UA-R-GC-1914-01-01-1990-05_Page-012

President's Report Page 4 May, 1990 The most important development is that AID believes it has Egyptian approval not only to provide the required pounds this year but to replenish the endowment annually to the $ 50 million level, having regard to anticipated future drops in the value of the pound. The Congress had requested, in committee language, that this be achieved, but it was not part of the legislation. AID believes it will be covered not in the formal Memorandum of Understanding that governs the endowment but in a side letter between Minister Makramalla and AID Director Brown. The importance of the decisions on the endowment can easily be judged by these figures: the original amount of the endowment was L.E. 50 million. The addition required this year to rebuild it to $ 50 million will produce an infusion, at L.E. 2.7 = $ 1, of L.E. 85 million (i.e. more than the original amount). The "replenishment" feature will produce in 1991 a further L.E. 15 million if the pound goes down to L.E. 3 = $ 1, as we expect it to do. Thus, by the middle of 1991 the total pounds in the endowment should be in the range of L.E. 150 million. This "replenishment" feature, added to the Board's policy of using only 5% in interest for current expenditures, will accordingly give us double protection in maintaining the value of the endowment against the declining purchasing power of the pound, not only in 1991 but as long as significant U.S. aid to Egypt is continuing. AID now expects the new endowment money to be provided to it by July. If so we also will have an additional increase in budgeted income for next year, as we had calculated on a September 1 date, with income for AUC only starting in December. We could not have had better support than we have had from the Ambassador, and it is due to similar firm support and efforts of AID Director Brown that the highly important "replenishment" feature is on the verge of being implemented. STUDENT WITHDRAWAL is the only other current issue I believe to be of significance. Last year we discovered that the rate of withdrawal of AUC students, while not high by American standards, was significant. We also ascertained that the highest rate was at the ELI and freshman level. Both last year and this year we accordingly accepted more than 800 incoming students with the objective of "netting" 800 students by the end of the year, that being the number on which financi al plans - including salary levels and number of faculty - ha d been made