Government Crackdown Raises Larger Questions About Egypt's Economic Future

Aug 15, 2013

President Obama speaks by phone with his National Security Staff regarding the situation in Egypt, while in Chilmark, Mass., Aug. 15, 2013.
Credit Amanda Lucidon / The White House

On Thursday President Obama canceled joint military exercises with Egypt – saying U.S. cooperation with that country can't "continue as usual" amid the violence that claimed more than 600 lives since Wednesday. 

Samer Shehata, a University of Oklahoma professor of Middle East Studies and an expert on Egypt and the Muslim Brotherhood, says while the move was the least President Obama could do, it was still necessary.

“It isn't terribly costly for the United States or for the Egyptian military,” Shehata says. “I think the larger questions, the more important questions, are will U.S. military assistance to Egypt, which is on the tune of $1.3 billion annually, will that be suspended or ended?”

So far the Obama administration still isn't giving any signs that it might cut off the $1.3 billion in annual U.S. military aid to Egypt. The government crackdown also raises questions about Egypt’s economic future, with businesses like General Motors closing operations in Cairo and 6th October City indefinitely.

“Will the United States assist in Egypt's attempt to receive an [International Monetary Fund] loan?” Shehata says. “[That’s] very important not only for the money itself, but what that signals to the international economic community in terms of doing business in Egypt.”

Information from the Associated Press was used in this report.