A Hospital in Egypt

In the Beltway's scandal of the day, the New York Times reports that Egypt's military duped the US military into paying for a commercial, civilian hospital. Miffed, the Pentagon moved to cut off funding for the project and even tried to recoup some of the expenses for this blatantly non-military project.

We keep hearing about the size and influence of the Egyptian military. Certainly, the actions of the military kept Egypt's remarkable transition largely peaceful, winning both admiration and support from around the globe. But, as the cynic says, let's look at the numbers.

Egypt has the 10th largest military in the world by manpower: about 470,000 men on active duty. That comes to just under 2% of Egypt's 25-million strong labor force. Egypt spends $5.8 billion on its military: $1.3 billion of that comes from us; $4.5 billion from the Egyptian taxpayer. Egyptians pay about 1% of their $470 billion GDP (2009) for their military; the US kicks in about 0.01% of our GDP. That's over 3 times what we spend on public broadcasting.

How does this stack up against the rest of the world? Egypt spends less of its GDP on its military than many large nations, including China, the UK, France, Germany, India, and Iran - all around 2.5%. It is far, far less than the USA (4.3%), Saudi Arabia (8.2%), or Israel (7%).

Also, for all their US-supplied goodies, the Egyptian military is pretty low-tech. Consider that Egypt's military is 2% of the work force but 1% of their GDP. In the US, the active military is just under 1% of the work force (just under 2% if you add in reservists), but over 4% of GDP. Another way of saying it is that an Egyptian soldier costs taxpayers half as much as a civilian job; in the US a soldier costs taxpayers 2 to 4 times as much as a civilian job.

One might even ask if Egypt needs this large a military. The nation is relatively safe. Although its neighbors Libya and Ethiopia can be considered unstable, the desert provides hundreds of miles of buffer between the borders and Egypt's population centers, and neither has a really capable military.

Egypt made peace over three decades ago with the only truly capable military in the region: Israel. One can see a real "peace dividend" for Egypt: 1% of GDP for their military while Israel continues to spend 7%. In current dollars, that peace dividend is worth over $1 trillion to Egypt, over twice its GDP (by my calculation).

Of course, the United States remains the guarantor of that peace. We've put $40 billion into aid to the Egyptian military during the past 30+ years: more into Israel. The American taxpayer got a real bargain, especially compared to the $1 trillion we've spent on Iraq and Afghanistan in the last ten years: a solid peace versus a result even the most ardent hawks admit is dicey. And best of all, no coffins.

What is so bad about the US building a hospital in Egypt? They need it. It will be helping people long after the plane or tank that we wanted the money to go for is rust. The average Cairene does not feel a lick safer if the Egyptian military has a few more arms, but they do see the benefit of a state-of-the-art medical facility. Especially since it is not off-limits to the 99% of Egypt's population that is not on active duty.

In addition to $1.3 billion in military aid to Egypt, we budget about $250 million in civilian aid. The lopsided ratio in favor of running aid out of the Pentagon instead of Foggy Bottom is typical of the United States going back to the early days of the Cold War. Republican presidents and Democratic presidents followed the same pattern.

Egypt faces some formidable challenges. Besides the obvious issue of creating a post-Mubarak government, the nation must deal with 10% unemployment and 13% inflation which overwhelm their 4.7% growth.

The average Egyptian undoubtedly values the American-financed hospital more in this troubled time than they would more military hardware. Talk about winning hearts and minds. Too bad it took subterfuge rather than clear policy to get it done. We had to be tricked into doing the right thing.