Background Briefing En Route to Cairo

Senior Official, Office of the Spokesperson
Washington, DC
July 14, 2012

MODERATOR: All right, everybody. We are en route from Siem Reap, Cambodia to Cairo, Egypt. With us to talk about the Secretary’s visit to Cairo and Alexandria is [Senior State Department Official], hereafter Senior State Department Official. Take it away, [Senior State Department Official].

SENIOR STATE DEPARTMENT OFFICIAL: Thanks, guys. So we are headed into Cairo a couple of weeks after President Morsi took the oath of office because Secretary Clinton thought it was very important to have early engagement with him and with all the stakeholders in Egypt. She wants to underscore how important this relationship – U.S.-Egypt relationship – is to us and how the United States would like to support Egypt as it moves forward with its transition to democratic, civilian rule. And she intends to engage with President Morsi, with civil society, with Field Marshal Tantawi on this question of what the United States can do to support a complete transition.

She also intends to speak with the President and the other stakeholders about how the United States and Egypt can work together on a range of shared interests that are important to both Egypt and to the United States. And she believes that taking this opportunity early on provides the chance to begin a serious engagement and dialogue with a new president and to carry on a dialogue with all of the other stakeholders there at a very important time of change and transition in Egypt.

She’s going to be focused on three areas. The first is economic and how the United States can bring a variety of economic tools to bear to help Egypt deal with two sets of problems – short-term problems related to the need for economic stabilization, to help them deal with their finance gap, to help them contend with some of the economic challenges that have been created over the past year or so as a result of the transition, including a loss of growth, a loss of tourism, and other economic dislocations, and then long-term challenges chiefly related to unemployment and underemployment as a very large cadre of young Egyptians come of age and come into the workforce with education but not necessarily with skills that are matched to the jobs that are actually available. That and other structural questions about the modernization of Egypt’s economy will be very much on the agenda.

And so many of you will recall that a year ago the President said that we would provide a billion dollars to support the new Egyptian Government as it began its work. And now that we have a new President, she will be speaking with him and with other stakeholders in Egypt about the component elements of that billion dollar package, which will include budget support to help with Egypt’s financing gap and help them deal with the support (inaudible) and then a debt swap, which essentially translates into relieving some of Egypt’s debt over the coming period and taking that money to put it into job-creating programs in innovation, in technology, in technical and relational training, especially focused on Egypt’s young people.

She’ll be announcing that we have named a chair of the board of the U.S-Egypt Enterprise Fund that the President also announced. His name is Jim Harman. We’ll get you more information on him. He’s a well-known quantity in the region, and he’s somebody who is familiar with how effective these enterprise funds can be in emerging democracies. We have had very positive experiences with him elsewhere in the world. We are doing an initial capitalization of $60 million with the expectation that, over the course of the next few years, we will be adding to that endowment to grow the size of the fund. And Jim Harman will be out in the region soon to begin the process of actually making investments and doing deals.

She will speak with the Egyptian leadership about an OPIC fund of $250 million focused on small-and-medium-sized enterprises and about the steps that the Egyptian Government needs to just complete in order to begin to have access to that fund. And then she will tell President Morsi that she’s being responsive to the requests of the Egyptian Government by sending out Tom Nides, her deputy, with a large delegation of American businesses in September to try to deepen and extend ties and to generate American investment in Egypt.

In the course of those conversations, she will also talk about how the United States can support Egypt as it works with international and financial institutions and with other donors and how we can support Egypt with technical assistance as it makes the reforms and takes the modernization steps to bring its economy kind of fully up to sort of 21st century standards, something that President Morsi himself has talked a lot about. So that’s on the economy.

On the political transition, the Secretary will be eager to hear from President Morsi, from civil society, from Field Marshal Tantawi, from across this spectrum about the steps that the Egyptians are planning to take and how they are intending to answer the questions that are confronting them right now on the constitution, on the parliament, and on the other aspects of institutions that will ultimately result in a full transition to democratic, civilian rule. These are questions that only the Egyptians can answer. She’s not coming with prescriptions or with a specific set of proposals, but rather is going to seek to understand better from them how they intend to proceed and is going to underscore her view that dialogue among the stakeholders to develop consensus on a way forward is crucial to avoid the kind of confrontation and instability that could derail the transition.

So that will be her message both in private and in public, and she will be focused not so much on what these specific elements are, which are things the Egyptians need to work out, as on the principles that have guided the U.S. approach to the transition all along – a fully representative parliament, a constitutional process that is inclusive and produces a document that protects the rights of all Egyptians, and all of the other attributes, from an independent judiciary to a thriving civil society, that make up a sustainable democracy over time.

She, in the context of this, will also stress her deep belief that Egypt’s democracy can only be successful and that the aspirations of the revolution can only be redeemed if the rights of all Egyptians are protected, including the rights of minorities, including religious minorities, and the rights of women. And that’s also a message that she will carry both publicly and privately. And in that regard, she will welcome President Morsi’s commitments and his public statements and be eager to hear from him on how – what he plans to do to carry out those commitments and to follow through on them.

The third area --

MODERATOR: What about the meetings?

SENIOR STATE DEPARTMENT OFFICIAL: Oh, right. Yeah. So just to give you a quick run of play, today she’s going to see President Morsi in a small meeting, and then she will see Foreign Minister Amr, where she’ll have an opportunity to talk about the next areas here, regional security, regional issues.

And then tomorrow, in addition to having a meeting with Field Marshall Tantawi, she will be meeting with women civil society activists from a range of walks of life, some who work on democracy and education and health, some who work in the business sector, so a cross-section of women who also reflect the kind of deep diversity of Egypt’s civil society. And then she’ll be meeting with more than a dozen Christian leaders from across Egypt, who represent a variety of denominations – Coptic Christians, but other Christians as well – to hear from them about their concerns and to talk to them about what they plan to do to contribute to the democratic transition and to a new Egypt over time.

And then she will visit a sort of business incubator, a technology incubator, where young entrepreneurs are looking to grow new businesses and are getting seed money and technical assistance to do so. And this is, in part, financed and supported by a U.S.-Egypt partnership. So this is a way in which we’re trying to help contribute to opportunities for young people to become entrepreneurs and the engine of economic growth in the new Egypt.

So from entrepreneurs to civil society to women to religious minorities, her business kind of reflects the breadth of engagement across all of the main constituent groups and stakeholders in Egypt.

Then we’ll go up to Alexandria, which is the economic hub of Egypt. Eighty percent of Egypt’s trade comes in through Alexandria’s port. It is the economic engine of the country. And while she’s there, she’ll have an opportunity both to open – reopen the American consulate, which was closed in 1993, and to give remarks on that occasion, where she continues to talk about how the United States can play a positive role in supporting Egypt’s transition and in supporting the future of Egypt’s economy. It’s appropriate to be in Alexandria because of its role as a business and economic hub, and it’s a place where she can get out of Cairo and speak to another kind of different audience of Egyptians than the one that you find in the capital city.

So taking us to the third major area, which is regional security, again here she has heard very positive statements from President Morsi in terms of his commitment to upholding the peace treaty and his desire for Egypt to remain an important source – a cornerstone of regional peace and security. And she will stress her view that Egypt’s leadership is crucial to the future of the region, to its peace and security, and to the future of Egypt itself, that over the course of the last 30 years you had a generation of Egyptians grow up without war or conflict and that that has been a boon to Egypt and to the Egyptian people, and the new Egyptian President should have the vision and the leadership to be able to carry that forward.

She’ll talk about some of our shared security interests, including counterterrorism and counter-piracy and also concerns about developments in the Sinai, which she recognizes ultimately a matter that the Egyptian Government itself has to work out as it’s obviously Egyptian territory. But the United States is prepared to support Egypt in this with resources, equipment, technical capacity, training, and other things. So she’ll want to speak with the President and other stakeholders in Egypt about that subject.

But above all, her message is really going to be about Egypt’s historic role and about the ways in which the U.S.-Egypt partnership has provided great benefits to both our countries and that during the period of transition and after the period of transition we should maintain that partnership and continue a lot of the good work that has been done to secure better futures for the Egyptian people, for the American people, and for all of the people of the region.

I think it would be fair to say that she will be very much eager to listen and to hear from President Morsi. This is the first opportunity she’ll have to meet him, and so part of it will be an opportunity for the two of them to understand each other better at a personal level and for each of them to understand the perspective that they bring – she on behalf of the United States, he on behalf of a changing Egypt – to what the future of this partnership will look like. And I think you will also find that in her public comments, both later tonight and tomorrow, she will sound a lot of the themes that I just talked about, but ultimately will sound a note of optimism about her view both of what Egypt can achieve and what the U.S.-Egyptian partnership can achieve as we move forward, and that note of optimism comes even in the context of challenges that exist today and will continue to exist and that we are very much mindful of.

So that’s all I’ve got. I don’t know, [Moderator], if you’ve got anything to add, but I’d be happy to take your questions otherwise.

MODERATOR: We’ll start with Arshad.

QUESTION: Three things: One, what specifically is going to be her message for Field Marshal Tantawi? I ask because you mentioned twice, or several times, the importance of moving to a complete transition, a full transition. It seems fairly obvious that the military has not been enthusiastic about a complete or full transition. So what exactly is she going to say to Tantawi about that?

Second, has any of the one billion dollars that you discussed, that the President referenced in his speech last year, actually been appropriated or not?

And then lastly, you talk about the importance of the U.S.-Egyptian partnership, but it is, of course, the successive U.S. administrations that worked very, very closely with President Mubarak, who spent a fair amount of energy oppressing, imprisoning, arresting, marginalizing the Muslim Brotherhood. What makes you think they’re going to be all that eager to work with you?

MODERATOR: So the questions were: What’s the message for Tantawi? Has any of the money been appropriated yet from the Congress? And how are you going to work with the Muslim Brotherhood?

SENIOR STATE DEPARTMENT OFFICIAL: So the first one, Tantawi has made clear repeatedly that his ultimate objective is to produce that same complete transition to a full democracy, that that is his object, that that is what he would like to achieve. That has been the message from the SCAF and from Tantawi personally. What the Secretary is going to say to Tantawi and ask him is what are your plans for your part of it, because this is not just about the military, it’s about all of the different players. It’s about all aspects of Egypt civil society, about a newly elected president, and about the SCAF. And so she will seek his perspective and his ideas for how they intend to move forward.

In terms of message, I think she’s going to say you have to stick with it, you have to keep going; you set out the objective, you’ve made the commitment, now we want to support you in following through on that. I think she will also say what she said publicly a couple of days ago, which is that it is crucial that all of the stakeholders who need and have a voice in Egypt’s transition engage in a dialogue to answer the complicated questions around parliament and the constitution and other things that are presented right now. And so she will encourage Tantawi – as she will encourage Morsi and civil society – to engage in that dialogue and to avoid the kind of confrontation that could potentially lead to the transition veering off track.

In terms of money being appropriated, a substantial portion of the package that the Secretary will discuss has, in fact, been appropriated. Some of it has not because the debt swap money will come over multiple tranches and it will get appropriated as it comes due. And I would also add that over the course of the last year, even as we have tried to put ourselves in a position to have this package for the new government, we still have been continuing programming and investing substantial sums of money in Egypt on a whole range of issues that I can get you more information on. But the answer is yes --

QUESTION: I thought the actual number --

SENIOR STATE DEPARTMENT OFFICIAL: On how much is that? I’ll get back to you.

And then on the third issue, I think the Secretary’s main message on regional security to President Morsi is that --

QUESTION: (Inaudible) how are you going to – what makes you think the Muslim Brotherhood, when you supported governments that oppressed them for decades, are going to be very eager to work with you?

SENIOR STATE DEPARTMENT OFFICIAL: I think her message to President Morsi on this issue is going to be that the United States and Egypt have a number of shared interests, common interests that will continue through and beyond the transition. I spoke a little bit about the issue of Egypt’s role as a leader in peace and security, about the peace treaty. These are things that have produced substantial benefits and dividends to the Egyptian people, and she will convey to President Morsi her view that the United States and Egypt working together on this set of issues is ultimately very much in the interest of the Egyptian people, as it is in the interest of the American people.

I think she will make clear to President Morsi that we have deep shared interests in Egypt’s economic growth and its integration into the global economy and its modernization and that the United States has unique capacities to bring to bear, both in terms of direct assistance of various kinds and in terms of our capacity to mobilize the international community to help Egypt on these things, and that working with an Egyptian Government that is committed to economic modernization and committed to seeing through the democratic transition is something that the United States is very much seeking to do as much on behalf of the Egyptian people as on behalf of our own interests.

I think in those two areas, they can have a very fruitful conversation about the way that our partnership can proceed going forward.


QUESTION: The $60 million and the $250 million you announced earlier – are those parts of the billion or are they separate money?

SENIOR STATE DEPARTMENT OFFICIAL: No, separate. They’re separate.

QUESTION: Okay. And then how worried is the United States about what is happening with the Coptic Christians and also with women in Egypt, as women inside the country?

SENIOR STATE DEPARTMENT OFFICIAL: Well, let me start with women. At various points over the course of last year, you’ve heard the Secretary express some pretty strong concerns about the treatment of women in various contexts. And so it is something that she certainly worries about and wants to ensure that women and women’s rights and women’s opportunities are respected and protected in a new constitution and a new democratic order.

MODERATOR: And in fact, advanced?

SENIOR STATE DEPARTMENT OFFICIAL: And, in fact, advanced, yeah, that women come out of this democratic transition with the same rights and opportunities as men, the same chance to fulfill their political and economic aspirations. And this is something that she will be very forthright about in her private meetings and in public, and she will make the case – as she does all over the world – that this is not an American interest or an American value, but a universal value and fundamentally in the interest of Egypt, because a country that leaves behind half of its citizens is not a country that’s going to succeed over time.

With respects to Christians and other religious minorities – because it’s not just Christians – her view is that, again, over the course of the last year, there have been some worrying signs, but that the new President has gone out and made very positive statements and commitments about working on behalf of all Egyptians. And her goal over the course of this visit will not be to lecture on this issue but rather to encourage and to solicit from the President what it is that he intends to do in terms of his actions to follow through on those statements and commitments.


QUESTION: If the U.S. recognizes the legitimacy of Morsi’s victory and at the time of the parliamentary election it recognized that that was a free and fair and transparent process, why isn’t it taking a stronger position against the SCAF? It seems like you’re still sitting on the fence and not really pushing them hard for their manipulation of parliamentary and the constitutional process.

SENIOR STATE DEPARTMENT OFFICIAL: In the particular issue with the ruling on the parliament, you have a whole range of actors engaged with interests. You have a judiciary; you have the members of parliament, of the parliament that was dissolved; you have the SCAF; you have civil society groups that have differing perspectives on how things should proceed. So the Secretary’s perspective and the United States’ perspective is that ultimately this is something that has to get resolved through dialogue among all of those stakeholders, that the complicated set of questions – legal, political and otherwise – are things we can’t answer on their behalf, that they have to answer for themselves.

We don’t view that as sitting on the sidelines. We view that as recognizing the reality that there is a very complicated set of questions that have been posed by the events of the last month and that effective dialogue that’s consistent with the principles and the objectives of a democratic transition is the only way that you’re going to get a sustainable result.

MODERATOR: And I think [Senior State Department Official] has already said at the beginning of this that the message both to civilians and the military is going to be complete this full, civilian, democratic transition.

QUESTION: Right. But when we have actions (inaudible) power grab on the eve before the Morsi inauguration, when you have actions that clearly reject the principles you’re laying out, why won’t you call them out as such?

SENIOR STATE DEPARTMENT OFFICIAL: I mean, I think – I can’t really say much more than what I’ve said. I mean, your question characterizes it one way, but you have a range of stakeholders across Egypt who are presenting very different perspectives on what transpired. And from our perspective, we can say true to the ultimate conclusion of this, which is a full democracy in Egypt with all of the intended institutions. The specific steps along the path have to ultimately be worked out by the various stakeholders in Egypt.

MODERATOR: (Inaudible.)

QUESTION: I understand that the Secretary was going to make a speech in Alexandria to civil society leaders and that that has been – that plan has been changed. Can you talk about – is that true, and if so, why did that change?

SENIOR STATE DEPARTMENT OFFICIAL: This is your first trip with us? I’m [Senior State Department Official] by the way. I don’t think we’ve actually met. Okay. So some of your compatriots can tell you that our method of planning for trips involves putting a whole bunch of ingredients in the mix and then working the schedule right up to the last minute before making a decision. And there’s a number of factors that went into the schedule that got laid down.

Number one, she wanted to be able to have as much time as possible to engage with this broad cross-section of Egyptians. Number two, she wanted to be able to go to two cities. And then number three, she wanted – she had to fit – squeeze all of these things into a certain number of hours in the day. So you’ll notice that tomorrow night we’re going to finish up in Alexandria pretty late in the evening before moving onto Israel, and so there is just simply the question of how many events you can plug into various places. And one of the things that we had considered but decided not to do was to give a speech. Scheduling had a lot to do with that.

And then the other thing is, when we thought where are we at this moment, what’s the most effective use of her time, how can she most effectively convey her messages, we thought some kind of seated lecture was just not going to be the most useful event to put on to try to accomplish what we’re accomplishing. I would not read into it. There wasn’t a high policy decision taken to do the speech and then not to do the speech. It was a much more organic process where we arrived at our final decision.

MODERATOR: I would add to that, for her, the U.S. speech you don’t hear from the audience, right? In this context, where she’s going to be able to have three different seated encounters, where it’s really going to be a back and forth, it’s her opportunity to hear from different players in this Egyptian story, how they see it going, what they want, and how we can support them.

SENIOR STATE DEPARTMENT OFFICIAL: And I can tell you as, in my capacity, I propose and ultimately don’t follow through on more speeches on more trips than just about anybody.

QUESTION: It’s part of the just trip prep planning.

QUESTION: [Senior State Department Official], when the revolution – when it happened, one thing that became clear is that a lot of international organizations really had no sense what life was actually like on the ground. (Inaudible) are clean, there was economic growth, and yet things were really hard. If the focus now is on structuring and helping to build the economy, what has changed in the process and what are some of the benchmarks to (inaudible) fund that you’re now (inaudible) structure (inaudible)?

SENIOR STATE DEPARTMENT OFFICIAL: So I’d say three things about that. First, actually while it’s true that some international institutions did not have a particularly good fix on things in Egypt for, shall we say, your average family or your average citizen, there was certainly a bevy of information coming out of it in the last few years in the area* of human development reports, in other World Bank materials, about the challenges that Egypt was facing and about what worked and what really didn’t work through – around the reforms that happened a few years ago. So there is a lot of data and a lot of lessons learned over the past several years that the international community can draw on today. We’re not drawing on a blank slate in that regard. That’s first.

Second, a big part of the reason why we are coming to Egypt to consult on a debt swap is that we believe that taking debt from the Mubarak era and converting into an effective job-creating set of programs that is specifically targeted at what those development reports show, which is the gap between young people’s education and the opportunities that they have and closing that gap – we think that that is the single most effective way to connect people to the economy and to ultimately create the engine so that a self-sustaining growth settles in.

And then the third thing I’d say is that we have been encouraging the IMF and Egypt to work together to come up with a program that really works and that takes into account the unique challenges Egypt’s facing both in the short term and in the more structural ways in which you’re talking about. We’re not going to get right in the middle of that. That’s between the IMF and Egypt. But part of what she will talk about with President Morsi is what is it that the United States can do; what messages can we convey to international institutions and to other donors that can help you as you think through how you want to carry out your economic modernization plans.

President Morsi and the party that he comes from has made this issue a central part of what they hope to achieve and in relatively short order. They have ambitious plans. They have a lot of ideas. And the goal is for us to be able to figure out how to marshal the whole international community to effectively support that.

MODERATOR: Thank you. We will have – the Secretary will be out in about an hour and a half after we land in Egypt, so you’ll get to hear from her as well. Thanks very much.

PRN: 2012/T68-35