I can see why some influential Republicans on Capitol Hill would be reluctant to support the administration’s request to provide $450 million in emergency aid to Egypt. The recent mob attack on our embassy in Cairo, and President Mohammad Morsi’s slowness in condemning the attack, are hardly an advertisement for the new regime. But ask yourself this: Is Egypt likely to produce more or fewer terrorists if its economy collapses?
The question answers itself, and to the extent that an emergency infusion of cash from the U.S. and IMF can tide over the Egyptian economy for a while, it is likely to promote stability and deter the potential radicalization of Egyptian youth. It may even buy time for the new Muslim Brotherhood government to implement some of the free-market reforms it promised during the campaign, if it is so inclined and if it can overcome intense internal resistance from many sectors including the army. Conversely if the Egyptian debt crisis blows up, a la Greece or Iceland, the results are likely to be much more serious than in those countries, given the number of Salafist radicals already present in Egypt and given Egypt’s important strategic position as the largest Arab state.
Foreign aid is intensely unpopular among American voters and it has often backfired and failed to produce growth, as Governor Romney noted in a recent speech. But in this case the U.S. aid is not designed to promote long-term growth; it is designed to tide Egypt over to prevent an immediate crisis. And extending more aid to Egypt actually enhances our leverage over the new government—something that President Obama was able to take advantage of after the embassy attack to tough talk with Morsi, forcing Egypt’s president to strongly condemn the anti-American violence and to order a more vigilant role by the security forces in protecting the American diplomatic outpost.