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.

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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.

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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"

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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