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Over the past 24 hours, a handful of unnamed U.S. officials have been leaking to major U.S. news outlets that the Obama administration is considering suspending some or all aid to Egypt. White House officials have meanwhile maintained that no final decision has been reached on the aid to Egypt and that an announcement will be made in the coming days. The administration once again appears to be using the threat of aid cutoffs to regain leverage over Cairo amid the military-backed regime's ongoing violent crackdowns against the Muslim Brotherhood. But just as the United States is demonstrating a new willingness to challenge Egypt, the Egyptian military, backed by Saudi Arabia, seems equally willing to test the United States on its strategic commitment to the region.
The amount of U.S. aid in question is the remaining $585 million of the $1.3 billion in foreign military aid that the United States had pledged to Egypt for fiscal year 2013. These funds -- which were supposed to be applied largely to an order of AH-64D Apache helicopters -- have been on hold since the deadly crackdowns against Muslim Brotherhood supporters in recent months. The White House, while avoiding the politically loaded term "coup" to describe the military's takeover, has withheld the remaining aid in order to prod Cairo into speeding up Egypt's democratic transition and ending the violence against protesters. Those appeals have been flatly ignored, and excessively violent crackdowns continue. Moreover, Egyptian authorities announced Wednesday that ousted Egyptian President Mohammed Morsi and several of his associates will be put on trial Nov. 4 for inciting murder -- the first of what will likely be many show trials to demonstrate the Muslim Brotherhood's demise.
Threats to cut off aid will not reverse Egypt's course. The military is following a mandate to both preserve its role as the ultimate authority of the state and extinguish the political ambitions of Egyptian Islamists. There is no clear democratic path to that objective. Moreover, this is an agenda ardently supported by regimes across the region -- from Jordan to Syria to Saudi Arabia to the United Arab Emirates to Kuwait -- which share a collective fear of Islamists and a common purpose to defeat them, whatever the cost.
This puts the United States in a tight corner, not just in dealing with Egypt, but also in trying to preserve its influence in the wider region. U.S. President Barack Obama discussed this unavoidable contradiction in U.S. policy in his September address to the U.N. General Assembly. While maintaining that the United States has an interest in supporting a liberal democracy in Egypt, he subtly, yet critically distinguished this interest from a "core interest" in promoting the Camp David Accords and counterterrorism cooperation. With an air of Kissinger-like candor, he summed up his point with the following statement: "The United States will at times work with governments that do not meet, at least in our view, the highest international expectations, but who work with us on our core interests." In other words, don't be surprised when the United States still supports allies who do things Washington tells them not to do.
The United States will continue to withhold and redirect the most obvious forms of direct military assistance to Egypt to make a point, but its strategic interest in the country is more or less unchanged. It needs a stable, capable partner in Cairo to hold the state and its peace treaty with Israel together. The Egyptian military knows this, and so is not going to be particularly receptive to U.S. condemnations on human rights as it proceeds with its plan to restore stability.
For now, the Egyptian military can also leverage other types of assistance from its Gulf Arab allies in cushioning against whatever military aid or equipment is withheld by the United States. Egypt has so far received around $7 billion of the $12 billion in aid pledged by Gulf countries, with the United Arab Emirates providing $3 billion, Saudi Arabia $2 billion and Kuwait $2 billion in a combination of central bank deposits, grants and energy shipments. The Gulf aid boosted Egypt's foreign reserves to $18.8 billion in late September, helping forestall, but not eliminate, the need for painful measures to restore a modicum of investor confidence and maintain a stable-enough energy supply in Egypt.
Even though Egypt remains in dire economic straits in the face of falling energy production and skyrocketing inflation at home, it apparently still had the luxury of making a politically-motivated decision to return $2 billion in aid from Qatar. Doha, which provided some $8 billion to Egypt in financial support when the Muslim Brotherhood was still in power, was turned down when it requested that Cairo delay the transfer of its funds into bonds. Cairo also rejected a recent request to increase Qatar Airlines flights to Egypt, and Doha-based Al Jazeera's bureaus in Egypt have been attacked verbally and physically for their allegedly biased coverage of the military's crackdowns.
From the Egyptian military's point of view, Egypt is not so desperate that it needs to compromise on its political agenda. The United States will be the one to eventually readjust to the old reality of backing unpopular regimes that can preserve U.S. influence in the Nile River Valley. For a real shift in U.S. balance of power politics, look instead to the Persian Gulf, where a possible peace between Iran and the United States is guaranteed to send Egypt's Gulf sponsors into a frenzy.
Courtesy : Stratfor (www.stratfor.com)