Israel war: Time to halt IMF money if Egypt refuses to admit Gaza civilians
Tiana Lowe Doescher
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Despite an indicted Egyptian agent sitting in the United States Senate, we have evidently been unable to convince Egypt‘s military dictatorship to open up the Rafah crossing to civilian refugees in Gaza. Secretary of State Antony Blinken seems to have bought time to hold off Israel’s necessary grand invasion into Gaza with President Joe Biden’s forthcoming visit to the Middle East’s sole democracy, but both Egypt and Jordan have remained firm in their commitment to keeping Gaza cordoned off from the rest of the Gulf.
If Egypt refuses to listen to diplomacy, it is time for the U.S. and the West to flex a far bolder muscle: shutting off the money supply.
BIDEN SHIFTS FOCUS AWAY FROM DOMESTIC AFFAIRS AS ISRAEL WAR INTENSIFIES
The U.S. has both directly and indirectly bankrolled much of the Egyptian economy. From 1978 to 2022, the State Department reported that the U.S. had given Egypt more than $50 billion in military aid and $30 billion in economic aid. Just last month, the Biden administration approved $235 million in military aid for Egypt that it had withheld for the past two years due to human rights concerns.
But perhaps the most punitive potential could come from leveraging our power at the International Monetary Fund. Egypt is the second largest debtor to the IMF, with some $18 billion owed to the organization. The U.S. in turn is the IMF’s single greatest financial contributor, responsible for 17% of the IMF’s “quotas,” or the obligatory dues to the IMF by voting member states.
So the U.S. broadly controls billions in aid to Egypt, and the nation’s economy needs it badly. To bolster state-run and subsidized industries, as well as repaying outstanding loans to other countries, Egypt has relied on its money printer. As a result, inflation has reached nearly 40%, and prices are on pace to double every two years.
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At the end of last year, the IMF began to pay out a $3 billion loan to Egypt but has paused its final two installments, aware of Egypt’s crumbling credit. The West could use these outstanding payments, the potential of debt restructuring, and the promise of international aid to convince Egypt to open the Rafah crossing at last.
If the White House truly does believe that Israel has a duty to defend itself, the country must be able to freely attack and obliterate the military capabilities of Hamas, as well as the terrorists themselves. Opening up the Gaza border to Israel would allow the Palestinians to reject Hamas rule and assert themselves as civilian noncombatants, correctly sparing them from Israel’s equally correct counteroffensive. Any potential of Palestinian statehood is contingent on such a plan and eradication of Hamas, and its purported allies evidently must be made to prove they understand this, lest they admit their historic support of a Hamas-controlled Gaza really serve as a cover for their Nazi sympathies.