U.S.-Egypt ties: Cool or cordial? Americans reducing leverage on the Nile
Posted By Karima Saifullah
January 16, 2008
The United States provided about $2 billion a year to Egypt for years after it signed the 1979 peace treaty with Israel. The U.S. aid represented about 1.4 percent of Egypt's gross domestic product in 2006, compared to about 10 percent in 1980.
Moreover, Egypt's economy is booming and petrodollars are pouring in from Gulf investors, who use their revenues to snap up Egyptian banks and real estate. Oil and gas companies are also investing heavily for exploration and production in Egypt.
All this reduced the U.S. leverage over the Egyptian government.
"In all, Egypt has many other ways to mobilise foreign exchange," said Patrick Clawson, deputy director for research at the Washington Institute for Near East Policy. "U.S. aid is no longer essential for that purpose."
Military aid
Even though the Egyptian government doesn’t seem to care about the declining civilian part of the U.S. aid, the military component does make a difference because it helps ensure the stability of Egyptian President Hosni Mubarak's government.
Last year, Egypt protested when U.S. lawmakers threatened to withhold $200 million in military funds unless Cairo cracks down on arms smuggling into Gaza, which is now controlled by Hamas.
The Egyptian government “went bananas when Congress put some conditional ties (on the military aid)... The regime is totally dependent on the army's support," says prominent Egyptian dissident and sociologist Saadeddin Ibrahim.
The Egyptians even accused Israel of inciting U.S. lawmakers to damage relations between Cairo and Washington.
"Israel has succeeded in inciting the U.S. Congress, and not the U.S. administration, by putting some sticks in the wheels of this relationship,” Foreign Minister Ahmed Aboul Gheit said in an interview with the Egyptian newspaper Rose el-Youssef published on the eve of Bush’s visit.
However, Abul Gheit said the dispute over arms smuggling was coming to an end after the United States offered to give Egypt special equipment to enable it to detect tunnels along the border. Visits to the border area by U.S. members of Congress and congressional aides have also helped, he added.
"Some people on the U.S. side adopted the Israeli position, and the U.S. aid programme (to Egypt) came to be targeted... We succeeded in cutting Israel down to its real size as far as its talk about the tunnels is concerned,” the Egyptian foreign minister said.
Reassessment
Although most analysts do not predict a major change in foreign policy under Mubarak, some signs of tension have emerged recently.
Earlier this month, Egypt defied U.S. ally Israel by allowing Palestinian pilgrims to return to the Gaza Strip without Israeli screening -- a move that was seen as a boost for the Hamas government.
Moreover, many analysts undermine Egypt’s importance to the U.S., saying that Cairo is no longer as important to Washington as a mediator in the Arab-Israeli conflict or as a logistical gateway for U.S. forces to the Gulf.
"Egypt, which rightly sees itself as a central player in the Arab world, is at a juncture where we are likely to see some big reassessment of the relationship, although it's not likely to happen while Mubarak is in office," Telhami said.
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