USAID and Egypt's Strategic Partnership: Proven Commitment, Growing Capacity, and Enhanced Private Sector Engagement

Thursday, October 3, 2019
USAID/Egypt Mission Director Sherry F. Carlin and the mission's technical team leaders speak with AmChamEgypt about USAID's strategic partnership with Egypt.
USAID/Egypt Mission Director Sherry F. Carlin and the mission's technical team leaders speak with AmChamEgypt about USAID's strategic partnership with Egypt.
AmChamEgypt

Remarks [as prepared] to the American Chamber of Commerce in Egypt
USAID/Egypt Mission Director Sherry F. Carlin
Cairo, Egypt

 

INTRODUCTION
Good morning everyone.  Thank you Shariff and thanks to Sylvia and the AmCham membership for inviting me to speak today.  And thanks to those who took the time this morning to share how USAID has impacted your lives and businesses in the film booth.

Many of you know that USAID has a 40-year legacy of inspiring Egyptian success, but as the USAID Mission Director, it never fails to astonish me when I hear comments like, “I didn’t know USAID was still in Egypt.”  And, truth be told, I hear comments like that even here, at AmCham events.  So my goal is for you to leave here this morning with a better understanding of what we’re doing right now and what we have planned -- and to appreciate the impact we’re making, and the strength of USAID and Egypt’s strategic partnership.

You’ll hear me speak about COMMITMENT and CAPACITY.  At USAID, world-wide, we’re looking to support a country’s journey to self-reliance by leveraging its policy-level COMMITMENT to effective, inclusive, and accountable solutions to educating their people, building a skilled and healthy workforce, ensuring economic stability, and other development challenges.

At the same time, we’re partnering with countries to deliver on their COMMITMENTS by building human and institutional CAPACITY across government, civil society, the economy, and the wider population.

Since 1978, USAID has contributed over $30 billion dollars to Egypt’s development, representing one of the longest and most substantial assistance commitments by the U.S. Government to any country in the world.

Based on Egypt’s COMMITMENT to transformational development, we’ve built an incredible legacy.  USAID helped lay the groundwork to increase commerce and industry by supporting policy reform, helping stand up essential public services and utilities, and building human CAPACITY.  Additionally, as many of you know because many of your businesses benefited from the Commodity Import Program – we helped import $7.6 billion dollars’ worth of commodities to construct, expand, and modernize businesses and infrastructure.

Our early work formed the backbone of Egypt’s modern economy and laid a foundation to strengthen the workforce, create consumers, and establish an environment where businesses can thrive.

Where Egypt showed COMMITMENT, USAID strengthened CAPACITY, resulting in systems and investments that have proven their longevity.

So let’s talk about relationships.  When I arrived in Cairo in 2015, the relationship between our governments was strained.

USAID’s partnership with Egypt remains instrumental to U.S. foreign policy objectives; and, as part of the U.S. government, everything we do is for the ultimate foreign policy aim of a prosperous and peaceful Egypt.

So, early in my tenure, we prioritized relationship-building and worked hard at it – at all levels.  We consulted extensively with Minister Sahar Nasr and 13 line ministries.  Over time, new perspectives and new leadership presented windows of opportunity.

Today, 4 ½ years later, USAID’s relationship with our Egyptian counterparts is based on respect, value, and trust, which has translated to the forward movement of impactful programs once again, that are fully in line with Egyptian government priorities. 

Let me now tell you about what we’re doing, how we’re doing it, and, why this matters to you.

USAID’s PRIORITIES IN EGYPT
We have projects in a range of sectors, from education and health to economic growth and governance.  Every activity in our $660 million portfolio has some relation to jobs as well as empowering women and youth to be the economic engine that businesses here in Egypt need.

In all of these areas, our work is informed by a strategic willingness to take calculated risks, and the importance we place on innovation.  We intentionally focus on not just implementing best practices, but developing them -- Practices that are now being replicated around the globe.

For example, our early grade reading program.  Through this program, USAID piloted an innovative new curriculum to ensure that Egyptian students learned to read in Grades 1 through 3.  It was so successful that the Government of Egypt adopted the model and has rolled it out nation-wide.  The government was COMMITTED to improving early grade reading, but lacked the CAPACITY to do so.

USAID’s comparative advantage was and is to step in and help develop the government’s CAPACITY to expand and manage programs like this one. 

With our assistance, the Ministry of Education has trained 115,000 primary school teachers on innovative teaching approaches for reading; and, the program now reaches 5 million children at 16,000 schools nation-wide every year.  By fundamentally changing the way Egyptians learn to read, we’re laying the foundation for a more educated and productive workforce. 

Countries in the region and beyond are taking note.  Both Morocco and Pakistan have now introduced Egypt’s methodology to increase their countries’ literacy rates.

The Ministry of Education also showed a COMMITMENT to introducing STEM education – Science, Technology, Engineering, and Math – to meet the demands of industries essential to Egypt’s growth. 

Beginning in 2011, USAID helped establish Egypt’s first two STEM high schools and built the CAPACITY of its teachers.  The success of these schools resulted in the Ministry’s COMMITMENT to expand this innovative model by establishing 15 new STEM high schools across the country that now reach over 12,000 students.  Today, these schools are home to Egypt’s smartest and most talented students. 

And, if you’re ever concerned about this country’s future, all you need to do is spend some time with this young and vibrant generation.  Let me show you what I mean.  [Watch Maadi STEM School video]

Every time I watch this video, I’m in awe of the COMMITMENT these young women show to their education, and what this means for the future of Egypt. 

WOMEN
At USAID, empowering women is one of our highest priorities.

As we all know, societies that empower women to participate fully in civic and economic life are proven to be more prosperous and peaceful. 

However, women represent a largely untapped resource in Egypt’s economy – only 15 percent of all businesses are owned by women.  The IMF estimates that Egypt’s GDP would increase by 34 percent – if female employment rates rose to match those of men’s. 

Egyptian women continue to face barriers to economic participation, including a lack of business skills and financial literacy, as well as sexual harassment and violence.

Looking forward, we’re currently designing new activities to remove barriers to women’s economic participation across all sectors and to support local initiatives that encourage female empowerment at home, work, school, and in the community. 

I’d now like to offer a few examples of our work in water, agriculture, trade, workforce development, and higher education.  In all of these sectors, the government has demonstrated a clear COMMITMENT to transform and grow, and USAID is helping deliver on this COMMITMENT by building human and institutional CAPACITY.  This combination is paying huge dividends. 

WATER
For instance, one of the facts we like to share is that we’ve helped bring potable water and wastewater services to the homes of over 25 million Egyptians – many for the first time. 

However, the bigger story is that we supported the establishment of the Holding Company for Water and Wastewater and its subsidiary companies that manage the entire country’s water and wastewater systems.  We’ve worked – and continue to work – with the Holding Company to build staff expertise and develop management systems to improve operating efficiencies, billing, and collections.  Our technical assistance impacts every Egyptian who receives a water bill.

This is an example of where we made the business case as well as the development case.  We’ve learned that even the very poor will pay for basic services that their families need. This is the basis for our market-driven approach and emphasis on cost recovery. 

As a result of our assistance, the Holding Company and its subsidiary companies have more than quadrupled total revenues, from 4.2 billion Egyptian pounds in 2013 to 17.5 billion pounds in 2018.  I’m also proud that 16 of the 25 subsidiary water companies have reached 100 percent cost recovery for their operations and maintenance costs.

We continue to increase access to clean water and sanitation services in underserved rural areas.  Our current water and wastewater programming, valued at more than $80 million dollars, is bringing direct access to potable water to 650,000 residents of Upper Egypt – as well as to residents of North Sinai.

Yes, I said North Sinai.  Senior Government and military officials have told me repeatedly that a “whole of government” approach, which includes economic development is “the basis for security in North Sinai.”  We couldn’t agree more.  In support of the Egyptian government’s efforts to develop North Sinai, our projects range from youth empowerment, community health worker training, teacher training, and university scholarships … to large-scale water and wastewater infrastructure.

In this $50 million infrastructure project, we’re working with the governorate's leadership and the Sinai Water and Wastewater Company to ensure that all 450,000 residents have access to safe drinking water.  

Honestly, I become a bit emotional when speaking about our work in North Sinai.  Very few in Washington and here in Egypt ever thought we could successfully implement activities there, let alone a large-scale infrastructure project.  As you’ll see, we’ve proved them wrong!  

With demonstrated commitment from the Egyptian government and communities, USAID is offering hope, CAPACITY, and positive options to Bedouin youth and communities to improve stability in this challenging environment. 

AGRICULTURE
Agriculture is another area where the Egyptian government and communities have demonstrated a strong COMMITMENT.  This major driver of the Egyptian economy accounts for over a quarter of all jobs, with 41 percent of the agricultural workforce being women.  There is huge opportunity for growth in this sector due to the quality and growing seasons of Egypt’s horticulture products. 

We’re helping thousands of Egyptian small-holder farmers respond to that opportunity and global markets.  We’re supporting them in developing commercial alliances and building and strengthening sustainable value chains. 

We always look to build on our legacy projects.  For instance, twenty years ago, we helped establish a number of producer associations – including the Horticulture Export Improvement Association, or HEIA.  We helped build its management systems and expand its capacity to increase exports.  HEIA has grown from 25 Egyptian member organizations to 800 – many of which are currently receiving technical assistance from USAID. 

These organizations export nearly 80 percent of Egypt's high-value crops, contributing over $2 billion annually to Egypt’s economy.  And, every Egyptian pound made by the farmer, the packer, and the many others who are part of the value chain, makes a significant difference in their lives and the lives of their families.

I’d like to show another video that reflects how one of our agriculture activities has empowered a young woman who is now providing for the needs of her family.  [Watch Ducks for Doaa video]

TRADE AND INVESTMENT
Of course, we’re supporting Egyptians at the firm-level and the policy level, from micro-enterprises like Doaa’s to multi-nationals. 

I’d like to turn now to our work in trade and investment; which, I know, is near and dear to your hearts. 

When I first arrived, I was under pressure from Washington to immediately begin a macro-economic reform project.  But we held tight until the government entered into the Extended Fund Facility with the IMF, demonstrating its COMMITMENT to hard reforms that were so direly needed.  We then acted immediately to have expert advisors directly support Ministry of Finance officials to increase their CAPACITY to meet IMF benchmarks. 

Since then, we’ve been supporting both the Ministry of Finance and Ministry of Planning by building their staff’s CAPACITY with new tools that will strengthen public financial management and investment planning. 

Parliamentarians and other government officials just returned from a study tour in America better-equipped to tackle the root sources of Egypt’s macro-economic imbalances and improve  public services, saving you time and safeguarding your taxpayer money.

In the context of the TIFA talks, we’ve been helping the government promote private sector investment by addressing concerns related to intellectual property, customs valuation, and other issues – issues that many in this room have voiced.

In the coming months, we’ll focus even more on ways to help you increase your bottom line – while working to ensure that economic growth is inclusive and sustainable and benefits all Egyptian citizens more equitably. 

Activities will include upgrading e-services for investors, enhancing the functionality of the Economic Courts, and working with you and the government to improve trade and investment policies and the regulatory and institutional environment.

USAID is also involved in Prosper Africa, a U.S. government initiative to substantially increase two-way trade and investment between the United States and Africa.  With Sylvia’s permission, I’m throwing out a teaser: Watch for an invitation next month to learn more about Prosper Africa and the U.S. government’s new Development Finance Corporation, or DFC.

Once established, the DFC will have the ability to establish investment funds and make limited equity investments.   

And, we continue to strengthen micro, small, and medium-sized businesses through mentors, incubators, accelerators, and business development service providers.  Over 5,000 entrepreneurs have taken advantage of – and directly benefited from – our assistance over the past four years. 

I suspect many of you are mentors who have shared your expertise with startups – or even invested in these burgeoning enterprises.

WORKFORCE DEVELOPMENT
Let me now speak about how we’re revolutionizing vocational education to the mutual benefit of youth, teachers, industry, and the economy.  

Through our workforce development project and our partnership with the Ministry of Education and Technical Education, we’ve brought the private sector into conversations with the government to modernize and expand Egypt’s technical secondary education system to ensure that training will be meaningfully linked to market demand.  Our work with technical schools provides you with a pool of talented candidates to draw from – and a means to access them. 

We’re currently working in 60 vocational schools in 11 governorates.  In the last 3 years, we’ve helped employ over 25,000 graduates and job seekers, 40% of whom are female.

In collaboration with the government and private sector, we’ve developed and introduced two competency-based, accredited diploma programs in areas where we collectively identified the biggest gaps: renewable energy and logistics. 

Students participating in these specializations receive classroom instruction AND hands-on practical experience, which is just what industry representatives requested.

In renewable energy, USAID helped establish programs at two vocational schools in Aswan, just down the road from the Benban Solar Park.  These students are becoming technicians with the skills they need to immediately contribute to this growing industry.  What’s more, the Governor of Aswan established the first public-private partnership Advisory Board in a technical school – in part, to facilitate on-the-job training and employment for these students. 

In logistics, after getting approvals and accreditation for the three-year curriculum we co-designed with the private sector, we introduced it into three of the vocational schools we’re supporting in the Suez Canal Corridor and ensured the teachers had the capacity to introduce and teach this new curriculum.

In July, I had the pleasure to attend the first graduation for 55 young men who completed the logistics course.  Not only did we hand out diplomas, we also handed out employment contracts to every single graduate – that’s a 100% success rate!

The young graduates came up to me afterwards and said, “We want you to know that we’ve created our own hashtag”:  “We’re Tech – We’re Proud.”  I told them they forgot one very important tag line:  “...and, We’re Employed!” 

Behind all of USAID’s work are stories of real people whose lives are transformed for the better.  I’d like to introduce you to Mahmoud, one of the 55 graduates, as he tells his story through this video.  [Watch Port Said logistics training video]

We love this video; but, shortly before it was finalized, we found out that Mahmoud turned down his job offer.  He decided he wanted to go to university to study logistics engineering.  When I heard the news,       I was disappointed.  Like me, you may be thinking, “He didn’t accept the job he was offered – so…how is that a success?”  I thought a lot about Mahmoud and in time, my perspective changed.  Mahmoud now has the hope, vision, confidence, and CAPACITY to do anything he chooses to do. 

This - in fact - is “development.”  This - in fact - is “success”. 

HIGHER EDUCATION
Upskilling Egypt’s youth – in other words, building human CAPACITY – is also the basis of our $250 million higher education initiative.  In fact, higher education programs, including university-level scholarships, make up nearly one-third of our programming.  Since 2015 alone, we’ve provided scholarships to 1,200 talented young women and men from underserved communities throughout Egypt – and to mid-career professionals –  to study at premier Egyptian and American universities.

Taken together, our objective is to create a pipeline of Egyptians with the right skills for today’s labor market who can lend their talents to ministries, companies like yours, or become entrepreneurs, and even – the next generation of AmCham leaders.

Finally, in addition to building human CAPACITY, we recently launched a bold, new $90 million dollar U.S.-Egypt research initiative that will position Egypt to become an important leader and player in the knowledge economy.

I’m speaking of course of our three new Centers of Excellence in Water, Agriculture, and Energy – sectors that are at the heart of Egypt’s long-term growth and development.  These Centers are the first of their kind, bringing together American and Egyptian academia, scientists, government, and the private sector.

Such linkages are required in order to solve complex, real-world challenges and drive economic growth and job creation.  Our partners are prestigious and visionary: from MIT, Cornell, and AUC - to -Alexandria, Cairo, and Ain Shams universities.  I’m sure these universities and their partners will achieve greatness for the benefit not only of Egyptians, but also Americans, the region, and the rest of the world. 

PIPELINE/EXPENDITURES
Let me turn briefly to some trends that illustrate the progress I’ve discussed today.  Over the years, many of you may have heard about our "pipeline."  Well, I know some of you have, because you haven’t been shy in asking me about it!  We use the term “pipeline” to refer to the funds USAID/Egypt has been allocated - but not yet spent.

I’m proud to report that our pipeline has been tamed by our steadily increasing rate of expenditures.  Since my arrival in 2015, we’ve more than doubled our expenditure rate -- from $13 million dollars to $28 million dollars per quarter.  One main reason we’ve been able to do this is because of the renewed trust and confidence the Egyptian government has in our intentions, programming, and relationship.         

PRIVATE SECTOR ENGAGEMENT
Since I’m in a room filled with private sector representatives, I’d like to wrap up by speaking about how our work and your work are intertwined.  The long and short of USAID’s new Private Sector Engagement Initiative is that we’ll achieve bigger, better, and more long-lasting results if we work together every step of the way.

This means we’re looking to consult and strategize with you as we design new programs.  We want, wherever possible, to make a business case for the interventions we’re putting forth, then collaborate with you in the course of implementation.  We want to hear about the opportunities you see and the obstacles you face.

We want to pool our expertise and resources with yours to support the COMMITMENT we see here in Egypt.  When we invest together in Egypt’s long-term success, we help more people – and you make more money.

We’ve seen this at work time and again through partnerships with Coca-Cola, IBM, and Microsoft, to name a few.  And, most recently, PepsiCo/Egypt’s subsidiary, Chipsy.

This past July, USAID launched an important partnership with Chipsy to improve the livelihoods of small-holder farmers.  Thanks to Mohamed Shelbaya and his team at PepsiCo, this short video will highlight the facts.  [Watch PepsiCo video]

This strategic partnership is a win-win for all involved: for USAID, Chipsy, and the people of Egypt.  Ultimately, PepsiCo will consistently receive the quantity and quality of potatoes they need to meet market demand, and USAID-supported small-holder farmers will increase their incomes and enjoy higher living standards.  

This example is one of many, and I wish I had time to tell you more.  I haven’t had the time to tell you about our work to demonstrate that Egypt's rich heritage has value in both cultural and economic terms.  I didn’t highlight the $300 million dollar Egyptian-American Enterprise Fund.

I also haven’t talked about the 20 University Career Centers we’ve established that will reach 70% of Egypt’s university students and link graduates with jobs.  And, I haven’t touched on our partnerships with the private sector who are delivering health and family planning messages and services to workers.  These not only address the pressing issue of population growth, but stand to produce a three-to-one return on investment in economic terms. 

CONCLUSION
In conclusion, I hope today I’ve broken the myth of our disappearance and have shown you that USAID is not only still in Egypt, we’re ALL OVER Egypt.

Just like you, we continue to be pioneers in Egypt’s development. 

We’ve been innovators and risk-takers in our shared goal of modernizing Egypt’s economy and social fabric.  And these efforts have paid off.

As I look around the room at all of you today, I see Egypt’s champions – all successful business people who have grown your businesses on the foundations that USAID helped build.  And, we’ll continue to help pave the way to a prosperous and peaceful Egypt, right by your side. 

Thank you.

Issuing Country 

Last updated: October 18, 2019

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