When We Don't Need U.S. Aid


Like the rest of the world, the U.S. was caught off-guard by the wave of demonstrations and revolutions across the Middle East and North Africa. President Barack Obama and Congress have rushed to show they welcome change and want better Arab relations. Obama stated clearly in his May 19 speech that, “it will be the policy of the United States to promote reform across the region, and to support transitions to democracy.”

My fellow PolicyMic contributor Bilal Wahab recently wrote about the need to strengthen the U.S. Agency for International Aid (USAID) and turn its focus toward supporting better governance and institutions, while rightly pointing out the danger of dependence on foreign funding. However, the core policy dilemma for the U.S. is not the technocratic question of how to best deliver aid, but rather the strategic question of whether to deliver aid at all. Policymakers should step back from the rush to assist transitions to democracy, however well-intentioned, and examine whether assistance is appropriate in any context.

If the Obama administration wished to convey the message that it stood in solidarity with Arabs’ democratic aspirations, its first misstep was the aggressive effort to place all reform aid within a framework of economic liberalization and structural adjustment. Indeed, in his speech, Obama explicitly tied American support for democracy to the expansion of free trade. This stance is supported by numerous policy proposals, from the G8 offer of $20 billion to Egypt and Tunisia to the U.S.’s call for the World Bank and IMF to forgive large amounts of Egyptian debt and provide the country with a new loan.

Unlike some observers, I do not believe Obama is disingenuous; I am sure he and his policy advisors believe that growth and expanded economic opportunity will be crucial to making a sustainable democratic transition. However, growth and expanded opportunity are not the same and, particularly in Egypt, they are the opposite. Egypt’s economy has been growing at a healthy rate, over 5% a year since 2006; Tunisia’s economy was growing as well. Income inequality in both countries rose in recent years thanks to the IMF and World Bank policies and endemic corruption. As a result, very little of the economies’ growth benefited the people.

More importantly, these liberal economic policies do not represent Egyptian and Tunisian policy preferences — they are profoundly undemocratic and paternalistic. Discussions of Middle Eastern political discussions frequently invoke the “Islamic paradox,” that support for democracy could mean support for parties who will introduce anti-American (or anti-Israeli) foreign policies. What is not discussed is the “socialist paradox”: true democracy in the Middle East could reverse the trajectory of economic liberalization. Anyone actually paying attention to Egypt’s revolution cannot ignore its foundation in long-simmering labor strikes, opposition to structural adjustment, and demands for social justice. The Wall Street Journal recently recognized this reality when it editorialized against use of the IMF loan in Egypt to fund popular increases in subsidies for food, housing, and other welfare provisions.

The real question is not what form assistance should take, but whether the U.S. should be assisting at all. Institutions like the National Endowment for Democracy and the International Republican Institute have seen their attempts to involve themselves in Tunisia’s transition rebuffed; Tunisians are more worried about foreign intervention than setting up their election incorrectly. Especially given the inconsistency of U.S. policy in the region, it is not surprising that pro-democracy activists would question our intentions. This is not the first time that Arabs with different political ideologies have come together to denounce foreign intervention in political reform efforts.

It is naïve to assert that the U.S. has no compelling interests in the region and should simply “get out.” Our reliance on oil unfortunately makes such a position impossible. We should, however, have a debate on if our assistance is wanted or needed, and if its form could ultimately harm our image and influence.

Photo Credit: Wikimedia Commons