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Mar 13, 2015 5:56 AM

Kerry promotes US investment in Egypt; no new military aid

The Associated Press

SHARM EL-SHEIKH, Egypt (AP) Secretary of State John Kerry delivered words of encouragement Friday for Egypt's efforts to attract greater foreign investment but no new military assistance as demanded by the country's president.

Kerry's hands are tied because the Obama administration is undecided about whether to affirm Egypt's progress on democracy and human rights or issue a national security waiver. It must do one or other under the 2015 federal budget to unblock hundreds of millions of dollars in military aid for Egypt.

In the Red Sea resort of Sharm el-Sheikh, America's top diplomat said investment was needed to restore confidence in Egypt and provide stability for the region.

"This part of the world is blessed with a stunning amount of commercial potential," Kerry said at an American Chamber of Commerce event. He said the U.S., whose companies invested $2 billion in Egypt last year, stood ready to help.

Kerry attended an Egyptian economic conference later Friday and met with Egyptian President Abdel-Fattah el-Sissi, who has been clamoring for U.S. tanks, planes and other materiel held up since the military's 2013 takeover of the government.

El-Sissi said earlier this week the logjam was creating the impression that the U.S. isn't standing by the Egyptians as they battle the Islamic State and other extremists. The country's need for weapons and equipment is "dire," he told Fox News.

Kerry had hoped to announce on his three-day trip to Egypt the delivery of F16 fighter jets, according to U.S. officials, who weren't authorized to speak publicly on internal deliberations and demanded anonymity.

But no path forward has emerged from multiple White House discussions in recent weeks over funds which were suspended 21 months ago when el-Sissi, then military chief, overthrew Egypt's first democratically elected leader, Islamist President Mohammed Morsi.

The U.S. has been providing hundreds of millions in counterterrorism assistance to its ally, which isn't stalled as a result of the coup. Egypt says it needs the money to face growing threats from extremists creeping over the border from lawless Libya or operating in the Sinai Peninsula, and the U.S. sees the funds as critical for stability in the volatile Middle East.

But Washington cannot provide almost half of its $1.5 billion annual aid package along with assistance held up from previous years until it does one of two things. It must certify advances by el-Sissi's government on democracy, human rights and rule of law, or tell Congress the assistance should go through because it is in America's national security interest.

The administration has reservations about both options.

It doesn't want to endorse a post-coup Egyptian crackdown on political opponents that started with hundreds killed in street clashes and thousands jailed. There have since been mass trials and death sentences.

The administration is likewise uncomfortable with a national security declaration that would recall the decades of American support for Egypt's former autocrat Hosni Mubarak despite his government's obvious shortcomings.

Officials said the focus of Kerry's trip wasn't on military matters but rather the investment conference. Top executives from General Electric, Microsoft and other U.S. companies attended.

Egypt's economy was rocked after Arab Spring protesters chased Mubarak from power in 2011. El-Sissi has sought to make the county more conducive for investment and is reforming Egypt's tax code, among other efforts to spur renewed economic vitality.

Kerry also met Friday with Palestinian President Mahmoud Abbas and Jordan's King Abdullah II.

From Egypt, he will travel to Switzerland Sunday for another round of nuclear talks with Iran. Negotiators hope to reach a framework deal by month's end.


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