Egypt's NGO Crisis: How Will U.S. Aid Play in the Controversy?

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Amr Nabil / AP

Egyptian investigative judges Sameh Abu Zeid, right, and Ashraf el-Ashmawi, who are investigating the foreign funding of NGOs, enter a press conference at the Justice Ministry in Cairo on Feb. 8, 2012

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The timing of all this is critical. In December, Congress decided on a new set of conditions for the Egyptian military's $1.3 billion annual aid package, and Egypt so far isn't meeting them. The conditions include demonstrating a commitment to Egypt's peace treaty with Israel, progress toward democratic reforms and the protection of free expression, association and religion. "Right now, they're meeting one of the conditions. There's a big question mark over the second one, and they're definitely violating the third," says Dunne. That leaves the U.S. government with little choice when it comes to ratifying the 2012 aid package, which is set to start flowing soon.

The conditions can be waived for national-security concerns, and that may be one thing that the Egyptian government is banking on while it looks for ways to save face. Last week, even as the crisis escalated in public, some developments appeared to hint that the government was still looking to extricate itself from the mess. Even after several defendants had already learned of their position on the no-fly list, an internal memo circulated by the NDI said the Egyptian government was still — paradoxically — proceeding with protocol to renew the group's operating license, a source close to the NDI told TIME.

Most likely, Egypt may be gambling that the U.S. will simply prove unwilling to jeopardize the two countries' strategic alliance — ensured by its unfaltering $2 billion annual aid commitment — no matter the cost. "Minister Aboul Nega is convinced that because of the importance of Egypt, if they just hang tough, they're going to get this," says Dunne. "I don't think that's going to work."

Here's why: The subject of Egypt's aid package has periodically erupted into congressional debate in the past, but this time the Americans are furious. And if Egypt's generals get away with the NGO crackdown and the political humiliation of its biggest foreign benefactor, it's going to set a dangerous precedent for other regimes' testing the waters of democracy. Then for U.S. policymakers and, indeed, an increasing number of Egyptians, there's the question of whether Egypt really needs the money. Egypt's economy is on the rocks and could benefit from the roughly $250 million in non-military aid. But Egyptian liberals and youth activists who have taken to the streets in recent months to protest military rule say the powerful apparatus left behind by Mubarak doesn't need any more help from the U.S.

There's also the oft-neglected question of what all that military aid — more than $30 billion since 1987 — has really guaranteed. In recent years, the aid has facilitated U.S. military use of Egyptian airspace and the Suez Canal — critical, perhaps, during U.S. operations in Iraq, but less so now. Officials in Washington argue that the aid has functioned largely as a guarantor of Egypt's upkeep of its peace treaty with Israel, something conservative lawmakers warn that Egypt's newly elected Islamist parliament could prove less willing to uphold without conditions-free aid.

But many experts, including the man who brokered the treaty, say aid has nothing to do with it — Egypt will uphold the treaty regardless, and can't cut off access to the Suez Canal. "The peace treaty that I helped negotiate between Israel and Egypt is so precious and so beneficial to Egypt [that] to renounce it and to take a chance on going back to war with Israel — as they did four times in the 25 years before I became President — is almost inconceivable," former U.S. President Jimmy Carter told TIME when he visited Egypt last month.

Of course, given the Egyptian military's leadership track record over the past year — which, according to Dunne, has followed "a general pattern of poor judgment and mismanagement" — there's always room for disaster. But as many Egyptians and U.S. policymakers are pointing out, so much money funneled over the past 30 years into a dictator's military hasn't bought a whole lot either.

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