Egypt: Background and U.S. Relations

Egypt: Background and U.S. Relations
Updated August 12, 2008
Jeremy M. Sharp
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division

Egypt: Background and U.S. Relations
This report provides an overview of Egyptian politics and current issues in U.S.-
Egyptian relations. It briefly provides a political history of modern Egypt, an
overview of its political institutions, and a discussion of the prospects for
democratization in Egypt. This report will be updated regularly.
U.S. policy toward Egypt is aimed at maintaining regional stability, improving
bilateral relations, continuing military cooperation, and sustaining the March 1979
Egyptian-Israeli peace treaty. Successive Administrations have long viewed Egypt’s
leaders as a moderating influence in the Middle East, though in recent years, there
have been increasing U.S. calls for Egypt to democratize. Congressional views of
U.S.-Egyptian relations vary. Many lawmakers view Egypt as a stabilizing force in
the region, but some Members would like the United States to pressure Egypt to
implement political reforms, improve its human rights record, and take a more active
role in reducing Arab-Israeli tensions.
The United States has provided Egypt with an annual average of over $2 billion
in economic and military foreign assistance since 1979. The Administration has
requested $1.3 billion in military aid for Egypt in FY2009 — the same amount it
received in FY2008. For FY2009, the Administration is requesting $200 million in
ESF for Egypt, a notable decrease from previous fiscal years. According to the U.S.
State Department’s FY2009 Congressional Budget Justification, “FY 2009 economic
assistance funds for Egypt will decrease from the FY 2008 level, reflecting a more
balanced, mature bilateral relationship consisting of foreign assistance and
commercial linkages.”
There are several pieces of pending legislation on Egypt before the 110th
Congress. Among them, H.Res. 1303, referred to the House Committee on Foreign
Affairs on June 24, 2008, encourages the Egyptian government, among other things,
to honor its commitment to repeal the state of emergency in order to allow for the full
consolidation of the rule of law in Egypt and take the steps necessary to fully
implement and protect the rights of religious minorities as full citizens.

Stagnation in U.S.-Egyptian Bilateral Relations..........................1
Historical Background .............................................2
Egypt During the Colonial Era ...................................2
The Constitutional Monarchy & the British.........................3
Nasser and Egypt During the Cold War.............................3
Egypt-Israeli Peace ............................................5
The Camp David Agreement and 1979 Peace Treaty..............5
Egypt Under Mubarak..........................................6
Regime Structure..................................................7
Overview ....................................................7
The Role of the Military in Egyptian Society....................8
The National Democratic Party (NDP).........................9
Reinforcing Regime Rule.......................................9
Political Opposition and Civil Society.................................11
The Muslim Brotherhood ......................................12
The Brotherhood’s “Party Platform”..........................13
Civil Society in Egypt.........................................13
Organized Labor.............................................14
Current Issues in U.S.-Egyptian Relations..............................15
The Debate over U.S. Assistance to Egypt.........................15
The FY2008 Withholding of U.S. Military Aid..................15
Recent History of Congressional Action on Aid to Egypt .........16
Hamas and the Egypt-Gaza Border...............................18
Overview ...............................................18
Hamas-Egypt Relations....................................18
The Egyptian-Brokered “Cease-Fire” and Rafah Border Crossing...19
Inflation and Prospects for Social Unrest ..........................19
Human Rights, Religious Freedom, and Women’s Rights.............20
Religious Freedom........................................21
Women’s Rights.........................................22
U.S. Foreign Assistance to Egypt....................................22
Economic Aid...............................................23
Military Aid.................................................24
List of Figures
Figure 1. Map of Egypt.............................................3

Table 1: Recent U.S. Foreign Assistance to Egypt.......................25
Table 2. U.S. Foreign Assistance to Egypt, 1946-1997...................26

Egypt: Background and
U.S. Relations
Stagnation in U.S.-Egyptian Bilateral Relations
As the 30-year anniversary of the Camp David peace accords approaches, most
observers believe that U.S.-Egyptian relations must be revitalized. Although
diplomatic ties remain strong, the current paradigm of the relationship has grown
stale and condemnation of Egypt’s poor human rights and democratization record has
increased both in the U.S. media and in Congress. From Egypt’s standpoint, there has
been deep disappointment and anger directed at the U.S. government, as many
Egyptian officials believe that their cooperation with U.S. policy in the region has
been taken for granted. They argue that Egypt dutifully upholds its peace treaty
obligations with Israel and has pushed other parties in the region to pursue peace. In
addition, the Egyptian military facilitates U.S. military requests for transit of the Suez
Canal, overflight of Egyptian territory, and storage of U.S. military equipment in
Egypt. Yet, while other Arab governments have received additional U.S. support in
recent years, Egypt’s annual foreign assistance package has remained flat and, despite
its lobbying, plans for a possible U.S.-Egyptian free trade agreement have been put
on hold.
U.S. officials have found it more difficult to defend U.S.-Egyptian relations in
light of continued reports of regime-sponsored suppression of peaceful opposition
figures. While many U.S. policymakers continue to express gratitude for Egyptian
military cooperation, intelligence sharing, and contributions to international
peacekeeping operations, it would seem that both parties have had difficulty in
publicly framing the relationship around any one issue. Egypt continues to push for
a more active U.S. role in the Middle East peace process, while the United States
continues to push for meaningful government reform in Egypt, albeit less intensely
since the 2006 Hamas electoral victory in Palestinian Authority legislative elections.
The core question for the Administration and Congress remains how to preserve the
strategic benefits of close military, intelligence, and diplomatic relations with Egypt
while promoting political and economic reforms that will ensure the stability and
development of Egypt over the long term.
Experts have posited a variety of reasons for the current stagnation. Egyptian
critics have called their government a gerontocracy, noting that 80-year-old President
Hosni Mubarak continues to be surrounded by some of the same advisors and cabinet
officials from the early 1980s. While some Egyptians consider such stability
reassuring, others contend that the Egyptian government needs to be infused with a
new generation of civilian leaders. Analysts continue to speculate over Mubarak’s
44-year-old son Gamal’s possible ascension to the Egyptian presidency and what his
leadership would mean for U.S.-Egyptian relations. Other observers contend that
Egypt’s regional prominence has declined in recent years, and other countries, such

as Saudi Arabia, have stepped in to the fill this void. Egypt is minimally affected by
violence in Iraq, Afghanistan, and elsewhere. The Gaza Strip is one of the few areas
in the region where it remains influential.
In July 2007, as a part of a larger arms package to the region, the United States
announced that it would provide Egypt with $13 billion in military aid over a ten-year
period. Since Egypt has already been receiving approximately $1.3 billion a year in
military assistance, the announcement represented no major change in Administration
policy toward Egypt. Soon after the announcement, the United States and Israel
signed a memorandum of understanding to provide Israel with $30 billion in military
aid from 2009 to 2018, a 25% increase.
Historical Background
Egypt During the Colonial Era
Egypt’s relations with the West, including its current friendly relations with the
United States, are colored by a long history of foreign intervention in Egyptian
politics, which has made Egypt, along with other Arab states, wary of outside
influences on their domestic affairs. In the 19th century, Egypt was a semi-
autonomous province in the Ottoman Empire, which by then was in decline and
being propped up by the British in order to serve as a buffer between it and Czarist
Russia. At the time, Egypt was viewed as extremely valuable to the British and
French empires and was prized for its agricultural output, large domestic market, and
strategic location between the Mediterranean and Red Seas. Most importantly, the
British saw Egypt as vital to securing the sea route to its most prized colony, India.
Ottoman weakness led its Sultans to grant Europeans certain legal protections and
economic advantages in Egypt, which stifled the Egyptian economy by flooding it
with European manufactured goods, driving local merchants out of business.1
Over time, Egypt developed a “cash crop” economy based almost solely on the
export of cotton, the price of which constantly fluctuated, leaving the economy
vulnerable and dependent on good harvests. Without a strong, diverse economy,
Egypt could not generate enough capital to fund its modernization, leading it to
become even more financially dependent on the West, as it rulers borrowed huge
sums from European banks. Six years after the completion of the Suez Canal in 1869,
Egypt was forced to sell all of its shares in the Suez Canal Company, which operated
the Canal, in order to make payments on its foreign-owned debt. When Egypt could
no longer pay its debts, the British and French became directly involved in Egyptian
politics — a trend that would continue until the mid 20th century.2

1 Library of Congress, Federal Research Division, Egypt: A Country Study, accessible at
[ ].
2 Napoleon invaded Egypt in 1798. The British invaded in 1882 and established a de facto
protectorate. They would keep a sizeable military force in Egypt until the 1950s.

Figure 1. Map of Egypt
The Constitutional Monarchy & the British
Britain unilaterally declared Egyptian independence in 1922, and for the next
three decades, political power in Egypt was contested among three main actors: the
British, the Egyptian monarchy, and the nationalist Wafd party, which was the
driving force behind the Egyptian independence movement after World War I.
Thousands of British troops remained stationed near the Suez Canal, and British
officials served in the Egyptian ministries. Egypt’s king could appoint a government
and dismiss parliament, but ultimately relied on the British for support. The Wafd
party dominated parliamentary elections during Egypt’s experiment with
parliamentary democracy (1922-1952), though the Wafd gradually began to lose
popularity to more radical organizations, such as the Muslim Brotherhood.
Nasser and Egypt During the Cold War
By the early 1950s, anti-British sentiment in Egypt had sparked civil unrest,
allowing a cabal of Egyptian Army officers, known as the Free Officers Movement,
to oust the king in what is referred to as the July 1952 revolution. The Free Officer
Movement ushered in an era of military involvement in Egyptian politics, as all of

Egypt’s presidents in the post-revolutionary period have been high ranking officers.
In the aftermath of the coup, Colonel Gamal Abdul Nasser, the most charismatic of
the Free Officers, succeeded in gaining total control over the government. Nasser
abolished the monarchy and outlawed the Muslim Brotherhood (1954), which at the
time was the only potential rival for power. Nasser would rule Egypt until his death
in 1970.
During the Nasser era, Egypt found itself at the center of superpower
competition for influence in the Middle East. Wary of taking sides, Nasser managed,
for a short period, to steer Egypt clear of either the Soviet or Western “camp” and
was instrumental in helping to establish the non-aligned movement. U.S.-Egyptian
relations soured when Nasser turned to the Soviets and the Czechs in 1955 for
military training and equipment after the West, frustrated by Nasser’s repeated
rejections and his support of Algerian independence against the French, refused to
provide Egypt with defense assistance. A year later, following a U.S.-British
decision to retract an offer of economic assistance and help for the construction of
the Aswan Dam, Nasser nationalized the Suez Canal Company to use its revenues to
finance the dam project. (Egypt owned the Suez Canal, but the British-French
company operated the Canal, and collected the revenues from which it paid a small
rent to Egypt.) In October 1956, Israel, France, and Britain invaded Egypt — Israel
to stop Palestinian guerrillas from using Egypt as a base for operations against Israel,
and France and Britain to occupy the Canal. President Eisenhower persuaded the
three countries to withdraw from Egypt in early 1957, which briefly improved U.S.-
Egyptian relations.3
After the 1956 Suez War, Nasser’s popularity soared, as he came to embody
Arab nationalism in the post-colonial era. Nasser did not hesitate to brandish his
newfound authority and developed a muscular Egyptian foreign policy that attempted
to destabilize pro-Western governments in Jordan, Iraq, and Lebanon, support
Palestinian guerrilla action against Israel, create a unified Arab state by merging
briefly with Syria (the United Arab Republic 1958-1961), and intervene against the
Saudi-backed royalists in the Yemeni civil war.4 However, Egypt’s defeat at the
hands of Israel in the June 1967 War and other setbacks temporarily deflated
Nasser’s popularity and crushed his ambitions to spread a pan-Arab ideology across
the region.
On the domestic front, Nasser turned Egypt into a socialist dictatorship with
absolute power in the hands of the President. All banks and commercial firms were
nationalized, large landowning estates were broken up into much smaller parcels and
held in a state trust, and all political parties were banned. The precursor to the present
National Democratic Party (NDP) was formed by Nasser in 1962 and was called the
Arab Socialist Union. It served as the Egyptian republic’s first mass party and an
extension of the ruling elite. Other movements, such as the Muslim Brotherhood,

3 M.E. Yapp, The Near East Since the First World War, London: Longman, 1991, p. 409.
4 During the Yemeni Civil War of 1963 through 1967, Egypt reportedly used mustard bombs
in support of South Yemen against Saudi-backed royalist troops in North Yemen. See
Federation of American Scientists (FAS) Egypt Special Weapons Guide, available online
at [].

were forced to go underground, as Nasser arrested thousands of Brotherhood activists
after a failed Brotherhood assassination attempt against him in 1954.5
Egypt-Israeli Peace
After Nasser’s death in 1970, Anwar Sadat, one of the original Free Officers,
became President of Egypt. At the time, Egypt was humiliated by its defeat in the
June 1967 War and the ensuing loss of the Sinai Peninsula to Israel. In addition,
military rebuilding expenditures were absorbing nearly 25% of Egypt’s gross
domestic product. Under these circumstances, Sadat calculated that a military victory
was needed to boost his own legitimacy and improve Egypt’s position in any future
negotiations with Israel. The October 1973 War, which initially took Israel by
surprise, was costly for both sides, but succeeded in boosting Sadat’s credibility with
the Egyptian people, enabling him to embark on a path which would ultimately sever
Egypt’s ties to the Soviet Union and bring it closer to the West.
In November 1973, Egypt and the United States restored diplomatic relations
(which had been cut off in 1967), and in December, the two countries participated in
the Geneva peace conference. U.S. Secretary of State Henry Kissinger’s shuttle
diplomacy led to Egyptian-Israeli and Syrian-Israeli disengagement agreements in
1974 and a second set of Egyptian-Israeli disengagements in 1975. The United States
resumed economic aid to Egypt in 1975 after an eight-year hiatus.
The Camp David Agreement and 1979 Peace Treaty. On November 20,
1977, President Sadat made his historic visit to Israel, where he addressed the
Knesset (parliament). Sadat’s visit was symbolic as he became the first Arab leader
to visit Israel, thereby implicitly recognizing the Jewish state. Sadat believed that his
initiative would jumpstart the Arab-Israeli peace process which had stalled.
In the late summer of 1978, Israeli and Egyptian leaders accepted an invitation
from President Carter to attend talks at Camp David, Maryland, intended to save
what had been a faltering peace process. After nearly two weeks of clandestine and
exhausting negotiations, on September 17, 1978, Egypt and Israel, with the United
States as a witness, signed two agreements, A Framework for Peace in the Middle
East and A Framework for the Conclusion of a Peace Treaty between Egypt and
Israel. The first “framework” called for an autonomous Palestinian entity in the West
Bank and Gaza Strip following an Israeli withdrawal. The latter agreement ultimately
led to the signing of the 1979 Israel-Egypt peace treaty. Israel maintained that the two
agreements were not linked, as it did not want to be obligated to grant self-
determination to the Palestinians.

5 One of the Brotherhood activists arrested was Sayyid Qutb, a writer and former
government official whose writings provided a philosophical foundation for Islamic
radicalism. Qutb spent years in prison and, after being briefly released in 1964, was
rearrested and hanged in 1966. See Daniel Benjamin & Steven Simon, The Age of Sacred
Terror (New York: Random House, 1966), p. 62.

On March 26, 1979, President Sadat and Israeli Prime Minister Menachem
Begin signed a peace treaty,6 the first ever between Israel and an Arab country, in a
ceremony at the White House. Three days later, the Arab League voted to expel
Egypt from it ranks. At the time, the rest of the Arab world felt betrayed by Egypt for
making a separate peace with Israel.
The 1979 Peace Treaty between Israel and Egypt ushered in the current era of
U.S. financial support for peace between Israel and her Arab neighbors. In two
separate memoranda accompanying the treaty, the United States outlined
commitments to Israel and Egypt, respectively. In its letter to Israel, the Carter
Administration pledged to “endeavor to take into account and will endeavor to be
responsive to military and economic assistance requirements of Israel.”7 In his letter
to Egypt, former U.S. Secretary of Defense Harold Brown wrote that “the United
States is prepared to enter into an expanded security relationship with Egypt with
regard to the sales of military equipment and services and the financing of, at least
a portion of those sales.”8 Ultimately, the United States provided a total of $7.3
billion to both parties in 1979. The Special International Security Assistance Act of
1979 (P.L. 96-35) provided both military and economic grants to Israel and Egypt at
a ratio of 3 to 2, respectively, though this ratio was not enshrined in the treaty as
Egypt would later claim.
For Egypt, U.S. funds helped to subsidize its defense budget and upgrade its
aging Soviet hardware. Egypt became the second-largest recipient of U.S. aid after
1979. The U.S. assistance program in Egypt also helped modernize the country’s
infrastructure, as U.S. economic assistance was used to build Cairo’s sewer system,
a telephone network, and thousands of schools and medical facilities. The United
States also helped organize the peacekeeping mission along the Egyptian-Israeli
border and the Multi-National Force and Observers (MFO), and still maintains a
rotating infantry task force as part of it.9
Egypt Under Mubarak
Sadat’s rule came to an abrupt end in 1981, when he was assassinated during a
military parade in Cairo by soldiers who also belonged to the Jamaah Islamiyah
(Islamic Group) and Al Jihad, the more radical offshoots of the Muslim Brotherhood.

6 A copy of the 1979 Egyptian-Israeli peace treaty is available online from MidEast Web
Gateway at [].
7 Memorandum of Agreement between the Governments of the United States of America
and the State of Israel, March 26, 1979. Available online at:
[ a.go v. il/mfa/peace%20process/guide% 2 0 t o % 2 0 t h e % 20peace%20process
/us-israel%20memorandum%20of%20agr eement]
8 Letter on United States Defense Assistance to Egypt, March 23, 1979. The Search for
Peace in the Middle East, Documents and Statements, 1967-79, Prepared for the House
Committee on Foreign Affairs by the Congressional Research Service, 1979.
9 The MFO is an independent (non-UN) peacekeeping mission, created as a result of the
1979 peace treaty. The MFO’s expenses are funded in equal parts by Egypt, Israel, and the
United States with additional contributions from Germany, Japan, and Switzerland. For
more information on the MFO, see [].

Hosni Mubarak, Sadat’s Vice President and former commander of the Egyptian Air
Force, immediately ascended to the presidency and has remained in office to the
present day. Under Mubarak, Egypt has continued to maintain good relations with
the United States, as evident in Egypt’s 1991 decision to join the allied coalition
against Saddam Hussein in Operation Desert Storm. The United States and Egypt
began conducting bi-annual joint military training exercises in 1983. U.S. and
Egyptian armed forces served together in Somalia in 1991, and were part of an
international peacekeeping force in Bosnia in the mid 1990s. Egypt now assembles
the “Abrams” M-1 tank at a government facility near Cairo (some components are
shipped from the United States and other components are manufactured in Egypt).
Following the path laid out by Sadat, Egypt has remained at peace with Israel,
although critics have characterized this as a “cold peace.” Mubarak has made a
number of attempts to serve as a broker for Israeli-Palestinian peace talks. During the
Mubarak era, conflict between Egyptian Islamists and the Egyptian authorities
continued, culminating in a period (1992-1997) of violent confrontations between
Islamic militants and Egyptian police.
After the September 11, 2001, terrorist attacks and the ensuing U.S. focus on
promoting democracy in the Middle East, the Mubarak regime has come under
increasing U.S. pressure to accelerate political reforms and make Egypt more
democratic. In an effort to control the reform agenda without relinquishing their grip
on power, Mubarak and the ruling National Democratic Party (NDP) have instituted
some political reforms, while emphasizing the need for economic growth as a
precondition for democratic change.
Regime Structure
Since the 1952 revolution, Egypt
has officially been a republic, and itsEgypt at a Glance
political system has developed some
aspects of a democracy, though mostPopulation:80 million (est.)
observers continue to describe Egypt asGDP per Capita:$1,400
an authoritarian regime dominated by aReligions:90% Sunni Muslim
strong president, who draws his9% Coptic Christian
support from the ruling NationalLiteracy Rate:83% (59% female)
Democratic Party (NDP) and theUnemployment Rate:15%-20% (est.)
military. Under the 1971 Constitution,Source: U.S. Central Intelligence Agency
authority is vested in an electedWorld Factbook 2007.

president who must stand for reelection
every six years.10 The president
10 In 1980, the Constitution was amended to allow the president to run for an unlimited
number of terms, rather than one as was stipulated in the 1971 Constitution. An English

appoints the cabinet, who in turn draft and submit legislation to the legislature, the
People’s Assembly (lower house) and the Shura Council (upper house). The
People’s Assembly debates legislation proposed by government ministries and calls
for amendments to government-sponsored bills but rarely initiates its own bills. The
Shura Council has modest legislative powers and must ratify treaties and
constitutional amendments. Overall, analysts consider Egypt’s legislative branch to
be weak; the ruling party constitutes an overwhelming majority.
In the People’s Assembly, 444 members are elected and ten are appointed by the
President; 176 members of the Shura Council are elected and 88 are appointed.11
People’s Assembly members are elected for five-year terms, and Shura Council
members for six-year terms (one-half the Council members are elected every three
years). The NDP controls 324 seats in parliament, Muslim Brotherhood-affiliated
members hold 88 seats, and the remaining seats are held by a mix of independents
and secular opposition parties. NDP members won 84 of the 88 seats contested in the
June 2007 Shura Council election. Religious parties, such as the Muslim
Brotherhood, are officially banned.
The Role of the Military in Egyptian Society. Although military officers
no longer play a direct role in the affairs of the civilian-run government, the military
remains the preeminent institution in Egyptian society, and has been called on by
successive governments to maintain internal security and regime stability.12 The
military also provides employment and social services for hundreds of thousands of
young people in a country with annual double digit unemployment rates. Military
experts have often asserted that Egypt’s armed forces are bloated and maintain
manpower at unnecessary levels for peacetime, while others contend that the large
size of the military is justified based on the services it provides to soldiers and their
families. Some experts estimate that the military trains 12% of young Egyptian males13
and that defense industries employ over 100,000 people. The military has its own
companies that produce consumer products, pharmaceuticals, and manufactured
goods. The officer corps also benefit from higher salaries, better housing, and high
quality healthcare which help ensure their loyalty to the government. Some members
of the opposition have criticized these special benefits and the military’s fiscal
autonomy, asserting that there is little civilian control over the military’s budget.

10 (...continued)
language version of the Egyptian Constitution is available at
[http://www.parliame EPA/en/sections.j sp?typeID=1&leve lid=54
11 One half of the elected members of the People’s Assembly and the Shura Council must
be farmers and laborers (Art. 87 and Art. 196 of the Constitution).
12 In 1986, President Mubarak called on the military to put down riots in Cairo, sparked by
the protests of police conscripts who were angry with their low pay and poor working
conditions. The military also was deployed in 1977 during riots over a temporary reduction
in food subsidies.
13 Imad Harb, “The Egyptian Military in Politics: Disengagement or Accommodation?,” The
Middle East Journal, Washington, spring 2003. vol. 57, Issue 2, p. 269.

The National Democratic Party (NDP).14 As the ruling party, the NDP
dominates the political scene in Egypt, controlling well over 80% of the seats in
parliament. The party itself is more of a coalition of business and political elites
rather than a coherent and disciplined organization with a unifying ideology. In the
2000 parliamentary election, popular dissatisfaction with the status quo led to the
defeat of many NDP incumbents, though the party maintained its supra-majority in
parliament after a number of “independents” who had been NDP members rejoined
the party. Thereafter, NDP officials embarked on a campaign to improve the party’s
public image, holding the first party congress in 10 years in 2002. Since then, the
NDP has held conferences in each successive year, touting a number of political
reforms under the slogan of “new thinking.” More importantly, the President’s son,
Gamal Mubarak, was appointed to the NDP’s higher policy council, and other young
figures have become more visible in the party.
Reinforcing Regime Rule
Over the last two years, the Mubarak government has tightened its grip on
power and cracked down on domestic opponents (see below). Experts have posited
a myriad of theories behind both the increase in domestic opposition and the
subsequent government crackdown. Some analysts assert that the government is
deliberately flexing its muscles during a delicate period of political transition, as the
president may be grooming his son to succeed him. Others have speculated that the
regime may be sending a message to the international community, particularly the
United States, that it will not be pressured into liberalizing its political system. Still
other observers take a more Marxist approach, citing the growing resentment among
the poor and middle class of the private sector elite, a demographic group which has
disproportionately benefitted in recent years from the state’s economic liberalization
Now entering its third year, the government has used both legal tactics and brute
force to suppress opposition activity. Independent analysts have long noted that the
Egyptian legal system is a labyrinth of codes and procedures that can be twisted to
the state’s benefit when necessary. The following is a sampling of recent government
action to reinforce its rule:
!On August 2, 2008, an Egyptian court sentenced prominent self-
exiled dissident Saad Eddin Ibrahim to two years in prison for
harming Egypt’s reputation through his public writings. The court
ruled that Ibrahim, who is currently abroad, could post a bond of
$1,900 to remain free pending an appeal. In response, the U.S. State
Department issued a press release stating, “We are disappointed by
the recent conviction in Egypt of democracy activist Dr. Saad Eddin
Ibrahim. On August 2, Dr. Ibrahim was convicted of harming
Egypt’s reputation through his writings in the foreign press and was
sentenced to two years in prison. Lawsuits should not be used to
undermine the principles of freedom of expression. We strongly

14 The NDP’s website is available at [].

advocate — in all countries — the protection of civil and political
rights, including freedom of speech and due process.”
!On May 26, 2008, parliament approved a two-year extension of the
emergency laws, which have been in place since Sadat’s
assassination in 1981. During his 2005 election campaign, President
Mubarak pledged to introduce a number of reforms, including the
elimination of the emergency laws which have been used to quell
political dissent by holding people without charge for long periods
and referring civilians to military courts, where they have fewer
!On April 8, 2008, after a two-year delay, Egypt held nationwide
municipal elections for local councils. These councils had been of
little importance in national politics, but became more relevant after
the Egyptian Constitution was amended in 2005. Under the revision
of Article 76, which, for the first time in Egypt’s history legally
established the framework for a multi-candidate presidential
election, the Constitution now requires that all presidential candidate
nominations must obtain the support of at least 250 members of
various elected bodies, including 65 members of the lower house of
parliament, 25 members of the upper house, and 140 members of
various local councils. The Muslim Brotherhood (MB), the only well
organized opposition group in Egyptian politics, boycotted the
elections at the last minute, citing various government attempts to
thwart their participation and rig the results. The MB had initially
fielded several thousand candidates for 52,000 seats in 4,500 local
councils. Bureaucratic obstruction eventually whittled the number of
MB candidates down to a few hundred, of whom only a handful
(perhaps 20) were expected to compete.15 Ultimately, the ruling
National Democratic Party obtained a majority of seats, helping to
maintain its monopoly over the political system
!In September 2007, authorities closed the Association for Human
Rights and Legal Aid after it helped bring a case against the
government over a political activist who died in police custody.
!Also in September, a judge sentenced four newspaper editors,
including Ad Dustour chief Ibrahim Issa (also spelled Eissa), to
prison sentences on charges of defaming President Mubarak and his
son Gamal. Issa was already on trial on charges of “disturbing the
peace and harming national economic interests” after he published
several speculative articles over the health and possible death of
President Mubarak. According to Oxford Analytica, “The regime is
exacting revenge against individuals such as Eissa for their zealous
criticism of the government since the war on Iraq. Much of the
criticism was seen as breaking previous publishing red-lines. While

15 “Egypt Vote Ends with Little Excitement,” Agence France Presse, April 8, 2008.

it would not have been prudent to crack down then given the
international pressure and attention, the context has changed and the
regime is feeling secure enough to repress.”16
!On June 11, 2007, Egypt held a mid-term election for the Shura
Council, the upper chamber of parliament with modest legislative
powers.The NDP won 84 of 88 seats. As usual, opposition activists
charged that the election was marred by irregularities and violations
(e.g. ballot stuffing, obstruction of polling centers, and underage
voting ) committed by the state and NDP. Prior to election day,
police and security forces arrested hundreds of Muslim Brotherhood
members, including several Shura Council candidates claiming that
they violated prohibitions against the use of religious slogans in
political campaign material.
!On March 26, 2007, 34 amendments to the Egyptian constitution
were approved in a popular referendum widely considered to be
managed by pro-government forces. U.S. officials criticized both the
content of the amendments and the expediency of their approval
while Amnesty International called the amendments the “greatest
erosion of human rights in 26 years” in Egypt. Amended Article 179
allows the president to have civilians tried in military courts and
eliminates protections against arbitrary search and arrest in offenses
related to terrorism. Revised Article 88 curtails judicial supervision
of general elections and transfers oversight responsibility to an
electoral commission. In 2000, the Egyptian Supreme Constitutional
Court ruled that elections should have direct judicial oversight.
Revised Article 62 changes the electoral system from a
candidate-centered system to a mixed system of party lists and
individual districts. This revision would further restrict the Muslim
Brotherhood since, as an illegal organization, it cannot field a list of
party candidates (Brotherhood members run as independents). This
amendment also establishes a quota for female lawmakers in
Political Opposition and Civil Society
Over the past few years, political opposition in Egypt has broadened to include
an array of various groups, both secular and religious. However, despite a growing
chorus of regime critics, particularly over the Internet, the Muslim Brotherhood
remains the only serious organized opposition movement in Egypt today.
Nevertheless, labor strikes and spontaneous demonstrations organized by activist
bloggers have received more international attention as of late, despite widespread
political apathy and resignation that pervades Egyptian society.

16 “EGYPT: Press Crackdown Linked to Succession,” Oxford Analytica, November 1 2007.

A handful of legal opposition parties, which must be approved by the
government, serve as the token, official opposition to the NDP.17 Most experts regard
Egypt’s legal opposition parties as divided with limited popular support. In the 2000
parliamentary elections, the principal opposition parties secured just 17 seats, despite
widespread popular dissatisfaction with the ruling NDP. In 2005, these parties fared
even worse, winning just 12 seats.
The Muslim Brotherhood18
The Muslim Brotherhood (MB) was founded in Egypt in 1928 to turn Egypt
away from secularism and toward an Islamic government based on Sharia (religious)
law and Muslim principles.19 The Muslim Brotherhood operates as a religious
charitable and educational institution, having been banned as a political party in
1954; however, many Muslim Brotherhood members run for parliament as
independents. In the 2000 parliamentary elections, 17 independent candidates, who
were regarded as Brotherhood sympathizers, were elected. In 2005, Brotherhood-
affiliated candidates won 88 seats in parliament. Over the years, the Egyptian
government has alternated between tolerating and suppressing the Muslim
Brotherhood, sometimes arresting and jailing its members, and other times allowing
its members to operate almost without hindrance.
Many foreign observers agree that the organization has renounced the use of
violence as a political tactic, while many Egyptian officials continue to perceive the
Brotherhood as a threat and are unwilling to legalize the movement.20 In the United
States, the issue of whether or not to recognize the Muslim Brotherhood as a
legitimate political actor continues to perplex policymakers, particularly after the
September 11, 2001 terrorist attacks. On the one hand, there has been a general
reluctance to push for Islamist inclusion in politics, out of concern that, once in
power, groups such as the Muslim Brotherhood will pursue policies counter to U.S.
interests in the region or will transform states into theocracies like Iran.21 On the
other hand, some experts believe that if Islamists were brought into a functional

17 By law, political parties must be approved by the seven-member Political Parties
Committee (PPC). Since 1977, the Committee has approved 18 political parties and rejected
almost 50.
18 For more information, see CRS Report RL33486, U.S. Democracy Promotion Policy in
the Middle East: The Islamist Dilemma, by Jeremy M. Sharp.
19 The Muslim Brotherhood is generally considered as the parent organization for
Brotherhood branches throughout the Middle East region. Former Brotherhood members
also have formed a number of radical and extremist off-shoots, including Hamas. See Gilles
Kippel, Jihad: The Trail of Political Islam (Cambridge: Harvard University Press, 2002),
p. 151.
20 During the 1940s and early 1950s, the Brotherhood’s paramilitary wing waged a guerrilla
campaign against British rule and, after independence, against Nasser.
21 According to Essam al-Arian, a leading figure in the movement, “The Muslim
Brotherhood does not recognize Israel and rejects the Camp David agreement.... If a popular
referendum were held, we’re sure the people would also reject it.” See, “Egyptian
Government, not People, Recognize Israel,” Inter Press Service, December 21, 2007.

democratic system, then they would temper their rhetoric in order to appeal to a
wider audience.
Most analysts believe that, from an organizational standpoint, the Brotherhood
is the only movement capable of mobilizing significant opposition to the government,
though opinions vary on how much mass support the Brotherhood commands. As is
typical for Islamist groups across the region, the Muslim Brotherhood is strongest
among the professional middle class, controlling many of the professional syndicates
(associations), including those representing engineers, doctors, lawyers and
academ i cs.22
The Brotherhood’s “Party Platform”. For years critics have charged that
the Muslim Brotherhood, like other Islamists groups, has been unable to articulate
concrete policies and has relied too heavily on conveying its agenda through vague
slogans, such as the party mantra of “Islam is the solution.” When the Brotherhood
circulated a draft party platform in late 2007, it generated a great deal of attention and
condemnation by its opponents. The draft, which was contested by a more moderate
faction of the Brotherhood,23 reportedly called for the establishment of a board of
religious scholars with whom the president and the legislature would have to consult
before passing laws. According to one critic, “Reminiscent of Iran’s Guardian
Council, this undemocratically selected body could have the power vested by the
state to veto any and all legislation passed by the Egyptian parliament and approved
by the president that is not compatible with Islamic sharia law....The Muslim
Brotherhood should have looked to Turkey as a model for how to integrate Islam into24
a secular system.” The draft platform also states that neither women nor Christians
may stand for president.
Civil Society in Egypt
Although political opposition continues to be stymied, observers note that, over
the past two decades, Egypt has developed a vibrant civil society, which some
development experts hope will further democratization in the country. The term
“civil society” generally refers to the growing number of non-governmental
organizations (NGOs), charities, and advocacy groups that openly operate in
Egyptian society. Many of these groups pursue so-called “safe issues,” such as
women’s rights, human rights, and social equality, as a way to work toward the much
broader goal of democratization. Often times, the Egyptian government has created
its own associations in order to boost its reform image at home and abroad, such as
the government-sponsored National Council on Human Rights.

22 John Walsh, “Egypt’s Muslim Brotherhood,” Harvard International Review (Cambridge:
winter 2003), vol. 24, issue 4, p. 32.
23 Some observers contend that the authorities deliberately arrested the more moderate
Brotherhood members in order to make the platform reflective of conservative and
hardliners’ positions. See, “Egypt Politics: Brothers at Odds, Economist Intelligence Unit
- ViewsWire, October 15, 2007.
24 “The Muslim Brotherhood Shows its True Colors,” Christian Science Monitor, October

12, 2007.

In Egypt, NGOs are required to apply for legal status and, according to
Association Law 84-2003, NGOs must be registered with the Ministry of Social
Affairs. There are an estimated 16,000 registered civic organizations in Egypt. In
some cases, it may take years before the ministry rules on an application, and many
groups are routinely rejected. If an NGO’s application is rejected, it has few legal
rights and can be shut down. Its members can be imprisoned. However, even
registered NGOs must tread carefully when engaging in sensitive political issues, as
some groups have been periodically closed or have had their legal status revoked.
NGO’s also must report all foreign donations to the Ministry of Social Affairs.
Overall, tolerance for the activities of non-registered groups varies, and many NGOs
operate without any legal protection.25
Organized Labor
While reform-minded intellectuals and conservative Islamists have served as the
backbone of political opposition in Egypt, a series of successful worker strikes in
2007 have led some analysts to speculate that organized labor could be the most
effective opposition movement in Egypt today.26 Low wages and rising inflation have
led to several strikes at mostly government-owned textile factories. One strike, at a
textile factory in the Nile Delta town of Mahalla al Kubra, witnessed a week-long sit-
in of an estimated 20,000 workers. Protestors not only demanded a wage hike, but
expressed their opposition to the government’s economic liberalization strategy,
fearing that privatization plans will lead to job cuts. According to Joel Benin, a
professor at the American University in Cairo, “It seems like the decision is to pacify
the workers and give them what they want and crack down on the intellectuals and
not give them anything.... The workers are more of a threat.” A recent report by
Carnegie Endowment for International Peace speculated that:
recent strikes represented a departure from the tradition of workers holding sit-ins while
work continued, because strikes were seen as hurting Egypt’s national interest. This
perception changed, however, as the reform process advanced. A new feature of the most
recent strikes is that they are ending peacefully, whereas in the past they would be broken
by police force. Some analysts have interpreted this as a sign of the increased societal
tensions around economic reform, while others have seen it as a result of increased27

international scrutiny.
25 Human Rights Watch, “Margins of Repression: State Limits on Non-Governmental
Organization Activism,” July 2005. Available online at [

07/04/egypt11217.htm] .

26 While Egyptian workers belong to a number of trade unions, the Egyptian Trade Union
Federation (also referred to as the General Confederation of Trade Unions), is the sole
legally recognized labor federation.
27 Sufyan Alissa, “The Political Economy of Reform in Egypt: Understanding the Role of
Institutions,” Carnegie Endowment for International Peace, Carnegie Middle East Center,
October 2007.

Current Issues in U.S.-Egyptian Relations
The Debate over U.S. Assistance to Egypt
For the past four years, Congress has debated whether U.S. foreign aid to Egypt
should be conditioned on, among other things, improvements in Egypt’s human
rights record, its progress on democratization, and its efforts to control the Egypt-
Gaza border. Some Members believe that U.S. assistance to Egypt has not been
effective in promoting political and economic reform and that foreign assistance
agreements must be renegotiated to include benchmarks that Egypt must meet to
continue to qualify for U.S. foreign aid. Others have periodically called for
restrictions on U.S. aid to Egypt on the grounds that Egypt’s record on religious
freedom is substandard.
The Administration, some lawmakers, and the Egyptian government assert that
reducing Egypt’s aid would undercut U.S. strategic interests in the area, including
support for Middle East peace, U.S. naval access to the Suez Canal, and
U.S.-Egyptian intelligence cooperation. U.S. military officials argue that continued
U.S. military support to Egypt facilitates strong military-to-military ties. The U.S.
Navy, which sends an average of a dozen ships through the Suez Canal per month,
receives expedited processing for its nuclear warships to pass through the Canal, a
valued service that can normally take weeks for other foreign navies. In addition,
some U.S. lawmakers argue that cutting aid, particularly military assistance, harms
the United States since all of Egypt’s FMF must be spent on American hardware and
associated services and training.
The FY2008 Withholding of U.S. Military Aid. During consideration of
the House version of the FY2008 State, Foreign Operations, and Related Programs
Appropriations bill (H.R. 2764), lawmakers inserted new language that proposed to
withhold $200 million in Foreign Military Financing assistance (FMF) to Egypt until
the Secretary of State certifies that Egypt has taken concrete steps toward improving
its human rights record, strengthening judicial independence, and curbing Palestinian
smuggling along the Gaza border.
Despite vociferous protests from the Egyptian government asserting that this
conditionality would harm bilateral relations, Congress passed legislation that
temporarily suspended some aid to Egypt. P.L. 110-161, the FY2008 Consolidated
Appropriations Act, contained Section 690, which withheld the obligation of $100
million in FMF or ESF until the Secretary of State certifies, among other things, that
Egypt has taken concrete steps to “adopt and implement judicial reforms that protect
the independence of the judiciary; review criminal procedures and train police
leadership in modern policing to curb police abuses; and detect and destroy the
smuggling network and tunnels that lead from Egypt to Gaza.”
Both during consideration of P.L. 110-161 and after its passage, Egyptian
officials charged that certain Israeli officials were publicly supporting congressional
efforts to condition U.S. aid to Egypt in order to compel for more Egyptian
cooperation in tightening control over the Gaza border. In a January 2008 interview,
Egyptian Foreign Minister Ahmed Aboul Gheit said that “Israel has succeeded in

inciting the U.S. Congress, and not the U.S. Administration, by putting some sticks
in the wheels of this relationship.... Some people on the U.S. side adopted the Israeli
position, and the U.S. aid program (to Egypt) came to be targeted.... We succeeded
in cutting Israel down to its real size as far as its talk about the tunnels is
Israeli leaders suggested that Egypt’s accusations were overblown. During a
December 2007 Israeli Knesset Foreign Affairs and Defense Committee meeting,
Israeli Foreign Minister Tzipi Livni defended the Israeli Foreign Ministry’s decision
not to distribute alleged video footage of Egyptian soldiers assisting Hamas
smugglers to U.S. lawmakers, stating that “Some things are done on stage, some are
done in Congress, and some other things are done behind the scenes. Every move
needs to be calculated. To take an extreme scenario, would you sever relations with
Egypt over weapons smuggling?”29
Although the Administration ultimately waived the restrictions laid out in
Section 690 of the FY2008 Consolidated Appropriations Act,30 questions remain over
whether congressional action successfully achieved a change in Egypt’s behavior.
According to Representative Steve Israel, “From the moment Congress began
circulating the language conditioning aid to Egypt, the Egyptians began to make an
effort to close the tunnels.”31 During and after the debate on aid conditionality, the
Administration sought to broker a solution to the smuggling problem that was
amenable to all parties. In late 2007, the Administration set aside $23 million of
Egypt’s annual Foreign Military Financing (FMF) toward the procurement of more
advanced detection equipment, such as censors and remote-controlled robotic
devices. On June 16, 2008, U.S. Embassy in Cairo Spokesman Robert Greenan said
that a U.S. (Defense Department) team had begun training Egyptian forces in using
electronic equipment to detect smuggling tunnels.
Recent History of Congressional Action on Aid to Egypt . Since theth
108 Congress, there have been several attempts in Congress to reduce or reallocate
U.S. assistance to Egypt, including the following.
108th Congress
!An amendment offered on July 15, 2004, to the House FY2005
foreign operations bill (H.R. 4818) would have reduced U.S. military
aid to Egypt by $570 million and increased economic aid by the
same amount, but the amendment failed by a vote of 131 to 287.

28 “Egyptian FM says Israel Incited U.S. Congress to Withhold Aid,” Ha’aretz, January 15,


29 See, “Livni, Gheit to Patch up Relationship,” Jerusalem Post, April 29, 2008.
30 In March 2008, U.S. Secretary of State Condoleezza Rice stated that “I have exercised
on behalf of the United States the waiver in terms of Egyptian assistance.... The Bush
Administration sought to have that flexibility. We believe that this relationship with Egypt
is an important one and that the waiver was the right thing to do.”
31 “Threat To Cut U.S. Aid Opens Rift With Egypt,” The Forward, January 9, 2008.

109th Congress
!An amendment offered on June 28, 2005, to the House FY2006
foreign operations bill (H.R. 3057) would have reduced U.S. military
aid to Egypt by $750 million and would have transferred that amount
to child survival and health programs managed by USAID. The
amendment failed by a recorded vote of 87 to 326.
!H.R. 2601, the FY2006/FY2007 House Foreign Relations
Authorization bill, would have reduced U.S. military assistance to
Egypt by $40 million for each of the next three fiscal years, while
using the funds to promote economic changes, fight poverty, and
improve education in Egypt. There was no comparable provision in
the Senate’s Foreign Relations Authorization bill (S. 600).
!On May 25, 2006, the House Appropriations Committee in a voice
vote rejected an amendment to cut $200 million in military aid to
Egypt during markup of H.R. 5522, the FY2007 Foreign Operations
Appropriations Bill. In June 2006, the House narrowly defeated an
amendment (198-225) to the bill that would have reallocated $100
million in economic aid to Egypt and used it instead to fight AIDS
worldwide and to assist the Darfur region of Sudan. Many supporters
of the amendment were dismayed by the Egyptian government’s
spring 2006 crackdown on pro-democracy activists in Cairo.
Representative David Obey of Wisconsin sponsored both
!In report language (H.Rept. 109-486) accompanying the House
version of H.R. 5522, the FY2007 Foreign Operations
Appropriations Bill, appropriators recommended that the
Administration rescind $200 million in cash assistance funds
previously appropriated but not yet expended. The Senate version
recommended rescinding $300 million from prior year ESF
assistance for Egypt.
110th Congress
!On February 15, 2007, Congress passed H.J.Res 20, the FY2007
Revised Continuing Appropriations Resolution (P.L. 110-5). Section
20405 of the act rescinded $200 million in previously appropriated
economic assistance to Egypt.
!Section 690 of P.L. 110-161, the Consolidated Appropriations Act,
FY2008, withheld the obligation of $100 million in FMF or ESF
until the Secretary of State certifies, among other things, that Egypt
has taken concrete steps to “detect and destroy the smuggling
network and tunnels that lead from Egypt to Gaza.”

Hamas and the Egypt-Gaza Border
Overview. Since Israel unilaterally dismantled its settlements and withdrew its
troops from the Gaza Strip in August 2005, it has repeatedly expressed concern over
the security of the Egypt-Gaza border. Israel claims that smuggling of sophisticated
weaponry into the Gaza Strip could shift the balance of power in Hamas’s favor.
Israel also asserts that Egypt is not adequately sealing its side of the border, citing the
breakthrough of hundreds of thousands of Palestinians who rushed into Egypt on
January 23, 2008. Egypt claims that Israel has not only exaggerated the threat posed
by weapons smuggling, but is deliberately acting to “sabotage” U.S.-Egyptian
relations by demanding that the United States condition its annual $1.3 billion in
military assistance on Egypt’s efforts to thwart smuggling.
Hamas-Egypt Relations. Hamas’s control of the Gaza Strip poses a
challenge for Egypt, which wants to keep Hamas isolated, but not be held solely
responsible for failing to do so by either Israel or the United States. In addition, the
secular Mubarak regime is opposed to Islamists wielding real political power, and it
fears that Hamas could serve as a model for Egyptian Muslim Brotherhood activists
who may secretly yearn for an Iranian-style revolution in Egypt. Moreover, due to
domestic political sensitivities in Egypt, its leaders have sought to avoid the
appearance of harming Palestinian civilians. Based on the events of January 23,
Egyptian forces appear unwilling to shoot either Hamas members or civilians who
breach the border fence unless it is in self-defense. Hamas deftly exploits Egyptian
public opinion to its benefit and to the detriment of Egypt’s military. According to
Mouin Rabbani, an analyst at the International Crisis Group think tank in Jordan,
“Egypt is confronted with what for them is a nasty dilemma — put in the position of
being co-jailer of Gaza Palestinians.”
Hamas has criticized Egypt for indirectly supporting Israel’s Gaza isolation
policy. In an interview conducted by the International Crisis Group, one unnamed
Hamas official said:
Egypt and Israel have turned Gaza into a prison. In a prison, only five things are
available: air, water, light, food, and medicine. That is all Egypt and Israel make
available to us. We cannot put Egypt and Israel on a par, but the Egyptians share
the responsibility. They are doing nothing, less than nothing if that’s possible,32
and it is a disgrace.
On April 8, a Hamas spokesperson threatened to breach the border again, stating
that “I expect that what will happen next will be greater than what happened before,
not only against the Egyptian border, but against all the crossings.” In May 2008,
Hamas again warned that desperate circumstances inside Gaza would lead to an
“unprecedented explosion”along the border with Egypt. Although a Hamas official,
Sami abu Zahri, immediately softened the group’s rhetoric, stating that “Hamas has
no plan to knock down the border fence or to target Egyptian border guards,” Egypt

32 “Ruling Palestine I: Gaza Under Hamas,” International Crisis Group, Middle East Report,
number 73, March 19, 2008.

has started construction of 11-foot high concrete wall along its Gaza border to deter
future provocations.
In recent months, Israel has quietly expressed support for Egypt’s border efforts.
Yuval Diskin, head of Israel’s internal intelligence service (Shin Bet), stated that “the
Egyptian activity isn’t perfect and much more must be done but they are preventing
more smuggling attempts.”33
The Egyptian-Brokered “Cease-Fire” and Rafah Border Crossing.
On June 17, 2008, Egypt announced that it had successfully brokered a six-month,
Israeli-Hamas unofficial cease-fire agreement. Reportedly, the United States
supported Egypt’s role as a mediator between Israel and Hamas (a U.S.-designated
Foreign Terrorist Organization). Previous cease-fire arrangements have been short-
lived, and many observers expect that this new arrangement will ultimately break
down. Nevertheless, media reports indicate that under the terms of the truce (or
calm), Israel will ease its Gaza closure policy, and may stop objecting to the
reopening of the Rafah border crossing34 if, among other things, discernible progress
is made on the release of Gilad Shalit, the Israeli soldier who has been held by Hamas
for nearly two years.
Since Shalit was captured on June 25, 2006, the Rafah Crossing Point has been
closed for normal operations and open on an exceptional basis only. In order to
resume its normal operation, Israel, Egypt, and the international community have
demanded that the Palestinian Authority be allowed to resume control over the Gaza
side of the border. So far, Hamas has rejected this position and has insisted that it
retain control over its side of the crossing.
Inflation and Prospects for Social Unrest
With the price of oil at an all-time high, consumers throughout the developing
world are being financially squeezed by subsequent increases in the price of fuel,
food, and other basic necessities. In Egypt, where an estimated 20% of the country’s
80 million citizens live in poverty (international estimates suggest that up to 40% of
Egyptians lived on less than $2 a day), there is some concern that inflationary
pressures could lead to social unrest. Most middle and lower class Egyptians have not
benefitted from strong macroeconomic growth (7.1% in 2007), and bread prices have

33 “Diskin: Egypt doing More to Stop Arms Smuggling; PM, Abbas to Meet Today,”
Ha’aretz, April 7, 2008.
34 The Rafah crossing point is the only non-Israeli army-controlled access point for
Palestinians to leave Gaza. When Israel unilaterally withdrew from the Gaza Strip in 2005,
Secretary of State Rice helped broker an agreement (“The Agreement on Movement and
Access”) between Israel, Egypt, and the Palestinian Authority to provide Gazans access
through the Rafah terminal. Israel agreed to allow the European Union to maintain a Border
Assistance Mission (EUBAM) to monitor the Rafah crossing. Without a physical presence
on the border, Israel monitored the checkpoint using closed-circuit cameras. Most
importantly, Israel retained the power to open and close the crossing based on its assessment
of the security situation. After Hamas took over the Gaza Strip in June 2007, Egypt worked
with Israel to close the Rafah crossing.

climbed nearly 50% over the past year. Bread is heavily subsidized in Egypt, where
anyone can buy it, though in limited quantities. As food prices have increased,
consumer demand for subsidized bread also has risen.35 Many observers assert that
the entire subsidy system is broken, as many government-subsidized bakeries
conspire with corrupt bureaucrats and inspectors to sell their allotments to private
bakeries. Larger families in need of more bread must turn to private distributors,
whose prices have skyrocketed, and shortages have compelled President Mubarak to
order the military to bake additional loaves. In the past several months, an estimated
11 people have died in bread lines either from heat exhaustion or stab wounds
suffered in altercations for positions in line.36 In 1977, when the Egyptian
government temporarily lifted its bread subsidy, 70 people were killed in rioting, and
then President Sadat had to order the military to deploy to Cairo to restore order. For
five days, the government lost control of its capital city.
As of June 2008, the economic situation for middle and lower class Egyptians
has not improved, and some analysts are beginning to speculate that the food crisis
and inflation may threaten the Mubarak regime’s very survival. In early April 2008,
spontaneous demonstrations and rioting broke out in Mahalla al Kubra, as protestors
responded angrily to the government’s heavy-handed attempts to deter activists from
carrying out a nation-wide general strike called for Sunday, April 6. During the riot,
protestors destroyed portraits of President Mubarak, two schools were burned, and
70 people were injured from tear gas and rubber bullets used by the police. One
bystander, a 15-year-old, was shot while standing in the third-floor balcony of his
apartment.37 The Egyptian government sent a high-level delegation to the town to
calm tensions, offering bonuses and higher wages for workers. In June, protests again
erupted in the Mediterranean town of Burullus after local officials banned the sale of
subsidized flour directly to people in order to crack down on black market trading.
According to various reports, 60 were injured in the melee and 87 arrested.
President Mubarak and his government have made some attempt at easing the
inflation burden on average consumers. In April, the president announced a 30%
public-sector wage increase. A month later, the government expanded its food ration
program to cover an additional 17 million people, making more than 70% of the total
population eligible for subsidized rations. However, after the government announced
that these expanded social welfare benefits would be paid for by lifting fuel subsidies
and thereby raising gas prices, public anger grew, and the government lost any of the
good will it had accrued from earlier plans to relieve consumers.
Human Rights, Religious Freedom, and Women’s Rights
As a major recipient of U.S. assistance, Egypt has been of great interest to
lawmakers, some of whom believe that portions of U.S. aid should be conditioned

35 The subsidized price of a 110-pound sack of flour has been less than $3 for years. In early

2008, it reached $45 on the open market. See, “In Egypt, Upper Crust Gets the Bread;

Shortage Exposes Inequities,” Washington Post, April 5, 2008.
36 “Struggling Country Where Bread Means Life,” Guardian (UK), April 12, 2008.
37 “Two Die after Clashes in Egypt Industrial Town,” Reuters, April 8, 2008.

on improvements in Egypt’s human rights record. According to the U.S. State
Department’s 2007 Country Reports on Human Rights Practices, the Egyptian
government’s respect for human rights “remained poor, and serious abuses continued
in many areas.” The 2007 report, as in past years, documents several instances of
torture allegedly carried out by Egyptian security forces. The prison system,
particularly detention facilities used for incarcerating suspected Islamist radicals, has
come under increasing international scrutiny for exacerbating militancy in the region
due to its tendency to harden some criminals who have been tortured over prolonged
periods of time. Several of Al Qaeda’s leaders, including second-in-command Ayman
al Zawahiri, were former prisoners in Egyptian jails.
International human rights organizations have long documented instances of
torture, arbitrary detainment, and discrimination against women, homosexuals, and
Coptic Christians in Egypt. In 2007, the international human rights watchdog group
Human Rights Watch actually commended the government for convicting two police
officers on charges of illegally detaining, beating and then raping a 21-year-old
mini-bus driver while he was in police custody.38 However, some observers suggest
that the incident was an attempt to placate the international community and would
never have come to light had Egyptian bloggers not circulated over the internet a cell
phone video of the bus driver’s beating.
Some Egyptian and international human rights activists have charged that U.S.
human rights policy toward Egypt is hypocritical, asserting that U.S. policymakers
have not adequately championed improved human rights in Egypt due to realpolitik
considerations in the region. In addition, several reports suggest that, since the
September 11, 2001, terrorist attacks, the U.S. Central Intelligence Agency has
deported several suspected Al Qaeda operatives to Egypt (along with other Arab
countries) in order to be interrogated and possibly tortured.39 Some observers have
questioned the credibility of U.S. human rights policy toward Egypt, if, on the one
hand, the United States condemns Egyptian practices of torture and illegal
detainment, and, on the other hand, the United States condones Egyptian government
behavior when it suits the interests of U.S. national security.
Religious Freedom. There is no official government policy of discrimination
against the 9 million Coptic Christians in Egypt, and the Constitution provides for
equal rights without regard to religion. Nevertheless, critics note that there are no
Christians serving as governors, police commissioners, city mayors, public university
presidents, or deans.40 Although Coptic Christians play a prominent role in the
private sector, the U.S. State Department’s 2007 International Religious Freedom
Report notes that only 6 Christians (5 appointed, 1 elected) serve in the 454-seat

38 “Egypt: Police Officers Get Three Years for Beating, Raping Detainee,” Human Rights
Watch, November 7, 2007.
39 Egypt has admitted that between 60 and 70 of its citizens have been seized abroad and
flown to Egypt. See, “Inside the Dark World of Rendition,” The Independent (London), June

8, 2007.

40 Egypt’s Minister of Finance, Yusef Boutros-Ghali, hails from a prominent Christian

People’s Assembly and only 2 Christians serve in the 32-member cabinet.41 Converts
to Christianity in Egypt may face bureaucratic obstacles in registering their new
religious status with the state. In addition, there have been reports of periodic
discrimination against small minority communities of Baha’is (an estimated 2,000
Baha’is live in Egypt), Shiites, and Jews (200 remain in Egypt). However, in January
2008, an Egyptian court ruled that Baha’is may obtain state documents if they omit
listing their faith on their identification cards, a move that repudiates the Muslim
religious establishment’s longtime refusal to recognize the Baha’i faith.
Despite government efforts to improve Muslim-Christian relations, a number
of obstacles remain. For example, the 10 articles of “Humayun,” or the Humayun
Code, a portion of Ottoman legislation from 1856, still controls the building or repair
of churches in Egypt and is a source of great aggravation to Coptic Christians. Under
this law, a license is required to erect a church. In addition, there are ten restricting
conditions for the construction of churches, including a minimum distance between
churches and between a church and the nearest mosque, as well as the absence of
objection on the part of Muslim neighbors. In December 2004, President Mubarak
issued a new decree that devolved church repair and reconstruction decisions to the
provincial level and stipulated that churches would be permitted to proceed with
rebuilding and repair without legal hindrance. However, permits for construction of
new churches require a presidential decree.
Women’s Rights. Although Egyptian women have played major roles in the
country’s drive for independence and many women currently serve in prestigious
public posts, women face a number of obstacles at the legal, religious, and cultural
levels. Female genital mutilation (FGM) remained a serious problem because of
widespread cultural acceptance, despite the government’s attempts to eliminate the
practice. Moreover, personal status laws governing marriage, divorce, custody, and
inheritance discriminate against women, particularly when it comes to divorce, as
there is much societal resistance to breaking up the family unit. Domestic violence
also is a major issue, as some estimate that as many as a third of all married Egyptian
women have faced some form of physical abuse.42 In recent years, new non-
governmental organizations have started to provide services and counseling to
women who may be too afraid to go to the authorities.
U.S. Foreign Assistance to Egypt
Since 1979, Egypt has been the second largest recipient, after Israel, of U.S.
foreign assistance. Congress typically earmarks foreign assistance for Egypt in the
foreign operations appropriations bill.

41 U.S. State Department, International Religious Freedom Report 2007, Released by the
Bureau of Democracy, Human Rights, and Labor, September 14, 2007.
42 Human Rights Watch, “Divorced from Justice: Women’s Unequal Access to Divorce in
Egypt,”June 2004. Available online at [].

Economic Aid
Annual bilateral economic assistance to Egypt is provided as both a direct cash
transfer to the Egyptian government and as funds for USAID programming in Egypt.
In recent years, Congress has sought to specify how Egypt’s economic aid would be
spent, prioritizing funding for USAID’s democracy and education programs. Egypt
claims that U.S. assistance programs must be jointly negotiated and cannot be
unilaterally dictated by the United States.43
U.S. economic assistance to Egypt has been decreasing since 1998, when the
United States began reducing economic assistance to Egypt and Israel. In January
1998, Israeli officials negotiated with the United States to reduce economic aid and
increase military aid over a 10-year period. A 3 to 2 ratio similar to U.S. aid to Israel
and Egypt was applied to the reduction in aid ($60 million reduction for Israel and
$40 million reduction for Egypt), but Egypt did not receive an increase in military
assistance. Economic aid dropped in annual $40 million increments from $815
million in FY1998 to $415 million in ESF in FY2008.44
Due to the Egyptian economy’s strong macroeconomic growth, a growing desire
for more U.S.-Egyptian trade, and a reluctance by the Egyptian government to accept
“conditions” on U.S. aid, U.S. and Egyptian officials have expressed a desire to
“graduate” Egypt from U.S. bilateral economic assistance. However, neither the
United States nor Egypt seem to agree on how aid should be reduced over the coming
decade. Egypt would like to establish an endowment to jointly fund development
projects. Some analysts believe that the proposed endowment, which reportedly
would be matched by the Egyptian government on a dollar-for-dollar basis, would
serve as a substitute for the annual appropriations process and shield Egypt from
potential conditionality agreements mandated by Congress. So far, the
Administration has moved ahead with its own plans for reducing economic aid to
For FY2009, the Administration is requesting $200 million in ESF for Egypt,
a notable decrease from previous fiscal years. According to the U.S. State
Department’s FY2009 Congressional Budget Justification, “FY2009 economic
assistance funds for Egypt will decrease from the FY 2008 level, reflecting a more
balanced, mature bilateral relationship consisting of foreign assistance and
commercial linkages.” Of the $200 million FY2009 ESF request, $110 million will

43 Congress seeks to ensure that U.S. foreign assistance for Egypt is being appropriately
used to promote reform. In conference report (H.Rept. 108-792) language accompanying
P.L. 108-447, the FY2005 Consolidated Appropriations Act, conferees specified that
“democracy and governance activities shall not be subject to the prior approval of the GoE
[government of Egypt]. The managers intend this language to include NGOs and other
segments of civil society that may not be registered with, or officially recognized by, the
GoE. However, the managers understand that the GoE should be kept informed of funding
provided pursuant to these activities.”
44 Egypt has periodically received supplemental aid. The FY2003 Emergency Supplemental
Appropriations Act (P.L. 108-11) included $300 million in ESF for Egypt, which was used
to cover the costs of up to $2 billion in loan guarantees issued over three years.

be used for education and health projects managed by USAID; $45 million will be
used for democracy programs, including direct grants to Egyptian NGOs; and $44
million will be provided to Egypt as a direct cash transfer to help Egypt further
liberalize its economy.
Military Aid
The Administration has requested $1.3 billion in FMF for Egypt in FY2009 —
the same amount it received in FY2008. FMF aid to Egypt is divided into three
general components: (1) acquisitions, (2) upgrades to existing equipment, and (3)
follow-on support/ maintenance contracts. According to U.S. and Egyptian defense
officials, approximately 30% of annual FMF aid to Egypt is spent on new weapons
systems, as Egypt’s defense modernization plan is designed to gradually replace most
of Egypt’s older Soviet weaponry with U.S. equipment.45 That figure is expected to
decline over the long term due to the rising costs associated with follow-on
maintenance contracts. Egyptian military officials have repeatedly sought additional
FMF funds to offset the escalating costs of follow-on support. They point out that as
costs rise, static aid appropriations amount to a reduction in net assistance. Egypt also
receives Excess Defense Articles (EDA) worth hundreds of millions of dollars
annually from the Pentagon. Egyptian officers also participate in the IMET program
($1.3 million requested for FY2009) in order to facilitate U.S.-Egyptian military
cooperation over the long term.
In addition to large amounts of annual U.S. military assistance, Egypt also
benefits from certain aid provisions that are available to only a few other countries.
Since 2000, Egypt’s FMF funds have been deposited in an interest bearing account
in the Federal Reserve Bank of New York and have remained there until they are
obligated. By law (P.L. 106-280), Congress must be notified if any of the interest
accrued in this account is obligated. Most importantly, Egypt is allowed to set aside
FMF funds for current year payments only, rather than set aside the full amount
needed to meet the full cost of multi-year purchases. Cash flow financing allows
Egypt to negotiate major arms purchases with U.S. defense suppliers.

45 According to a 2006 Government Accountability Office report, over the life of Egypt’s
FMF program, Egypt has purchased 36 Apache helicopters, 220 F-16 aircraft, 880 M1A1
tanks, and the accompanying training and maintenance to support these systems, among
other items. See [].

Table 1: Recent U.S. Foreign Assistance to Egypt
($s in millions)
Fiscal YearEconomicMilitaryIMETTotal
1948-1997 23,288.6 22,353.5 27.3 45,669.4
1998 815.0 1,300.0 1.0 2,116.0
1999 775.0 1,300.0 1.0 2,076.0
2000 727.3 1,300.0 1.0 2,028.3
2001 695.0 1,300.0 1.0 1,996.0
2002 655.0 1,300.0 1.0 1,956.0
2003 911.0 1,300.0 1.2 2,212.2
2004 571.6 1,292.3 1.4 1,865.3
2005 530.7 1,289.6 1.2 1,821.5
2006 490.0 1,287.0 1.2 1,778.2
2007 450.0 1,300.0 1.3 1,751.3
2008 411.6 1,289.4 1.2 1,702.2
T otal 30,320.8 36,611.8 39.8 66,972.4

Table 2. U.S. Foreign Assistance to Egypt, 1946-1997
(millions of dollars)
MilitaryMilitaryI.M.E.T EconomicD.A.D.A.ESFESF P.L. 480P.L. 480
YearTotal Loan GrantGrant GrantLoanGrantLoanGrantIII
9.6 Surplus0.3
1.4 1.4
Sur p lus
0.1 0.1 Tech
1.2 0.4 0.8
12.9 12.9
4 3.3 0.7
66.3 7.535.3 23.5
33.3 2.6 13.217.5
1 0.7 0.3
0.6 0 0.6
44.8 2 33.98.9
65.9 15.45.7 36.68.2
73.5 2.3 48.622.6
200.5 202.220 11444.3
146.7 36.32.310 78.519.6
95.5 1.4 85.28.9
97.6 2.3 84.910.4
27.6 1.5 16.49.7
12.6 0.8 11.8
1.5 1.5
0.8 0.8
370.1 194.358.5104.512.8
464.3 5.4150102.8201.74.4
Q552.5 429107.814.61.1
907.8 60099.2196.811.7
943.2 0.20.1 Narc. 617.4133.3179.712.5
2588.51500 0.4 250585230.722.4
1167.3 0.8 280585285.316.1
1681.2550 0.8 70759272.528.9
1967.37002002.4 77126231.9
23329004251.9 750238.316.8
2470.89004651.7 852.9237.513.7

MilitaryMilitaryI.M.E.T EconomicD.A.D.A.ESFESF P.L. 480P.L. 480
YearTotal Loan GrantGrant GrantLoanGrantLoanGrantIII
2468.7 11751.7 1065.1213.813.2
2539.1 1244.11.7 1069.2217.56.6
2317 13001.8 819.7191.73.9
2174.9 13001.5 717.81532.6
2269.6 13001.5 1.5 815150.51.2
2397.4 1294.41.6 898.4203
2300.2 13001.9 780.816552.5
2235.1 13001.8 892.940.4
2052.9 13001.8 747.0 4.1
1868.6 13000.8 561.6356.2
2414.5 13001 0.2 1113.3
2116.6 13001 815 0.6
2116 13001 815
o tal 45669.4 4550 17803.5 27.3.0 11.2 80.7 82.8 2620.7 15923.8 4 ,114.3 455.1
Notes: Totals may not add due to rounding. No U.S. aid programs for years 1947, 1949, 1950, 1968,
1969, 1970, and 1971. P.L. 480 II Grant for 1993 includes $2.1 million in Sec. 416 food donations.
TQ = Transition Quarter; change from June to September fiscal year
* = less than $100,000
I.M.E.T. = International Military Education and Training
UNRWA = United Nations Relief and Works Agency
Surplus = Surplus Property
Tech. Asst. = Technical Assistance
Narc. = International Narcotics Control
D. A. = Development Assistance
ESF = Economic Support Funds
P.L. 480 I = Public Law 480 (Food for Peace), Title I Loan
P.L. 480 II = Public Law 480 (Food for Peace), Title II Grant
P = Preliminary