Halting aid to Egypt over military 'coup' would hurt US interests
Some in Congress want to call the military takeover in Egypt a coup and cut off the $1.5 billion aid the US gives the country annually. This position fails to appreciate the limits of the leverage Washington derives from its aid to Cairo and the potential consequences of halting it.
When Egyptians took to the streets demanding the ouster of President Morsi, the Egyptian military could have intervened with a scalpel. Instead it used a hammer. Less than a week into the intervention, the military has deposed the president, taken senior members of the Muslim Brotherhood into custody, suspended the constitution, dissolved the upper house of parliament, taken control of the country’s flag ship newspaper, intimidated independent media, and escalated violence against pro-Morsi demonstrators.Skip to next paragraph
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Thus far the US administration has assiduously avoided the term “coup” to describe the military’s actions. This is a conscious effort to avoid tripping the legal requirement that the US suspend aid to countries where the military has overthrown democratically elected governments. Not surprisingly, many disagree with the administration’s approach. Critics advocate for acknowledging that what occurred in Egypt is a coup and shutting off the more than $1.5 billion that Egypt receives annually from the US government.
Unfortunately, this position fails to appreciate the limits of the leverage Washington derives from its aid to Cairo and the potential consequences of halting it.
The United States has provided several streams of aid to Egypt over the past three decades. The largest stream is the $1.3 billion in Foreign Military Financing that is given to Cairo annually to acquire fighter jets, tanks, helicopters, and the spare parts and maintenance each piece of equipment requires.
A second smaller stream is the so-called Economic Support Funds, which since the 2011 Revolution, have been allocated to pay down Egypt’s more than $2.5 billion in debt to the US. In other words, those funds are delivered in the form of a self-addressed check – a form of debt forgiveness that the US can use as a kind of “carrot.” Giving money to Egypt to pay down its US debt in this form allows the US to hold Egypt to International Monetary Fund conditions that would put its economy on a more stable path.
And finally there are smaller pots of money the United States allocates for democracy promotion, professional military education, and other programs.
Egypt is currently the fifth largest recipient of US assistance worldwide. This leads many policymakers to assume it is a great source of leverage for the US to influence the Egyptian government’s decisionmaking. This view overstates what the US can accomplish by threatening to withhold aid. For starters, US aid to Egypt pales relative to the $12 billion in aid the Arab Gulf states of Saudi Arabia, the United Arab Emirates, and Kuwait have pledged to Cairo over the past few days.