U.S. rallying Europe and others to aid Egypt
Share Now on:
TEXT OF STORY
Kai Ryssdal: Five days after Hosni Mubarak was driven from office, the political process in Egypt seems to be working itself out. There’s a group drafting a new constitution. There’s vague talk of dates for new elections.
The economy is quite a different story. Tourism has basically dried up. Banks and stock markets are still closed. Workers at textile factories, chemical plants and airports are striking for better pay and working conditions. All of which has left the interim government in Cairo a little short of cash.
Marketplace’s John Dimsdale reports from Washington on new plans for Egyptian aid.
John Dimsdale: The U.S. funnels $1.5 billion a year in foreign aid to Egypt — mostly to the military. Now, in an effort to kickstart Egypt’s faltering economy, U.S. and European officials are talking about tens of billions more.
Shaul Backhash at George Mason University says it’s important that the money bypass the military.
Shaul Backhash: Protests and demonstrations show what Egyptians want is more opportunity, better jobs, better standards of living. And it would be a very intelligent thing if some of the aid were redirected to help create jobs, produce business and economic enterprises that create jobs, expand freedoms and the like.
To target foreign aid at Egypt’s economy, the money would go through institutions like the World Bank and International Monetary Fund. It could finance community development to serve as a bridge to sparking more private enterprise.
But economist Steve Hanke at Johns Hopkins University says foreign aid is the wrong way to help.
Steve Hanke: You look at any developing country that’s turned it around in a hurry and foreign aid is nowhere to be found. Foreign aid is almost like squirting water on a fire. It puts out any innovation and any job creation.
Hanke says Western aid often ends up in corrupt hands. The best way to create jobs, he says, is wean Egypt from foreign largesse and create the kind of economy that attracts private entrepreneurs.
In Washington, I’m John Dimsdale for Marketplace.
Ryssdal: Check our map for a breakdown of which country in the Middle East gets the most U.S. foreign aid and what they get it for.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.