R 201046Z OCT 92
FM AMCONSUL ALEXANDRIA
TO SECSTATE WASHDC 0192
INFO AMEMBASSY CAIRO 
USCINCCENT MACDILL AFB FL
DIA WASHDC

C O N F I D E N T I A L ALEXANDRIA 000721 
 
C O R R E C T E D  C O P Y ( HEADING ADDING ADDEES) 
 
E.O. 12356: DECL:OADR 
TAGS: PGOV ECON KISL EG
SUBJECT: ALEXANDRIA: CONSENSUS OF VIEWS ON 
         THE PROBLEMS FACING EGYPT: THE ECONOMY 
 
¶1.  CONFIDENTIAL - ENTIRE TEXT. 
 
¶2.  SUMMARY AND COMMENT:  DURING A DAY-LONG SERIES OF 
MEETINGS OCTOBER 17, CG SCHELL AND VISITING NEA/EGY 
DIRECTOR SURBER HEARD FROM A CROSS-SECTION OF OUR 
REGULAR LOCAL CONTACTS THAT THE MOST SERIOUS PROBLEM 
FACING EGYPT TODAY IS THE ECONOMY, MORE SPECIFICALLY, 
THE LACK OF EMPLOYMENT OPPORTUNITIES.  OUR CONTACTS WERE 
ALMOST UNANIMOUS IN THEIR VIEWS THAT ISLAMIC 
FUNDAMENTALIST MILITANCY DERIVES MUCH OF ITS MOMENTUM 
FROM THE FRUSTRATIONS AND HOPELESSNESS WHICH ATTEND THE 
CURRENT SITUATION.  THEY ALL RECOGNIZED THE NEED TO 
CONTINUE THE PROCESS OF ECONOMIC REFORM AND TO CREATE 
JOBS AND A FUTURE FOR EGYPTIANS.  COMMENT: THOUGH NOT 
NEW,  THEIR MESSAGE WAS NONETHELESS REMARKABLE FOR ITS 
UNIFORMITY.  END SUMMARY AND COMMENT. 
 
¶3.  THE ALEXANDRIANS WHO MET WITH NEA/EGY DIRECTOR 
SURBER AND CG SCHELL OCTOBER 17 REPRESENTED A 
CROSS-SECTION OF OUR LOCAL CONTACTS.  THEY INCLUDED THE 
MAYOR OF ONE OF ALEXANDRIAS SIX DISTRICTS, THE DIRECTOR 
OF AN A.I.D.-FUNDED SMALL BUSINESS PROJECT, SEVERAL 
YOUNG AND SUCCESSFUL BUSINESSMEN, A MEMBER OF THE SHOURA 
COUNCIL, AND A MEMBER OF THE PEOPLES ASSEMBLY, WHO IS 
ALSO AN ACADEMIC. 
 
¶4.  A CONSENSUS EMERGED FROM THE SERIES OF INDIVIDUAL 
MEETINGS WE HELD; NAMELY THAT THE ECONOMY IS THE MOST 
SERIOUS PROBLEM FACING EGYPT TODAY AND, SPECIFICALLY, 
THAT THERE IS A CRITICAL NEED TO ADDRESS THE 
UNEMPLOYMENT PROBLEM AND INCREASE THE ROLE OF THE 
PRIVATE SECTOR.  THE DISTRICT MAYOR, A HARD-WORKING 
PUBLIC SERVANT HEAVILY-INVOLVED IN LOCAL PUBLIC WORKS 
PROJECTS, STATED FLATLY THAT THE UNEMPLOYMENT PROBLEM 
WAS BEYOND HIS LOCAL RESOURCES.  THE A.I.D. PROJECT 
ADMINISTRATOR, WHOSE PROJECT PROVIDES LOANS FOR SMALL 
BUSINESSES, SAID THAT EVERY 1,690 L.E. (APPROX. USD 510) 
HE LOANS CREATES ONE NEW JOB.  HE WAS AN AGGRESSIVE 
ADVOCATE OF JOB-CREATION AND THE ROLE OF THE PRIVATE 
SECTOR IN RESTORING THE AILING ECONOMY.  HIS VIEWS WERE 
ECHOED BY THE YOUNG BUSINESSMEN AND BY THE SHOURA 
COUNCIL MEMBER, WHO ARGUED FOR EXPANSION OF THE 
A.I.D.-FUNDED PROGRAM AND TOLD US THAT THE MAIN 
CHALLENGE OF HIS COUNCIL WAS TO "CONTINUE THE PROCESS 
(ECONOMIC REFORM) WHICH WE HAVE STARTED."  FINALLY, THE 
PEOPLES ASSEMBLY MEMBER STRESSED THAT ECONOMIC REFORM 
WAS NOT JUST A MATTER OF GOVERNMENT DEREGULATION AND 
REDUCTION OF THE PUBLIC SECTOR.  HE NOTED THAT THE 
BUSINESS COMMUNITY HAD TO BE READY INVOLVE ITSELF IN 
OFFERING AN ALTERNATIVE TO THE PUBLIC SECTOR. 
 
¶5.  OUR CONTACTS ALSO AGREED THAT EGYPTS ECONOMIC 
PROBLEMS, WITH THEIR ATTENDENT FRUSTRATION AND 
HOPELESSNESS, WERE BEHIND THE RISE IN FUNDAMENTALIST 
MILITANCY AND VIOLENCE.  THEY NOTED THAT THE 
FUNDAMENTALIST MOVEMENT INCLUDED A SOCIAL WELFARE 
COMPONENT WHICH AIDES YOUNG EGYPTIANS IN THE PURCHASE OF 
TEXTBOOKS AND IN THE QUEST FOR HOUSING, THUS APPEARING 
MORE RESPONSIVE TO PEOPLES NEEDS THAN THE GOVERNMENT. 
THE ONLY POSSIBLY DIFFERING VIEW WAS THAT OF THE 
UNIVERSITY ADMINISTRATOR WHO, WHILE IN AGREEMENT ABOUT 
THE IMPACT OF ECONOMIC PROBLEMS, ARGUED THAT EXCESSIVE 
FORCE AND OVERREACTION BY SECURITY FORCES HAD ALSO 
CONTRIBUTED TO INCREASED FUNDAMENTALIST POPULARITY AND 
MILITANCY. (HER VIEWS ARE REPORTED SEPTEL). 
 
¶6.  COMMENT: ALTHOUGH OUR CONTACTS CAME FROM A VARIETY 
OF BACKGROUNDS AND OUTLOOKS, THE SIMILARITIES IN THEIR 
ANALYSES AND CONCLUSIONS WERE STRIKING.  NO ONE ARGUED 
WITH THE BASIC PREMIS OF THE NECESSITY OF ECONOMIC 
REFORM, NOR WITH THE PACE OF REFORM, YET ALL RECOGNIZED 
THE POLITICAL DANGERS THE PROCESS OF REFORM COULD 
BRING.  THEIR COMMENTS ON FUNDAMENTALISM WERE ALSO 
REMARKABLY SIMILAR.  END COMMENT. 
 
¶7.  NEA/EGY SURBER DID NOT REVIEW OR CLEAR ON THE TEXT 
OF THIS MESSAGE. 
 
 
SCHELL