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Abstract
The Arab Gulf States (AGS), or the member states of the Gulf Cooperation Council (GCC) (Saudi Arabia, Kuwait, Oman, Bahrain, Qatar and the United Arab Emirates), have historically used foreign aid and humanitarian aid as a quiet tool of their respective foreign policies within the wider Middle East. More recently, however, we have seen targeted financial aid and military assistance by these states, particularly Saudi Arabia, Qatar and the United Arab Emirates, towards neighbours in crisis. Looking at the expansion of GCC state aid in the wider region after 2011 in the historical context of oil wealth windfalls, the article offers a close case study of UAE aid and financial intervention in Egypt. UAE aid and investment ties to Egypt are part of a growing strategic commitment linking Emirati domestic economic interests and security interests, particularly on counter-terrorism and weakening extremist ideologies. The flexibility of Emirati economic statecraft reflects a willingness to reduce support, especially when the investment opportunities are not seen as profitable to the state and its related entities. Arguably, the Emirati approach to Egypt presents a new form of conditionality, less interested or invested in the implementation of fiscal reform or political inclusion, and more concerned with advancing the twin goals of state-led capitalism and a regional vision of secular Arab leadership.
Notes
1 Woods, “Whose Aid? Whose Influence? China, Emerging Donors and the Silent Revolution in Development Assistance”, International Affairs 84.6 (2008), pp. 1205–21. Zimmerman and Smith, “More Actors, More Money, More Ideas for International Development Co-Operation”, Journal of International Development 23.5 (2011), pp. 722–38. For a more critical stance of the dominance of Western ideas in the donor community, see: Duffield, “The Development Security Nexus in Historical Perspective: Governing the World of Peoples”, Challenging the Aid Paradigm: Western Currents and Asian Alternatives, ed. Sorensen (2009), pp. 25–46.
2 Krageland, “The Return of the Non-DAC Donors to Africa: New Prospects for African Development”, Development Policy Review 26.5 (2008), pp. 555–84. See: Kim and Lightfoot, “Does DAC-Ability Really Matter? The Emergence of Non-DAC Donors: Introduction to the Policy Arena”, Journal of International Development 23.5 (2011), pp. 711–21.
3 In this paper, I conceptualize aid in a very broad sense, including foreign aid, development aid and targeted investment, from both private and public sources. Gulf states’ political economy merges state and private funds through ownership structures blending ruling family and government institutions. Cash, in-kind oil and gas, and directed aid in foreign direct investment are all part of the The GCC states “aid” portfolio and foreign policy tools.
4 For an exploration of how the UAE, as a small state, allocates aid and why, see: Al Mezaini, The UAE and Foreign Policy: Foreign Aid, Identities and Interests (2012).
5 Collier, “Is Aid Oil? An Analysis of Whether Africa Can Absorb More Aid”, World Development 34.9 (2006), pp. 1482–97. See also, more explicitly making the argument that natural resources and foreign aid have similar effects on entrenching governments in power when rents accrue: Morrison, “What Can We Learn about the ‘Resource Curse’ from Foreign Aid?”, The World Bank Research Observer 27.1 (2012), pp. 52–73.
6 Neumayer, “What Factors Determine the Allocation of Aid by Arab Countries and Multilateral Agencies?”, Journal of Development Studies 39.4 (2003), pp. 134–47.
7 Shilling, “Get Ready for $10 Oil”, Bloomberg View, 16 Feb. 2016.
8 Ibid.; Acharya, “How Ideas Spread: Whose Norms Matter? Norm Localization and Institutional Change in Asian Regionalism”, International Organization 58.2 (2004), pp. 239–75, excerpted in: Momani and Ennis, “Between Caution and Controversy: Lessons from the Gulf Arab States as (Re-)Emerging Donors”, Cambridge Review of International Affairs 25.4 (2012), p. 608.
9 See details of the economic development conference, orchestrated by the Egyptian government with assistance by high profile public relations and event specialist Richard Attias and Associates, on the event website “Egypt the Future” https://web.archive.org/web/20161011070343/www.egyptthefuture.com/. On the international investor and political support of the event, see: Shenker, “Sharm El Sheikh Rumbles with Grand Promises of the International Elite”, The Guardian, 15 Mar. 2015.
10 Arnold and Aboudi, “Egypt Got $23 Bln in Aid from Gulf in 18 Months – Minister”, Reuters, 2 Mar. 2015.
11 El Wardany, Al-Tablaway, and Feteha, “Egypt Secures Billions in Aid, Deals as Gulf Arabs Lead Way”, Bloomberg, 14 Mar. 2015.
12 Ulrichsen, “Meaningful Change or False Dawn: Policymaking in an Age of Austerity”, Gulf Affairs: Oxford Gulf and Arabian Peninsula Studies Forum (2016), pp. 2–4.
13 Arvai, Prasad, and Katayama, Macroprudential Policies in the GCC States Countries (2014), pp. 9–11.
14 Desai and Kharas, “The Determinants of Aid Volatility”, Brookings Institute Global Economy and Development Series, Working Paper 42 (2010), pp. 5–6.
15 Kholaif, “Egypt Free Floats Its Currency, Devaluaing It Against the Dolar”, Wall Street Journal, 3 Nov. 2016.
16 Momani and Ennis, “Between Caution and Controversy” (2012), pp. 605–27.
17 Nonneman, Development, Administration and Aid in the Middle East (1988), p. 133.
18 Simmons, Arab Foreign Aid (1981).
19 Ibid.; Nonneman, Development, Administration and Aid in the Middle East, p. 133.
20 Gulf State Assistance to Conflict-Affected Environments”, LSE Kuwait Programme on Development Working Paper 10 (2010), p. 9. Barakat and Zyck elegantly demonstrate this dramatic peak in official development aid by Gulf states in 1991–92, see p. 9.
21 Ibid.; Momani and Ennis, “Between Caution and Controversy” (2012), p. 609. Momani and Ennis rely on data adapted from MEES website: see www.mees.com, a subscription oil and gas industry service.
22 Cooper and Momani, “The Challenge of Re-Branding Countries in the Middle East: Opportunities Through New Networked Engagements Versus Constraints of Embedded Negative Images”, Place Branding and Public Diplomacy 5.2 (2009), pp. 103–17.
23 IMF, Regional Economic Outlook: Middle East and Central Asia (2008), p. 61.
24 Shushan and Marcoux, “The Rise (and Decline?) of Arab Aid: Generosity and Allocation in the Oil Era”, World Development 39.11 (2011), pp. 1969–80.
25 The Foreign Aid Coordination Office (FACO) of the UAE Ministry of Foreign Affairs, created in 2014, signals a public commitment to its aid and intervention strategy in the region and beyond: UAE Ministry of Foreign Affairs, “The Foreign Aid Coordination Office” (2014).
26 See for example, Kuwait Fund for Economic Development (2013): Kuwait Fund for Economic Development , “Kuwait Fund Activities” (2013).
27 Tok, Calleja, and El-Ghaish, “Arab Development Aid and the New Dynamics of Multilateralism: Towards Better Governance?”, European Scientific Journal 1 (2014), pp. 591–604.
28 Villanger, Arab Foreign Aid: Disbursement Patterns, Aid Policies and Motives (2007), pp. 6–7.
29 Billat, The Funding of Humanitarian Action by Non-Western Donors: The Sustainability of Gulf States’ Contributions, MA diss. (2015).
30 There is some debate on how foreign aid can help or hinder a country at risk of civil war, depending on the timing of the aid allocation and if it allows governments to continue fiscal expenditure to stave off crisis, particularly in agricultural/primary product economies. See: Savun and Tirone, “Exogenous Shocks, Foreign Aid and Civil War”, International Organization 66.3 (2012), pp. 363–93. See: Collier and Hoeffler, “Aid, Policy and Peace: Reducing the Risks of Civil Conflict”, Defence and Peace Economics 13.6 (2002), pp. 435–50.
31 Bearce and Tirone, “Foreign Aid Effectiveness and the Strategic Goals of Donor Governments”, Journal of Politics 72.3 (2010), pp. 837–51.
32 There is debate on whether even recipients with “good governance” might reap economic growth from foreign aid. See: Burnside and Dollar, “Aid, Policies, and Growth”, American Economic Review 40 (2000), pp. 847–68. And in rebuttal, see: Easterly, Levine, and Roodman, “Aid, Policies, and Growth: Comment”, American Economic Review 94 (2004), pp. 74–80.
33 Sons and Wiese, “The Engagement of Arab Gulf States in Egypt and Tunisia since 2011: Rational and Impact”, DGAP Analyse 9 (2015).
34 Ahmed, “The Perils of Unearned Foreign Income: Aid, Remittances, and Government Survival”, American Political Science Review 106.1 (2012), pp. 146–65.
35 Ibid., p. 146.
36 Lis, “Terrorism, Armed Conflict and Foreign Aid”, Peace Economics, Peace Science and Public Policy 20.4 (2014), pp. 655–67.
37 Woods, “The Shifting Politics of Foreign Aid”, International Affairs 81 (2005), pp. 393–409.
38 Duffield, “Human Security: Linking Development and Security in an Age of Terror”, 11th General Conference of the EADI, Bonn, 21 to 24 Sept. 2006, pp. 11–38.
39 Dietrich, “Bypass or Engage? Explaining Donor Delivery Tactics in Foreign Aid Allocation”, International Studies Quarterly 57 (2013), p. 698.
40 Ibid., pp. 699–712.
41 Ibid., p. 701. Dietrich makes this point referencing the work of Paul Collier. See: Collier, Guillaumont, Guillaumont, and Gunning, “Redesigning Conditionality”, World Development 25.9 (1997), pp. 1399–407.
42 Mesquita and Smith, “A Political Economy of Aid”, International Organization 63.2 (2009), pp. 309–40.
43 Jones, “Aid Supplies Over Time: Addressing Heterogeneity, Trends and Dynamics”, World Development 69 (2015), pp. 31–43.
44 Ibid., p. 31.
45 Jones cites an early argument on the peer cycles of aid in: Dudley and Montmarquette, “A Model of the Supply of Bilateral Foreign Aid”, The American Economic Review 66 (1976), pp. 132–42.
46 Savun and Hays, “Foreign Aid as a Counterterrorism Tool: Aid Delivery Channels, State Capacity, and NGOs”, presented at the American Political Science Association Annual Meeting, Seattle, 1–4 Sept. 2011, p. 25.
47 Godfrey, “Egyptian NGOs Live Under Threat of Regulation”, Nonprofit Quarterly, 27 May 2015.
48 Habboush and El Wardany, “Saudi Suspends Egypt's Oil Shipments until Further Notice”, Bloomberg, 7 Nov. 2016.
49 Young, “The Gulf's Entanglement in Egypt”, Arab Gulf States Institute in Washington, 25 Aug. 2016.
50 Ibish and Aly, “Egypt-GCC Partnership: Bedrock of Regional Security Despite Fissures”, Arab Gulf States Institute in Washington Issue Paper 11 (2016).
51 Ahmed, “Egyptian Court Annuls Deal to Hand Over Two Red Sea Islands to Saudi Arabia”, Reuters, 21 June 2016.
52 Mahdi, “Kuwait Said to Renew Contract to Supply Crude Oil to Egypt”, Bloomberg, 17 Nov. 2016.
53 Feteha, “Egypt Said to Get $2 Billion Saudi Deposit in IMF Deal Boost”, Bloomberg, 12 Oct. 2016.
54 Mounir, “Will Sisi's Economic Reforms Succeed?”, Al-Monitor, 25 Aug. 2015.
55 Interviews with international consultants engaged with Ministry of Foreign Affairs on development strategy in Egypt, London, Mar. 2015.
56 Interview with educational charity executive, Washington DC, Aug. 2015.
57 Arnold and Torchia, “UAE's Arabtec Says No Progress on Egypt Housing Project”, Reuters, 2 Sept. 2015.
58 Kholaif, “Egypt Free Floats Its Currency”, Wall Street Journal, 3 Nov. 2016.
59 Parasie, “Egypt Unveils Plans for New Capital City: Development to Receive Support for UAE”, Wall Street Journal, 14 Mar. 2015.
60 Bailey and Willoughby, “Edible Oil: Food Security in the Gulf, Energy, Environment and Resources”, Chatham House Briefing Paper, 1 Nov. 2013.