By Isabel Bucknall and Alex Odlum
This op-ed was originally published by ERCAS, European Research Centre for Anti-Corruption and State-Building.
This op-ed was originally published by ERCAS, European Research Centre for Anti-Corruption and State-Building.
A strategy at an impasse
As demonstrated by the Muslim Brotherhood’s widespread
boycott of this month’s constitutional referendum and the ensuing post-poll
violence, it is clear that deep-seated political tensions are
unlikely to recede swiftly in Egypt. The road to democracy will continue to be
long and hard, and donor assistance efforts will have to endure through thick
and thin if they are to have any impact. To date, the EU’s
assistance strategy has been unable to handle Egypt’s
tumultuous political realities. If the EU is to offer effective assistance to
support Egypt’s democratic progress, it must significantly change its strategy.
EU aid to Egypt channeled through the European Neighbourhood
Partnership (ENP) is manifestly ineffective in its current format. Tying EU
assistance to Egyptian progress on governance standards has proven too rigid.
Setting such conditions is incompatible with a turbulent political atmosphere.
Substantial reform is urgently required to scrap conditionality as the
overarching rationale of the ENP, replacing it with a more selective,
trade-based approach that supports Egyptian development amidst and despite
political chaos.
Can democratic
progress be ‘conditional’?
In 2007, the EU launched a €1 billion European Neighbourhood
Partnership programme to support Egypt’s political and economic development. It
has proven futile. A European
Court of Auditors report published last year found that funds
intended to back Egyptian government reform in democracy, human rights, good
governance and justice were either ineffectively spent, or not disbursed at
all. Of €17 million allocated to the Promotion and Protection of Human Rights
and Civil Society between 2007-2010, for example, only 1.8 million was spent.
As conditions remained unmet, funds failed to leave EU coffers and projects
were perpetually grounded. The result? Negligible, if any, EU impact on Egyptian
democratic progress.
Conditionality, even when based on partnership and
negotiated standards, inevitably results in impassable deadlocks in unstable
political environments. Devolving ownership by setting conditions that tie in
with a country’s own development agenda are the key to making conditionality
work. But when that development agenda, and indeed the government itself, are
changing at a rapid rate – Egypt has had four different heads of state and 2
constitutional referenda since January 2011– previously set conditions are
unlikely to be fulfilled by rival politicians.
Of course, such chaos may have been difficult to foresee
before 2011. Yet, rather than brace for a long and divisive struggle for power,
EU policy hastened to deepen its
commitment to conditions that had been agreed with a government
just toppled by sheer popular force. Thus far, EU calls of “more for more” have
been drowned out by the retreat of democratic progress and descent into
political instability.
Scrapping conditionality and reframing the ENP around
selectivity must be the first step of reform. This approach
would allow Egyptians to regain ownership, with the Government designing and
implementing their own targets for good governance prior to receiving full aid
funding. Seed-funding and technical assistance would be essential to kick-start
the process and provide the Egyptian government with initial momentum. This
model would allow Egypt to signal its own strong commitments to reform,
stimulating more donor and private investment, in turn producing a further
incentive for the government to push forward on social, political and economic
reform.
Policy Coherence for Democracy,
as well as Development
A move from conditionality to selectivity drastically cuts
EU funding outlays for governance support to Egypt. As little as €10 million
over 2 years would be required, according to
baseline figures of the Millennium Challenge Corporation (MCC),
an independent US government aid agency who works using the selectivity model.
It would be false, however, to equate a renewed emphasis on efficiency and
effectiveness in development aid disbursements, with abandoning Egypt
altogether. Selectivity can only succeed if it is matched by a parallel
commitment to economic support through deeper cooperation on free trade.
Current bilateral trade arrangements between the EU and
Egypt stem from 2004 ENP agreements
limiting manufacturing and agricultural tariffs. To foster tangible impact
through trade, the EU must substantially deepen its commitments to Egypt and
the surrounding region. Talks that
began in 2012 on a Deep and Comprehensive Free Trade Area
encompassing Tunisia, Jordan, and Morocco need to be urgently revived.
A DCFTA trade package
should comprehensively eliminate agricultural and manufacturing
tariffs and all other barriers to trade. Technical assistance should also be
lent to Egypt to align regulations with EU standards to the furthest extent
possible without jeopardizing Egypt’s trade compatibility with other global
partners. Finally, the DCFTA should relax rules of origin restrictions on goods
assembled in Egypt and other Southern Mediterranean countries, allowing
benefits to accrue in advance of final product transformations. Smooth flows of
component trade between producers in Egypt and high-end assembly plants in Europe
boast great potential for mutual benefit and should be encouraged, rather than
inhibited by arbitrary origin rules.
Agreement on a DCFTA will profit both Egypt and the EU, not
only economically, but also politically. Given that dire socio-economic malaise
contributed to protestors demand for Mubarak’s overthrow in 2011, political
tensions are likely to soften if economic growth can be boosted through trade
and translated into visible improvement to livelihoods.
2014 holds a host of democratic opportunities and challenges
for Egypt. Momentum for reform should rightly be driven from within. The EU
must also strike the balance of being a responsible neighbor, and treating
Egypt as an equal partner, listening to and accepting the realities of the Egyptians’
self-determined struggle for freedom and prosperity. Implementing an assistance
approach that combines selectivity and free-trade is a legitimate response to
the socio-economic and political demands of Egypt: “Bread, Freedom and Social
Justice”.
Isabel
Bucknall and Alex Odlum
are Master’s of Public Policy candidates at the Hertie
School of Governance in Berlin.
This is a guest post; views may not represent that of ECDPM
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