No catching up to the Gulf! The catch 22 facing Western donors to Egypt
The suspension of western economic aid to Egypt, which is relatively small compared to the financial assistance that Gulf countries provide, will lead the country to turn to the East, reducing Western influence, according to a new report from the Brookings Institution.
“Western interests and values would probably be best served by maintaining engagement with Egypt and economic assistance,” the report’s authors concluded, saying the public would not understand that the aid cut was intended as a stance to support democracy.
According to the report, the nature of the international community’s engagements in Egypt needs to be reexamined, however.
Aid flows needs to be “reoriented toward different areas and sectors” that will result in a direct improvement in the economic and political inclusiveness, Brookings asserted. The reorientation should be directed towards institution building, supporting small scale enterprises, and agriculture and rural development.
“This doesn’t mean that the international community should provide unconditional support to the current Egyptian government,” the report’s authors wrote. “Continued support could be linked to the implementation of the authorities’ road map for a transition to democracy and the level of support could be adjusted to reflect progress on the democratic transition.”
Brookings suggested that the international community needs to look to the long-term in Egypt.
“By remaining engaged with Egypt the international community could maintain a high-level policy dialogue aimed at gradually achieving reconciliation and greater inclusiveness,” according to the report.
Brookings argued that, in Egypt, the distribution of public investment is biased towards relatively wealthier regions and groups.
The study indicated that there is a need to develop economic institutions that would provide the middle class and poor citizens an opportunity to voice their opinions in the process of economic policymaking. Support should also be provided to small and medium enterprises.
“Such inclusive economic institutions would provide important support for the democratization efforts,” researchers wrote.
- DP World’s profits soared by 41 percent in H1. What’s their secret?
- Kingdom’s SMEs hold stronger outlook for Q3
- Jordan's King Abdullah has a 10-year plan for the country's economy
- Dubai's economy could have an optimistic future with a 5.6 percent growth this year
- Ups and downs: Jordan's public debt is up and ratio to GDP is down