What does the U.S. presidential election hold for Egypt?
Most Americans would agree that U.S. presidential campaigns are far too long — two years — and far too costly — almost USD 2 bn. Democrats and Republicans will both conduct primaries in many states between February and June 2016 and will hold conventions to select a candidate for the general election in November 2016.
Most Americans would also agree that the key issues in U.S. presidential elections are the economy and national security. Recent terrorist attacks in California and Paris have made Americans anxious and more focused on national security.
The Democrats currently have three active candidates, but Hillary Clinton is the clear favorite. The Republicans have more than ten candidates. A year ago, most people expected that Jeb Bush, the son and brother of two former presidents, would be the Republican frontrunner. Today, Jeb is trailing in the polls and it is more likely that Marco Rubio, a young Cuban-American senator from Florida, will be the Republican candidate.
The current leader in the Republican primary race is Donald Trump. Trump — a real estate developer with no prior political experience — is an unusual candidate and the political surprise of 2015. In an effort to appeal to conservative voters in the Republican Party, Trump has taken a number of extreme positions, including building a wall along the Mexican border and restricting Muslims from entering the U.S.
My advice to friends from other countries is to disregard the rhetoric that occurs in U.S. Presidential debates. Many Americans are embarrassed by Trump’s extreme positions and his language. He has, however, continued to lead his Republican opponents with 30+% of likely Republican voters. This translates to about 10% of American voters. Trump’s lead will be cut significantly as other candidates drop from the campaign — and in a head-to-head election with Rubio, Trump would lose.
An election between Clinton and Rubio would be close. Rubio is a young, photogenic, Hispanic senator, and Florida is a key state, but Hillary will be favored to win and become the first female President of the U.S. Her husband, Bill Clinton, would become the first “first man” in the White House. Lots of potential firsts this year.
A Clinton administration would be more conservative and tougher than Obama. As Secretary of State under Obama for four years, Hillary’s fundamental foreign policy positions are likely to be similar to Obama’s. However, she would be among the most experienced foreign policy experts ever elected President of the U.S. She lived in the White House as First Lady from 1993 to 2001, served as a Senator from New York and as Secretary of State. No other candidate from either party has had more foreign policy experience.
Hillary has encouraged financial support to countries in need of economic development and has been an advocate of the Egyptian-American Enterprise Fund (EAEF). I would expect a future Clinton administration to consider additional enterprise funds in the MENA region — including, under the right circumstances, Syria.
Regardless of who wins the U.S. election in November, the next President will seek to maintain a strong relationship with Egypt. Economic support for Egypt will be a priority for any administration, Republican or Democrat. The candidates know that Egypt is critical to the United States’ MENA policy for a number of reasons. National security is most important, but military support is not enough.
A strong Egyptian economy, with a growing private sector creating jobs, is the key to growth and prosperity. A reauthorized Export-Import Bank of the U.S. together with the Overseas Private Investment Corp. can be helpful in providing additional capital for the private sector. Funding small- and medium-sized enterprises is important. Investing in early-stage ventures offers attractive opportunities for U.S. investors. Following a revalued currency, there will be an increase in foreign direct investment coming from the U.S. private sector.
Egypt will likely benefit from whoever wins the U.S. presidential elections, but be prepared for ten months of disagreeable and exaggerated rhetoric from across the political spectrum.
The op-ed is solely the opinion of James A. Harmon and in no way reflects the opinion of the EAEF nor the U.S. government.
About the author: James A. Harmon is Chairman and Chief Investment Officer of Caravel Management LLC, the investment manager of the Caravel Fund (International) Ltd., an emerging and frontier markets fund that was launched in 2004. In 2004, Mr. Harmon was elected Chairman of the Board of the World Resources Institute (WRI), a global policy and research institution.
Mr. Harmon is the Chairman of the Egyptian American Enterprise Fund, a private corporation seeded by U.S. government funds to promote the development of the Egyptian private sector with a particular focus on job creation, financial inclusion and sustainability.
Mr. Harmon served as the Chairman, President and CEO of the Export-Import Bank of the U.S. from June 1997 to June 2001. Ex-Im Bank assists in financing the export of U.S. goods and services to international markets. Prior to Ex-Im Bank Mr. Harmon was Chairman and CEO of the investment bank Schroder Wertheim & Co.
Mr. Harmon was the US Representative on the High Level Panel (HLP) for Infrastructure Investment 2011, a panel appointed by the Finance Ministers and Central Bank Governors of the G20.
A member of the Council on Foreign Relations and a Trustee Emeritus of Brown University and Barnard College, Mr. Harmon received a B.A. in English Literature from Brown University and an MBA in Finance from Wharton Graduate School, University of Pennsylvania.