Why Cutting Foreign Aid to Egypt Would Backfire
Business + Economy

Why Cutting Foreign Aid to Egypt Would Backfire

REUTERS/Mohamed al-Sayaghi

Egypt continued to descend toward a violent civil war Thursday as supporters of the Muslim Brotherhood torched government buildings and continued to clash with the military over the ousting of President Mohamed Morsi. More than 500 are dead with nearly 4,000 injured.

The violence is the worst since the onset of the Arab Spring, which removed the military-backed Hosni Mubarak from office in 2011. President Obama condemned the violence, while canceling joint military exercises scheduled for next week.

Critics of the president allege the cancellation is not enough and are calling on him to cut off $1.5 billion in aid the United States is providing to Egypt this year.  Most of this aid goes to the military, the group that’s responsible for the coup (even if the president won’t call it a coup).

Sen. Rand Paul (R-KY) said in a statement, “The law is very clear when a coup d’état takes place. Foreign aid must stop, regardless of the circumstances. With more than 500 dead and thousands more injured this week alone, chaos only continues to grow in Egypt. So, Mr. President, stop skirting the issue, follow the law, and cancel all foreign aid to Egypt.” 

But removing the aid is neither a good nor feasible idea. Here’s why:

1. Foreign aid is the only leverage the United States has over Egypt. The Egyptian military has no reason to negotiate with the secularists of the Muslim Brotherhood. The only way Obama can get the military to the negotiating table is to use this funding as leverage. The cancellation of the joint exercise is a not-so-subtle hint of what’s on the line.

2. The United States needs an ally in the region. Washington has few friends in the Middle East. The United States has provided some $85 billion in aid to Egypt over the last three decades for this very reason: Egypt is a rent-an-ally.

If the United States abandons Egypt now, it’s putting the entire Middle East in danger. It also complicates the Israeli-Palestinian peace process, since  United States aid has kept peace between Israel and Egypt. If the country enters a civil war, it could nullify a 1979 peace treaty between Cairo and Tel Aviv.

3. Egypt controls the Suez Canal. Another reason for the U.S. aid to Egypt is to keep the Suez Canal open. Global trade would take a sever hit if the military decides to close it. Oil prices are already on the rise because of the crisis.

Continuing to fund Egypt might not be the most palatable option, but it’s the best one the United States has right now. It might be the only thing that keeps Egypt from descending into full-blown civil war.