Watson Institute for International and Public Affairs

What does U.S. aid "buy" in the Middle East?

February 24, 2012

The survival strategies of incumbent regimes shape the outcome of foreign aid in the Middle East, according to Dr. Anne Mariel Peters, assistant professor at the Wesleyan University Department of Government. The degree to which aid supports growth of institutions, the nature of the recipient government’s relationship with the donor, and the composition of aid portfolios are all heavily influenced by the type of regime in the recipient country.

Peters argues that the domestic politics of aid recipients, rather than their international position, are crucial to understanding the repercussions of US aid in the region. “The political survival strategies of recipient rulers determine the type of foreign aid they receive from a geopolitically motivated donor, whether this aid will enhance state infrastructural power, and the degree to which the recipient cedes various aspects of its own sovereignty to the donor,” Peters said.

According to Peters, U.S. foreign aid in the Middle East was originally undertaken as “a tool to eliminate the logistical costs of making peace…help stabilize and liberalize Egypt’s socialist economy, compensate for Gulf Arab aid,” and strengthen US –Egyptian military cooperation. Often, US aid is a significant portion of the recipient government’s GDP.

Between 1979 and 2009, the US provided between 1.7 and 2.1 billion USD in annual aid to Egypt. Critics insist that these payments have “built an oligarchy of senior officials and businessmen that concentrated among themselves and refused to comply with [US] demands,” Peters said. Unequal access to capital, police brutality, and patchy social services are likewise associated with foreign aid. On the other hand, US aid in the region can be credited with an array of positive effects, including infrastructure programs, Egypt’s rapid economic reforms since 2004, and extensive cooperation between Egyptian and US military forces, according to Peters.

Peters undertook a comparative historical analysis, looking at current US foreign aid ties with Egypt, Jordan, Israel and Palestine. All four are large-scale recipients of US aid motivated by geopolitics. This relationship should “lock them into subordinate relations [with the US],” but it hasn’t, according to Peters. On the contrary, all four have variable amounts of sovereignty in relation to the US. Israel “routinely bucks US authority” and enjoys very strong infrastructure, a successful national innovation policy, and a skilled military. Conversely, Egypt, Jordan, and Palestine have comparatively low infrastructural and hierarchical power. Palestine has poor
market institutions and allows the US “substantial influence over its security forces,” according to Peters. Jordan, too, routinely implements unwelcome economic reforms at US insistence, and allows US military basing and staging in its territory.

The power dynamic between aid donors and recipients is closely linked to the type of aid. This is an especially important factor in the Middle East, says Peters. Discretionary aid, such as budget support and commodity programs that generate local income, are favorable to local development. Other types of aid include means of coercion, such as small arms transfers and security infrastructure; distributive goods, such as cash transfers and debt forgiveness; infrastructure and bureaucracy, including parallel institutions and refugee assistance; market access, including
technological assistance for WTO accession and preferential investment protocols; and territorial integrity in the form of military interventions, military training programs, and security and defense treaties.

Egypt and Jordan receive the widest array of such provisions of order from the US among all the countries in the Middle East. They are also notable for the high levels of domestic sovereignty that they cede. When the hierarchical relationship between the donor and recipient nation is thus weakened, and the recipient’s sovereignty is challenged, what is it most likely to cede in exchange for support? Peters highlighted domestic authority, cross-border and territorial control and foreign policy autonomy as four key areas of concession.

So, what does US aid buy in the Middle East? The answer depends on the product in question, according to Peters. If we look at defense, providing aid to Egypt and Jordan may allow the US to expand its regional influence by taking advantage of institutional weaknesses. In terms of development, on the other hand, providing aid to Israel can support an amenable political leadership that is committed to building strong local institutions—and furthering regional stability.

The Human Security in the Middle East Seminar Series is sponsored by the Middle East Studies Program.

By Watson Institute Student Rapporteur Anna Andreeva ’12