News

In Egypt NGO Case, Economic Reality Appears to Trump Politics

Egyptian protesters chant anti-military ruling slogans during a trial of employees of pro-democracy groups charged with using foreign funds to foment unrest in Cairo, February 26, 2012.
Egyptian protesters chant anti-military ruling slogans during a trial of employees of pro-democracy groups charged with using foreign funds to foment unrest in Cairo, February 26, 2012.

Political tensions between Egypt and the United States appear to be easing, after Egypt lifted a travel ban on seven American democracy activists. Economic considerations appear to have been key to the resolution.

Whatever political gains Egypt's leaders may have sought to reap from a wave of anti-Americanism seems to have come up against a hard economic reckoning.

U.S. officials had vowed to cut off aid to Egypt after seven Americans in Cairo, part of a larger group of democracy activists, were accused of conducting illegal operations and barred from leaving the country.

This week, Egypt backed away from the case, with officials first postponing the trial until April, then lifting the travel ban on Wednesday.  U.S. Secretary of State Hillary Clinton said she expects the case to be resolved soon.

The re-balancing reflects practical needs on both sides.  After more than 30 years, the U.S. alliance with Egypt remains a linchpin of its Middle East policies, even as it continues to raise concerns about Egypt's commitment to democracy. For Egypt, one year after a popular uprising threw off the old leaders, the new ones are struggling with an economy thrown off kilter.

“Egypt needs an influx of cash as soon as possible," said Amira Ahmed, the business editor at Egypt Daily News. "There's a widening budget deficit and the foreign reserves are depleting.  They've gone down to $16 billion and it needs this money, an infusion of money, as soon as possible.”

The United States provides $1.6 billion in annual aid to Egypt - part of its reward for signing a peace treaty with Israel in 1979.  Most  - $1.3 billion - goes to the military and much of that is slotted to buy American equipment.  How little is seen by the average Egyptian is reflected in a recent Gallup poll suggesting a majority does not want further U.S. aid.

At the same time, Egypt's military rulers are facing increasing protests against the slow hand-over to civilian rule, criticism that some observers say they deflected by pointing to a “foreign hand” as responsible for Egypt's ills.  Political observers said the trial of democracy activists appeared part of the campaign of distraction, by way of appealing to national pride.

The executive director of the Egyptian Center for Economic Studies, Magda Kandil, says the structure of the aid played into the calculation.

“Had people felt the appreciation for the aid, they probably would not have waved their hands and said 'So what?,” said Kandil.

Kandil argues for a restructuring of U.S. assistance.  But she also thinks there was a certain ignorance on the part of people who were willing to give it up.  U.S. help to Egypt during its period of transition is broader than the annual aid package:  Kandil notes discussions of debt cancellation and talks between Washington and Cairo on revamping economic ties to expand investment and strengthen trade relations.

The willingness to risk foreign aid was seen earlier in the transition, with the ruling military council last year rejecting a $3.2 billion line of credit from the International Monetary Fund - a move that also appealed to national dignity.

But as business editor Ahmed points out, by January with the government floundering in efforts to provide basic services and unemployment soaring, leaders reversed course and the IMF loan came back in play.

Economist Kandil believes the implications of both the U.S. and IMF packages were too important to ignore. Other groups including the European Union, the World Bank and the African Development Bank, have been waiting for those deals to go through before committing money of their own.

“I think in both those cases it's about a lack of information about the economic reality and about the need to have the IMF money, not just for the value of the loan, but also to provide the seal of approval. Because continuing on the same path that we have had over the past year is very, very problematic,” said Kandil.

Discussions on both aid packages and the others that could follow, continue.

This forum has been closed.
Comment Sorting
Comments
     
by: Mandi Fahmy
March 03, 2012 2:35 AM
As Economist Magda Kandil so rightly states, there is a lack of transparency, info and awareness among the Egyptian public of our economic situation, of USAID's role in Egypt and of what exactly these democracy NGOs did. of course, it doesn't help that the mentioned US NGOs don't have such a bright past in other countries, an issue the US should not ignore. Full transparent disclosure is best at all times and the US has tolerated its lack for too long.

by: sania el alma
March 02, 2012 1:54 AM
The west should understand that demcracy has no place in Egypt.. it is wasting time and money to send NGO to Egypt to promote demcracy. domcracy can not exist with the islam .muslim understand demcracy that each indvidual salfi is proescutor and executor

by: sayed hussin
March 01, 2012 7:35 AM
good news for getting ngo out. this is not that the case is over. it is indicated that the relation is not good any more. Us has to review the whole issue and us aid should not be given

by: Faces
March 01, 2012 7:33 AM
Which democracy are you talking about whereas US and Israel have been sustaining Mubarak till last days in his throne ? This is the real policy of US and its vital ally which depends on exploitation and intimidation under fake slogans of democracy . We are going to solve under the tables via our ways .People are sick and tired of this farce . Let Egyptians get fair prices for their Gas which Israel sells to other countries and then they will grant US aid to Israel without paying a penny .

by: Balasticman
March 01, 2012 6:59 AM
Good. Now can the grown-ups please get back to the task of helping Egypt get back on its own feet? http://balasticman.blogspot.com/2012/01/imf-and-egypt-helping-egypt-help-itself.html

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Astronauts Train Underwater for Deep Space Missionsi
|| 0:00:00
...    
🔇
X
George Putic
July 30, 2015 8:59 PM
Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.

VOA Blogs