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$50 billion later, taking stock of US aid to Egypt

Egyptian President Hosni Mubarak meets with President Bush Sunday in Crawford, Texas.

By Charles LevinsonContributor to The Christian Science Monitor / April 12, 2004


Amid fresh fighting by US forces in Iraq, Sunday's meeting between Egyptian President Hosni Mubarak and President Bush at his Texas ranch serves as a reminder of America's deep involvement in this other key Arab nation.

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Aid is central to Washington's relationship with Cairo. The US has provided Egypt with $1.3 billion a year in military aid since 1979, and an average of $815 million a year in economic assistance. All told, Egypt has received over $50 billion in US largesse since 1975.

The money is seen as bolstering Egypt's stability, support for US policies in the region, US access to the Suez Canal, and peace with Israel. But some critics question the aid's effectiveness in spurring economic and democratic development in the Arab world's most populous country - a higher US priority after Sept. 11, 2001.

"Aid offers an easy way out for Egypt to avoid reform," says Edward Walker, the US ambassador to Egypt from 1994 to 1998. "They use the money to support antiquated programs and to resist reforms."

Egypt's economy is deeply troubled. Unemployment has climbed to 25 percent, foreign investment last year dropped to a 20-year low, and until recently the currency was losing value on a weekly basis. Rather than helping, American aid is "depressing the need for reform," according to former Ambassador Walker.

Meanwhile, the Mubarak regime is inching towards political reform and democratic pluralism at a pace so slow that many question the sincerity of the government's pro-democracy rhetoric.

In the past, issues like democracy and economic reform were of secondary concern to policymakers looking to shore up a friendly government. Support for Egypt jumped after it made peace with Israel in 1979.

However, US policy has changed since 19 hijackers demonstrated that bolstering stable, pro-American, but undemocratic regimes in the Middle East affected America's security. The ringleader and four of the 9/11 hijackers were Egyptian.

In 2002, the US National Security Strategy articulated a new aid doctrine, saying that money should go to "countries whose governments rule justly, invest in their people, and encourage economic freedom."

Colin Powell's Middle East Partnership Initiative (MEPI) is refocusing funding priorities in the Middle East - including those at USAID's 300 person Cairo office - on economic reform, democracy, education, and women's issues.

"We're shifting our emphases to reflect changes in US foreign policy," said Ken Ellis, the director of USAID Egypt.

USAID is a government-to-government economic assistance program. It operates on the premise that economic development will spur democratic development. In the words of Mr. Ellis, "There is a correlation between strong, vibrant, open economies, and a strong, vibrant, open political system."

But many say that USAID needs to alter its approach if it is going to push successfully for substantive reform in Egypt. Ismail Sabry Abdallah is the former Egyptian minister of development and planning, and negotiated the first USAID contract on behalf of Egypt in 1974.

Now an independent economist, Abdallah says USAID needs to decrease support for the Egyptian government, and increase its support for civil society in order to realize the sort of economic and political reforms that the United States and the Egyptian people desire.