Changes in US aid to Egypt: Inconsistency, blind austerity and fluctuations in political will

When news first broke of the United States’ decision to conditionally withhold up to US$290 million in Egypt’s foreign assistance package, analysts launched into a frenzy, seeking to understand the rationale and calculations behind the figure. At the time, it was reported that, of the $290 million, $195 million would be withheld and $95.7 million reprogrammed. Befuddled observers were left to speculate on what accounts the numbers stemmed from, the rationale behind the restriction, and whether the move had revealed an inflection point in US President Donald Trump’s strategy toward Egypt, and relations more broadly.

The $195 million that Reuters reported the US administration was to withhold from Egypt’s 2016 Foreign Military Financing Funds (FMF) is the sum that the US government must withhold from the $1.3 billion in annual FMF it provides to Egypt, in accordance with the Consolidated Appropriations Act of 2016, which stipulates that 15 percent of Egypt’s FMF will be automatically withheld until the secretary of state can verify progress on human rights and democracy benchmarks. With the exception of Fiscal Year 2014, since FY 2012, conditions imposed on FMF have, to varying degrees, come with an option for a waiver that would allow the secretary of state to release the funds in the event they had not been met, if the disbursement was in the interests of US national security. The waiver condition was used to release the $195 million in FY12, FY13, FY15 and FY16.

The $95.7 million that was reprogrammed is made up of $30 million that was allocated to Egypt in FY16 Economic Support Funds (ESF) and $65.7 million in FY17’s FMF. Egypt’s ESF account has long been an issue of contention within the US. Until recently, the account had accumulated $500-700 million in backlogged funds, a figure that was recently reduced to $400 million. While approximately $200 million of the current backlog stems from multi-year commitments associated with scholarship programs, the rest is a byproduct of the Egyptian government’s aversion to working with implementing partners on the ground, an issue exacerbated by its ever intensifying crackdown on civil society and the criminalization of foreign funding. This was most recently made evident with the reopening of the NGO foreign funding case (Case 173) and the passage of a crippling NGO law in May. Thus after much clamoring from voices within Congress and the NGO and Think Tank community, the FY17 Omnibus permitted the administration to reprogram backlogged ESF funds to other, more cooperative, countries, should the Egyptian government block or interfere with their disbursal. The $65.7 million in FY17’s FMF on the other hand, corresponds with a previously withheld figure from FY14. The figure is what remained of a larger sum of $650 million, blocked by Senator Patrick Leahy in April 2014, former chair of the Senate Subcommittee on State, Foreign Operations and Related Programs, before he released ‘the bulk’ of the funds later that year.

Questions swirled. Did the administration use the waiver to greenlight the 15 percent of FMF and still choose to withhold the amount? Did this signal a different set of conditions between the Trump Administration and President Abdel Fattah al-Sisi’s regime? Was the NGO law and other human rights concerns, as reported by the Reuters article, the primary factor dictating both withholding and reprogramming? Or were there other issues, such as Egypt’s relationship with North Korea? Other, more technical, questions lingered: Why withhold FY14 funds in FY17? What legal grounds allowed the government to reprogram FMF funds? What program within ESF had been withheld? More generally, what do these moves tell us about Egypt-US relations under Trump?

The Trump administration’s decision to withhold 15 percent of FMF in FY16, which needed to be made by September 30, 2017, differs from its predecessors. Unlike the years prior where the funds were released and a report addressing Egypt’s lack of progress on these conditions was sent to Congress, FY16’s 15 percent remains withheld, despite the Trump administration’s decision to use the waiver. State Department officials have confirmed the existence of a separate set of conditions and, have indicated that the passage of Egypt’s new NGO law is their most significant concern.

Other issues such as travel bans on Egypt’s human rights defenders and the resumption of Case 173 continue to be points of contention, while North Korea seems to only pose a concern in the way any country’s relations with it would. Initial reports on the $65.7 million in FMF were conflicting, with some stating that the sum came from FY14 and others FY17. In reality, it’s both. As noted, the $65.7 million was withheld by Senator Leahy from Egypt’s FY14 funds and has been shelved, with Egypt asking about it consistently ever since. Although it was subtracted from Egypt’s FY14 FMF, it has remained in addition to the usual $1.3 billion to be released. It is part of the FY17 package the same way it was in FY16 and 15; reprogramming it in FY17 means that the Egyptians lose the money retroactively, effective FY14. The Foreign Assistance Act of 1961 as well as Omnibus legislation permits the administration to reprogram these funds so long as Congress is notified, a requirement that has been fulfilled with respect to this decision.

The $30 million in reprogrammed ESF is more clear-cut, but of note is the Trump administration’s decision to take this money specifically out of a government to government water program. As noted, ESF typically goes to NGOs and American partners on the ground; since the Egyptian government is averse to cooperation with these organizations and has been passing legislation that criminalizes their work, the administration chose to reprogram the amount from a government to government project. This allows the US to reprogram backlogged funds without indicating that they endorse the Egyptian government’s crackdown on NGOs.

Changes in Egypt-US relations: Public praise, private criticism and coincidental feasibility?

Prior to the decision to reprogram and withhold assistance, many observers cited Trump’s public praise of Sisi as a drastic change from Obama, describing him as much more pro-Egypt because of descriptions like he’s a “fantastic guy,” or actions such as the resumption of the Operation Bright Star joint military exercises, and maintaining Egypt’s $1.3 billion in FMF while zeroing out the accounts of other countries. The reality however, is that Donald Trump’s policy toward Egypt has been an erratic series of contradictions, none of which fulfill the high expectations Egypt has seemingly built on slew of positive adjectives he’s thrown Sisi’s way. The Sisi regime had five major asks of the Trump administration:

  1. FMF – Increase FMF, reverse the Obama administration’s decisions to end cash flow financing and stipulate that FMF go to four categories (Counter terrorism, border security, maritime security, Sinai security)
  2. Dispense backlogged Economic Support Funds to the Egyptian government
  3. Designate the Muslim Brotherhood a Foreign Terrorist Organization
  4. Have Trump visit Cairo
  5. The extradition of wanted Egyptians back to Cairo

Trump has granted zero of these requests and offered up a series of contradictory decisions instead: He restored Bright Star, he maintained Egypt’s $1.3 billion, he received Sisi in White House, he reduced Economic Support Funds, he declined to designate the Muslim Brotherhood as a foreign terrorist organization, and maintained Obama administration’s decisions to categorize FMF and end cash flow financing.

How does the latest decision fit within this context? The State Department insists that the move came down to human rights and that the decision was bottom up. But Jared Kushner’s recent thoughts on Sisi’s undeserved criticism for human rights violations and Trump’s praise and legitimization of notorious dictators in the Philippines and Saudi Arabia, respectively, tell a different story. Egypt’s statement condemning North Korea a few days after the assistance adjustment also clouded the government’s rationale.

It could also be that Donald Trump is a president with an inconsistent agenda across the board that incorporates the need to make massive budget cuts, which may or may not conveniently overlap with other long-held issues by Congress and observers, like human rights, that increase the political will needed to execute part of this agenda. If the Trump administration is indeed serious about human rights, then it needs to maintain the pressure. That means that its private conditions reached with Egypt regarding the withheld $195 million must include the release of political prisoners, the repeal of the protest law, the lifting of travel bans and the halting of Case 173, in addition to revisiting the NGO law.

If the Trump administration is not serious and the decision is simply the latest fluctuation in an inconsistent policy that tends to hover around aid cuts, then voices in Congress and the NGO and Think Tank Community should remain critical of Egypt’s human rights violations, in the interest of making adjustments to its aid package more politically feasible. The Senate, in particular, has been an arena where Egypt’s critical voices have begun to fan out across bipartisan lines; it is the Senate that suggested legislation to reprogram ESF in its FY17 appropriations bill, and to halve the amount to $75 million. The administration’s latest actions on US assistance to Egypt may have empowered the Senate to go one step further.

A little over two weeks after the administration’s withholding and reprogramming decision, the Senate Subcommittee on State, Foreign Operations and Related Programs doubled down, releasing a summary of an appropriations bill that slashed Egypt’s FMF by $300 million, lowering its total to $1 billion, and raised democracy and human rights conditions to 25 percent. Underlying rationale aside, it does indeed seem that parts of Congress and the Trump administration are finding themselves on the same page. As of the time of this article, the bill is currently being voted on in full committee.  

Either way, it seems the Egyptian government may be listening. Its statement following the administration’s decision to reprogram and withhold aid deviated from the proverbial rage that tends to follow such actions and criticism. The statement expressed Egypt’s “regret,” and measuredly suggested the US had underestimated its security needs.

Perhaps public praise, private criticism and action is the American method that will finally yield results in Egypt, even if the underpinning rationale is a strange combination of inconsistency, blind austerity and political will.


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