Back to the complete issue
Thursday, 24 August 2017

Strained ties with the US following aid cuts?

Strained ties with the US following aid cuts? White House envoy Jared Kushner’s Middle East tour hit a speed bump when he landed in Cairo yesterday after the US State Department let slip it was cutting or withholding some USD 290 mn in aid to Egypt. The Foreign Affairs Ministry was initially reported to have canceled planned meetings with the delegation (which is touring the region to jump-start Palestinian-Israeli peace talks), but the meeting went ahead, as did a sit-down with President Abdel Fattah El Sisi. Also part of the delegation are international negotiations chief Jason Greenblatt and deputy national security adviser Dina Powell.

The move to deny USD 95.7 mn in aid and delay a further USD 195 mn “may have a negative impact on common interests,” the Foreign Ministry says. The Ministry’s statement added that “Egypt sees this measure as reflecting poor judgement of the strategic relationship that ties the two countries over long decades and as adopting a view that lacks an accurate understanding of the importance of supporting Egypt’s stability,” according to Reuters. Bloomberg’s Tarek El Tablawy writes that “the funding penalty again thrusts Egypt’s human rights record under an unforgiving spotlight at a time when the country is working to revive its economy and attract foreign investment. Although Trump has praised Egypt for battling Islamists, rights groups say the crackdown has been extended to encompass all government opponents, leaving no room for political dissent. The NGOs Act — which has received criticisms from Republican senators — is being widely touted as one of the major reasons for freezing aid.

Is this really about human rights and democracy — or our ties to North Korea? Writing for the New York Times, Gardiner Harris and Cairo bureau chief Declan Walsh convincingly suggest that the Trump administration is using the aid as leverage to push Egypt to break its civilian and military ties with North Korea. “Secretary of State Rex W. Tillerson’s top priority has been to increase North Korea’s economic and diplomatic isolation, and he has asked foreign leaders in almost every meeting that they cut ties with Pyongyang.” Egypt and North Korea have cooperated on the military front since the 1970s, and the UN alleged in 2015 that North Korea has smuggled weapons through Egyptian ports. Naguib Sawiris and OTMT’s role in setting up the country’s cell phone network was cited example of civilian cooperation between both countries.

Trump actually raised his concerns about North Korea with El Sisi in a call last month. According to a readout of the 5 July call released by the White House: “The two presidents also discussed the threat from North Korea. President Trump stressed the need for all countries to fully implement U.N. Security Council resolutions on North Korea, stop hosting North Korean guest workers, and stop providing economic or military benefits to North Korea.”

The Foreign Ministry did reverse what the foreign press is calling “the snub.” Foreign Minister Sameh Shoukry later sat in on Kushner’s face-to-face with President Abdel Fattah El Sisi, which according to official statements from Ittihadiya was focused squarely on the Middle East peace talks. The delegation expressed “their appreciation of Egypt’s efforts in the fight against terrorism and extremism, as well as its historical role in supporting a comprehensive settlement of the Palestinian issue.” The Americans then sat down with Shoukry separately at the Foreign Ministry, where the he reportedly outlined Egypt’s views on the state of affairs on the ground in Israel, the West Bank, and Gaza, said foreign ministry spokesperson Ahmed Abou Zaid. Neither statements touched upon the aid issue.

The decision is unlikely to have great impact on Egypt’s economy or foreign investors’ renewed appetite for all things Egyptian, AmCham Executive Vice President Ahmed Abou Ali tells Daily News Egypt. AmCham plans to hold a board meeting next week to discuss ties between the two countries.

Valiant members of our House of Representatives are volunteering to make the oneroustrip to the mosquito-infested swamp that is Washington, DC, to help dispel misconceptions about Egypt’s human rights record, reports Al Mal. The announcement had caused an uproar within the halls of parliament, where MPs are viewing it as another attempt to put pressure on Egypt, just as the Obama administration had done. The sacrifices our elected representative are willing to make in defense of our democracy are simply breathtaking.

The reversal of the Trump administration’s stance on human rights in Egypt — which dominates the conversation on Egypt in the foreign press — has been confusing pundits across the globe, generating wide speculation on the behind-the-scenes purpose of the move. Foreign Policy’s Emily Tamkin believes that the administration had been paying attention to testimony by regional experts, including Michelle Dunne, before the a subcommittee of the Senate Appropriations Committee. Slate is even suggesting that this might be a genuine reversal on making human rights a lower priority. “It’s encouraging that the State Department is acknowledging the deteriorating state of human rights in Egypt and the grave implications for stability in the Middle East,” Amnesty International’s Advocacy Director Adotei Akwei said in a Wednesday statement. “To effectively make human rights a priority, these transfers [of military aid] must be suspended immediately.”

No mentions of the Qatar rift: Kushner’s visit follows meetings with leaders from UAE, Qatar, Saudi Arabia, and Jordan, and based on statements from the Saudi Press Agency and Qatar News Agency, Palestine-Israeli peace talks was all that was discussed. Neither statements mentioned the diplomatic rift with Qatar. Kushner will be in Israel today.

This story will have legs in the international press for another cycle or two — we don’t think it is stretching things to say it’s the dominant foreign policy story globally this morning. Depending on your reading preferences, see coverage in the Wall Street Journal, Financial Times, Politico, the New York Times (here and here), Washington Post (plus a gloating editorial egging Trump on to give us another slap), Slate, CNN, the Guardian, the Los Angeles Times, Foreign Policy, Russia Today, and the BBC. We could go on, but you get the point. And note, please, that these are original pieces to which these outlets devoted staff time — not just wire pickups.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.