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Cablegate: Arab Lg Cos On Arab Development, Iraq, Iran, Yemen, and Moussa's Future Plans

VZCZCXRO7154
PP RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHEG #2388/01 3631411
ZNY CCCCC ZZH
P 291411Z DEC 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC PRIORITY 4583
INFO RUEHEE/ARAB LEAGUE COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 002388

SIPDIS

FOR NEA/ELA AND NEA/RA

E.O. 12958: DECL: 12/29/2019
TAGS: PREL PGOV YE IR IZ EG
SUBJECT: ARAB LG COS ON ARAB DEVELOPMENT, IRAQ, IRAN, YEMEN, AND MOUSSA'S FUTURE PLANS Classified By: MINISTER-COUNSELOR DONALD A. BLOME REASONS: 1.4 (B) and (D)
1.(C) Key points: -- Arab League Chief of Staff Hisham Yousef told poloff Dec 27 the Arab League was moving forward with the Arab Fund for Economic and Social Development on an Arab small/medium enterprise fund. More than USD one billion has been pledged by Arab states thus far. -- Iranian Majlis speaker Ali Larijani met with Moussa on Dec 23. Yousef said the two discussed key regional issues; Larijani told Moussa that Tehran "fully supports" the Yemeni government but criticized recent Saudi military action against Houthi rebels. -- Iraqi PM Maliki met SYG Moussa on Dec 18. Yousef said Iraq appears to be on a positive political trajectory, and noted the successful passage of the electoral law. -- When asked about Moussa's Dec 23 interview with Al Masri Al Youm (in which Moussa was critical of aspects of Egyptian domestic policy), Yousef did not foreclose the possibility of Moussa running for president in 2011, and noted that Moussa's position as AL SYG prevented him from going farther on this subject. ARAB DEVELOPMENT FUND CAPITALIZED ---------------------------------

2.(SBU) Yousef told poloff Dec 27 that his recent visit to Washington had been very positive, and that he looked forward to returning in January/February 2010 with a small team to further discuss how the AL can work with the USG on economic/social programs that would further the ideas laid out in President Obama's June 4 Cairo speech. He said the Arab small/medium enterprises fund, which had been announced at the Arab League economic summit in Kuwait in January 2009, had already been capitalized with more than USD one billion. The Arab Fund for Economic and Social Development (AFESD) will administer the program in coordination with the AL. Saudi Arabia and Kuwait each recently pledged USD 500 million; Egypt USD 10 million and Yemen USD 5 million. The goal is for a total of USD 2 billion in capitalization, Yousef said, but it can begin operating with one third of that amount. Yousef said the idea is to provide low-interest loans (as little as USD 10000) to support start up companies throughout the Arab world. Details, such as eligibility requirements, accountability and how to distribute equitably among Arab states, still need to be worked out, he said. MOUSSA MEETS LARIJANI ---------------------

3.(C) SYG Moussa met Larijani on Dec 23. Yousef said he was impressed by Larijani, whom he characterized as "organized and logical." He said Moussa still hasn't settled on a strategy to put Arab-Iranian relations "on the right track." The fundamental problem, Yosuef said, was that AL member states had vastly different relationships with Tehran. A unified AL approach is very difficult to develop, he said. SYG Moussa personally favors an approach that includes dialogue, incentives and disincentives for improving Iran's regional behavior, especially with respect to Hizballah, Hamas, Gulf security and now "perhaps" Yemen, Yousef said. Larijani told Moussa that Iran is ready for increasing dialogue, "but it is impossible to call their bluff because the Arabs are divided."

4.(C) Larijani told SYG Moussa that Iran "fully supported" the Yemeni government, according to Yousef. However, Larijani said Tehran disapproved of Saudi Arabia's recent military action along the Saudi-Yemeni border against the Houthi rebels. Yousef commented that "the Iranians are clever. You must be clever in return. You cannot be intellectually lazy when dealing with them." He assessed that the "moment of truth" is approaching with respect to Iran and its nuclear program, which is why he believed Russia has become somewhat more willing to consider sanctions against Tehran. MOUSSA MEETS MALIKI -------------------

5.(C) Yousef said PM Maliki had a warm meeting with Moussa, and that he came away from that meeting optimistic that Iraq's political progress will continue. Additional progress will be tough, he said, but the passage of the electoral law is an example "for the whole Arab world" on how to resolve an CAIRO 00002388 002 OF 002 issue democratically. MOUSSA'S DEC 27 INTERVIEW -------------------------

6.(C) Yousef commented on SYG Moussa's interview with Al Masr Al Youm (in which Moussa was critical of Egyptian social and economic development, and did not rule out the possibility of running in the 2011 presidential election). He said the path (for Moussa's candidacy) is currently blocked (by Egyptian candidacy law requirements) but that if it were to be "unblocked" Moussa will cross that bridge when he comes to it. He asked what the USG thought of the idea of Moussa's candidacy; poloff demurred. Yousef noted that Moussa's position as AL SYG requires that he limit his comments on whether or not he will be a candidate. Scobey

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