On March 26, 1979, President Jimmy Carter smiled over one of the most expensive handshakes in U.S. diplomatic history: the signing of a peace treaty between Egypt and Israel by Anwar Sadat and Menachem Begin. As part of what Carter called "tangible evidence of U.S. dedication to the peace process," the United States agreed to provide $4.8 billion in "special financial aid" to the two countries over the next three years. But "special" quickly became normal: since then, Uncle Sam has handed over anywhere from $3 billion to $5 billion a year to both. That's a lot of "dedication." In fact, from 1962 to 2008, the United States has devoted at least 20 percent of its total foreign aid to Egypt and Israel, which were the top foreign aid recipients from 1978 until the wars in Afghanistan and Iraq. And guess what, you lucky taxpayers: we recently guaranteed Egypt and Israel, respectively, $1.3 billion and $3 billion in military financing each year for the next decade.
It's time to cap this broken gusher. You don't have to point fingers at either the Arabs or the Israelis to observe that the tactic of using U.S. foreign aid to promote a lasting peace in the Middle East has not only failed, but has also sucked up scarce foreign aid resources.
The idea behind giving Egypt such a large chunk of change was, as Carter put it, "to ensure that the Egyptians understand that our sensitivity to Israel's security requirements is paralleled by a concern for their security and national development." Yes, we managed to buy a cold peace between Egypt and Israel. But in the process, we helped Hosni Mubarak build himself a nice little security apparatus that's kept him pharaoh-for-life. (Why exactly does Egypt need the world's 11th biggest active military force, anyway?) Meanwhile, our aid levels to Israel have stayed high even as its ability to bear the burden of its own defense has steadily improved (as has its strategic edge): defense spending now accounts for about 7 percent of Israel's gross domestic product, less than half of what it represented in 1988; its economy is thriving--in fact, it had a trade surplus with the United States of $9 billion in 2009.
I don't think we should use the threat of aid cuts to try to bully Mubarak into reforming Egypt's political system, or Netanyahu into making concessions in Israel's talks with the Palestinians. Instead, for larger strategic reasons, we should just flat out cut aid to both countries and redirect some of the money toward other goals that have gone neglected.
Want to help a friendly, strategic Muslim country? How about funneling some of Egypt's annual bonanza to Indonesia, which has about three times the population but is slated to get about one-sixth the amount of U.S. foreign aid. Worried about the border with Mexico? Tilt Israel's horn of U.S. plenty to provide our southern neighbor with more development assistance and military equipment. And while we're redirecting money, let's not forget those plucky Jordanians, longtime recipients of our largesse who received $871 million in 2009--or about $137 per capita, versus the $35 per capita doled out that year to the hapless Haitians. (If you want to play your own version of rotisserie foreign aid-ball, dive into the 2011 Congressional Budget Justification and the USAID Greenbook.)
U.S. foreign aid shouldn't be like a long-term, fixed-rate mortgage agreement. Even in a cause as well-meaning as the fight against HIV/AIDS in Africa, steadily increasing assistance is reducing our leverage and strategic options, and encouraging delusions, dependence, and bad behavior on the part of its recipients. We need to be more flexible and opportunistic. Thirty years ago, the United States put its chips down in the Middle East. The bet hasn't paid off. We shouldn't have to wait another decade until we can put our money someplace where it's likely to do more good.