F.A.Q. on U.S. Aid to Egypt: Where Does the Money Go, And How Is It Spent?

This article has been updated to reflect new developments. It was first published on Jan. 31, 2011.

The Obama administration is reportedlypreparing
to cutmuch
of the $1.55 billion in annual aid that the U.S.
sends to Egypt.

The move, which has yet to be formally announced, comes
after more than 1,000 Egyptians have died in a crackdown following the military
coup this summer, including at least 51 who were killed on Sunday in clashes in Cairo and other cities. Most were
apparently supporters of ousted president Mohamed Morsi.
 

We’ve taken a step back and tried to answer some basic
questions about the aid, including how much the U.S. is giving Egypt, what’s
changed in the years since the Arab Spring and what all the money buys.

How much does the U.S. spend on Egypt?

Egypt receives more U.S. aid than any country except for
Israel, Afghanistan, Pakistan and Iraq.

The exact amount varies from year to year and there are
many different funding streams, but U.S. foreign assistance to Egypt has averaged about $2 billion a year since 1979, when Egypt struck a peace treaty with Israel. Most of that goes toward military aid.
President Obama’s 2014 budget tentatively included $1.55 billion in aid, about
the same amount the U.S. has sent in recent years.

Has any of the aid been cut off?

Yes. The State Department said
in August that it had put a hold on some of the
programs financed by the $250 million in annual economic aid to Egypt, including training programs in the U.S. for Egyptian
hospital administrators, teachers and other government workers. The
administration is now planning to cut off all economic aid that goes directly
to the Egyptian government, U.S. officials told the New York Times on Tuesday, but not aid for
education, hospitals and similar activities.

What about the military aid?

We don’t know the
details yet, but it appears most of the military aid will be cut off, too. The administration, which delayed a scheduled
delivery of four F-16 fighters to Egypt in July, is now planning
to halt more deliveries, including helicopters, tanks and fighter jets.

It’s not clear exactly how much of the military aid — which
has held steady at about $1.3 billion since 1987 — will be cut
off. (The economic aid, meanwhile, has fallen by more than two-thirds
since 1998.) About $585 million of the aid of the 2013 fiscal year, which ended
last week, has yet to be deposited in the Egyptian government’s account in the
Federal Reserve Bank in New York, according to the Times.

The U.S. is unlikely to cut off aid that funds counterterrorism operations
or security in the Sinai Peninsula and along Egypt’s border with Israel and the
Gaza Strip, according to the Times and the Associated Press. The administration
is expected to announce the exact cuts in the coming days.

American officials
say that military aid doesn’t just promote peace between Egypt and Israel, it
also gives the U.S. benefits such as “expedited processing” for U.S. Navy
warships when they pass through the Suez Canal. A 2009 U.S. embassy cable
released by WikiLeaks makes essentially the same point:

President Mubarak and military leaders view our military
assistance program as the cornerstone of our mil-mil relationship and consider
the USD 1.3 billion in annual FMF as “untouchable compensation” for
making and maintaining peace with Israel. The tangible benefits to our mil-mil
relationship are clear: Egypt remains at peace with Israel, and the U.S.
military enjoys priority access to the Suez Canal and Egyptian airspace.

According to the
State Department, the military aid has included tanks, armored personnel
carriers, antiaircraft missile batteries and surveillance aircraft in addition
to the F-16 fighters and Apache attack helicopters. In the past, the Egyptian
government has bought some of the weaponry on credit.

How important is the aid to
Egypt?

Pretty
important. Saudi Arabia, which along with other Persian Gulf countries
pledged $12 billion in aid to Egypt after the coup, promised to make up the difference in any aid cut by the U.S. or other Western nations. But much of
the aid can’t easily be replaced, in particular the fancy American-made weaponry and replacements
parts for them.

The Egyptian government declined
to comment on the reported cuts on Wednesday.

“We have not been officially informed of any
change,” BadrAbdellaty, a
spokesman for the Egyptian Foreign Ministry, told the Washington Post. “Until the administration takes its decision and
informs us officially, we cannot comment.”

Does the aid require Egypt to
meet any specific conditions regarding human rights?

Not really. When an
exiled Egyptian dissident called on the U.S. to attach conditions to aid to
Egypt in 2008, Francis J. Ricciardone Jr., who had
recently stepped down as the U.S. ambassador to Egypt, told the Washington Post the idea was “admirable but not realistic.” And then-Defense
Secretary Robert Gates said in 2009 that military aid “should be without conditions” at a Cairo press
conference.

Sen. Patrick Leahy, a Vermont Democrat, led Congress in adding
language to a spending bill in 2011 to make aid to Egypt conditional on the
secretary of state certifying that Egypt is supporting human rights and being a
good neighbor. The language requires that Egypt abide by the 1979 peace treaty with
Israel, support “the transition to civilian government including holding
free and fair elections,” and put in place policies to protect freedom of
expression, association, and religion, and due process of law.” It sounds
pretty tough, but it’s not.

Has American aid to Egypt ever
been cut off before?

No. Congress
threatened to block aid last year when Egypt began a crackdown on a number of
American pro-democracy groups. A senior Obama administration official said that
then-Secretary of State Hillary Rodham Clinton had no way to certify the conditions set out in the spending bill were being met.

But Clinton waived
the certification requirement (yes, the secretary of state can do that) and
approved the aid, despite concerns about Egypt’s human rights record. The
reason? “A delay or cut in $1.3 billion in military aid to Egypt risked
breaking existing contracts with American arms manufacturers that could have
shut down production lines in the middle of President Obama’s re-election
campaign,” the New York Times reported. Breaking the contracts could have left the Pentagon on the hook
for $2 billion.

Doesn’t the U.S. have to cut
off foreign aid after a coup?

The Foreign
Assistance Act mandates that the U.S. cut aid to any country “whose duly
elected head of government is deposed by military coup or decree.” But in July
the White House decided that it was not legally required to decide whether Morsi, who was democratically elected last year, was the
victim of a coup — which allowed the aid to keep flowing. “We will not
say it was a coup, we will not say it was not a coup, we will just not say,” an anonymous senior official told the New York Times.

As the Washington
Post’s Max Fisher points out,
Obama and his predecessors have dealt this kind of thing before. The president
cut some aid to Honduras after a coup in 2009 and to Mali and the Central
African Republic after coups there in 2012, but not all of it. And those
countries aren’t nearly as important to U.S. foreign policy as Egypt. President
Bill Clinton cut some aid to Pakistan after a coup there in 1999, but President
George W. Bush reinstated all of it after the Sept. 11, 2001, attacks.

Obama’s refusal to
call it a coup infuriated Morsi supporters. “What is
a coup?” Wael Haddara, a
senior adviser to Morsi, told the New York Times. “We’re going to get into some really Orwellian stuff here.”

What about economic aid and
efforts to promote democracy?

The various economic
aid efforts have had mixed results. The State Department has described the Commodity Import Program, which gave Egypt millions of
dollars between 1986 and 2008 to import American goods, as “one of the
largest and most popular USAID programs.” But an audit of
the four-year, $57 million effort to create agricultural jobs and boost rural
incomes in 2007 found that the program “has not increased the number of
jobs as planned.” And an audit of a $151 million program to modernize Egypt’s real estate finance market in 2009
found that, while the market had improved since the program began, the growth
was “not clearly measureable or attributable” to the aid efforts.

The U.S. has also
funded programs to promote democracy and good government in Egypt — again
with few results. It has sent about $24 million a year between 1999 and 2009 to
a variety of NGOs in the country. According to a 2009 inspector general’s audit, the efforts didn’t add much due to “a lack of support”
from the Egyptian government, which “suspended the activities of many U.S.
NGOs because Egyptian officials thought these organizations were too
aggressive.”

A recent audit of
the European Union’s €1 billion — about $1.35 billion
—aid program found that it had been “well-intentioned but ineffective” in
promoting good governance and human rights. And a WikiLeaks cable revealed the Egyptian
government had asked USAID in 2008 to stop financing NGOs that weren’t properly
registered.

Marian Wang contributed reporting.