Back to the Future, Again: A Mini-Marshall Plan for Egypt?

Ted Bromund / May 19, 2011

Earlier this week, former National Security Adviser Jim Jones was promoting “a type of Marshall Plan for emerging democratic states like Egypt.” The White House has now stated that in his speech on the Middle East this morning, President Obama will announce a new foreign aid package for Egypt.

Egypt’s financial situation is undeniably dire. As David P. Goldman noted two weeks ago in the Asia Times, “Egypt is running out of food and, more gradually, running out of money with which to buy it. . . Egypt imports half its wheat, and the collapse of its external credit means starvation.” The Egyptian revolution has driven away tourists, while the Libyan one has cut remittances from Egyptians working there. Goldman calculates that Egypt lost $13 billion in foreign exchange reserves in the first quarter of 2011 alone.

But the idea of a ‘mini-Marshall Plan’ for Egypt is still a bad one. It calls to mind the President’s proclamation in January of a “Sputnik moment” for education: the administration likes to conceive of itself as forward-looking, but has a curious addiction to concepts and names derived from the early Cold War, perhaps because it is actually stuck in the past. On Goldman’s figures, the amounts the administration is talking about – $1 billion in debt forgiveness, and $1 billion in loan guarantees – will be swallowed up by the broader collapse of the Egyptian economy. In practice, the Administration’s plan is not enough to matter, but enough to create the false impression that the U.S. can simply ride to the rescue of the Egyptian economy. (more…)