Since the overthrow of Egypt’s democratically elected president Mohammed Morsi earlier this month, US government officials have made painstaking efforts to avoid calling the ouster a military coup d’état. Why the semantic sensitivity? Because according to the FY2012 Consolidated Appropriations Act (PL 112-74), all US foreign assistance to the Egyptian government must be terminated if the military’s actions did, in fact, constitute a coup. This isn’t the first time the United States has bumped up against this provision; it’s had to grapple with how to respond to coups in recent years in Honduras and Mali. Max Fisher of the Washington Post discusses these and a few other recent cases here.
CGDers have written about Obama administration “coup calls” in the past. Martin Ravallion, for one, has weighed in recently with the opinion that cutting off assistance after a coup could be a bad idea.
Without taking a side on that question (for now), this post tackles another important one: just how much aid is at stake? Here are some of the basic facts about US assistance to Egypt to set the record straight.
The Long View
Between 1946 and 2011, the United States provided Egypt with a total of $71.7 billion in bilateral foreign aid ($118.3 billion in constant 2011 US $). US military assistance levels started ramping up following the 1979 Peace Treaty between Israel and Egypt, when the United States pledged financial support to maintain peace, and since 1987 the US congress has appropriated $1.3 billion in military assistance to Egypt each year. According to a recent report by Jeremy Sharp at the Congressional Research Service, in FY2011 “Egypt received almost a quarter of all US Foreign Military Financing (FMF) funds, and Israel received nearly 60 percent.” However despite this steady commitment for military financing, economic assistance has experienced a gradual decline over the same time period. In each year since 2009 the Congress has appropriated $250 million to the Economic Support Fund, less than a quarter of the amounts appropriated in the early 1990s.
US Assistance Appropriated (current $) and Obligated (constant 2011 $) to Egypt, 1946–2011
Source: Appropriations data from CRS, denominated in current year US $. Obligations data from US Overseas Loans and Grants, aka the Greenbook, denominated in 2011 constant US $. Government obligations are defined as a “binding agreement that will result in outlays, immediately or in the future. Budget resources must be available before obligations can be legally incurred.”
How Has US Assistance Been Allocated in Recent Years?
Since 2009, economic assistance funding has comprised only 16 percent of total US foreign assistance to Egypt. This marks a reversal from a few decades back, where up until 1987 the majority of US assistance was allocated to economic development.
Source: Annual Congressional appropriations by account, as reported in Congressional Research Service report “Egypt: Background and US Relations,” June 27, 2013. FY2014 figures represent requested appropriations.
Focusing just on the 16 percent of assistance ($250 million for FY2014) that goes to Egypt’s Economic Support Fund (ESF), US assistance provides resources for programs in health, education, economic growth, and the (contentious) democracy and governance sectors. The following chart shows the sectoral breakdown of economic assistance funding in recent years.*
Source: US Foreign Assistance Dashboard, Accessed July 2013. Figures represent ‘Planned Spending’ for Egypt for all sectors (excluding ‘Peace and Security’ which represents FMF funding) and all reporting agencies. See here for CGD’s tracker, which records which US government agencies are currently reporting to the Dashboard.
How Does US Assistance to Egypt Compare to Aid to other Countries?
According to the most recent data (FY2011) from USAID’s US Overseas Loans and Grants database, Egypt was the fifth largest recipient of US foreign assistance when both economic and military obligations are considered. Afghanistan was far and away the largest recipient of US assistance, followed by Israel, Iraq, Pakistan, and then Egypt.
When we analyze economic and military assistance separately, however, although Egypt ranks third in military assistance (comprising 7 percent of total US military assistance) it doesn’t even show up in the list of the top 20 recipients of US economic assistance. Rather it ranks 32nd, with economic assistance comprising a mere 0.54 percent of total US economic assistance.
It’s Not All About US: Other Donors’ Contributions to Egypt**
Of course, the United States is just one of many countries and institutions that provide financial assistance to Egypt. The following chart puts the United States’ contributions in context by quantifying each donor’s share of gross Official Development Assistance (ODA) that flowed into Egypt in 2010. Total disbursements amounted to $1.54 billion (constant 2011 $). While the United States was the largest contributor, with disbursements of nearly $300 million constituting 19 percent of total gross ODA to Egypt, France, Japan, and other countries also contributed a significant amount of development assistance funding. And, taken as a whole, European bilateral aid plus EU assistance is double that of the United States.
Source: OECD Creditor Reporting System, Table DAC2a, accessed July 2013. Total includes Gross Disbursements of Official Development Assistance, All Sectors and Aid Types, and Channels, denominated in 2011 constant US $. Note these OECD CRS figures exclude major non-DAC donors except for Saudi Arabia and Kuwait, which are included.
Conditions on Providing Assistance to Egypt
Although there has been some confusion over the implications of declaring President Morsi’s ouster a coup, here’s what the existing legislation (the FY2012 Consolidated Appropriations Act) says:
Section 7008, which applies to all countries receiving US assistance: States that “none of the funds appropriated or otherwise made available … shall be obligated or expended to finance directly any assistance to the government of any country whose duly elected head of government is deposed by military coup d’état or decree or, after the date of enactment of this Act, a coup d’état or decree in which the military plays a decisive role” (emphasis added). Notably, the last part implies that it is not strictly necessary for events to be deemed a ‘coup’ for them to fall within the scope of the legislation. The Appropriations Act includes no waiver for this provision, and aid cannot be restored until the president certifies that a “democratically elected government has taken office.”
Section 7041, which places specific restrictions on Egypt: Specifies that no funds may be made available until the secretary of state certifies that Egypt is meeting its obligations under the 1979 Egypt-Israel Peace Treaty, and that no FMF may be provided until the secretary certifies that the government of Egypt is supporting the transition to civilian government, including holding free and fair elections, and implementing policies to protect freedom of expression, association, and religion, and due process of the law. Note that the secretary can waive these certifications if s/he believes it is in the United States’ national security interest to do so.
The language in section 7008 implies that in the event of a military (or militarily-influenced) coup d’état,
there is no waiver that can allow for the continued provision of assistance to the Egyptian government. One exception may be food, medicines, and other humanitarian assistance which, according to Kim Elliott of CGD, are explicitly exempted from most US sanctions—and given this assistance is often provided through NGOs or international organizations like the World Food Program, it would not be subject to sanctions anyway.
Furthermore, according to this CQ Roll Call article (gated) the law “does not delineate who in the U.S. government is responsible for ultimately determining whether in fact a coup has taken place … or impose a deadline for that determination.” According to a former State Department legal advisor, the process is generally led by the person in his (former) position, but may take several weeks or longer. That may provide some explanation for the awkward, if not somewhat convenient, limbo in which the US government currently finds itself.
For extra-curious readers, the aforementioned CRS report includes a more detailed account of the history of assistance to Egypt and a long list of legislation under consideration in the 113th Congress that would impose additional restrictions on assistance to Egypt (see page 20). We at CGD will also continue to track ongoing news and views about US development assistance to Egypt—stay tuned.
Thanks to Haider Raza for his assistance on this blog.
* It is unclear why the Foreign Assistance Dashboard reports planned spending of $350 million for 2011 and 2012; according to CRS reports and the State Department’s Congressional Budget Justification requested appropriations were only $250 million for those years.
** Credit to Lant Pritchett and his creative titles for inspiration for this header.