Will Foreign Aid Continue in Post-Morsi Egypt?

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CAIRO, Egypt – In the wake of recent events in Egypt, the foreign aid the country receives from the United States could be in jeopardy. After widespread protests erupted on June 30, Mohamed Morsi, elected to be the president of Egypt last year, was ousted from office in what some have called a military coup. This week, the Egyptian military installed a temporary government and has declared its intent to restore democracy to post-Morsi Egypt.
The U.S. government is prohibited from distributing aid to nations whose governments have been “deposed by a military coup d’etat,” according to the Foreign Operations Appropriations law. Egypt has long been one of the top receivers of U.S. aid. In the 2012 fiscal year, the country received nearly $1.6 billion, making it the fifth-largest recipient of aid from the U.S.
While some lawmakers have called for the immediate suspension of U.S. funds to Egypt, the administration is taking a more cautious approach to the situation. In a statement, President Obama expressed his hope that the country would return to a democratic system. The State Department took a similar tone, saying that it would be “premature” to take steps towards suspending aid, and that “assessments would be made based on the facts on the ground.”
For the 2013 fiscal year, another $1.6 billion was requested for aid to Egypt. Should that aid be suspended, the effects could be devastating for Egyptians. Economist Martin Ravallion, former head of research at the World Bank, told Pacific Standard that such a response “may well help put longer term institutional development in the country back even further.”
– Andrew RasnerĀ 
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