Abstract
By many accounts, one of the key major factors shaping Egypt’s Arab Spring revolutionary momentum was the dismal state of its economy. Since the Arab Spring though, the economic situation in Egypt has only worsened. While the real growth rate stood at 5.1% in 2010, it plummeted to 1.2% in 2011. 25-30% of the youth population is now unemployed, over 20% of the population lives below the poverty line, and Egypt’s external debt in 2011 reached almost 40 billion dollars, significantly more than its foreign reserves of exchange and gold at close to 30 billion dollars. With political uncertainty looming large, foreign investors are still shying away. For many Egyptians then, US economic assistance can be a blessing. The 4.8 billion IMF package, for example, can potentially help stabilize the economy, move resources into free-trade zones, and promote job growth. For skeptics however, the IMF intervention is more of curse. It is perceived as a way of ensuring continued payment on the hefty loans taken by Mubarak’s regime. Exacerbating the problem, a majority of Egyptians have been skeptical of previous IMF interventions which led to the shrinking of the public sector, the rolling back of subsidies, and the increase in prices on basic foodstuffs.
At a time, where Mohammad Mursi’s Muslim Brotherhood is trying to win more popular support for its policies, including the IMF loans, Egypt’s population remains suspicious. In fact, nationalists (both secular and Islamists) worry about aid conditionality; the poor worry about further privatization, and a significant sector of Egypt’s pious agonize about the un-Islamic “tenants” of the loans themselves. Will these loans come with “interest-based” stipulations prohibited by Islamic law? Will foreign companies introduce new industries (linked to tourism for example) that might offend the Islamic sensibilities of Egypt’s masses?
In the politically fractured and rather unstable country of Egypt, economic development becomes all the more imperative for the country’s successful transition. Yet, several questions remain outstanding. Primarily, will citizens endorse US assistance as the country moves forward on its economic trajectory? Our paper will address this and other questions. We will utilize an original dataset of experimental and observational survey data of 3000 Egyptian citizens to test our hypotheses and advance our arguments
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