EU audit finds €1 billion aid to Egypt is wasted

From FT.com:

The €1bn in EU aid supplied to Egypt over the past seven years has done little to achieve its stated aims of improving democracy and human rights in the country, according to a damning assessment by the bloc’s spending watchdog.

The European court of auditors found that the new Egyptian government that swept to power in the wake of popular uprisings in 2011 had – if anything – demonstrated even less interest than its predecessor in EU-sponsored programmes to foster civil society and protect the rights of women and minorities.

It also warned that Brussels was unable to track about 60 per cent of the aid money after it was transferred to Egyptian government coffers, raising concerns about widespread fraud and mismanagement.

“They do not fulfil the conditions at all – and nevertheless, the money is given,” said Karel Pinxten, the court of auditors official who oversaw the review, and is urging the EU to overhaul the policy.

The report suggests that the EU continues to fumble a decades-old effort to craft an effective policy to improve governance and generate economic growth in a vital region on its southern doorstep.
The most recent incarnation of the bloc’s so-called “neighbourhood policy” was unveiled in 2004 with the philosophy that Brussels would give more aid money to governments that delivered on reform and withhold it from those that did not.

The initiative gained greater urgency after the wave of popular uprisings that rocked north Africa and the Middle East two years ago, turning out authoritarian governments and opening the way for a new approach by the EU.

As the largest country in the Arab world and one of the EU’s biggest recipients of foreign aid, Egypt has been a particular priority. The EU has allocated about €1bn to Cairo between 2007 and 2013 – the period covered by the audit.

Yet the court of auditors found that the European Commission, the EU’s executive arm, and the European external action service, its diplomatic service, “have not been able to manage EU support to improve governance in Egypt effectively,” according to a copy obtained by the Financial Times.

“The commission took quite a few initiatives. But taking initiatives is one thing – getting results is something else,” Mr Pinxten said.

He also noted the resistance to programmes to stamp out corruption and protect human rights shown by Hosni Mubarak, the long-time Egyptian ruler, as well as the current Islamist government led by Mohamed Morsi.

“It’s quite clear under the period of Mubarak but also now under Morsi, from the Egyptian side, there was not a high degree of willingness to go along with the commission. And that’s an understatement,” Mr Pinxten said.

A formal reply by the commission generally accepted the report’s findings but said it did not “take sufficiently into consideration the local political context” and argued more time was needed to see results.

Nonetheless, it acknowledged “an increased aversion towards civil society and human rights more broadly” in Egypt since the 2011 uprising.

The report is likely to spur a fresh debate about the merits of EU foreign aid – particularly at a time of budget cuts in Europe.

Guy Verhofstadt, the leader of the Liberal Democrats in the European parliament, said the report showed the EU human rights policy to be “a joke” and demanded that the bloc be more forceful about suspending aid.

Aid by the US to Egypt dwarfs that from the EU. And the US is not obligated to send one cent! JPost noted last week:

At Friday’s State Department daily press briefing one reporter asked, “How much is the US obligated to provide to Egypt under the Camp David Accords?” Nothing at all, the spokesman responded a day later, obviously after consultation with Foggy Bottom policy makers.

“The United States is not obligated to provide assistance to Egypt. We provide assistance because it serves U.S. national interests in a crucial and volatile region.”

During his most recent trip to Cairo, Secretary of Sate John Kerry pledged another $250 million. In response to a reporter’s question, the department spokesman said it was all for economic stabilization and development and none was for military assistance.

So who lobbies for continued US aid to Egypt?

In part, Israel.

In prior years when Congress tried to link aid to Egypt to democratic reform and respect for human rights, some of the loudest objections came from the Israeli embassy in Washington, whose diplomats scurried to Capitol Hill to explain how vital that aid was to maintaining their peace treaty.

They weren’t overly concerned about Cairo’s abysmal human rights record, though they did want Washington to press for an end to anti-Israeli incitement in the Egyptian media.

US aid to Egypt is far more expansive than that from the EU, but it seems clear that much the money being sent by USAID is being wasted.

Two years ago, Egypt claimed to have rejected USAID money exactly because of the strings attached - that they require human rights and democracy to flourish. But they seem to still accept it, as nothing on the USAID site mentions any problem.

Perhaps the reason is that the Muslim Brotherhood considers all the Western money flowing indirectly into its coffers to be a jizya tax on the West.

Just last month, John Kerry pushed through an extension on military aid to Egypt with seemingly no conditions:

Discreetly, the US State Department renewed military aid to Egypt last month. The announcement was made only 7 June. The administration of Barack Obama avoided a public debate that would be embarrassing on the latter's support for the new political regime in Egypt, run by the Muslim Brotherhood.

US Secretary of State John Kerry used the exemption granted him by law to extend military assistance, despite the concerns of Washington on the new Egyptian regime's policy towards the establishment of a true democracy and respect of fundamental freedoms and human rights in Egypt.

On 9 May, Kerry sent Congress a memo informing it of his decision to extend $1.3 billion of annual military aid to Egypt, citing the need to protect the essential interests of the United States in the Middle East, namely the passage of warships in the Suez Canal, necessary to protect the oil-rich Gulf region against threats from Iran, the protection of the borders with Israel from infiltration by Islamic militants and weaponry, which enhances the security of the former against the threats of Islamic extremists in the Gaza Strip and the Sinai Peninsula.

At any rate, the EU audit proves that any Western money being sent as an incentive to improve human rights and democracy in Egypt is being thoroughly wasted. Just as importantly, it proves that the West is reluctant to reign in aid even when it is shown to be a waste - it is harder to stop a program than to start it. (Think about UNRWA, over sixty years after it was supposed to have disappeared.)

Will the EU do a similar audit on money sent to the PLO, directly and through NGOs?

(h/t Elliott E)