EGYPT: LIMITED CABINET RESHUFFLE

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 005384 SIPDIS SIPDIS NSC FOR RICK WATERS E.O. 12958: DECL: 08/28/2016 TAGS: PGOV KDEM EG SUBJECT: EGYPT: LIMITED CABINET RESHUFFLE REF: CAIRO 3556 Classified By: DCM Stuart Jones, for reasons 1.4 (b) and (d). ¶1. (C) SUMMARY. In a minor August 27 cabinet shake-up, a new Minister of Justice (Mamdouh Marei) and Minister of Local Development (Mohamed Abdel Salam Al Mahgoub) were named, and Minister of Planning Mohamed Othman given an additional economic development portfolio. Reformers are disappointed with the President's choice of the new Minister of Justice but Marei may be more effective at building bridges to the Judges Club than his predecessor. Embassy contacts are, however, encouraged by the shifts in the other ministerial portfolios. END SUMMARY. ¶2. (SBU) Following months of rumors of pending ministerial changes, a minor cabinet reshuffle was announced by the Egyptian government on August 27. Mamdouh Marei (former head of the Supreme Constitutional Court) replaced Mahmoud Abu el-Leil as Minister of Justice; Mohamed Abdel Salam Al Mahgoub (former governor of Alexandria) was named Minister of Local Development; and Minister of Planning Mohamed Othman was given an additional portfolio as State Minister for Economic Development. The reshuffle also included changes to Egypt's gubernatorial line-up - Adel Labib (former Governor of Behaira) was named as Governor of Alexandria, Mohamed Abdel Hamid Shaarawy (former Governor of Sohag) is now Governor of Behaira, and Mohsen El Noamany has been appointed Governor of Sohag. -------------- -------------- NEW MINISTER OF JUSTICE CAUSES CONCERN AMONG ACTIVISTS, JUDICIARY -------------- -------------- ¶3. (C) While official sources assert that former Minister of Justice Abu el-Leil resigned due to health problems, it is widely believed that he was dismissed because of his inability to control the confrontation last spring with the influential Judges Club (reftel). The Egyptian reformist community gave Marei poor marks for his performance in heading the Presidential Election Commission that oversaw Egypt's 2005 presidential elections, and views his new appointment as a reward for "complicity" in largely ignoring elections violations. Multiple Embassy contacts expect him to be more "cooperative" than Abu el-Leil in dealing with controversial issues such as the upcoming constitutional amendments package, and the drafting of a new Anti-Terror Law to replace the Emergency Law. Some observers also anticipate a further alienation of the Judges Club from the Ministry of Justice. But others suggest that Marei was chosen for his superior political gifts, and will engage the judges more proactively than his predecessor. -------------- OTHER SHIFTS LARGELY VIEWED POSITIVELY -------------- ¶4. (C) Former Alexandria Governor Al Mahgoub's appointment to head the newly re-created Ministry of Local Development is viewed by some contacts as a side-lining of the powerful and popular Governor. Al Maghoub has been criticized for allowing sectarian tensions to erupt in Alexandria last winter and again in the spring. The appointment of Adel Labib may reflect the regime's desire for a firmer security posture. A rumored rift between Al Maghoub and Egyptian First Lady Suzanne Mubarak has caused some to speculate that the move equals Al Mahghoub being "kicked upstairs" to a position without much authority or significance. Others assert that Al Mahghoub's solid anti-corruption credentials, as well as his success in bringing local development projects to Alexandria and his commitment to decentralization, means his new position will allow him to effect important changes in the relationship between localities and the central government. Dynamics between local governments and Cairo will be increasingly in the spotlight as the GOE proceeds with a decentralization initiative, and prepares for the 2008 local elections. ¶5. (C) The Ministries of Finance and Planning have long battled over control of the national budget. Our contacts report that the re-creation of the Ministry of Local Development and the new focus of Minister of Planning Othman on economic development is a coup for Minister of Finance Youssef Boutros Ghali, an influential Gamal Mubarak ally. As a result of the changes, the Ministry of Finance seems ascendant over Planning, and has assumed more power in directing GOE financial policy priorities. It is not yet clear precisely how Othman's new "Economic Development" CAIRO 00005384 002 OF 002 portfolio will manifest itself, though observers have pointed out that Othman himself is a centrally-oriented theoretician with little understanding of the complexities involved in implementing economic policies. Some observers see this as the creation of a kind of "watchdog," albeit a relatively impotent one, for the reformist economic ministers, whose policies still retain Mubarak's cautious approval. In a best case scenario, Othman might serve as a sounding board for reaction to implementation of policies likely to cause social disruption, such as cutting subsidies. ¶6. (SBU) Biographical information on the new ministers and governors will be provided septel. RICCIARDONE