VZCZCXYZ0023
OO RUEHWEB

DE RUEHEG #2477/01 1171422
ZNR UUUUU ZZH
O 271422Z APR 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7688
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS CAIRO 002477 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NSC STAFF FOR SINGH 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PTER KISL KDEM EG
SUBJECT: MUBARAK'S MAY DAY SPEECH STRESSES CONTINUED REFORM 
AND STABILITY 
 
 
Sensitive but unclassified.  Please protect accordingly. 
 
------------------- 
Summary and comment 
------------------- 
 
¶1.  (SBU)  President Mubarak's annual May Day address to the 
Egyptian labor movement, on April 27 at the Convention Center 
in Nasr City, a suburb of Cairo, was notable for his comments 
on reform and stability.  In addition to the obligatory 
congratulations to Egypt's labor movement, Mubarak recapped 
his key policy initiatives.  His restatement of key policy 
positions is reproduced below.  Among the key points that 
President Mubarak made were the following: 
 
--My campaign promises for reform were not "just" talk. 
 
--Achievement of the promises will occur, but over a six-year 
time frame, not in a matter of months. 
 
--Economic reform is proceeding strongly, including boosting 
ties with Europe, Turkey, and Russia. 
 
--Privatization will not imperil workers' economic security. 
 
--Terrorism and sectarian strife are two grave threats to 
Egypt's security and stability.  "Egypt's national security 
is a red line."  We "will win the battle against violence and 
extremism." 
 
--The Middle East does not need new threats of unrest in the 
Gulf and around the Red Sea (i.e., regarding the prospects of 
military action to contain the Iran nuclear threat, and 
international intervention in Sudan). 
 
--"We will continue to implement our reform agenda, believing 
that a free democratic society is the proper foundation." 
 
The Embassy's initial read is that Mubarak's speech is most 
notable for his restated commitment to proceeding with 
reform, albeit at a pace of his choosing.  In addition, his 
standard encomiums about national unity and stability have 
taken on a new urgency in light of the recent sectarian 
unrest in Alexandria and the April 24 and 26 terror attacks 
in Sinai.  End summary and comment. 
 
¶2.  (U)  Begin informal Embassy translation of highlights of 
Mubarak Labor Day speech: 
 
------------ 
Introduction 
------------ 
 
Salutations.  Celebrating Labor Day is to honor the role of 
Egypt's workers and emphasize the hopes we pin on them for 
the future. 
 
Last year witnessed many reform steps; we will intently 
continue on the same path.  Much has happened in the past 
year, for example, the Presidential and People's Assembly 
Elections. 
 
Carrying out my electoral agenda is the core of my speech 
today before you.  It was not "just" talk or promises; we 
insist on carrying it out to build a contemporary society 
with free citizens. 
 
I asked in December for a poll among MPs of both the People's 
Assembly and the Shura council about my electoral campaign 
pledges to figure out whether the constitutional reform 
suggestions that I called for are what the Egyptian people 
really want.  I call upon the PA and the Shura council to 
complete their polls during the current session, and also to 
complete their legislative agendas. 
 
I am keen on following-up with the Government on the 
implementation of my elections program, within the promised 
timeline of six years, but it would be unfair to expect it to 
be done within a few months instead of the full six years' 
range, but it would also be unfair if we lend an ear to the 
skeptics who say it cannot be done. 
 
--------------- 
Economic Reform 
--------------- 
 
We are reaping benefits in the fields of reform of taxes, 
customs, banking and investment incentives. 
 
 
The economy has recovered and is ready to move forward. We 
have: 
      - surplus in the current account; 
      - stability in the exchange rate; 
      - control of the budget deficit despite high oil prices 
and other expenses; 
      - 6.1 percent GDP growth in the second quarter of 
2005/06, a level not witnessed in ten years; 
      - increase in the growth rate of the industrial and 
construction sectors over the last couple of months; 
      - unprecedented increase in oil, gas and mining sectors; 
      - foreign direct investment has increased eight-fold. 
 
Within implementation of the electoral platform, 257 new 
factories have been established and 211 have been expanded. 
These changes absorbed LE 7.5 billion investments and 
generated more than 62,000 jobs. 
 
Workers and breadwinners may claim that it is still difficult 
to meet their costs of living.  I say that what we achieved 
is still the beginning.  We have to be aware that investment 
money requires time in order to turn into projects and 
generate returns. 
 
In the coming stage of the electoral platform, it is vital to 
raise the productivity of the Egyptian worker and external 
competitiveness. 
 
Training and Foreign Job Markets: 
 
Workers should not be biased towards government jobs but be 
open to new fields. 
 
Cooperation is underway with Italy to train Egyptian workers 
in Egypt on specialized training needed by the Italian labor 
market and later allowing them to work in Italy. The first 
such training project is ongoing in the textile sector. 
 
Foreign Investment: 
 
Policy is to provide maximum facilities to investors which 
will in the end lead to the generation of job opportunities. 
 
Seeking to increase efficiency of services to exporters by: 
      - expanding the EU Partnership; 
      - recently concluding an FTA with Turkey; 
      - negotiating an FTA with Russia; 
      - 14 areas for QIZs are operating and have led to a 
jump in Egyptian exports to the United States from $ 64 
million to $ 307 million in one year. 
 
Asset Management Program (Privatization): 
 
Privatization has become the main engine of our investment 
process and is a means of increasing job opportunities. The 
program has gained strong attractiveness to local and foreign 
investors. 
 
The program is meeting the needs of restructuring and 
rehabilitation of factories. 
 
Public funds are saved for projects which the private sector 
is unable to undertake while other projects are handed over 
to private hands for more efficient management. 
 
Labor rights in privatization: 
 
There will be no backing from our firm stance and commitment 
to labor rights. The government is always given strict 
instructions to preserve these rights and involve labor union 
representatives in all stages of the sale negotiations. 
 
Results of the Program: 
 
Profits of public enterprises have increased from LE 91 
million in 2004 to LE 604 million in 2005. 
 
All workers, public and private are protected by law. 
 
The government is due to address issues of irregular workers, 
women and expand the social welfare network to cover two 
million families by the end of this year. 
 
------------------------------------------- 
Terrorism, extremism, and domestic security 
------------------------------------------- 
 
We face many dangers: 
 
- Blind terrorism, from which nobody is safe and which aims 
to undermine our aspirations and path forward and continues 
to harm innocent people and hurt the incomes of our children 
and citizens. 
 
- Forces of Extremism and Fanaticism, which aim to drive a 
wedge between Muslims & Christians, fuel sectarian strife and 
in turn undermine the nation's stability/security.  National 
security is far more important than political parties 
problems or anything else.  I have vowed to protect the 
security of Egypt and I tell you from here that Egypt's 
national security is a red line! 
 
- We will win the battle against violence and extremism and 
we will uproot terrorism; and Egypt will remain a safe and 
stable nation. 
 
--------------------------------------- 
Middle East Peace and Regional Security 
--------------------------------------- 
 
We live in a tumultuous region.  We must: 
 
- Work hard to revive the Peace Process 
- Work hard to unify the voice of Palestinian (forces) to 
establish their state with Jerusalem as the capital. 
- Exert efforts with Israel to make it acknowledge the just 
cause of the Palestinians 
- We observe the situation in Iraq and trust that the all 
Iraqi forces will unify their efforts for their country. 
- Be sad for the inflamed situation between Syria and Lebanon 
and hope it will be resolved soon 
- Worry about the situation in Sudan/Darfur, despite the 
progress of the peace agreement signed by the south. 
 
- This sensitive region (i.e., the Middle East) does not need 
new tension zones that threaten the security of the Gulf and 
the Red Sea and (further) de-stabilize the security of the 
region. 
 
----------------- 
Internal Security 
----------------- 
 
Egypt's unity and security is the number one priority.  I say: 
 
- To the Youth: Egypt needs your efforts; 
- To the men of religion:  Spread values of tolerance and 
teach people that religion is to God and Egypt is for all 
citizens; 
- To the intellectuals, writers, and professors:  Carry the 
torch of enlightenment and guide the youth; 
- To the Judges:  You are the sponsors of justice and rule of 
law in our country, (I urge you to) reach agreement amongst 
yourselves; 
- To everyone who works diligently to serve Egypt: workers, 
farmers, government bodies, private sector, 
civil society organizations, etc.: Carry on and continue your 
efforts. 
 
We will continue to implement our reform agenda, believing 
that a free democratic society is the proper foundation. 
We will carry on, Muslims, Copts, Armed Forces, Policemen, 
workers, farmers, all together. 
 
I salute the workers and farmers of Egypt and the investors 
who create new job opportunities and everyone who works hard 
to serve our nation. 
 
May you stay well during the coming year. 
 
End informal translation of highlights of Mubarak May Day 
speech. 
RICCIARDONE