July 13 (Bloomberg) -- Hillary Clinton’s planned trip to Egypt this weekend was at one point a question mark on her world tour.
Officials debated whether the U.S. secretary of State should be meeting with newly elected Egyptian President Mohamed Mursi after he called into question his commitment to the rule of law by defying the country’s Supreme Constitutional Court.
On Thursday, Mursi wisely bowed to the court after it ordered him to do so, clearing the way for Clinton to continue on to Cairo. The next question is whether she should pursue her original agenda: releasing U.S. economic assistance that had been frozen in response to an earlier clampdown by Egypt’s interim military leaders on pro-democracy groups.
The answer is a qualified yes. Egypt’s bedraggled economy needs the help.
True, the new president’s opening act was worrying, and we hope he has learned a lasting lesson from his overreach. The danger is that this reversal by Mursi, an Islamist from the Muslim Brotherhood, was merely a tactical retreat, that he lacks commitment to judicial independence and other hallmarks of democracy.
Notwithstanding the motives of the court, which had ruled that elections for a third of the seats in the Muslim Brotherhood-dominated Parliament were invalid, the judiciary is seen in Egypt as a highly respected and stabilizing institution. Liberal activists were alarmed by Mursi’s move to reconvene the Parliament, which the interim military council had dissolved in its entirety before he took office, and prominent judges threatened to go on strike if he did not back down.
In the end, thankfully, he did. Now there is the chance to breathe life into Egypt’s economy. Since unrest began in January 2011, the country has used up about half its foreign reserves, depleting them to $15.5 billion. For a year, the U.S. has offered Egypt the prospect of $1 billion in debt forgiveness. Under congressional requirements, Egypt would have to spend the equivalent sum on internal development projects, which must be agreed upon by the two countries.
Perhaps most important is the fate of a $3.2 billion loan the International Monetary Fund has been discussing with Egyptian authorities, on and off, for more than a year. Brotherhood officials have been ambivalent about accepting such a loan. Yet without the ballast of IMF support, and the structural reforms that would come as conditions, Egypt will see neither significant new foreign investments nor the billions more in aid promised by the Gulf countries.
Giving the economy a boost ought to appeal to Mursi and the Brotherhood because parliamentary elections, at least for one-third of the seats, will have to be held relatively soon.
These are points Clinton can make subtly, of course, in private discussions. In her public utterances, she almost certainly will say that Egyptians know best how to tackle their challenges.
Still, the U.S. should continue to communicate openly that to be a good friend of the U.S. (which brings not only material assistance but also a strategic alliance), Egypt must respect three red lines. It must not breach its peace treaty with Israel or oppress Egyptian women or minorities, notably Coptic Christians.
U.S. officials will be watching Egypt for other signs of reflux as well. American aid flows in a pipeline and should be stopped again if Mursi and the Cabinet he appoints stray from democratic fundamentals. The U.S. may not be able to push Egypt hard for progress, but there is no reason for it to financially support backsliding.
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