The U.S. Must Rethink Its Aid Strategy with Egypt

Egyptian President Abdel Fattah el-Sisi. Photo by the Official Internet Resources of the President of Russia.

As one of the most influential nations in the Middle East, Egypt wields considerable influence in shaping the region’s geopolitics, particularly in light of the conflict between Israel and Palestine. Recently, increased fighting in the Sinai Peninsula and the mass displacement of Palestinians from Gaza have had a significant spillover into Egypt, negatively impacting the Egyptian economy and the country’s political stability. Although Egypt has long been involved in Israel’s conflict with Palestine due to the country’s geographical proximity and diplomatic engagements with both parties, escalating violence within Gaza marks a crucial turning point, exacerbating Egypt’s economic and political involvement amid the war.

While Egypt gains the alliance and financial support from Western powers to aid in war recuperation efforts, more resources should be made to encourage structural reforms within Egypt rather than allocating funding for military purposes. Egypt’s autocratic governance under President Abdel Fattah al-Sisi and the resulting dissatisfaction among Egyptians necessitate foreign assistance beyond financial means. Through humanitarian engagement with Egypt, the U.S. can promote political stability given President Abdel Fattah al-Sisi’s autocratic governance style. Beyond this, Egypt is part of an essential strategy for the political and economic stability of the greater Middle East. Western powers, particularly the United States, have a responsibility to push for smarter governance and adherence to human rights commitments in Egypt to ensure political stability within Egypt and the greater Middle East for years to come. The United States should substantively engage with Egypt to both alleviate the region’s direct impact from the war in Gaza and further its security interests in maintaining a regional foothold. 

The War in Gaza’s Impact Within Egypt

Throughout the war, Egypt’s economic conditions have rapidly declined, further exacerbated by political divisions between the Sisi administration and Egyptian citizens.

Sharing a border with the contentious Gaza Strip through the Rafah Border Crossing, Egypt’s geographical proximity directly places them in the center of the war’s immediate impact. Due to the conflict, the crossing has grown in significance, serving as the sole gateway for humanitarian aid and evacuees from Gaza into Egypt. While the Egyptian government previously controlled the crossing, the Israeli government seized control of the crossing on May 7 as an escalation of Israel’s invasion of the city of Rafah. Israel’s invasion of the border crossing bears major repercussions on Egypt, in turn blocking the full extent of aid into Gaza and undermining Egypt’s territorial integrity. 

Israel’s incursion into Rafah alarms Egyptian officials due to issues of national security and risks of heightened economic strain. As of this past May, over 100,000 Gazans have crossed over into Egypt, with numbers steadily increasing. However, President Sisi remains adamant about his resistance against allowing evacuees from entering the country’s borders, citing fears of Hamas’ infiltration into the country’s territory and the entry of displaced Palestinians—both security concerns that Egypt is unwilling to assume responsibility for. 

All the same, while the Sisi administration has sought to restrict the outflow of displaced Palestinians, Egypt’s economy has faced the brunt of the war’s spillover. The Sisi regime is primarily run by government-owned and military-run infrastructure projects. Although this style of governance has secured President Sisi and the Egyptian army’s loyalty, it has only exacerbated poverty within the country. Due to Sisi’s governance, the military has monopolized much of the economy. As a result, the Egyptian military dominates the private sector, taking away valuable jobs from citizens. 

The economic influence of the Egyptian military has been exacerbated by the war’s economic downturn. Following Hamas’ attack on October 7, 2023, revenue from tourism and the Suez Canal Transit fees have decreased by 25% and 50%, respectively. The country’s currency has further devalued due to rising inflation rates, contributing to increasing levels of food insecurity and a higher cost of living. Before the war, the official exchange rate was 15 pounds to the dollar; as of January, it has reached a low of 30 pounds to the dollar. 

In addition, clashes between the Sisi administration and Egyptian citizens have exacerbated Egypt’s political instability. The Sisi regime has cracked down on government dissent, shutting down independent news outlets and committing human rights violations towards individuals based on gender, sexual orientation, and religious identity. The Egyptian government has created a facade of equality by creating the National Human Rights Strategy (NHRS), a five-year plan to enact executive, legislative, and educational reforms. However, these reforms are a performative act of legislation, allowing the regime to paper over human rights restrictions that have since heightened due to the conflict. 

Throughout the conflict, members of the Egyptian populace have organized peaceful demonstrations in solidarity with the Palestinian cause, including raising pro-Palestine banners in public settings. In response to Egyptian citizens’ acts of dissent, the Sisi administration detained several of the protestors, part of the government’s larger campaign to crack down on free speech in Egypt despite Sisi’s diplomatic and peacemaking efforts amid the war. Since October 7, 120 Egyptians have been detained for supporting Palestine. Sisi’s crackdown on protests emphasizes his authoritarian tendencies, unveiling himself as a hypocritical leader blatantly disregarding civil liberties–all while publicly promoting himself as an international arbiter of peacemaking during the war.

As the war escalates, Egypt’s economic and political upheaval necessitates foreign assistance to ensure the country’s longevity. Under the leadership of Abdel Fattah El-Sisi, a paradigm shift is necessary to rectify Egypt’s political turmoil and economic downfall.

The Flawed Aid Strategy Between the U.S. and Egypt

Western powers, primarily the United States, have provided economic relief to adequately support Egypt amid the war, emphasizing their commitment to reducing Egypt’s economic burdens. However, by sourcing their primary funding source through foreign military financing and waiving Egypt’s human rights concerns, the U.S.’s foreign assistance prioritizes short-term regional goals over reforming Egypt’s economic and political conditions. 

Historically, the U.S.’s continued investment in Egypt has played a crucial role in sustaining the country’s economy through the war. Egypt and the U.S. have a long history of diplomatic and economic ties, primarily attributed to the U.S.’s desire to maintain a political foothold in the Middle East. A notable diplomatic agreement between the two countries includes the landmark Camp David Accords agreement between Egypt and Israel, which the United States brokered. The agreement made Egypt the first Arab nation to initiate relations with Israel in 1978. 

In addition to diplomatic gains, Egypt and the U.S. have had strong economic relations since 1978. In the 2023 fiscal year, Egypt received $1.4 billion in aid from the United States. However, aid was primarily distributed across foreign military financing, a source of funding that authorizes partner nations like Egypt to purchase U.S. defense articles on a non-repayable grant or direct loan basis.

Applying a disproportionate focus on military financing represents a limiting scope that fails to promote internal stability within Egypt. Given the military’s sway over Egypt’s business sector, disproportionately funding military financing reinforces the military dominance in the private sector. As U.S. aid towards Egypt stands, the current distribution structure requires a reallocation of funds to provide more holistic support to the Egyptian economy. 

In addition to the U.S.’s emphasis on military spending, the Biden administration has continued their allocation of foreign aid despite Egypt’s human rights violations–a strategic decision that risks undermining the U.S.’ reputation as a defender of human rights across the globe. In 2023, the U.S. announced it would provide Egypt with the 2022 fiscal year foreign military financing, which had previously been conditioned based on the Egyptian government's adherence to human rights conditions. Secretary of State Anthony Blinken justified this decision as a strategic means of sustaining a political foothold in the Middle East, claiming that “it [was] in the U.S. national security interest to waive certain human rights related conditions.”

This decision drew condemnation from organizations such as Human Rights Watch, who described the U.S. decision as undermining “the president's pledge to put human rights at the center of U.S. foreign policy.” By waiving Egypt’s human rights conditions to sustain the provision of aid, the U.S. fails to address internal political inequality—a crucial issue that can and should be addressed through stipulations on foreign assistance. In effect, the U.S. prioritizes its short-term strategic interests in the region while leaving the Sisi regime unchecked. 

The U.S. must reassess its current financing methods to assist Egypt. This should start with emphasizing the enforcement of the Sisi regime’s National Human Rights Strategy to ensure citizens’ democratic liberties. Further, as foreign military financing inadequately addresses Egypt’s economic inequality, funding should be reallocated to other sources to ensure that foreign assistance is distributed in an equitable manner. Without such action, Egypt risks facing further domestic instability, putting the entire Middle East at risk of destabilizing the region. Thus, Western powers can hold Egypt to higher standards of the rule of law, helping promote stability and democracy in the Middle East and supporting international security and economic stability. 

Akshara Santoshkumar (BC ’27) is a staff writer for CPR studying political science and economics. In her free time, you can find her exploring new restaurants or watching a Broadway show.