There needs to be a complete readjustment on the conditions of the development aid, too.
U.S. Aid to Egypt: The Current Situation and Future ProspectsAhmad Al-Sayed El-Naggar
WEB COMMENTARY, JUNE 2009
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As for U.S. security and military aid to Egypt, which is about $1.3 billion annually, it does not aim to strengthen Egyptian military power against any external threat, as this would be contrary to the declared U.S. objective of ensuring Israeli security and maintaining Israeli military supremacy over its Arab neighbors, including Egypt. Instead, this aid is devoted mainly to strengthening the regime’s domestic security and its ability to confront popular movements. This hardly enhances USAID’s popularity among the Egyptian people or educated elites. The unflinching American support for Israel, and Washington’s failure to reach a comprehensive political settlement even on its own conditions of ensuring Israel’s security within the 1967 borders, make Egyptians and other neighboring Arabs skeptical of political settlements that lead nowhere. It also leads them to question the value of the limited U.S. aid tied to the peace treaty with Israel, which is used to improve America’s image in the media and cover up the U.S. bias toward Israel at the expense of Arab rights.
Finally, aid given to Egypt provides the United States with political, strategic, and sometimes economic benefits that far exceed the value of what Egypt has received. The conditions tied to U.S. aid ensure that much of the money returns to the United States, whether in the form of the imported American products, work contracts that go to American companies at less competitive prices than Egypt could have obtained had the bidding been open to international companies, or the salaries of USAID experts. Most important of all, this aid consolidated a gross imbalance in trade relations between Egypt and the U.S. During the 1983–2007 period, Egypt’s total accumulated trade deficit with the United States was $45.1 billion, according to the IMF Trade Statistics Trends Yearbook. This sum is far greater than the total size of American economic aid to Egypt to date. The Egyptian trade deficit with the United States is closely related to this assistance, making Egypt one of the few countries with which the United States has a trade surplus, counter to its overall trend of an $820.6 billion foreign trade deficit in 2008.
Ahmad El-Naggar is editor-in-chief of the Economic Strategy Trends Report published by the Al-Ahram Center for Political and Strategic Studies.
Full article:
http://carnegieendowment.org/publications/index.cfm?fa=view&id=23282 (If anyone's got a more up to date review, I'd be really interested in reading it)