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Egypt bars Americans from leaving: What's going on here?

Egypt's military rulers escalated a dispute over US-funded NGOs by barring some American employees from leaving the country, including the son of Transportation Secretary Ray LaHood.

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Why Egypt raided NGO offices

Egypt alleged that the groups were illegally funding local political groups, and seized computers, documents, and cash in the armed raid. But preventing their executives from traveling – presumably because criminal charges may be brought against them – is a major escalation.

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Both IRI and NDI have run into trouble with Egypt's rulers in the past, but problems were eventually smoothed over. The work of both organizations is hardly radical, with a focus on teaching NGOs how to craft messages and manage budgets, and political parties the importance of polling and using focus groups. After Egypt briefly shut down both groups a few years ago, they found new ways to operate by working with the state. NDI, for instance, kept state security informed of all their programs in advance.

Now, SCAF is escalating tensions at a time when Egypt needs international funds more than ever.

Official statistics showed tourism dropped by 30 percent last year, and some officials privately say the decline was greater. Wealthy Egyptians have moved cash offshore, in a climate where criminal proceedings are ongoing against many close to the old regime, and many more are afraid that they will eventually be targeted.

Foreign investment, with plenty of domestic upheaval, has likewise dried up. Egypt's foreign reserves halved last year, and are now down to about $18 billion, a perilously small number for a country with 80 million people, the majority of whom rely on government fuel and bread subsidies.

A state too big to fail

As a practical matter, assuming the charges are eventually dropped, it's unlikely the US will turn its back on the military, or Egypt more generally. The country is in many ways too big to fail in the eyes of the US, with its peace deal with Israel and the emerging political power of the Muslim Brotherhood. After years of the State Department giving Egypt's most popular opposition movement the cold shoulder, US Ambassador Anne Patterson has been reaching out to them in recent weeks. Perhaps that's what the military is banking on.

Egypt's finances practically dictate that the country will be going cap in hand abroad for cash in the near future. The US would usually be a first port of call, as would the International Monetary Fund and World Bank, where Washington has considerable sway. All of this would argue that cooler heads will prevail. But the message from SCAF to Washington today feels like, "You need us more than we care about you."

Perhaps it's a posture to remind America not to oppose the military's interests as Egypt turns towards presidential elections and rewriting a constitution in a way that many activists hope will clips the military's wings.

But in an election year, with Obama's rivals looking for ways to show the president is easily pushed around abroad, this could become a bigger issue. This week, at least, SCAF is playing a dangerous game.

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