Egypt: linchpin of US strategy in the Middle East

IT has been nearly a decade since Egypt has become one of the two or three most important US allies in the Middle East. Indeed, since the fall of Iran, Egypt has become the linchpin of US strategy in the Middle East and the Persian Gulf. In exchange, the United States has become Egypt's main provider of economic and military assistance, at an annual rate of $2 billion. Over the years, US-Egyptian friendship has withstood some difficult tests, a fact that attests to its basic strength. These tests have included the assassination of President Anwar Sadat, the war in Lebanon, the Achille Lauro incident, and the US bombing of Libya. However, the cumulative impact of these events, coupled with other frustrations and disillusionments, has gradually been eroding the strength and resilience of US-Egyptian relations. In fact, if these relations are to remain strong and healthy, both partners should work harder at understanding each other's concerns and constraints.

The US, in particular, needs to have an accurate assessment of the depth of Egypt's frustrations and the difficulties involved in the delicate political and economic balancing act that the Egyptian government is trying to perform.

The Egyptians' frustration with the so-called economic dividends of peace with Israel - and indirectly friendship with the US - are equal to their early expectations. Regional economic developments of the last few years, especially the fall in oil prices, have exacerbated Egypt's chronic economic ills and have raised the level of popular frustration. The result has been a questioning of the wisdom of past economic policies and the political alliances associated with it.

The issue of Egypt's mounting foreign debt and the best ways to handle it and the US role in this regard are already controversial and troublesome issues in US-Egyptian relations. The issue of long-term solutions to Egypt's economic problems is only marginally less troublesome. Very few people in Egypt deny that a long-term solution to the country's economic problems would require drastic reform, including getting a handle on the runaway birthrate. But most believe also believe Egypt needs, and deserves, far more economic aid, particularly from its principal ally, to carry out reforms.

The Egyptian government is also keenly aware of the political costs involved in a too-sudden and drastic economic reform program which would inevitably hit the most vulnerable segments of the society. Therefore, the government also knows that, to carry out reforms, it must develop broad-based support for them and convince people of their urgency and necessity.

To achieve this goal, however, the government would need to be more responsive to political views and preferences of other groups and be prepared to reach political compromises. In fact, the government has been working in this direction for some time. The results of the latest elections may not be ideal from the perspective of all political groups. But they certainly are far more realistic than the over 90 percent majority that past governments had generally claimed, and certainly more representative of the configuration of political forces in Egypt.

This government policy to open up politically, together with other efforts to the same end, is also partly aimed at bringing the opposition forces - particularly the Islamic groups - out into the open and getting them to channel their activities through legitimate political processes. This is, indeed, a wise policy. However, if carried out in a meaningful way, it would also mean some curtailing of the government's freedom of action in setting policy, both foreign and domestic.

Certain aspects of Egypt's foreign policy may become particularly vulnerable: relations with Israel, relations with the Arab world, and even, to an extent, relations with the US.

While most Egyptians are still committed to peace with Israel, the lack of progress on the Palestinian issue has had a corrosive effect. It would be a mistake to take popular commitment to peace for granted. Nor should one underestimate the depth of Egyptian frustration at having lost its central place in the Arab world - at least officially if not in reality.

Also, while most Egyptians are aware of the importance of their relations with the US, they don't want to be hemmed in by them, and they want more leeway in order to follow policies in the Arab world, the third world, and elsewhere that are more in line with a nonaligned posture. For domestic political purposes as well, the Egyptian government may need to show its independence from the US by pointing to certain divergencies of opinion and policy between itself and Washington. One such area could involve the best means of starting a peace process between Israel and the Arabs.

These developments imply that the US needs to be more sensitive to Egypt's economic problems and political constraints. With budgetary difficulties and the already high level of US aid to Egypt, however, more US aid may not be feasible. But the US should encourage some of its allies - such as West Germany and Japan - to assist Egypt financially and to help it carry out economic reforms without sustaining much political damage. The US should also avoid incidents, like the Achille Lauro affair, which cause embarrassment for the Egyptian government, should do what it can to get the peace process going, and should encourage Egypt's efforts to develop a more independent and nonaligned image.

These measures will help to maintain the underlying health of US-Egyptian relations and the most vital US interest in Egypt, which is the continued existence of a stable, prosperous, and moderate Egypt in the highly unstable and increasingly less hospitable Middle East.

Shireen T. Hunter is deputy director of the Middle East project at the Center for Strategic and International Studies.