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Cablegate: Embassy Cairo

VZCZCXYZ0008
PP RUEHWEB

DE RUEHEG #1924/01 2811536
ZNY CCCCC ZZH
P 081536Z OCT 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 3794
INFO RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L CAIRO 001924

SIPDIS

USAID/ME, STATE FOR F, NEA AND EB

E.O. 12958: DECL: 10/07/2019 TAGS: EAID ECON PREL PGOV EWWT ETRD EG

SUBJECT:

PRIME MINISTER DISCUSSES ESF, ELECTIONS, SINAI DEVELOPMENT, AND POST SAID EXPANSION Classified By: Ambassador Margaret Scobey for reasons 1.4 (b) and (d)
1. (C) Key Points: -- Prime Minister Nazif says the GOE will consider allowing international observers to participate in upcoming elections, but noted that the issue "is on the table in any election." He believes that a more capable and engaged political opposition is needed. -- Nazif supports a new mechanism for ESF with a greater emphasis on education. He wants more opportunities for Egyptians to study in the U.S. and continued USG funding of some select GOE positions. -- Nazif advocates continued USG assistance to Bedouin communities in the Sinai. -- Under a GOE master plan, Port Said will quadruple in size by expanding port facilities, adding an industrial zone, and creating a new city housing up to two million people.

2.(SBU) The Ambassador called on Prime Minister Ahmed Nazif on October 5 and discussed a wide-range of issues, including the state of Egyptian political opposition, a possible role for international observers in upcoming elections, the future of ESF, USG assistance to the Sinai, and GOE plans to develop Port Said and its environs. ---------------------------- PM Wants New Approach on ESF ----------------------------

3. (C) The Ambassador told Nazif that she continues to discuss the future of ESF with Minister of International Cooperation (MIC) Fayza Aboulnaga and noted that clear differences remain on how to move forward. As she had done with Aboulnaga on September 9, the Ambassador explained that debt relief should not be discussed in the context of economic assistance; while the concept of an endowment is appealing, a modest start (both in funding and scope) would be more likely to garner USG support; and greater clarity on the level and duration of ESF after 2010 will not be forthcoming until further along in the FY2011 budget process.

4. (C) Nazif said he is still for a new approach on ESF, one that differs from past program-specific funding. He agreed that, so long as there is agreement in principle on a jointly-managed, jointly-funded endowment, then its size can grow over time. The Ambassador noted that both U.S. and Egyptian interests are important in continuing talks with MIC on the subject, particularly USG requirements for accountability of U.S. funds.

5. (C) Nazif expressed his desire that future ESF focus on education, particularly for supporting study in the U.S. He added that study in the U.S. offers not only opportunities for advanced degrees but also a more favorable context for learning. He asserted that growth of Egyptian IT and Banking Sectors has helped reduce the brain drain of U.S. graduates departing for more lucrative jobs in the Gulf and elsewhere. Nazif requested that ESF funds continue to support the salaries of GOE experts, but the Ambassador replied that the external funding of positions is being phased out. Nazif advised that he is trying to identify a way to secure salary support for select positions from his own budget but has been unsuccessful thus far. (Comment: While USD funding of salaries has been phased out, USAID has agreed that local currency in Egypt's "special account" could be used for this purpose as a transition to bringing these technical positions into the GOE's budget. End comment.) ----- Sinai -----

6. (C) The Ambassador told Nazif that she has also discussed with Aboulnaga the issue of U.S. assistance in the Sinai, particularly how best to move forward with the $50 million in FY2009 Supplemental funds. Ambassador noted that in cooperation with Sinai's Governor progress had recently been made in implementing $10 million in programs supported by earlier funding. The Ambassador emphasized that USAID is prepared to move quickly in implementing other Sinai-focused programs and will continue to work with MIC on the means to do so. Nazif said that the Sinai needs both medium and long-term programs focusing on meeting the basic needs of the Bedouin population. ---------------------------------- Science and Technology Cooperation ----------------------------------

7. (C) The Ambassador reviewed with Nazif some of themes of President Obama's Cairo Speech, particularly science and technology in education, and Nazif suggested that the U.S. and GOE align their programs. He noted that there are five higher-level schools called "centers of excellence" which could benefit from USG-GOE coordinated involvement. Technical schools spread throughout the country could also use more attention, he continued, adding "we need more technicians than university graduates." He also described specific GOE funds dedicated to education and science and technology. The Ambassador offered to have post follow up on these ideas with Nazif's staff. --------- Elections ---------

8. (C) The Ambassador raised the issue of People's Assembly and Shura Council elections in 2010 and the Presidential election in 2011 and said that the USG stands ready to provide support, including technical assistance. She added that she hoped the GOE would soon accept NGO registration for IFES, a U.S.-based international NGO specializing in elections. She noted that recent elections in Lebanon and Iran will prompt greater scrutiny of upcoming elections in Egypt. Nazif replied that there needs to be greater engagement on the part of political parties, otherwise extremists will fill the void. He added that ensuring the participation of women was also a challenge. He said that he doubted the NDP worried about losing its majority. Nazif said one problem is the opposition parties themselves: their leaders' cannot speak English, are generally of "a lower level," and focus on the negative without articulating solutions.

9. (C) The Ambassador also asked Nazif to consider the participation of international election monitors in the upcoming elections. Nazif replied that this issue "is always on the table in any election" and he is "sure it will be considered." He added that Egypt's political reform process is complicated and its pace may be slower than what some would prefer. ---------- Port Plans ----------

10. (SBU) Nazif began by mentioning his October 4 tour with President Mubarak of ongoing construction at Port Said. He said that Port Said is the fourth largest port in the Mediterranean, handling 6.2 million containers in the past year, and the fastest growing port in the world. A master plan for the port will quadruple its size, with an industrial zone to the south and continued post expansion eastward, to include a development housing a million people. Nazif said that, at a later stage, a city for two million people will be created. He added that the GOE intends to construct a bridge or tunnel to traverse the Suez Canal east of Port Said. Scobey

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