Egypt

Eurasia Group founder and emerging markets guru Ian Bremmer has come around to the view that the BRICS construct is nothing more than a bunch of countries “united by a catchy acronym” and little else. His op-ed piece in last Friday’s New York Times  notes that Brazil, Russia, India, and China “have formalized their club and extended their reach by inviting South Africa to join” – a development that occurred in December of 2010 and asks, “But do their meetings and joint statements really allow them to punch above their individual weight? What do these countries share beyond a common interest in bolstering their global clout?” Several hundred words later he concludes that these five countries “will sometimes use their collective weight to obstruct U.S. and European plans. But the BRICs have too little in common abroad and too much at stake at home to play a single coherent role on the global stage.” Has he been reading my blog? [click to continue…]

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In these dark days of an ever-widening political divide, it is nice to know there is still something on which Republicans and Democrats can agree: foreign aid. Both sides are against it. John Sides, writing in his “The Monkey Cage”  blog, cites a YouGov poll conducted in early March of this year, in which a sample of Republican primary voters and a sample of all voters agreed that foreign aid is the budget item they would most like to cut. Okay, it was 90% of the Republicans and only 73% of all voters, but in the sample of all voters no other item came even close to 50%, while among Republicans, the environment, housing, and unemployment benefits – no surprise there – were the only other items that got more than a 50% share.

 

 

 

 

 

 

These numbers are unsurprising in light of another poll  conducted last November, in which respondents, asked “Just based on what you know, please tell me your hunch about what percentage of the federal budget goesto foreign aid,” gave an average response of 27%. When asked what they thought an appropriate percentage would be, the mean answer was 13%. When told that we spend much, much less than this on foreign aid, most people said it still should be cut.

Not that cutting foreign aid would have the slightest effect on the deficit. In an excellent analysis of the cuts the Romney-Ryan budget – which would cap Federal spending at 20% of GDP and maintain defense spending at 4% of GDP – would require, Richard Kogan and Paul Ven de Water of the Center on Budget and Policy Priorities demonstrate that “if policymakers repealed [Obamacare] and exempted Social Security from cuts, as Romney has suggested, and cut Medicare, Medicaid, and all other entitlement and discretionary programs by the same percentage to meet Romney’s overall spending cap and defense spending target, then they would have to cut nondefense programs other than Social Security by 22 percent in 2016 and 34 percent in 2022 If they exempted Medicare from cuts for this period, the cuts in other programs would have to be even more dramatic — 32 percent in 2016 and 53 percent in 2022.”

It’s not easy to make sense of the Federal budget for foreign assistance (try it yourself and see what numbers you come up with http://www.state.gov/documents/organization/183755.pdf ) but 2012 commitments amount to about $35 billion, less than one percent of the total budget of $3.8 trillion, and barely a third of that amount consists of the kind of humanitarian, public health, and economic development assistance most people think of when they think of foreign aid. The big-ticket items include:

  • Roughly $10.4 billion in foreign military and security assistance – things like fighting terrorism abroad, military training, underwriting foreign arms purchases, the war on drugs, and the annual payments of $3 billion to Israel and $1.3 billion to Egypt (the price we continue to pay for the Camp David accords);
  • $8.1 billion on global health and child survival programs;
  • The $5.8 billion Economic Support Fund, which gives direct grants to foreign governments for them to spend on infrastructure and development projects (thus freeing up funds to buy U.S. arms); and,
  • About $4.1 billion on economic and agricultural development.

Except for Ron Paul supporters, most Republicans and not a few Democrats would resist cutting foreign military assistance and our annual subsidy to Israel. Indeed, to judge by his recent pronouncements on the subject, Mitt Romney would be more than happy to increase support to Israel, though it might come out of Egypt’s share.

A Romney-Ryan budget would probably keep all or most of the $10.4 billion for security-related foreign assistance and the $5.8 billion Economic Support Fund (at least those portions most directly linked to arms procurement) and take an axe to the aggregate $12.2 billion health, child survival, and economic and agricultural development budgets, which in the context of the overall budget are hardly more than a rounding error.

Dana Millbank, writing in The Washington Post, tells us that Rep. Darrell Issa, Republican chairman of the House Oversight and Government Reform Committee, called a hearing earlier this week to probe the security lapses that led to the recent deaths of Ambassador Christopher Stevens and three other Americans in Benghazi, Libya.

“The purpose of the pre-election hearing, presumably, is to embarrass the administration for inadequate diplomatic security. But Issa seems unaware of the irony that diplomatic security is inadequate partly because of budget cuts forced by his fellow Republicans in Congress…House Republicans cut the [Obama] administration’s request for embassy security funding by $128 million in fiscal 2011 and $331 million in fiscal 2012. Ryan, Issa and other House Republicans voted for an amendment in 2009 to cut $1.2 billion from State operations, including funds for 300 more diplomatic security positions. Under Ryan’s budget, non-defense discretionary spending, which includes State Department funding, would be slashed nearly 20 percent in 2014, which would translate to more than $400 million in additional cuts to embassy security.”

Romney has criticized the Obama Administration for trying to “lead from behind” in situations like Libya and Syria, and says he wants the United States to lead from the front, “using the full spectrum of our soft power to encourage liberty and opportunity for those who have for too long known only corruption and oppression,” in the words of his September 30 op-ed piece in The Wall Street Journal. What is soft power, if not effective diplomacy and assistance in – to use Mr. Romney’s own words again – “promoting human rights, free markets and the rule of law?” Much of the development assistance provided by he U.S. Government and U.S. Government-supported institutions such as the World Bank promotes precisely these values.

Cutting foreign assistance and State Department budgets sends a very different message. Since the proposed diplomacy and foreign aid budget cuts are so insignificant in fiscal terms they must have been chosen for their symbolic value, effectively consigning emerging and transition countries to the international equivalent of Mr. Romney’s famous 47 percent: food stamp and welfare recipients and miscellaneous moochers he is not going to worry about.

There are certainly ways to improve foreign assistance, which could involve reducing or eliminating aid to some current beneficiary countries, but which would equally involve innovative new approaches to the problems of poverty, disease, climate, and growth, which could end up costing less, more, or about the same amount as we currently spend.

Lord Leverhulme, the founder of Lever Brothers – now Unilever –  is reputed to have said, “I know half my advertising isn’t working, I just don’t know which half.” Foreign aid is a bit like that. As much as half, but not all, of it is wasted, and if we could figure out which half to chuck out and which to keep we, together with the recipients, would be all the better for it. But just as Lever Brothers kept on advertising and, presumably, wasting half of what it spent, eliminating the foreign aid budget or cutting it in half is a lousy idea.

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If any event could illustrate the fragility of the BRICS conceit, it is the recent blackout in India, which left as many as 600 million people without power for up to two days. More than anything else, it reveals the sorry state of India’s governance. Yes, there are some extenuating circumstances: an unusually hot and dry monsoon season, which has reduced the available flow in hydroelectric plants while also causing the wealthy to use more power to run their air conditioners, while at the same time farmers are using more power to run pumps bringing up irrigation water from deep wells.

But the real story is under-investment in power generation, in coal production, and in transmission and distribution infrastructure, which in turn are attributable to monopoly pricing, hugely inefficient subsidies, endemic corruption, and political stagnation. The power outage was unique only in its extent and duration. Businesses, households, and public institutions all rely on diesel generators, which to a large extent have gone from a backup to the primary source of electricity, as “load shedding” – the system of rolling blackouts that utilities impose to reduce the strain on an overtaxed network, which often deprive whole areas of a city of power for as much as 14 hours a day. The event, and the global publicity it has attracted, has put a dent in India’s self-image as a nascent superpower. India has nuclear weapons and a space program – it launched a lunar probe in 2008 and has announced plans to send an orbiter to Mars next year – but it can’t keep the lights on. [click to continue…]

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It must come as some reassurance to Mitt Romney that he is not the only would-be President who says remarkably silly things he knows to be untrue. Last week Hillary Clinton, on a tour of sub-Saharan Africa, delivered a speech in Senegal in which she said that the United States would stand up for democracy and universal human rights “even when it might be easier or more profitable to look the other way, to keep the resources flowing.” In a barely veiled dig at China, she added, “Not every partner makes that choice, but we do and we will.” [click to continue…]

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In retrospect, no one should be surprised at recent moves by the Egyptian armed forces to consolidate their power, in what some have called a soft coup d’état. Although the Supreme Council of the Armed Forces, which has ruled the country since Hosni Mubarak’s ouster, maintains that it will hand over power to a civilian government as planned by the end of June, it is hard to see how this might happen.

With both sides claiming victory in Sunday’s presidential election, the armed forces are poised to retain the real power no matter which of the two candidates is declared the winner when the results are announced on Thursday. Egypt’s Supreme Court, which is packed with Mubarak appointees, last week dissolved the elected parliament in which Islamists held the majority of seats, declaring it unconstitutional. This past Sunday, after the polls had closed, the armed forces issued a constitutional declaration giving it the right to veto many presidential decisions and to maintain control over its own budget. The decree also said the military would soon name a group of Egyptians to draft a new constitution, which will be subject to a public referendum within three months. Following ratification of the new constitution, an election will be held to replace the Islamist-dominated Parliament. [click to continue…]

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