Egypt: Background and U.S. Relations
Jeremy M. Sharp
Specialist in Middle Eastern Affairs
December 6, 2012February 26, 2013
Congressional Research Service
7-5700
www.crs.gov
RL33003
CRS Report for Congress
Prepared for Members and Committees of Congress
Egypt: Background and U.S. Relations
Summary
This report provides a brief overview of the key issues for Congress related to Egypt 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 112th113th Congress.
For Obama Administration officials and the U.S. military, there is a clear desire to engage
Egyptian President Muhammad Morsi’s new government on a host of issues, including immediate
economic support and Sinai security. For others, opportunities for renewed diplomacy may be
overshadowed by disruptive political trends that have been unleashed by the so-called Arab
awakening and allowed for more expression of anti-Americanism, radical Islamist politics,
antipathy toward Israel, and sectarianism, among others.
For FY2013, President Obama is requesting $1.55 billion in total bilateral aid to Egypt ($1.3
billion in military aid and $250 million in economic aid). The aid levels requested are unchanged
from FY2012 appropriations. In late September 2012, House Foreign Affairs Committee
Chairwoman Ileana Ros-Lehtinen and House Foreign Operations Appropriations Subcommittee
Chairwoman Kay Granger placed holds on a congressionally notified $450 million Economic
Support Fund (ESF) cash transfer to Egypt. Those funds that would have been used to pay down
Egypt’s bilateral debt to the United States in exchange for Egyptian government commitment to a
fiscal stabilization program as prescribed by the International Monetary Fund. As of early
December 2012, the holds on the cash transfer remain in place.
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Egypt: Background and U.S. Relations
Contents
Overview: Egypt’s Constitutional Crisis Under the Continuing Appropriations Resolution, FY2013
(H.J.Res. 117, P.L. 112-175), approved by Congress in September 2012, regular aid accounts
(ESF, FMF, etc.) are funded at the same level as in FY2012 (P.L. 112-74) plus .612%. Conditions
placed on appropriations in the FY2012 bill apply to FY2013 CR funds unless otherwise noted.
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Egypt: Background and U.S. Relations
Contents
Overview.......................................................................................................................................... 1
Political Outlook .............................................................................................. 1
Background ................................ 2
Economy ....................................................................................................................................... 1
Outlook ... 4
Egypt and the International Monetary Fund .............................................................................. 4
Relations with Israel ........................................................................ 4
U.S. Policy .................................................. 5
U.S.-Egyptian Relations .......................................................................................................... 5........ 6
U.S. Foreign Aid to Egypt ......................................................................................................... 67
Military Aid ......................................................................................................................... 68
Economic Aid ...................................................................................................................... 7 10
U.S. Foreign Aid to Egypt Sincesince the February 2011 Revolution ....................................... 12
Recent Legislation ............................... 9
The Consolidated Appropriations Act, FY2012 ................................................................ 10
Latest Foreign Aid Developments .......................... 14
The Consolidated Appropriations Act, FY2012 ................................................................. 11..... 14
FY2013 State and Foreign Operations Appropriations Bills ................................................... 15
Legislation in the 113th Congress 11
Figures
Figure 1. Map of Egypt ............................................................................................. 16
Figures
Figure 1. Map of Egypt ....................... 5
Tables
Table 1. U.S. Assistance to Egypt, FY2010-FY2013 Request.............................................................. 7
Table 2. Top 10 recipients of U.S. Foreign Assistance, FY2012 and FY2013 Req. .......................... 13
Table 3. U.S. Foreign ..... 6
Tables
Table 1. U.S. Assistance to Egypt, FY2010-FY2013 Request............................................................... 9
Table 2. Top 10 recipients of U.S. Foreign Assistance, FY2012 and FY2013 Req. ...................... 1417
Table 43. U.S. Foreign Assistance to Egypt, 1946-1997 ................................................................. 15
Contacts
Author Contact Information..................................... 18
Table 4. U.S. Foreign Assistance to Egypt, 1946-1997 ...................................................................... 17
Acknowledgments .............. 19
Contacts
Author Contact Information........................................................................................................... 17
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Egypt: Background and U.S. Relations
Overview: Egypt’s Constitutional Crisis
On November 22, Egyptian President Muhammad Morsi issued a controversial constitutional
declaration that has sharply divided the Egyptian polity, heightening the potential for violent
unrest in the most populous Arab country in the Middle East and a longtime strategic partner of
the United States. As of December 6, 2012, reports indicate that mass protests and violent clashes
between proponents and opponents of Morsi are continuing, and at least six people have been
killed and 450 injured. The Obama Administration and many Members of Congress are closely
monitoring developments in Egypt in the hope that civil strife does not spiral out of control. In the
context of a volatile regional environment that has witnessed two years of revolutionary upheaval,
sectarian conflict, terrorist attacks, and recent clashes between Israelis and Palestinians in Gaza,
U.S. Secretary of State Hillary Rodham Clinton has urged both sides to engage in a dialogue to
maintain order and find a path forward. Heightened instability in Egypt could have serious
negative consequences for regional and U.S. national security. To date, the overall level of
violence has been somewhat limited. However, should the political impasse endure, the risk of
violent confrontation could increase. So far, Egypt’s military, the most durable state institution,
has remained publicly silent over the constitutional dispute, though many experts believe that the
army may move to reassert its control over civilian politics if the current situation is not
peacefully resolved soon. It has already deployed tanks outside the presidential palace in order to
maintain public security.
Background
The political battle over drafting a new Egyptian constitution reflects the deep divisions in post
Mubarak Egypt. Liberal and secular forces distrust the country’s democratically, but narrowly
elected President, Mohammed Morsi, an Islamist and former leading Muslim Brotherhood
activist. His opponents believe that Morsi is seeking to consolidate Islamist control over the entire
political system. 1 President Morsi and his supporters are at odds with prominent judges who have
used court decisions to institutionally weaken the Islamist-led parliament and limit Morsi’s
authority since his election in June 2012. Morsi supporters believe many of these judges are
Mubarak holdovers or nationalists hostile to Islamist rule.
Under the terms of Egypt’s interim constitutional arrangements, a 100-person Constituent
Assembly has been tasked with drafting a new permanent constitution. The Assembly was
appointed by the lower house of parliament elected in late 2011. Like the Egyptian public, the
Assembly’s membership generally was divided along secular and Islamist lines, with Islamists in
the majority. For months its members debated draft language governing the role of religion in
civic life, the role of the military, and the future form of government. However, the legal status of
the Assembly had been in question since the courts ruled it invalid and then later invalidated the
electoral process that governed parliamentary elections, leading to the military’s dissolution of the
Islamist-dominated lower house of parliament which appoints Assembly members.
1
This view was reinforced in August 12, when Morsi issued a new constitutional declaration abrogating a June 2012
military-issued document, restoring full executive authority to the president, and providing him with interim legislative
powers until the election of a new parliament following the completion of the new constitution.
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The current crisis erupted as lawsuits questioning the validity of the Assembly moved further
through the courts, and some legal experts predicted the Assembly was soon to be disbanded.2
Had that transpired, the process of selecting members of the Assembly would have had to begin
anew—a setback for Islamists who held a majority of Assembly seats. President Morsi
presumably feared having to appoint a more politically balanced Assembly in order to appease the
courts. Morsi also may have feared that drawing out the transition process even further would
damage the country’s prospects for economic recovery. Moreover, almost all the secular and
Coptic Christian members of the Assembly were boycotting its proceedings by mid-November.
Morsi preempted judicial action by issuing an executive document on November 22 that declared,
among other things, that his decisions are immune from judicial review until the approval of a
new constitution. Many elements of the judicial establishment and non-Islamist segments of the
public were swift in condemning what they described as a power grab. International reactions
were mixed, and speculation focused on the timing of Morsi’s move, which followed praise for
his success in brokering an Israeli-Hamas cease-fire and the approval of a $4.8 billion IMF loan
for Egypt.
In the weeks since that November 22 document was issued, protesters have returned to the streets
of Cairo and have ransacked Muslim Brotherhood offices elsewhere in the country. On December
4, President Morsi was escorted from the presidential palace after thousands of demonstrators
held a rally outside its gates. Morsi supporters have staged counterdemonstrations and clashed
with opponents outside the palace on December 5. The crisis has galvanized what until now had
been a loose coalition of liberal youth, secular political parties, supporters of the Mubarak regime,
and Coptic Christians. In recent days, prominent figures led by Nobel laureate Mohamed
ElBaradei formed the broad-based National Salvation Front coalition in opposition to Morsi’s
recent actions.
President Morsi has not backed away from his declaration despite the mounting opposition. On
the contrary, he has accelerated the constitutional approval process, asking the remaining, almost
exclusively Islamist members of the Constituent Assembly to complete a draft document. The
Assembly completed a draft that Morsi then approved (see criticisms of the draft below). He has
scheduled a public referendum on the constitution for December 15. His opponents have vowed
to prevent the referendum from taking place, raising the prospect of a political showdown with
potentially violent consequences.
2
If the courts had declared the Assembly invalid, then, according to President Morsi's August 12 constitutional
declaration, the president will form a new 100-member Assembly to draft the constitution, which would then have three
months to produce a draft. Within 30 days of the issuance of that draft document, a public referendum would be held to
determine its approval. Within 60 days of its approval, new parliamentary elections would be held.
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Timeline: Egyptian Constitutional Crisis 2012
November 19: over the course of three days, 26 liberal and Christian members of Egypt’s 100-member Constituent
Assembly (CA) resign; 11 are replaced by members of the Muslim Brotherhood.
November 22: the day after the announcement of a cease-fire in Gaza (an agreement Egypt helped broker and for
which it was widely praised internationally), President Morsi issues a decree granting himself broad powers, making
his decisions immune from judicial review until the approval of a new constitution; protecting the Constituent
Assembly from being disbanded; and firing several Mubarak-era officials and ordering retrials for those already
convicted, including Mubarak himself. Morsi supporters argue the move is only temporary and is necessary to
safeguard the revolution; opposition leaders such as Mohammed ElBaradei condemn the decree as a dangerous and
unconstitutional seizure of absolute power.
November 23: tens of thousands of opposition protesters take to Cairo’s Tahrir Square; over 100 people are injured.
November 24: the Judges Club (association of Egyptian judges) calls for a nationwide strike by judges; the Supreme
Constitutional Court (SCC), one of the main targets of Morsi’s decree, announces it may consider disbanding the CA.
November 25: on the first day of trading since the decree, the Egyptian stock market plunges nearly 10%, as protests
continue around the country.
November 26: in an apparent compromise with the judiciary, Morsi releases a statement that limits his powers to
“acts of sovereignty” (e.g., declaring war), but keeps the CA from being dissolved by the SCC before it finishes its
work on the new constitution.
November 27: Citing fears of clashes between the rival rallies, the Muslim Brotherhood calls off its pro-Morsi
demonstration; nearly two hundred thousand gather in Tahrir Square to protest Morsi’s decree, with some calling for
his resignation.
November 28: after reports that the SCC is preparing to disband the Constituent Assembly, the head of the CA
announces that the drafting of the new constitution, originally scheduled for February, will be completed that day and
voted on the next.
November 29: the constitution is approved in an article-by-article vote by the CA.
December 1: Morsi announces a national referendum on the constitution will take place on December 15.
December 2: the SCC attempts to meet to decide on disbanding the CA (a ruling that would have been largely
symbolic, given Morsi’s decree) but is prevented from doing so by a public demonstration by Morsi supporters, and
subsequently announces an indefinite strike; the Judges Club announces that it will boycott the December 15
referendum and refuse to supervise the voting process.
December 3: the country’s judges splinter as some announce their intent to oversee the referendum vote,
disappointing those who had hoped a unified boycott of the entire judiciary would delegitimize the draft constitution.
December 4: as an anti-Morsi protest of perhaps a hundred thousand approaches the presidential palace in Cairo’s
Heliopolis neighborhood, Morsi leaves the building in response to “possible dangers;” protests take place across the
country, include the country’s second largest city Alexandria, where 100,000 meet to protest Morsi and the Muslim
Brotherhood.
December 5: at least five are killed and hundreds injured as Morsi supporters attack (with the apparent acquiescence
of the police) hundreds of Morsi opponents who had been staging a sit-in outside the presidential palace; Muslim
Brotherhood offices are stormed in Ismailia and Suez; four Morsi advisors resign in protest, bringing the number of
resignations from his 17-member advisory panel to six.
Thursday, December 6: elite Republic Guard tanks and troops are deployed outside the presidential palace in the
wake of Wednesday’s street clashes; the university of al-Azhar, Egypt’s most important Islamic institution, calls for
Morsi to suspend the decree; Morsi schedules a nation-wide televised address.
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Outlook
President Morsi may be calculating that a rush to approve the constitution will defuse public
unrest, since his declaration of November 22 becomes null and void as soon as a new constitution
is approved. Morsi’s supporters have rallied Muslim Brotherhood members and the more
conservative Salafists to his corner, holding loyalty rallies in response to opposition
demonstrations. Meanwhile, many judges have gone on strike in protest, but others have
promised to supervise the constitutional referendum. Egyptian law requires judicial supervision
over elections, and it is unclear whether or not there will be enough judges for every ballot box if
the referendum is held on December 15. With a referendum date now set and at least a partial
commitment for judicial supervision, Morsi’s opponents may be running out of options, and
therefore may heighten their public displays of defiance in order to delegitimize the entire
process.
Morsi’s decree has been described as a serious overreach, and his rejection of judicial oversight
over executive authority merely reinforces the zero-sum nature of Egyptian politics post
Mubarak. If compromise between warring political factions is not reached, then the legitimacy of
Egypt’s transition will be perpetually in question, creating an atmosphere of instability for the
foreseeable future.
Debating Egypt’s Constitution
Most criticism of the draft constitution comes from members of groups that boycotted the Assembly (i.e., secularists,
liberals and Christians). Among their complaints: the constitution does not do enough to protect personal freedoms
and the rights of minorities; gives too much power to the executive; and preserves many of the military’s old
prerogatives. Some Salafis and other Islamists have criticized the document for not doing enough to safeguard Egypt’s
Islamic identity. Debates over specific issues and provisions include:
•
Islam and the State—Article 2 of the constitution states that "Islam is the religion of the state and Arabic its
official language. Principles of Islamic Sharia are the principal source of legislation." Though Salafi calls to change
“principles” to “laws” were rejected, Article 219 was added, defining ‘the principles of Islamic Shariah’ as
including “general evidence, foundational rules, rules of jurisprudence, and credible sources accepted in Sunni
doctrines and by the larger community.” These seemingly minor semantic changes are actually deeply meaningful
phrases rooted in the language of Islamic jurisprudence, and could have significant consequences depending on
how they are interpreted. Article 4 specifies that the Islamic scholars of Al Azhar “are to be consulted in matters
pertaining to Islamic law,” though how this will work in practice is unclear.
•
Form of Government—Since the revolution, Egyptians have debated whether to retain a strong presidential
system of government, revert to a parliamentary system, or create some hybrid form of rule. The draft
constitution features something of a hybrid, with a bicameral legislature (with terms of five years in the lower
house and six in the upper) and a strong president (who may be elected to two four-year terms) who selects the
Prime Minister.
•
Women’s Rights and Social Issues—articles 10 and 11 state that it is the prerogative of the state to “preserve
the genuine character of the Egyptian family” and that the state “shall safeguard ethics, public morality and public
order.” Critics charge that these clauses violate previous guarantees of individual liberties and will enable the
state to take a proactive role in enforcing Islamic norms throughout society. An original article committing the
state to “taking all measures to establish equality between women and men” was removed in the final draft.
•
Role of the Military—One of the most sensitive debates in Egyptian politics centers on enshrining military
prerogatives and rights within the constitution. The final draft gives the military budgetary autonomy and secrecy,
control over the selection of its leaders, war powers, and a formal role in formulating national security strategy
and even foreign policy. The right of the military to try civilians under certain circumstances in military courts
also remains despite heavy criticism by human rights groups.
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Figure 1. Map of Egypt
Source: Map Resources, adapted by CRS.
U.S. Policy
For the United States and Egypt, core aspects of the bilateral relationship remain intact, but
disputes remain over other areas of potential cooperation. The Obama Administration seeks a
stable Egypt that remains at peace with Israel per the existing terms of the 1979 Israeli-Egyptian
peace treaty. It also seeks Egypt’s cooperation in preventing terrorist groups in the Sinai
Peninsula from destabilizing the region and in brokering talks between Palestinians and Israelis.
The centrality of Egypt’s role was evident in President Morsi’s diplomacy during Israel’s recent
Operation Pillar of Defense in Gaza in November 2012. More broadly, the Administration and
Congress also expect Egypt to continue its military and intelligence cooperation with the United
States and facilitate transit through the Suez Canal for U.S. warships and over flight rights for
U.S. aircraft. The Egyptian military also seeks to maintain its longstanding cooperation with the
United States.
On the other hand, there are a number of issues that may hamper more robust U.S.-Egyptian
relations. President Morsi may welcome U.S. assistance in stabilizing the country’s economy
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while at the same time he works to distance what Islamists believe has been Egypt’s overreliance
on the United States during the Mubarak regime. Many observers expect President Morsi to more
forcefully advocate for Palestinian rights, criticize Israeli policy in the Middle East, and question
the U.S. position as an honest broker in the peace process. Amongst segments of the American
public and in Congress, there is some suspicion of the Muslim Brotherhood agenda, not just
regarding Israel but also its espousal of liberal democracy and rights for women and religious
minorities. The events of September 11, 2012, in which a visiting U.S. business delegation
dispatched to Egypt to expand trade and investment was in Cairo while an angry mob attacked the
U.S. Embassy, may be a harbinger of increased dissonance in U.S.-Egyptian bilateral relations for
years to come.
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.3 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).4
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
3
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.
4
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.
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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.5 Egypt also receives Excess Defense Articles (EDA) worth hundreds of
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.6 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
5
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.
6
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.
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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.
In prior years, ESF funds were divided into two categories: USAID projects and cash transfers.7
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 recent dispute over U.S. funding for nongovernmental organizations.8
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).9 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
7
It is unclear if USAID is still operating the cash transfer program, as it had been scheduled to be phased out by 2011.
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. Having departed Egypt,
almost all of the accused Americans are being tried in absentia.
9
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.”
8
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of that assistance shall not be subject to the prior approval by the government of any foreign
country.10
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.11 Appropriations for FY2012 contain
multiple conditions on all types of assistance to Egypt (discussed below).
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.
10
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.”
11
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
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
9
Egypt: Background and U.S. Relations
•
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.
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 2012.12 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.13
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.”
12
13
“Despite Rights Concerns, U.S. Plans to Resume Egypt Aid,” New York Times, March 15, 2012.
op.cit.
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Egypt: Background and U.S. Relations
Latest Foreign Aid Developments
For FY2013, President Obama is requesting $1.55 billion in total bilateral aid to Egypt ($1.3
billion in military aid and $250 million in economic aid). The aid levels requested are unchanged
from FY2012 appropriations.
According to multiple reports, the Administration is currently negotiating with Egypt the terms
for obligating funds that have already been appropriated by Congress, such as up to $1 billion in
bilateral debt relief and the seed capital for the enterprise fund mentioned above. Egypt currently
owes the United States approximately $3.2 billion from decades-old food aid loans. In order to
provide debt relief, U.S. government agencies are required to value U.S. loans, such as bilateral
debt owed to the United States, on a net present value basis rather than at their face value, and an
appropriation by Congress of the estimated amount of debt relief is required in advance. P.L. 11274 did provide that ESF funds appropriated for Egypt in the act and from prior acts could be used
for an Egypt debt initiative. Moreover, according to P.L. 112-74, bilateral debt relief funds would
be a “swap” and channeled into programs that improve “the lives of the Egyptian people through
education, investment in jobs and skills (including secondary and vocational education), and
access to finance for small and medium enterprises with emphasis on expanding opportunities for
women, as well as other appropriate market-reform and economic growth activities.”
Given the rampant anti-Americanism permeating Egyptian politics at the moment and general
concern over the intentions of the Muslim Brotherhood in Egypt, some lawmakers have sought to
limit additional U.S. economic aid to Egypt. In late September 2012, House Foreign Affairs
Committee Chairwoman Ileana Ros-Lehtinen and House Foreign Operations Appropriations
Subcommittee Chairwoman Kay Granger placed holds on a congressionally notified $450 million
Economic Support Fund (ESF) cash transfer to Egypt. Those funds that would have been used to
pay down Egypt’s bilateral debt to the United States in exchange for Egyptian government
commitment to a fiscal stabilization program as prescribed by the International Monetary Fund.
As of early December 2012, the holds on the cash transfer remain in place.
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:
•
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 (1) has
completed the transition to civilian government, including holding free and fair
elections; and (2) is implementing policies to protect freedom of expression,
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
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11
Egypt: Background and U.S. Relations
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 their
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
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
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Egypt: Background and U.S. Relations
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.”
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
$460
Source: Allocation tables provided to CRS by the Department of State, F Bureau. Does not including funding
from independent agencies such as MCC, which, if included, could change the ranking of Tanzania.
Congressional Research Service
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Egypt: Background and U.S. Relations
Table 3. U.S. Foreign Assistance to Egypt
($ 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
2012
250.0
1,300.0
1.4
1,551.4
Total
31,320.3
41,809.2
Congressional Research Service
44.54
73,174.0
14
Egypt: Background and U.S. Relations
Table 4. U.S. Foreign Assistance to Egypt, 1946-1997
($ in millions)
Year
Total
Military
Loan
Military
Grant
I.M.E.T
Grant
1946
9.6
—
—
—
1948
1.4
—
—
0.1
—
1952
1.2
1953
Misc.
Economic
Grant
D.A.
Loan
D.A.
Grant
ESF
Loan
ESF
Grant
P.L.
480 I
P.L.
480 II
9.3 Surplus
0.3 UNWRA
—
—
—
—
—
—
—
1.4 Surplus
—
—
—
—
—
—
—
—
0.1 Tech
Asst
—
—
—
—
—
—
—
—
—
—
—
0.4
—
—
—
0.8
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.
700
200.0
2.4
—
—
—
—
771.0
262.0
31.9
1951
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Egypt: Background and U.S. Relations
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 I
P.L.
480 II
3
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
45,66
9.4
4,550
17,803.5
27.3.0
11.2
80.7
82.8
2,620.
7
15,923
.8
4,11
4.3
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
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Egypt: Background and U.S. Relations
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
Acknowledgments
The author would like to acknowledge the assistance provided by Clayton Thomas, Research
Associate, in the preparation of this report.
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Congressional Research Service
Egypt: Background and U.S. Relations
Overview
Two years after the resignation of former President Hosni Mubarak, Egypt is fraught with a
polarized political culture and a contracting economy that, if not stabilized, could spark greater
public unrest. The Muslim Brotherhood and the military are the two dominant actors, with the
former gradually consolidating power in all branches of government and the latter retaining a large
measure of control over national security and some foreign policy decision-making.1 Although
President Muhammad Morsi may perceive his growing control over the state2 as necessary for
stability, his opponents perceive a power grab, as the Morsi Administration has faced a recent public
backlash from urban middle class residents in Cairo3 and citizens of the canal cities of Port Said,
Ismailia, and Suez.4
Egyptians are divided on questions pertaining to the role of religion in public life and the degree of
state involvement in the economy, among other issues. Generally speaking, voters identify with
various movements, including the Muslim Brotherhood, Salafist parties, former members of the
previous ruling and now-outlawed National Democratic Party (NDP), Leftists (or Nasserists), and
1
This arrangement was formalized in President Morsi’s August 2012 constitutional declaration, which was issued after
Sinai-based militants killed 16 Egyptian soldiers in an incident which damaged the prestige of the military. As a result of
that incident, President Morsi “dismissed” 77-year-old Defense Minister Field Marshal Mohamed Hussein Tantawi and
other officers, though many experts believe that, behind-the-scenes, younger officers forced Tantawi and others into
retirement, desiring a less public military role in governance. In exchange for its relinquishing most executive authority,
the military most likely sought the Muslim Brotherhood’s guarantee that it would constitutionally enshrine autonomy for
the military and protection from civilian oversight on key traditional prerogatives. Egypt’s new constitution, approved by
referendum in December 2012, does precisely that: it allows the military to choose the defense minister; creates three
different “councils” (National Security Council, Supreme Council of the Armed Forces, and National Defense Council)
that are comprised of a majority of military officers and have ultimate authority over the defense budget; and continues the
practice of allowing civilians to be tried by military courts, though only in cases where the “crimes are susceptible to harm
the armed forces.”
2
In general, many Egyptians and some in the international community have bemoaned what they perceive to be a
propensity toward authoritarian governance exhibited by President Morsi in recent months. For example, according to
Gamal Eid, the executive director of the Arab Network for Human Rights, there have been four times as many “insulting
the presidency” lawsuits filed against citizens during President Morsi's first 200 days in office than during the entire 30year reign of former president Hosni Mubarak. See, “More 'insulting president' Lawsuits under Morsi than Mubarak,” Al
Ahram Online, January 20, 2013. Others charge that the Brotherhood is attempting to control the education system, labor
unions, and religious institutions. See, Open Source Center Report: Egypt – “Officials, Media Criticize Latest
'Ikhwanization' Efforts,” GMP20130118256001 Egypt -- OSC Report in English, January 17, 2013.
3
In the past three months, Egypt has experienced a wave of popular unrest directed against President Morsi himself and
the process leading to the approval of the constitution. Although Muslim Brotherhood supporters still turned out in large
enough numbers (total national turnout of 32%) to approve the Islamist-crafted constitution in a public referenda by a
margin of 64% for to 36% against, critics charge that President Morsi forced the process forward, starting with his
November 2012 declaration that provided him with immunity from judicial oversight, which he made in order to avoid
having the courts annul the Islamist-dominated Constituent Assembly charged with drafting the document (Morsi
rescinded most of the decree on December 8 but insisted that the referendum occur as scheduled). When protests occurred
outside the presidential palace, regime critics allege that members of the Muslim Brotherhood violently dispersed
protestors. Anti-Brotherhood protests in Cairo were particularly strong, as 56% of Cairene voters actually voted against the
constitution’s approval.
4
In January 2013, a court verdict sentencing 21 “Ultras” (hard-core Egyptian soccer fans) to death for their role in a riot
last year sparked widespread violence in Egypt’s three canal cities against the Muslim Brotherhood and the much maligned
police forces, who, many Egyptians claim, continue to brutalize the population. For several days, authorities actually lost
control over Port Said to protestors, leading Defense Minister General Abdul Fattah al Sisi to declare on January 29 that
“The continuation of the conflict between different political forces and their disagreement on running the affairs of the
country may lead to the collapse of the state and threatens the future of the coming generations.”
Congressional Research Service
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Egypt: Background and U.S. Relations
the so-called secular-liberal parties. Of these political groupings, the Muslim Brotherhood continues
to be the most successful at attracting supporters due to its sustained focus on social services, party
discipline and organization, its history of opposition to Mubarak, and the broad popular appeal of
Islam. Its electoral strength has led it to victories in the 2011-2012 parliamentary elections, the June
2012 presidential election, and the December 2012 constitutional referendum. Its decades-long
experience in opposition gives it unparalleled credibility among its constituents and the movement
has a major advantage in voter mobilization, especially when overall voter turnout is lower than
anticipated. The Brotherhood did not immediately employ its full political weight, having only a
year ago changed course by opting to field a presidential candidate after initially pledging not to do
so. After three consecutive electoral victories, clearly the Brotherhood has embraced the
opportunities afforded it in the post-Mubarak era.
However, actual governance has been far more challenging for the Brotherhood than winning
elections, as the reality of Islamists wielding real political power has engendered a fierce backlash
from Brotherhood opponents who deeply distrust its motives. President Morsi on November 22,
2012 declared temporary immunity of the presidency from judicial review. This controversial step
was the catalyst for the creation of a new opposition coalition, named the National Salvation Front
(NSF). It is composed of several former presidential candidates, including Amr Moussa and
Hamdeen Sabahi.5 It also includes Mohammed ElBaradei, the former Secretary General of the
International Atomic Energy Agency.
Overall, though the Brotherhood may be attempting to consolidate power, some observers still
believe that state institutions can somewhat hold it in check. According to one Egyptian editor, “If
you think of the main pillars of the bureaucracy, the Brotherhood has not gotten control of them yet,
and I don’t think they will completely....There are so many people who are very difficult to bring to
heel.... I think we are in for several years of turbulence where state power is diffused.”6 Perhaps the
single greatest challenge for the Brotherhood is controlling and reforming the Interior Ministry and
national police forces, which have been practically at war with street protestors over the past two
years and have made no progress in gaining public trust. According to one account, “In a measure of
the low level of the new government’s top-down control over the security forces, officers even
cursed and chased away their new interior minister when he tried to attend a funeral for two
members of the security forces killed in the recent clashes.”7
Political Outlook
The Muslim Brotherhood’s political party, the Freedom and Justice Party (FJP), has declared that it
is seeking an outright parliamentary majority in the parliamentary elections tentatively scheduled for
April 2013.8 For opposition groups the key to electoral success will be maintaining internal unity,
which in the past has proved difficult. The Salafi voting block has already split (it had been the
second most powerful grouping in Egypt’s short-lived, first post-Mubarak parliament), and the
5
Analysts have paid particular attention to Sabahi, who finished third in the 2012 election due to his personal charisma,
past record of opposition to the Mubarak regime, and socialist economic populism.
6
“Brotherhood Struggles to Translate Power Into Policy in Egypt,” New York Times, January 19, 2013.
7
“Egypt’s Army Chief warns of ‘collapse,’” International Herald Tribune, January 30, 2013.
8
In February 2013, the Supreme Constitutional Court (SCC) objected to a draft electoral law. The Upper House of
Parliament revised the law, and parliamentary elections will begin on April 22/23 and last well into the month of May.
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Egyptian media is constantly speculating over possible splits within the NSF. The NSF itself may
choose to boycott parliamentary elections entirely.
Whatever the electoral outcome brings, numerous anecdotes indicate that continued factional
fighting between Islamist and non-Islamist groups seems to be contributing to a reduction in public
faith in government. According to Shadi Hamid, Director of Research at the Brookings Doha Center,
“I think the lack of trust is so deep-seated that even if the Brotherhood made good faith gestures I
don't know if the opposition could believe them or take them at face value.”9 This trend may become
exacerbated by deteriorating economic conditions. Overall, Egyptian groups appear to be treating
politics as a zero-sum game in which the Brotherhood and its opponents have used heightened,
sometimes even violent, rhetoric to discredit the other side. As violence in the streets becomes more
commonplace, politicians seize upon each incident as an opportunity to delegitimize their opponents
and blame them for the country’s ills. With each successive incident of public unrest, the rhetoric is
becoming more heated, which raises international concern over respect for the rule of law in Egypt.
There is even speculation of a return to direct military rule if political violence grows. According to
Army Chief of Staff Sedki Sobhi, “It [the military] keeps an eye on what goes on in the nation and if
the Egyptian people ever needed the armed forces, they will be on the streets in less than a
second.”10
For example, in late January and early February, as the two-year anniversary of the 2011 revolution
coincided with rioting in the canal cities, national figures condemned their opponents in harsh terms.
In February 2013, Hamdeen Sabahi commented on political unrest by saying that President Morsi
demonstrated “arrogance, the use of force and more bloodshed... thus we have sided with the street
and call for the bringing down of the dictatorship regime and the trial of its figures.”11 A well-known
Salafi cleric, Mahmoud Shaaban, was recently detained for allegedly inciting potential attempts on
the lives of Sabahi and other NSF leaders when he said on February 2 that the NSF wanted power
and were “burning Egypt to get it.... It is clear now their sentence in God’s law is death.”12 Although
some degree of inflammatory rhetoric is to be expected in Egypt’s volatile political climate, the
situation appears to be getting worse with time. According to the International Crisis Group:
In the absence of a shared view of the foundations of a future political system, Islamists are
pressing their vision, while their opponents play spoilers. This has the makings of a selffulfilling prophecy: the more the opposition obstructs and calls for Morsi's ouster, the more it
validates the Islamists' conviction it will never recognize their right to govern; the more the
Brotherhood charges ahead, the more it confirms the others' belief of its monopolistic designs
over power. Even if leaders back away from the brink, this could quickly get out of hand, as
their ability to control the rank and file — and, in the case of the opposition, ability to represent
the rank and file — dwindles.13
As of late February 2013, relatively small nation-wide protests continue along with crippling labor
strikes (including an unprecedented protest outside the Suez Canal Authority), but the worst unrest
has subsided. In the canal cities, President Morsi has imposed a 30-day national emergency (martial)
law and curfew. There have been calls for a national dialogue to reduce political tensions between
9
“Egypt is once again Risking its Future,” Reuters, January 30, 2013.
“Egypt’s Military growing Impatient with Morsi,” Times of Israel, February 21, 2013.
11
“BBCM Analysis: Winners, Losers in Egypt's Political Crisis,” Open Source Center GMP20130205950052 Caversham
BBC Monitoring in English, February 5, 2013.
12
“Egypt Orders Cleric held over ElBaradei Death Call,” Reuters, February 11, 2013.
13
“Egypt Conflict Alert,” International Crisis Group, Brussels/Cairo, February 4, 2013.
10
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the Brotherhood, NSF, and other factions, but these are unlikely to take place because the NSF has
conditioned its participation in such a dialogue on the Morsi Administration’s formation of a new
government of national unity and prosecution of police suspected of killing protestors.
Economy
Egypt’s economy has suffered immensely since the 2011 revolution, and efforts to stabilize the
country’s fiscal deficit run the risk of exacerbating growing social unrest. Egypt is experiencing a
phenomenon known as “stagflation,” a crippling combination of inflation and lack of growth. In
2012, real GDP grew by 2.2%, a figure that barely exceeds the country’s population growth. In 2011,
real GDP grew by 1.78%. In order to prop up social spending, preserve costly fuel and food
subsidies, service the debt, and counter the effects of investor capital flight, the central government
has been running huge budget deficits and drawing down its foreign exchange reserves. Almost
three-quarters of Egypt’s national budget is spent on state salaries, subsidies, and interest payments.
In its current fiscal year, Egypt’s annual budget deficit could range from $26 to $31 billion; the high
end of that range may exceed the Ministry of Finance’s projection of a deficit around 10% of GDP.
In addition to the government’s domestic borrowing, its foreign exchange reserves are down from
$36 billion in 2011 to $13.6 billion as of February 2013—enough for three months of import cover.
In order to assist exports14 and tourism, the Central Bank has tried to manage the gradual
devaluation of the currency (Egyptian Pound), which has slid 8% against the dollar in 2013.
Although the government claims that the currency will not collapse, there is concern that rising
prices may spark additional unrest, as imported food and fuel become more expensive. Food prices
increased 8% last year and overall inflation was 7%. With the government considering additional tax
increases and subsidy reductions as part of a proposed International Monetary Fund (IMF) deal, the
cost of living may substantially increase for all Egyptians in 2013.
Egypt and the International Monetary Fund
Domestic banks are no longer able to buy government debt at levels needed to sustain rising
government expenditures. In order to address its balance of payments deficit, Egypt has been in
negotiations with the IMF for a $4.8 billion low interest credit facility that would spark billions more
(perhaps as much as $14 billion) in foreign loans if reached. Although the terms of the deal have yet
to be finalized (and may not be until after the parliamentary elections currently scheduled for April),
its parameters include a reduction in fuel subsidies and the imposition of a value added tax. So far,
the government has raised prices on high-octane petrol and residential electricity and has announced
plans to introduce rationing systems for the sale of subsidized butane and diesel.
Accepting IMF credit may be a divisive issue in Egyptian politics. Clearly, unpopular steps like
price and tax increases may prove politically costly for the Muslim Brotherhood, and thus President
Morsi may try to delay finalization of the deal until after parliamentary elections. In December 2012,
the Morsi Administration proposed new taxes, including duties on cigarettes and alcohol, but
14
Textile exports are a key industry in Egypt, providing nearly a quarter of all industrial jobs and according to the
Financial Times accounting for 27% of non-oil exports. See, “Trade conditions weaken Egypt textiles,” Financial Times,
Feb. 11, 2013.
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retracted them due to public protest. In February 2013, President Morsi announced the
implementation of a progressive property tax with new revenue to be allocated toward public
housing and healthcare. The government may also enact a tax on all stock market transactions and
raise the corporate tax rate to standard 25% for all companies. In the meantime, credit agencies such
as Moody’s, Fitch, and S&P all have recently downgraded the government’s bond rating.
International lenders, such as Qatar, Saudi Arabia, and Turkey, have provided the Central Bank with
new lending and grants, but more may be required in the short term.15 Egypt’s foreign debt remains
manageable at $34.7 billion, or around 13-15% of GDP.
Relations with Israel
Many historians have documented the long tradition within the Muslim Brotherhood of antiIsrael/anti-Semitic sentiment, most recently highlighted when reports surfaced of a 2010 Morsi
speech in which he called Jews “the descendants of apes and pigs.”16 Israel remains deeply
concerned over the trajectory of Egyptian politics and its implications for Israel-Egypt relations and
the 1979 peace treaty. In practical terms, however, both sides continue to cooperate on military and
intelligence matters, as evidenced by a series of recent military exchanges between Israeli and
Egyptian officials. According to one report, Israeli military leaders met in mid-February with Egypt's
intelligence chief, General Raafat Shehata, to discuss Hamas and security along the Israel-Egypt
border.17
Although Egyptian military and intelligence may be the key interlocutors with Israel, President
Morsi clearly feels that he himself has a role to play. In addressing Morsi’s mediation role between
Hamas and Israel in reaching a cease-fire back in November 2012, one Morsi advisor remarked,
“Let me tell you why the Gaza mediation worked. For the first time in a long time, there was an
honest broker.” According to the Jerusalem Post, about two-thirds of Israelis polled in late 2012 said
that Morsi had a positive impact on ending the Gaza violence.18 Egypt continues to mediate indirect
Israel-Hamas discussions—following from the November cease-fire agreement—regarding the
possible further easing of restrictions on commerce in Gaza and relaxing of various buffer zone
security measures.19 Egypt also is mediating a new round of intra-Palestinian talks aimed at
implementing past agreements for a Fatah-Hamas consensus government in the West Bank and
Gaza.
15
In January 2013, Qatar, which has already provided Egypt with $2.5 billion in loans and grants since Muhammad Morsi
took office, gave the government an additional $1 billion in grant aid and $1.5 billion in loans, bringing its total assistance
over the past year to $5 billion. In addition, Qatar’s QInvest Corporation is taking a majority stake in Egypt's biggest
investment bank, EFG Hermes.
16
See the Middle East Media Research Institute’s (MEMRI) Anti-Semitism and Holocaust Denial Project at:
http://www.thememriblog.org/antisemitism
17
“Report: Israeli delegation meets with Egyptian intelligence chief,” Israel News (YNET), February 20, 2013.
“Majority of Israelis supported Gaza operation - poll. Two-thirds of the public believe Egypt's Mohamed Morsi had
positive impact on ending conflict,” The Jerusalem Post, December 9, 2012.
19
“Hamas confirms Indirect, Egyptian-sponsored talks with Israel over Gaza,” Xinhua, February 16, 2013.
18
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Figure 1. Map of Egypt
Source: Map Resources, adapted by CRS.
U.S.-Egyptian Relations
The United States is facing a series of challenges stemming from more than two years of dramatic
change in Egypt. The Administration and Congress have a number of interests at stake in Egypt as
well as some potential levers of influence. Interests include maintaining U.S. naval access to the
Suez Canal20, maintaining the 1979 Israel-Egypt peace treaty, and promoting democracy and
economic growth within Egypt, the region’s largest Arab country. Egypt’s President Muhammad
Morsi, who hails from the Muslim Brotherhood, may choose to cooperate with the United States on
some security and economic matters, though many analysts are concerned that his government may
at times act undemocratically, be more confrontational toward Israel, and limit its cooperation with
20
For example, the U.S. Navy relies on receiving expedited passage for U.S. warships through the Suez Canal in order to
deploy carrier groups swiftly to the Persian Gulf region. Without passage through the Canal, the Navy would have to
deploy ships around the Cape of Good Hope —adding significant time to deployment from Norfolk, VA to the Persian
Gulf or Indian Ocean.
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the United States on intelligence and terrorism-related issues. Others assert that while Egypt may not
follow the U.S. lead as closely as in the past (as evident by recent Iranian-Egyptian exchanges), its
need for U.S. support to grow its economy and support its military should provide the United States
with some leverage.
Current debate surrounding U.S. policy toward Egypt centers on the degree to which the United
States should support a government led by a former leading member of the Muslim Brotherhood.
Although most stakeholders in this debate would seek to avoid Egypt’s state failure and the negative
repercussions it would almost certainly entail for U.S. and global security, there is less consensus
over the degree to which the United States should help an Egyptian government that may or may not
pursue policies in line with American values and regional security interests. There is also
disagreement about the related question of how much leverage the United States gains through
various forms of financial assistance.
Overall, U.S. policymakers have broadly emphasized political inclusion21 and economic stabilization
while carefully avoiding entanglements in Egyptian domestic politics. Some critics of the
Administration’s approach have called for President Obama to exert more pressure on the Egyptian
government, especially in advocating for religious minorities’ and women’s rights. In response, the
Administration has counseled patience. Amidst the widespread December 2012 protests in Egypt,
one senior Administration official reportedly said that “These last two weeks have been concerning,
of course, but we are still waiting to see....One thing we can say for Morsi is he was elected, so he
has some legitimacy.”22 After taking office, Secretary of State John Kerry rejected the notion of
reducing U.S. aid to Egypt: “A hold up of aid might contribute to the chaos that may ensue because
of their collapsing economy...their biggest problem is a collapsing economy.”23
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.24 In July 2007, the George
21
For example, the State Department commented on the public approval of the constitution, stating that: “The future of
Egypt’s democracy depends on forging a broader consensus behind its new democratic rules and institutions. Many
Egyptians have voiced deep concerns about the substance of the constitution and the constitutional process. President
Morsi, as the democratically elected leader of Egypt, has a special responsibility to move forward in a way that recognizes
the urgent need to bridge divisions, build trust, and broaden support for the political process. We have called for genuine
consultation and compromise across Egypt’s political divides. We hope those Egyptians disappointed by the result will
seek more and deeper engagement. We look to those who welcome the result to engage in good faith. And we hope all
sides will re-commit themselves to condemn and prevent violence.” See, Referendum on the Egyptian Constitution, Press
Statement, Patrick Ventrell, Acting Deputy Spokesperson, Office of the Spokesperson, Washington, DC, December 25,
2012.
22
“Obama Walks a Fine Line with Egyptian President,” New York Times, December 14, 2012.
23
“US Aid to Egypt must continue despite Unrest, says John Kerry,” Al Ahram Online, January 31, 2013.
24
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
(continued...)
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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).25
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.26
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.27 Egypt
also receives Excess Defense Articles (EDA) worth hundreds of 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
(...continued)
and Egypt at a ratio of 3 to 2, respectively, though this ratio was not enshrined in the treaty as Egypt would later claim.
25
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.
26
Congress was notified in July 2011 of a potential M1A1 agreement. The notification is listed here:
http://www.dsca.mil/PressReleases/36-b/2011/Egypt_10-67.pdf
Congress did not object to the sale, and an M1A1 contract was finalized thereafter. The following is information on the
contract from the Department of Defense: General Dynamics [GD] Land Systems has received a $395 million contract for
work under the Egyptian tank co-production program. The contract, issued by the Army TACOM Lifecycle Management
Command, has awarded the funds for production of 125 M1A1 Abrams tank kits for the 11th increment of the Egyptian
co-production program. Since 1992, General Dynamics has provided components for kits used in the co-production
program. The parts are shipped to a production facility near Cairo, Egypt, where the tanks are manufactured for the
Egyptian Land Forces. This latest increment will increase the number of Egyptian co-production-built tanks to 1,130.
Work on the components is to be performed in Anniston, Ala.; Tallahassee, Fla.; Sterling Heights, Mich.; Lima, Ohio; and
Scranton, Penn., by existing General Dynamics employees. Deliveries are to begin in July 2013 and continue to January
2016.
27
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.
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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.
Arms Sales Issues
With the President of Egypt hailing from the Muslim Brotherhood, some lawmakers and U.S.
citizens are concerned that continued U.S. military aid and sales of U.S. equipment could be one day
used by a government and military that is controlled by Islamist forces hostile to U.S. national
security interests and to peace with Israel. Some opponents of U.S. military aid to Egypt may apply
further scrutiny in the months ahead to proposed U.S. arms sales to Egypt financed by U.S. taxpayer
dollars. Already, some media attention has focused on the pending delivery (In January 2013, four F16s arrived in Egypt) in 2013 of 20 F-16 C/D fighters to Egypt that were notified to Congress in
2009.28 Congress did not object to the sale after the notification, which was before the change in
Egypt’s government, and in 2010 Lockheed Martin and Egypt reached an agreement for the
purchase of 20 F-16C/Ds29 valued at an estimated $2.5 billion.
Another concern of some lawmakers is security in the Sinai Peninsula. P.L. 112-74, the Consolidated
Appropriations Act, 2012, includes language that specifies that “$1,300,000,000 shall be made
available for grants only for Egypt, including for border security programs and activities in the
Sinai.” The Administration has been calling on the Egyptian military to use FMF to purchase border
security equipment, but no purchase decision has been reached.
Finally, some lawmakers may be seeking to restructure the way Egypt may use FMF grants in the
future. Although the Defense Department has for years tried to gradually convince the Egyptian
military to focus its procurement more on counter-terrorism and counter-insurgency equipment and
training than on conventional military items, the deterioration of law and order in Egypt has
reenergized this issue. Some lawmakers may seek to direct future FMF spending toward reforming
Egypt’s internal police forces and countering the terrorist threat in the Sinai Peninsula.30
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
28
See, http://www.dsca.mil/PressReleases/36-b/2009/Egypt_%2009-34.pdf.
Since 1980, under the Peace Vector Foreign Military Sales Program, Egypt has acquired over 220 F-16s. It is the fourth
largest operator of the F-16 after the United States, Israel, and Turkey.
30
“Bipartisan Senate Group Calls for Egypt Aid Restructure,” Congressional Quarterly, February 12, 2013.
29
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Account
NADR
Total
FY2010
FY2011
FY2012
FY2013 Request
2.800
4.600
5.600
—
1,555.7
1,553.9
1,557.25
1,559.7
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.31 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.
In prior years, ESF funds were divided into two categories: USAID projects and cash transfers.32
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 recent dispute over U.S. funding for nongovernmental organizations.33
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.
31
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.
32
It is unclear if USAID is still operating the cash transfer program, as it had been scheduled to be phased out by 2011.
33
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. Having departed Egypt, almost all of
the accused Americans are being tried in absentia.
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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).
Many U.S.-based and Egyptian NGOs are concerned that a draft NGO law under consideration by
the Upper House of parliament would, if passed, seriously curtail the ability of civil society
organizations to obtain funding. Reportedly, the Egyptian Ministry of Insurance and Social
34
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 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.”
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Solidarity requires that local NGOs obtain permission from state security before “engaging with
international entities.”37
U.S. Foreign Aid to Egypt since the February 2011 Revolution
U.S. foreign aid to Egypt, which was contentious during the reign of former President Hosni
Mubarak, has continued to spark debate among lawmakers and between Congress and the Obama
Administration. Although the Administration proposed the same bilateral foreign operations
appropriation request for Egypt in FY2013 that Egypt received in the previous three fiscal years
(approx. $1.55 billion), the implementation of new Administration aid initiatives previously
authorized by Congress, such as debt relief and an Enterprise Fund, have been placed on hold by
some lawmakers. Due to overall U.S. budgetary limitations, concern over widespread antiAmericanism permeating Egyptian politics, uncertainty over the intentions of the Muslim
Brotherhood, and general U.S. concern over Egypt’s transition to democracy and adherence to the
1979 Israel-Egypt Peace Treaty, bilateral cooperation on aid has not been as robust as elsewhere in
the region (e.g., Tunisia).
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 million38). In a speech delivered at the State Department on May 19, 2011, President
Obama outlined a new plan for U.S. engagement with Egypt and other Arab countries undergoing
political transitions. Major components of that plan included providing up to $1 billion in bilateral
debt relief39 to Egypt and $1 billion in U.S.-backed loan guarantees40 to finance Egyptian
infrastructure and job creation, and creating an enterprise fund to invest in small- and medium-sized
Egyptian businesses (SME).
The current status of various U.S. aid initiatives for Egypt is as follows:
•
Bilateral Aid (Appropriated & Obligated): P.L. 112-10, the Department of Defense and
Full-Year Continuing Appropriations Act, 2011, became law on April 15, 2011, after
Mubarak’s resignation. It included $1.55 billion in military and economic aid. P.L. 112-74,
the Consolidated Appropriations Act, 2012, also provided the full request for Egypt ($1.55
billion). It also authorized debt relief funding for the creation of an enterprise fund.41
Although Administration requests regarding U.S. bilateral aid to Egypt are not tied to a
specific bilateral Memorandum of Understanding (as they are for Israel and Jordan),
37
Open Source Center, “NGO concerned over Human Rights in Egypt,” Cairo Daily News Egypt Online (in English),
GMP20130226966013, February 26, 2013.
38
USAID provided support to both the 2011 parliamentary and 2012 presidential elections (est. $20-$23 million),
including assistance to domestic and international election “witnesses” who reported on the election process and
administration assistance in collaboration with the Egyptian High Election Commission (HEC), among other activities.
39
As of June 2012, total Egyptian debt to the United States was approximately $2.7 billion, with $1.2 billion owed to
USAID and the balance owed to USDA.
40
According to the U.S. State Department, Loan Guarantees to Egypt were authorized in the Emergency Wartime
Supplemental Appropriations Act, 2003 (P.L. 108-11). The maximum principal to be guaranteed was $2 Billion and the
authority expired on September 30, 2005. Only $1.25 billion in guarantees were issued under the program, and that amount
remains outstanding, with the total principal due in September 2015.
41
For information on conditionality in P.L. 112-74, see page 14 and “Recent Legislation.”
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Congress has appropriated $1.3 billion in Foreign Military Financing a year to Egypt since
FY1987. In 2009, the State Department and government of Egypt exchanged letters on an
informal U.S. commitment of $250 million in ESF per year with no end date.
•
Reprogrammed Aid (Delivered): As mentioned above, the Obama Administration
reprogrammed an estimated $160 million in previously appropriated Economic Support
Funds for Egypt in the months following Mubarak’s resignation. Approximately $65 million
of this total was directed toward democracy and governance support.42
•
Debt Relief43 (Authorized but on Hold): In late September 2012, some Members of
Congress placed holds on a congressionally notified $450 million Economic Support Fund
(ESF) cash transfer to Egypt.44 Those funds would have been used to pay down Egypt's
bilateral debt45 (approximately $2.7 billion) to the United States in exchange for Egyptian
government commitment to a fiscal stabilization program as prescribed by the International
Monetary Fund.46 As of January 2013, the holds on the cash transfer remained in place. The
remaining $550 million in debt relief pledged by the Obama Administration, according to
the State Department, is still under consideration but it has not been notified to Congress.
•
Enterprise Fund (Authorized but on Hold): In November 2012, the Administration
notified Congress of its intent to spend $60 million in previously appropriated ESF on the
42
According to USAID, this funding included grants to local Egyptian civil society and international organizations to
conduct voter education programs, election observation missions, and advisory services on election management and
processes. Some Egyptian politicians objected to U.S. funding for unregistered civil society organizations inside Egypt and
took legal action against 45 American and international employees of some of these implementing partners. Though almost
all accused American nationals have left Egypt, they continued to be tried in absentia. Known informally as the NGO trial,
their case has been adjourned until the summer of 2013.
43
Egypt has already received substantial debt relief from the United States. In recognition of Egypt’s participation in
Operation Desert Storm in Iraq, in 1990, President George H.W. Bush asked Congress to forgive $6.7 billion of debt that
stemmed from military loans extended to Egypt by the United States between 1979 and 1984 to help finance large amounts
of weapons purchased under the Foreign Military Sales (FMS) Program. Debt cancelation authority for the full amount
was granted in the 1991 Foreign Operations Appropriations Act. At the time, total Egyptian debt owed to the United
States, including ESF and PL-480 loans, was about $12 million.
44
The ESF cash transfer would come from previously appropriated ESF, including: $55,170,041 ESF (FY 2012),
$225,436,126 ESF (FY 2011), $167,461,116 ESF (No Year), and $1,932,717 ESF (Prior Year Recoveries).
45
A portion of Egypt’s debt to the United States government stems from past food aid programs. U.S. food aid to Egypt
primarily consisted of concessional sales of U.S. wheat under Title I of the Food for Peace Act, which makes available
long-term, low-interest loans or grants to developing countries and private entities for their purchase of U.S. agricultural
commodities to support specific projects. According to one analyst, by the end of 1976, one of every three loaves of bread
consumed by urban Egyptians was a product of wheat purchased under the PL-480 program. See, William Joseph Burn,
Economic Aid and the American Policy Toward Egypt, 1955-1981 (State University of New York Press, Albany,
NY,1985). Loan agreements under the Title I credit program provided for repayment terms of up to 30 years with a grace
period of up to five years. Egypt stopped receiving loans under Title I in 1995 and no U.S. funding for any Title I credit
sales and grants has been appropriated since FY2006.
46
Egypt currently owes the United States approximately $2.7 billion from decades-old food aid loans. In order to provide
debt relief, U.S. government agencies are required to value U.S. loans, such as bilateral debt owed to the United States, on
a net present value basis rather than at their face value, and an appropriation by Congress of the estimated amount of debt
relief is required in advance. P.L. 112-74 provided that ESF funds appropriated for Egypt in the act and from prior acts
could be used for an Egypt debt initiative. Moreover, according to P.L. 112-74, bilateral debt relief funds would be a
"swap" and channeled into programs that improve "the lives of the Egyptian people through education, investment in jobs
and skills (including secondary and vocational education), and access to finance for small and medium enterprises with
emphasis on expanding opportunities for women, as well as other appropriate market-reform and economic growth
activities."
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establishment of the Egyptian-American Enterprise Fund (EAEF). According to USAID, the
EAEF will invest in the Egyptian economy to unlock the benefits of private-sector led
growth, particularly among SMEs. The EAEF was incorporated as a nonprofit non-stock
corporation under the laws of the State of Delaware on October 19, 2012. It is to be led by a
fund manager with private sector experience and overseen by a board of directors comprised
of three Egyptians and six Americans.
Recent Legislation
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 2012.47 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.48
The Secretary of State exercised the waiver on March 23. In an accompanying statement, a State
Department spokesperson said that:
As the Secretary’s statement makes clear, as the statement we released with regard to her
decision makes clear, we have a huge number of interests and equities at stake in our
relationship with Egypt. This is a strategic partnership; so rather than talking about leverage,
we’re talking about partnership, as we have for all of these years. And as we make clear here,
Egypt itself is changing very fast. We have a new Egypt emerging. So U.S. support in all of its
47
48
“Despite Rights Concerns, U.S. Plans to Resume Egypt Aid,” New York Times, March 15, 2012.
op.cit.
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forms – FMF, ESF in countries around the world – is designed to allow us to support the
partnership that we have with countries and the developments that we want to see in countries in
a more democratic, prosperous, stable, secure direction. 49
FY2013 State and Foreign Operations Appropriations Bills
House (112th Congress; H.R. 5857)—The House bill would have provided the full Administration
request for Egypt of $250 million in ESF and $1.3 billion in FMF. It included a number of specific
directives, including:
49
•
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 (1) has
completed the transition to civilian government, including holding free and fair
elections; and (2) is implementing policies to protect freedom of expression,
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 their 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
Victoria Nuland Spokesperson, Daily Press Briefing Washington, DC, March 23, 2012
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Egypt: Background and U.S. Relations
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 (112th Congress; S. 3241)—The Senate bill also contained 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 included 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
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.”
Legislation in the 113th Congress
•
H.R. 276 – a bill that prohibits any funds made available after FY2013 to any
federal department or agency from being used to provide assistance to Egypt.
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•
H.R. 416 – a bill that, among other things, limits specified security and economic
assistance to Egypt unless the Secretary of State certifies to Congress every six
months that the Egyptian government: (1) is not controlled by or under the influence
of a foreign terrorist organization, or that no supporter of a foreign terrorist
organization serves in a policy-making position in the government; (2) has
implemented legal reforms that protect the political, economic, and religious
freedoms and human rights of all citizens and residents of Egypt; (3) is fully
implementing the Israel-Egypt Peace Treaty; and (4) is taking verifiable steps to
destroy the smuggling network and tunnels between Egypt and the Gaza Strip, and
is cracking down on extremist groups in the Sinai Peninsula.
•
S. 201 – a bill that prohibits the U.S. government from licensing, approving,
facilitating, or otherwise allowing the sale, lease, transfer, retransfer, or delivery of
F-16 aircraft, M1 tanks, or other specified defense articles or services to Egypt.
•
S. 207 – a bill that prohibits the U.S. government from allowing the sale, lease,
transfer, retransfer, or delivery of F-16 aircraft, M1 tanks, or certain other defense
articles or services to Egypt until the President certifies to Congress that Egypt has
agreed to: (1) continue to uphold its Camp David Peace Accords commitments, (2)
provide proper security at U.S. embassies and consulates, and (3) end its systematic
exclusion and silencing of all official minority political opposition parties and
engage in dialogue for a power-sharing government with such parties.
•
S.Amdt. 9 to H.R. 325 – an amendment stating that “Notwithstanding any other
provision of law, the United States Government shall not license, approve, facilitate,
or otherwise allow the sale, lease, transfer, retransfer, or delivery of F-16 aircraft,
M1 tanks, or other defense articles or services listed in Category VI, VII, or VIII of
the United States Munitions List to the Government of Egypt.” The Senate failed to
adopt the measure by a vote of 19 for to 79 against.
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
$460
Source: Allocation tables provided to CRS by the Department of State, F Bureau. Does not including funding from
independent agencies such as MCC, which, if included, could change the ranking of Tanzania.
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Table 3. U.S. Foreign Assistance to Egypt
($ 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
2012
250.0
1,300.0
1.4
1,551.4
Total
31,320.3
41,809.2
Congressional Research Service
44.54
73,174.0
18
Table 4. U.S. Foreign Assistance to Egypt, 1946-1997
($ in millions)
Year
Military
Loan
Total
Military Grant
IMET
Grant
Misc. Econ
Grant
DA Loan
DA Grant
ESF Loan
ESF Grant
PL. 480 I
PL. 480 II
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
CRS-19
Year
Military
Loan
Total
Military Grant
IMET
Grant
Misc. Econ
Grant
DA Loan
DA Grant
ESF Loan
ESF Grant
PL. 480 I
PL. 480 II
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
—
CRS-20
Year
Total
Military
Loan
Military Grant
IMET
Grant
Misc. Econ
Grant
DA Loan
DA Grant
ESF Loan
ESF Grant
PL. 480 I
PL. 480 II
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
IMET = International Military Education and Training
UNRWA = United Nations Relief and Works Agency
Surplus = Surplus Property
Tech. Asst. = Technical Assistance
Narc. = International Narcotics Control
DA = Development Assistance
ESF = Economic Support Funds
PL 480 I = Public Law 480 (Food for Peace), Title I Loan
PL 480 II = Public Law 480 (Food for Peace), Title II Grant
CRS-21
Egypt: Background and U.S. Relations
Author Contact Information
Jeremy M. Sharp
Specialist in Middle Eastern Affairs
jsharp@crs.loc.gov, 7-8687
Congressional Research Service
22