From a standing start in 1974, U.S. economic assistance for Egypt has grown to the biggest aid program in the world.More American economic assistance is being channeled to Egypt than to the rest of of Africa and Latin America combined.
John J. Gilligan, administrator of the Agency for International Development, toured the country today for a first-hand look at the impact of an aid flow now-running at more than $900 million a year. He said the United States is commited to sustaining this effort for "a long time to come."
Gilligan described Egyptian President Anwar Sadat as "a good deal more satisfied" with the aid program than he was when the two met in Washington in March because "he thinks things are beginning to move."
Interviewed aboard an Egyptian military helicopter carrying him from the Suez Canal to Cairo, Gilligan said he told Sadat that "we are insisting that the Egyptians develop a long-term, sound economic development plan and stick with it. If we are going to go Congress for the money, we have to see some results at the end."
The United States is giving or lending Egypt everything from tallow for soap to a $100 million cement factory. But aside from three new trucks purchased with an AID loan that were on display at the American consul's residence here, Gilligan saw little in the way of tangible results from the aid program because the most ambitious projects are still in their early stages.
The significance of his visit lies less in what he saw than in what he said.
He made official what had already become apparent after a long debate in the U.S. embassy in Cairo - that neither the Congress nor President Sadat is getting the kind of aid program they expected when assistance was resumed after the 1973 Middle East war.
Economic aid was promised by former Secretary of State Henry A. Kissinger to induce Sadat to participate in the shuttle diplomacy that followed that war and to accept the Sinai disengagement agreement. The aid program was envisioned as giving Sadat immediate, visible results to show the Egyptian people that his policy was correct and to strengthen his political position. In the words of one informed American, it was to have been a "high velocity, quick impact program," run by a small staff that would keep a low profile.
What has evolved over three years is a complicated intricate program to aid the long-term development of the Egyptian Economy, with a commitment to keep the United States deeply involved in that effort for the foreseeable future.
"We're going to remain in this effort for years ahead, for a long time to come," said Gilligan. He said he had informed Sadat at their meeting here today that the emphasis of the U.S. program was shifting away from the immediate projects that might yield political gain to well-planned, long-term efforts to rebuild the national economy - projects that may not come to fruition until after Sadat has left the presidency.
The tough questions about aid to Egypt that have been raised during hearings on the AID budget in Congress, he said, were to be expected because "this was presented to Congress not as a development program but as a political payoff. Now they're saying, "we paid for peace, where is it?"
This is not to suggest that three years of rapidly growing America economic aid to Egypt have not produced any results.
Bonds purchased with American funds - buses and electrical machinery, margarine and bulldozers, tractors and herbicides - are flowing into the country. After an initial period in which AID staff members here had difficulty finding suitable projects on which to spend the money that Congress was giving them, contracts are being signed for major industrial facilities such as an electric power station for the city of Ismailia.
The nature of the American relationship with Egypt has changed substantially from what it was to be when Kissinger established the aid program. The United States has now undertaken an extended commitment not just to keep Sadat afloat but also to reshape this country's economic future.
Egypt has a reputation for getting less than full value out of the money given to it by the United States, the European countries and the Arab oil states, but Gilligan said it had been made clear to Sadat that "the donors won't stick with him" if this continues.
He said Sadat responded that he was sometimes forced to set aside sound long-range plans because of "political pressures for immediate relief," which in contemporary Egyptian terms means using development capital to buy food for the masses.
While the United States and other donor nations have condemned this practice, the Americans have also yielded to it. After the food price riots that rocked the Sadat government in January, AID took $190 million out of capital development projects and allowed the government to use the money for food.
Any partial listing of the AID projects gives an idea of how deeply the United States has become involved in the Egyptian economy.
In the next fiscal year, American funds will be paying for social work training, family planning, rehabilitation of the country's major textile mill, port improvement, poultry farming, railroad cars and a bank that will provide loans for the country's private-sector economy.
For some time, as the program grew, political officers at the embassy expressed fears that the AID mission here would take on the characteristics of those in Indochina, with teams of advisers but in the field. Kissinger's insistence that the staff be kept to a minimum had faded even before his departure from office and as an Embassy officer observed, "You can't really run a billion-dollar program with a low profile."
Still, all but one of the AID staff work in Cairo and they are said to be carry out the projects, not expect the Americans to do the work for them.
After his tour today, which included a visit to a suspiciously clean and well-painted village in the Nile Delta, Gilligan said, "It's fair to say that if we don't help to stabilize the economic situation here, we're going to have a highly volatile situation over a long period of time."
He said that "Egypt is a powder keg" which the United States and other donors have to help out of "enlightened slef-interest." He said that Egypt's economy is "not out of the woods" but that he believed the prospects for improvement were greater than a year ago. He said he also told Sadat that if Egypt wants American private investors to come in and do business here, they have to be assured that this country is not preparing for a new war.
Gilligan's visit coincided with the arrival of the first of 1,600 buses that Egypt is buying with aid funds from Ward Industries of Conway, Ark.
The contract with Ward Industries, which is for $69 million, also provides for Ward to train Egyptian mechanics and supply spare parts.