US Aid to Egypt Is Counterproductive

Egypt has been gripped by a deepening economic crisis since the country's revolution began on Jan 25, 2011.

Now that the Obama administration announced $250 million in aid to the country, the question that MUST be raised is whether such aid will be useful — or on the contrary — counterproductive?

An analysis of the current economic situation in Egypt reveals that the country’s problems stem largely from poor decision-making by Islamist president Mohammed Morsi and his supporting Muslim Brotherhood (MB).

For example, because of their ideological beliefs, the MB did not promote the country’s tourism industry, which has been a vital piece of the economy. Additionally, Morsi’s attitude toward Naguib Sawiris, Egypt's biggest businessman, and others have scared away investors.

Moreover, since Morsi attempted to consolidate power and placed himself above the law, the country has grown unstable. He essentially allowed thugs to surround Egypt’s Supreme Constitutional Court and prevented judges from doing their job, which was likely to involve ruling against Morsi’s power grab.

Morsi also turned a blind eye to his supporters' vicious attacks (and murders) of those who were peacefully demonstrated in front of his palace.

He further weakened the country by breaking his pre-election promise to include political opponents in the process to draft a new constitution.

The recent arrest warrant for satirist Bassem Youssef did not make matters any better.

Consequently, the U.S. offer to provide financial aid to the Muslim Brotherhood-led government will only have major negative consequences.

First, the aid will be seen by President Morsi and the MB as an endorsement for — and blessing of — their destructive and divisive political policies. These policies have significantly contributed to the current economic downfall.

Morsi and his Islamist group will feel that they are being rewarded for their policies and accordingly will have no incentive to change. U.S. aid will serve as positive reinforcement for all of the wrong political policies.

This will also mean that the MB will be encouraged to continue on the same path to economic failure.

Second, giving aid to an Islamist government — particularly one that could suffer a political collapse and loss of power — will only jeopardize the ability of the U.S. to work with future governments in Egypt.

The U.S. should use its aid to put pressure on the MB government to develop a less divisive approach that will ultimately bring more stability to the country and improve the Egyptian economy.

Such an approach will also generate more trust in the U.S. among Egyptians who are turning rapidly against the MB. Opposition groups haave also been suspicious of US intensions based on perceived U.S. support for the Morsi government.

It is unlikely that putting conditions on U.S. aid to Egypt would bring much of a backlash, if any, since the MB will not dare confront the U.S. while the economy is in such a vulnerable state. The MB hopes to prove that “Islam is the solution," a perception that would only be reinforced by U.S. aid.

The best way to provide aid to the Egyptian people is to withhold it from the Egyptian government — at least for the time being.

Providing aid without insisting on much-needed political reforms will only empower the Muslim Brotherhood and delay meaningful progress that is vital to generate Egypt’s economic recovery.

On the contrary, putting conditions on U.S. aid to Egypt — as the European Union did — will create pressure on the Morsi government to consider a better political approach that will hopefully bring more stability to the country.

Dr. Tawfik Hamid is the author of "Inside Jihad: Understanding and Confronting Radical Islam." Read more reports from Tawfik Hamid — Click Here Now.