Capital projects : U.S. aid and trade in Egypt

commercial interests while promoting development overseas. This study examines total U.S. aid and trade relationships with Egypt between 1975-91, concluding that U.S. economic assistance has not been effective in generating commercial exports to Egypt. The fundamental problem has been stagnation in Egyptian imports overall. Egypt's policies have impeded the growth of export earnings, thus limiting the country's capacity to buy goods. Particular assistance modalities, such as capital projects, cannot overcome this constraint. Nor has the fact that the United States provides the bulk of bilateral aid to Egypt given it a privileged share of Egypt's capital equipment market. Compared with its competitors, U.S. market penetration for capital equipment is actually lower in Egypt than in developing countries generally. These findings, it is noted, are similar to those of a case study (PN-AAX-281) of nine U.S. capital projects in Egypt, which found that the projects produced little follow-on business for U.S. firms. In sum, neither total A.I.D. assistance nor capital project assistance to Egypt seems to have greatly developed or expanded U.S. commercial (non-aid-financed) sales in Egypt. (Author abstract, modified)