CODEL PELOSI MARCH 19-20 VISIT TO CAIRO: MEETING

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 002281

SIPDIS

FOR NEA, H, NEA/ELA

E.O. 12958: DECL: 03/19/2015
TAGS: OREP PREL PGOV ECON EFIN ETRD EG IZ
SUBJECT: CODEL PELOSI MARCH 19-20 VISIT TO CAIRO: MEETING
WITH PRIME MINISTER NAZIF


Classified by Charge Gordon Gray for reasons 1.4 (b) and (d).


1. (C) Summary. During a meeting with CODEL Pelosi, PM
Nazif asserted that Egypt is "systematically" building a
democratic system. He also highlighted Egypt's economic
reforms and called for strengthening the bilateral economic
relationship. Nazif expressed concern over the image of the
U.S. in Egypt, noting how history has made the concept of
occupation a very sensitive one for Egyptians. Nazif argued
strongly against shifting U.S. assistance from the military
sector to development. End summary.


2. (U) House Democratic Leader Pelosi (D-CA) was joined at
the meeting by Rep. Darrell Issa (R-CA),Rep. George Miller
(D-CA),Rep. Henry Waxman (D-CA),Rep. Edward Markey (D-MA),
Rep. Anna Eshoo (D-CA),Rep. Jim McGovern (D-MA),Rep. Linda
Sanchez (D-CA),House Sergeant at Arms Wilson Livingood, the
Charge, and ECPO Counselor (notetaker). Nazif was
accompanied by Cabinet Secretary General Dr. Sami Zaghloul,
Spokesman Magdy Rady, and Assistant Foreign Minister for the
Americas Shadia Farrag.


4. (SBU) Nazif welcomed the CODEL to Egypt's Smart Village,
a high-tech business park outside Cairo. Nazif took
particular pride in pointing out that the Smart Village,
which he nurtured during his previous job as Minister for
Communications and Information Technology, counted Microsoft
and Vodafone among its tenants. He emphasized the value he
put on the U.S.-Egypt relationship, and expressed his desire
to see greater bilateral trade and investment. Nazif
highlighted recent Egyptian political reforms, calling the
CODEL's attention to President Mubarak's recent announcement
on multicandidate presidential elections and a new law on
political parties.


5. (C) Leader Pelosi expressed gratitude for Egypt's
assistance during the recent conflict with Iraq, particularly
overflights of U.S. aircraft and expeditious transit of the
Suez Canal. Rep. Miller asked Nazif to what extent Egypt's
recent "political opening" was home-grown, rather than
imported. Nazif responded that "we can not ignore messages
from the U.S." and that Egypt understands that the U.S. sees
democratic reform in the Middle East as essential to its own
security. At the same time, Nazif noted that every country
must move at its own pace of development and the Egypt is
"systematically" building a democratic system. He cautioned
that Egypt is determined to avoid the "instability" that
Lebanon is currently suffering. He said that Egyptians'
first preoccupation is with jobs, then prices and government
services, with democracy falling fourth on the list of
priorities. Later in the meeting, Leader Pelosi expressed
concern about the arrest of opposition politician Ayman Nour,
suggesting his detention bodes ill for democratic reform.
Nazif replied that the charges against Nour were not
political. Rather, he said, serious and credible criminal
charges had been made, and they would be investigated and
appropriate action taken.


6. (SBU) Nazif highlighted recent or planned changes to
Egypt's customs and income tax regimes and asked for help
from the U.S. as Egypt reforms its social safety net, i.e.,
subsidies. Nazif said that he planned to visit the U.S.
soon, perhaps in the first half of May, and would bring with
him a detailed explanation of what reforms the GOE plans to
carry out and what help it will seek from the U.S.


7. (C) After praising Egypt's constructive role in the peace
process, Rep. Waxman asked for Nazif's views on perceptions
of the U.S. in Egypt in the wake of the Iraq war. Nazif
described himself as "very concerned" about the image of the
U.S. in Egypt. He emphasized that Egyptians know and
appreciate the assistance the U.S. has provided over the past
25 years, but that history makes the concept of foreign
occupation of an Arab country "very vivid" in Egyptian minds.
That said, Nazif continued, it would be a "huge
accomplishment" if the U.S. could bring stability to Iraq.
Unfortunately, he added, the media "focuses on bombs, not
progress." Egyptians are also worried by U.S. efforts to
"impose democracy" and wary of U.S. policy towards Syria.


8. (SBU) Rep. Markey asked Nazif to explain how Qualifying
Industrial Zones (QIZ) work and how they benefit Egypt. The
Prime Minister explained the background of the program and
how the end of national textile quotas forced Egypt to find a
way to preserve its share of the U.S. apparel market. He
commended the U.S. Trade Representative's office for their
part in reaching a QIZ agreement quickly, and said that the
deal will mean 150,000 new jobs for Egyptians.


9. (C) Nazif then raised the proposal of Rep. Lantos to
shift some U.S. assistance to Egypt from security to economic
development, (i.e., from FMF to ESF). Nazif argued strongly
against such a shift, emphasizing that it is essential to
keep Egypt's military strong. "It is a zero-sum game," Nazif
said, meaning that any reduction in U.S. military assistance
will have to be made up from elsewhere in the GOE budget. In
response, Rep. Waxman asked Nazif what enemy requires Egypt
to have such a strong military. Nazif emphasized that
Egypt's is a defensive, rather than offensive, army, an
"anti-terrorist army."


10. (SBU) Rep. Eshoo asked about Internet penetration in
Egypt. Nazif replied that the GOE is pushing hard to
implement e-government and e-learning initiatives, with plans
to have 7,000 schools serving grades 7-9 completely wired for
high-speed Internet access within three years. He also
highlighted Egypt's programs to make computers and Internet
access more affordable.


11. (SBU) Rep. McGovern praised the GOE's education
initiatives, and Nazif explained the GOE's plans to expand an
education decentralization pilot plan. Rep. McGovern asked
about the role of women in Egyptian politics. Nazif said
that, while progress had been made in increasing voter
turnout among women, Egypt still elected few women to public
office.


12. (U) CODEL Pelosi did not have an opportunity to clear
this message before departing Egypt.


Visit Embassy Cairo's Classified Website:
http://www.state.sgov.gov/p/nea/cairo

You can also access this site through the
State Department's Classified SIPRNET website.

GRAY