Egypt: Background and U.S. Relations

Egypt in Transition: Transition under Military Rule Jeremy M. Sharp Specialist in Middle Eastern Affairs February 8June 21, 2012 Congressional Research Service 7-5700 www.crs.gov RL33003 CRS Report for Congress Prepared for Members and Committees of Congress Egypt in Transition Summary On February 11, 2011, President Hosni Mubarak resigned from the presidency after 29 years in power. For 18 days, a popular peaceful uprising spread across Egypt and ultimately forced Mubarak to cede power to the military. In the wake of Mubarak’s resignation, a Supreme Council : Transition under Military Rule Summary On January 25, 2011, Egyptians began 18 days of mass protests that eventually drove President Hosni Mubarak to resign from the presidency after 29 years in power. In the wake of Mubarak’s resignation, a Supreme Council of the Armed Forces (SCAF)—made up entirely of military officers who enjoyed leading positions under Mubarak—has exercised executive authority directly and via an interim cabinet. The SCAF oversaw a March 2011 referendum that approved amendments to Egypt’s constitution, issued a constitutional declaration, and has and also issued new laws on the formation of political parties and the conduct of parliamentary elections. The amended constitution lays out a transition laid out a transitional framework in which the elected People’s Assembly and Shura Council will, in conjunction with with the SCAF, were to select members for a 100-person constituent assemblyConstituent Assembly to draft a new constitution subject to a referendum. How Egypt transitions to a more democratic system in the months ahead will have major implications for U.S. foreign policy in the Middle East and for other countries in the region ruled by monarchs and dictators. This report provides a brief overview of the transition underway and information on U.S. foreign aid to Egypt. U.S. policy toward Egypt has long been framed as an investment in regional stability, built primarily on long-running military cooperation and sustaining the March 1979 Egyptian-Israeli peace treaty. Successive U.S. Administrations have viewed Egypt’s government as a moderating influence in the Middle East. U.S. policy makers are now grappling with complex questions about the future of U.S.-Egypt relations, and these debates are likely to influence consideration of appropriations and authorization legislation in the 112th Congress. Congressional Research Service Egypt in Transition Contents Egypt in Transition: The Military and Muslim Brotherhood Forge a Tentative Trail to Civilian Rule................................................................................................................................. 1 Domestic Politics: Islamists in Parliament ................................................................................ 3 Domestic Politics: Egypt’s 2012 Presidential Election ............................................................. 4 The Economy: Urgent Need for International Lending................................................................... 4 Foreign Policy: Relations with Israel............................................................................................... 5 Egypt’s Role as a Peace Broker?......................................................................................... 5 Security in the Sinai Peninsula............................................................................................ 6 Islamists and Israel .............................................................................................................. 6 Foreign Policy: U.S.-Egyptian relations .......................................................................................... 7 U.S. Foreign Aid to Egypt Since the February 2011 Revolution .............................................. 8 Egypt’s Raids on NGOs and Possible Cuts to U.S. Aid ...................................................... 9 U.S. Aid to Egypt: Options for Congress .......................................................................... 10 Figures Figure 1. Map of Egypt.................................................................................................................... 2 Tables Table 1. U.S. Assistance to Egypt, FY2010-FY2012..................................................................... 11 Table 2. U.S. Foreign Assistance to Egypt..................................................................................... 11 Table 3. U.S. Foreign Assistance to Egypt, 1946-1997 ................................................................. 12 Contacts Author Contact Information........................................................................................................... 14 Congressional Research Service Egypt in Transition Egypt in Transition: The Military and Muslim Brotherhood Forge a Tentative Trail to Civilian Rule To date, Egypt’s year-old transition from military to civilian rule has been anything but smooth. Popular protests, sectarian violence, and clashes between police and demonstrators have all at one time or another threatened to derail the process. Since the resignation of former Egyptian President Hosni Mubarak last year, nearly 800 people have died as a result of constant political unrest. Many indicators suggest that Egypt is far worse off economically now than a year ago. In this tense political atmosphere, minor disputes can trigger major unrest, and many analysts are cautiously watching Egypt’s domestic politics for signs of potential instability. However, it appears that in the short term, the two most powerful forces in Egyptian politics—the victorious Islamist political parties led by the Muslim Brotherhood and the ruling Supreme Council of the Armed Forces or SCAF—are negotiating, often behind the scenes, to bring about a transition to civilian rule by the summer of 2012. According to the latest transition timeline (which has changed multiple times in the past year), in the months ahead, the new Islamistdominated People’s Assembly will elect a 100-person Constitutional Assembly, which will then draft a new constitution. Should this document be written and then approved by popular referendum, presidential elections will be held in the summer of 2012, though the presidential campaign and the constitutional drafting will most likely overlap due to the short time allotted for each. If presidential elections run smoothly and the process goes as planned, Egypt’s military will then step aside from day-to-day governance, and a civilian administration will resume executive authority, as defined by a newly revised constitution. This SCAF-Muslim Brotherhood understanding is the direct result of political brinksmanship by both sides that had narrowly avoided unleashing prolonged mass unrest in November 2011. That month, SCAF spokesmen had attempted to interfere with the appointment of members to the constitutional assembly, a privilege specified for parliament according to the March 2011 constitutional referendum. The Muslim Brotherhood, which had anticipated an electoral victory and perceived the SCAF’s move as a threat to their own power, responded by bringing tens of thousands of protestors back into the streets of Cairo on November 18. A day later, Islamists withdrew from the demonstrations content with their show of strength, but thousands of other Egyptians continued protesting, clashing with police when the latter attempted to clear Tahrir Square. Police-protestor confrontations then dramatically escalated, resulting in several deaths, condemnation of the SCAF, and a subsequent concession by the military to accelerate the timetable for transition to civilian rule from 2013 to the summer of 2012. The SCAF’s concession combined with the start of elections cooled public tensions. This key episode demonstrated how the SCAF had clearly miscalculated the degree of opposition to any drastic changes to the transition plan, and the events of November-December clearly indicate that their room for maneuver is limited. Moreover, this new timetable aligns with public expectations. According to Gallup polls, 82% of Egyptians believe that the military will relinquish power to a civilian government after they elect their next president and a 63% majority think it would be bad for the military to remain involved in politics after the presidential Congressional Research Service 1 Egypt in Transition election.1 Furthermore, nearly 9 in 10 Egyptians say delaying the presidential election, expected to take place before June 30, 2012, would be a bad thing for their country. Figure 1. Map of Egypt Source: Map Resources, adapted by CRS. In the months ahead, SCAF-Brotherhood agreement over the powers of the military once civilian rule is established will be critical to stabilizing Egypt’s domestic politics. According to former President Jimmy Carter, who met with Field Marshal Hussein Tantawi in January 2012, “I don’t think the SCAF is going to turn over full responsibility to the civilian government. There are going to be some privileges of the military that would probably be protected.” Reportedly, both sides are negotiating the terms of immunity for the military for deaths that occurred at the hand of security services following former president Hosni Mubarak’s resignation in February 2011. SCAF may desire that all current and retired military officers be tried only in military courts for alleged crimes committed during the transition. In order to improve its public perception in the midst of crucial behind-the-scenes negotiations, the SCAF announced that the Emergency Law, which it extended until the end of June 2012, would be applied only to cases of “thuggery.” It also 1 "Egyptians Expect Military to Hand Power to Elected Gov't," Gallup, January 25, 2012. Congressional Research Service 2 Egypt in Transition released hundreds of detained protestors and a prominent blogger and critic of the military (Maikel Nabil). Overall, the exact nature and details of the separation of powers in Egypt’s emerging political system are unclear. Going forward, the military may retain certain powers after the transition is complete, particularly in the realms of national security, war powers, foreign affairs (specifically Egypt’s relationship with Israel), and the defense budget. These powers may either be enshrined constitutionally or assumed as extra-constitutional principles. The newly elected People’s Assembly may create a special limited national security committee (called the National Defense Council) that oversees the details of the defense and intelligence budgets with only the full Parliament able to review the total size of the military budget.2 The status of other military interests, such as their vast land holdings and corporations, is unclear. Domestic Politics: Islamists in Parliament On January 23, the People’s Assembly held its inaugural session following what many international observers have deemed to be a somewhat successful, though not perfect, election for the lower house of parliament known as the People’s Assembly. Of the 498 elected seats, Islamists of varying sorts control nearly 70%, with the Muslim Brotherhood’s Freedom and Justice Party (FJP)-led Democratic Alliance controlling the most at 47% (235 total). The Islamist Alliance-list led by the Salafist Nour Party came second with 25% (125 seats), followed by the Wafd at 8% and the liberal Egyptian bloc party list at 6.8%. The SCAF appointed 10 seats (mostly women and Coptic Christians). With an overwhelming majority of seats, most analysts anticipate that many legislative issues will be subject primarily to intra-Islamist competition between the Muslim Brotherhood and the Salafists. Only 12 women, some of whom were appointed, are serving in the People’s Assembly. The FJP’s strong electoral showing will allow it to mostly frame the agenda for parliament. The Speaker of Parliament is Brotherhood member Saad al Katatny, who previously chaired the organization's parliamentary bloc. FJP members chair the Foreign Relations Committee and Defense and National Security Committee. Committees of planning, industry, economy, manpower, Arab affairs, housing, culture, transport, human rights, health, legislation, education, complaints, and religious affairs also are now headed by MPs directly affiliated with the Muslim Brotherhood or either parties in the Democratic Alliance.3 Salafists4 are in the opposition, as the Brotherhood has enough support from smaller parties to keep them in the minority. Salafists, who take a conservative, literalist approach to interpreting the Koran, are expected to focus on infusing Islam into domestic and foreign policies. A Nour party member is chairman of the Education and Scientific Research Committee and the Economic Affairs Committee. 2 "In Egypt, Signs of Accord Between Military Council and Islamists," New York Times, January 22, 2012. Gulf News, in English, February 1, 2012. 4 Egypt’s Salafi movement aims to transform post-Mubarak Egypt into an Islamic state by making Islamic Shari'ah law the main source of legislation in the country. Prior to the 2011 revolution, the Salafis avoided politics and instead focused on preaching, running social programs and promoting their strict interpretation of Islam through their network of mosques and satellite television channels. However, Salafis have moved into the political arena and embraced political activism as a way to spread Islamist ideology. See, “OSC Report: Egypt-- Guide to Key Salafis and Groups,” Open Source Center, Document ID# GMP20111207372001, December 7, 2011. 3 Congressional Research Service 3 Egypt in Transition Many experts expect the FJP to differentiate itself from the Salafist opposition by being more pragmatic, especially when it comes to the economy. The party may focus on promoting private investment, recovering lost revenue from land deals reached during the Mubarak era, creating jobs, boosting the agricultural sector, and reducing income inequality through redistributive tax policies. However, many Islamists from both the Muslim Brotherhood and the Salfist Nour party share general goals of inserting certain Koranic prohibitions into civil law, such as bans on interest-based banking and consumption of alcohol. Though both sides may differ on the implementation, according to one expert, “no matter how generously one interprets the sharia, certain prohibitions are unavoidable -- and the Brotherhood's parliamentarians vow to push those prohibitions into law.”5 Domestic Politics: Egypt’s 2012 Presidential Election Presidential elections are, according to the SCAF, to be held by the end of June 2012. No official date has been set but candidates may start to register on March 10. A civilian advisory panel has recommended that the election be set for May 16. A candidate must be endorsed by at least 30 members of parliament or 30,000 eligible voters. Potential frontrunners include former Arab League Secretary General and former Egyptian Foreign Minister Amr Moussa; Abdel Moneim Abul Fotuh, a former member of the Muslim Brotherhood; and Ahmad Shafiq, the last prime minister to serve under Mubarak. The Economy: Urgent Need for International Lending Egypt’s economy has suffered greatly during the past year’s transition, and without substantial international support, the situation could deteriorate further, leading to significant public hardship. GDP growth in 2011 was a mere 1.8%. Foreign investment has fallen by nearly threequarters and tourism is down a third. With less revenue and the government’s decision to protect the pound, foreign exchange reserves have been dropping rapidly, from a pre-revolution high of $36 billion to perhaps as little as $10 billion (about four months worth of import cover) after accounting for certain obligations. If the situation continues as is, Egypt may have to devalue the pound. To meet its obligations, Egypt has been borrowing from domestic sources, having rejected loans from the International Monetary Fund (IMF) in the summer of 2011.6 However, domestic banks are no longer able to keep buying government debt at levels needed. In order to address its balance of payments deficit, Egypt has indicated a new willingness to negotiate with the IMF, though the terms of the new package are expected to be more stringent. Many Egyptians anticipate that the government will have to curb costly energy subsidies, and that perception, combined with rising inflation, has led Egyptians to stockpile gasoline. The Egyptian government spends more than $15 billion a year on energy subsidies, and any government that tries to curb 5 “Where Did Nick Kristof Get the Idea That the Muslim Brotherhood Is Moderate?” The New Republic, December 14, 2011. 6 At the time, Egyptian officials erroneously believed that spending cuts, economic growth, and foreign aid would help the treasury weather the storm and avoid the prospect of having to turn to the West for financial assistance. Congressional Research Service 4 Egypt in Transition this benefit may face staunch public opposition.7 Nevertheless, the IMF could require the government to reduce energy subsidies as a condition for its assistance. According to one banker, “Egypt lost out on quite a significant opportunity by rebuffing the IMF…. Whatever they would offer will come with much more conditionality than six months ago.”8 In rejecting an earlier IMF loan offer last year, Egypt’s military leaders may have calculated that the wealthy Gulf Arab states would make up the difference; they were wrong. Instead of a promised $10 billion by Gulf Cooperation Council members, only $1 billion—$500 million each from Saudi Arabia and Qatar—was delivered. The Gulf states may actually want Egypt to participate in an IMF program in order to enforce fiscal discipline before delivering more funds. Qatar has stated that it will provide more money for Egypt once power is handed over to a civilian government. Accepting IMF credit may be a divisive issue in Egyptian politics. The Salafist Nour party in the opposition rejects foreign borrowing, and the SCAF may choose to pass the issue off to the new civilian government after presidential elections. According to the Economist Intelligence Unit, “The FJP has not taken a clear position on the IMF issue, but it is unlikely to raise objections unless it considers that the loan carries conditions that would inhibit the party's ability to pursue its policy goals.” Foreign Policy: Relations with Israel The 2011 revolution injected the decades-old Arab-Israeli conflict into the realm of Egyptian domestic politics in a manner previously unseen. Under Mubarak’s rule, antagonism toward Israel was certainly permitted and permeated the Egyptian media. However, regime censorship contained criticism of Egyptian policy toward Israel or even Hamas by allowing for only a very limited public discussion of the issue. Now Egyptian public opinion and support for the Palestinian cause has the ability to seriously rupture Israeli-Egyptian relations in an unprecedented manner. Many U.S. policymakers fear that should unanticipated conflict occur, the fallout from heightened Arab-Israeli tensions would be difficult to contain. Non-state actors, such as Hamas, base their military forces in civilian areas, and should another war or Palestinian uprising break out (as it did in 2000, 2006, and 2008), images of Arab civilian casualties broadcast over satellite television and the Internet may have a deeply destabilizing effect in the region. No longer can autocratic regimes such as Egypt under Mubarak be counted on to suppress public anger against Israel. Egypt’s Role as a Peace Broker? Egypt also may no longer play as helpful a role in brokering Israeli-Palestinian peace talks. Though Egypt under Mubarak maintained a cold peace with Israel, under his leadership Egypt did host a number of important Israeli-Palestinian negotiations, and Israel counted on some Egyptian cooperation in countering Hamas rule in the Gaza Strip. Though Egypt’s military has an interest in maintaining peace with Israel and keeping conflict outside Egypt’s borders, Egyptian Islamist groups—though they have indicated a willingness to maintain the overall peace treaty with 7 8 "Economic Crisis Adds Dangers on Egypt’s New Political Path," New York Times, January 24, 2012. "Egypt Goes Back to the IMF for Loan," Wall Street Journal, January 11, 2012. Congressional Research Service 5 Egypt in Transition Israel—may not accept a foreign policy that is as adversarial to Hamas. Many analysts suggested that when Israel completed the prisoner exchange with Hamas to return Gilad Shalit from captivity, it did so in part in anticipation that Egypt would not be willing or able to broker such deals in the future due to Egyptian Islamist support for the Hamas cause. For the United States, the possible loss of Egypt as a reliable broker limits its options when trying to corral regional support for renewed negotiations. Recent talks between Israelis and Palestinians in Amman suggest that Jordan may try to fill this vacuum, though the small kingdom does not carry the same political weight as Egypt. Security in the Sinai Peninsula Over the past year, since the resignation of former Egyptian President Hosni Mubarak, security and the rule of law has deteriorated throughout Egypt, particularly in the Sinai Peninsula, posing new challenges for Israeli-Egyptian relations. Criminal and terrorist organizations based in the Sinai have taken advantage of more lax security to conduct operations against Israeli, Egyptian, and foreign targets. Terrorist groups based there have bombed gas pipelines and raided resorts, and on August 18, 2011, a Gazan terrorist cell traversed the Sinai into Israel and attacked both civilian and military targets—killing 8 and injuring 31. In hot pursuit of the perpetrators across the border, Israeli and Egyptian forces reportedly killed seven of them, but an Israeli aircraft apparently also killed five Egyptian police officers by mistake. The incident heightened IsraeliEgyptian tensions, as revolution in Egypt and the resentment toward Israel it unleashed had already strained diplomatic bilateral relations throughout 2011. Fundamental tension remains between having sufficient Egyptian troops to maintain security in the Sinai and avoiding a buildup that could threaten Israel’s perception of security. The 1979 peace treaty limits the number of soldiers that Egypt can deploy in the Sinai, subject to the parties’ ability to negotiate changes to Egyptian deployments as circumstances necessitate. In the days leading up to the August 18 attacks, reports indicated that Egypt and Israel had agreed to an Egyptian deployment of an additional 1,000 soldiers/policemen to the Sinai. Other reports suggest that Israel has agreed to the deployment of up to 3,000 Egyptian troops. Israel also is accelerating construction of a 17-foot tall, 150-mile long, $400 million security fence along its border with Egypt. With Israel hesitant to amend the peace treaty, some analysts anticipate more provisional concessions allowing Egypt to bolster its military presence.9 Islamists and Israel Many observers are carefully watching how Egypt’s newly empowered Islamist legislators address their country’s relationship with Israel. According to the English translation of the FJP’s program on political leadership, the FJP affirms the right of the Palestinian people to liberate their land, and highlighting the duty of governments and peoples of Arab and Muslim countries, especially Egypt, to aid and support the Palestinian people and the Palestinian resistance against the Zionist usurpers of their homeland.10 9 Policy Forum Report Sinai: The New Frontier Of Conflict? Policywatch #1872, The Washington Institute for Near East Policy,November 21, 2011. 10 Available online at http://www.ikhwanweb.com/article.php?id=29291&ref=search.php Congressional Research Service 6 Egypt in Transition At the same time, Muslim Brotherhood leaders have signaled their intent to maintain peace with Israel. In an interview with Tom Friedman of the New York Times, Essam El Erian, vice chairman of the FJP, said that “This [peace treaty] is the commitment of the state—not any group or party— and we have said we are respecting the commitments of the Egyptian state.”11 However, many Brotherhood members have said that the peace treaty may be “reviewed.” One spokesperson for the Salafist Nour party said, “We will abide by the treaty, but this does not mean accepting a number of clauses which the Egyptian people are clearly and unanimously against, such as exporting gas to Israel.” Foreign Policy: U.S.-Egyptian relations One tension that has been present in U.S.-Egyptian relations for the past decade, and is expected to continue unabated and perhaps amplified as a result of the revolution, is the balance between the pursuit of U.S. national security interests vis-à-vis Egypt and the promotion of American values and universal human rights. Realism versus idealism is a foreign policy dilemma confronted in all statecraft, perhaps no more starkly than in U.S.-Egyptian relations. For the United States, Egypt is a strategic partner. The U.S.-brokered 1979 Israeli-Egyptian peace treaty has kept two of the most powerful Middle Eastern conventional armies at peace for over three decades, a remarkable accomplishment considering the record of Arab-Israeli wars over the three decades before the treaty. The Suez Canal is one of the world’s key waterways, and the United States relies on continued access to it to project its power in the Mediterranean and the Persian Gulf and to protect global oil and cargo shipments that pass through the canal daily. Finally, the United States relies on a strong Egyptian partner in counter-terrorism due to the country’s long experience in combating extremist groups, though some of these groups, like Gemma Islamiyya, have ironically become part of Egypt’s political landscape. Complications have arisen when the maintenance of these interests conflicts with other goals, such as the protection of minority and women’s rights in Egypt. The rise of Islamist parties in Egypt may be a harbinger of new conflicts over differing Western and Egyptian values. Various Islamist groups, particularly Salafists such as the Nour Party (generally believed to be more extreme than the Muslim Brotherhood), which received the second-highest share of the vote in Egypt, may try to continue the suppression of Coptic Christian rights in Egypt and place new restrictions on the rights of women in social and family law. Though the United States may argue that Egypt will only grow stronger as a nation if it supports religious freedom and gender equality, new Islamist political leaders may not agree, forcing U.S. lawmakers to make difficult choices when it comes to supporting Egypt in other arenas such as trade and bilateral aid. Moreover, it also is quite possible that Islamists, once in power, undermine Egypt’s fragile democracy by restricting freedom of speech, particularly when it comes to religion. As a possible harbinger of things to come, Egyptian Coptic billionaire businessman and liberal politician Naguib Sawiris is currently being sued by Islamists for insulting religion, months after he tweeted a cartoon making fun of Islamists. As Egypt transitions toward greater civilian rule, U.S. policymakers may have to broaden relationships with an array of actors to a degree unknown during the Mubarak era. It appears that the Obama Administration is already adapting its diplomacy to new Egyptian circumstances. U.S. policymakers have already held preliminary meetings with leaders of the Muslim Brotherhood’s 11 "Political Islam Without Oil," New York Times, January 10, 2012. Congressional Research Service 7 Egypt in Transition political party, the Freedom and Justice Party. After meeting with FJP officials, Under Secretary of State for Economic Growth, Energy, and the Environment Robert D. Hormats said that the FJP members he met with were “very pragmatic. They understand, they're the majority party now in the parliament. They are going to be the primary political party in Egypt. They need to deliver results.”12 As the United States reaches out to new political actors, many experts question the degree of U.S. leverage in post-Mubarak Egypt, particularly as U.S. resources for foreign policy overall may be shrinking given national budgetary constraints and domestic priorities. Many experts suggest that the Muslim Brotherhood, to the extent that it can dictate Egypt’s foreign policy, will try to move Egypt away from the United States and return the country to the non-aligned, more independent foreign policy course it followed during the 1960s and early 1970s. Even under Mubarak, Egypt has always been strongly nationalistic, and anti-colonialism is a powerful narrative there. Others suggest that while Islamists may not hold the United States in high esteem, economic realities will force Egypt, at the least in the short term, to maintain relations with the West, particularly as it seeks lending from the World Bank and International Monetary Fund to stabilize its stalled economy. U.S. Foreign Aid to Egypt Since the February 2011 Revolution After Mubarak’s resignation in February 2011, the Administration made several aid proposals for Egypt. In the weeks following the resignation, the Obama Administration reprogrammed $165 million in already appropriated ESF for support to Egypt's economy ($100 million) and political transition ($65 million). In a speech delivered at the State Department on May 19, 2011, President Obama outlined a new plan for U.S. engagement with Arab countries undergoing political transitions, such as Egypt. Major components of that plan include the following: 12 • Launch a $2 billion facility in the Overseas Private Investment Corporation (OPIC) to support private investment across the region. • Provide up to $1 billion in bilateral debt relief to Egypt, working with the Egyptian government to invest these resources to foster growth and entrepreneurship. • Help Egypt regain access to capital markets by providing $1 billion in U.S.backed loan guarantees to finance infrastructure and job creation. • Work with Congress to create enterprise funds to invest in Tunisia and Egypt, modeled after funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall. Enterprise funds are to focus on making loans to, or investments in, small- and medium-sized (SME) businesses in the fund's host country that other financial institutions are reluctant to invest in. • Refocus the European Bank for Reconstruction and Development (EBRD) so that it may provide similar support for democratic transitions and economic modernization in the Middle East and North Africa as it has in Europe. • Launch a comprehensive Trade and Investment Partnership Initiative in the Middle East, working with the European Union (EU), to encourage more trade "Obama set to speed aid to Egypt-official," Reuters, January 25, 2012. Congressional Research Service 8 Egypt in Transition within the region; build on existing agreements to promote integration with U.S. and European markets; and open the door to freer trade for countries that adopt high standards of reform and trade liberalization to construct a regional trade arrangement. Overall, Congress has supported new Obama Administration proposals for Egypt but with conditions. P.L. 112-74, the Consolidated Appropriations Act, 2012, provides the full request for Egypt ($1.55 billion), authorizes debt relief, and authorizes and appropriates funding for the creation of an enterprise fund to promote private sector investment. However, Section 7041 of P.L. 112-74 specifies that no funds may be made available to Egypt until the Secretary of State certifies that Egypt is meeting its obligations under the 1979 Egypt-Israel Peace Treaty. It further specifies that no military funds be provided until the Administration certifies that Egypt is supporting the transition to civilian government, including by holding free and fair elections and by implementing policies to protect freedom of expression, association, and religion, and due process of law. These certifications may be waived by the Administration under certain conditions. In addition, conferees directed the Secretary of State to submit a report to the Committees on Appropriations, not later than 60 days after enactment of the act, outlining steps that the government of Egypt is taking to protect religious minorities, including Coptic Christians; prevent sectarian and gender-based violence; and hold accountable those who commit such acts. Egypt’s Raids on NGOs and Possible Cuts to U.S. Aid Egypt’s recent treatment of Americans employed by U.S.-based democracy promotion organizations working in Egypt has led to widespread calls for cuts or suspension of U.S. aid to Egypt. On December 29, 2011, Egyptian police raided the offices of at least 10 U.S.-based international non-governmental organizations working on election monitoring, political party training, and government transparency in Egypt, including the International Republican Institute (IRI), National Democratic Institute (NDI), and Freedom House, as part of a criminal investigation commissioned by Minister of International Cooperation Fayza Abul Naga into foreign funding of NGOs. Abul Naga is the only remaining cabinet holdover13 from the Mubarak era and has served since 2001.14 Police seized laptop computers and interrogated employees, accusing various organizations of operating illegally without a license. Several U.S. groups have applied for legal registration, but their applications have been pending for years, leaving them in legal limbo; hence Congress’s decision to employ the legislative language referenced above.15 As a result of the raids, many NGOs were forced to close their local offices. The U.S. government protested the raids, and the Supreme Council of the Armed Forces (SCAF), the effective executive authority in transitional Egypt, promised that equipment would be returned and NGO operations would return to normal. However, these pledges were not fulfilled. Two weeks later, Egypt barred at least six American NGO employees from leaving the country, drawing further criticism from the Administration and lawmakers. Reportedly, President Obama 13 According to one unnamed senior U.S. official, “When the regime changed, we all thought, Faiza will be gone....Man, were we wrong. She’s more powerful than ever.” See, “Architect of Egypt’s NGO crackdown is Mubarak holdover,” Washington Post, February 7, 2012. 14 Among the many challenges this crisis poses for the United States is ascertaining which Egyptian group is driving the decision-making behind the NGO issue, besides Minister Abul Naga herself. Members of the military and the Muslim Brotherhood have been equivocal when asked to publicly clarify their position on this issue. 15 NDI has attempted to register since 2005. See, http://www.ndi.org/facts-on-ndi-egypt Congressional Research Service 9 Egypt in Transition personally called Field Marshall Tantawi, the head of the SCAF, to remind him that the FY2012 Appropriations Act contains a certification requirement (see above) before any military aid may be released, though “Tantawi did not believe him.”16 As a result of these developments, many lawmakers are calling for a suspension of military aid to Egypt. On February 6, Egyptian authorities charged 43 people, including the Egypt country directors of NDI and IRI, with spending money from organizations that were operating in Egypt without a license. Nineteen Americans, including Sam LaHood, the son of U.S. Transportation Secretary Ray LaHood, face criminal charges. Secretary of State Hillary Rodham Clinton said shortly before the charges were announced that she had warned Egyptian officials that the investigation of NGOs had cast doubt on the delivery of U.S. aid, saying “We are very clear that there are problems that arise from this situation that can impact all the rest of our relationship with Egypt.”17 On February 8, Egyptian investigative judges said that the 43 employees who have been charged could face up to five years in prison for working at unlicensed organizations, failing to pay taxes, entering the country on tourist visas, and training political parties.18 U.S. Aid to Egypt: Options for Congress Egypt’s recent actions toward American citizens working there have placed U.S. officials in a difficult position. On the one hand, many officials feel a tough U.S. response is warranted, and that cutting U.S. aid or suspending it is a logical starting point. On the other hand, such a step may play into the hands of the very same sources within the regime who appear to have instigated the current crisis. The Administration and Congress are faced with a decision about what the right balance is between disapprobation and overreaction. Should the acrimony continue to increase, both sides will risk a more permanent rupture in relations that may run counter to certain U.S. national security interests—such as leverage within Egypt’s military, influence on Egypt’s policy toward Israel, access to the Suez Canal, etc. The budget request President Obama is scheduled to release on February 13 may provide a better sense of how the Administration is approaching the aid question. In addition to the option of cutting aid for FY2013, another potential option is for the Secretary of State to not do anything until Egypt relents in its campaign against U.S. citizens. In practice, this would mean not obligating any FY2012 funds in order to avoid certifying that, according to P.L. 112-10, “Egypt is supporting the transition to civilian government including holding free and fair elections; implementing policies to protect freedom of expression, association, and religion, and due process of law.” Under this scenario, military aid funds would lay dormant during a period of availability.19 Another option for Congress would be to rescind FY2012 funds altogether though new legislation. 16 “Obama warns Egypt that military aid is at risk,” International Herald Tribune, January 28, 2012. "Egypt Defies U.S. by Setting Trial for 19 Americans on Criminal Charges," New York Times, February 5, 2012. 18 "NGO Workers could face 5 years in Prison, Egyptian Judges say," Washington Post, February 8, 2012. 19 Section 7011 of P.L. 112-74 limits the availability of unobligated FMF to the one fiscal year unless otherwise specified. 17 Congressional Research Service 10 Egypt in Transition The disposition of future Egyptian governments toward the United States is unknown,20 as is the likely future separation of powers between the legislature, the executive, the military, and the judiciary in the emerging Egyptian political system. Egypt’s military rulers have indicated their intention to step down from power as soon as elections are held either in May or June of 2012, although they may retain significant financial and internal oversight authorities. The Administration and Congress may view that move as an opportunity to reach either a formal or informal understanding with any new Egyptian government, stipulating that U.S. assistance comes with certain conditions that reflect U.S. national interests and values, subject to the approval of Congress. This understanding could be enshrined in a memorandum of understanding or another type of agreement. Table 1. U.S. Assistance to Egypt, FY2010-FY2012 (regular and supplemental appropriations; current year $ in millions) Account FY2010 FY2011 FY2012 ESF 250.0 249.5 250.0 FMF 1,300.0a 1,297.4 1,300.0 IMET 1.900 1.400 1.400 INCLE 1.000 1.000 .250 NADR 2.800 4.600 5.600 1,555.7 1,553.9 1,557.25 Total Source: U.S. State Department. a. Congress provided $260 million of Egypt’s total FY2010 FMF appropriation in P.L. 111-32, the FY2009 Supplemental Appropriations Act. The remaining $1.04 billion was appropriated in P.L. 111-117, the FY2010 Consolidated Appropriations Act. Table 2. U.S. Foreign Assistance to Egypt ($ in millions) Fiscal Year Economic 1948-1997 Military IMET Total 23,288.6 22,353.5 27.3 45,669.4 1998 815.0 1,300.0 1.0 2,116.0 1999 775.0 1,300.0 1.0 2,076.0 2000 727.3 1,300.0 1.0 2,028.3 2001 695.0 1,300.0 1.0 1,996.0 2002 655.0 1,300.0 1.0 1,956.0 2003 911.0 1,300.0 1.2 2,212.2 2004 571.6 1,292.3 1.4 1,865.3 20 A recent Gallup poll noted that about 7 in 10 Egyptians surveyed in December 2011 oppose U.S. economic aid to Egypt, and a similar percentage opposes the U.S. sending direct aid to civil society groups. See, “Most Egyptians Oppose U.S. Economic Aid,” Gallup, February 6, 2012. Congressional Research Service 11 Egypt in Transition Fiscal Year Economic Military IMET Total 2005 530.7 1,289.6 1.2 1,821.5 2006 490.0 1,287.0 1.2 1,778.2 2007 450.0 1,300.0 1.3 1,751.3 2008 411.6 1,289.4 1.2 1,702.2 2009 250.0 1,300.0 1.3 1,551.3 2010 250.0 1,300.0 1.9 1,551.9 2011 249.5 1,297.4 1.4 1,548.3 Total 31,070.3 40,509.2 43.14 71,623.9 Table 3. U.S. Foreign Assistance to Egypt, 1946-1997 ($ in millions) Year Total Military Loan Military Grant I.M.E.T Grant Misc. Economic Grant D.A. Loan D.A. Grant ESF Loan ESF Grant P.L. 480 II P.L. 480 I 1946 9.6 — — — 9.3 Surplus 0.3 UNWRA — — — — — — 1948 1.4 — — — 1.4 Surplus — — — — — — 0.1 — — — 0.1 Tech Asst — — — — — — 1952 1.2 — — — — — 0.4 — — — 0.8 1953 12.9 — — — — — 12.9 — — — — 1954 4.0 — — — — — 3.3 — — — 0.7 1955 66.3 — — — — 7.5 35.3 — — — 23.5 1956 33.3 — — — — — 2.6 — — 13.2 17.5 1957 1.0 — — — — — 0.7 — — — 0.3 1958 0.6 — — — — — 0.0 — — — 0.6 1959 44.8 — — — — — 2.0 — — 33.9 8.9 1960 65.9 — — — — 15.4 5.7 — — 36.6 8.2 1961 73.5 — — — — — 2.3 — — 48.6 22.6 1962 200.5 — — — — 20.0 2.2 20 — 114.0 44.3 1963 146.7 — — — — 36.3 2.3 10 — 78.5 19.6 1964 95.5 — — — — — 1.4 — — 85.2 8.9 1965 97.6 — — — — — 2.3 — — 84.9 10.4 1966 27.6 — — — — — 1.5 — — 16.4 9.7 1967 12.6 — — — — — 0.8 — — — 11.8 1951 Congressional Research Service 12 Egypt in Transition Year Total Military Loan Military Grant I.M.E.T Grant Misc. Economic Grant D.A. Loan D.A. Grant ESF Loan ESF Grant P.L. 480 II P.L. 480 I 1972 1.5 — — — — 1.5 — — — — — 1973 0.8 — — — — — — — — — 0.8 1974 21.3 — — — — — — — 8.5 9.5 3.3 1975 370.1 — — — — — — 194.3 58.5 104.5 12.8 1976 464.3 — — — — — 5.4 150.0 102.8 201.7 4.4 TQ 552.5 — — — — — — 429.0 107.8 14.6 1.1 1977 907.8 — — — — — — 600.0 99.2 196.8 11.7 1978 943.2 — — 0.2 0.1 Narc. — — 617.4 133.3 179.7 12.5 1979 2,588.5 1,500 — 0.4 — — — 250.0 585.0 230.7 22.4 1980 1,167.3 — — 0.8 — — — 280.0 585.0 285.3 16.1 1981 1,681.2 550 — 0.8 — — — 70.0 759.0 272.5 28.9 1982 1,967.3 700 200.0 2.4 — — — — 771.0 262.0 31.9 1983 2332.0 900 425.0 1.9 — — — — 750.0 238.3 16.8 1984 2,470.8 900 465.0 1.7 — — — — 852.9 237.5 13.7 1985 2,468.7 — 1,175.0 1.7 — — — — 1,065.1 213.8 13.2 1986 2,539.1 — 1,244.1 1.7 — — — — 1,069.2 217.5 6.6 1987 2,317.0 — 1,300.0 1.8 — — — — 819.7 191.7 3.9 1988 2,174.9 — 1,300.0 1.5 — — — — 717.8 153.0 2.6 1989 2,269.6 — 1,300.0 1.5 — — 1.5 — 815.0 150.5 1.2 1990 2,397.4 — 1,294.4 1.6 — — — — 898.4 203.0 — 1991 2,300.2 — 1,300.0 1.9 — — — — 780.8 165.0 52.5 1992 2,235.1 — 1,300.0 1.8 — — — — 892.9 40.4 — 1993 2,052.9 — 1,300.0 1.8 — — — — 747.0 — 4.1 1994 1,868.6 — 1,300.0 0.8 — — — — 561.6 35.0 6.2 1995 2,414.5 — 1,300.0 1.0 — — 0.2 — 1,113.3 — — 1996 2,116.6 — 1,300.0 1.0 — — — — 815.0 — 0.6 1997 2,116.0 — 1,300.0 1.0 — — — — 815.0 — — Total 45,669.4 4,550 17,803.5 27.3.0 11.2 80.7 82.8 2,620.7 15,923.8 4,114.3 455.1 Notes: Totals may not add due to rounding. No U.S. aid programs for years 1947, 1949, 1950, 1968, 1969, 1970, and 1971. P.L. 480 II Grant for 1993 includes $2.1 million in Sec. 416 food donations. TQ = Transition Quarter; change from June to September fiscal year * = less than $100,000 I.M.E.T. = International Military Education and Training UNRWA = United Nations Relief and Works Agency Surplus = Surplus Property Tech. Asst. = Technical Assistance Congressional Research Service 13 Egypt in Transition Narc. = International Narcotics Control D. A. = Development Assistance ESF = Economic Support Funds P.L. 480 I = Public Law 480 (Food for Peace), Title I Loan P.L. 480 II = Public Law 480 (Food for Peace), Title II Grant Author Contact Information Jeremy M. Sharp Specialist in Middle Eastern Affairs jsharp@crs.loc.gov, 7-8687 Congressional Research Service 14 constitution subject to a referendum. Legislative elections held in late 2011 and early 2012 granted significant majorities to Islamist political parties, including the Muslim Brotherhood’s Freedom and Justice party. The SCAF and various non-Islamist forces challenged the legislature’s efforts to select members for the Constituent Assembly, and a court ruling found the legislative electoral law unconstitutional, putting the recent election results and the future of the Islamist-dominated parliament in doubt. As polls closed for the final round of Egypt’s June 2012 presidential election, the SCAF issued further amendments to the transitional constitution, granting itself sweeping powers to appoint members of the Constituent Assembly, enforce martial law, and remain immune from oversight by the newly elected president. Muslim Brotherhood candidate Mohammed Morsi has claimed victory in the poll. This report provides a brief overview of the transition thus far and information on U.S. foreign aid to Egypt. The United States has provided significant military and economic assistance to Egypt since the late 1970s. U.S. policy makers have routinely justified aid to Egypt as an investment in regional stability, built primarily on long-running military cooperation and on sustaining the March 1979 Egyptian-Israeli peace treaty. Successive U.S. Administrations have viewed Egypt’s government as generally influencing developments in the Middle East in line with U.S. interests. U.S. policy makers are now grappling with complex questions about the future of U.S.-Egypt relations, and these debates and events in Egypt are shaping consideration of appropriations and authorization legislation in the 112th Congress. Congressional Research Service Egypt: Transition under Military Rule Contents Overview: Egypt’s Military Retains Control ................................................................................... 1 Latest Developments........................................................................................................................ 4 Issues for Congress .......................................................................................................................... 7 Egyptian-Israeli Relations ......................................................................................................... 7 The 1979 Peace Treaty ........................................................................................................ 7 The Economy and Possible IMF Loan ...................................................................................... 9 U.S.-Egyptian Relations ................................................................................................................ 12 The NGO Case ........................................................................................................................ 13 U.S. Foreign Aid to Egypt ....................................................................................................... 15 Military Aid....................................................................................................................... 15 Economic Aid.................................................................................................................... 16 U.S. Foreign Aid to Egypt Since February 2011............................................................... 18 The Consolidated Appropriations Act, FY2012 ................................................................ 19 FY2013 State and Foreign Operations Appropriations Bills............................................. 19 Figures Figure 1. Map of Egypt.................................................................................................................... 7 Figure 2. Egyptian Opposition to U.S. Aid.................................................................................... 13 Tables Table 1. U.S. Assistance to Egypt, FY2010-FY2013 Request....................................................... 16 Table 2. Top 10 recipients of U.S. Foreign Assistance, FY2012 and FY2013 Req. ...................... 22 Table 3. U.S. Foreign Assistance to Egypt..................................................................................... 22 Table 4. U.S. Foreign Assistance to Egypt, 1946-1997 ................................................................. 23 Contacts Author Contact Information........................................................................................................... 24 Congressional Research Service Egypt: Transition under Military Rule Overview: Egypt’s Military Retains Control Egypt’s first truly competitive presidential election appears to have been won by the Muslim Brotherhood’s candidate, Mohammed Morsi, although a final announcement of the results is still pending.1 Ahmed Shafik, Morsi’s opponent, also has declared himself the winner. On June 20, the Presidential Electoral Commission announced that final results, which were to be released on June 21, would be delayed in order to evaluate charges of electoral abuse. The delay has created a tense atmosphere in Egypt, raising suspicions that the electoral process could be manipulated in favor of Shafik. As polls closed, the Supreme Council of the Armed Forces (SCAF), with the aid of courts dominated by judges appointed under former President Hosni Mubarak, took significant steps to limit presidential authority. A court ruling leading to the dissolution of parliament may take away Morsi’s key base of support in the government, while the SCAF has exempted itself from oversight and asserted broad powers through last-minute changes to the transitional constitution.2 The developments have led some Egyptian activists and outside observers to conclude that Egypt is no longer in “transition.” It remains to be seen if full civilian rule can be achieved or if the demands of the January 25 revolution for democracy and substantive constitutional reform will remain unfulfilled. While many analysts had anticipated that the SCAF would seek to limit the incoming president’s powers in the absence of a permanent constitution, few observers anticipated the degree to which the SCAF would be willing to manipulate Egypt’s transition to preserve its primacy and privileges. Apparently, the SCAF is calculating that the support of many Egyptians within the secular elite—the military, the private sector, and the Coptic Christian community—will mitigate public protest against its final-hour maneuvers, and that the Brotherhood will consider accepting the outcome if it secures the presidency. The Brotherhood, despite its victories at the polls, had its reputation suffer somewhat in recent months as it sought more power by deciding to field a candidate in presidential elections—backtracking on its previous promise not to. The SCAF also may calculate that the protest movement is exhausted and that it can contain whatever public backlash it may face in the weeks ahead. Finally, the SCAF also may be betting on the resignation of the international community to accepting its fait accompli, as foreign nations fearing the spread of instability in an already volatile region may choose what they perceive as the lesser of two evils by supporting Egypt’s government rather than seeing it fail. In the end, after 16 months of a messy transition, the military, which perceives itself as the guardian of the Egyptian state, appears unwilling to abandon the reins of power to the Muslim Brotherhood. The Brotherhood, for its part, may not seek to foment instability as a result of this reverse, perhaps considering this latest episode a lost battle in a decades-long struggle for power 1 According to a running tally on the Al Ahram website, Morsi leads Shafiq by 900,000 votes. Available online at http://english.ahram.org.eg/ui/front/townvotes.aspx 2 An English translation of the new June 17, 2012, annex to the amended March 2011 constitution is available online at http://english.ahram.org.eg/NewsContent/1/64/45350/Egypt/Politics-/English-text-of-SCAF-amended-EgyptConstitutional-.aspx. On June 18, SCAF also announced that it would appoint General Abdel Momen Abdel Baseer to be the new president’s chief of staff. It also re-constituted the National Defense Council to handle national security affairs. The council is headed by the president and has 17 members, 12 of whom belong to the military. SCAF has said that it will officially transfer power to the president on June 30. Congressional Research Service 1 Egypt: Transition under Military Rule with Egypt’s “deep state.” According to this perspective, even a weakened presidency represents a gain. According to one Brotherhood official, “It is not easy to uproot the military’s grip on the state.... We are planning for a 7- or 10-year process.” Egypt’s transition had, at times, been guided by agreements reached in SCAF-Brotherhood negotiations, much to the consternation of liberal political forces. However, as presidential elections approached and the Muslim Brotherhooddominated parliament became more confrontational toward the military, the two sides drifted apart and Egyptian politics became a zero-sum game. Secretary of State Hillary Clinton stated days before the presidential election that “There can be no going back on the democratic transition called for by the Egyptian people.” Recent events suggest otherwise. For the United States, there are most likely negative implications to the SCAF’s recent moves. In spite of broader efforts to engage with the Brotherhood and other political actors in Egypt, U.S. relations remain closest with the Egyptian military, supported by an annual $1.3 billion military aid package. On June 18, a Defense Department spokesman said that Secretary of Defense Leon Panetta, who spoke to the head of SCAF, Field Marshal Mohamed Hussein Tantawi, on June 15, was not told by Tantawi of SCAF’s intentions to amend the interim constitution.3 Many Egyptians will most likely blame the United States government for the SCAF’s authoritarian behavior. Moreover, U.S. policymakers will be faced with the quandary of accepting imperfect results while being asked to support international efforts to lend Egypt funds to help with its severe budgetary shortfalls. Some Members of Congress have already threatened to withhold foreign aid. On June 19, former President Jimmy Carter, who monitored the presidential election, stated that he was “deeply troubled by the undemocratic turn that Egypt has taken.” 3 “’Deeply Concerned’ about Egypt Decree: Pentagon,” Reuters, June 18, 2012. Congressional Research Service 2 Egypt: Transition under Military Rule Key Egyptian Movements, Institutions, and Religious Communities The Military—Since the resignation of former President Hosni Mubarak in February 2011, Egypt has been ruled by a military council known as the SCAF—The Supreme Council of the Egyptian Armed Forces. Since 1952, the military has been the strongest government entity, comprising nearly half a million personnel and possessing vast land holdings and businesses. It plays a key social role, providing employment and a sense of national identity to many Egyptians. The military is led by 77-year-old Field Marshal Mohamed Hussein Tantawi. The Muslim Brotherhood—Since its founding in 1928, the Muslim Brotherhood (MB) has been one of Egypt’s strongest political movements. Its purpose is to turn Egypt away from secularism and toward an Islamic government based on sharia (religious) law and Islamic principles. Over the years, the Egyptian government has alternated between tolerating and suppressing the Muslim Brotherhood, sometimes arresting and jailing its members, and other times allowing them to operate almost without hindrance. After the February 2011 revolution, the political party arm of the movement, the Freedom and Justice Party (FJP), was legalized, and the FJP secured 45% of all seats in the lower house of parliament following parliamentary elections in 2011-2012. Many foreign observers agree that the organization renounced its former policy of using violence as a political tactic decades ago, and point out that the former Brotherhood members most committed to violence largely gravitated toward organizations that formed the basis for Al Qaeda. The U.S. State Department does not list the MB as a Foreign Terrorist Organization. The “Remnants” of the Old Regime—Known colloquially in Egyptian Arabic as feloul, there are many former supporters of the old order who wish to see their power restored. Mubarak’s former ruling party was known as the National Democratic Party (NDP) before it was disbanded in 2011 and its headquarters burned by protestors. The party had been a symbol of a corrupt system to many, yet in recent months it had slowly returned, led by former Minister of Civil Aviation and Prime Minister Ahmed Shafik. Shafik appears to have narrowly lost the presidential election to the Muslim Brotherhood candidate Mohammed Morsi. Revolutionary Youth—Youth activists are widely credited with sparking and leading the uprising that led to the dissolution of the Mubarak regime. Like many Arab countries, Egypt has experienced a youth bulge in recent years, though its economy is unable to produce adequate employment for college-educated youth, leading to high youth unemployment, delayed marriage rates, and frustration with the status quo. For the last several years, youth activists have organized themselves into non-party movements, such as April 6 Youth Movement and the National Association for Change. However, young revolutionaries were not able to translate their successful protests into postrevolutionary politics and have subsequently been marginalized by more established forces during Egypt’s transition. Salafis—After the February 2011 revolution, Salafis (conservative Muslims who endorse strict interpretations and implementation of Islamic law) began organizing themselves politically. The Al Nour Party is the largest Salafi political party, having secured 21% of the seats in the last parliamentary election. Coptic Christians—Coptic Christians comprise an estimated 8% to 12% of the population. They are largely absent from high level government and military positions, though Copts play a prominent role in the private sector. Copts may face discrimination, and the community is subject to occasional instances of sectarian attacks, to which both the government and the Coptic Orthodox Church rapidly respond to ease communal tensions. However, more often than not, the Egyptian government only acts to redress the immediate symptoms of violence rather than the underlying causes. Judiciary4—In recent months, Egyptian judges have ruled on cases with enormous implications for Egyptian political life. Historically, Egyptians have had great respect for judges, in spite of state attempts to coerce the judiciary. In general, the civilian court system is well regarded and operates independently of the executive branch. Judges also supervise polling stations during elections. Recent statements and decisions may change the courts’ reputation. 4 For a complete list of Egypt’s various courts, see http://egyptelections.carnegieendowment.org/2012/06/06/a-guidethrough-the-egyptian-maze-of-justice Congressional Research Service 3 Egypt: Transition under Military Rule Latest Developments • Presidential Election—Mohammed Morsi, the Muslim Brotherhood’s candidate for the presidency, has claimed victory in Egypt’s first truly competitive presidential election, facing Mubarak regime stalwart Ahmed Shafik in a run-off. According to unofficial election results, he received 51.89% of the vote. Anecdotal reports noted that some voters were dispirited by their choices.5 Shafik also is claiming victory and final results have been delayed. Egyptian Presidential Candidate Mohammed Morsi Born in 1951 in a rural Nile Delta village, Mohammed Morsi rose through the ranks of the Muslim Brotherhood to become the chairman of the movement’s political party, the Freedom and Justice Party, having previously served as an independent in parliament between 2000 and 2005. He was the Brotherhood’s backup candidate and was not nominated as a candidate until April 7. As a candidate, Morsi pledged to launch the Brotherhood’s “Renaissance Project,” an economic development plan that seeks to launch a number of large infrastructure projects with a goal of attaining an average rate of annual growth that ranges between 6.5% and 7%. Morsi also is known for being pragmatic and, during the Mubarak regime, maintained dialogue with internal security in order to ensure that suppression of the Brotherhood was kept to a minimum. Morsi is a U.S.-educated engineering professor and received a PhD from the University of Southern California in 1982. He is married with four children. • SCAF Issues Supplementary Constitutional Declaration—The June 17, 2012 constitutional annex grants the SCAF legislative powers, oversight of the defense budget, the authority to appoint Army commanders and the minister of defense, and legal consent over any declaration of war. It also grants the SCAF the ability to form a new Constituent Assembly if the previous one fails to complete its work. A new Assembly must complete its work within three months of formation and must be approved in a public referendum within 15 days from the date of its preparation. Under the June document, new parliamentary elections are to be held within a month of the approval of a new constitution. The June Annex grants the president the power to form and fire a government and ratify and reject laws. According to Nathan Brown at the Carnegie Endowment for International Peace, “The full extent of the SCAF’s authority is not always clear. Its executive authority is strong but not absolute under the emerging system, and it will turn over some significant authority to the president, especially in administrative and domestic affairs. It is likely that true clarity will come only in practice.”6 • Parliament Disbanded—On June 14, the Supreme Constitutional Court ruled that a third of the parliament was elected illegally, upholding an earlier lower court’s ruling that the electoral law governing parliamentary elections was unconstitutional.7 The court enforced the provisions of a 2011 electoral law8 that 5 On May 29, Egyptian officials announced the results of the first round of presidential elections. No single candidate won an outright majority of votes, triggering a run-off between the top two vote-getters, Muslim Brotherhood candidate Mohammed Morsi, who received 25% of all votes, and former Prime Minister Ahmad Shafik, who finished second with 24% of all votes. The run-off vote was held on June 16 and 17. The turnout for the first round was a disappointing 46%. 6 See, “The Egyptian Political System in Disarray,” Carnegie Endowment for International Peace, June 19, 2012. 7 It also ruled that presidential candidate Ahmed Shafik was not disqualified from running for president under a parliamentary-approved disenfranchisement law designed to bar former regime officials who had served during the last 10 years from returning to high public office. Congressional Research Service 4 Egypt: Transition under Military Rule created a complicated dual vote system reserving two-thirds of seats for a party list vote and the remaining third for individual candidates. Article V of the electoral law banned political parties from running candidates in the individual seat system. However, in the run-up to the 2011 elections, political parties, including the Muslim Brotherhood, protested the electoral law and demanded that party members be allowed to run for individual seats. Islamists and others threatened to boycott parliamentary elections, thereby depriving any legitimacy to the military-led transition. In response, the SCAF permitted parties to run candidates in the individual seat system, but SCAF did not actually amend Article V of the law. A lawsuit challenging the validity of the elections subsequently was referred to the Supreme Constitutional Court. The court’s June 2012 ruling had legal validity,9 but many observers believed that the Court and the SCAF would uphold the election results to ensure political stability on the eve of presidential elections. The court ruling cannot be appealed. With 166 of Egypt’s 498 (total of 508 but the other 10 are appointed by the head of state) parliamentary members now having been elected illegally, the SCAF declared the entire lower house of parliament invalid and dissolved it on June 15. The SCAF then assumed legislative powers. The leadership of the lower house has refused to recognize the dissolution order, and security forces have surrounded the parliament building, prompting fears of confrontation. • SCAF Re-authorizes Military Detainment of Civilians—Nearly two weeks after the expiration of the decades-old Emergency Law, the Ministry of Justice decreed on June 13 that officers may legally detain civilians involved in criminal activity and refer them to military tribunals. The move was widely condemned by liberal and human rights activists. Article 53 of the newly amended transitional constitution appears to endorse these changes as well. • Constituent Assembly in Peril—On June 12, parliament voted to approve the 100-person membership of the Constituent Assembly, the body tasked with drafting a new constitution. The Assembly’s composition has been a source of acrimony between secularists and Islamists for months. After Islamists were victorious in parliamentary elections, they packed the Assembly in March 2012 with sympathizers, drawing the ire of non-Islamist members who refused to participate in order to deny the Assembly broad-based legitimacy. Negotiations over the reform of the Assembly ensued, and the SCAF threatened to unilaterally appoint members if a compromise was not reached. All parties finally agreed on its composition, which was subsequently approved by parliament; however, now that parliament has been disbanded, the military has invalidated the existing Constituent Assembly and assumed authority to govern the country and select a new Assembly to write a permanent constitution. Nevertheless, the existing (...continued) 8 In 2011, the electoral law was amended several times in response to outcries from liberals and Islamists who wished to thwart the return of former regime elements. As originally proposed by the SCAF, the electoral law would have set aside half the seats for single member districts and the other half for party lists. 9 According to one source, the Constitutional Court ruled that allowing party members to compete on the individual lists violates the principles of equal opportunity because it gives party members two chances to compete for all the seats while independent candidates don't have the same opportunity. In 1987 and 1990, the SCC invalidated electoral laws on similar legal ground leading to the dissolution of various parliaments. U.S. Open Source Center (OSC) Report GMP20120615966026, “What to know on Egypt’s new political drama,” Al Ahram Online (Cairo), June 15, 2012. Congressional Research Service 5 Egypt: Transition under Military Rule Assembly continues to meet and appointed the head of Egypt’s judiciary, Hussam El Ghuriany, as its chief. 10 11 • Impartiality of Judges Questioned—In the past several weeks, many observers suggested that high level judges had grown more critical of the Muslim Brotherhood and had begun indirectly advocating the election of presidential candidate Ahmed Shafik.10 On June 7, the president of the Judges Club, the professional association for all Egyptian judges, remarked that “We used to stand at the edge of the judiciary and not go near politics.... But now Egypt is falling. We won’t leave matters for those who can’t manage them, with the excuse that we’re not people of politics. No, we are people of politics.”11 • Mubarak Sentenced—On June 2, 2012, a three-judge panel sentenced former president Hosni Mubarak and his interior minister, Habib el Adly, to life in prison for failing to protect hundreds of unarmed protesters during the January 2011 demonstrations. Citing lack of evidence that either President Mubarak or his top aides had expressly ordered the killing of protesters, the panel found that Mubarak was an “accessory to murder,” which did not merit a murder conviction under either Egyptian or international law. The court also acquitted Mubarak and his two sons, Alaa and Gamal, of all corruption charges, citing that the statute of limitations had expired. Similarly, six top security officers accused of a participatory role in the government’s violent response to protesters were acquitted. “Mara Revkin, Egypt’s Injudicious Judges,” Atlantic Council’s Egypt Source, June 11, 2012. “Egyptian Judge Speaks Against Islamist Victory Before Presidential Runoff,” New York Times, June 7, 2012. Congressional Research Service 6 Egypt: Transition under Military Rule Figure 1. Map of Egypt Source: Map Resources, adapted by CRS. Issues for Congress Egyptian-Israeli Relations The 1979 Peace Treaty For the United States, the maintenance of the 1979 Israeli-Egyptian peace treaty is a major regional foreign policy priority, and there is concern that instability in Egypt will disrupt the “cold peace” that Israel and Egypt have maintained for over 30 years. In the period since the resignation of former President Mubarak, Egyptian-Israeli relations have been tense, culminating in the September 2011 siege of the Israeli Embassy in Cairo by protestors,12 in which Israeli diplomats 12 This followed the events described in footnote 14. Congressional Research Service 7 Egypt: Transition under Military Rule holed up inside their compound came perilously close to being confronted by rioters before Egyptian commandos rescued the diplomats at the urging of the Obama Administration. Since then, Israel has maintained a minimal diplomatic presence in Egypt, having moved most of its staff from Cairo to offices in Maadi, New Cairo, and near the Cairo International Airport. Yaakov Amitai is the Israeli ambassador to Egypt, and Egypt’s Ambassador to Israel is Yasser Reda. The peace treaty remains intact. Most observers assert that despite widespread Egyptian anger toward Israel, most Egyptian politicians and party leaders—especially the military—understand the importance of maintaining peace. However, with growing lawlessness in the Sinai Peninsula on Egypt’s side of the border following Mubarak’s departure, and restrictions against additional Egyptian troop and armored unit deployment there per the terms of the treaty’s first annex,13 questions abound over the possible amending of the 1979 agreement. Some Egyptian leaders have made public comments suggesting that the treaty is “open to changes.” In September 2011, just weeks after clashes in the Sinai between Israeli forces and Palestinian terrorists which led to the accidental killing of several Egyptian soldiers,14 former Egyptian Prime Minister Essam Sharaf said “the Camp David agreement is not a sacred thing and is always open to discussion with what would benefit the region and the case of fair peace and we could make a change if needed.”15 That same month, unnamed Israeli military officials said that Israel was looking to launch a strategic dialogue with Egypt in which it would conduct a comprehensive review of the ties between the countries and make necessary changes to the military appendix of the peace treaty.16 Overall, however, some analysts suggest that Israel would prefer to continue the practice of negotiating changes to Egyptian deployments in the Sinai as circumstances necessitate.17 Egypt’s Role as a Mediator in the Arab-Israeli Conflict Since Mubarak’s resignation, there has been much speculation over whether Egypt would continue to play a consequential role in brokering Israeli-Palestinian peace talks and containing Hamas in the Gaza Strip. Many analysts suggested that when Israel completed an October 2011 prisoner exchange with Hamas to return Gilad Shalit from captivity, it did so partly in anticipation that Egypt would not be willing or able to broker such deals in the future due to Egyptian Islamist support for Hamas. For the United States, the possible loss of Egypt as a reliable broker limits its options when trying to corral regional support for renewed negotiations. Some observers assert that a Hamas-sympathetic Egypt could help advance negotiations by facilitating a unified Palestinian stance, but such unity might be objectionable to Israel. Under military rule, Egypt has been an active player in mediating between Israelis and Palestinians and between the Palestinian Authority in the West Bank and Hamas in the Gaza Strip. In addition to the Shalit deal, Egypt helped broker a cease-fire between Israel and Palestinian 13 Available online at http://www.jewishvirtuallibrary.org/jsource/Peace/egypt-israel_treaty.html On August 18, 2011, a Gazan terrorist cell traversed the Sinai into Israel and attacked both civilian and military targets—killing 8 and injuring 31. In hot pursuit of the perpetrators across the border, Israeli and Egyptian forces reportedly killed 7 attackers, but an Israeli aircraft also killed 5 Egyptian police officers, apparently by mistake. The incident further heightened Israeli-Egyptian tensions as thousands of Egyptians demonstrated at the Israeli Embassy a month later. Israeli Defense Minister Ehud Barak issued a statement of regret for the Egyptian deaths on August 20. 15 “Israel Summons Egypt Envoy over PM Comments,” Al Jazeera, English, September 16, 2011. 16 “Israel May Amend Military Appendix of Egypt Peace Treaty,” Jerusalem Post, September 1, 2011. 17 Policy Forum Report Sinai: The New Frontier Of Conflict? Policywatch #1872, The Washington Institute for Near East Policy, November 21, 2011. 14 Congressional Research Service 8 Egypt: Transition under Military Rule militants in the Gaza Strip in March 2012. In May 2012, Egyptian intelligence mediated a deal between Palestinian prisoners and Israeli authorities in which 2,000 prisoners had been on a hunger strike for weeks in protest of Israeli incarceration policies. In return for an end to their strike, Israel agreed to limit solitary confinement and expand visits from Gazan relatives who had previously been denied travel. Security in the Sinai Peninsula Most analysts believe that the deterioration in security in the Sinai Peninsula is perhaps the biggest threat to Israeli-Egyptian peace. Though the area has never been fully under Egyptian control, Bedouin Arab tribes in the area have lashed out at state authorities since the revolution for perceived injustices and lack of development in the area.18 Moreover, Palestinian militant groups based in Gaza have reportedly operated more freely in the area and are equipping themselves with weapons from looted Libyan stockpiles sold on the black market. With the national police forces in disarray, Bedouin criminal networks appear to have taken advantage of the security vacuum to increase human trafficking of African migrants into Israel, drug and weapons smuggling, and armed robbery and kidnapping of foreign tourists. In addition, terrorist organizations based in the Sinai have taken advantage of relatively lax security to conduct operations against Israeli, Egyptian, and foreign targets. Such groups have bombed gas pipelines19 and raided tourist resorts. Militants also have fired rockets from the Peninsula into Israel, alarming Israeli officials in nearby cities such as Eilat, which may be a terrorist target due to its proximity to Egypt and destination as a tourist attraction. In response, Israeli officials continue to insist that information sharing between Israel and Egypt continues. In April 2012, Defense Minister Ehud Barak remarked that “Israel, Egypt and Jordan have tasted the fruits of peace, and even during these uncertain times, the crucial communication channels between the Israeli and Egypt security establishments remain both open and effective.”20 Israel also is accelerating construction of a 17-foot tall, 150-mile long, $400 million “security fence” along its border with Egypt. On June 18, unidentified militants attacked Israeli construction workers building that security fence. One worker and two gunmen were killed. The attackers had crossed into Israel and planted a roadside bomb, which destroyed a vehicle carrying workers to the border fence. The Economy and Possible IMF Loan As a result of over a year of political unrest, Egypt’s economy has stagnated (GDP has grown at just 2% from July 2011 to present), and the interim military-led government has boosted social spending, leading to spiraling fiscal deficits. Though certain aspects of the economy have started to recover (such as revenues from Suez Canal receipts, oil and gas exports, and expatriate 18 Bedouins in the Sinai have long resented state investment directed toward beach tourism while tribal villages were neglected. Some tribes, such as the Azazna in northern Sinai, have many members that are not recognized as Egyptian citizens, with identity cards reading “nationality unknown.” See, “Sinai Seethes,” Al Ahram Weekly Online, 17 - 23 May 2012, Issue No. 1098. 19 Gas pipelines supplying Israel and Jordan with Egyptian natural gas have been struck at least 14 times since February 2011. In April 2012, Egypt terminated its controversial 20-year gas supply deal with Israel reached in 2005 due to socalled “contractual violations.” The arrangement had supplied Israel with 40% of its natural gas needs. However, the deal was unpopular in Egypt not only because it involved Israel, but because it involved corrupt dealing between former President Mubarak and his associates. One partner in the deal, Hussein Salem, is awaiting extradition in Spain. Salem is under investigation for corruption for receiving a no-bid contract for the supply of gas to Israel. 20 “Israel Challenges Egypt over Sinai Security Chaos,” Agence France Presse, April 30, 2012. Congressional Research Service 9 Egypt: Transition under Military Rule workers’ remittances), foreign direct investment and tourism receipts remain below their previous levels. Moreover, many economists are concerned that the financial crisis in Europe will lower demand for Egyptian exports and further reduce foreign investment in the months ahead. With a bleak short-term economic outlook and Egyptian leaders sensitive to further domestic instability, public expenditures have increased dramatically in order to reassure the population. Spending on public sector salaries (there are over 6 million Egyptian state employees) and energy and food subsidies has soared, leading to a predicted deficit for this year’s state budget of $23 billion. Since February 2011, authorities have been financing the deficit by borrowing from domestic banks and using the country’s foreign exchange reserves, which have gone from nearly $36 billion in early 2011 to $15.5 billion (including $4 billion in gold bullion) in June 2012. In the last few months, reserves have somewhat stabilized, and Saudi Arabia21 also provided Egypt $1 billion, though it had pledged even more last year (up to $4 billion) to support the transition. At present, it is unclear how a future Egyptian government will finance its fiscal deficit. Currently, the government is paying nearly 16% interest on one-year debt. Spending cuts may prove dramatically unpopular, as would inflationary policies that increase prices on basic commodities. If foreign exchange reserves continue to dwindle, it is unclear whether officials will be forced to depreciate the Egyptian Pound, a move that could boost interest rates and reduce asset values, potentially stalling any recovery. Many analysts suggest that Egypt may have no choice but to increase foreign borrowing, particularly from foreign governments and international financial institutions, since private foreign investors may be unwilling to take the investment risk and domestic banks are overstretched. Credit rating agencies such as Moody’s, Fitch, and Standard & Poor’s have downgraded Egypt’s sovereign credit rating over the past year.22 The International Monetary Fund may be a key foreign lender for Egypt, as it has offered the country $3.2 billion in financing over 18 months to three years at a minimal interest rate. More importantly, an IMF loan would ensure other investors that Egypt was on a path toward economic reform, thereby paving the way for additional foreign lending (the country’s current external debt is $33.7 billion). However, the IMF deal may have drawbacks for the Egyptian government, as it may be conditioned upon Egypt undertaking certain reforms and unpopular austerity measures, such as reducing food and fuel subsidies. Early indications are that officials may propose changing the country’s sales tax to a value-added tax (VAT) and targeting energy subsidies by instituting a direct-payment program for poor Egyptians. To date, Egypt’s lack of acceptance of an IMF loan has been largely based on political factors. According to one source, “Lack of internal political consensus over the loan (a condition set by the IMF) is said to be delaying the final approval. The inability to arrive at an agreement seems to be a result of party politics rather than of divergent views on the nature of the constraints facing the 21 Saudi Arabia is a key player in the Egyptian economy. According to one report, Saudi Arabia is one of Egypt’s biggest foreign investors and more than 1.5 million Egyptians work in Saudi Arabia. Their remittances represent half the value of all Egyptian remittances worldwide. The overall value of Saudi investments in Egypt amounts to $45 billion, while trade between the two countries adds up to $10 billion. Saudi investors also are the biggest investors in the Egyptian stock market and the most frequent visitors to Egypt’s tourist destinations. See, Sherine Abdel-Razek “Economic Ruptures,” Al Ahram Weekly Online, 3 - 9 May 2012, Issue No. 1096. 22 “Egypt Faces Hard Economic Challenges,” Daily Star (Beirut), June 12, 2012. Congressional Research Service 10 Egypt: Transition under Military Rule country’s public finances. Apparently, the Islamist Freedom and Justice Party did not want an interim government to negotiate a loan deal.”23 Members of the Muslim Brotherhood may have desired to lead negotiations with the IMF in order to take credit for the deal and shape an agreement according to its own party priorities. It is unclear whether IMF negotiations will proceed more expeditiously following the presidential election and the recent SCAF- and judiciary-driven action. Chronology: Egyptian Transition Timeline: January 2011-Present January 25, 2011 Large protests begin in major cities. Over 18 days, protesters clash with the police, who withdraw, as military forces are deployed to keep order. Hundreds are wounded in clashes and 848 are killed. February 11, 2011 After daily protests, President Hosni Mubarak resigns after 30 years and hands power to the military, led by Field Marshal Hussein Tantawi. March 2011 The Supreme Council of the Armed Forces proposes a series of amendments to the Egyptian constitution and, on March 19, 77.2% of voters approve the amendments in a public referendum. Several groups boycott the referendum. April 8, 2011 More than 100,000 protesters gather in Tahrir Square to pressure the Supreme Council of the Armed Forces (SCAF) to meet the demands of the public, chief among them the prosecution of Hosni Mubarak. May 2011 Mubarak is officially charged with the abuse of public office and with ordering the killing of protesters during the demonstrations. June 2011 On June 6, the Muslim Brotherhood’s Freedom and Justice Party is declared legal. July 2011 On July 13, the SCAF announces a new electoral law and delays parliamentary elections until November 2011, amplifying tension between the SCAF and the protesters who feel their revolution is being betrayed. Mass protests erupt in Tahrir Square and parliament buildings. In response to the protests, Prime Minister Sharaf dismisses the ministers of finance, industry, and foreign affairs. August 2011 The Mubarak trial begins. Israel kills 5 Egyptian soldiers while in pursuit of Palestinian terrorists in the Sinai Peninsula. Israeli Defense Minister Barak issues statement of regret. September 2011 Protestors storm the Israeli embassy in Cairo, and Israeli diplomats are rescued by Egyptian commandos. At least 3 Egyptians are killed in the clashes, and more than 100 are wounded. The SCAF amends the electoral law under pressure, reducing the proportion of non-party list candidates. October 2011 Security forces forcefully disperse a mass demonstration by Coptic Christians angry about attacks on churches, killing 24 people and wounding over 200. The demonstration further exacerbates tensions between Muslims and Coptic Christians. November-December 2011 The Egyptian supreme court rules that former members of Mubarak’s now defunct party, the National Democratic Party, are eligible to run for office in the upcoming elections. Ensuing protests leave about 40 dead and hundreds wounded. In the first post-revolution parliamentary election, Islamist parties win approximately 75% of the seats. They state that ending “ military rule” is their first priority. 23 Daily Star, op. cit. Congressional Research Service 11 Egypt: Transition under Military Rule February 2012 Riots kill 74 people after a Port Said soccer match, adding to public criticism of the SCAF and its ability to maintain law and order. April 2012 Amidst a boycott by liberals, moderate Muslims, and the Coptic Church, the Administrative Judicial Court suspends the Islamist-dominated commission in charge of drafting a new constitution. The electoral commission bars 10 candidates from the presidential race, including 2 Islamists and Mubarak’s ex-intelligence chief. May 2012 Egypt holds its first post-revolution presidential election, and the state of emergency imposed in 1981 ends. June 2012 Hosni Mubarak and former Minister of Interior Habib el-Adly are sentenced to life in prison for the death of demonstrators in the 2011 protests. Six police commanders are acquitted of the same charge. The court drops corruption charges against Mubarak and his two sons, citing an expired statute of limitations. Protesters stage various angry demonstrations. The Supreme Constitutional Court invalidates elements of the parliamentary election law, undercutting one-third of the members elected to the Islamistdominated parliament. The Court also overturns a law that would have barred former Prime Minister Ahmed Shafik from the imminent presidential election runoff. In response, the SCAF moves to enforce the ruling, prevent the parliament from reconvening, and claims the right to appoint representatives of Egypt’s constitutional commission. Mohamed Morsi claims victory in presidential election, while the SCAF issues constitutional decrees limiting presidential powers. U.S.-Egyptian Relations U.S. policymakers have long confronted difficulties in balancing the pursuit of U.S. national security interests vis-à-vis Egypt and the promotion of American values and universal human rights. Such tensions, which are common in foreign policy, are likely to continue and perhaps increase in the post-Mubarak era. The bilateral crisis (discussed below) over the arrest of U.S. employees of non-governmental organizations working in Egypt starkly illustrated this tension. Egypt’s transitional government and new Islamist lawmakers, like previous governments, have resorted to blaming the country’s ills on outside forces, namely the United States and Israel. This time, however, the inclusion of anti-U.S. and -Israeli sentiment in political debates is much greater, as various politicians attempt to channel public frustration with the economy and slow political transition and a renewed national sense of “dignity” toward those elements, both foreign and domestic, associated with the ancien régime. In March, for example, the People’s Assembly called for a vote to end U.S. military aid to Egypt after many Egyptian politicians were angered over the release of American NGO employees. Also in March, the People’s Assembly voted to expel the Israeli ambassador from Cairo, recall Egypt’s envoy from Tel Aviv, and halt all natural gas shipments to Israel in response to a new round of fighting in the Gaza Strip between Israel and Palestinian militants. Congressional Research Service 12 Egypt: Transition under Military Rule Figure 2. Egyptian Opposition to U.S. Aid A Gallup Survey in February 2012 Source: Gallup, Mohamed Younis and Ahmed Younis, March 29, 2012 The NGO Case Egypt’s ongoing prosecution of Americans and others employed by U.S.-based democracy promotion organizations led to widespread calls for cuts to, or suspension of, U.S. aid to Egypt. On December 29, 2011, Egyptian police raided the offices of U.S.-based international nongovernmental organizations working on election monitoring, political party training, and government transparency in Egypt, including the International Republican Institute (IRI), National Democratic Institute (NDI), and Freedom House, as part of a criminal investigation commissioned by Minister of International Cooperation Fayza Abul Naga24 into foreign funding of NGOs. Some of the U.S. entities had long ago applied for but had not yet received registration and approval by the Egyptian government, an issue of long-running bilateral dispute.25 Police seized laptop computers and interrogated employees, accusing various organizations of operating illegally without a license. As a result of the raids, many NGOs were forced to close their local offices. The U.S. government protested the raids, and the SCAF promised that equipment would be returned and that NGO operations would return to normal. However, these pledges were not fulfilled. On the contrary, two weeks later, Egypt barred at least six American NGO employees 24 Abul Naga is the only remaining cabinet holdover from the Mubarak era and has served since 2001. Under Egypt’s NGO law (Association Law 84-2002), passed during the Mubarak era, NGOs are required to apply for legal status and must be registered with the Ministry of Social Affairs and report all foreign donations to the government. According to Article 17 of the law, “associations may not accept foreign funding without explicit authorization from the Ministry of Social Affairs.” For an NGO seeking legal status during the Mubarak era, in some cases it took years before the ministry ruled on an application, and many groups were routinely rejected. Often, no response was given to the application, which left an organization in legal limbo; this was the case of NDI, which has attempted to register since 2005. If an NGOs application was rejected, it had few legal rights and could be shut down. Successive U.S. Administrations and Congress have sought to provide aid to Egyptian civil society organizations without the prior approval of the Egyptian government. See NDI factsheet, at http://www.ndi.org/facts-on-ndi-egypt 25 Congressional Research Service 13 Egypt: Transition under Military Rule from leaving the country. On February 6, Egyptian authorities charged 43 people, including the Egypt country directors of NDI and IRI, with spending money from organizations that were operating in Egypt without a license. 19 Americans, including Sam LaHood of IRI, the son of U.S. Transportation Secretary Ray LaHood, face criminal charges. Most of the accused American employees were nonetheless able to leave Egypt with the exception of six or seven individuals who had fled to the U.S. Embassy in Cairo. Throughout February and early March, U.S. and Egyptian officials negotiated to (at the very least) have the travel ban on the Americans who remained at the U.S. Embassy in Cairo lifted. Reportedly, U.S. officials and lawmakers threatened not only to withhold bilateral aid, but to obstruct the IMF loan to Egypt if the situation was not resolved.26 Finally, on March 1, days after three Egyptian judges recused themselves from the NGO case (reportedly because they refused orders to overturn the travel ban due to U.S. pressure and had refused to do so), Egyptian authorities lifted the travel ban, and NDI and IRI were forced to pay a combined $4 million bail. Almost all of the accused Americans are now outside Egypt, but the legal case against them and the other civil society workers continues. Although in the short term some bilateral tensions have abated, many analysts assert that the case (along with earlier Egyptian campaigns against U.S. democracy promotion activities)27 has succeeded in tarnishing Egypt’s NGO sector in general and, perhaps more worrisome, the perception that the United States supports Egypt’s transition. The dispute has engulfed the bilateral relationship at a time when many other issues of interest to the United States are being adjudicated. According to U.S. Assistant Secretary of State for Near Eastern Affairs Jeffrey Feltman, Because of the focus on the NGO issue, that sort of basic message has been lost, which is that we are impressed with what the Egyptian people are trying to do, we are fully supportive of their efforts to build a democratic system.... Now we have had to spend a lot of time, for example, talking to people on Capitol Hill to remind people of the long-term interest that we have in Egypt and the long-term benefits that we think that both countries have. Opportunistic Egyptian politicians, epitomized by Minister Abul Naga, who eagerly sought a foreign scapegoat and distraction from the country’s economic woes, not only diverted the United States from engaging more broadly with new Egyptian leaders, but also created a public backlash against U.S. aid of any kind. According to Egyptian-born scholar Michael Wahid Hanna, “The demands for dignity that were part of the protest movement also implicated what many perceive to be Egypt’s undignified dependency on the United States.” As a result of the NGO dispute, some Egyptian politicians have started a national campaign to raise funds that would replace U.S. assistance. Prominent Egyptians, the military, and Islamist groups are supporting the campaign, called the Fund for Dignity and Pride, which has so far raised $10 million. At present, 2 Americans (the remaining 14 defendants are out of the country), 1 German national, and 14 Egyptian NGO employees are on trial inside Egypt. Their colleagues who were allowed to leave the country are on trial in absentia. If convicted, the NGO workers could face up to six years in prison. According to Robert Becker, an employee of NDI who remained in Egypt to face 26 “U.S. Defendants Leave Egypt Amid Growing Backlash,” New York Times, March 1, 2012. Since the revolution, Egyptian cabinet ministers and Islamist politicians have decried against continued U.S. foreign aid. A December 2011 Gallup survey found that about seven in 10 Egyptians oppose U.S. economic aid to Egypt, and a similar percentage opposes U.S. direct aid to civil society groups. 27 Congressional Research Service 14 Egypt: Transition under Military Rule trial, “Of the four Egyptians charged from NDI, three of them worked for me. At every turn when I was pressured to leave, I couldn't stomach it.... You don't walk away from your colleagues.”28 U.S. Foreign Aid to Egypt Between 1948 and 2011, the United States provided Egypt with $71.6 billion in bilateral foreign aid, including $1.3 billion a year in military aid from 1987 to the present. Since 1979, Egypt has been the second-largest recipient, after Israel, of U.S. bilateral foreign assistance.29 In July 2007, the George W. Bush Administration signed a 10-year Memorandum of Understanding (MOU) with Israel to increase U.S. military assistance from $2.4 billion in FY2008 to over $3 billion by 2018. Egypt received no corresponding increase in U.S. military aid; instead, the Bush Administration pledged to continue to provide Egypt with $1.3 billion in military aid annually, the same amount it has received annually since 1987. Unlike with Israel and, separately, with Jordan, the Bush Administration’s pledge did not involve signing a bilateral MOU with the Egyptian government. Congress typically specifies a precise allocation of foreign assistance for Egypt in the foreign operations appropriations bill. Egypt receives the bulk of foreign aid funds from three primary accounts: Foreign Military Financing (FMF), Economic Support Funds (ESF), and International Military Education and Training (IMET).30 Military Aid In FY2011, Egypt received almost a quarter of all U.S. FMF funds, and Israel received nearly 60%. FMF aid to Egypt is divided into three general categories: (1) acquisitions, (2) upgrades to existing equipment, and (3) follow-on support/maintenance contracts. U.S.-Egyptian coproduction of the M1A1 Abrams Battle tank, which began in 1988, is one of the cornerstones of U.S. military assistance to Egypt. Egypt plans to acquire a total of 1,200 tanks. Under the terms of the program, a percentage of the tank’s components are manufactured in Egypt at a facility on the outskirts of Cairo and the remaining parts are produced in the United States and then shipped to Egypt for final assembly. General Dynamics of Sterling Heights, MI, is the prime contractor for the program. Although there are no verifiable figures on total Egyptian military spending, it is estimated that U.S. military aid covers as much as 80% of the Defense Ministry’s weapons procurement costs.31 Egypt also receives Excess Defense Articles (EDA) worth hundreds of 28 “In Egypt, American NGO workers head to court in civil society trial,” Christian Science Monitor, June 5, 2012. The 1979 Peace Treaty between Israel and Egypt ushered in the current era of U.S. financial support for peace between Israel and her Arab neighbors. In two separate memoranda accompanying the treaty, the United States outlined commitments to Israel and Egypt, respectively. In its letter to Israel, the Carter Administration pledged to “endeavor to take into account and will endeavor to be responsive to military and economic assistance requirements of Israel.” In his letter to Egypt, former U.S. Secretary of Defense Harold Brown wrote that “the United States is prepared to enter into an expanded security relationship with Egypt with regard to the sales of military equipment and services and the financing of, at least a portion of those sales.” Ultimately, the United States provided a total of $7.3 billion to both parties in 1979. The Special International Security Assistance Act of 1979 (P.L. 96-35) provided both military and economic grants to Israel and Egypt at a ratio of 3 to 2, respectively, though this ratio was not enshrined in the treaty as Egypt would later claim. 30 Egypt also receives, though not consistently, relatively small sums from the Nonproliferation, Antiterrorism, Demining, and Related Programs (NADR) account and the International Narcotics Control and Law Enforcement (INCLE) account. NADR funds support counter-terrorism training through the Antiterrorism Assistance Program. INCLE funds support police training and respect for human rights in law enforcement. 31 According to one source, U.S. military assistance pays for about a third of Egypt’s overall defense budget each year. See, “Three Decades of Weapons, Training for Egypt Keep U.S. in Loop,” Bloomberg, February 2, 2011. 29 Congressional Research Service 15 Egypt: Transition under Military Rule millions of dollars annually from the U.S. Defense Department. The United States offers IMET training to Egyptian officers in order to facilitate U.S.-Egyptian military cooperation over the long term. IMET assistance also makes Egypt eligible to purchase training at a reduced rate. In addition to large amounts of annual U.S. military assistance, Egypt benefits from certain aid provisions that are available to only a few other countries. Since 2000, Egypt’s FMF funds have been deposited in an interest bearing account in the Federal Reserve Bank of New York and have remained there until they are obligated. By law (P.L. 106-280), Congress must be notified if any of the interest accrued in this account is obligated. Most significantly, Egypt is allowed to set aside FMF funds for current year payments only, rather than set aside the full amount needed to meet the full cost of multi-year purchases. Cash flow financing allows Egypt to negotiate major arms purchases with U.S. defense suppliers. Table 1. U.S. Assistance to Egypt, FY2010-FY2013 Request (Regular and Supplemental Appropriations; Current Year $ in Millions) Account FY2010 FY2011 FY2012 FY2013 Request ESF 250.0 249.5 250.0 250.0 FMF 1,300.0 1,297.4 1,300.0 1,300.0 IMET 1.900 1.400 1.400 1.800 INCLE 1.000 1.000 .250 7.900 NADR 2.800 4.600 5.600 — 1,555.7 1,553.9 1,557.25 1,559.7 Total Economic Aid During the 1980s and 1990s, Egypt received large amounts of annual economic loans and grants, mainly to support large-scale USAID infrastructure projects in sanitation, education, and telecommunications.32 By the late 1990s, Congress began to scale back economic aid both to Egypt and Israel due to a 10-year agreement reached in the late 1990s known as the “Glide Path Agreement.” In January 1998, Israeli officials, sensing that their economic growth had obviated the need for that type of U.S. aid at a time when Congress sought to reduce foreign assistance expenditures, negotiated with the United States to reduce economic aid and increase military aid over a 10-year period. A 3:2 ratio that long prevailed in the overall levels of U.S. aid to Israel and Egypt was applied to the reduction in economic aid ($60 million reduction for Israel and $40 million reduction for Egypt), but Egypt did not receive an increase in military assistance. Thus, Congress reduced ESF aid to Egypt from $815 million in FY1998 to $411 million in FY2008. The Bush Administration, whose relations with then-President Hosni Mubarak suffered over the latter’s reaction to the Administration’s democracy agenda in the Arab world, then requested that Congress cut ESF aid by half in FY2009 to $200 million. Congress appropriated the President’s request. Upon taking office in 2009, President Obama sought a $50 million increase in economic aid to Egypt for FY2010, which Congress then passed. 32 According to the U.S. State Department, U.S. economic aid has helped provide clean drinking water and sanitation to the city of Cairo, build more than 2,000 schools and double literacy levels, and decrease in the maternal mortality rate by over 50% and the child mortality rate by over 70%. See, U.S. State Department, Assistance to Egypt Fact Sheet, Office of the Spokesman, Washington, DC, May 19, 2011. Congressional Research Service 16 Egypt: Transition under Military Rule In prior years, ESF funds were divided into two categories: USAID projects and cash transfers.33 ESF funds are allocated to a variety of sectors, including health, education, economic growth, and democracy and governance. U.S. funding for the latter has been a source of acrimony between the United States and Egypt for years, culminating in the current dispute over U.S. funding for nongovernmental organizations. U.S. Funding for Democracy Promotion in Egypt Each year, a small portion of USAID-managed bilateral economic aid is spent on democracy promotion programs. On principle, the Mubarak government rejected U.S. assistance for democracy promotion activities, though it grudgingly accepted certain programming. On the other hand, democracy activists believe that the U.S. government, particularly during the Obama Administration and before the January 2011 popular uprising, had not been aggressive enough in supporting political reform in Egypt. The Mubarak government staunchly opposed foreign support to independent civic groups that demanded government accountability, as well as civic groups that had not received government approval. During the Bush Administration, executive branch policymakers and Members of Congress directed some ESF toward direct support for Egyptian non-governmental organizations (NGOs). In FY2005, Congress directed that “democracy and governance activities shall not be subject to the prior approval of the GoE [government of Egypt],” language which remained in annual foreign operations appropriations legislation until FY2010 (see below).34 Under Mubarak, Egypt had claimed that U.S. assistance programs must be jointly negotiated and could not be unilaterally dictated by the United States. P.L. 111-117, the Consolidated Appropriations Act, FY2010, contained general legislative language on the use of U.S. funds to NGOs, stating in Section 7034: With respect to the provision of assistance for democracy, human rights and governance activities in this Act, the organizations implementing such assistance and the specific nature of that assistance shall not be subject to the prior approval by the government of any foreign country.35 P.L. 112-10, the Department of Defense and Full-Year Continuing Appropriations Act, 2011, became law on April 15, 2011, after the resignation of former Egyptian President Hosni Mubarak, and did not contain language addressing the NGO issue.36 Appropriations for FY2012 contain multiple conditions on all types of assistance to Egypt (discussed below). 33 It is unclear if USAID is still operating the cash transfer program, as it had been scheduled to be phased out by 2011. Congress sought to ensure that U.S. foreign assistance for Egypt was being appropriately used to promote reform. In conference report (H.Rept. 108-792) language accompanying P.L. 108-447, the FY2005 Consolidated Appropriations Act, conferees specified that “democracy and governance activities shall not be subject to the prior approval of the GoE [government of Egypt]. The managers intend this language to include NGOs and other segments of civil society that may not be registered with, or officially recognized by, the GoE. However, the managers understand that the GoE should be kept informed of funding provided pursuant to these activities.” 35 P.L. 111-117. The conference report accompanying the Act notes, “the requirements of section 7034(m)(4) of this Act shall apply with respect to the provision of assistance to Egyptian NGOs.” 36 The FY2011 Act did contain the following provisions on economic aid to Egypt: “That of the funds appropriated under this heading, up to $250,000,000 shall be made available for assistance for Egypt for activities that support democratic elections, promote representative and accountable governance, protect human rights, strengthen civil (continued...) 34 Congressional Research Service 17 Egypt: Transition under Military Rule U.S. Foreign Aid to Egypt Since February 2011 After Mubarak’s resignation in February 2011, the Administration made several aid proposals for Egypt. In the weeks following the resignation, the Obama Administration reprogrammed $165 million in already appropriated ESF for support to Egypt’s economy ($100 million) and political transition ($65 million). In a speech delivered at the State Department on May 19, 2011, President Obama outlined a new plan for U.S. engagement with Arab countries undergoing political transitions, such as Egypt. Major components of that plan include the following: • Launch a $2 billion facility in the Overseas Private Investment Corporation (OPIC) to support private investment across the region. • Provide up to $1 billion in bilateral debt relief to Egypt, working with the Egyptian government to invest these resources to foster growth and entrepreneurship. • Help Egypt regain access to capital markets by providing $1 billion in U.S.backed loan guarantees to finance infrastructure and job creation. • Work with Congress to create enterprise funds to invest in Tunisia and Egypt, modeled after funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall. Enterprise funds are to focus on making loans to, or investments in, small- and medium-sized (SME) businesses in the fund’s host country that other financial institutions are reluctant to invest in. • Refocus the European Bank for Reconstruction and Development (EBRD) so that it may provide similar support for democratic transitions and economic modernization in the Middle East and North Africa as it has in Europe. • Launch a comprehensive Trade and Investment Partnership Initiative in the Middle East, working with the European Union (EU), to encourage more trade within the region; build on existing agreements to promote integration with U.S. and European markets; and open the door to freer trade for countries that adopt high standards of reform and trade liberalization to construct a regional trade arrangement. (...continued) society and the rule of law, reduce poverty, promote equitable economic development, and expand educational opportunities for disadvantaged Egyptian youth, including through scholarship programs: Provided further, That the Secretary of State shall submit a spending plan, including a comprehensive strategy to promote democracy and development, to the Committees on Appropriations for funds provided for Egypt under this heading: Provided further, That such plan shall not be considered as meeting the notification requirements under Section 7015 of division F of P.L. 111-117 or under Section 634A of the Foreign Assistance Act of 1961: Provided further, That such funds shall be subject to the regular notification procedures of the Committees on Appropriations: Provided further, That funds appropriated under this heading shall be made available to support democratic transitions in the Middle East and North Africa, including assistance for civil society organizations and the development of democratic political parties:’ (b) Not later than 45 days after enactment of this Act, the Secretary of State shall submit to the Committees on Appropriations a report on Egypt detailing whether—(1) a transparent, political transition is occurring that includes the participation of a wide range of democratic opposition and civil society leaders and is responsive to their views; (2) the emergency law and other laws restricting human rights have been abrogated; protesters, political and social activists and journalists are not being arrested, detained or prosecuted for the peaceful exercise of their rights; and the government is respecting freedoms of expression, assembly and association; and (3) legal and constitutional impediments to free and fair presidential and parliamentary elections are being removed.” Congressional Research Service 18 Egypt: Transition under Military Rule The Consolidated Appropriations Act, FY2012 Overall, Congress has supported new Obama Administration proposals for Egypt but with conditions. P.L. 112-74, the Consolidated Appropriations Act, 2012, provides the full request for Egypt ($1.55 billion), authorizes debt relief, and authorizes and appropriates funding for the creation of an enterprise fund to promote private sector investment. However, Section 7041 of P.L. 112-74 specifies that no funds may be made available to Egypt until the Secretary of State certifies that Egypt is meeting its obligations under the 1979 Egypt-Israel Peace Treaty. It further specifies that no military funds be provided until the Administration certifies that Egypt is supporting the transition to civilian government, including by holding free and fair elections and by implementing policies to protect freedom of expression, association, and religion, and due process of law. The Administration may waive these certifications under certain conditions. In addition, conferees directed the Secretary of State to submit a report to the Committees on Appropriations, not later than 60 days after enactment of the act, outlining steps that the Government of Egypt is taking to protect religious minorities, including Coptic Christians; prevent sectarian and gender-based violence; and hold accountable those who commit such acts. On March 15, the New York Times reported that the Administration intends to obligate FY2012 military aid to Egypt by exercising the waiver authority Congress granted it in Section 7041 (c) of P.L. 112-74, the Consolidated Appropriations Act 2012.37 That section would waive a provision of law requiring the Secretary of State to certify to the Committees on Appropriations that the Government of Egypt is supporting the transition to civilian government before FY2012 Foreign Military Financing to Egypt is obligated. According to the New York Times report, some Administration officials have argued that the certification should wait until the presidential election. However, existing FMF funding previously appropriated by Congress may be dwindling, and the Egyptian military may be at risk of missing defense contract payments.38 The Secretary of State exercised the waiver on March 23. In an accompanying statement, a State Department spokesperson said that “'the secretary’s decision to waive is also designed to demonstrate our strong support for Egypt’s enduring role as a security partner and leader in promoting regional stability and peace.” FY2013 State and Foreign Operations Appropriations Bills House (H.R. 5857)—The House bill provides the full Administration request for Egypt of $250 million in ESF and $1.3 billion in FMF. It includes a number of specific directives, including: 37 38 • Section 7042 of the bill contains a certification that no funds may be made available for Egypt unless the Secretary of State certifies to the Committees on Appropriations that Egypt’s central government is meeting its obligations under the 1979 Egypt-Israel Peace Treaty. • The bill also contains a requirement stating that prior to obligations of ESF and FMF, the Secretary of State shall certify that the Government of Egypt has (1) completed the transition to civilian government, including holding free and fair elections; and (2) is implementing policies to protect freedom of expression, “Despite Rights Concerns, U.S. Plans to Resume Egypt Aid,” New York Times, March 15, 2012. op.cit. Congressional Research Service 19 Egypt: Transition under Military Rule association, and religion, and due process of law. The Secretary of State may waive these requirements if the Secretary determines and reports to the Committees on Appropriations that to do so is in the national security interest of the United States. The bill states that such a determination and report shall include a detailed justification for such waiver and that the Secretary of State shall consult with the Committees on Appropriations prior to waiving such requirements. • In addition, the Committee on Appropriations must be consulted prior to the transfer of FMF funds to an interest-bearing account for Egypt. The committee also must be notified 15 days in advance of the obligation of funds for Egypt. • The committee also directs the Secretary of State to submit a report to the Committees on Appropriations, not later than 90 days after enactment of this act, detailing the status of human rights within Egypt. The report should include whether the Government of Egypt is providing adequate protection for religious minorities, including protection of Coptic Christians, their property, and places of worship. • The committee directs the Secretary of State to report to the Committees on Appropriations, not later than 90 days after enactment of this act, on all assistance provided under this heading for Egypt from fiscal year 2008 through 2012. The report should include the following: (1) the ministries, agencies, or instrumentalities of the Government of Egypt that received funding; (2) United States, international, or Egyptian organizations that received funding; (3) a description of the purpose of each program, project, or activity; (4) whether each program, project, or activity complied with mandatory audit requirements; and (5) a description of whether each program, project, or activity fulfilled its stated purpose. • Section 7032 of the bill contains a passage stating that “None of the funds appropriated or otherwise made available by title III of this Act may be obligated for direct Government-to-Government assistance if such assistance is to a government that is actively and significantly interfering with the operation of civil society organizations.” This restriction does not specifically refer to Egypt but could possibly apply to some economic aid to Egypt should its government obstruct operations of non-governmental organizations. Senate (S. 3241)—The Senate bill also contains most of the Administration request for Egypt, though it “reduces assistance for Egypt under ESF by an amount equal to the amount posted as bail in February 2012 for members of United States NGOs operating in Egypt.” The Senate bill includes the following provisions: • “None of the funds appropriated under titles III and IV of this Act and in prior Acts making appropriations for the Department of State, foreign operations, and related programs may be made available for assistance for the Government of Egypt unless the Secretary of State certifies to the Committees on Appropriations that such government is meeting its obligations under the 1979 Egypt-Israel Peace Treaty.” • “The President shall submit to the Committees on Appropriations, concurrent with the fiscal year 2014 budget request, a comprehensive review of United States assistance for Egypt, including the strategic purposes and mechanisms for Congressional Research Service 20 Egypt: Transition under Military Rule disbursing such assistance, and specific programs to be conducted in furtherance of security sector and other reforms.” • “Funds appropriated by this act under the heading ‘Foreign Military Financing Program’ for assistance for Egypt shall be made available for border security programs in the Sinai, and for purposes related to peacekeeping and disaster response: Provided, That a portion of such funds estimated to be outlayed during fiscal year 2013 may, following consultation with the Committees on Appropriations, be transferred to an interest bearing account for Egypt in the Federal Reserve Bank of New York: Provided further, That funds appropriated by this Act under the heading ‘Economic Support Fund’ shall be made available to promote security sector reform in Egypt, in accordance with section 7034(r) of this Act.” • “Prior to the initial obligation of funds appropriated by this Act for assistance for Egypt under the heading ‘Foreign Military Financing Program’, the Secretary of State shall certify to the Committees on Appropriations that the Government of Egypt is a democratically elected civilian government that is implementing policies to—(A) provide civilian control over, and public disclosure of, the military and police budgets; (B) fully repeal the Emergency Law; and (C) protect judicial independence; freedom of expression, association, assembly, and religion; the right of political opposition parties, civil society organizations, and journalists to operate without harassment or interference; and due process of law. The Secretary of State, after consultation with the Committees on Appropriations, may waive the requirements of paragraphs (1) and (4) if the Secretary determines and reports to the Committees on Appropriations that to do so is important to the national security interest of the United States: Provided, That such determination and report shall include a detailed justification for such waiver.” Congressional Research Service 21 Egypt: Transition under Military Rule Table 2. Top 10 recipients of U.S. Foreign Assistance, FY2012 and FY2013 Req. (in millions) FY2012 FY2013 Req. 1. Israel $3,075 1. Israel $3,100 2. Afghanistan $2,327 2. Afghanistan $2,505 3. Pakistan $2,102 3. Pakistan $2,228 4. Iraq $1,683 4. Iraq $2,045 5. Egypt $1,557 5. Egypt $1,563 6. Jordan $676 6. Jordan $671 7. Kenya $652 7. Nigeria $599 8. Nigeria $625 8. Tanzania $571 9. Ethiopia $580 9. South Africa $489 10. Tanzania $531 10. Kenya $460 Source: Allocation tables provided to CRS by the Department of State, F Bureau. Does not including funding from independent agencies such as MCC, which, if included, could change the ranking of Tanzania. Table 3. U.S. Foreign Assistance to Egypt ($ in millions) Fiscal Year Economic 1948-1997 Military IMET Total 23,288.6 22,353.5 27.3 45,669.4 1998 815.0 1,300.0 1.0 2,116.0 1999 775.0 1,300.0 1.0 2,076.0 2000 727.3 1,300.0 1.0 2,028.3 2001 695.0 1,300.0 1.0 1,996.0 2002 655.0 1,300.0 1.0 1,956.0 2003 911.0 1,300.0 1.2 2,212.2 2004 571.6 1,292.3 1.4 1,865.3 2005 530.7 1,289.6 1.2 1,821.5 2006 490.0 1,287.0 1.2 1,778.2 2007 450.0 1,300.0 1.3 1,751.3 2008 411.6 1,289.4 1.2 1,702.2 2009 250.0 1,300.0 1.3 1,551.3 2010 250.0 1,300.0 1.9 1,551.9 2011 249.5 1,297.4 1.4 1,548.3 Total 31,070.3 40,509.2 Congressional Research Service 43.14 71,623.9 22 Egypt: Transition under Military Rule Table 4. U.S. Foreign Assistance to Egypt, 1946-1997 ($ in millions) Year Total Military Loan Military Grant I.M.E.T Grant Misc. Economic Grant D.A. Loan D.A. Grant ESF Loan ESF Grant P.L. 480 II P.L. 480 I 1946 9.6 — — — 9.3 Surplus 0.3 UNWRA — — — — — — 1948 1.4 — — — 1.4 Surplus — — — — — — 0.1 — — — 0.1 Tech Asst — — — — — — 1952 1.2 — — — — — 0.4 — — — 0.8 1953 12.9 — — — — — 12.9 — — — — 1954 4.0 — — — — — 3.3 — — — 0.7 1955 66.3 — — — — 7.5 35.3 — — — 23.5 1956 33.3 — — — — — 2.6 — — 13.2 17.5 1957 1.0 — — — — — 0.7 — — — 0.3 1958 0.6 — — — — — 0.0 — — — 0.6 1959 44.8 — — — — — 2.0 — — 33.9 8.9 1960 65.9 — — — — 15.4 5.7 — — 36.6 8.2 1961 73.5 — — — — — 2.3 — — 48.6 22.6 1962 200.5 — — — — 20.0 2.2 20 — 114.0 44.3 1963 146.7 — — — — 36.3 2.3 10 — 78.5 19.6 1964 95.5 — — — — — 1.4 — — 85.2 8.9 1965 97.6 — — — — — 2.3 — — 84.9 10.4 1966 27.6 — — — — — 1.5 — — 16.4 9.7 1967 12.6 — — — — — 0.8 — — — 11.8 1972 1.5 — — — — 1.5 — — — — — 1973 0.8 — — — — — — — — — 0.8 1974 21.3 — — — — — — — 8.5 9.5 3.3 1975 370.1 — — — — — — 194.3 58.5 104.5 12.8 1976 464.3 — — — — — 5.4 150.0 102.8 201.7 4.4 TQ 552.5 — — — — — — 429.0 107.8 14.6 1.1 1977 907.8 — — — — — — 600.0 99.2 196.8 11.7 1978 943.2 — — 0.2 0.1 Narc. — — 617.4 133.3 179.7 12.5 1979 2,588.5 1,500 — 0.4 — — — 250.0 585.0 230.7 22.4 1980 1,167.3 — — 0.8 — — — 280.0 585.0 285.3 16.1 1981 1,681.2 550 — 0.8 — — — 70.0 759.0 272.5 28.9 1982 1,967.3 700 200.0 2.4 — — — — 771.0 262.0 31.9 1983 2332.0 900 425.0 1.9 — — — — 750.0 238.3 16.8 1951 Congressional Research Service 23 Egypt: Transition under Military Rule Military Loan Military Grant I.M.E.T Grant Misc. Economic Grant D.A. Loan D.A. Grant ESF Loan ESF Grant P.L. 480 II P.L. 480 I Year Total 1984 2,470.8 900 465.0 1.7 — — — — 852.9 237.5 13.7 1985 2,468.7 — 1,175.0 1.7 — — — — 1,065.1 213.8 13.2 1986 2,539.1 — 1,244.1 1.7 — — — — 1,069.2 217.5 6.6 1987 2,317.0 — 1,300.0 1.8 — — — — 819.7 191.7 3.9 1988 2,174.9 — 1,300.0 1.5 — — — — 717.8 153.0 2.6 1989 2,269.6 — 1,300.0 1.5 — — 1.5 — 815.0 150.5 1.2 1990 2,397.4 — 1,294.4 1.6 — — — — 898.4 203.0 — 1991 2,300.2 — 1,300.0 1.9 — — — — 780.8 165.0 52.5 1992 2,235.1 — 1,300.0 1.8 — — — — 892.9 40.4 — 1993 2,052.9 — 1,300.0 1.8 — — — — 747.0 — 4.1 1994 1,868.6 — 1,300.0 0.8 — — — — 561.6 35.0 6.2 1995 2,414.5 — 1,300.0 1.0 — — 0.2 — 1,113.3 — — 1996 2,116.6 — 1,300.0 1.0 — — — — 815.0 — 0.6 1997 2,116.0 — 1,300.0 1.0 — — — — 815.0 — — Total 45,669.4 4,550 17,803.5 27.3.0 11.2 80.7 82.8 2,620.7 15,923.8 4,114.3 455.1 Notes: Totals may not add due to rounding. No U.S. aid programs for years 1947, 1949, 1950, 1968, 1969, 1970, and 1971. P.L. 480 II Grant for 1993 includes $2.1 million in Sec. 416 food donations. TQ = Transition Quarter; change from June to September fiscal year * = less than $100,000 I.M.E.T. = International Military Education and Training UNRWA = United Nations Relief and Works Agency Surplus = Surplus Property Tech. Asst. = Technical Assistance Narc. = International Narcotics Control D. A. = Development Assistance ESF = Economic Support Funds P.L. 480 I = Public Law 480 (Food for Peace), Title I Loan P.L. 480 II = Public Law 480 (Food for Peace), Title II Grant Author Contact Information Jeremy M. Sharp Specialist in Middle Eastern Affairs jsharp@crs.loc.gov, 7-8687 Congressional Research Service 24