SETTING THE SCENE FOR THE 2005 U.S.- EGYPT MCC

C O N F I D E N T I A L SECTION 01 OF 04 CAIRO 008873

SIPDIS

E.O. 12958: DECL: 11/23/2015
TAGS: PREL MASS MOPS KDEM KPAL IS IZ EG
SUBJECT: SETTING THE SCENE FOR THE 2005 U.S.- EGYPT MCC

Classified by DCM Stuart Jones for reasons 1.4(b) and (d).

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Summary
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1. (C) The U.S. - Egyptian military partnership represents
the foundation of our broader strategic relationship.
Although both nations benefit from the relationship, we
occasionally differ in the strategies we adopt to achieve our
shared goals. Egypt is committed to strengthening our ties,
and the 2005 Military Cooperation Committee meeting offers an
opportunity to confirm the mutual benefits of the
relationship and press for further engagement in key areas.
Because of the 2005 effort in Congress to redirect or
withhold an earmark from Egypt's military assistance, Egypt
will be seeking reassurance as to the importance of the
relationship. Egypt understands that there will be no
political release "deliverables" this year, but may ask the
U.S. to reconsider. The U.S. team should urge Egypt to (1)
bolster MoD's own public affairs program so that it can
better ariculate how Egypt supports U.S. global priorities,
(2) explore opportunities for greater engagement in the
Global War on Terror (GWOT) and in promoting regional
stability, and (3) define its vision of military
transformation and modernization.

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The internal political scene
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2. (C) 2005 has witnessed a remarkable series of political
developments that are remaking Egypt's political landscape.
Political reform has been under discussion for several years,
but it was only on February 26, after extracting from the
opposition the concession that any discussion of
constitutional reform should be postponed until 2006, that
President Mubarak unilaterally announced that he supported an
amendment to the Constitution that would permit the direct
election of the president in competitive multi-party
elections. (Note: Egypt's president since 1952 has been
chosen by a yes/no referendum after nomination by the
parliament. End note.)


3. (C) Mubarak's announcement came against a backdrop of
USG-GOE tension over the arrest and detention of Ayman Nour,
leader of the newly-formed liberal Ghad Party on January 30.
Nour was released in March after being charged with forging
signatures on the documents establishing his party in late

2004. Nour's trial opened in June and quickly was postponed
until the end of the year, but not before the GOE's lead
witness recanted his testimony and alleged that the GOE had
coerced his statements against Nour. Nour's effort to reform
and revitalize the opposition occurred in tandem with an
effort by the so-called young guard in the NDP, led by
presidential son Gamal, to revamp and re-legitimize the
ruling party, through "New Thinking" that focuses on greater
accountability, economic reform, and democracy.


4. (C) On May 25, a nationwide referendum ratified the
GOE's proposed amendment to Article 76, which set stringent
candidacy rules for registered parties and effectively ruled
out independent candidates. The amendment passed
overwhelmingly, but the GOE is widely believed to have
exaggerated the turnout. (The GOE claimed that 53 percent of
eligible voters placed votes, with the overwhelming majority
in favor. By contrast, the actual presidential election in
September only drew 30 percent of voters according to GOE
figures--and independent monitors asserted that the number
was closer to 23 percent.) In addition, the referendum was
marred by attacks by NDP-affiliated thugs on both
demonstrators protesting the referendum and on female
journalists covering the event. Shortly after Mubarak
formally announced his candidacy in July, GOE security forces
again violently dispersed a peaceful protest demonstration.
The USG issued critical public statements after both the May
25 and July 30 incidents.


5. (C) President Mubarak and the NDP ran a high-profile
campaign for the September 7 presidential election. Most of
his opponents were representatives of fringe parties, but
both Ayman Nour of the Ghad Party and Noman Gomaa of the Wafd
Party made significant public challenges. The September 7
voting proceeded in an atmosphere of calm and order. The
official results gave Mubarak 88 percent of an approximately
20 percent turnout. Nour took second, with 7 percent, while
Gomaa polled third at 3.5 percent. Nour's campaign
complained that he had actually polled higher and that
significant rigging had taken place to boost the president's
margin of victory.


6. (C) By mid-October, the stage was set for the
parliamentary elections, which were scheduled for three
stages, beginning on November 7 and finishing on December 6.
The surprise developments in the first round were the defeat
of Ayman Nour in his home area (apparently after a major NDP
push to support his opponent, a retired State Security
colonel) and the fact that the banned but tolerated Muslim
Brotherhood, running as independents, won 34 seats out of the
164 in play. In the second round, amid violence apparently
instigated by NDP supporters, the MB continued its surprising
run of electoral success. As of November 23, the MB had
secured 47 seats, and appears to be en route to unprecedented
electoral success.


7. (C) The actual impact of these various political
developments will only become apparent with the seating of
the new parliament on December 13 and the naming of a new
cabinet. The surprising successes of the MB (and collapse of
the established opposition parties),and the apparent failure
of the NDP's "New Guard" to present candidates articulating a
clear vision of political reform, raises crucial questions
about the directions of Egypt's political scene in 2006.


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Military funding--a source of concern
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8. (C) MoD tells us that the annual USG contribution of
$1.3 billion in security assistance pays for 80 percent of
Egypt's military procurement budget. MoD's effort to
modernize its equipment from an old-style Soviet stock to a
U.S. based inventory is more than one-half complete. (Note:
MoD estimates that their stock of equipment is now 52 percent
U.S. and 48 percent Soviet. End note.) Progress with
modernization, however, is increasingly slow because the bulk
of the $1.3 billion in annual assistance goes to maintenance
and upgrades of existing sytems. The Egyptians will argue
that the assistance budget does not allow them to purchase
the systems their modernization plan calls for and that
efforts in Congress to redirect military assistance are
therefore damaging to their strategic goals. They will
explain that military modernization is a national security
issue on which the GOE will not compromise and likely note
that should the GOE lose any of its military assistance, it
will take money currently allocated to other sectors, such as
health and education, to ensure that modernization can
continue. In addition, they will stress that the loss of
military assistance will force them to look for cheaper
(non-U.S.) sources of equipment. Such a shift would hamper
our goal of bolstering interoperability, lessen our ability
to shape Egypt's military modernization, and could
potentially reduce our access to the MoD.


9. (C) The MoD will also explain that the 2005 Senate Bill
that did not include an earmark on Egypt's FMF was
unjustified, particularly given Egypt's partnership with the
U.S. in the GWOT (in Afghanistan and Iraq) as well as its
efforts to promote stability in Gaza and Sudan. Although
Congress restored the earmark during a late October
conference, MoD contacts said they considered the experience
troubling because military assistance is not "just about the
money." Rather, they said it symbolizes the strength of
Egypt's relationship with the U.S. and the commitment that
the U.S. made to both Egypt and Israel when they signed the
Treaty of Peace. Removing the earmark, one MoD contact
noted, would represent a "downgrade" in the relationship and
a sign that the U.S. values Egypt less than Israel or Jordan.
The fact that senior GOE officials, including Foreign
Minister Aboul Gheit, Field Marshal Tantawi, Egyptian General
Intelligence Service Director Soliman, and President Mubarak,
have all underlined the importance of military assistance in
recent months illustrates GOE's view of the significance of
the military relationship to the overall bilateral
relationship. Egypt is well aware that its FMF troubles are
not over. In a November 17 meeting with the Ambassador,
Field Marshal Tantawi acknowledged that he anticipates that
the military funding debates will reemerge in 2006.

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U.S. gains from the relationship: political and operational
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10. (C) Global War on Terror: The GOE cooperates in the
GWOT in numerous ways. This includes expeditious management
of Suez canal transit and overflight requests. Although
Egyptian law requires a presidential waiver for the passage
of nuclear powered vessels through the canal, since the
beginning of 2003, at least 49 nuclear powered warships
transited the canal. The MoD is keenly attuned to our
security needs in the Canal and waives the $50,000 per vessel
security surcharge that other vessels pay. In Afghanistan,
Egypt still staffs a U.S. funded field hospital and has
started to train local Afghan medical personnel. The GOE
also sent two C-130s of arms and ammunition to Afghanistan in
2005, is considering providing weapons and driving training
to Afghan police, and has agreed to send two engineers to
support Provincial Reconstruction Team work. The GOE has
also agreed to send an officer to serve as liaison to
Headquarters, Joint Task Force, Horn of Africa to further
improve coordination with the U.S.


11. (C) Iraq: With U.S. urging, Egyptian political
engagement with Iraq has increased significantly in the past
six months, and we can credit our strong military
relationship for at least some of Egypt's willingness to
cooperate on this issue. In addition to sending Ambassador
Ihab al Sherif to Baghdad (Note: he was killed before he
could present his credentials. End note.),Egypt hosted
Iraq's National Security Advisor Rubaie for high-level
meetings, and supported the Arab League's November 19-21
National Accord Conference on Iraq by having Mubarak speak at
the opening plenary and engaging Iraq's government officials
during the visit. Egypt's ongoing support for the political
process in Iraq will play a key role in helping Iraq reengage
with the Arab world, and we should urge them to maintain the
momentum. The GOE has also provided technical assistance to
the Iraqis, including training for diplomats, police and
security forces and has offered to do more.


12. (C) Israel-Palestine: Egypt's efforts to create an
atmosphere for progress in the Israeli-Palestinian
relationship prove its commitment to helping the U.S. achieve
regional stability. GOE security forces are continuing to
provide training to fledgling Palestinian security forces.
The Egyptian-Israeli Border Guard Agreement allowing Egypt to
place 750 guards along its border with Gaza facilitated
Israel's withdrawal from Gaza. Ongoing GOE support for the
Palestinian Authority and close coordination with Israel
played an equally critical role in the November 15 Agreement
on Movement and Access that will prevent Gaza from becoming a
prison and thereby diffuse tensions among Palestinians.


13. (C) Syria: Senior GOE officials, including President
Mubarak, have repeatedly pressed President Bashar al Asad to
cooperate with Mehlis in the investigation of Hariri's
killing and with the U.S. to prevent insurgents from entering
Iraq via Syria. Senior GOE officials, including Foreign
Minister Aboul Gheit have assured us as recently as the week
of November 13 that a breakthrough is in sight and that Asad
is considering a proposal that would allow for questioning
Syrian suspects outside of Lebanon.


14. (C) Sudan: In addition to sending large amounts of
humanitarian aid to Sudan, the GOE has also deployed three
mobile medical teams and 800 peacekeeping troops there.
Egypt's support for the peace negotiations likewise reflects
support for the U.S. goal of promoting regional stability.

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Areas for Greater Cooperation
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15. (C) Iraq and GWOT: The USG would like Egypt to provide
even more tangible support in the GWOT and to the new Iraqi
government, and Egypt appears willing. Greater Egyptian
financial support of the Bagram field hospital would also be
useful. We should consider asking MoD to send its own C-130s
to Bagram when it redeploys the staff in December (and in the
future) rather than relying on U.S. support. Funding for the
field hospital will expire in March 2007, and it is worth
pressing the MoD to maximize the hospital's outreach to the
local community over the next 15 months. On Iraq, we should
underscore the need for ongoing political support for the new
government and the political process through additional
high-level visits, training, and cultural exchanges.


16. (C) Interoperability: The absence of interoperability
between the Egyptian and U.S. militaries poses a challenge to
greater military engagement. There is no possibility that
Egypt will sign either a Communications Interoperability
Security Memorandum of Agreement (CISMOA) or an Acquisition
and Cross-Servicing Agreement (ACSA) in the near term. Under
instruction from CENTCOM, we have temporarily stopped raising
the CISMOA with MoD because the lack of progress on the issue
was negatively impacting the relationship. In reality,
should Egypt opt to sign a CISMOA, the USG would be faced
with additional, more complex challenges, such as the lack of
sufficient military assistance funds to purchase secure
communications equipment and political release
considerations. We have tabled a proposal on the ACSA, but
have yet to receive a response from MoD. As a sign of MoD's
recalcitrance on signing the ACSA, they recently declined
CENTCOM's request for bilateral discussions on the matter.


17. (C) Transformation: USG interest in encouraging the
MoD to define its military transformation goals will remain
high and should guide our military assistance program and
priorities. We have asked MoD to outline its transformation
strategy (and start to define how the MoD intends to shape
its doctrine, personnel, equipment, and priorities to meet
new strategic objectives) during the MCC, but given the
traditional reticience and the promotion of a new Chief of
Staff may lead the MoD to be hesitant or unable to offer much
detail on plans to recruit, train, equip and organize their
forces to meet emerging regional challenges and objectives.
The most significant change in staffing involves Chief of
Staff Samy Enan, who replaced LTG Waheba. In contrast to LTG
Waheba, a fluent English speaker who spent extensive periods
of time in the U.S. and attended briefings on the U.S.'s own
transformation strategy, LTG Samy speaks little English and
has not studied in the U.S. (Note: His only known training
outside of Egypt was in France and Russia. End note.)
Because of LTG Samy's limited exposure to the U.S. system, he
may be a traditionalist. MCC discussions of transformation
may provide insights into how LTG Samy views this pivotal
issue.


18. (C) Modernization: After considerable U.S. urging,
Egypt has drafted a modernization plan. Getting Egypt to
ensure that its requests for acquisitions are consistent with
its plan will be key, and we should stress this in MCC
discussions. We should also encourage the MoD to think more
critically about whether they still need to retain their
stock of aging and difficult to maintain Soviet equipment.


19. (C) Public Relations: A more refined public relations
strategy would allow the MoD to answer questions from
Washington regarding the utility of USG military assistance
and the degree of Egyptian support for U.S. strategic goals.
The MoD has been reluctant to allow the international press
to cover events in which Egypt is seen as supporting U.S.
objectives. But we should remind MoD of the extent to which
media in America influences public opinion and urge them to
use this to their advantage by publicizing cases where the
MoD partners with the U.S. to achieve shared goals.

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Weapons' release
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20. (C) The MoD will continue to press, at a minimum, for
release of the TOW 2B anti-tank missiles and the Longbow
upgrades for Apache helicopters. But they understand that
this is not realistic and know that there will be no release
"deliverable" at this year's MCC. Egypt needs to understand
that it must gear systems requests to actual strategic goals,
as defined in their modernization plans and consistent with
the long term transformation strategy. Absent this
justification and given the USG commitment to preserving
Israel's qualitative military edge, it will be difficult to
obtain inter-agency and Congressional support for requests
for new systems.

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The Value of MCC Dialogue
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21. (C) The MCC is a central component in our bilateral
dialogue and gives us a valuable opportunity to explore
mutual views on the state and direction of the relationship.
Although the MoD originally asked to keep the Executive and
Plenary sessions smaller than in the past, the mere fact that
the issues discussed touch multiple USG agencies and multiple
offices within each agency mandate greater inclusivity. MoD
has asked for a brief "pull-aside" with ASD Rodman. This,
along with the meeting with the Minister of Defense, would
likely be the most appropriate time for a candid exchange.
In addition to urging ongoing GOE engagement in the GWOT, and
greater focus on MoD's public affairs, transformation and
modernization strategies, we suggest that ASD Rodman thank
Egypt for its role in promoting regional security and for
being a critical partner to the U.S. The sole deliverable
for this year's MCC is a commitment to support the Egyptian
field hospital in Bagram until March 2007.


RICCIARDONE