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Cablegate: Scenesetter for General Petraeus' Visit to Egypt

DE RUEHEG #2543/01 3561526
O 211526Z DEC 08

S E C R E T SECTION 01 OF 03 CAIRO 002543



E.O. 12958: DECL: 10/15/2018

REF: A. CAIRO 2175
B. CAIRO 2141

Classified By: Ambassador Margaret Scobey per 1.4 (b) and (d).

1. (S/NF) Summary and Introduction: General Petraeus,
welcome to Egypt. Your visit will be, I hope, the first in a
regular process of dialogue and consultation with Egyptian
leaders who view the U.S.-Egyptian security partnership as
the cornerstone of the bilateral relationship. This visit
provides an opportunity for you to assess the state of our
military partnership and to identify new opportunities. To
date, the U.S. investment in the Egyptian Armed Forces (over
$36 billion since 1980) through the Foreign Military
Financing (FMF) program has supported peace between Egypt and
Israel and assured Egyptian support for extending peace to
the rest of the Arab world. In addition, the Egyptian
military has the potential to become interoperable with U.S.
forces * capable of fighting side by side as they did in the
1991 First Gulf War - and continues to provide critical Suez
Canal and overflight access for U.S. military operations and
to provide peacekeepers to regional and international
conflict zones.

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2. (S/NF) The United States has sought to interest the
Egyptian military into expanding their mission in ways that
reflect new regional and transnational security threats, such
as piracy, border security, and counterterrorism. Egypt,s
aging leadership, however, has resisted our efforts and
remains satisfied with continuing to do what they have done
for years: train for force-on-force warfare with a premium
on ground forces and armor.

3. (S/NF) We have requested meetings with President Mubarak,
Defense Minister Field Marshal Tantawi, EGIS Chief General
Soliman, and Foreign Minister Aboul Gheit. The overall
U.S.-Egyptian relationship has suffered in the past few
years. The Egyptians have lost confidence in U.S. regional
leadership. They believe that the U.S. invasion of Iraq was
an unmitigated disaster that has unleashed Iranian regional
ambitions and that the U.S. waited far too long to engage in
Arab-Israeli peacemaking efforts. In addition, U.S. and
Egyptian differences over the pace and direction of political
reform have drained the warmth from the relationship on both
sides. We believe President Mubarak would be interested in
an early visit to Washington to consult with President Obama,
in large part to try to begin repairing the relationship.
End Summary.

Mil-Mil Cooperation: In Need of Renovation

4. (S/NF) Mubarak and military leaders view the FMF program
as the cornerstone of our security relationship and believe
the $1.3 billion annual grant should be viewed as
"untouchable compensation" for making peace with Israel. They
complain that the parity between U.S. assistance to Israel
and to Egypt has been destroyed as U.S. security assistance
to Israel has climbed and theirs has remained fixed. We have
come to take the U.S.-Egyptian security partnership for
granted, but we should not underestimate its value to us and
the region. Our partnership guarantees there can be no
resumption of overt Arab-Israeli war and also provides
valuable US military access to the Suez Canal and Egyptian
airspace. We would not like to contemplate complications for
U.S. regional interests should the U.S.-Egyptian bond be
seriously weakened. Nevertheless, we recognize the
backward-looking nature of Egypt,s military posture and
believe that finding new, mutually agreed objectives could
assure the continuation of our strategic ties with Egypt into
the future.

5. (S/NF) Seventy-seven year old Field Marshall Tantawi, in
office since 1991, has resisted any change to usage of FMF
funding and has been the chief impediment to transforming the
military,s mission to meet emerging security threats.
During his tenure, the tactical and operational readiness of
the Egyptian Armed Forces (EAF) has decayed. But he retains
Mubarak's support, and could easily remain in place for years
to come. Tantawi will likely express his opposition to
Congress conditioning military and economic assistance and
will seek support in convincing Congress of Egypt's strategic
importance. He will also make a case for the release of
certain military systems such as the TOW IIB and F-15
fighter aircraft.

CAIRO 00002543 002 OF 003

6. (S/NF) You should assure Mubarak and Tantawi that Egypt
remains a key U.S. ally, but that we would like to find new
areas of cooperation that build on existing relationships but
that look to meeting new threats. Such a development would
help us defend the Egyptian FMF program by demonstrating its
ongoing value.

7. (S/NF) Threats to this partnership exist. Although all
previous Administrations and Congresses since Camp David have
reaffirmed the U.S. commitment to a strategic U.S.-Egyptian
relationship, the events of the last few years have made a
few cracks in the foundations. Congressional concern about
Egypt,s poor human rights and democracy record prompted the
imposition in 2008 of conditions upon Egypt,s assistance
program. Although the Secretary of State was given the right
to waive the conditionality, the Egyptians view
conditionality as "unacceptable." We are currently dealing
with the conditionality issue for FY2009.

8. (S/NF) The potential for Congressional action that could
affect Egyptian FMF/ESF funding, creates even greater reason
for Egypt to begin to orient more of its military
capabilities toward unconventional threats. The more
Egyptian military cooperation can be viewed as backstopping
U.S. military requirements in the region, the easier it is to
defend the Egyptian assistance program on the Hill. Over the
last year, we have engaged MOD leaders on developing shared
objectives to address current threats, including border
security, counter terrorism, civil defense, and
peace-keeping. Our efforts thus far have met with limited
success. After initially strong resistance, MOD supported
the first phase of a $23 million FMF-funded counter-smuggling
system soon to be installed on the Gaza-Egyptian border (ref
A). You should encourage Tantawi to immediately approve the
follow-on stages and stress the importance of using the
knowledge gained from the seismic-acoustic equipment to
destroy tunnels and break up arms smuggling rings.

9. (S/NF) One way to demonstrate Egypt's continued strategic
importance is through shifting more FMF funding to address
asymmetric threats like terrorism and improving border
security along its long and porous borders. You should also
stress with GOE interlocutors that our mil-mil relationship
is much greater than the yearly flow of military assistance.
Egypt could play a much more active
and influential role in regional security issues, including
supporting and training the Iraqi military, deploying more
peace keeping troops to Sudan, joining neighbors in combating
piracy, and stemming the flow of illegal migration. Another
such concrete display of a more forward looking security
strategy would be to support CENTCOM's efforts to re-invent
BRIGHT STAR. Tantawi will lament the loss of large-scale
BRIGHT STAR. You should stress that BRIGHT STAR continues to
be an important strategic
statement for the U.S. and its regional allies, and solicit
his input for ways to make BRIGHT STAR more relevant.

Regional Efforts

10. (S/NF) While the military remains inwardly focused,
Mubarak and key Egyptian officials remain engaged on a number
of regional issues. On Iraq, although President Mubarak
remains deeply suspicious that Nuri Al Maliki answers to
Tehran, other GOE officials have expressed increasing
confidence that Iraq has turned a corner and may avoid civil
war. Foreign Minister Aboul Gheit recently completed a
successful trip to Baghdad in October (ref B) and is moving
forward to reopen the Embassy in Baghdad. On the
Israeli-Palestinian conflict, GOE efforts to facilitate
intra-Palestinian reconciliation under the auspices of EGIS
Chief General Soliman foundered in November due, in their
view, to Iranian-Syrian meddling. On Iran, Egypt is concerned
by rising Iranian influence in the region and has supported
UN sanctions, but does not have a comprehensive strategy to
counter Iran's regional momentum. The
Egyptians have worked with Saudi Arabia and other Arab states
to support Lebanese political and territorial sovereignty.

11. (S/NF) Egypt is a steadfast ally in the GWOT, and we
maintain close cooperation on a broad range of
counter-terrorism and law enforcement issues. We have a
long-standing and productive relationship with EGIS and SSIS,
the two Egyptian agencies that cover internal and regional

CAIRO 00002543 003 OF 003

terrorism issues. Through the Department of State's
Anti-Terrorism Assistance program, we are working with SSIS
to establish an anti-terror investigative unit, and also are
in the beginning stages of a USG-funded community policing
program that will include needed human rights training.

Internal Politics and Economics

12. (C) Our fundamental political reform goal in Egypt
remains democratic transformation, including the expansion of
political freedom and pluralism, respect for human rights,
and a stable and legitimate transition to the post-Mubarak
era. Egyptian democracy and human rights efforts, however,
are being suffocated, and Mubarak remains skeptical of our
role in democracy promotion, lecturing us that any efforts to
open up will result in empowering the Muslim Brotherhood
(which currently holds 86 seats in Egypt's parliament).
Mubarak now makes scant public pretense of advancing a vision
for democratic change. An ongoing challenge remains balancing
our security interests with our democracy promotion efforts.

13. (S/NF) Mubarak, who is now 80, is in solid health,
notwithstanding a hearing deficit in his left ear. The next
presidential elections are scheduled for 2011, and if Mubarak
is still alive it is likely he will run again, and,
inevitably, win. Despite incessant whispered discussions, no
one in Egypt has any certainty about who will eventually
succeed Mubarak, nor how the succession will happen. Mubarak
himself seems to be trusting to God and the inertia of the
military and civilian security services to ensure an orderly
transition. The most likely contenders for next president
are presidential son Gamal Mubarak (whose profile is
ever-increasing at the ruling party), EGIS chief Omar
Soliman, dark horse Arab League Secretary-General Amre
Moussa, another old-guard regime insider, or an as-yet
unknown military officer.

14. (C) Economic reform has been a success story, although
Egypt still suffers from widespread and so far irremediable
poverty affecting upwards of 35-40% of the population.
Reforms in trade and tax policy, financial reform,
privatization and increased transparency have led to 7%
economic growth in the last fiscal year. Foreign investment
increased from around $3 billion in 2005 to $11
billion in the last year, mostly in the petroleum sector.
Despite this success, significant problems remain, including
20% inflation, high levels of poverty and unemployment, and
endemic corruption. The effects of the global financial
crisis on Egypt may not be as severe as elsewhere, as
Egyptian banks operate very conservatively and have been
spared involvement in risky financial products. The informal
economy also provides a certain degree of resiliency to the
economic picture. Nevertheless, as the economic crisis
worsens, Egypt remains vulnerable as exports, Suez canal
revenues, tourism, and remittances will reflect global

15. (S/NF) U.S. economic assistance will drop from $415
million in FY 2008 to $200 million annually for the next five
years starting in FY 2009. The Egyptians are not pleased
with the cut and have suggested several ways of using the
assistance that would be difficult to get through Congress,
such as debt relief. We would like to focus assistance on
health care and education reform along with poverty
alleviation. Negotiations are ongoing over use of future
assistance funds.

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