John Kerry announced the U.S. will give $250 million to Egypt on Sunday as a reward for President Mohammad Morsi's pledges for economic reform. If his government actually succeeds at reforming the country's economy, the U.S. will give him close to $1 billion.
Yes, you read that right. The President announced last year the U.S. would provide $1 billion in economic relief for Egypt. This $250 million is the first payment from that plan. It's already been approved by Congress, so it's not like it was a surprise handshake deal Kerry made on Sunday. Morsi had to sit down and convince Kerry he was serious about economic reform in the Middle Eastern country before Kerry would approve the payment. At some point over their meeting Sunday, Morsi succeeded, and so now he gets paid.
This aid package is the first step towards Morsi's ultimate goal: closing a $4.8 billion loan package from the International Monetary Fund. Egypt is desperately trying to get the loan approved to deal with an ever growing budget deficit, but talks have stalled over the last year. The negotiations will resume this month when the IMF team returns to Egypt to try and get this deal done. "The United States can and wants to do more," Kerry said in a statement. "Reaching an agreement with the IMF will require further effort on the part of the Egyptian government and broad support for reform by all Egyptians. When Egypt takes the difficult steps to strengthen its economy and build political unity and justice, we will work with our Congress at home on additional support."
But Kerry warned that the rest of the U.S. financial aid package is not a guarantee. The U.S. will keep a close eye on his government through the scheduled April elections to make sure everything in Egypt seems on the up-and-up. "The path to that future has clearly been difficult and much work remains," Kerry said. Morsi has faced criticism over the last year for over-extending his Presidential powers as the first freely elected President in Egypt. Instead, they say, his government has behaved more like former President Honsi Mubarak, who will face a new trial nine days before the coming election. The U.S. will most likely be watching very closely.