Prospects-1988 (Washington: USAID, 1988, mimeo.), pp.20-23, and MEED, 1 Nov.
1986, p.8. American civilian loans carried interest of only 2-3%.
38 N. Ball, Security and Economy in the Third World (Princeton: Princeton U.P., 1988), p.199.
FM S loans, if not the cancellation of all or p a rt of the loan, was now an u rg en t m atter. Yet W ashington ad am an tly refused to a lte r the in te re st rate, for fear of encouraging other FM S beneficiaries, like P a k ista n and Turkey, to seek sim ilar trea tm e n t. In stead , the U nited S tates decided in 1985 to m ake an em ergency cash g ra n t of $500 million, to be disbursed d uring FY1985 and FY1986. This step was necessary to avoid Egypt falling behind in its paym ents by more th a n twelve m onths, which would resu lt in the autom atic suspension of A m erican aid, u n d er the provisions of the Brooke am endm ent. The irony of th is situ atio n w as not lost on Egyptian com m entators, who noted th a t the U nited S tates sem ed to take w ith one h a n d w h a t it gave w ith the other: m ost of the value of the economic assistance was cancelled out by the size of debt paym ents. In M arch 1985, M ubarak h im self h ad told Newsweek:
You’re giving me about $815 million in economic aid. E ach year, I am giving you back, as in te re st on th e m ilitary loans, about $500 million. The re s t is only about $300 million. I t is not helping me to raise the sta n d ard s [sic] of th e people.39
Opposition and governm ent alike m ain tain ed th a t th is was no way to tre a t a friend.40
The E gyptian governm ent faced a difficult task. I t was em barrassed and fru stra te d by W ashington's behaviour; yet, lacking an altern ativ e source of funding, it h ad to p ersist in its req u ests for m ore helpful policies. At th e sam e tim e, it w as attack ed by th e domestic opposition for being weak an d subm issive. H ere, it w as p a rtly th e victim of its own attem p ts to h ig h lig h t th e benefits of th e A m erican-E gyptian connection. As D ina Galal, a critic of A m erican aid policies, h as pointed out,
39 Newsweek, 11 March 1985, p.18.
40 See the Arab Strategic Report (hereafter ASR), 1985 and ASR, 1986, and I'sam Rif at in Al-AJiram al-Iqtisadi, 19 Aug. 1985, cited in R pt No. 19 (2e semestre 1985), pp.245 ff. Mustafa Amin at al-Akhbar (22 May 1985) maintained that, as American support for Israel had over the years compelled Egypt to squander its resources on wars and defence expenditure, Egypt was not 'begging' for more aid, only asking for its 'rightful entitlement'.
[o]ne can say that the [official] Egyptian press gives accords concluded with [AID] regular, repetitive and, one might even say, insistent coverage. News items on this subject are scattered and published at different times, so th at the average citizen is unable to grasp the real volume of aid and believes th at there is an abundant influx. In fact, each accord is reported at least three times: at the beginning and end of negotiations, and at the time of its implementation.41
Moreover, the language used by the semi-official press in its coverage of the government's dealings with Washington gave a false impression of progress. Every speech, complained Ali al-Din Hilal, was a 'turning point', every visit, 'historic'.42 Measured against such expectations, the results of Mubarak's rather unproductive trip to Washington in March 1985, for example, were bound to look disappointing.
Caught in a difficult and unequal relationship with Washington, the government felt bound to defend its position in public. The editorials of Makram Muhammad Ahmad, a journalist who was close to Mubarak, provide good examples of its attempts to do so. Besides reiterating the government's case to Washington, for more aid with fewer restrictions, lower interest rates on its debt and movement in the peace process, Ahmad defended the American-Egyptian relationship. Though it was one between a superpower and a medium power, this in no way meant that Cairo did Washington's bidding; there were often differences of opinion, which both sides did their best to resolve, and there was a high level of mutual dependence. Those who called for more belligerence on Egypt's part forgot th at Egypt had no alternative, in economic terms or with regard to regional political problems, but to deal with the United States. He reminded his readers that American aid had been more generous than th at of the Arabs,