US and Egypt seek to repair relationship after NGO row

Egypt's campaign against foreign activists appeals to nationalist opinion

Egypt and the United States are working to repair their relations, after one of the most bruising arguments in the many years of this strategic alliance.

It follows the lifting of a travel ban on a number of foreign democracy activists - including seven Americans - who have been accused of receiving illegal foreign funding for their work in Egypt.

The move has provoked recriminations within Egypt, where the prosecution of foreign activists has proved hugely popular with domestic opinion.

The crisis has been growing, since the Egyptian authorities stages a series of raids at the end of December on organisations that work for democracy and human rights in the country.

They include the National Democratic Institute (NDI) and the International Republican Institute (IRI), both of which are closely connected with the US government; Freedom House, an independent human rights organisation based in the US; and other mainly Egyptian human rights groups such as the Arab Centre for the Independence of the Judiciary.

The Egyptian authorities accused the organisations of operating illegally, something they deny. Some officials went much further, accusing them of plotting to spread chaos within Egypt.

Forty-three people were eventually charged in connection with the case - 16 Americans, 16 Egyptians, , as well as Germans, Palestinians, Serbians and Jordanians.

Sam LaHood, the son of US Transportation Secretary Ray Lahood, has now left Egypt

Refuge

What provoked fury in Washington was when the Americans under investigation were refused permission to leave Egypt.

Several of them took refuge inside the US embassy in Cairo, including Sam LaHood, the son of US Transportation Secretary Ray LaHood and the head of the IRI's office in Egypt.

American officials threatened to cut off the roughly $1.5bn (£941m) in aid paid to Egypt every year. Even more critical for Egypt, negotiations for a vitally-needed IMF loan ground to a halt.

Those discussions now appear to be back on track.

In retrospect, it is not clear which side was blackmailing the other. Did Egypt take up the issue of foreign funding in order to increase pressure for an IMF loan? Or did Washington use the issue the press for the release of its citizens?

International leverage

Amongst all those involved, there is deep scepticism about the motives behind the legal case.

Nancy Okail, who runs the Cairo office of Freedom House - now sealed as a crime scene - accused the Egyptian government of using the issue as a way to silence civil society in the wake of last year's revolution, which forced President Hosni Mubarak to step down.

Fayza Abul Naga, the driving force behind the trial

The minister seen as the driving force behind the legal case, Fayza Abul Naga, almost openly admitted that Egypt was using the issue to increase its international leverage.

"Every country has pressure cards in the political field, Egypt is no exception," she said, according to the state newspaper al-Ahram.

The role of Ms Abul Naga is just one of the issues that has shocked Western and liberal opinion.

Her official title is minister for international co-operation. She is Western-educated and a former top UN official. But she was also one of the few Mubarak-era ministers to hold onto their jobs and now looks to be securing her position by playing the nationalist card.

But what may have shocked some liberals has secured the warm approval of Islamists, including the Muslim Brotherhood and the ultraconservative Salafists, and indeed many ordinary Egyptians.

Antagonism

One Salafist preacher, Mohammad Hassan, used his television show to start a campaign for Egyptians to donate money to replace the American aid under threat.

The problem for the Egyptian government was they they could not afford to continue antagonising Washington for too long.

Egypt is rapidly running out of foreign exchange reserves. The financial shortfall has been created, both by the collapse in business and the tourist trade following the revolution, but also as the long term consequence of an unsustainably high and growing level of public subsidies.

The IMF loan is vital if the country is not to suffer a very severe financial crisis very soon.

So last week, the travel ban on the seven Americans and other foreign citizens was suddenly lifted, and they quickly left the country, though they risk forfeiting bail payments of $332,000 (£208,000) each if convicted in their absence.

Egyptians, who were delighted with this re-assertion of national pride, are now casting around about who to blame. Government officials are busy denying responsibility.

Complaints

The original judges looking after the case stepped down before the travel ban was lifted. There is talk of a parliamentary inquiry, possibly even a vote of no-confidence in the government.

Official complaints are flowing as fast as the spring waters of the Nile. Those in government who pressed the issue forward so enthusiastically may believe they have reaped a whirlwind.

Fayza Abul Naga insists the trial will go ahead once a new judicial panel had been named

Meanwhile, the case against the foreign-funded organisations rumbles on. New judges are due to take it in hand this week, at an earlier hearing the case was postponed until 26 April.

Despite the rhetoric, the charges facing the NGO workers are fairly bureaucratic.

They are accused of not formally registering their organisations - they say they have done everything required of them - and of receiving illegal payments.

If they are convicted, many lawyers say the worst they should face is a substantial fine. But the activists are worried about the consequences as the international spotlight moving away from their case.

It is the latest reminder of the tangled state of Egyptian politics a year after the revolution.

The liberals who led the fight in Cairo's Tahrir Square can sound like a small minority, in the new and noisy political scene.

And Egypt's old international allies have been warned - this country can no longer be taken for granted.