Egypt needs U.S. aid and debt relief, along with Washington's recognition that Morsi has the sovereign right to adjust policies and treaties to better adhere to his political goals. Morsi is a former leader of the Egyptian Muslim Brotherhood and is still guided largely by the group's political agenda. His honeymoon is nearing an end, and he faces a growing set of problems. First, the Egyptian Constitution — which will determine and codify the president's powers in relation to the military, judiciary and other actors — has yet to be drafted and finalized.
Additionally, the Muslim Brotherhood will have to deal with upcoming parliamentary elections. These elections bring challenges from a spectrum of Islamist, liberal, Nasserite, Coptic and other groups as well as the various Salafist and former jihadist factions. Although the Muslim Brotherhood likely will secure a majority of seats, it will face tough competition in some quarters.
Moreover, Egypt's economic problems are only worsening, with fuel shortages and public-sector strikes growing more common. Foreign reserves are down to $15 billion from $36 billion at the end of 2010, foreign lending has dried up, tourism is down and foreign investment is limited. Plans for $1 billion in debt relief — not to mention the annual $1.5 billion in military aid — from the United States are being held up by Washington. The United States could also slow Egypt's negotiations with the International Monetary Fund for a $4.8 billion credit line that would help Egypt avoid having to devalue the Egyptian pound.
The United States has no confidence in the Morsi government or in the Muslim Brotherhood's agenda. Washington has decided to work with Cairo and would like to reaffirm ties on every level, including the Camp David accords. But it is no doubt asking for guarantees — including that Camp David will not be changed and that the balance of forces in Sinai will not be redrawn — that Morsi is refusing to give. Indeed, on Sept. 18, one of Morsi's advisers said that amending Egypt's peace treaty with Israel was "a matter of time" and for the first time mentioned the idea of canceling or suspending the Camp David accords. This is not the first time that Morsi has hinted at changes to Camp David, but the new statement does suggest a subtle yet important development.
Egyptian security forces' lackadaisical response on the first day of protests against the U.S. Embassy in Cairo adds to Washington's fears that the new Islamist government's interests and agenda are already diverging from those of the United States. Because of this, Obama said recently that Egypt is neither an ally nor an enemy — an important though later tempered statement that reveals the growing unease in Washington over the new Egyptian leadership and its agenda.
Washington's concerns will come to the forefront when Morsi visits the United States. For Washington, Egypt is a linchpin for the Middle East. Peaceful and secure relations are critical for Israel's national security — a redline for the United States. Washington also needs Egypt for its regional influence and historical leadership. There is a longer-term divergence of interests between the new Egyptian government and Washington, and although Washington sees this divergence, it does not want to sever ties with Egypt.
The United States also has an interest in a politically and financially stable Egypt. However, Washington probably will delay funding and debt relief until it gets the reassurances it seeks. Morsi knows that he needs the U.S. financial aid and support and so will try to offer what assurances he can without risking his constituency at home. Longer term, however, a fundamental re-evaluation of the U.S. reliance on Egypt, and of all the region's new democratically elected Islamist regimes, will be in order, as will a review of Israel's national security.
Morsi's visit to the United States will thus be important for U.S.-Egyptian relations. There are significant indicators that will show which way things are progressing. If Morsi is invited to the White House, and if he and Obama issue joint statements of reaffirmed ties, these will be signs of an agreement and a crisis will be averted — at least for the short term. Alternatively, if Morsi does not go to Washington at all, the strain between the United States and Egypt likely will worsen.