Gen Kenneth McKenzie, head of US Central Command and the most senior US military commander in the Middle East. AP
Gen Kenneth McKenzie, head of US Central Command and the most senior US military commander in the Middle East. AP
Gen Kenneth McKenzie, head of US Central Command and the most senior US military commander in the Middle East. AP
Gen Kenneth McKenzie, head of US Central Command and the most senior US military commander in the Middle East. AP

Top US general in Egypt after Biden cuts military aid


Hamza Hendawi
  • English
  • Arabic

A top US general arrived in Egypt on Wednesday on a surprise visit that follows a decision by President Joe Biden’s administration to withhold $130 million in military aid to Cairo over human rights concerns.

On his flight to Cairo, Gen Kenneth McKenzie, head of the US Central Command, sought to play down the significance of the cut and emphasised the “robust” military ties between the two countries, which have been close allies for decades.

“Compared to the amount of other money that's in play, it's a very small amount. But I think it's intended to be a signal,” Gen McKenzie said. “We still have a very robust weapons programme with Egypt and we're still very heavily engaged with them.”

Since the late 1970s, Egypt has received billions of dollars in US military aid, which stands at $1.3 billion a year.

The aid, along with economic assistance, is partially a reward for Egypt becoming the first Arab state to sign a peace treaty with Israel in 1979. It also serves as an incentive for Egypt to continue its close co-operation and intelligence-sharing on terrorism with Washington.

These close ties have allowed the US military to use Egyptian airspace for overflights and for its navy ships to be given priority when passing through the Suez Canal.

The January 28 decision by Mr Biden’s administration to cut military aid was a rare censure of Egypt. It followed what US officials say is Cairo’s failure to address human rights-related issues, which have never been publicised by Washington.

Activists have said those conditions included the release of people considered to be political prisoners.

Gen McKenzie is the top American military commander in the Middle East region. He is a frequent visitor to Cairo, where he consistently praises co-operation with Egypt’s military.

The Egyptians have not made a huge fuss like they did in the past. They’ve handled the decision with greater restraint
Michael Hanna,
International Crisis Group

He said that he did not plan to shy away from the US's human rights concerns in his talks with Egyptian leaders.

“At the [military] level, we need to be honest with each other about factors that can influence the relationship. Clearly that's a factor that can influence the relationship.”

Egypt did not respond publicly to the Biden administration’s decision as it has done on similar moves in the past, said Michael Hanna, director of the US Programme in the International Crisis Group.

“The Egyptians have not made a huge fuss like they did in the past. They’ve handled the decision with greater restraint,” he told The National from New York.

That restraint, he said, might have had something to do with a better understanding in Cairo of how the US government functions, as well as the mixed message Washington was sending.

Egyptian President Abdel Fattah El Sisi. Reuters
Egyptian President Abdel Fattah El Sisi. Reuters

Rights groups welcomed the announcement of the aid cut, but some considered it as just a slap on the wrist since it closely followed US approval of an arms package worth more than $2.5bn for air defence radars and C-130 Super Hercules planes.

That deal, Mr Hanna said, was partly financed from unspent military aid accumulated over several years and partly from Egyptian national funds.

“The deal covers items the US wants Egypt to have to serve the interests of both countries,” he said.

Mr Hanna said that while the State Department had been in the habit of speaking against Egypt’s human rights record, the Pentagon and the military tended to be more cautious on the subject so as not to jeopardise their valuable co-operation with the Egyptian military.

Under President Abdel Fattah El Sisi, Egypt has become one of the world’s biggest arms buyers, seeking to diversify its arsenal of US and Soviet-era weapons with cutting-edge new weapons and equipment from Russia, France, Germany and Italy.

Cairo’s shift on arms procurement came after the Obama administration suspended some military aid to Egypt in 2013.

The Egyptian government at the time said the suspension hurt its counter-terrorism operations against militants in the northern region of the Sinai Peninsula and accused the Obama administration of supporting the Muslim Brotherhood.

The aid suspension was in response to the removal by the military, then led by Mr El Sisi, of president Mohammed Morsi, a Muslim Brotherhood member, amid a wave of street protests against his one-year rule.

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

COMPANY%20PROFILE
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Fixtures

Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs

Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms

Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles

Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon

Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon

MATCH INFO

Euro 2020 qualifier

Fixture: Liechtenstein v Italy, Tuesday, 10.45pm (UAE)

TV: Match is shown on BeIN Sports

Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Neo%20Mobility%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20February%202023%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Abhishek%20Shah%20and%20Anish%20Garg%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Logistics%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Delta%20Corp%2C%20Pyse%20Sustainability%20Fund%2C%20angel%20investors%3C%2Fp%3E%0A

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Mental%20health%20support%20in%20the%20UAE
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Innotech Profile

Date started: 2013

Founder/CEO: Othman Al Mandhari

Based: Muscat, Oman

Sector: Additive manufacturing, 3D printing technologies

Size: 15 full-time employees

Stage: Seed stage and seeking Series A round of financing 

Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now. 

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Last-16 Europa League fixtures

Wednesday (Kick-offs UAE)

FC Copenhagen (0) v Istanbul Basaksehir (1) 8.55pm

Shakhtar Donetsk (2) v Wolfsburg (1) 8.55pm

Inter Milan v Getafe (one leg only) 11pm

Manchester United (5) v LASK (0) 11pm 

Thursday

Bayer Leverkusen (3) v Rangers (1) 8.55pm

Sevilla v Roma  (one leg only)  8.55pm

FC Basel (3) v Eintracht Frankfurt (0) 11pm 

Wolves (1) Olympiakos (1) 11pm 

Updated: June 17, 2023, 1:23 PM