Important piece in the NYT by Steven Lee Myers, about the US going ahead with $1bn debt forgiveness (out of $3bn, mostly low-interest Food for Peace loans):
Mr. Morsi and his Islamic movement, the Muslim Brotherhood, have since made it clear that the struggling economy is their most urgent priority, brushing aside reservations about American and international assistance and outright opposition to it from other Islamic factions.
American officials say they have been surprised by how open Mr. Morsi and his advisers have been to economic changes, with a sharp focus on creating jobs.
“They sound like Republicans half the time,” one administration official said, referring to leaders of the Muslim Brotherhood, which was long banned from office under the former president, Hosni Mubarak, a close American ally.
Hoping to capitalize on what they see as a ripening investment climate, the State Department and the U.S. Chamber of Commerce will take executives from nearly 50 American companies, like Caterpillar and Xerox, to Cairo beginning Saturday as part of one of the largest trade delegations ever. The officials and executives will urge the government to make changes in taxation, bankruptcy and labor laws to improve the investment climate.
“It’s important for the U.S. to give Egypt a reason to look to the West, as well as the East,” said Lionel Johnson, the chamber’s vice president for the Middle East and North Africa.
The Brotherhood has spoken a language on the economy that Americans like to hear for a while now: entrepreneurship, liberalization, public-private partnerships etc. In reality I suspect we will continue to see some protectionism in the Egyptian tradition (on pharma, some agricultural produce, price controls for steel, cement etc.) that is perfectly understandable. But what's interesting here is how things are being framed as a need to "balance" the East — the GCC countries of course with their easily spent cash, but also China. Makes Morsi's trip there and supposed $4-6bn in contracts look smart.