Order Code IB93087
CRS Issue Brief for Congress
Received through the CRS Web
Egypt-United States Relations
Updated August 20, 2003
Clyde R. Mark
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Egypt-U.S. Relations
Historical Background
U.S. Interests in Egypt
U.S. Policy Toward Egypt
Role of Congress in Egyptian-U.S. Relations
Issues in Egyptian-U.S. Relations
Iraq
Arab-Israel Peace Process
Relations with Israel
Human Rights
Saad al-Din Ibrahim
Coptic Christians
Democracy
Economic Issues
Economic Reforms
Previous Issues
EgyptAir Flight 990
Militant Islamic Movement in Egypt
Shaikh Umar Abd al-Rahman
U.S. Foreign Assistance to Egypt
U.S. Economic Assistance
U.S. Military Assistance
Military Cooperation
U.S.-Egyptian Military Industrial Cooperation
“Bright Star” and other Joint Military Operations
“Desert Storm”
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Egypt-United States Relations
SUMMARY
U.S.-Egyptian relations are tied to main-
The United States has provided Egypt
taining regional stability, improving bilateral
with an annual average of over $2 billion in
relations focused on Egyptian economic
economic and military foreign assistance since
development and military cooperation, devel-
1979. The United States will reduce Economic
oping Egypt’s democracy, sustaining the
Support Funds (ESF) to about $400 million
March 1979 Egyptian-Israeli peace treaty, and
per year by 2008 in keeping with a plan to
continuing U.S. foreign assistance to Egypt.
reduce aid to Israel. The Administration
Experience gained from Egyptian-U.S. joint
requested $575 million in economic grants
military exercises proved valuable in easing
and $1.3 billion in military grants for FY2004
coordination during the February 1991 Desert
for Egypt.
Storm operation reversing Iraqi aggression
against Kuwait. Egypt is a leader and moder-
ating influence among many Arab, African,
Egypt
Islamic, and Third World states.
Area = 385,229 sq. miles (equal to Wisc., Mich.,
Ohio, Ind., Ill., Ky, and Tenn.)
Among the current issues in
Population = 74.7 million (2003 est.)
U.S.-Egyptian relations are a shared concern
Pop. Growth rate = 1.88% pr. yr. (2003)
about international terrorism. Egypt can claim
Religion = 94% Muslim, 6% Christian
Labor Force = 17.4 million (1996)
some familiarity with the subject, having
Unemployment = 12% (2001)
defeated domestic Islamic terrorists intent on
Literacy Rate = 57.7% (2003)
overthrowing the Egyptian government. The
GDP = $92 billion (2000)
two countries disagree over the speed and
GDP per cap. = $1420 (2000)
GDP Growth Rate = 4% (2000)
depth, but not the need for some of Egypt’s
Inflation = 4.3% (2002)
economic reforms. Egypt and the United
Exports = $7 billion (2000)
States agree on the importance of the
Imports = $15.2 billion (2000)
Egyptian-Israeli peace treaty, the need to
Gov’t. Revenues = $17.4 billion (1995 est.)
continue current Arab-Israel peace talks, and
Gov’t. Expend. = $18.8 billion (1995 est.)
Foreign Debt = $30.5 billion (2000)
the need for regional stability. The two
nations agree on Egypt’s determination to
introduce democratic reforms to Egypt.
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MOST RECENT DEVELOPMENTS
The United States announced on August 11, 2003, that it was canceling the “Bright
Star” joint Egyptian-U.S. military training exercise scheduled for October 2003 because of
over commitment of U.S. forces in Afghanistan, Iraq, and other areas. The exercises had
been held every two years since 1983.
BACKGROUND AND ANALYSIS
Egypt-U.S. Relations
Historical Background
The United States endorsed the 1952 Revolutionary Command Council military coup
that overthrew King Faruk and the monarchy. The military reformers appeared to have
Egypt’s best interests at heart, and, although not pro-Western, at least were not pro-Soviet.
But, U.S.-Egyptian relations soured when the Colonels turned to the Soviets and the Czechs
in 1955 for military training and equipment after the West refused defense assistance. That
same year, 1955, Egypt, Yugoslavia, and India led the third world nations at the Bandung
Conference in establishing a movement independent from the Eastern and Western blocs, an
act that further alienated Egypt and the United States.
In July 1956, following a U.S.-British decision to retract an offer of economic assistance
and help for the Aswan Dam, Egypt nationalized the Suez Canal Company to use the
revenues to finance the dam. (Egypt owned the Suez Canal, but the British-French company
operated the Canal, and collected the revenues from which it paid a small rent to Egypt.) In
late October 1956, Israel, France, and Britain invaded Egypt, Israel to stop Palestinian
guerrillas from using Egypt as a base for operations against Israel, and France and Britain to
occupy the Canal. President Eisenhower persuaded the three invaders to withdraw from
Egypt in early 1957, which improved U.S.-Egyptian relations briefly. (According to
persistent but unconfirmed reports, Eisenhower’s persuasion included threats to cut U.S. aid
to Israel and to withdraw support for the British and French currencies.)
Many in the West believed Egypt fomented the 1958 anti-Western unrest in Jordan and
Lebanon and coup in Iraq that led to the U.S. intervention in Lebanon and the British
intervention in Jordan, and relations between Egypt and the United States remained strained.
Egypt broke formal diplomatic relations during the June 1967 war following Egyptian
charges that the United States provided direct assistance to Israel. Egypt expelled Soviet
advisors in July 1972, an act that some in the United States considered a harbinger of better
Egyptian-U.S. relations. Egypt attacked Israeli forces occupying the Sinai Peninsula and
Syria attacked the Golan Heights in October 1973. In November 1973, Egypt and the United
States restored diplomatic relations, and in December, the two nations participated in the
Geneva peace conference. U.S. Secretary of State Henry Kissinger’s so-called shuttle
diplomacy led to Egyptian-Israeli and Syrian-Israeli disengagement agreements in 1974 and
a second set of Egyptian-Israeli disengagements in 1975. The United States resumed
economic aid to Egypt in 1975 after an 8-year hiatus.
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The United States endorsed Egyptian President Anwar al-Sadat’s dramatic and
courageous trip to Jerusalem in November 1977, and provided good offices to assist in the
Israeli-Egyptian peace negotiations at Camp David in September 1978 and the Egyptian-
Israeli peace treaty of March 1979. The United States organized the peacekeeping regime
along the Egyptian-Israeli border (Multi-National Force and Observers, MFO), and maintains
a rotating infantry battalion in the force.
U.S. Interests in Egypt
A primary U.S. interest in continued good relations with Egypt is to capitalize on
Egypt’s leadership role in the Arab world. Often, other Arab states look to Egypt to initiate
action or set an example on regional problems. In the past, other Arab states followed the
Egyptian lead in turning to the Soviet Union for weapons, in nationalizing foreign interests,
in land reform programs, in introducing democratic institutions, and in many other areas.
Another U.S. interest in good relations with Egypt is to sustain Egypt’s moderate voice
in Arab councils, and in some cases to rely upon Egypt to persuade less moderate Arab states
of the wisdom of compromise. President Mubarak serves as a conduit carrying the various
peace proposals among the Syrian, Lebanese, U.S., Israeli, Jordanian, and Palestinian
negotiators and has acted as a counselor to leaders of Libya, Sudan, and Iraq.
A third U.S. interest is to maintain the Egyptian-Israeli peace treaty.
A fourth reason for maintaining good U.S.-Egyptian relations is defense cooperation in
opposing threats or aggression against regional friends, as was demonstrated in Egypt’s
active participation in the 1991 liberation of Kuwait and in Egypt’s cooperation with U.S.
forces in the 2003 invasion of Iraq.. Cooperation between U.S. and Egyptian armed forces
in joint military exercises over the previous decade (the “Bright Star” exercises) prepared the
way for the 1990-1991 defense of the Arabian Peninsula. The most recent Bright Star
exercise took place in October and November 2001.
U.S. Policy Toward Egypt
Beginning after World War II, the United States opposed all aspects of Egypt’s
belligerency toward Israel, including military posturing, military expansion, arms purchases,
the economic boycott, use of Soviet military advisors, attempts to exclude Israel from
international fora, providing haven for guerrilla attacks against Israel, refusal to negotiate,
and other gestures or positions considered unfriendly. As a result of Egypt’s cooperation
with the 1974-1975 disengagement agreements, President al-Sadat’s 1977 trip to Jerusalem,
the 1978 Camp David agreements, and the 1979 Egyptian-Israeli peace treaty, Egypt’s policy
toward Israel changed from belligerency to cooperation, and U.S. policy toward Egypt
changed as well. At first, U.S. friendly gestures toward Egypt appeared to be intended as
guarantees for Israeli security and the Egyptian-Israeli peace treaty, but in the 14 years since
the peace treaty signing, U.S.-Egyptian relations have evolved, moving beyond the limited
connection to Israel and toward an independent bilateral friendship. The United States
provides foreign assistance, cooperates in economic development, shares military equipment
and technology, participates in joint military exercises, and includes Egypt among its
advisors and confidants on Middle Eastern affairs.
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Although the United States fostered independence among nations, the United States did
not approve of Egypt or other newly independent states fomenting or aiding armed rebellion
among remaining European colonies in Africa and the Middle East, as, for example, Egypt’s
support for the 1954-1962 Algerian rebellion against France. The U.S.-Egyptian policy
difference over colonial independence has faded as Middle Eastern and African nations
became independent until today it is no longer an item of contention.
Egypt, with Yugoslavia and India, chaired the 1955 Bandung Conference that led to the
formation of the Non-Aligned Movement. At the time and for many years afterward, most
U.S. Administrations saw countries either as pro-Eastern Communist Bloc or a pro-Western
Free Bloc, without room or reason for a third choice, the Non- Aligned Movement. Many
in the United States presumed that nations choosing to associate with the Non-Aligned
Movement, among them Egypt, actually were sympathetic to the Soviet-dominated Eastern
Bloc. U.S. attitudes changed during the 1970’s, becoming more tolerant of nations that
preferred not to be aligned either with the Soviet or with the Western blocs. With the 1990s
demise of the Soviet system and the disappearance of the Eastern Bloc, such “cold war”
alignments are no longer an issue, but Egypt’s association with the Non-Aligned Movement
and friendship with the Soviet Bloc caused much U.S.- Egyptian friction until the early
1970s.
Role of Congress in Egyptian-U.S. Relations
In the past, Congress earmarked foreign assistance for Egypt in the foreign aid
authorization and/or appropriation bills. (See Table 1, and section on Current Issues in
Egyptian-U.S. Relations below) The annual earmark included a statement that Egypt should
undertake economic reforms in addition to reforms taken in previous years. In the 107th
Congress, Members criticized Egypt for withdrawing its ambassador from Israel in
November 2000 to protest Israel’s treatment of the Palestinians and advocated withholding
U.S. foreign military assistance from Egypt (see Jerusalem Post, March 21, 2001, and
Washington Post “op ed,” July 2, 2001).
Issues in Egyptian-U.S. Relations
Iraq
Egypt opposed the U.S. intervention in Iraq and has continued to oppose unilateral U.S.
occupation. In July 2003, the Egyptian President’s office issued a statement praising the
formation of the interim governing council in Iraq and repeated the hope that Iraq would draft
a new constitution, hold elections, and quickly install a permanent Iraqi government.1 Egypt
informed the United States that it would not participate in any international security
arrangements unless such peacekeeping operations were under United Nations auspices.2
1 “Egypt Welcomes Iraqi Council as ‘Step in the Right Direction,’ ” Financial Times, July 14, 2002.
2 “Egypt said to Reject Iraq Role Without UN Mandate at Talks With US,” BBC Monitoring
Newsfile
, July 12, 2003.
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In the past, Egypt did cooperate with U.S.-led international efforts, such as the Kuwaiti
liberation, Somalia, and the Balkans. Apparently, Egypt allows without question U.S.
overflights and Suez Canal passages in support of the U.S. military efforts in Iraq.
Arab-Israel Peace Process
In 1977, President Anwar al-Sadat announced that he would go to Jerusalem to discuss
peace with the Israelis. Israeli Prime Minister Menachem Begin extended an invitation, al-
Sadat accepted, and the visit led to the 1978 Camp David meetings and the March 1979
Egyptian-Israeli peace treaty. Egypt benefitted from the peace treaty by redirecting resources
from defense to development, but Egypt suffered by being ostracized by other Arab states.
President Mubarak acts as a broker, advisor, messenger, and arbitrator for the
continuing peace talks. Mubarak offered Cairo as a venue for the talks, offered compromise
positions on returning the 415 deportees in Lebanon in December 1992, encouraged the other
Arabs to continue the talks, and endorsed the Declaration of Principles signed by the PLO
and Israel in Washington on September 13, 1993. Egypt hosted the September 4, 1999 Sharm
al-Shaykh signing of an Israeli-Palestinian agreement for implementing past commitments,
and Egyptian President Mubarak was in contact with the Palestinian and Israeli negotiators
at the Camp David summit in late July 2000. President Mubarak hosted the meetings
between Secretary Albright and President Arafat at Sharm al-Shaykh on October 4 and also
hosted the Arab League meetings that began on October 21. In November 2000, Egypt
recalled its ambassador to Tel Aviv to protest Israeli actions against the Palestinian
demonstrators in the intifadah that began in late September. On April 3, 2002, President
Mubarak cut all contacts with Israel except those dealing with the Palestine issue; the
President was protesting Israel’s treatment of the Palestinians and the Israeli invasion of
Palestinian areas. On June 3, 2003, Mubarak hosted a meeting of U.S. and Arab leaders in
preparation for the June 4 meeting among President Bush, Israeli Prime Minister Sharon, and
Palestinian Prime Minister Abbas.
Relations with Israel. Egypt refused to negotiate on behalf of the Palestinians, as
the Israelis wished. Israel complains that Egypt is engaged in a “cold peace” and has not
established the close economic, political, and diplomatic relations that Israel envisioned
would emerge from the peace treaty. Despite close Egyptian-Israeli cooperation on the peace
process, relations soured in early 1995 when Egypt pushed for an Israeli signature on the
Nuclear Non-Proliferation Treaty. Egyptian-Israel relations remained strained following
August 1995 disclosures that Israeli soldiers killed Egyptian prisoners of war and civilians
during the 1956 and 1967 wars but improved when President Mubarak attended the funeral
of Israeli Prime Minister Rabin in November 1995. Relations declined after Prime Minister
Netanyahu’s election in May 1996, because Egyptians believed Netanyahu slowed the peace
process, but relations improved after the May 17, 1999, election of Ehud Barak as Prime
Minister of Israel. Egypt withdrew its ambassador to Tel Aviv in November 2000 to protest
Israeli actions against the Palestinians. Prime Minister Ariel Sharon sent two envoys to Cairo
shortly after his February 6, 2001, election, ostensibly to request the return of the Egyptian
ambassador and to seek Egyptian assistance at moderating Arab League reactions to Israeli
policies. Egyptian-Israeli relations remain proper, but distant.
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Human Rights
According to the State Department human rights reports, there is “convincing evidence”
that the Egyptian police use torture to extract confessions, and detain suspects without charge
or trial. Freedom of assembly has been constricted because the government fears violence
associated with some public demonstrations. Many newspapers are partially
government-owned and tend to follow the government line, although even some
government-owned newspapers will voice anti-government opinions. Journalists oppose a
1995 law that places a greater burden on the press in libel cases, which in their view restricts
the press even more. According to the State Department reports, some judges are becoming
more independent and are deciding cases against the government, but cases against the
Islamic militants were held in military courts where the government prevailed and
opportunity for appeal was nil. There appears to be little restriction on freedom of religion,
speech, movement, occupation, or trade union association. Egypt has executed more than 60
of the 90 Islamists sentenced to death since 1992.
Saad al-Din Ibrahim. One human rights case that has drawn international attention
involves Saad al-Din Ibrahim, a sociology professor at American University of Cairo and a
critic of the Egyptian government’s human rights and democracy record. Ibrahim, who also
holds U.S. citizenship, was arrested for defaming Egypt by describing discrimination against
Copts and for not reporting a foreign donation from the European Union for a voter
education project. Egyptian officials closed Ibrahim’s Ibn Khaldun Center for Development
Studies and arrested some 20 of its staff. Ibrahim was convicted and sentenced to seven
years on May 21, 2001, but the conviction was overturned on appeal in February 2002. A
second trial completed on July 29, 2002, produced the same result — conviction and a seven-
year sentence. On December 3, 2002, the Court of Cassation overturned the second verdict
and announced that the Court of Cassation would conduct a new trial. On March 18, 2003,
the Court of Cassation acquitted Ibrahim of the charges.
Coptic Christians. The Department of State Human Rights report for 2002 and the
International Religious Freedom Report for 2002 point out that there is no official
government policy of discrimination against the 6 million Coptic Christians in Egypt but that
some Egyptian people do discriminate against the Copts. Islamic terrorists attacked Coptic
churches, Coptic-owned businesses, and Coptic villagers in southern Egypt because the
Islamists believed the Christians were a conduit for foreign influence.
Democracy
In keeping with a goal of the 1952 revolution, Egypt has been moving away from the
totalitarian regimes of the monarchy and the early years of the Revolutionary Command
Council toward democracy, although some would argue that the progress toward democracy
has been slow. Under Egypt’s parliamentary system, the President appoints the cabinet, who
in turn draft and submit legislation to the legislature, the People’s Assembly (lower house)
and the Shura Council (upper house). The People’s Assembly debates legislation proposed
by Government Ministries and calls for amendments to government-sponsored bills but
rarely initiates its own bills. The Shura Council is an advisory body, offering reports and
recommendations on important subjects, but the Shura Council does not introduce, consider,
or vote on legislation.
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In the People’s Assembly, 444 members are elected and ten are appointed; 176 members
of the Shura Council are elected and 88 are appointed. One half of the elected members of
the People’s Assembly and the Shura Council must be farmers and laborers (Art. 87 and Art.
196 of the Constitution). People’s Assembly members are elected for 5-year terms, and
Shura Council members for 6-year terms (one-half the Council members are elected every
3 years). The National Democratic Party (NDP) won 388 seats in the October-November
2000 People’s Assembly elections, independents won 37 seats, (17 of whom were Muslim
Brotherhood supporters), the Wafd Party won 7, Tagammu won 6, the Nasserites won 3, and
al-Ahrar won one seat. NDP members won 74 of the 88 seats contested in the May/June 2001
Shura Council election, with independents winning the other 14 seats. Religious parties, such
as the Muslim Brotherhood, are banned.
Economic Issues
Egypt comprises 387,000 square miles (about the size of Wisconsin, Michigan, Illinois,
Indiana, Ohio, Kentucky, and Tennessee combined), but of that total only 3% is arable (or
11,600 sq. mi., a little less than Maryland). There are 65 million people, growing at a rate
of 1.89% per year. Cairo is estimated to contain between 12 and 20 million people, one of
the most populous cities on Earth. Forty-two percent of the people are engaged in
agriculture, but Egypt cannot feed itself and must import two-thirds of its food. The official
unemployment rate for 2000 was estimated at 12%, but some economists estimate the figure
may be higher. Estimates of per capita income range from $1420 up to $3,900. There are
1 million Egyptians working in Europe and another 1 million in the Persian Gulf, according
to Egyptian officials.
Economic Reforms. The transition from a centrally controlled socialist economy
to a free market economy has created difficult decisions for the Egyptian government, and
hardships for the Egyptian people. Egypt signed agreements with the International Monetary
Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) in 1991
stipulating that Egypt implement a series of economic reforms in order to qualify for a
structural adjustment loan and for debt reductions. Among the IMF/IBRD reforms are
eliminating subsidies and liberalizing prices on consumer goods, eliminating export/import
non-tariff barriers, privatizing Egyptian government-owned industries, reducing budget
deficits, deregulating some industries, implementing fiscal and monetary reforms, and
developing human resources.
Egypt eliminated subsidies on essential consumer goods, such as sugar, cooking oil, or
dairy products — only the subsidy on bread remains — and allowed other prices to rise to
world market levels. Egypt reduced the budget deficit, reduced many non- tariff barriers, and
deregulated some industries (cement and fertilizer, for example). Since 1994, Egypt has sold
119 government-owned companies of the 314 targeted for privatization. The Egyptian
government has contracted public credit and expanded private credit, floated the Pound,
increased taxes, and witnessed a decrease in inflation from 22.5% in 1988 to 3.67% in 1998
(but creeping back up to 4.3% in 2000). The IMF and the IBRD convinced Egypt’s debtors
to reduce Egypt’s $30 billion external debt by 15%, and have targeted another 15%
reduction. The reforms have placed Egypt firmly on the road to a free market economy. (See
CRS Report RL30686, Egypt’s Economy: U.S. Interests and Market Reforms, by Jeannie
Sowers, September 18, 2000.)
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Previous Issues
EgyptAir Flight 990. On October 31, 1999, EgyptAir flight 990 en route from New
York to Cairo crashed shortly after takeoff, killing 271 passengers and crew. Investigators
reported that there was no evidence of mechanical failures or explosions on the plane but that
a co-pilot was heard repeating a prayer prior to sending the plane into a steep dive that
resulted in the crash. The implication of the investigators report was that the co-pilot
purposely had committed suicide and killed the passengers and crew. The National
Transportation Safety Board (NTSB) issued its final report on March 21, 2002, concluding
that the co-pilot purposely crashed the plane but did not offer an explanation for the co-
pilot’s actions. Egyptian officials rejected the NTSB report.
Militant Islamic Movement in Egypt. The Muslim Brotherhood was founded in
Egypt in 1928 to turn Egypt away from secularism and toward an Islamic government based
on Sharia (religious) law and Muslim principles. The Muslim Brotherhood exists as a
religious charitable and educational institution, having been banned as a political party in
1954. But, offshoots of the Brotherhood, the Jemaah Islamiyah (Islamic Group) and
Egyptian Islamic Jihad, were more militant and used violence in an attempt to overthrow the
government. Both were implicated in the 1981 assassination of President Anwar al-Sadat,
and in the attacks beginning in 1992 against foreign, and therefore in their view anti-Islamic,
influences, Coptic Christians, tourists and tourist sites, and the police. Between October 1992
and November 1997, the confrontation between the police and the Islamic militants killed
1,200, 90 of whom were foreign tourists. The Islamic revivalist forces called a cease-fire in
1997 and since have been relatively quiet. President Mubarak and other Egyptian officials
claimed that the Islamic reformers were financed, trained, and directed by Iranian and
Sudanese religious militants and returning Egyptian volunteers from the Afghan war.
Some have expressed concern that the Egyptian police did not conform to international
human rights standards in pursuing and bringing to justice Islamists suspected of terror
attacks (see Human Rights below). Ayman al-Zawahiri, leader of the Jihad group,
Muhammad Atif, and other Egyptians have been associated with Osama bin Laden. The press
reported that Muhammad Atif was killed during a mid-November 2001 U.S. bombing attack
in Afghanistan.
Shaikh Umar Abd al-Rahman. Shaikh (an honorific title for a learned religious or
tribal leader) Umar Abd al-Rahman, a cleric and Islamic scholar associated with the Jemaah
movement, was arrested 6 times in Egypt on various charges, and served prison time
although he was acquitted of involvement in the al-Sadat assassination. In 1989, Abd al-
Rahman went to Sudan, where, one year later, he acquired a U.S. visitors visa despite having
his name on a list of undesirables. On June 24, 1993, the FBI arrested 8 men in New York
suspected of plotting to assassinate several prominent people and planning to bomb several
targets in New York. Reportedly, the accused were associated with Shaikh Abd al-Rahman
and his New Jersey mosque. Abd al-Rahman and 14 others were indicted for conspiracy in
the assassination and bombing schemes on August 25, 1993. Egypt requested Abd al-
Rahman’s extradition on July 3, 1993. The trial of 10 men in custody began on January 9,
1995, and ended on October 1, 1995, with guilty verdicts for all. Some observers speculated
that the United States served Egypt’s best interests by refusing extradition and trying Shaikh
Abd al-Rahman in U.S. courts because the Shaikh may have become a martyr and rallying
symbol for the militant Islamists at an Egyptian show trial.
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U.S. Foreign Assistance to Egypt
Some Members of Congress hold that U.S. relations with and assistance for Egypt
guarantees continued Egyptian adherence to the 1979 Egypt-Israel peace treaty, thereby
helping to secure Israel. Other Members of Congress believe that U.S. assistance for and
good relations with Egypt extend U.S. influence in Egypt and among Egypt’s moderate Arab,
Islamic, and African friends, which contributes to regional stability. And, some Members
of Congress view U.S. aid to Egypt as a key to continued access to the region’s oil reserves,
trade opportunities, or military bases. For these and other reasons, a majority of the
Members of Congress approve aid to Egypt. Members opposed to U.S. aid to Egypt often
base their opposition on their belief that Egypt has failed to establish the close economic,
political, and cultural relations with Israel expected after the 1979 peace treaty, or because
they believe that the U.S. is financing the wrong kinds of projects. In June 1997, a
subcommittee of the Senate appropriations committee dropped the earmark for Egypt
because, in the subcommittee’s judgement, Egypt was hindering the peace process and Egypt
was improving its relations with Libya, thereby encouraging the Libyan quest for chemical
weapons and the Libyan programs to assist terrorists. The Senate agreed later to restore the
earmark.
The Zionist Organization of America circulated a report in late March 2001 calling for
the United States to stop all assistance to Egypt because Egypt maintained relations with
Libya, Iraq, Iran, and other “enemy” states, Egypt “persecutes” Coptic Christians, Egypt
sheltered Palestinian “terrorists,” Egypt is preparing for war, and for other reasons.
According to March 2001 press reports, Members of Congress considered legislation to cut
military assistance to Egypt because Egypt recalled its ambassador to Israel to protest Israeli
treatment of the Palestinians.
U.S. Economic Assistance. From 1993 through 1998, Egypt received from the
United States $815 million in Economic Support Funds (ESF) annually, $200 million of
which was designated for the Commodity Import Program, and an equal amount was direct
transfer not associated with any specific program. In the past, Egypt also received food aid,
but the food aid has been reduced in recent years. In January 1998, Israeli officials
negotiated with the United States to reduce economic aid and increase military aid over a 10-
year period. A similar formula for reducing economic aid was applied to Egypt but no
increase in military assistance. Economic aid has dropped in annual $40 million increments
from $815 million in FY1998 to $575 million requested for FY2004.
In early January 2002, the United States agreed to release $655 million in FY2002 ESF
and $304 million in pipeline funds to help Egypt overcome economic problems exacerbated
by the fall in tourism after September 11, 2001. The House Appropriations Committee
considered but rejected an amendment to the FY2002 supplemental appropriations bill (H.R.
4775) to provide $134 million in economic assistance for Egypt. The proposed funds for
Egypt would have maintained the three-to-two ratio of aid to Israel and Egypt; Israel was
slated to receive $200 million in ESF in the supplemental bill.
The President’s March 25, 2003, request to Congress for supplemental appropriations
included $300 million in Economic Support Funds (ESF) and $2 billion in loan guarantees
for Egypt. The President also announced that $379.6 million in Commodity Import Program
funds and other programs in the pipeline would be converted to cash grant. The loan
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guarantees are to be issued over three years, and Egypt will pay the fees and subsidy costs.
The aid to Egypt was included in P.L. 108-11, the FY2003 supplemental appropriations.
U.S. Military Assistance. The United States has provided $4.6 billion in military
loans, $12.6 billion in military grants, and over $20 million in International Military
Education and Training funds over the past 15 years, an average of $1.1 billion per year.
Because of cash flow financing, all but $700 million of $3.9 billion in U.S. Foreign Military
Financing (FMF) aid anticipated over the next 3 years is already committed to payments on
previous year sales.
On September 14, 1990, former President George H.W. Bush asked Congress to transfer
Egypt’s $6.7 billion military debt from the Federal Financing Bank of the Treasury
Department to the Department of Defense, and to cancel the debt. President Bush was
rewarding Egypt for cooperating with the Desert Shield operations against the Iraqi invasion
of Kuwait and was relieving Egypt of part of its debt repayment burden. Section 592 of P.L.
101-513, signed into law on November 5, 1990, provided for canceling Egypt’s military debt
to the United States.
On March 11, 1999, Defense Secretary William Cohen announced a $3.2 billion arms
sale to Egypt that includes 24 F-16 aircraft, 200 M-1 tanks, and a Patriot missile battery.
Congress added $25 million in military assistance for Egypt as part of the Wye Agreement
between Israel and the Palestinians (H.R. 3194) although the Administration had not
requested additional funds for Egypt. Under the proposal announced in March 1999, Egypt
would assemble another 200 M1 tanks.
Military Cooperation
U.S.-Egyptian Military Industrial Cooperation. In addition to the FMF purchases
and excess defense articles, Egypt co-produces the U.S. M1A1 “Abrams” tank under a 1988
Memorandum of Understanding. Beginning in mid-1992, Egypt started assembling M1A1
tank components imported from the United States. Egypt manufactured about 40% and
imported 60% of the components for the 555 tanks produced. Egypt also repairs and
overhauls U.S. M60-A3 and M60-A1 tanks, trucks, jeeps, armored personnel carriers, and
is involved in a rehabilitation program to re-fit some older Soviet T-62 tanks. The Egyptians
propose contracting for depot level maintenance and repairs for U.S. and NATO armored
forces and some cargo aircraft.
“Bright Star” and other Joint Military Operations. The United States and Egypt
conducted the first “Bright Star” joint military exercise in August 1983, and continue to hold
periodic “Bright Star” exercises for infantry, airborne, artillery, and armored forces. The
1983 Bright Star was more than a training exercise: President Mubarak asked the United
States to send Airborne Warning and Control System aircraft (AWACS) to monitor Libya’s
activity toward Sudan in February 1983. President Reagan sent AWACS planes and crews
to monitor Libyan flights and the AWACS remained to take part in the first Bright Star.
AWACS returned to Egypt in March-April 1984 to monitor Libyan flights toward Sudan
after an incident in which a Libyan plane allegedly bombed Khartum. 70,000 troops from
10 nations participated in the October 7 through 31, 2001, Bright Star exercises. On August
11, 2003, the United States announced that it was canceling the October 2003 Bright Star
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08-20-03
exercise because U.S. armed forces were over committed in Afghanistan, Iraq, and other
areas.
Egypt and the United States conducted their first joint naval exercise in August 1986
and followed with other naval exercises in subsequent years. Earlier, in August 1984, the
U.S. Navy cooperated with the Egyptians in clearing Libyan mines from the Suez Canal, the
Gulf of Suez, and the Red Sea. And in 1974, the U.S. Navy and private U.S. companies had
assisted in clearing the Suez Canal of sunken ships, military ordnance, and other obstacles
from the 1967 and 1973 wars.
“Desert Storm”. In the week prior to the August 2, 1990 Iraqi invasion of Kuwait,
Egyptian President Husni Mubarak traveled to Iraq, Kuwait, and Saudi Arabia in an attempt
to negotiate a peaceful end to the crisis. After the invasion, Mubarak advised President Bush
to withhold sending armed forces to allow Egypt more time to work out a peaceful
resolution. On August 7 when the United States announced that it was deploying troops to
Saudi Arabia, Mubarak denied a U.S. request to allow U.S. forces use of Egyptian military
bases on their way to the Arabian Peninsula so that he would have time to negotiate (he later
granted the request). Mubarak and other Egyptian officials continued their peacemaking
efforts in the Arab League, the Islamic Conference Organization (ICO), and on personal
contacts and visits with Arab leaders. On August 10, Egypt voted for an Arab League
resolution to send armed forces to defend Saudi Arabia against a possible Iraqi invasion. The
first contingent of Egyptian troops, a commando unit and a paratrooper unit, joined U.S.
forces along the Saudi- Kuwaiti border the next day, on August 11. Egypt stated that its
forces would assist in liberating Kuwait but would not attack or occupy Iraq. In February
1991, an Egyptian reinforced infantry division of some 30,000 troops took part in Desert
Storm, advancing into western Kuwait in a corridor between U.S. Marines to the east and
U.S. Army forces to the west in Iraq. Egypt lost 9 killed in action and 74 wounded in action
in Desert Storm.
Egyptian and U.S. military officers state that cooperation in Bright Star exercises
facilitated the U.S.-Egyptian cooperation and military compatibility in Desert Storm, and
Egyptian officers claim that Bright Star and Desert Storm serve as precedents for future
U.S.-Egyptian cooperative ventures. Egyptian troops currently serve as peacekeeping forces
in Somalia and Yugoslavia, and an Egyptian contingent has been designated to serve with
the Gulf Cooperation Council armed forces.
Bases. United States interest in a military base in Egypt followed the renewed interest
in the late 1970’s in a “Rapid Deployment Force” (now Central Command) and the need for
overseas staging, support, and material storage areas. According to press reports, the United
States has shown an interest in an air facility, such as Cairo West or the air base near Nag
Hamadi, or an air and sea base, such as the small Egyptian base at Ras Banas on the Red Sea.
In 1981, Egypt agreed to allow the United States use of Ras Banas if an Arab state were
threatened, but the negotiations to upgrade the facility collapsed in 1984 because of
disagreements over managing the facility and the U.S. Congress’ insistence on a formal
agreement. Under a reported but unconfirmed understanding, Egypt will allow U.S. access
to military facilities after mutual discussion and agreement in time of crisis. Egypt denied
rumors that the United States used Egyptian air fields during the April 1980 attempted
hostage rescue in Iran.
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Table 1. Recent U.S. Aid to Egypt
(millions of dollars)
Year
Economic
Military
IMET
Total
1948-1997
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
Total
27,866.9
30,153.5
33.5
58,053.9
Notes for Table 2 (following pages):
Totals may not add due to rounding
No U.S. aid programs for years 1947, 1949, 1950, 1968, 1969, 1970, and 1971
P.L. 480 II Grant for 1993 includes $2.1 million in Sec. 416 food donations
TQ
= Transition Quarter; change from June to September fiscal year
*
= less than $100,000
I.M.E.T.
= International Military Education and Training
UNRWA
= United Nations Relief and Works Agency
Surplus
= Surplus Property
Tech Asst
= Technical Assistance
Narc.
= International Narcotics Control
D. A.
= Development Assistance
ESF
= Economic Support Funds
P.L. 480 I
= Public Law 480 (Food for Peace), Title I Loan
P.L. 480 II
= Public Law 480 (Food for Peace), Title II Grant
P
= Preliminary
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Table 2. U.S. Foreign Assistance to Egypt, 1946-1997
(millions of current dollars)
Year
Total
Military Loan
Military Grant
I.M.E.T Grant
Misc. Economic
Grant

1946
9.6



9.3 Surplus
0.3 UNWRA
1948
1.4



1.4 Surplus
1951
0.1



0.1 Tech Asst
1952
1.2




1953
12.9




1954
4




1955
66.3




1956
33.3




1957
1




1958
0.6




1959
44.8




1960
65.9




1961
73.5




1962
200.5




1963
146.7




1964
95.5




1965
97.6




1966
27.6




1967
12.6




1972
1.5




1973
0.8




1974
21.3




1975
370.1




1976
464.3




TQ
552.5




1977
907.8




1978
943.2


0.2
0.1 Narc.
1979
2588.5
1500

0.4

1980
1167.3


0.8

1981
1681.2
550

0.8

1982
1967.3
700
200
2.4

1983
2332
900
425
1.9

1984
2470.8
900
465
1.7

1985
2468.7

1175
1.7

1986
2539.1

1244.1
1.7

1987
2317

1300
1.8

1988
2174.9

1300
1.5

1989
2269.6

1300
1.5

1990
2397.4

1294.4
1.6

1991
2300.2

1300
1.9

1992
2,235.1

1,300
1.8

1993
2,052.9

1,300
1.8

1994
1868.6

1,300
0.8

1995
2414.5

1300
1

1996
2116.6

1300
1

1997P
2116

1300
1

Total
45669.4
4550
17803.5
27.3
11.2
CRS-12

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Table 2. (Cont’d) U.S. Foreign Assistance to Egypt, 1946-1997
(millions of current dollars)
Year
D.A.Loan
D.A.Grant
ESF Loan
ESF Grant
P.L. 480 I
P.L. 480 II
1946






1948






1951






1952

0.4



0.8
1953

12.9




1954

3.3



0.7
1955
7.5
35.3



23.5
1956

2.6


13.2
17.5
1957

0.7



0.3
1958

0



0.6
1959

2


33.9
8.9
1960
15.4
5.7


36.6
8.2
1961

2.3


48.6
22.6
1962
20
2.2
20

114
44.3
1963
36.3
2.3
10

78.5
19.6
1964

1.4


85.2
8.9
1965

2.3


84.9
10.4
1966

1.5


16.4
9.7
1967

0.8



11.8
1972
1.5





1973





0.8
1974



8.5
9.5
3.3
1975


194.3
58.5
104.5
12.8
1976

5.4
150
102.8
201.7
4.4
TQ


429
107.8
14.6
1.1
1977


600
99.2
196.8
11.7
1978


617.4
133.3
179.7
12.5
1979


250
585
230.7
22.4
1980


280
585
285.3
16.1
1981


70
759
272.5
28.9
1982



771
262
31.9
1983



750
238.3
16.8
1984



852.9
237.5
13.7
1985



1065.1
213.8
13.2
1986



1069.2
217.5
6.6
1987



819.7
191.7
3.9
1988



717.8
153
2.6
1989

1.5

815
150.5
1.2
1990



898.4
203

1991



780.8
165
52.5
1992



892.9
40.4

1993



747.0

4.1
1994



561.6
35
6.2
1995

0.2

1113.3


1996



815

0.6
1997P



815


Total
80.7
82.8
2,620.7
15923.8
4,114.3
455.1
CRS-13