"The US Department of State and reform in the region" - Alan P. Larson, undersecretary for economic, business and agricultural affairs at the US Department of State - (February 26, 2004)

"Ingredients for a Successful Reform Program" was the topic of the talk given by Alan P. Larson, undersecretary for economic, business and agricultural affairs at the US Department of State, to a special lunch for members of AmCham Egypt on February 26.

Larson opened his talk saying that US initiatives for the region aim to create greater economic and educational opportunities, while at the same time expand citizens' role in shaping their countries. The development of those initiatives follows an extensive process of consultation, as well as exploration of the findings of sources like the Arab Human Development Report, he said, underlining that plans were not "hatched first, then followed by consultation."

Larson contested the perception that US and EU visions for reform in the region are highly distinct, offering that "there is a large degree of convergence" between the two.

In view of what he called "signs that people and leaders in the region are interested in accelerating the reform process," he said the US 's goal is "to be a good partner" in supporting those endeavors.

The undersecretary hailed the Egyptian government's efforts to reform the private sector, the changes to the customs regime and the floating of the pound as "signs that Egypt is moving ahead on reform." He also mentioned the de-listing of a number of companies on the Cairo and Alexandria Stock Exchanges, following their failure to comply with disclosure procedures, as an instance of the government's commitment to transparency in economic dealings.

Nonetheless, he asserted that there is more work to be done in enhancing the free flow of information, accountability and good governance, saying that a lack of transparency creates "a form of uncertainty that can be very damaging" to the business environment.

As for the direction of the US-Egypt relationship, he said an "economic relationship whose fundamental core is economic development assistance is not going to be a vibrant relationship." Instead, the relationship needs to develop toward emphasizing private sector interactions because "private capital can make Egypt the powerhouse of the 21 st century."

In response to questions on Egypt 's aspirations to open negotiations for an FTA with the US , Larson said, "I believe the important strategic relationship will not be complete until there is a FTA." Such an arrangement would be "a rock in the relationship and provide an organizing principle for further reform." Embarking on negotiations for an FTA "is now a matter of timing and how to ensure there will be success." However, he cautioned that the process is far from simple. "For FTAs with the US , negotiations are extraordinarily complex, dealing with services, manufacturing, agriculture, investment, IPR [intellectual property rights], transparency procedures and other activities."

In closing, he reaffirmed the necessity of reform in light of the demands of the increasingly global economy. "The most successful countries are those that decide to reform faster - to take those steps now."

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