US argues over foreign aid policy along with its debt problem

Despite change in the Middle East, the US is slashing its aid plans and placing strings on air to the Palestinian Authority, Lebanon and Yemen – but no cuts are proposed to the $3bn aid package to Israel.

WASHINGTON // With the same acrimony it has debated the debt limit, US Congress is arguing over how much financial help Washington should give foreign governments, civil society groups and humanitarian aid organisations.

Last year, Washington approved US$55.8 billion (Dh205bn) in foreign aid. This year, despite a period of unprecedented change in the Middle East and North Africa, the Republican-led Foreign Affairs Committee of the House of Representatives already has approved legislation that calls for $8.6 billion less and attaches political conditions on what remains.

Nothing will be decided before September, and it is unlikely the measure by the House committee will be adopted by the Democrat-led Senate, the other chamber of US Congress.

Some cuts to foreign aid look likely. Equally worrying to some, such as Stephen Cook of the Council on Foreign Relations, is that the bill reflects the narrow thinking on international issues of many in the 435-member House of Representatives, and especially, how they view the Arab Spring.

"The language suggests what people genuinely believe," Mr Cook said. "It's clearly not nuanced. It takes what has changed [the Arab Spring] and turned it into the worst possible outcomes."

Under the proposal passed by the House panel, chaired by Ileana Ros-Lehtinen, an ultraconservative Republican from the state of Florida, aid to the Palestinian Authority, Lebanon and Yemen would be slashed if Hamas, Hizbollah or other groups on the State Department's list of terrorist organisation participate in government in any way.

The draft legislation also urges all Arab states to normalise relations with Israel and end the Arab League boycott of the country. Any country that participates in the boycott should be faced with "concrete steps" including possible restrictions on purchases of US arms.

By contrast, no cuts were proposed to the US$3.075 billion aid package to Israel. Instead, the committee urged the administration to recognise Jerusalem as the undivided capital of Israel and move its embassy there from Tel Aviv.

As for Egypt, the bill would condition aid to Cairo on its willingness to observe its peace treaty with Israel, prevent smuggling into Gaza and reject any role for the Muslim Brotherhood in government.

Yet with the Muslim Brotherhood a likely political player in any democratic Egypt, such restrictions appear to contradict the Obama administration's policy for support for democratic change in Egypt.

In a speech in May, President Barack Obama said international efforts to advance economic development in the region were essential to ensure that countries like Tunisia and Egypt make a smooth transition to democracy.

Such efforts, especially in Egypt, remain at the discussion stage, in part because of resistance there to any hint of international interference in internal Egyptian affairs, and in part because a plan by the US Senate to create a pool of funds to support investment and economic growth has stalled.

Joseph Lieberman, one of the senators promoting the programme, last week acknowledged that any movement on creating the funds before September was unlikely and a major aid package to Egypt was not on the cards. "In the current political climate, billions of dollars of new bilateral assistance are not likely to be flowing from the US Treasury to Cairo for the foreseeable future," Mr Lieberman said.

He cautioned, however, that the international community could not just stand by and do nothing, either: "I don't want to look back in a few years time and say we missed an incredible opportunity to bring this part of the world into modernity, democracy and rule of law."

Mr Lieberman was speaking at a presentation last month of a report on Egypt's economy and the international community's role in it.

The report, "Egypt's Democratic Transition: Five Important Myths about the Economy and International Assistance", was prepared by the Rafiq Hariri Centre for the Middle East, the London-based Legatum Institute and the Carnegie Endowment for International Peace.

One of the co-authors of the report, Carnegie's Uri Dadush, a former World Bank official, said Egypt's economy was in much better shape than generally assumed and that the international community should not be too focused on emergency aid.

"The most important thing the international community can do is create a framework within which Egypt's private sector can integrate better in the global market," Mr Dadush said. An emphasis on forging trade pacts and free-trade agreements would be an easier sell to a reluctant Congress, he added.

Mr Dadush conceded, however, that some foreign assistance for private sector development in Egypt is necessary.

Yet under the House panel's proposed foreign aid package, such aid would only provided if a certain kind of government emerged in Cairo.

To Mr Cook, the implications of the US foreign aid programme envisioned by the panel are plain.

"Promoting democracy is not the emphasis," he said. By stressing instead the honouring of agreements with Israel in terms more akin to the Mubarak era than the new Egypt, these politicians "think perhaps a role for the armed forces in politics is better than a democratic transition."

That would be at odds with much of Washington's rhetoric during the Arab Spring, Mr Cook said.

"If we want to support democracy in Egypt, we should support democracy - in word and deed."

Published: August 2, 2011 04:00 AM


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