“But that money never gets to Egypt. It goes to the Federal Reserve Bank of New York, then to a trust fund at the Treasury and, finally, out to U.S. military contractors that make the tanks and fighter jets that ultimately get sent to Egypt.”
So far, the Obama administration has penalised Egypt by suspending the delivery of four F-16 fighter planes (the Egyptian air force already has 143 F-16s, with the last order of 20 dating back to March 2010 still in the pipeline) and the cancellation of joint military exercises with Egypt scheduled for September.
The Obama administration has also refused to describe the military takeover of a civilian government as a “coup” because under U.S. legislation such a designation would automatically generate a cut off of U.S. aid.
As of Friday, the death toll from the military crackdown has been estimated at between 500 and 1,000, with nearly 4,000 injured.
Pieter Wezeman, a senior researcher with the Arms Transfers Programme at the Stockholm International Peace Research Institute (SIPRI), told IPS, “It is correct that the U.S. military industry benefits from U.S. military aid to Egypt.
“And it is correct that if the United States would stop altogether with supplying such aid to Egypt, that would have some effect on the turnover of the U.S. arms industry,” he added.
However, he said, “I am doubtful if arms industry lobbying [or] concern for the arms industry is a reason of any significance for the U.S. to not halt all FMF aid to Egypt.”
There are several reasons, he said, including a temporary stop which would have only a minor effect.
“After all, some of the equipment that has been contracted for can be produced and stored by the U.S. government – which is, after all, the entity that signed the contracts with the U.S. industry – until the situation in Egypt changes.”
Presumably, funding not earmarked can be withheld and would benefit the industry later, he added.
Moreover, said Wezeman, the U.S. has embargoed major buyers of U.S. arms and cut military aid before, despite the obvious costs for the industry.
The best examples are Iran in 1979 – although that was arguably as well a decision by Iran at that time – Pakistan in early 1990s and India in 1963.
Citing other examples, he said, in the case of Saudi Arabia and the United Arab Emirates (UAE), the U.S. has foregone some major deals due to the fact they did want to supply certain advanced equipment. For example, it is generally assumed that France clinched a major deal for combat aircraft in the late 1990s because it included 300 km range cruise missiles which the U.S. had refused.
Military aid to countries like Greece has diminished from high in the 1980 and ’90s to a very low level now.
Wezeman said although 1.3 billion dollars a year is a lot of money, it is relatively small compared to the current cutbacks in U.S. military spending and the sequestration issue, which will have a much bigger effect on the U.S. arms industry.
© 2013 IPS North America