Adli Mansour has been sworn in as Egypt’s interim president. But donors remain cautious.
Following the removal from office on Wednesday of Egyptian President Mohammed Morsi, U.S. President Barack Obama immediately asked relevant U.S. agencies to review assistance to Egypt.
But other donors, such as the European Union and the World Bank, prefer to wait and see.
“So far we are following how the situation develops; no immediate impact on the operations. It is premature to draw any conclusions. We really need to see how the situation develops,” Peter Stano, spokesman for European Commission member Štefan Füle who handles the bloc’s Enlargement and European Neighborhood Policy, told Devex.
In 2012, a few months following Morsi’s win in the country’s first democratic presidential elections in June, the EU announced a €5 billion grants and loans package for Egypt. That package included a possible €200 million in budget support aimed at assisting the country toward social and economic reforms.
The budget support provides evidence of donors warming up to Egypt. The EU has not provided budget support to the country since early 2012 “due to the slowdown in reforms and the lack of ownership by the different governments that Egypt has had since the uprising,” Stano explained.
But the EU spokesman noted that planned support has been put on hold “for the time being” given the stalemate in Egypt’s negotiations with the International Monetary Fund over a $4.8 billion loan request and “the bumpy democratic transition” — part of the funding is instead being used to support social programs implemented by the bloc’s civil society partners. Also untouched is the €500 million macro financial aid offered in September by European Commission President Jose Manuel Barroso that is conditioned to the IMF deal.
The World Bank, meanwhile, hopes to continue its own programs in the country worth over $4 billion mainly in loans, although it is also trying to figure out how events will actually play out in Egypt.
“We’re in the middle right now of trying to understand just what did happen and what the legal status is of the government that’s in place,” World Bank chief Jim Yong Kim told reporters on Thursday in Chile.
The Washington, D.C.-based institution has at least 24 ongoing and planned projects in Egypt through its many arms, such as the International Finance Corp., focusing on energy, transport, agriculture and job creation.
“The only thing that I would say right now is that we really urge everyone to stay calm and to have a dialogue and to move as quickly as possible to having re-elections … Whatever the political situation, what we know is that there are still many people living in poverty, many people who need the kind of support that the World Bank is providing,” Kim noted.
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