The Illusion of Aid

US_aid_mouse_trap_b

By Muhammad Mustafa

al-Ahram | Watching America

Translated from the Arabic by Magda Gilpin with editing by Peter McGuire for Watching America

People want to put a permanent end to American aid; this is the mantra raised by various classes of Egyptian society a year after the revolution and termination of the old “servile” regime that — as we were being convinced on daily basis — neglected the rights of the country and its subjects.

It has become pressing to earnestly and “calmly” evaluate both the military and economic aspects of American aid in order to react to the possibly sincere or possibly cynical American threat to cut aid to Egypt.

Using these threats, the U.S. aims to put pressure on Egypt, particularly following recent raids on civil society groups that were illegally operating in Egypt. Egypt accused the groups of receiving funding from abroad to manipulate the country’s destiny, and detained those in charge of the groups. By threatening to cut aid to Egypt, the U.S. also intends to put pressure Arab Gulf countries so they withdraw from their pledges to help Egypt.

It is necessary to make a decision whether to keep or renounce American aid, based on compliance with Egypt’s interests, without waiving its sovereign rights and while respecting international agreements and contracts!

The story of U.S. aid began after Egypt and Israel signed an American-sponsored peace treaty in 1979. At the time, the U.S. announced its commitment to grant economic and military aid to both countries to ensure their adherence to the articles of the treaty.

From then on, the aid encouraged suspicions that Egyptian political and economic decisions were influenced by the American and Israeli agenda in the region. That Egypt, after Israel, is the second biggest recipient of U.S. economic and military aid, totaling about $635 billion since 1979, particularly influences this suspicion.

Military aid reaches $1.1 billion annually, expended on arms, maintenance and spare parts for military equipment. Fair evaluation of its pros and cons shows that America is Egypt’s biggest weapons manufacturer. It enhances our weapons capability and we take advantage of American experience during training missions.

However, the cons are also numerous. Egyptian armament has become dependent on the American market; it lacks diversity as well as efficient power or quantity in comparison to the military aid directed to the Israeli enemy. Aid to Israel has made its development, offensive capabilities and ability to diversify from global markets superior. Additionally, the fact that U.S. aid provides us with primitive weapons means that Egypt or other Arab states do not represent a threat to Israel. If the military aid is blameless, it is for two reasons: it has been maintained and has not been reduced from its inception, and it is crucial to the army’s subsidized armament. A reduction in U.S. aid would perhaps be an impediment to the modernization and its fighting abilities of the Egyptian military.

As far as the economic aid is concerned, there is little need for it because of its continuous reductions and because spending it actually profits the Americans, rather than Egypt.

For example, the aid has comprised expenditures of $67 billion on imports of American commodities; $59 billion on infrastructural projects including irrigation, sanitation, energy, communication and transportation; $49 billion on basic services like healthcare, family planning, education, agriculture and environmental programs; $39 billion on food aid; and $3.3 billion in cash transfers, technical aid for political reform and structural adjustment, training and the provision of technical consultation.

Since 1999, America has decided to reduce economic aid by approximately 5 percent, or about $40 million, annually. In 2009, the U.S. Senate voted to reduce economic assistance to Egypt, although military aid was retained without amendments. That vote brought American economic assistance to almost a half of its 2006 value of $815 million. In 2011, assistance fell again, to only $250 million.

The primary benefit of economic aid to Egypt has been the maintenance of the country’s stability: aid programs assist in providing citizens with services that the state is obliged to provide, like infrastructure projects, water desalination and sewage systems.

In the eyes of Egyptian citizens, the aid was also maintained the honor of the old regime, which was always deceitfully praising its achievements in public service delivery. The aid’s negative effects are visible in the lack of Egypt’s eligibility to determine the form of its delivery. Thus, the aid neither jump-started Egypt’s development nor created a strong economic sector, because it failed to achieve self-sufficiency by financing strategic crops like wheat and cotton.

Aid also encouraged the spread of corruption through rewards granted to ministers and advisers and to studies. America directly benefits from the aid to Egypt by employing cadres of American technicians and consultants with their equipment to carry out any projects funded through the aid.

Furthermore, in exchange for every dollar spent by the United Sates on development in Egypt, Egypt spends $37 on U.S. imports. This means that the aid represents one-thirtieth of what Egypt is buying from the U-S. So what would the United States of America do if it cut the current $250 million of aid and its exports to Egypt, worth $6.835 billion, was affected?!

Now, after putting both military and economic aid on the scale for a fair evaluation, and considering the strong tone used by the United States in its threats to cut or reduce the aid — which constitutes violation of Egyptian sovereignty — the following questions have to be answered definitively:

Is it possible to renounce American assistance? The short answer is “yes.” Because American assistance stands for less than .007 of the Egyptian national product. The assistance is $1.5 billion and Egypt’s nominal GDP is $216 billion and its purchasing power is $496 billion.

Is it possible to organize a substitute to this assistance from local and national sources? The answer again is “yes,” but only under certain conditions: 20 million pounds would need to be collected in two days on the initiative of Sheikh Muhammad Hassan, along with continuous contributions from those working abroad and respectable businessmen, daily deductions from the salaries of the employees in the country and most importantly, the recovery of the Egyptian economy through remedying its previous lesions of looting, corruption and bribery to enable the return of tourism and foreign investment.

Those who know Egyptian laws and are aware of Egypt’s sizable resources are able to carry the responsibility for this revolutionary decision. Who has the courage to implement it?

 

Sources: al_Ahram (Arabic) | Watching America (English)
http://www.ahram.org.eg/Free-Opinions/News/133994.aspx
http://watchingamerica.com/News/147227/illusion-of-aid/

 

 

Leave a Reply