Reaching out to the south
Development and job creation efforts in Assiut have borne fruit. Sherine Nasr tours the southern governorate with USAID
Of all the governorates in Upper Egypt, Assiut is perhaps the best off. Known for its history as a centre of trade and leading a strong cultural movement sponsored by its 50-year-old university, Assiut deserves its title as the "Heart of Upper Egypt".
But there are other, more recent, causes for Assiut's privileged status. The development programmes led by local NGOs and international donors have become so well-established they can be models for job creation and poverty alleviation for other Upper Egyptian governorates.
For example, the Assiut Businessmen's Association (ASBA), established in 1996, has extended 100,000 loans valued at over LE202 million to 49,000 entrepreneurs operating in the Assiut and New Valley governorates. According to Gamal Abdel-Metaal, ASBA's chairman, women make up 58 per cent of the recipients.
Established with the assistance of the United States Agency for International Development (USAID), ASBA has managed to operate five programmes including the Small and Micro Enterprises Project (SME), the Poverty-Lending Project and the Medical Development Project.
Established in 1996, the SME offers financial and technical support to develop small and micro enterprises. While the project's fixed assets are estimated at more than LE6 million, Abdel-Metaal said, the total operation cost has reached over LE9.5 million.
"When we first started, we had 3,959 loans disbursed. Now, the number of loans has jumped to 52,719 loans at a repayment rate of 99 per cent," Abdel- Metaal said, adding that the loans are expected to increase.
Through its eight branches in Assiut, the SME project has managed to provide some 89,000 permanent and temporary job opportunities.
The Poverty-Lending Project or the "Blossoms of Good-Will", as locals like to call it, was launched in 1999 to provide loans to the poorest of the poor women in the villages and disadvantaged areas in order to start or expand income-generating activities.
"We started in three villages with a sum of LE18,850 in loans and now the project has expanded to cover 110 villages in 13 governorates, with a loan figure that has reached LE12.6 million," said Sanaa Farghali, the project's manager.
In addition to its income-generating activities, the project provides many non-financial services, including healthcare, women's legal rights consultancy, environmental awareness and illiteracy alleviation.
The ASBA is looking forward to more co-operation with USAID. "More funds are needed to meet the increasing demand for the SME project. The available fund nowadays covers only 30 per cent of actual demand," Abdel-Metaal said. USAID had earmarked $357,000 in funds for the Poverty-Lending Project, not considering the operation costs, he said. More funds are also needed to finance the expansion of ASBA in other governorates.
As part of its commitment to creating more job opportunities and contributing to economic growth, the USAID in Egypt has adopted a Small and Micro Enterprise Programme that was first launched in 1988. Since then, over 350,000 Egyptian entrepreneurs have benefited from US-financed credit, technical assistance and marketing support. Loans for smaller businesses, with less than 15 employees, are administered through self-sufficient, non-profit Egyptian foundations, and enable enterprising men and women to buy raw materials, upgrade equipment, invest, introduce expansions to their business and hire staff.
"By expanding their businesses, these entrepreneurs not only increase their productivity, sales and personal income, but also build and contribute to Egypt's growing economy," said US Ambassador David Welch, on a recent visit to Assiut to review USAID projects.
Existing owner-operated businesses, defined as either small (six to 15 employees) or micro (five or fewer employees) enterprises, receive loans under this programme, which range from LE500 to LE5,000 for micro enterprises and from LE5,000 to LE15,000 for small enterprises. According to a USAID source, about 850,000 loans totalling LE2.1 billion have been disbursed, creating approximately 170,000 jobs. "This model has been replicated, with technical advice from the Egyptian foundations, in a number of countries in the region," the source said.
During his two-day visit to Assiut, Welch confirmed that the philosophy of USAID in Egypt would remain the same. "We will keep our strategic partnership to this country. We will focus on enhancing economic opportunities through increasing trade liberalisation and creating more job opportunities," the US ambassador said.
However, issues related to empowering civil society, governance and political participation would be given more attention. In an exclusive interview with Al- Ahram Weekly, Welch said, "We would like to support more democratisation in Egyptian society, which I would call political participation."
Welch added that transparency should not be a sensitive topic because "people have the right to know and to have a stake in their future".
NGOs in Upper Egypt are typical political participants. "Civil society is the engine of change. We want to be supportive in this area," he said.
Pressed to comment on the economic relations between Egypt and the United States in light of the two countries not recently seeing eye to eye on various political issues, Welch emphasised that economic relations will grow despite the many political agreements or disagreements. "Of course we will have disagreements from time to time. But Egypt will remain one of our most strategic partners in the area," he said.
However, Welch indicated that Egypt would have to make some difficult decisions and stick to those decisions in order to make the necessary move towards an open-door economy. "Egypt can emerge as a growing tiger. Yet, in order to do so, it has to open up faster and the rate of economic growth has to be as fast as in other places in the world. Liberalisation of the economy is perhaps the most important step to take towards this end," Welch said. According to him, "Globalisation is a reality and Egypt has no choice but to open up."
C a p t i o n : Mr and Mrs Welch met benefactors of the Poverty Lending Project when in Assiut
Al-Ahram Weekly Online : 19 - 25 December 2002 (Issue No. 617)
Located at: http://weekly.ahram.org.eg/2002/617/ec2.htm