Egypt, like many countries receives considerable foreign aid from the US and other nations. US aid in Egypt is exceptionally pronounced, with Egypt receiving the second most US aid in the entire world after Israel. Other countries such as France and Japan give large amounts of aid as well, but their impacts have not been as historically, politically or economically profound, and as a result this post will focus on the results of US aid. A large part of the reason the US’s aid has been so important is due to its nature and how it is spent.
Egypt’s annual aid budget of 1.3 billion dollars is twice as large as the next three largest aid recipients combined. Much like in Israel’s case, most of the US money that Egypt receives is focused on military spending, with only about 250 million dollars going towards anything else. Much of this military aid comes directly in the form of tanks, helicopters and other advanced weapons. Egypt has received as many as 1,200 US Abrahams tanks and 20 F-16 fighter jets since 2013, despite the toppling of its first democratically elected president by a military coup. There are no official statistics on how much of Egypt’s total military budget comes from US aid, but it has been speculated to be up to 80 percent. In short, US military aid is grossly disproportional to its humanitarian or infrastructure spending in Egypt.
The issues discussed in Dambisa’s articles of foreign aid slowing national growth due to the unproductive, aid-reliant policies it creates are less of a concern in Egypt than the direct impact of US military aid on the functioning of democracy and freedom of citizens. That is not to say that US and other foreign aid has not impacted the economy of Egypt significantly, as discussed later in this post US military contributions have defined as much as a third of Egypt’s economy. The US AID website does not even list programs in Egypt on its interactive map, preferring instead to focus on the much more politically popular aid programs it has created in Sub-Saharan Africa. US military aid has propped up every one of Egypt’s dictator’s since its independence from colonial rule. From Nasser all the way up to the modern reign of el-Sissi, the US has consistently given military aid to ensure stability and good political relations in Egypt.
There have been arguments made that it is possible Egypt could have economically benefited from having a centralized, totalitarian authority directing control of the economy. Such arguments fail to account for the loss of Egypt’s educated, innovative thinkers who largely preferred to flee the country rather than stay and build new industries and improve existing ones. Additionally, the regimes the US supported by their very nature had to focus huge amount of their budgets towards remaining militarily dominant.
The Egyptian army has historically been one of the largest in the world for the country’s size and has dominated its economy dramatically. Anywhere from 10-30 percent of Egypt’s national budget goes towards supporting the military. Military spending is only truly beneficial for a modern nation state if it either fuels local industry (as it does in the US) or can be used to negotiate stronger trade deals due to the threat of force. Most of the Egyptian military’s weapons are made in the US, providing little local industrial growth. It has been ineffective as an international trade tool either, since the primary aid provider (the US) gives aid mostly to ensure stability and prevent international conflict.