Obama set to speed aid to Egypt

Obama set to speed aid to Egypt: official

By Warren Strobel

(Reuters) - U.S. President Barack Obama plans to accelerate the pace of American aid to Egypt, a top State Department official said on Wednesday, as the most populous Arab nation reaches a critical stage in its uncertain transition away from autocratic rule.

Undersecretary of State Robert Hormats, part of a U.S. delegation that held unprecedented talks last week with Egypt's Muslim Brotherhood, said Washington wanted to provide "more immediate benefits" to Egyptians, who earlier this month conducted their first democratic elections in decades.

"During this period, we want to be as supportive as we can. This is an historic moment. Egypt's a country of enormous importance," Hormats said.

Under the plan, some non-urgent U.S. aid slated for other countries - he did not name them - would be redirected to Egypt. And funding in the pipeline for long-term programs in Egypt would be shifted to quick-impact projects, he said.

Hormats, speaking to Reuters on the sidelines of the annual World Economic Forum, emphasized that the White House had not made any final decisions, and that he was providing Washington's "broad thinking" on the subject.

It was unclear whether the total amount of U.S. aid to Egypt would be increased. "Whether it's an increase or whether it's reprioritizing existing assistance, we're still working this out," Hormats said.

Still, he made clear the United States wants to be seen as doing more to assist a hoped-for democratic evolution in Egypt, where the military still holds ultimate power on the first anniversary of protests that ousted President Hosni Mubarak.

Egypt has long been among the top recipients of U.S. aid, which began flowing in substantial sums after it became the first Arab nation to sign a peace agreement with Israel in 1979, regarding the money as an investment in regional security.

According to a report by the Congressional Research Service, the United States gave roughly $2 billion or more annually for 25 years after the peace agreement, most of it for the military.

That figure has drifted down to hold steady at around $1.55 billion in recent years.

Congress approved $1.3 billion in military aid to Egypt for the current fiscal year, but with conditions attached. It also approved $250 million in economic aid, as well as an "enterprise fund" of up to $60 million.

For the money to flow, Secretary of State Hillary Clinton must certify that the Egyptian government is supporting the transition to a civilian government, including holding free and fair elections, and implementing policies to protect freedom of expression, association, and religion, and due process of law.

In addition, the law says that none of the aid, military or economic, can be spent unless Egypt is meeting its obligations under the 1979 Egypt-Israel peace treaty.

U.S. lawmakers appear in no mood to approve more, at least for Egypt's military, which has earned U.S. criticism for cracking down on pro-democracy non-governmental organizations and for the way security forces have treated women protesters.

SUPPORT FOR DEMOCRACIES

In his State of the Union address Tuesday, Obama said the United States had a "huge stake in the outcome" of the revolutions that have swept the Arab world. He pledged to "support policies that lead to strong and stable democracies," but offered no concrete proposals for additional assistance.

Obama is to unveil his proposed federal budget for fiscal year 2013, including foreign assistance, on February 13.

He has yet to announce major new aid packages following the overthrow of governments in Egypt,Tunisia and Libya.

U.S. officials have cited fiscal restraints at home, as well as resistance in the Congress.

"It's unfortunate the juxtaposition, that our budgetary constraints come at the same time that you have this enormously hopeful series of changes in the region," Hormats said.

When the Cold War ended in 1989 and it was clear which anti-Communist leaders would take power in former Soviet bloc states, Congress was quick to provide backing "without a lot of cajoling," Hormats noted.

Following the revolts of the "Arab Spring," and in Egypt particularly, "you have a much more fluid situation, and we don't know what the government's going to look like," he said.

Underscoring that point, Hormats last week held what he called the first-ever economic meetings between a senior U.S. official and the Muslim Brotherhood, a once-banned Islamist group that this month won the biggest share of seats in Egypt's lower house of parliament.

The delegation that met with the Brotherhood, which Washington had long kept at arm's length, was led by Deputy Secretary of State William Burns.

Hormats described the half-dozen Brotherhood officials he met with as "very pragmatic. They understand, they're the majority party now in the parliament. They are going to be the primary political party in Egypt. They need to deliver results."

"And their focus primarily is on small- and medium-enterprise" as generators of job creation, he said.

Earlier this month, Representative Frank Wolf, a Virginia Republican, wrote to Obama and Clinton, warning them that recent raids on foreign non-governmental organizations in Cairo could jeopardize U.S. military assistance.

While acknowledging lawmakers' concerns over trends in Egypt and other Middle East countries where dictators have been toppled, Hormats said, "democracy is not always a smooth or predictable process."

"We have to understand that and not expect miracles. ... We have to explain to the American people that patience is needed and support is needed," he said.

Along with formal government assistance to Egypt, the Obama administration is promoting expanded trade ties; supporting efforts by the International Monetary Fund to reach an agreement with Cairo; and encouraging U.S. firms to explore investment.

A U.S. business mission led by General Electric (GE.N) is headed to Egypt next month, Hormats said.

(Additional reporting by Susan Cornwell and Arshad Mohammed in Washington; Editing by Jon Boyle and Sandra Maler)

CAIRO — With the Muslim Brotherhood pulling within reach of an outright majority in Egypt’s new Parliament, the Obama administration has begun to reverse decades of mistrust and hostility as it seeks to forge closer ties with an organization once viewed as irreconcilably opposed to United States interests.


The administration’s overtures — including high-level meetings in recent weeks — constitute a historic shift in a foreign policy held by successive American administrations that steadfastly supported the autocratic government of President Hosni Mubarak in part out of concern for the Brotherhood’s Islamist ideology and historic ties to militants.


The shift is, on one level, an acknowledgment of the new political reality here, and indeed around the region, as Islamist groups come to power. Having won nearly half the seats contested in the first two rounds of the country’s legislative elections, the Brotherhood on Tuesday entered the third and final round with a chance to extend its lead to a clear majority as the vote moved into districts long considered strongholds.


The reversal also reflects the administration’s growing acceptance of the Brotherhood’s repeated assurances that its lawmakers want to build a modern democracy that will respect individual freedoms, free markets and international commitments, including Egypt’s treaty with Israel.


And at the same time it underscores Washington’s increasing frustration with Egypt’s military rulers, who have sought to carve out permanent political powers for themselves and used deadly force against protesters seeking an end to their rule.


The administration, however, has also sought to preserve its deep ties to the military rulers, who have held themselves up as potential guardians of their state’s secular character. The administration has never explicitly threatened to take away the $1.3 billion a year in American military aid to Egypt, though new Congressional restrictions could force cuts.


Nevertheless, as the Brotherhood moves toward an expected showdown with the military this month over who should control the interim government — the newly elected Parliament or the ruling military council — the administration’s public outreach to the Brotherhood could give the Islamic movement in Egypt important support. It could also confer greater international legitimacy on the Brotherhood.


It would be “totally impractical” not to engage with the Brotherhood “because of U.S. security and regional interests in Egypt,” a senior administration official involved in shaping the new policy said, speaking on the condition of anonymity to discuss diplomatic affairs.
“There doesn’t seem to me to be any other way to do it, except to engage with the party that won the election,” the official said, adding, “They’ve been very specific about conveying a moderate message — on regional security and domestic issues, and economic issues, as well.”
Some close to the administration have even called this emerging American relationship with the Brotherhood a first step toward a pattern that could take shape with the Islamist parties’ coming to power around the region in the aftermath of the uprisings of the Arab Spring. Islamists have taken important roles in Morocco, Libya, Tunisia and Egypt in less than a year.


“You’re certainly going to have to figure out how to deal with democratic governments that don’t espouse every policy or value you have,” said Senator John Kerry, the Massachusetts Democrat who is chairman of the Foreign Relations Committee and recently joined with the ambassador to Egypt, Anne W. Patterson, for a meeting with top leaders of the Brotherhood’s political party.
He compared the Obama administration’s outreach to President Ronald Reagan’s arms negotiations with the Soviet Union. “The United States needs to deal with the new reality,” Mr. Kerry said. “And it needs to step up its game.”






In the meeting with the Brotherhood’s Freedom and Justice Party, he said, the Brotherhood’s leaders said they were eager to work with the United States and other Western countries, especially in economic areas.


“They certainly expressed a direction that shouldn’t be a challenge to us, provided they follow through,” he said, adding, “Obviously the proof will be in the pudding.”


Brotherhood leaders, for their part, often talk publicly here of their eagerness for Egypt to have cooperative relations “as equals” with the United States. The Brotherhood renounced violence as a political tool around the time the 1952 revolution overthrew the British-backed monarchy. Over the years, many of its leaders said they had become comfortable with multiparty electoral democracy while serving as members of a tolerated — if marginalized — parliamentary minority under Mr. Mubarak.


They also seem to revel in their new standing. After the meeting with Senator Kerry and Ambassador Patterson, the Brotherhood’s newspaper and Web site reported that Mr. Kerry said “he was not surprised at the progress and leading position of the Freedom and Justice Party on the electoral landscape in Egypt, emphasizing his respect for the public will in Egypt.”


“Egypt is a big country with a long honorable history and plays an important role in Arab, Islamic and international issues, and therefore respects the conventions and treaties that were signed,” the Brotherhood leaders said they told Mr. Kerry.
But, on the group’s English language Web page, the report also urged the United States “to hear the peoples, not to hear of them,” and advised “that America could play a role in the economic development and stability of various peoples of the world, if it wished.”
On Tuesday, the administration intensified its criticism of Egypt’s military rulers over raids that last week shut down 10 civil society groups, including at least 3 American-financed democracy-building groups, as part of an investigation of illicit foreign financing that has been laden with conspiratorial and anti-American rhetoric.


“It is, frankly, unacceptable to us that that situation has not been returned to normal,” a State Department spokeswoman, Victoria Nuland, said, charging that Egypt’s military rulers had broken pledges last week to top American officials, including Defense Secretary Leon E. Panetta.


She called the officials behind the campaign against the organizations “old Mubarak holdover types who clearly are not on the new page with the Egyptian people.”


The administration’s willingness to engage with the Brotherhood could open President Obama to new attacks by Republicans who are already accusing him letting Islamists take over a pivotal ally. Some analysts, though, said the overtures amounted to a tacit admission that the United States should have begun such outreach to the region’s Islamist opposition long ago.


Discreet American contacts with the Muslim Brotherhood go back to the early 1990s, although they were previously limited to unpublicized meetings with members of Parliament who also belonged to the Brotherhood but were elected as independents. And even those timid encounters evoked vitriol from Mr. Mubarak.


“Your government is in contact with these terrorists from the Muslim Brotherhood,” he reportedly told the American journalist Mary Anne Weaver in 1994. “Very secretly, without our knowledge at first,” he said, adding, “I can assure you these groups will never take over this country.”


Shadi Hamid, director of research at the Brookings Doha Center in Qatar, argued that the United States missed chances to build ties to moderate Islamists earlier. When Mr. Mubarak jailed thousands of prominent Brotherhood members in 2005 and 2006, for example, the organization reached out to Washington.


“Now the Brotherhood knows it is in a stronger position and it is almost as if the U.S. is chasing them and they are sitting pretty,” Mr. Hamid said. “But what can the U.S. do, intervene and change the election results?” he asked. “The only alternative is to be against democracy in the region.”


 Egypt’s elections are expected to continue to Wednesday, with runoffs next week, and Parliament’s first session is expected to open Jan. 23, two days before the anniversary of the protests that forced out Mr. Mubarak.