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The logic of partially suspending aid to Egypt

- October 12, 2013

This is a guest post by Sharanbir Grewal, a PhD student at Princeton University and a former student and co-author of mine.

— Erik Voeten

The United States on Wednesday suspended part of its $1.55 billion in foreign assistance to Egypt “pending credible progress toward an inclusive, democratically elected civilian government.”  This decision comes after the July military coup that ousted former Egyptian president Mohamed Morsi from power, and after growing concerns that the new regime’s bloody crackdown on Morsi supporters is doing little more than encourage an Islamic insurgency.
The U.S. government has taken heat from all sides for its decision, receiving criticism for both cutting aid and for not cutting it enough. Strategically, however, this partial suspension of aid was the Obama administration’s smartest possible option and demonstrates resourcefulness in maximizing what little leverage it has over Egypt.
The administration halted cash assistance and “large-scale military systems,” including F-16 fighter jets, M1A1 Abrams tanks, Harpoon missiles and Apache helicopters, leaving all other aspects of the aid relationship — from counterterrorism to economic assistance — untouched. By doing so, the U.S. government suspended the portions of the relationship that are most important to the Egyptian military and least important to U.S. interests.
The Egyptian military is particularly keen on receiving the big-ticket items like F-16s for power projection, both to deter Israel and Iran and to compete for regional hegemony with the arsenals of the Persian Gulf. Indeed, the U.S. has for years been attempting to shift its military assistance to smaller weapons and equipment that actually serve a strategic purpose such as  counterterrorism, yet the Egyptian military has been reluctant to give up these big, shiny toys.
It is precisely such big-ticket items that give the United States the least bang for its buck. These items cost upward of hundreds of millions of dollars yet are not, in the administration’s words, “necessary to address vital security interests.” They are generally cited as means of assuring that Egypt continues to maintain its peace treaty with Israel, but as the Brookings Institution’s Shadi Hamid and Peter Mandaville recently noted, the aid is unnecessary: “it has been in Egypt’s own strategic interest to maintain the peace treaty.” Ironically, the F-16s and Abrams tanks actually strengthen Egypt’s military, increasing the threat posed to Israel. Even if the partial suspension of aid does not improve the Egyptian regime’s behavior, it may still have been strategically sensible to jettison of a portion of the assistance that had costs outweighing its benefits.
But there is ample reason to believe that this suspension will be felt by the Egyptian military. The commonly cited refrain that U.S. dollars will simply be replaced with Saudi riyals and Emirati dirhams is missing the point: It’s not about the money; it’s about the American hardware. Egypt cannot simply use Saudi money to purchase F-16s directly from Lockheed-Martin; the U.S. government reviews all direct commercial sales from American defense companies to foreign governments. While Egypt could purchase Chinese or Russian models, American jets are far and away the most technologically superior in the world. It would also be costly for Egypt’s military to shift to another donor’s jets and have to retrain officers to fly them, especially since it will have to maintain its existing training programs for the 240 F-16s it does have. Indeed, we saw the first indications that the suspension has hurt the military on Friday, when Egypt hired D.C.’s top lobbyists to improve its image in Washington.
Most critics of aid suspension have argued that it will weaken the United States’ relationship with Egypt’s military, depriving the administration of crucial leverage over Egypt’s internal and foreign policies. However, much of the military-to-military relationship will continue despite the suspension, including counterterrorism assistance, spare parts for military equipment and, most importantly, the personal relations developed from joint military training and education.
It has also been made abundantly clear over the past four months that U.S. military assistance has not bought Washington much leverage. This is in part because Egypt’s military has not considered the administration’s threat to suspend aid as credible — a threat that, given the suspension, will now become more credible in the future. With a partial suspension, the United States now has a wider range of options to use for leverage, from cutting additional aid to reinstating part or all of the suspended aid. If anything, the U.S. leverage over the Egyptian military has now increased.
On the other side, the Obama administration’s decision is also being criticized for its muddled message for not having cut all aid. As a senior administration official answered, “I think it’s fair to say that holding up the deliveries of hundreds of millions [of] dollars in assistance is a pretty clear message.” Leaving part of the relationship intact allows for continual feedback on the military’s progress toward regaining the aid. Thus, while the administration seeks to reprimand the Egyptian military for the 1,000 people reported killed since the coup, it still extends a hand to recalibrate the close relationship. And that demonstrates very clever balancing of the multiple U.S. interests at stake in Egypt.