HAWALA-Follow the Money: Why Obama shouldn’t increase democracy aid to Egypt

Posted: February 14, 2011 by BlackNETintel-2 in BlackNET Intelligence
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Posted By Anne Mariel Peters

Foreign Policy –

 In short, the Egyptian government made it almost impossible for democracy organizations to do their work. >
One of the most enduring critiques of the Obama administration’s record on democracy promotion in the Middle East has been cuts in democracy and governance funding to Egypt.   Well before the 30-year rule of Egyptian President Hosni Mubarak ended last Friday, Washington-based democracy groups had embarked on a high-profile public relations campaign to protest cuts to democracy and governance programs aimed at civil society, party-building, and elections monitoring.  The upheaval in Egypt provided an opening for a renewed push. The bipartisan “Working Group on Egypt,” which counts Washington’s top democracy promotion denizens amongst its members, called for President Obama to suspend all economic and military aid, but now such democracy advocates will likely renew their calls for increases in democracy and governance funding to Egypt. How could Obama reduce this funding now just as Egypt has witnessed a long-awaited “political opening”? 
The U.S. should promote democracy in Egypt, and the Obama administration has shown itself to be receptive to the idea. Yet increasing democracy and governance funding (or cutting aid altogether) is not the way to do it. The great irony of democracy and governance programs is that they will only be followed by desired democratic outcomes precisely where they are not needed: in environments where society already faces positive incentives to collectively organize as an opposition movement. If nothing else, the past three weeks demonstrate that Egyptians do not need foreign money, consultants, or democracy and governance programs to collectively organize and exert their demands; they simply needed a pooled set of grievances, digital and print media for communication purposes, and a big push from the “Tunisia effect.” Egyptian society is already mobilized, and the degree to which it can organize itself is a function of how well it can manage to coordinate a wide variety of interests. This is not a matter of writing party platforms, distributing newsletters, or observing Western parliaments, but Egyptians’ ability to negotiate among themselves. And if the generals decide to hold on to power, there is little that democracy and governance funding can do.
 
U.S. aid to Egypt has long been linked to its peace treaty with Israel. Following the 1973 October War, Egyptian President Anwar Sadat moved away from the Soviet Union, opened Egypt to Western markets, and in 1979 signed a peace treaty with Israeli President Menachem Begin. In 1975, the US Agency for International Development (USAID) reopened its office in Cairo and, for the first decade in its existence, spent funds equivalent to between 7 and 14 percent of Egypt’s annual GDP on infrastructure, a Commodity Import Program (CIP), and Public Law 480 food aid; all sans the last came to be financed by Economic Support Funds (ESF) linked to the Middle East peace process. In 1979, Egypt began receiving military aid to a tune of about $1.3 billion per year, most of which was used to purchase American manufactured war material and send Egyptian officers to the U.S. for training. 
The Egyptian leadership has always strongly resisted any American initiatives that would manipulate the aid package to interfere in Egypt’s internal affairs or leverage favorable foreign policies. Thirty-two years later, military aid to Egypt remains largely unchanged in volume or composition– the major exception being the conversion of loans to grants in the mid-1980s. This stability is a product of the Egyptian military’s strategic importance, the symbolic value of maintaining the aid’s peg to that of Israel, the power of key stakeholders in the U.S. defense establishment, and the relatively small number of groups involved in annual negotiations. 
By contrast, the economic aid program has undergone numerous renovations in size and substance. Until 2004, most of these efforts were focused on economic reform. The CIP, cash transfer programs, and capacity-building projects for business associations incurred the ire of Egyptian public sector officials, who would have preferred to have no strings attached. However, these programs also found support in a growing private sector that was organized around the American Chamber of Commerce in Egypt and which ascended to political power under the recently-dismissed Ahmed Nazif government.  By 2004, Egypt’s ESF funds had been reduced by about 25 percent from their 1999 levels, the product of a “glidepath” that was informally negotiated after Israel announced that it would no longer require economic aid. 
This shifted when the George W. Bush administration seized upon Egypt as a crucial case for its democracy promotion agenda. In the Department of State, Deputy Assistant Secretary of State Liz Cheney and her successor, Scott Carpenter, adopted a twofold approach that focused on financial sector reform and revamping existing democracy and governance programs which, as one of my contacts complained, “included dredging the Nile in Alexandria and setting up an NGO center as an umbrella for the Ministry of Social Cooperation where only registered NGOs could benefit.” Suggestions for financial sector reform were received well by the Nazif government, and in 2002, Cheney established the Middle East Partnership Initiative (MEPI) in the Bureau of Near Eastern Affairs (NEA), which would dispense small grants oriented toward a range of political, economic, and social reform “pillars.” Democracy and governance funding began to steadily increase, particularly for civil society groups. 
It was 2005, however, that was a crucial turning point. In June, Secretary of State Condoleezza Rice said in a speech at the American University in Cairo, “For 60 years, my country, the United States, pursued stability at the expense of democracy in this region here in the Middle East, and we achieved neither. Now we are taking a different course. We are supporting the democratic aspirations of all people.” In the 2005 Foreign Operations Appropriations Bill, Senator Sam Brownback (R-KS) proposed a successful amendment stating, “That with respect to the provision of assistance for Egypt for democracy and governance activities, the organizations implementing such assistance and the specific nature of that assistance shall not be subject to the prior approval by the Government of Egypt.” With this new mandate, the administration secured funds to establish a “direct grants” program for USAID-Egypt, which would provide aid directly to civil society organizations regardless of whether they were registered and approved as NGOs by the Ministry of Social Affairs. The year ended with the imprisonment of former presidential candidate Ayman Nour, which allegedly led the White House to pull the plug on negotiations for a Free Trade Agreement. 
The direct grants program allowed USAID to fund groups that had previously been blacklisted because they were either registered “civil corporations” or unregistered NGOs — including Washington-based democracy giants like Freedom House, the National Democratic Institute (NDI), and the International Republic Institute (IRI). Freedom House, which initiated its work in Egypt in 2006, targeted the “next generation” of activist youth with training programs, international exchanges, and networking opportunities with U.S. and overseas policymakers; most participants were involved in Egyptian human rights organizations, though some bloggers also participated. Freedom House also provided small grants for capacity-building activities in civil society organizations. NDI, which until then had received all of its Egypt funding from the National Endowment for Democracy, established an Egypt Office in 2005. Unlike Freedom House, NDI focused primarily on elections monitoring and capacity-building for political parties. By holding small meetings with foreign consultants, NDI worked with the National Democratic, Wafd, Democratic Front, Reform and Development, and new and old Al-Ghad parties on crafting party messages, writing newsletters, formulating campaign strategies, and producing training manuals for campaign organizers. It also trained hundreds of elections observers using a “train the trainer” method. IRI also focused on political parties, though after its Cairo chief gave an interview critical of the Egyptian government, the organization opted to fly participants to large, out-of-country meetings and study missions. 
In 2008, democracy and governance funding for Egypt amounted to about $55 million, but by 2009 the moment for this funding seemed to be drawing to an end. For fiscal year 2009, the outgoing Bush administration unilaterally reduced its economic aid request for Egypt from $415 to $200 million (plus a $50 million supplemental), while leaving its democracy and governance request at around $50 million. Yet congressmen favoring strategic interests, such as Senator Judd Gregg (R-NH), successfully supported a cap of $20 million on democracy and governance funds in the fiscal year 2009 Omnibus Appropriations Act. This was the first time that Congress had acted to limit democracy and governance expenditures in a specific country by imposing an explicit maximum.  
The new Obama administration then terminated USAID’s direct grants program — though MEPI and the Bureau of Democracy, Human Rights, and Labor (DRL) could continue to finance unregistered NGOs. Democracy activists pointed out that this decision conflicted with the Brownback Amendment, which was couched in Egypt-specific terms until 2008 and then made global in the fiscal year 2009 Omnibus. For fiscal year 2010, the Obama administration’s request for Egypt aid upheld Bush’s unilateral reduction requesting only $250 million in economic aid for Egypt, and in the 2010 Consolidated Appropriations Act Congress approved a provision that set a minimum of $25 million for democracy and governance funding — still only half the amount spent between fiscal year 2006 and fiscal year 2008 — and made available $50 million for the establishment of an endowment, deemed “The Mubarak Trust Fund” by democracy activists. For fiscal year 2011, the administration again requested $250 million in ESF, $25 million of which would be used for democracy and governance programs; the direct grants program has not yet been revived. 
Most of the debate around these programs has focused on the dollar amounts and the terms of delivery. But a more useful debate might focus on the fundamental question of whether they work.  And here, the evidence is thin.  Between 2005 and 2009, when democracy and governance funding was at its peak, in the widely-used Freedom House ratings Egypt retained a steady “6” in Political Rights and a “5” on Civil Liberties, placing it squarely in the “Not Free” category. On media freedom, between 2005 and 2008 Egypt vacillated between Partially Free and Not Free. If anything, the 2005-2009 period saw greater crackdowns — with the detention of journalists, revelations of police brutality, the imprisonment of Ayman Nour, and amendments to the constitution that expanded the use of military courts, restricted political party activity, and prohibited independent candidates for president. 
Of course, it may be unreasonable to expect that the micro-level work of democracy organizations would affect the macro-level results captured by Freedom House scores. Most staff that I have spoken with emphasize that their work is a “drop in the pond.” One alternative, then, is the technique employed in a 2009 USAID audit of democracy and governance programs in Egypt, which evaluates these projects based on a mix of 1.) actual versus projected policy inputs, such as the number of public policy advocacy campaigns supported by the U.S. government; and 2.) project-specific impacts, such as percentage of U.S.-assisted courts with better case management. 
Unfortunately, metrics for project impact are difficult to identify, and all but one of the audit’s indicators for civil society projects are measured purely in terms of inputs, such as the number of journalists trained or number of media outlets receiving training. This may be why the report concludes that civil society projects were among the most effective, despite the overall dismal finding that democracy and governance programs only achieved 52 percent of planned results. 
Unlike capacity-building programs, elections monitoring activities might also be considered useful in upholding standards of free and fair elections, or else provoking the condemnation of the international community. For instance, when President Mubarak declared that the country would hold free and fair elections, democracy groups trained an army of whistleblowers that they hoped would discourage the use of undemocratic methods to ensure the re-election of the ruling party. Furthermore, free and fair elections do not simply refer to process, but are linked to a range of upstream activities with internationally-recognized standards: equal access to the media, barriers to participation, and voter registration drives. However, this rationale presumes that the prospect of international condemnation can deter the authoritarian leader from the short-term allure of electoral manipulation and repression. Based on the hocus-pocus surrounding the 2005 and 2010 elections, as well as Mubarak’s last-ditch effort to cling to his position — this leader was not easily deterred. 
There is also the possibility that the best effects of democracy and governance projects are not a function of their intended outcomes. Many democracy organizations claim to be under no false pretenses that democracy and governance funding will bring about democracy in Egypt, but argue that good organizations will go without funding if U.S. aid is cut. Some activists emphasize that the mere presence of such funding, regardless of its effectiveness, sends an important signal to the Egyptian government and civil society. To withdraw such funding would be “part of an overall picture that is harmful.” Yet others emphasize the normative commitment of the United States to promote democracy “against all odds” — a moral imperative unrelated to actual developments in Egypt.
Returning to the big picture, the most fundamental problem with traditional democracy and governance programs is that they do nothing to change underlying power structures and regime dynamics. In their primary focus on elections monitoring, party-building, and grassroots civil society activism, these programs are supposed to remedy two important obstacles to democracy: 1.) the disorganization, resource depravity, and political passiveness of non-regime collectives; and 2.) the local population’s disaffected attitude toward the democratic process. Yet these “obstacles” are rational responses of society to the real problem: authoritarian machinations, repression, and electoral manipulation. Democracy and governance programs attempt to treat the symptoms rather than the disease, and fail on both accounts…
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