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The 8 wealthiest industrial countries, meeting at the G-8, urged that the world give Egypt, Tunisia and liberated Libya (‘emerging democracies in the Arab world’) some $40 billion in aid. The sum will make headlines but there is less to it than meets the eye.

The G8 is only ponying up $10 billion itself, and that is only in the form of relatively vague promises of a sort that have often not been completely followed through on in the past. It is urging that the Gulf oil states to give $10 billion, though some of them, like Saudi Arabia, were not actually very happy about Hosni Mubarak being overthrown and it is not clear that they will want to help grassroots democratization succeed. That $10 bn. may or may not come through, and if it did it might have strings attached that would actually be undemocratic.

Then the G8 is urging that the International Monetary Fund and the World Bank provide another $20 bn., but that aid is likely to be in the form of loans.

But Egypt alone is carrying $80 billion in debt, and its debt servicing costs have risen because its credit rating has been downgraded in the wake of the political crisis.

Tunisia is even worse off, with 1/8 of Egypt’s population but a debt of $50 billion racked up by the Zine El Abidine kleptocracy. Before the crisis, Tunisia had been looking to borrow nearly $3 billion this year just to pay the interest on the old debt and cover budget shortfalls (caused by the ruling class stealing the country blind).

So the G8′s idea of getting these countries further in debt, and making vague promises on direct aid, isn’t probably actually very helpful.