Tuesday, December 14, 2010

Egypt continues to provide critical Suez Canal and overflight access for U.S

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. 

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. 
Source: 08Cairo2543


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