Background Briefing En Route to Cairo, Egypt

Special Briefing
Senior State Department Oficial
Cairo, Egypt
March 2, 2013

MODERATOR: Okay, ladies and gentlemen, we are en route from Ankara to Cairo, our sixth stop on Secretary Kerry's first trip as Secretary. Here to give you a little sense of the Secretary's plan for his stop in Cairo is [Senior State Department Official] hereafter Senior State Department Official. Take it away, [Senior State Department Official].

SENIOR STATE DEPARTMENT OFFICIAL: Okay. Let me go through – am I in the right place?


SENIOR STATE DEPARTMENT OFFICIAL: Let me go through with you what the outline of the schedule is. The Secretary will start with a meeting with Amr Moussa as one of the --

MODERATOR: Just stay right there.

SENIOR STATE DEPARTMENT OFFICIAL: -- because he's one of the major political leaders. He'll see – he'll probably do a phone call to Mohamed ElBaradei, another of the political leaders, and meet with --

QUESTION: Could you repeat that? I'm sorry – met ElBaradei?

SENIOR STATE DEPARTMENT OFFICIAL: He will do a phone call with Mohamed ElBaradei as another one of the political leaders and will have a meeting with several of the other political leaders to touch base with each of them. The idea here is – well, let me go through the whole schedule. So he'll do that first. He also meets with Amr Moussa – sorry, with Nabil Elaraby, the current Arab League Secretary General, and will then meet with the business roundtable to talk about the various economic issues. He has a meeting and then dinner with Mohamed Amr, the Foreign Minister, this evening, and then tomorrow meets with a group of NGO leaders. He goes to meet with the Minister of Defense. He meets with President Morsy, and then his last meeting is with the Intelligence Chief, General Shehata.

He's in Cairo for basically 24 hours. It's a very intense set of meetings that he has. He's basically working to touch base with the government, with the military, with a variety of people involved in the new Egypt – the political parties, the NGO leaders, the business people. And his basic message is: It's very important to the new Egypt for there to be a firm economic foundation on which the new Egypt can operate. It will be important for the government to make an arrangement, to make an agreement with the IMF that brings in not only the IMF money, the $4.8 billion that's in the IMF deal, but that unlocks a lot of the other money that would come from the U.S., from the EU, from the Arab states, and also from private investment. At the --

QUESTION: If there's an IMF deal.

SENIOR STATE DEPARTMENT OFFICIAL: If there's – yeah, it requires the IMF deal.

At the same time, in order for there to be agreement on doing the kinds of economic reforms that would be required under an IMF deal, there has to be a basic political agreement among all the various players in Egypt. And one of the big themes that we've been using with President Morsy is the importance of outreach, the importance of building consensus, the importance of rolling out the various elements, for example, of the constitution and of the election process that will get underway here pretty soon.

But at the same time, it's not all on President Morsy to build consensus. The various political leaders in Egypt need to be also amenable for these kinds of conversations to work to build consensus, to at least engage so that President Morsy has a sense and the government has a sense of the kinds of things that they believe are important as he moves forward both in terms of the constitution's – possible amendments to the constitution, ways to assure that the elections are free and fair, ways to ensure that the elections are monitored properly, and ways to ensure that civil society can operate in the way they should be able to operate in a democracy.

MODERATOR: Good. Let's take two or three. We don’t have a lot of time.

Arshad, please.

QUESTION: Is he going to explicitly call on the opposition to take part, to announce their boycott or their planned boycott of the elections?

SENIOR STATE DEPARTMENT OFFICIAL: He's not going to put it that way. He's going to talk in terms of the importance. If they want to engage, if they want to assure that their views are taken into account, that the only way to do that is to participate, that they can't sit aside and just assume that somehow by magic all of this is going to happen, that they've got to be able – they've got to participate. He's not going to tell them what to do, but he's going to say engagement is the only way to get things moving along the lines that they have in mind.

QUESTION: What specifically do you want them to do to facilitate the return of the IMF and the chances of getting an IMF package?

SENIOR STATE DEPARTMENT OFFICIAL: What they need to do is very detailed economic, esoteric kinds of things, but it's things like increasing tax revenues, reducing energy subsidies, making clear what the approval process will be to the Shura Council for an IMF agreement, that kind of thing.

QUESTION: How much emphasis will there be in the Secretary's discussions with President Morsy on the tone and tenor of his comments toward Jews and that sort of thing?

SENIOR STATE DEPARTMENT OFFICIAL: That issue – that will be part of the discussion, but that issue was addressed both in a phone call that the Secretary made to Morsy, and it was addressed in a phone call that the President made to Morsy – to President Morsy, so it will be --

QUESTION: Are you satisfied with the answers you got?

SENIOR STATE DEPARTMENT OFFICIAL: I think the best way to put it is that it's an iterative process. It's something that we'll continue to have conversations with President Morsy about. The primary goal here is to encourage his – to encourage the work that he did with the Israelis in getting the Gaza ceasefire, that he can see that he can get results by working with the Israelis, by having his team work with the Israelis. He sees that in terms of Gaza security, he sees that in terms of getting better security in Sinai, so that there are constant good conversations between the Israelis and the Egyptians on that whole set of issues, and it sort of – it's getting him to understand that that's the way to go.

MODERATOR: And how you can build on that to have --


MODERATOR: -- a more productive relationship across the --

SENIOR STATE DEPARTMENT OFFICIAL: On all of these things, so --


QUESTION: You just spoke with USAID. Is there any sense that the U.S. needs to shift to more economic aid, away from the military aid? Are there those kinds of conversations going on?

SENIOR STATE DEPARTMENT OFFICIAL: It won't be more of those kinds of conversations. If anything, the shift in the military aid is to think more in terms of border security, the kinds of things that are particularly appropriate for Egypt right now given the security situation in which Egypt finds itself. But in terms of U.S. assistance, there will be – some of our assistance is tied to – the prospective assistance is tied to the IMF deal on the idea that these kinds of economic reforms that the IMF is asking for exactly the kinds of reforms that we would be asking for.

QUESTION: Prospective assistance is beyond the roughly 1.55 billion that they've gotten for a long time, the 1.3 in military? (Inaudible.)

SENIOR STATE DEPARTMENT OFFICIAL: But let me back up a little bit. The President --

MODERATOR: This will be the last --

SENIOR STATE DEPARTMENT OFFICIAL: The President talked about the one billion in 2011 – up to one billion dollars in assistance.

QUESTION: One billion?


MODERATOR: In the President's speech in May 2011, he pledged a billion dollars to support Egypt.

SENIOR STATE DEPARTMENT OFFICIAL: Right. And that is – there's the OPIC piece of that, and then there are the other pieces that have been under discussion for some time. There's the $450 million piece, there is a $550 million piece on top of that. Some of that is loan guarantees. If you have – the economists are better at this than I am, but if you have, say, a $200 million loan guarantee, that can translate into about a billion or a billion and a half.

MODERATOR: We've got to wrap it up. Thanks, guys. We'll have more time to talk to [Senior State Department Official] later. Thank you.

PRN: 2013/T01-20