America Should Stop Giving $2 Billion of U.S. Aid to Egypt Unconditionally

ByGraham Palmer

The United States should base its military aid to Egypt on the Egyptian government’s performance on standard of living and good governance indicators. If Egypt under-performs, the U.S. should shift some of its military aid to promote economic growth. 

Since 1979, the United States has given an average of $2 billion annually in assistance to Egypt. This is divided between military and economic aid, with the majority ($1.3 billion annually) of the aid given for military purposes – training, weapons, etc. Military aid has historically propped up a government whose forces used “unwarranted lethal force and tortured and abused prisoners and detainees,” according to the Department of State. Resentment against America grew when these same forces were used against protesters during the revolution. To counter charges of interference, the U.S. should adopt a results-driven system for aid allocation in order to keep Egypt as an ally while avoiding popular resentment, ensuring stronger governance and positive relations. 


The key to achieving this objective lies in the relationship between the military and economic aid that the U.S. offers Egypt. The UN Human Development Index (HDI) and World Bank World Governance Indicators (WGI) are impartial measures of the standard of living and openness of government, respectively. The U.S. should tie Egyptian aid to these two standards. Specifically, the State Department should institute a sliding scale so that if Egypt’s performance falls, more funds will be shifted from military to economic aid.            

Military aid ensures that the U.S. can continue to reap the strategic benefits of an alliance with Egypt – priority access to the Suez Canal and Egyptian airspace, and Egyptian-Israeli peace. Results-based aid would show that the U.S. will not support an authoritarian government, but is willing to stand with any government that legitimately works for the Egyptian people. Congress is currently expected to determine aid based on whether the newly elected government shares our ideals. Instead, we should emphasize results over ideology. 

In the long term, a stable and prosperous Egypt would provide more security benefits to the U.S. than an ideologically friendly government. The wars in Iraq and Afghanistan, fought almost entirely to deal with unstable political conditions after regimes were toppled, will cost the U.S. at least $4 trillion – we cannot afford many more interventions to stabilize countries.4 Additionally, trade ties will develop with an increasingly open and productive Egyptian economy. Most importantly, this policy poses no costs to U.S. tax-payers, as the total amount of aid would remain the same even if the allocation were to shift. These marginal benefits of a stable Egypt far outweigh the marginal cost – the possibility that Egypt may not espouse all American principles. 

The primary beneficiaries of this aid will be the Egyptian people, 18.5 percent of whom live on less than $2 a day. Studies have shown that corruption and growth are inversely related. Thus, the government would have an incentive to reduce corruption and govern well. Continuing corruption among the military (which currently controls one third of the economy and much of the government) would trigger a shift in aid towards economic purposes, simultaneously benefiting the Egyptian people and weakening a repressive military. If we continue to apportion aid without objective measures, the U.S. runs the risk of strengthening a system that becomes corrupt and ineffective. 

Next Steps

Any new economic aid should go directly through USAID, so that it would not only be coordinated with the Egyptian government, but also provide assurance that aid does not simply go towards strengthening the military. Congress should be eager to extract every bit of leverage it can from the current level of aid to Egypt without increasing expenditures. This policy will appeal to the Egyptian people and government. It ensures quantitative results for the standard of living, and should not threaten the government as long as we emphasize that military aid will only be cut if the government underperforms.  

Egypt currently faces the prospect of a collapsing economy and further unrest. This proposal will pressure the military into relinquishing power, and thus must be implemented soon in order to prevent a further economic meltdown.