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John Kerry reaches out to al Sisi but offers no new military aid

Secretary of State John Kerry arrives for the Egypt Economic Development conference on March 13, 2015, in the Red Sea resort of Sharm el-Sheikh.

KHALED DESOUKI/AFP/Getty Images

Sharm al Sheikh, Egypt Secretary of State John Kerry arrived in the Egyptian resort of Sharm al-Sheikh on Friday to attend a summit meant to shore up investment in the economically troubled Arab nation.

The visit to the Sinai town is a rare public show of support for Egyptian President Abdel Fattah al Sisi, whose relationship with the Obama administration has been rocky since he came to power in a 2013 military coup and cracked down on political opponents. Yet the administration now wants to encourage al Sisi to continue to take meaningful steps to jumpstart the economy, which it hopes will help politically and financially stabilize Egypt.

By appearing at the Egyptian summit, the administration hopes that Kerry will help encourage reluctant investors to open up their pocket books. Unemployment is high in this country of nearly 90 million Egyptians, many of whom rely on government subsidies. The al Sisi government recently cut some of the agriculture-related subsidies, changed the tax code and made other reforms in an effort to strengthen state finances. That will require what one U.S. diplomat referred to as a "significant influx" of private capital. Kerry's visit to an American Chamber of Commerce event in Sharm al Sheikh attracted executives from Coca-cola, petroleum company BP, and tourism industry leaders.

The perception of political instability in Egypt undermines that sales pitch. A record of violent street clashes, mass arrests and death sentences led the Obama administration to freeze a chunk of the nearly $3 billion in mostly military aid to Egypt since al Sisi seized power in 2013. That has become a sore point in the relationship and is sure to come up during Kerry's meeting with al Sisi. Senior U.S. officials told reporters that Kerry arrived empty-handed in Sharm al Sheikh. Furthermore, they said the Obama administration has not yet made a decision to issue a national security waiver, or whether it feels confident enough to endorse progress on democracy by Egypt by releasing the funds.

Yet Egypt faces security threats along its eastern and western borders, which is why the White House has continued counterterrorism assistance to Egypt with the encouragement of neighboring U.S.-ally Israel. Right now Egyptian security forces are waging a military campaign against Sinai-based Islamists, including Ansar Beit al Maqdis which recently pledged allegiance to the Islamic State (ISIS). Along its western border, Egypt also faces spillover from the ongoing conflict in Libya. A group calling itself the Tripoli wing of the Islamic State recently kidnapped and then beheaded 21 Christian Coptic laborers from Egypt. In the wake of that killing, the al Sisi government launched military strikes on IS targets in Libya.

  • Margaret Brennan

    Principally assigned to the State Department, Margaret Brennan also serves as a CBS News general assignment correspondent based in Washington, D.C.