Krauthammer: Our aid to Egypt really ought to hinge on political reform

Egypt’s economy is in bad place, with an unemployment rate of around 13 percent and an even worse youth unemployment rate, and Morsi’s government has been negotiating with the International Monetary Fund about a $4.8 billion loan package to try to help stabilize the economy and get their budget in order. The IMF, however, would like to see some economic policy changes before they agree to that, including raising taxes and downsizing energy subsidies, but Egypt’s fractious political situation and struggling economy mean that the attempt to do so will not be a popular one.

Enter Secretary of State John Kerry, who offered to release $250 million in foreign aid to the Muslim Brotherhood government over the weekend as an incentive for Morsi to get cracking on those suggested economic reforms: “It is paramount, essential, urgent that the Egyptian economy get stronger, that it gets back on its feet… It’s clear to us that the IMF arrangement needs to be reached, that we need to give the market the confidence.” In a nutshell: You guys need to get it together to prevent an economic collapse and political chaos, and we’re going to be the ones to help you do it. The NYT reports:

Secretary of State John Kerry announced Sunday that the United States would provide $250 million in assistance to Egypt after Egypt’s president promised to move ahead with negotiations with the International Monetary Fund over economic reforms.

In a statement issued after his two-hour meeting with President Mohamed Morsi, Mr. Kerry said the aid decision reflected Egypt’s “extreme needs” and Mr. Morsi’s assurance that Egypt would reach an agreement with the I.M.F. after more than a year of talks over a $4.8 billion loan package.

The statement issued by Mr. Kerry noted that he and Mr. Morsi had discussed the need to ensure the fairness of Egypt’s coming elections, but it did not mention any specific political commitments the Egyptian president had made to receive the aid.

Er, is that wise? Kerry hinted that Egypt moving ahead with economic reforms is an implicit promise of some political changes as well, but as the Special Report panel pointed out last night, implicit promises and explicit promises are definitively not the same thing — and how exactly is it we can afford to be doing this when we just had a national freakout over the sequestration cuts?

The mistake, I think, the administration is doing, is making is having the engagement and the money and the support hinge on on economic reform, and not on political reform. … The economy is not a U.S. interest. The only U.S. interest is in the nature of this government. … We ought to be demanding political concessions as a reward for any kind of money, and not economic concessions. It’s an elementary idea, and I don’t understand why the administration doesn’t see it. … You don’t give them a free hand to do anything they want…

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