SCENESETTER FOR THE VICE PRESIDENT'S VISIT TO EGYPT

C O N F I D E N T I A L SECTION 01 OF 03 CAIRO 009263 SIPDIS E.O. 12958: DECL: 12/12/2015 TAGS: PREL PGOV ECON ETRD KPAL PHUM EAID KDEM IS IZ SY EG SUBJECT: SCENESETTER FOR THE VICE PRESIDENT'S VISIT TO EGYPT Classified By: Ambassador Francis Ricciardone for reasons 1.4(b) and (d). -------------- Summary -------------- ¶1. (C) Embassy Cairo warmly welcomes your visit to Egypt, which comes at a critical time not only in our relations, but also in Egyptian history: the slow sunset of a quarter century of benevolent but authoritarian rule. At 77, beginning his fifth Presidential term, Hosni Mubarak is the indispensable man in the Middle East, but one so deeply rooted in the past that he communicates mainly apprehension about the future. He leads most where it matter most to us, mainly on foreign policy: he remains in front of his public in advancing Egyptian-U.S. and Egyptian-Israeli cooperation. On Iraq, Mubarak personally pressed the recent Arab League,s reconciliation conference toward the positive goal of drawing Sunnis into the political process -- and may be the only Arab leader of note to have received both the Iraqi PM and President. Mubarak has repeatedly pressed Bashar Asad to cooperate with the Mehlis investigation, to stop foreign fighters from entering Iraq and to stop inciting the Palestinians against the PA. He will want to hear from you about our next steps on Syria, Iraq, and Iran, and we can exploit his anxiety on Iran to press for Egyptian help in the IAEA. He will read you very closely to measure the fall-out from Egypt,s flawed parliamentary elections and Ayman Nour,s anticipated conviction and their impact on the future of our relations. He is tepid about a Free Trade Agreement, welcoming it as a mark of U.S. confidence in Egypt. He accepts the political context of the FTA but resents what he sees as artificial U.S. "linkage" to specific political steps in Egypt. End summary. -------------- Syria -------------- ¶2. (C) Mubarak is exasperated with the Asad regime,s self-destructive behavior but also anxious about the USG,s next steps. He has repeatedly pressed Bashar to cooperate with the Mehlis investigation and to stop foreign fighters from entering Iraq. But he believes that Asad's downfall just now, absent some plausible transition to a more capable strongman, will create further "instability." On December 7, he rebuffed Syrian Foreign Minister al Shara'a,s pleas for an Arab summit, but he is disinclined to isolate Damascus. Mubarak will likely press you to give Asad more time to solve his internal problems, or otherwise to let Syria sort itself out. You may wish to thank Mubarak for his constructive role, note that we have consistently listened to his advice on Syria, and challenge him on what steps Asad has taken to stop foreign fighters from entering Iraq, support Abu Mazen, cooperate with the UN, U.S., or otherwise to support Egyptian/Arab interests. The resistance of Palestinian groups based in Damascus towards PA Prime Minister Abbas, leadership is an especially sore point for Mubarak. Mubarak would agree that Bashar is his own worst enemy, fatally flawed, and probably doomed as a leader. You may want to query him on what he sees as the range of post-Bashar scenarios and how Egypt would propose to influence them. -------------- Iraq -------------- ¶3. (C) Despite Mubarak's bitterness over the U.S. invasion of Iraq, in recent months Egypt has strongly supported the political process in Iraq. Foreign Minister Aboul Gheit has publicly lent Egypt's weight behind keeping U.S. forces in Iraq for the time being. Mubarak himself gave opening remarks at the Arab League,s Reconciliation Conference on Iraq and hosted Talibani and Ja'afari for a working lunch. Previously, Mubarak had received Shiite Islamist National Security Advisor Rubaie, who was also received by numerous ministers. The Sheikh al-Azhar gave Rubaie a written condemnation of (fellow Sunni) Zarqawi. Egypt has offered to accept an Iraqi Ambassador, if the Iraqis get around to naming one. But Mubarak distrusts Iraq,s Shi,a, fears Iranian influence in Baghdad, and fundamentally disagrees with us over democracy in Iraq. Like most Egyptians, he believes a "tough but fair" strong leader is what Iraqis "need". He may inquire about U.S. plans for withdrawal, supporting only the most deliberate process. We value our military and intelligence cooperation with Egypt on Iraq, which goes beyond overflights and Suez passage, and we should look for new areas of collaboration. For example, Egypt's state-influenced media could do much more to present an accurate picture of Iraq and U.S. actions there. -------------- Peace Process -------------- ¶4. (C) Peace between Israel and an independent Palestine is Mubarak,s first and life-long foreign policy goal. His leadership in the negotiations is marked by increasingly warm relations between Israeli and Egyptian officials at all levels and Egypt,s deepening engagement in the governance of the Palestinian Authority. Mubarak's spokesman publicly praised Secretary Rice,s November 15 Agreement on Gaza as a "breakthrough." Egypt is also pressing the Palestinian factions to continue their cease fire (scheduled to expire in January); training and equipping the Palestinian security forces; deploying border guards along its border with Gaza to control the smuggling; and coordinating intimately with Israel and the PA on Rafah border operations. Mubarak will urge greater and speedier assistance for Gaza and a lighter hand from Israel. He recognizes the realities of the Israeli political calendar but is eager to move beyond Gaza. He is upbeat on Sharon,s prospects, considers Sharon a friend, and hopes that he wins. -------------- Iran -------------- ¶5. (C) Egyptian help on Iran/IAEA could be a take-away from your visit. A key player in the Non-aligned, OIC, and Arab blocks, Egypt hides behind alleged block "consensus" to thwart U.S. interests in international organizations across the board. In the IAEA, Mubarak's foreign ministry has emphasized NPT universality (Israel) over compliance (Iran). The MFA opposes referring Iran to the Security Council and prefers to leave the matter with the IAEA, under the direction of Egyptian Nobelist, Mohammed El Baradei. Mubarak himself is bored with details of multilateral diplomacy and may not be fully aware of Egypt,s votes and agitation in Vienna. You can exploit his suspicion of Iran, in particular, to zero in on the IAEA. He should grasp that Egypt,s own security interests are best served by aggressively thwarting Iran,s nuclear aspirations. -------------- 2005 Elections -------------- ¶6. (C) Egypt,s recent parliamentary elections, held from November 8 - December 7, deteriorated steadily in each of three rounds. The first round, in Cairo and environs, was relatively free and fair but resulted in Independents from the banned Muslim Brotherhood winning nearly twenty percent of the seats. In the second round, the ruling NDP tried to arrest this trend with aggressive vote-buying and by deploying party thugs to intimidate voters. But the Brotherhood again scored significant gains. Finally, in the third round, the security services, which had been largely neutral in previous rounds, closed polling places in crucial districts to limit the Brothers, turnout. This led to demonstrations, violence, eight deaths, and fewer (but still substantial) MB gains. There were also widely reported cases of gross ballot box manipulation by the NDP in each of the three rounds. In the final tally, the NDP candidates or affiliates controlled nearly 360 (out of 444) seats, more than the two-thirds required to pass constitutional amendments. Still, the Brotherhood has built a significant platform from which to attack the Mubarak regime, and, should it choose to do so, Mubarak's cooperation with the United States. ¶7. (C) Mubarak would like to blame the United States, support for democracy for the Muslim Brothers, success, and to seek your buy-in to his portrayal of a stark choice between a slow-to-reform authoritarian regime versus a fanatic Islamist regime. He will also seek to measure the fall-out in our relations from the flawed elections and his regime's other anti-democratic steps, like the persecution of political opponents. The single most important result of your visit could be to nudge Mubarak back towards bolder, genuine leadership of the domestic reform agenda, as he pledged in his own presidential campaign. -------------- Ayman Nour -------------- ¶8. (C) Political opposition leader Ayman Nour may be convicted and sentenced on forgery charges on/about December 24, conveniently after your visit. Nour placed second in the September Presidential election, with eight percent of the vote, but his real offense was attacking the Mubarak family and Gamal,s aspirations to succeed his father. Mubarak,s camp insists that Nour is guilty of the crime, was accorded due process, and "can always appeal." Whatever the merits of the case, the anticipated conviction shows persecution of democratic reformers, not leadership of reform. We have warned close advisers, including son Gamal, that in convicting Nour, Egypt risks creating a potential Mandela. We've beaten up every one short of Mubarak on this. If he raises the Nour case, or you choose to do so, we suggest you urge him to find a way out of a trap of his own creation. -------------- The Economy -------------- ¶9. (C) Though bored with economic policy, and lukewarm to a prospective Free Trade Agreement with the United States, Mubarak recognizes the importance of free market economic reform in creating jobs. Hence he hopes you will bring some good news on FTA. Reformers in Mubarak,s cabinet regard the FTA as a badly needed lever for further economic reform. Their record since July 04 is impressive: tariffs and taxes have been reduced and simplified, the currency is now freely convertible, the exchange rate has stabilized, inflation has declined, the banking sector has consolidated, and new economic legislation, including a competition law, has been passed. Egypt also signed a Qualifying Industrial Zones agreement with Israel, which has expanded and deepened Egyptian-Israeli trade and political relations. To prepare for FTA negotiations with the United States, the GOE has resolved numerous U.S. business complaints and improved the general business climate. But the challenges are also daunting. Foreign direct investment allegedly is improving but is still far below required levels. Unemployment levels remain high. 600,000 new job seekers enter the labor force each year. Mubarak is more convinced of the need for economic reform than political, but he will still need to be pushed. Direct U.S. financial assistance is already tied to strict benchmarks on financial reform, where results have been best and rewards most promising. RICCIARDONE