U.S. Financial Support for Democratic Transition in the Middle East

Currently, a key question for U.S. policymakers is how to engage with and/or support new governments in Egypt, Libya and Tunisia. For those of you interested in the topic of U.S. foreign assistance to the Middle East, I strongly recommend a new Project on Middle East Democracy (POMED) paper, The Federal Budget and Appropriations for Fiscal Year 2013: Democracy, Governance, and Human Rights in the Middle East and North Africa. The paper, written by Stephen McInerney, the executive director of POMED, goes deep into the details of and issues surrounding the Obama administration’s FY 2013 budget request for foreign aid to MENA countries. Some key points from the report include the following:

• Country by country, Tunisia, Libya, and Yemen are the biggest recipients of increases in U.S. aid. Levels of aid to other countries remain about the same. The administration’s proposed $770 million Middle East and North Africa Incentive Fund, which, among other things, will “encourage political and economic reforms by rewarding governments that propose specific reform initiatives”—is a centerpiece of the FY 2013 budget. Although this FY 2013 budget is a 11.6 percent funding increase from the FY 2012 budget, the increase is only 3 percent in the absence of the Incentive Fund.

• The budget does not outwardly reflect tensions between the U.S. and Egypt, but arguably, a new paradigm could emerge in future years. Pointing to events like Egypt’s crackdown on American NGO workers, McInerney writes, “As of now, levels of U.S. bilateral assistance to Egypt remain nominally steady at $1.3 billion in military aid and $250 million in economic assistance, but it is unclear whether that will remain the case for long.” As the debate over the future of U.S. military aid to Egypt continues, McInerney’s perspective and his summary of the numbers behind U.S. assistance to Egypt is a valuable resource.

• A combination of factors makes Tunisia a fairly ideal site of U.S. support for democratic transition. As McInerney explains, “In general, the U.S. administration has viewed Tunisia as an important opportunity, as a country where assistance is welcomed, where strategic interests are not viewed as an impediment to supporting democracy, and where modest resources can have an outsized impact, due to the small size and relatively high level of development and infrastructure.” Since the revolution, the U.S. has provided some $400 million to facilitate Tunisia’s democratic transition, ranging from educating voters to training journalists to reestablishing the Peace Corps. The U.S. has also provided significant funds to programs supporting the Tunisian private sector, such as $30 million “debt facility to provide capital loans to franchises and small-and medium-enterprises.”

• In Libya, which is in a more solid financial condition than many of the other MENA countries receiving U.S. assistance, new requests for modest bilateral funding to Libya ($1.45 million) are focused on security issues like its porous border and loose weapons. McInerney also notes observes that Libyans are somewhat reticent to receive U.S. support for their civil society organizations. One reason is that the recent NGO debacle in Egypt instigated suspicion of American NGOs. Indeed, Egyptian generals’ claims “that such organizations are seeking to sow chaos and undermine Egypt’s revolution on behalf of foreign interests” appear to be contagious.

As a layperson, understanding the extent of and dynamics behind U.S. foreign assistance remains a challenge (despite laudable and helpful new government open data initiatives), so detailed reports like this POMED paper are particularly valuable. McInerney’s analysis also serves as a reminder that U.S. foreign assistance depends, in good part, on domestic fiscal pressures: he draws a memorable contrast between current support for MENA democracy and for Eastern European democracy 1990s. Perhaps it is unfortunate that the U.S. cannot provide greater levels of support for democratic transition, or perhaps a more constrained budget will inspire new foreign aid innovations and greater levels of multilateral cooperation.