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U.S. Cuts Military Aid to Egypt, Seeks Move to Democracy

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Oct. 9 (Bloomberg) -- The U.S. said it will cut military aid to Egypt until the army-backed government takes steps toward restoring democracy after the overthrow of President Mohamed Mursi and a crackdown on his Islamist supporters.

The delivery of large military equipment and cash assistance to the Egyptian government will halt “pending credible progress toward an inclusive, democratically elected civilian government,” State Department spokeswoman Jen Psaki said in a statement.

U.S. officials briefing reporters on condition of anonymity said $260 million in cash aid will be withheld, as well as deliveries of F-16 fighter jets, helicopters and tanks.

President Barack Obama said in August that the U.S. would “reassess” assistance to Egypt, an ally for more than three decades that receives about $1.3 billion of annual military aid, after the army ousted Mursi in July. Since then, a crackdown by security forces on his Islamist supporters has left more than 1,000 dead and several leaders of the ex-president’s Muslim Brotherhood detained.

U.S. law requires suspension of aid to countries where the government is deposed in a coup d’etat. Obama’s administration so far has declined to label Mursi’s overthrow as a coup. U.S. officials who briefed reporters said the aid cutoff won’t be permanent. Egypt’s government has said it expects to hold parliamentary elections in the first quarter of next year, to be followed by a presidential vote.

Holding Deliveries

The U.S. had already announced in July that it was holding back delivery of four Lockheed Martin Corp. F-16s. Four more were scheduled for delivery in December under a contract for 20 aircraft.

During its reassessment of Egypt policy, the U.S. also has been holding up delivery of 10 AH-64 Apache helicopters manufactured by Boeing Co. Military sales also include four kits a month to build M1A1 battle tanks under a contract for 125 kits from General Dynamics Corp.

The U.S. will continue to provide support that “directly benefits the Egyptian people” in areas such as health, education and private-sector development, Psaki said.

Assistance for counterterrorism, securing Egypt’s borders, and maintaining security in the Sinai also will continue, Psaki said. Those are important issues for Israel, the closest U.S. ally in the Middle East.

‘Politically Difficult’

Military aid to Egypt dates to the Camp David accords negotiated in 1978, a U.S. initiative in which Egypt broke away from Arab allies to sign a separate peace with Israel, which it has since maintained. Egypt has collaborated with Israel to impose restrictions on the Hamas-ruled Gaza Strip.

“It could potentially become more politically difficult in the absence of U.S. assistance to the military to maintain this very close working relationship with the Israelis,” David Schenker, director of the Arab politics program at the Washington Institute for Near East Policy, said in a telephone interview.

Egypt has been mired in political instability since the uprising against Hosni Mubarak, a longtime U.S. and Israeli ally, in 2011. Violence has escalated since the army takeover in July. Last weekend it flared again as dozens of Islamist protesters were killed at rallies, while a series of attacks on security posts left several policemen and soldiers dead.

Gulf Assistance

Since Mursi’s ouster, the military-backed government has received pledges of at least $12 billion in aid from Persian Gulf countries that oppose the Brotherhood, reducing the importance of financial support from the West. Egypt says it no longer needs International Monetary Fund loans.

Aaron David Miller, a vice president at the Wilson International Center for Scholars in Washington and a Middle East adviser to several U.S. administrations, said military aid hasn’t been increasing U.S. influence in Egypt.

“The fact is, we have no significant influence over the military with aid or without it,” Miller said in an e-mail. “Suspending assistance to make a point that we’re unhappy with the generals’ crackdown against the Islamists won’t change their behavior,” he said. “And keeping aid going to make a difference in pushing them to democratize won’t matter much either.”

To contact the reporters on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net; Caroline Alexander in London at calexander1@bloomberg.net

To contact the editors responsible for this story: Bob Drummond at bdrummond@bloomberg.net; John Walcott at jwalcott9@bloomberg.net

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