Egyptian and Tunisian Enterprise Funds Need Continued U.S. Support and Oversight, Can Be Profitable Economic Development Tools, Says Ros-Lehtinen

Egyptian and Tunisian Enterprise Funds Need Continued U.S. Support and Oversight, Can Be Profitable Economic Development Tools, Says Ros-Lehtinen

“Last month, I was proud to introduce, alongside Ranking Member Deutch and a number of our colleagues, a bill that would authorize a new enterprise fund for another U.S. ally: Jordan.”

(Washington, DC) – U.S. Rep. Ileana Ros-Lehtinen, Chairman of the Subcommittee on the Middle East and North Africa, made the following statement today at a subcommittee hearing entitled, “Grading the Egyptian and Tunisian Enterprise Funds.” Statement by Ros-Lehtinen:

“When the Obama administration proposed establishing enterprise funds in Egypt and Tunisia in 2011, I admit that I was skeptical. Previous versions of these U.S.-funded entities, first established by the George H. W. Bush administration following the breakup of the Soviet Union, had a mixed track record. Establishing new funds in Tunisia and especially in Egypt, where the Muslim Brotherhood had just taken power, seemed like a risky proposition. So despite a rocky start, I’m happy to see that these funds have made some positive progress.

And one thing we learned from the previous reviews and hearings on enterprise funds is that the capabilities of each fund’s chairman and board of directors may be the single most determining factor of that success. So I commend both Jim and Bo for their tremendous work over the past few years – we are grateful to each of you gentlemen for your time and for you leadership

And as Jim and Bo lay out in their written testimony, the road getting here was not easy, especially working in two countries with rapidly changing political conditions, difficult regulatory environments, and in need of serious economic reforms. Although both funds are still in relatively early stages, it is an opportune time to provide Congressional oversight and take a look at how each fund is fulfilling its dual mandate: making a profit and developing their respective private sectors.

In Egypt, we are finally seeing some positive economic signs after years of being on what seemed to be the edge of a crisis. Foreign direct investment is increasing, investors are buying Egyptian bonds, and the foreign currency shortage has abated. With difficult austerity measures already in place, it is critical that President Sisi continues to make the hard decisions necessary for long-term growth.

In Tunisia, the government is also taking important steps to reform the economy, including raising interest rates and launching an initiative to tackle corruption. In addition to corruption, however, there are still many other concerns, including underemployment of educated Tunisians, an extremely high unemployment rate among working-age youth, and a tourism sector that has still not recovered from several devastating terrorist attacks.

Reforming the economy in both Egypt and Tunisia is no easy task and it’s going to take an extraordinary amount of political will from each of their governments – in addition to international assistance – to make the necessary changes. That is one reason why so many people are excited about the prospect of these Enterprise Funds and the economic assistance opportunities that they can provide. In Egypt’s case, the Sisi government continues to prevent programming of regular U.S. economic assistance through both international and domestic NGOs, and we still have a backlog of hundreds of millions of Economic Support Fund dollars. And in the case of Tunisia, I am concerned that we are not providing the level of assistance that is required to meet U.S. stability and security goals in the region. The President’s proposed cuts to both the FMF and ESF accounts for Tunisia would unnecessarily hinder our ability to assist with our partner’s crucial democratic transition.

As important U.S. allies, both Egypt and Tunisia’s economic well-being are critical to U.S. interests, and it is important that we find ways to support them any way we can. Last month, I was proud to introduce, alongside Ranking Member Deutch and a number of our colleagues, a bill that would authorize a new enterprise fund for another U.S. ally: Jordan. With the Chairmen of the Egyptian-American and Tunisian-American Enterprise Funds here with us today, I am hoping that, in addition to answering questions about their funds and addressing any concerns Members may have, they will also provide recommendations for setting up a fund in Jordan.

While enterprise funds should not be looked upon as a panacea, it is clear that they can be powerful drivers of economic growth and spur the necessary development of sustainable private sectors – and turn a profit at the same time. I look forward to hearing our witnesses’ thoughts about enterprise funds as a foreign policy tool as well as any lessons that they may have learned along the way.”