August 17, 2013 in Opinion

Policy: Should U.S. cut aid?

Pro: Money can put Egypt back on track toward a successful democracy
James Jay Carafano
 

WASHINGTON – A compelling case for cutting off aid to Egypt could have been made before President Mohammed Morsi was bounced from office. After all, Morsi was well on his way to placing the country under an Islamist regime – forever.

That’s why he shut down foreign non-governmental organizations, curtailed civil rights and decreed the presidency superior to the courts. When the military stepped in, Morsi was in the process putting Muslim Brotherhood functionaries into 12 provincial governorships and more than 40 ambassadorships. A permanent Islamist takeover was well underway.

While striving to turn Cairo’s experiment in democracy on its head, Morsi made absolutely no effort to address the fundamental problem that had driven Egyptians’ revolt against the previous regime in the first place: the nation’s appalling lack of economic freedom.

Not only is the Egyptian economy in shambles, its government lacks all the instruments necessary to promote real economic growth.

Consider the poor state of property rights in Egypt and the rampant corruption. These drove hundreds of thousands into the streets during the Arab Spring, yet Morsi did nothing to rein in these problems.

In practice, Morsi replaced a secular authoritarian regime with an Islamist authoritarian regime. By presenting a downright threatening face to non-believing tourists, he drove the nation’s basket-case economy down even further even as he allowed the terrorist problem in the Sinai to spiral out of control.

Clearly, the Arab Spring had sprung. Pulling the plug on American largesse at that point would have made sense.

The United States should offer foreign aid for one reason and one reason only: to serve American interests. If foreign aid isn’t doing that – and doing it cost-effectively – Washington should shut its checkbook and walk away.

That would have made sense a few months ago. But with Morsi out of the picture, Egypt now has a “do-over” in its quest for freedom, peace and prosperity. America should support a second chance for Egyptians.

It is certainly in our interest to do so. A stable, peaceful Egypt is a huge factor in keeping the Middle East from melting down.

As America discovered, direct intervention in the region is neither cheap nor easy. Much better that nations in that part of the world keep it together among themselves. U.S. assistance can be a relatively inexpensive approach to a very challenging strategic problem.

Of course, Egypt may mess up again. Aid, however, is a pretty blunt instrument. It is worth waiting a few months to see if the Egyptian military follows through on re-establishing a civilian government free from dominance by the Muslim Brotherhood. If not, then Washington can simply stop bankrolling a failed revolution.

Meanwhile, though, Washington needs to get its own act together. The U.S. law banning aid in the event of a military coup is pretty clear. President Obama ought to respect it. After all, it doesn’t look right to promote the rule of law abroad while ignoring it at home.

To do this right, Obama needs to ask Congress for an extension of aid to Egypt. The authorizing legislation should set very clear expectations for what Egypt must do to continue receiving U.S. assistance.

For example, Egypt must: respect its treaty with Israel; safeguard the human rights of its own citizens; re-establish civilian rule, and cooperate in fighting terrorists – not only in Sinai but elsewhere in the region.

Beyond direct economic aid, America can help Egypt by encouraging its new government to adopt a serious economic freedom agenda. In the long run, unleashing the potential of the nation’s human capital is much more efficacious than repeated injections of foreign capital.

U.S. aid should be an economic Band-Aid, not an entitlement for the new Egyptian government. Right now, however, the Band-Aid approach makes sense.

James Jay Carafano is vice president for foreign and defense policy studies at the Heritage Foundation.

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