US embassy cable - 05CAIRO2281

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 002281 
 
SIPDIS 
 
FOR NEA, H, NEA/ELA 
 
E.O. 12958: DECL: 03/19/2015 
TAGS: OREP, PREL, PGOV, ECON, EFIN, ETRD, EG, IZ, Visits 
SUBJECT: CODEL PELOSI MARCH 19-20 VISIT TO CAIRO: MEETING 
WITH PRIME MINISTER NAZIF 
 
 
Classified by Charge Gordon Gray for reasons 1.4 (b) and (d). 
 
1.  (C) Summary.  During a meeting with CODEL Pelosi, PM 
Nazif asserted that Egypt is "systematically" building a 
democratic system.  He also highlighted Egypt's economic 
reforms and called for strengthening the bilateral economic 
relationship.  Nazif expressed concern over the image of the 
U.S. in Egypt, noting how history has made the concept of 
occupation a very sensitive one for Egyptians.  Nazif argued 
strongly against shifting U.S. assistance from the military 
sector to development.  End summary. 
 
2.  (U) House Democratic Leader Pelosi (D-CA) was joined at 
the meeting by Rep. Darrell Issa (R-CA), Rep. George Miller 
(D-CA), Rep. Henry Waxman (D-CA), Rep. Edward Markey (D-MA), 
Rep. Anna Eshoo (D-CA), Rep. Jim McGovern (D-MA), Rep. Linda 
Sanchez (D-CA), House Sergeant at Arms Wilson Livingood, the 
Charge, and ECPO Counselor (notetaker).  Nazif was 
accompanied by Cabinet Secretary General Dr. Sami Zaghloul, 
Spokesman Magdy Rady, and Assistant Foreign Minister for the 
Americas Shadia Farrag. 
 
4.  (SBU) Nazif welcomed the CODEL to Egypt's Smart Village, 
a high-tech business park outside Cairo.  Nazif took 
particular pride in pointing out that the Smart Village, 
which he nurtured during his previous job as Minister for 
Communications and Information Technology, counted Microsoft 
and Vodafone among its tenants.  He emphasized the value he 
put on the U.S.-Egypt relationship, and expressed his desire 
to see greater bilateral trade and investment.  Nazif 
highlighted recent Egyptian political reforms, calling the 
CODEL's attention to President Mubarak's recent announcement 
on multicandidate presidential elections and a new law on 
political parties. 
 
5.  (C) Leader Pelosi expressed gratitude for Egypt's 
assistance during the recent conflict with Iraq, particularly 
overflights of U.S. aircraft and expeditious transit of the 
Suez Canal.  Rep. Miller asked Nazif to what extent Egypt's 
recent "political opening" was home-grown, rather than 
imported.  Nazif responded that "we can not ignore messages 
from the U.S." and that Egypt understands that the U.S. sees 
democratic reform in the Middle East as essential to its own 
security.  At the same time, Nazif noted that every country 
must move at its own pace of development and the Egypt is 
"systematically" building a democratic system.  He cautioned 
that Egypt is determined to avoid the "instability" that 
Lebanon is currently suffering.  He said that Egyptians' 
first preoccupation is with jobs, then prices and government 
services, with democracy falling fourth on the list of 
priorities.  Later in the meeting, Leader Pelosi expressed 
concern about the arrest of opposition politician Ayman Nour, 
suggesting his detention bodes ill for democratic reform. 
Nazif replied that the charges against Nour were not 
political.  Rather, he said, serious and credible criminal 
charges had been made, and they would be investigated and 
appropriate action taken. 
 
6.  (SBU) Nazif highlighted recent or planned changes to 
Egypt's customs and income tax regimes and asked for help 
from the U.S. as Egypt reforms its social safety net, i.e., 
subsidies.  Nazif said that he planned to visit the U.S. 
soon, perhaps in the first half of May, and would bring with 
him a detailed explanation of what reforms the GOE plans to 
carry out and what help it will seek from the U.S. 
 
7.  (C) After praising Egypt's constructive role in the peace 
process, Rep. Waxman asked for Nazif's views on perceptions 
of the U.S. in Egypt in the wake of the Iraq war.  Nazif 
described himself as "very concerned" about the image of the 
U.S. in Egypt.  He emphasized that Egyptians know and 
appreciate the assistance the U.S. has provided over the past 
25 years, but that history makes the concept of foreign 
occupation of an Arab country "very vivid" in Egyptian minds. 
 That said, Nazif continued, it would be a "huge 
accomplishment" if the U.S. could bring stability to Iraq. 
Unfortunately, he added, the media "focuses on bombs, not 
progress."  Egyptians are also worried by U.S. efforts to 
"impose democracy" and wary of U.S. policy towards Syria. 
 
8.  (SBU) Rep. Markey asked Nazif to explain how Qualifying 
Industrial Zones (QIZ) work and how they benefit Egypt.  The 
Prime Minister explained the background of the program and 
how the end of national textile quotas forced Egypt to find a 
way to preserve its share of the U.S. apparel market.  He 
commended the U.S. Trade Representative's office for their 
part in reaching a QIZ agreement quickly, and said that the 
deal will mean 150,000 new jobs for Egyptians. 
 
9.  (C) Nazif then raised the proposal of Rep. Lantos to 
shift some U.S. assistance to Egypt from security to economic 
development, (i.e., from FMF to ESF).  Nazif argued strongly 
against such a shift, emphasizing that it is essential to 
keep Egypt's military strong.  "It is a zero-sum game," Nazif 
said, meaning that any reduction in U.S. military assistance 
will have to be made up from elsewhere in the GOE budget.  In 
response, Rep. Waxman asked Nazif what enemy requires Egypt 
to have such a strong military.  Nazif emphasized that 
Egypt's is a defensive, rather than offensive, army, an 
"anti-terrorist army." 
 
10. (SBU) Rep. Eshoo asked about Internet penetration in 
Egypt.  Nazif replied that the GOE is pushing hard to 
implement e-government and e-learning initiatives, with plans 
to have 7,000 schools serving grades 7-9 completely wired for 
high-speed Internet access within three years.  He also 
highlighted Egypt's programs to make computers and Internet 
access more affordable. 
 
11. (SBU) Rep. McGovern praised the GOE's education 
initiatives, and Nazif explained the GOE's plans to expand an 
education decentralization pilot plan.  Rep. McGovern asked 
about the role of women in Egyptian politics.  Nazif said 
that, while progress had been made in increasing voter 
turnout among women, Egypt still elected few women to public 
office. 
 
12.  (U) CODEL Pelosi did not have an opportunity to clear 
this message before departing Egypt. 
 
 
Visit Embassy Cairo's Classified Website: 
http://www.state.sgov.gov/p/nea/cairo 
 
You can also access this site through the 
State Department's Classified SIPRNET website. 
 
GRAY