The fear in Washington is thus that Egypt's hapless leadership is sending the country over a cliff. The nightmare scenario is of an Egypt unable to pay its bills, which would send half of Cairo flooding into Tahrir Square. The military might even feel it had to take control once again. That's today's problem. In Cairo, Kerry publicly harped on the need to reach agreement on the loan, and in private admonished (or perhaps the word is browbeat) Morsy to make the tough political choices, and to begin working with the opposition. And Kerry offered incentives: a $250 million down payment on the $1 billion which Obama has promised to make available, as well as an additional $300 million once Morsy signed a deal with the IMF.
So the overall toolbox is this: modest financial incentives, private exhortations with public encouragement, and no punitive measures. Is that really a sufficient response to a crisis of this magnitude afflicting the historic heartland of the Arab world? The first and most obvious thing that needs to be said is that it's way better than what Republican foreign policy geniuses like Marco Rubio have in mind, since withholding economic assistance until Egypt makes the political changes he wants will virtually ensure the kind of calamity which will make political compromise the least of Egypt's worries. And given Morsy's haplessness -- but also the likely backlash against public criticism from the United States -- private admonitions may be more effective right now than public opprobrium.
The big problem is money. In his recent book, Dispensable Nation, Vali Nasr points out that the United States offered large-scale assistance when democratic waves washed over Latin America and Eastern Europe, but has offered only trifling aid in the Arab world, and above all in Egypt. That's true; even Obama's promised $1 billion consists heavily of loan guarantees. And while Libya and even Tunisia will not need massive financial help, Egypt will. The administration has begun working on a multinational plan to leverage private investment in the democratizing Arab states -- another incentive for Morsy to sign a deal with the IMF. But there are no more Marshall Plans in the offing. The cupboard is bare.
On balance, I'm mostly with my colleague Marc Lynch, who argues that Obama has pretty much done what he can in Egypt. But that very fact brings home the limits of the possible. The fragile Arab democracies and would-be democracies need help more desperately than Poland or Hungary did; but they are also harder to help. There is not a lot the administration can do to make Egypt's political opposition engage in democratic politics, and there is not a lot it can do to make Morsy realize that winning a parliamentary majority does not authorize you to run roughshod over your opponents. Those are insights only gained through painful experience. And yes, the United States simply doesn't have the scratch any more. Financing is not something Washington leverages; it furnishes. In that regard, those who say the United States is weaker than it used to be are right.
Nasr argues that Washington has given up on the Arab world -- in fact, pretty much on the whole world. I think it's fairer to say that Obama can't do a good deal that he might like to do, and that he's quite prepared to rationalize that with the proposition that the Arab world must be allowed to work out its destiny on its own. Is that cynicism? Maybe a little. Mostly, I'd say, it's just reality.