The grantees are the Egyptian and U.S. universities receiving the applied research grants. One third of the grants are devoted to linkages with Historically Black Colleges and Universities.

Major Results Indicators:

Most indicators below measure success of research activities and will be measurable only after these grants are executed in 1999.

Baseline Target
Seed Grants 120 (1997)
Full Grants 60 (1999)
No. of successful research projects undertaken to solve Egyptian development problems N/A 75% of a sample of funded research grants judged successful by external expert evaluation panel (based on evaluation criteria) (1999)
No. of implemented research grants with significant end-user cost sharing N/A 50% of a sample of implemented research grants meet cost-sharing requirements (1999)
No. of high quality research products: full proposals (technically and economically feasible), adequate research designs and research findings and recommendations collaboratively produced by tripartite linkages N/A Research Products of 75% of a sample of implemented linkage grants are judged to be of high quality by expert evaluation team (1999)
Economic benefits accruing to end-users implementing research findings and recommendations. Increases in efficiency, productivity, cost saving N/A 25% of a sample of funded/completed grants exhibit significant internal rates of return on the USAID investment in the research grant of 30% or more (1999)

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Increased Civil Society Participation in Public Decision-making, 263-SO03

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $20,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To increase civil society participation in the formal decision making process by increasing the effectiveness of civil society groups, including elected and voluntary.

Background: Civil society does not yet play a dynamic role in the public decision-making arena in Egypt. Restrictive government regulations, poor management and lack of local authority and responsibility limit group participation.

USAID Role and Achievements to Date: The ability of civil society organizations (CS0s) and local government officials to identify their problems, take responsibility for them, and voice them in the public arena is an important focus of USAID assistance. While the pace of democratic change has been gradual, there are promising signs indicating forward movement. A new GOE initiative in rural development (Shrouk) places emphasis on empowerment of representative local government. Special interest groups are growing and becoming increasingly vocal in many areas such as the private sector, women's issues, environment, human rights and general democracy.

Description: Currently, USAID support focuses on increasing the effectiveness of selected CSOs through training and technical assistance to develop leadership, planning, management and team building skills. USAID is now planning to expand this concept to include special interest groups with specific interests in lobbying and advocacy. In addition, a new effort will more directly target USAID specific objectives, offering grants to Egyptian and U.S. PVOs and NGOs which can assist USAID in achieving these results. The program will improve the capacity of Egyptian NGOs to network between one another and with government agencies at the local, regional and central levels; support a fund to provide operational support and grants and seed money to Egyptian NGOs for activities which contribute to USAID strategic objectives; and establish training and offer technical assistance in areas related to improved advocacy skills. USAID has also recently initiated a policy-based program with the Egyptian Government to increase devolution of authority to local government and increase its participation in the rural development process.

Host Country and Other Donors: USAID is the lead donor in the field of strengthening civil society participation. Multilateral donors include UNICEF, UNFPA, the European Commission and the Arab Council for Childhood Development. An Egyptian/Swiss Development Fund supports employment generation and environmental and social services projects. The World Bank will become a major supporter of decentralized participation in one governorate. Other donors working in rural participation activities include UNDP, WHO, Denmark and Switzerland. The GOE has budgeted approximately $40 million since 1994 in rural participation and development activities and is committed to substantially increasing this amount over the next five years.

Beneficiaries: USAID-supported programs will reach several million villagers who will increase their participation in the democratic and developmental process. Also, local NGOs representing millions of citizens will receive training in effective management skills and will benefit from improved operation.

Principal Contractors, Grantees, or Agencies: USAID implements activities through the National Council of Negro Women, a U.S. PVO. Two firms, Management Sciences International and Development Associates, will assist in implementation of the Participatory Local Governance Program.

Major Results Indicators:

Baseline Target

(1996) (2000)

Percent of Shrouk villages whose male/female citizens 0 60%

believe that the Shrouk committee responds to their devel-

opment needs/priorities

Index of village ownership and responsibility for development 0 70%

management

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Increased Use of Information Services by the Legislature in Decision-making,

263-SpO B

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $0 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To enhance the quality and impact of legislative, advisory and oversight functions carried out by the legislature by providing relevant and reliable information services and expanding the use of information.

Background: Among the critical factors impeding the effectiveness of Egypt's legislative branch is the inadequacy of available information. This limits ability of members and staff to comment productively on government bills, analyze the budget and propose legislation.

USAID Role and Achievements to Date: USAID is supporting the technical and institutional development of the legislature to enhance the quality and impact of the legislative, advisory and oversight functions carried out by the legislature. To date, 625 committee staffers, researchers, librarian and computer staff received in-country and overseas training in the areas of economics, political science, law, research methodology, public policy formulation, budgeting and financial analysis, data gathering, use of library and Information services, and organizational behavior. In addition, the legislature's library and computer center received technical assistance to develop and support its role in information services delivery.

Description: USAID activities will improve the technical capacity and institutional development of the legislature. Through technical assistance and training, three activities are being implemented: developing a demand for and understanding of the use of information in the legislative process; developing services to adequately meet the information needs of the members; and increasing the efficiency and effectiveness of the institution so it contributes to a stronger, more sustained legislature. Local universities and training centers are the main training resources, which will ensure their availability to train over the long term. Also, in-house trainers will be created within the legislature.

Host Country and Other Donors: USAID is the major donor currently working with the legislature. In the late 1980s, the GOE conducted a series of studies to assess the legislature's information needs, resulting in a comprehensive plan to establish a legislative information system and modernize legislative procedures. The UNDP subsequently assisted the legislature to set up a computer center. UNICEF is providing consultation workshops on gender issues to parliamentarians. The GOE contributes approximately $450,000 in airfares for training participants.

Beneficiaries: USAID-supported programs directly benefit about 356 members of the two legislative assemblies and 650 staffers.

Principal Contractors, Grantees, or Agencies: USAID implements activities through Associates for Rural Development, a U.S. firm. The Congressional Research Service provided first year training before the contractor's arrival.

Major Results Indicators:

Baseline Target

Legislative actions indicate more information is 1 5 (2001)

used in the decision-making process.

(A 5-point rating scale is used to measure the percentage of members using information in the legislative process.)

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Improved Civil Legal System, 263-SpO C

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $4,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To improve the operation and performance of Egyptian civil courts as well as the quality of judicial and legal services with respect to commercial and other aspects of modern law in order for the legal system to serve the emerging private sector more effectively.

Background: The judicial system is unable to support fully the growing private sector because delivery of justice is slow and judicial personnel are not adequately briefed on new laws and regulations affecting the private sector. These constraints negatively affect newer and smaller Egyptian private investors and the foreign trade and investment community who cannot be assured that contracts entered into will be enforced or that justice will be delivered in a timely fashion. This program includes the five-year Administration of Justice project.

USAID Role and Achievement to Date: USAID's support for the justice sector launched in FY 1996 will improve the efficiency of two pilot court systems, improve judges' knowledge of Egyptian civil law and undertake other judicial strengthening programs. These newly initiated activities to improve the legal system are expected to serve the emerging private sector as they are implemented and expanded.

Description: There are two activity areas: 1) automation of streamlined court procedures along with the requisite training; and, 2) enhancing judicial knowledge of legal trends in the fields of Egyptian commercial and contracting laws. Two pilot court systems have been chosen for streamlining and automation: one in downtown Cairo and one in the provincial capital of Ismailiya. To ensure sustainability, a permanent small staff of trainers will be created at the National Center for Judicial Studies to provide teaching methodologies to a rotating staff of judges. Teachers at the center will be drawn from practicing judges to assure full knowledge of procedures and practices.

Host Country and Other Donors: USAID is the major donor currently working with the judiciary. The World Bank has conducted a thorough assessment of the commercial judicial system in Egypt. The Konrad Adenauer Foundation (German) has conducted a series of seminars on international arbitration and international contract drafting. The GOE contributes approximately $250,000 in training, technical assistance and commodities.

Beneficiaries: USAID-supported programs will affect private firms and individuals who depend on the pilot civil courts located in Cairo and Ismailiya. Eventually, citizens, businesses and nongovernmental organizations throughout Egypt using the services of better trained judges will benefit.

Principal Contractors, Grantees, or Agencies: USAID implements activities through AMIDEAST (a US PVO) and USIA.

Major Results Indicators:

Baseline Target

Model courts accepted by the Ministry of Justice for replication. 0 2 (2000)

Increased percentage of rulings that accurately TBD TBD (2001)

follow Egyptian civil law.

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Reduced Fertility, 263-SO04

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $15,000,000 ESF

INITIAL OBLIGATION: FY 1998; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To reduce Egypt's total fertility rate from 3.9 in 1992 to 2.92 in 2004 and to support the Government of Egypt's goal of reaching replacement fertility by the year 2015.

Background: Despite encouraging signs that use of modern contraceptive methods in Egypt expanded rapidly during the 1980s, fertility is still high and the pace of improvement has slowed. Population growth continues to surpass economic growth and have serious negative consequences for public services, employment, education, nutrition, health, and the environment. According to the 1995 Demographic and Health Survey (DHS), contraceptive prevalence is still low (24%) in rural upper Egypt and, alarmingly, has stagnated at around 48% nationwide. While there is consensus among high level political and religious leaders that current population growth rates are unsustainable, the Egyptian Government does not yet have the institutional and financial resources needed to adequately implement its national population strategy. Egypt is one of 15 USAID-assisted countries through which USAID expects to have a measurable impact on stabilizing global population.

USAID Role and Achievements to Date: USAID has been assisting the Government of Egypt (GOE) in the family planning sector since 1975. Total fertility rates have declined from 5.3 births per woman in the late 1970s to 3.6 births per woman in 1995, and contraceptive prevalence (the percentage of married women of reproductive age currently using contraception) reached 48% in 1995 from approximately 24% in 1980. Institutional capacity for management and service provision in both the public and not-for-profit sectors has grown significantly through USAID assistance, establishing a solid foundation for the program's sustainability. Current USAID activities are successfully meeting, and in some cases exceeding, projections for increased couple years' protection (CYPs), an indicator of increased demand for family planning services and commodities.

Description: Program activities will be concentrated in eight areas: further strengthening of the medical staff, facilities, management capacity and quality of care in the 3,700 family planning clinics operated by the Ministry of Health and Population; enhancing the quality of continuing education in reproductive health skills offered by two national institutions of post-graduate medical education; expanding the information, education and communication campaign led by the Ministry of Information; assisting family planning organizations to become more self-sufficient; and enhancing the quality, marketing, cost recovery, and coverage of private sector services.

The next stage of the program will build on accomplishments to date, but give greater emphasis to increasing the use of family planning services and strengthening the sustainability of family planning systems. To increase use, an enhanced supply of high quality services and contraceptive commodities must be ensured. In addition, new demand must be created, particularly in areas of high unmet need. The program will continue to work to strengthen implementing agencies' institutional capacity for cost-recovery and revenue generation; increase efficiencies in service provision; and reducing dependence on donor subsidies. It will do so through human resource development, improved management systems and development of strategic planning systems. Finally, the program will support an enabling policy environment to reduce restrictive regulations and increase budget allocations for the family planning sector.

Host Country and Other Donors: The GOE contributes approximately 24% of the total project cost for the current Population/Family Planning III project in cash and in-kind, including salaries and benefits, travel and other costs for participant training, and air time on television and radio.

USAID is the lead donor in family planning. Among other donors, UNFPA has also been an important supporter of the Egyptian program, followed by the International Planned Parenthood Federation and the Japanese. The World Bank has started to provide loan assistance in the population sector, principally for NGO demand-generating activities. The European Union and the Dutch and German governments provide limited assistance. The donors meet regularly in a working group on population and effectively coordinate their activities.

Beneficiaries: At the macro level, the entire Egyptian population will benefit from a rate of population growth more commensurate with national development goals and from increased choice in planning their families. More specifically, however, the strategy targets Egyptian married women of reproductive age (15-49) to receive more accessible and high-quality care. Intermediate beneficiaries are the family planning managers and workers in USAID-assisted organizations whose skills, facilities, and services to clients are improved.

Principal Contractors, Grantees or Agencies: Currently one contractor, Pathfinder International, provides a range of technical and management support to GOE implementing agencies involved in USAID's population/family planning activities in support of GOE national fertility goals.

Major Results Indicators:

Baseline
Target

(1992)

Reduced total fertility rate 3.9 3.5 (2001)

Increased contraceptive prevalence 47 53.8 (2001)

Decreased extended use failure rate 10% 7% (1999)

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Sustainable Improvements in the Health of Women and Children, 263-SO05

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $34,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To improve the quality and availability of child and reproductive health services as well as to ensure the sustainability of improved systems through cost recovery and policy reform.

Background: Although infant and child mortality have declined rapidly in the past years, deaths among young children remain unacceptably high for a country with good access to care and a moderate amount of spending on health (4.7% of GNP). Within Egypt there is great variation in health indicators: infant and under five mortality rates are about twice as high in Upper Egypt (97.7 and 129.2, respectively) as in urban governorates (42.9 and 56.9, respectively), and are more than three times higher among mothers with no education. The maternal mortality ratio (MMR, women dying of causes related to pregnancy and childbirth per 100,000 births) is also unnecessarily high at 174 per 100,000 births given the access to medical care. This, too, varies greatly within Egypt: the MMR is 217 for Upper Egypt, and within that region, the MMR is 544 in the governorate of Assiut and 386 in Qena. USAID is targeting more resources to these high risk areas of Upper Egypt in an attempt to narrow the gap in regional disparities and improve the health status of the poorest Egyptians. An alarming finding of the recent DHS indicates that approximately 97% of all Egyptian married women have been circumcized. Moreover, most Egyptian women say they want the practice to continue. USAID is supporting the Ministry of Health and Egyptian and U.S. NGOs in their programs to eradicate the practice. This S.O. includes the following activities: Healthy Mother/Healthy Child; Cost Recovery for Health; Schistosomiasis Research; Communicable, Endemic and Emerging Diseases; and a new Health Policy Support Program.

USAID Role and Achievements to Date: Since 1983, the focus of USAID's support has been to reduce mortality and illness of infants and children principally through three key interventions: oral rehydration therapy, an expanded program of immunizations (EPI), and the acute respiratory control program. The infant mortality rate has dropped 43% between 1980 and 1990, and the child mortality rate has declined 55 % in the same period. A goal to eradicate polio by 1997 has been set. Reported confirmed cases of polio dropped from 584 cases in 1992 to 60 in 1995. The target for elimination of neonatal tetanus has been reached for 1996. Reported cases of tetanus among newborns dropped from 1,823 in 1992 to 851 in 1995. A national study was carried out to document the causes of maternal mortality and determine avoidable factors which could guide reproductive care program improvements. At the same time as services are improved and extended for mothers and their children, efforts to improve the sustainability of the systems are underway. Intensive dialogue between the Ministry of Health and Population and the donors resulted in the GOE's paying for all routine vaccines for the EPI. Ongoing experiments in financing services in pilot cost recovery facilities are expected to improve the quality of care people receive and the efficiency of the facilities offering care. The management information system of the Health Insurance Organization, which covers 30% of the population with health insurance, has been partially automated and is providing data with which to improve management of this strategically important organization. New tools and approaches are being developed under the schistosomiasis research program; these have been effectively used to reduce the prevalence of schistosomiasis from 40% to 10% in rural areas of Egypt.

Description: Sustainable improvements in the health of women and children in Egypt are being realized through the achievement of four interrelated objectives: increased knowledge and improved health behavior in households, improved quality and utilization of care provided to women, infants, and children; new tools and approaches to combat selected endemic and emerging diseases; and improved environment to plan, manage and finance sustained health systems.

The Healthy Mother/Healthy Child activities are targeted to high risk areas of Upper Egypt. This program is developing a basic package of essential reproductive care and child health services to be available in all public and private facilities in selected districts. NGOs, including U.S. PVOs, are increasingly involved in community health promotion efforts. Mothers, as the primary providers of health for themselves and their families, are the focus of efforts to increase knowledge and improve health behavior in vulnerable households. Strengthening the curricula in medical and nursing schools as well as practical pre-service training are also important interventions supported by USAID to improve the quality of the basic package of essential reproductive health and child care services.

Testing is underway on several candidates for a vaccine to prevent schistosomiasis, the most significant cause of long term morbidity and curative care expenditures in Egypt. USAID is also supporting urgently needed efforts to determine the causes of the transmission of Hepatitis C, which is emerging as the greatest public health threat in the country. An assessment of the HIV/AIDS situation in Egypt is the basis for work with national organizations to keep the prevalence of this disease low throughout Egypt.

Improving the country environment to plan, manage and finance sustainable health systems is a critical element of the program. Child survival gains cannot be sustained without a national policy environment that puts a priority on resources for these programs. The Cost Recovery for Health Program and the Health Policy Support Program are working to enhance the capacity to plan, manage, finance and monitor health services. A broad-based dialogue on health policy is developing which involves public and private sector representatives working to improve equity and efficiency in the health sector. USAID is assisting the intensive efforts underway within the Health Insurance Organization to restructure and reengineer this agency.

Host Country and Other Donors: The GOE contribution to these activities approximates $119.2 million, including cash, salaries and operational expenses. Fourteen other donors are supporting health activities in Egypt, together averaging $22 million annually. UNICEF is the most active donor in the sector after USAID. USAID has recently awarded an $8 million grant to UNICEF to work with USAID in the high risk areas of Upper Egypt to reduce child and maternal mortality. In addition, USAID is collaborating with the World Bank and the EU in developing a health policy program.

Beneficiaries: Egyptian women of child-bearing age and children under five are the primary focus of activities. In addition, doctors and nurses and health sector managers are the recipients of improved and extended short term training as well as some long term public health and administration training designed to increase national capacity to manage public health programs. USAID is promoting the use of indigenous NGOs in health activities and works with U.S. PVOs to strengthen NGO capacity.

Principal Contractors, Grantees, or Agencies: USAID is implementing the program through a number of U.S. firms and universities. The University Research Corporation, Maximus and Medical Services Corporation International are the primary U.S. contractors currently working on health programs. USAID also expects to award an umbrella grant to a U.S. PVO to promote more NGO activity in the health sector.

Major Results Indicators:

Baseline Target

(2001)

Infant mortality rate 97.4 (1985) 53

Under five mortality rate 130.1 (1985) 73

Maternal mortality ratio 174 (1992) 139

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Increased Access to and Sustainability of Water and Wastewater Services, 263-SO06

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $72,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2004

Purpose: To increase access to improved and sustainable potable water and wastewater services in selected urban areas.

Background: A doubling of Egypt's population over the past 30 years and the influx of people from the rural areas to the cities have put a severe strain on Egypt's ailing urban infrastructure, especially water and wastewater facilities. Outmoded and poorly maintained, the inadequate number of operational wastewater facilities poses a significant health hazard. Lack of capital to invest in the rehabilitation and expansion of the systems, as well as inadequate institutional capabilities to plan, construct, operate, and maintain them further, exacerbate the problem. This program includes work in Alexandria, Cairo, Suez, Ismailia, Port Said, Minya, Beni Suef, and Fayoum.

USAID Role and Achievements to Date: In 1975, USAID began to address the urgent issue of raw sewage in the streets of Cairo, Alexandria and the canal cities of Ismailia, Suez and Port Said, and later in the provincial cities of Minya, Fayoum, and Beni Suef. Given the poor condition of the water and wastewater systems, rehabilitation preceded expansion. Over the past several years, several of the completed activities have affected 4 million customers: 700,000 residents in the poor Cairo areas of Pyramids and Embaba who received sewer hook-ups; more than 500,000 residents of Suez who were connected to the new wastewater treatment plant funded by USAID; and more than 3 million people now have improved potable water service from reservoirs built in the heart of urban Cairo.

Description: USAID assistance in the water and wastewater sector is focused on urban centers of production and commercial growth where water and wastewater problems are the most critical and where the maximum number of people can benefit from the interventions. Basic institutional reforms are now required as prerequisites to new infrastructure developments to ensure sustainability of these public utilities. The institutional reforms and USAID assistance to the water and wastewater utilities are designed to ensure financial viability and institutional autonomy. Once conditionality has been met in the structure and fees of the utility organizations, USAID provides funds for additional infrastructure construction. Assistance will continue in Alexandria, Cairo, Suez, Ismailia, Port Said, Minya, Beni Suef, and Fayoum and will begin in cities like Mansoura, Nuweiba, Sharm el Sheikh, Luxor and a group of cities in the Aswan Governorate.

Host Country and Other Donors: The Egyptian Government is heavily involved as a major partner in the large urban areas of Alexandria and Cairo and is contributing approximately $514 million to these activities. While USAID is by far the major donor in the sector, there are other foreign donors, including Denmark in the Aswan Governorate and Britain and Italy on Cairo's east bank. Cooperation with other donors is excellent as demonstrated by the close working relationship with the Government of Denmark in the Aswan Governorate and the Netherlands in Fayoum.

Beneficiaries: Beneficiaries include some 22 million Egyptians, or one out of every three individuals in the country. Among the beneficiaries, the health impact has been noteworthy, especially among children.

Principal Contractors, Grantees, or Agencies: USAID is currently implementing its water and wastewater program through 13 major U.S. firms, such as ABB SUSA, Inc.; Black & Veatch Int'l.; Camp Dresser & McKee; CH2M-Hill; Harbert Jones Construction; Harza Engineering Co.; Metcalf &Eddy Int'l.; Morrison-Knudsen Co.; Montgomery Watson and Stanley Consultants. In addition, these U.S. firms have subcontracts with numerous private-sector Egyptian firms which have strengthened domestic design and construction capabilities in the sector.

Major Results Indicators:

Baseline Target
Estimated population connected to improved sewerage systems (in millions of people) 18.6 (1995) 20.8 (2001)
Estimated population with access to improved water supply (in millions of people) 22.6 ( 1995) 23.5 (2001)

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Reduced Generation of Air Pollution, 263-SO07

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $40,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To achieve a sustainable reduction in the generation of air pollution (including total suspended particulates, carbon monoxide, nitrogen oxide, sulfur oxide, and hydrocarbons) through the demonstration of successful pilot activities and new technology applications. Technologically and economically viable demonstrations lead to replication, thereby laying the foundation for sustainability.

Background: In Egypt, poorly managed urbanization and weakly regulated industrial growth have resulted in enormous generation of pollution posing serious human health and environmental risks. For air pollution, many factors contribute to this continued deterioration: excessive and inefficient use of energy in industry; ineffective standards for industry, commerce and transportation; and a lack of a sustainable institutional framework to reduce the rate of environmental deterioration. If not effectively managed, serious environmental degradation will constrain Egypt's long-term economic development. This program includes two projects: the Energy Conservation and Environment Project (ECEP) and the Cairo Air Improvement Project (CAIP).

USAID Role and Achievements to Date: Collaborating with the Government of Egypt (GOE), USAID has conceived and implemented activities related to air pollution reduction since 1988. Thus far, USAID assistance has helped improve the conservation and efficient use of energy and encouraged the widespread application of pollution prevention applications. Achievements include: (1) the installation of dozens of energy efficiency technology demonstrations which amount to $14 million in annual energy savings, (2) the aversion of accumulated air pollution emissions amounting to 7,800 metric tons of carbon monoxide and 25,000 metric tons of sulfur oxide, and (3) the installation of low cost/no cost gas analyzers for monitoring boilers and furnaces demonstrating $26 million in fuel cost savings. CAIP is in initial stages of implementation, with results expected in future years.

Description: ECEP finances primarily energy conservation and pollution prevention activities. It funds technical assistance, the installation of low cost/no cost applications and energy efficiency technology/practices, and training through numerous subactivities. CAIP represents the first donor assisted effort that directly addresses air pollution. Results are structured to have immediate and longer term impacts through the demonstration of technologically and economically viable environmental solutions.

For CAIP, illustrative activities to reduce particulate air emissions include; the introduction of: compressed natural gas (CNG) fuel technology on 100 public sector buses, lead and cement plant control technology, vehicle tune-up and inspection programs, air quality monitoring/analysis, public awareness campaigns, and policy dialogue supporting the increased the use of unleaded gas. Illustrative activities to reduce carbon monoxide, sulfur oxide, nitrogen oxide, and hydrocarbon air emissions include; the establishment of: a Cairo-wide vehicle emissions testing system, vehicle tune-up and inspection programs, public awareness campaigns, air quality monitoring and analysis, and a broad range of pollution prevention technology demonstrations.

An appropriate lead smelter action plan will also be developed and implemented. This plan will identify the supporting institutional, policy, regulatory and financial framework necessary to support long term sustainability for lead smelter reduction. If CNG becomes a demonstrably viable substitute, then its use and replication will become self-sustaining. Establishment of a vehicle emissions testing system for Cairo will ultimately lead to a decentralized network of private sector testing and tune-up stations across Cairo. Public awareness campaigns will reinforce public knowledge and go a long way inensuring public participation in the achievement of results. Installation of pollution prevention technologies is already being replicated by the public and private sectors and has demonstrated significant fuel and energy savings.

Host Country and Other Donors: Within the donor community, USAID is the largest donor focusing on the reduction of air pollution. USAID gives very high priority to coordinating its environmental program with those of other donors. Quarterly meetings are held with the Environmental Donor Subcommittee to discuss current and planned activities, common approaches to perceived environmental problems, and coordination with the Egyptian Environmental Affairs Agency. The environmental coordinating subgroup includes: Denmark, Canada, EU, France, Germany, Japan, UNDP, World Bank, and ODA. USAID assisted the World Bank with the design of its Environmental Pollution Abatement Project, coordinated with the EU's new energy demand side management program, and consulted closely with ODA, DANIDA and CIDA on pollution prevention and air quality monitoring. A major USAID-funded activity is developing an air quality monitoring system to complement the system initiated by DANIDA. The GOE is contributing $12.7 million in cash, salaries, operational expenses and facilities for these activities.

Beneficiaries: The health of the 14 million inhabitants of Cairo will continuously benefit from the cleaner air resulting from activities funded under this strategic objective. The public and private sectors of Egypt as a whole stand to gain long term economic, social, and health benefits from the reduced generation of air pollution.

Principal Contractors, Grantees, or Agencies: USAID presently implements activities with these US contractors: Hagler-Bailly and Overseas Bechtel, Inc. 

Major Results Indicators          Baseline          Target
                                   (1993)           (1998)
                                             
No. of pollution prevention
technologies replicated              0              50  


Accumulated pollution reduction in:
(metric tons)


          Sulfur Oxide               0               47,535


          Nitrogen Oxide             0               18,436


          Carbon Monoxide            0               82,534

ACTIVITY DATA SHEET

PROGRAM:EGYPT

TITLE AND NUMBER: Promotion of Environmentally Sustainable Tourism, 263-SpO D

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998 ; $10,000,000 ESF

INITIAL OBLIGATION: FY 1998; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To foster sustainable growth in tourism which protects the natural and cultural sites upon which tourism is based and contributes to long term economic growth and job creation.

Background: Recent economic data suggests that tourism is Egypt's fastest growing sector, providing thousands of new jobs every year. Revenue from tourism is Egypt's second largest source of foreign exchange. The significance of tourism revenue to the Egyptian economy is likely to become even more important since the number of tourists is expected to more than double by the year 2000. However, this expected increase in tourism, if not planned and managed in a close partnership between the public and private sectors, will threaten the very natural and cultural attractions for which Egypt is world famous. Uncontrolled development in the vicinity of tourist attractions, coastal landfills, pollution from urban and industrial sources, resource allocation conflicts between and among users, a lack of zoning and building regulations, poor training and management of tourism staff and facilities, and the improper disposal of solid waste are among the major factors threatening sustainable tourism growth and development in Egypt.

USAID Role and Achievements to Date: In collaboration with the Egyptian Environmental Affairs Agency (EEAA), the Tourism Development Authority (TDA), and the Supreme Council for Antiquities (SCA), USAID initiated a small experimental two-year program in FY 1996 designed to preserve and protect the natural and cultural environment along the Red Sea coast through the promotion of environmentally appropriate tourism activities. Thus far, USAID assistance has helped to improve awareness of sustainable tourism issues. Achievements include: (1) two fully staffed project offices established in Hurghada and Cairo; (2) equipment procured and installation of 250 mooring buoys begun in the new Marine Park Protectorates area along the Red Sea coast; (3) commencement of preliminary conservation work at the monasteries of Sts. Anthony and Paul and the Seti I Tomb.

Description: USAID is planning to develop a new program for environmentally sustainable tourism starting in FY 1998. The follow-on activity will provide continuity for longer-term initiatives started under the pilot phase. USAID will focus on nationwide policy changes and technical assistance resources for tourism development along the Red Sea coast. Key activities will include: building capacity and extending the reach of regulatory agencies which oversee resource management and tourism development; building interagency collaboration to resolve disputes which weaken enforcement of environmental laws; developing new approaches to environmentally sensitive management; providing management training for the hotel and tourism sector; and encouraging the policy reforms to allow touristic sites to raise and retain revenues for maintenance and operation of those sites.

This program supports a variety of activities which are aimed at strengthening linkages among the public sector, private sector, and non-governmental organizations. Major elements include (1) site development and management (installation of mooring buoys to protect coral reefs, cultural site development at two desert monasteries, Quseir Fort and Seti I Tomb); (2) sustainable tourism strategies (Red Sea Tourism Action Plan, Solid Waste Action Plan, Comparative Advantage Review of Red Sea Tourist Industry); (3) creation of a new coral reef protectorates area with Training for Park Rangers; (4) touristic facility support (improvement of Sinai decompression chamber, Port of Safaga Audit, Environmental Management for Hotels); (5) regional and international cooperation (Madaba Map Conference); and (6) non-governmental organization development.

Host Country and Other Donors: USAID is currently collaborating with the European Union (EU) to replicate the Marine Park System in the South Sinai, funded by the EU, in the Red Sea islands and coast. The GOE is contributing staff (park rangers), salaries, housing, basic training, and operational expenses for the new marine park system.

Beneficiaries: The public and private sectors of Egypt as a whole stand to gain long-term economic benefits from sustainable tourism development.

Principal Contractors, Grantees, or Agencies: Contractors include the American Research Center in Egypt and Winrock International, Inc. 

Major Results Indicators         Baseline     Target
                                 (1996)       (1998)


No. of EEAA Park Rangers           0             8
enforcing Law 4 in Red Sea Coast


No. of Mooring Buoys installed     40          250


No. of Boat Captains trained       0            80


No. of Cultural Tourism Site       0             3
Plans Developed

ACTIVITY DATA SHEET

PROGRAM: EGYPT

TITLE AND NUMBER: Improved Human Capacity Development System Linked to Strategic Priority Areas, 263-SpO E

STATUS: Continuing

PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $20,000,000 ESF

INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001

Purpose: To strengthen the management and technical capabilities and enhance the professional performance of individuals and groups serving in Egyptian governmental and private sector entities, including universities, NGOs/PVOs, and other key development institutions.

Background: To achieve sustainable development in Egypt, continued investment in human capacity is essential. Egypt's training needs are evolving to meet new priorities in the areas of economic growth, private sector development, an improved environment for the growth of democracy, reduced population growth and improved health, and protection of the environment. Critical human resource constraints persist in Egypt across all of USAID priority areas, which must be addressed with strategically-linked training.

USAID Role and Achievements to Date: USAID has provided in-country training to tens of thousands of Egyptians and U.S. education and training opportunities to close to 15,000 Egyptians through its technical and human resource development projects since the mid-1970s. The knowledge and skills acquired by these trained individuals have contributed to development across all sectors under the many projects funded by USAID and implemented in conjunction with a multitude of Egyptian governmental and non-governmental organizations. However, experience has shown that earlier training project designs have lacked the necessary systems to effectively plan for, monitor, follow up, and evaluate the development impact of training. In addition, training activities have been implemented through an extensive variety of different implementation mechanisms which has contributed to management and oversight difficulties, lack of consistency and uniformity in provision of training services and application of policy and procedural regulations, and inadequate monitoring and evaluation. This special objective has been designed to correct these problems and achieve greater development impact through training.

Description: This special objective through the Development Training 2 (DT2) activity will address two development problems: (1) the need for customer-focused training opportunities that fully support strategic priority areas and (2) the need for a consolidated, focused training management system that effectively plans and implements training activities while concurrently demonstrating strategic results. DT2 consists of three activities: the training activity, an in-country English language testing and training (ELTT) activity to prepare Egyptian trainees for overseas training conducted in English, and an activity to fund external evaluations and required audits.

The DT2 activity will put into place a single, centralized training management system, under a USAID direct contract, to fund and implement all participant training in the United States and approved third countries and some in-country training that will directly support achievement of results under all strategic and special objectives (SOs/SpOs). DT2 will work directly with SO/SpO teams and their Egyptian partners to carry out organizational and training needs assessments of the Egyptian partner institutions to determine where training is an appropriate intervention to achieve results under the strategic and special objectives. Based on the needs assessments, training plans, budgets, and results indicators will be developed for each SO/SpO. The DT2 training management system will also provide consistent and adequate pre-departure orientation for all participants traveling overseas for training, place participants in appropriate training programs and monitor their progress and follow up returned participants to help maximize the training investment and ensure the application of the knowledge and skills. The ELTT activity will provide in-country English language training to assist participants in reaching a level of English proficiency to enable them to successfully undertake overseas training conducted in English.

Host Country and Other Donors: The GOE will contribute local currency equivalent to pay for international travel and pre-departure medical clearance examinations. In-kind contributions are estimated to be at least $5.6 million in the form of office space, utilities, and salaries and benefits of participant and in-country trainees while in training. Other donors provide in-country and overseas training opportunities for Egyptians to support the, development activities they finance.

Beneficiaries: The direct beneficiaries of DT2 will be those Egyptians who work in the various partner institutions involved in achieving results under the strategic and special objectives. Other beneficiaries include clients served by partner institutions through improved services and programs.

Principal Contractors, Grantees or Agencies: To be determined. 

Major Results Indicators:          Baseline     Target
                                                (1998)



Strategically linked                N/A          11 plans for first
training plans developed                          three-year period


Positive partner                    TBD          percentage of partner
institution feedback on relevance                institutions providing                          
and delivery of training                         positive feedback

EGYPT

FY 1998 PROGRAM SUMMARY

($ Thousands)

Promoting Broad Based Economic Growth Building Democracy Stabilizing Population Growth and Protecting Human Health Protecting the Environment Providing Humanitarian Assistance

Total

USAID Strategic Objectives
1. Accelerated Private Sector-led, Export-oriented Economic Growth

576,700 576,700
2. Increased Participation of Girls in Quality Basic Education 15,000 15,000
3. Increased Civil Society Participation in Public Decision Making 20,000 20,000
4. Reduced Fertility 15,000 15,000
5. Sustainable Improvements in the Health of Women and Children 34,000 34,000
6. Increased Access to and Sustainability of Water and Wastewater Service 72,000 72,000
7. Reduced Generation of Air Pollution 40,000 40,000
USAID Special Objectives
SpO A. Increased Use of Egyptian Universities in Quality, Demand-driven Applied Research 2,000 2,000
SpO B. Increased Use of Information Services by the Legislature in Decision Making -0- -0-
SpO C. Improved Civil Legal System 4,000 4,000
SpO D. Approaches to Sustainable Tourism Demonstrated 10,000 10,000
SpO E. Improved Human Capacity Development System Linked to Strategic Priority Areas 20,000 20,000
Other Cross-cutting Assistance

6,300 6,300
Total 620,000 24,000 49,000 122,000 -0- 815,000

USAID Mission Director:John Westley

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