EGYPT: CABINET SHUFFLE DUMPS KEY OLD GUARD

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 009547

SIPDIS

NSC STAFF FOR SINGH

E.O. 12958: DECL: 12/28/2015
TAGS: PGOV PREL ETRD EG
SUBJECT: EGYPT: CABINET SHUFFLE DUMPS KEY OLD GUARD
FIGURES, MODEST BOOST TO REFORM CAMP

Classified by Charge d'Affaires Stuart Jones for reasons 1.4
(b) and (d).

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Summary
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1. (C) News of a cabinet shuffle, anticipated in Cairo for
several weeks, broke overnight December 27-28. The leaders
of the "sovereign" Ministries - Defense, Foreign Affairs, and
Interior, remain in place. Also staying are key members of
Egypt's economic reform team: Finance Minister Boutros Ghali,
Trade Minister Rachid, and Investment Minister Mohieldin, and
of course Prime Minister Nazif. Dismissed were the ministers
of Agriculture, Housing, Social Affairs, Manpower, Health,
Transport, Local Development, Youth, and Supply. Of the
greatest political significance was the dismissal of Kamal
Shazly, Minister of People's Assembly Affairs. A veteran
machine politician and ruling party "enforcer," Shazly was a
principal symbol of the GOE's "old guard" and the arrogance
of power. Several other of the outgoing ministers were
distinguished by their reputations for corruption. The new
crop are generally seen as pro-business/pro-reform figures.
Two ministries, youth and supply, were abolished. End
summary.

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Breaking News
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2. (C) Although no formal announcement has been made, news
broke overnight December 27 and was published as fact in the
pro-government press on the morning of December 28, that a
cabinet shuffle anticipated for several weeks was finally
being initiated by Prime Minister Nazif, on instructions from
President Mubarak. There were three key elements to the
development:

-- First, the "sovereign" ministries - Defense, Foreign
Affairs, and Interior - would remain under the same
leadership. Also remaining in place are key members of the
economic reform cabinet - Yousef Boutros Ghali, Minister of
Finance, Rachid Rachid, Minister of Trade, and Mahmoud
Mohieldin, Minister of Investment, as, of course, is Prime
Minister Nazif.

-- Second, 11 members of the old cabinet, including several
notorious for their corruption, were being shown the door.

-- Third, Kamal Shazly, Egypt's quintessential old-guard
figure and machine politician, widely acknowledged to be one
of the most powerful and feared men in the country, was
dismissed. Political reform advocates have long been calling
for his head, citing his continued presence in the GOE as
"proof" that the GOE's talk of reform was cheap.

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Roll Call
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3. (C) Personnel changes in the Egyptian cabinet are as
follows:

-- Tourism: Ahmed Al-Maghraby, the respected businessman and
pro-reform figure, was transferred to take over the Ministry
of Housing. He will be replaced by Dr. Mohammed Zoheir
Garana, Maghraby's protege and a wealthy businessman whose
family owns a number of hotels at resorts across the country.

-- Housing: Ibrahim Soliman, probably the most notoriously
corrupt member of the outgoing cabinet was dismissed. He
will be replaced by Ahmed Al-Maghraby.

-- Transport: Minister Essan Sharaf was dismissed. He is
replaced by Mohammed Lotfy Mansour, a former chairman of the
American Chamber of Commerce and one of Egypt's wealthiest
businessmen with extensive dealings in the automotive and
transportation industries. Mansour was an early supporter of
Ayman Nour's Ghad Party, but resigned after the crisis
triggered by Nour's arrest.

-- Health: Dr. Awad Tag El-Din was dismissed. He will be
replaced by Dr. Hatem El-Geibaly, a professor of radiology
and senior partner in Dar Al-Fouad, one of Egypt's most
modern medical facilities. Geibaly is a proponent of health
care reform and privatization.

-- Manpower: Minister Ahmed Al-Amawy was dismissed. He is
replaced by Aisha Abdel Hady, a female and leader of Egypt's
principal pro-government federation of trade unions.

-- Insurance and Social Affairs: Minister Amina El-Guindy
was dismissed. She is replaced by Dr. Aly Mesalahy, a former
director of the National Postal Service, who holds a degree
in electronics from France.

-- Education and Scientific Research: Minister Ezzat Salama
was dismissed. He is replaced by Dr. Hany Hilal, a respected
Dean of the Engineering School at Cairo University.

-- Agriculture: Ahmed Al-Laithy, who only took the post in
July of 2004, was replaced by Amin Abaza, a cotton industry
executive who had been a consultant to USAID in the 1990s on
an agricultural reform project.

-- Youth: Minister Mamdouh Beltagi was dismissed, and the
Ministry is to be disbanded and reconstituted as two separate
entities - a National Council for Youth and a National
Athletics Council.

-- Supply and Domestic Trade: Minister Hassan Khadr was
dismissed. His ministry is to be disbanded and its functions
brought under the authority of the Ministry of Economy and
Foreign Trade.

-- People's Assembly Affairs: Kamal Shazly, the symbol of
Egypt's old-guard, listed in the Guinness Book of World
Records as the longest continuously serving parliamentarian
(since 1964),was dismissed. His departure is of great
symbolic importance and marks the end of an era.

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Comment
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4. (C) While not as dramatic as the July 2004 cabinet
shuffle, the personnel changes are significant and appear to
enlarge and add weight to the reform camp at the expense key
old guard figures like Shazly and Soliman, although both
retain their parliamentary seats. We see this step as
confirmation of Mubarak's commitment to move forward with
economic reform and proceed cautiously on sensitive political
and national security fronts. The dismissal of old guard
figures and inclusion of reformists could also be intended to
off-set the scathing domestic and international criticism of
the GOE and the Mubarak regime that followed the profoundly
flawed late-fall parliamentary elections.

JONES