Egypt — the only country besides Israel that is granted such a privilege by Washington — has effectively been given a credit card with a maximum limit in the billions of dollars, experts say.
The complex financing arrangement is making a tough policy debate over the future of military aid to Egypt far more complicated than is publicly acknowledged. Lawmakers reassessing Washington’s $1.3 billion in yearly military aid to Egypt in the aftermath of the country’s military coup have been stunned to learn just how difficult it would be to shut off the pipeline.
“It has gotten us into a situation where we are mortgaged years into the future for expensive equipment,” said Sen. Patrick J. Leahy (D-Vt.), chairman of the Appropriations subcommittee on the State Department, foreign operations and related programs. “It is not a sensible way to carry out U.S. policy toward a country of such importance, where circumstances have changed, our interests and needs change, our budget is under stress, and yet we’ve been stuck on autopilot for more than 25 years.”
During decades of autocratic rule in Egypt, the arrangement worked like a charm. The aid package delivered a windfall for U.S. defense contractors as Egypt-bound tanks, fighter planes and missiles rolled off assembly lines across the United States, gradually replacing Egypt's aging Soviet hardware and deepening that nation’s reliance on U.S.-made gear. The Pentagon cashed in on the bounty, getting expedited access to the Suez Canal for Navy ships, overflight rights for military aircraft and plenty of face time with Egypt’s generals. Egypt, meanwhile, developed one of the region’s strongest militaries.
From 2008 to 2012, Washington signed off on more than $8.5 billion worth of military orders placed by the Egyptian government, even though Congress appropriated $6.3 billion for defense aid to Cairo in that period, according to the latest data published by the Pentagon. During those five years, Egypt received equipment worth $4.7 billion.
The $3.8 billion gap between contract cost estimates and deliveries is a revealing but incomplete measure of the vast pipeline of items earmarked for Egypt that would be thrown into limbo if Washington were to cut off aid to Cairo.
U.S. officials declined to offer a more specific assessment of the value of orders that have been authorized but not delivered. They cautioned that several factors, including markups on the price tag of defense orders, partly account for the gap.