MUBARAK'S NUCLEAR PROTOCOL WITH RUSSIA:

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 000721 SIPDIS SIPDIS E.O. 12958: DECL: 03/26/2018 TAGS: PREL PGOV ENRG EPET ETRD KNNP EG RU SUBJECT: MUBARAK'S NUCLEAR PROTOCOL WITH RUSSIA: HIGHLIGHTING INDEPENDENCE FROM THE U.S.? REF: A. CAIRO 579 ¶B. CAIRO 574 Classified by Minister Counselor for Economic and Political Affairs William R. Stewart for reasons 1.4 (b) and (d). ¶1. (C) Summary: Contacts in the GOE and Egyptian academia have described President Mubarak's late March visit to Russia as "routine," including the Egyptian-Russian nuclear energy protocol signed during the visit. While the nuclear energy protocol and other agreements for Egyptian-Russian cooperation were light on substance, they show that Egypt continues to highlight diversity of its foreign relations. Publicizing relations with Russia also allows the GOE some space from criticism from an Egyptian public that is both opposed to U.S. policies in the Middle East and restive with its government over domestic concerns. End summary. Mubarak Visits Moscow -------------- ¶2. (U) Egyptian President Hosni Mubarak traveled to Moscow March 24 26 with a delegation that included Minister of Foreign Affairs Ahmed Aboul Gheit, Minister of Electricity and Energy Hassan Younes, Minister of Petroleum Sameh Fahmi, Minister of Trade and Industry Rachid Mohamed Rachid, Egyptian General Intelligence Service (EGIS) Chief Omar Soliman, and Presidential Advisor Zakariya Azmi. Mubarak told press before departing that the visit would focus on regional issues such as Israeli-Palestinian peace, and bilateral cooperation in nuclear energy, industry, technology, and investment, including Russian assistance to Egyptian nuclear power plant construction and establishing a Russian industrial zone near Alexandria. Separately, Minister Rachid told the press that Russia had agreed to grant preferential treatment to Egyptian agricultural products. ¶3. (C) MFA Cabinet Advisor for Eastern Europe Omar Amer Youssef told us April 2 that Mubarak's visit was the third in a series of strategic dialogue meetings between Egypt and Russia, and was timed so that Mubarak could pay a farewell call on outgoing Russian President Putin and meet President-elect Medvedev. The two leaders discussed three main bilateral issues: reinvigorating the stalled establishment of a Russian industrial zone in Burj Al Arab near Alexandria to produce cars for export and maintain Soviet military equipment still used by the Egyptian military; the high level of Russian tourism to Egypt (as more tourists from Russia visit Egypt than from any other country); and increasing bilateral trade. The two leaders also confirmed their intent to continue educational and cultural exchanges between the two countries, Amer said. ¶4. (C) Amer reported that Mubarak encouraged the Russians to see the proposed May meeting in Moscow regarding the Israeli-Palestinian issue as a continuation of the Annapolis process. Putin reportedly sought Mubarak's analysis on crises in Sudan, Lebanon, Iraq, and Iran, and reiterated Russian opposition to recognizing Kosovo. Amer contended that Egyptian opposition to recognizing Kosovo (ref A) was only due to Egyptian analysis that independence would destabilize the region, and not due to Russian pressure. Nuclear Protocol Low on Substance but "Teases" U.S. -------------- -------------- ¶5. (C) Minister of Electricity and Energy Younes told reporters that, while in Moscow, he signed a protocol with the head of ROSATOM that will allow Russian nuclear energy companies to participate in the pending Egyptian tender concerning consultancy services for site selection and evaluation for a nuclear power plant (ref B). FCS Counselor reports that so far two U.S. companies have expressed interest in this tender, for which bids are due May 15, 2008. Amer said that the nuclear protocol has been under negotiations since 2002 and was "not really a big deal," as Mubarak planned the visit to Russia to coincide with the change in leadership in Moscow and "we were looking around for deals." However, a Ministry of Trade contact told us separately that the protocol, while light on substance, is a message to the U.S. that Egypt has "other choices" when it comes to foreign support of Egyptian projects. ¶6. (C) Dr. Abdel Moneim El Mashat, Director of the Center for Political Research and Studies at Cairo University, told us April 1 that Mubarak's visit came in the normal course of Egypt diversifying its strategic foreign relations. While the GOE may be "teasing" the U.S., there is no substitute for the strong relationship that Egypt has with the U.S. Additionally, El Mashat assessed that the GOE may calculate CAIRO 00000721 002 OF 002 that announcing deals with Russia - a country historically at odds with the U.S. - may win it points at home by showing that the GOE is not beholden to the U.S. and its unpopular policies in the region. Comment: Diversified Relations Also Domestic Propaganda -------------- -------------- ¶7. (C) The GOE appears to be increasingly focusing on its relationships in Europe and Asia, and the visit to Russia falls under this framework. The deals so far are less than meets the eye: the nuclear energy protocol only allows Russian companies to compete for future tenders, and the industrial zone has been under discussion for some time and would be of limited scale. However, we assess that, for some in the GOE, highlighting Russian ties demonstrates Egypt's independence from perceived U.S. pressure, and as well is an avenue to deflect internal criticism as domestic woes mount. RICCIARDONE