Analysis On The Relation Between Foreign Aid And The Chang Of Egyptian Economic Model(1956-1981)

After the Second World War, a worldwide movement for national independence set off to a high climax. At this time in Egypt, the Suez Canal was still under the occupation of Britain and France. By the announcement of the control of Suez Canal by Egyptian government by president Nasser,Egypt began to recover its economic sovereignty. Later, the second Middle East war broke. The America and IMF's commitment to provide aid to build the Highdam was cancled.Just at that time of where to go,Soviet said that it can continue to finance the project.A Egypt pursitting independence received that.For the next two decades,from late 1950s to early 1970s,Soviet ,the leader of socialist countries, became the main supplier of aid for Egypt.Soviet's planned economic model was introduced to it.Foreign aid is one of the instruments,as political and military methods, served for the state's benefit.As the saying goes,there is no free lunch.The aid from Soviet made Egypt the front line to balance Israel and the U.S. in middle east.In 1970s,the domestic economy made Egypt realized that the planned economic model could no longer meet the requirement for development,and the endless war between Egypt and Israel forced the economy to the brink of collapse.But the arms and little funds given by Soviet and the Arab oil states , could just meet the temporary need.Those couldn't help Egypt escape from the crisis of economy.When Sadat came to power,he reformed the economic development model,chosed the Western-oriented"open door policy",put the market economy into practice,and ended the war with Israel. Then, the U.S. became the main supplier of aid to Egypt.Those big actions were the result of both domestic and foreign factors.Egypt changed the model of economic development, not only won peaceful environment and a huge sum of aid,but also, attracted foreign capital.This change conformed to the development trend of world economy, was a positive try to be near to the center of the world economy.So,the relations between foreign aid and the change of economic model were dialectically united and mutually causal.Foreign aid influenced the economic model deeply.At the same time,the development of Egyptian economy also determined the necessity and the source of foreign aid.