Council on Foreign Relations
Washington, DC

DAVID SANGER: Thank you all for coming to the Council luncheon today. I’m David Sanger. I’m one of the White House correspondents for the New York Times. And it’s our great pleasure to have you today for this conversation with Ahmed Mohammed Nazif, the prime minister of Egypt. And we thank him very much for coming and spending the time here today.

A few reminders to all of you: Between Egypt and America, we live in two of the most cell-phoned societies on Earth, if we can ask you to turn them off for an hour. As a reporter, I am absolutely delighted to say that in violation of usual Council tradition, this is completely on the record. And we’ll have a question-and-answer session after the prime minister’s comments. We’re going to end promptly at 2:00. And the Secret Service has asked that everybody who’s not in the prime minister’s delegation—and you’re spread out among the seats here—remain in their seats until the prime minister and his delegation have had a chance to leave. And then we’ll open all the doors to the meeting room as an indication that all is clear. Anybody who violates it, I guess, will be given what they now call the Cessna treatment in Washington. I [laughter]--so I thank you very much, and we will hear from the prime minister, and I look forward to the question-and-answer period.

AHMED MOHAMMED NAZIF: Good afternoon. And I hate speaking after lunch, but I hope you’re still awake. Well, it’s a great pleasure to be able to address such a distinguished group of participants from the Council on Foreign Relations. I would like to thank the Council for giving us this second opportunity—we had one in New York, and the second one here—and it really gives us a chance to interact with the American society, and a leading part of the American society.

Let me speak a little bit about Egypt and where it is and where we want it to be. Egypt, as you know, is the most populous country in the Middle East, sits there at the crossroads of three continents. It’s an emerging market, has a high demand for products and services, has a very strong infrastructure that we invested in—tens of billions of dollars over the years—excellent power network, an excellent telecommunication network, roads, airports. You name it, it’s there. It’s a rather stable and secure environment. We have excellent relations with everybody in the world. We’ve been able to lead in peace and maintain the peace. We’re successful in our war against terrorism.

So why aren’t we a world leader today? Good question. We should be. We have some challenges. First of all, we need to transform our society. We need to build a business environment that is pro-investment, pro-growth. That didn’t happen in the past. It’s happening today. We need to improve a very strong and able workforce. It’s cost-effective, adaptable, trainable, but needs more of our attention. We need to achieve a smooth integration into the world economy to become a real global player. We need to restructure our social-safety network to ensure efficient and adequate protection for the poor. We need to redefine the role of government and reorganize it, improve the administration, and reform it.

We started [this] past July to meet those challenges. With a very able group in this newly formed cabinet, we set ahead to change Egypt in a leapfrogging way. On the economic front, we introduced a bold package that includes customs reform, tax-system reform, banking-system reform, investment developments, and they all are starting to show.

The first immediate result to that was an increased business confidence in Egypt, whether by Egyptians or by foreign investors. We cut our taxes by more than 50 percent, corporate tax from 42 percent to 20 percent, flat tax, personal-income tax down to 20 percent as well. And we are overhauling the way we administer tax—not just administer it, but the way we deal with it as a society. We are changing the view of a government from being a tax collector to being a facilitator for society.

We are improving the investment environment in Egypt. We restructured our investment authority so that it can assume a promotional role. It used to be more a regulator for investment. We don’t need a regulator for investment; we need somebody to promote investment. Now that authority, which used to be a government agency full of red tape, is run by the private sector with a board of directors and a board of trustees that is totally from the private sector.

We’re reviewing a lot of legislation to remove impediments to investment; trying to ensure fast dispute settlement, and working with a new interface with investors, a one-stop shop. Complementing that is providing the opportunities for investment. Opening up sectors and areas that were previously unattainable. [Inaudible] an attractive portfolio of public-owned companies. We’re deregulating our public services; the transport, health, and education. We’re providing market-driven opportunities in the promising sectors such as housing, tourism, energy, oil and gas, agriculture, industry, ICT [information and communications technologies]. We have a very diversified economy in Egypt, and the potential in Egypt, those sectors that I’ve just mentioned, is very high.

We also have a lot of export-oriented opportunities that can achieve global market penetration, depending on the competitive advantages, in some sectors. We’ve developed our export infrastructure. We’re building bridges for free trade with many, many of the groupings in the world—the European Union, the United States, Africa, the Arab world, Israel.

We’re focusing on our end goal, the creation of jobs for Egyptians. We need to make sure that all the kinds of reforms that we’re doing at the end will translate into more jobs, a better standard of living, better services for the Egyptian population.

I believe that what we have done in terms of reform so far are starting to pay back. We’re seeing an economy that is moving faster, growing, a market that is emerging. Many of the numbers that we’ve achieved in the last 10 months, the statistics for July to March, nine months, have far exceeded our expectations. Investments—foreign investments in those nine months—are two and a half times the whole of last year. The stock market value has grown by over 150 percent. It was ranked No. 1 in the world last January. Our currency is stable. And for the first time, Egyptians saw the Egyptian bonds gain over other currencies in the world. Again, a confidence-building measure in an economy that has so much potential.

Parallel to that, we’re working on our social-reform agenda to make sure that what we’re doing will filter down. But it will take time, and we cannot afford for the poor in Egypt to wait another couple of years to feel the effect of what’s happening. That’s why we’re very concerned about our social-safety net, making sure that we can provide the poor with the support that they need until we can bring them up to the level at which we want them to be. That means, basically, an overall look at all our social programs: the subsidy system, which is widespread in Egypt—ad hoc in many ways; the pension plan, again, needs a lot of restructuring; medical services; the education system—all need a lot of revamping. Our challenges are still ahead of us, but I think that in those 10 months, we’ve been able to set the stage for moving ahead and meeting those challenges.

One area, of course, that has raised a lot of interest is the third component of our reform program that is [inaudible] with economic and social, which is the political-reform process. We have raised a strong initiative by writ of President [Hosni] Mubarak going into a new phase of democracy in Egypt. In February, President Mubarak came with an initiative to change the Egyptian constitution. That initiative has now been translated into a bill that is put in front of the people of Egypt in a referendum next week. It will allow Egyptians, for the first time, to select their president from more than one candidate. That election is scheduled for next September.

The political process in Egypt has been evolving over the years, unlike some people who think—it didn’t start with the president’s initiative. It started way back. It started by changing and introducing the new constitution in 1972 that allowed multiparty elections in Egypt for the parliament. It started with having increasingly effective freedom of the press, freedom of the media, freedom of expression that I would boast to say is one of the most widespread in our region.

So why is this particular step so important? Because it has addressed one remaining subject that was not touched before—the president. It’s a challenge to us, again. We are intent on conducting a free and fair election for the president in Egypt in September. We believe that we can do it, and we believe that we will lead democracy in the Middle East, as we have led in the Middle East in all other aspects. I do believe that we are passing through exciting times. [We] still have a lot to do. Our election law has to be drafted after the constitutional change. That will define how the elections will be conducted, how the campaigns will happen. How do we guarantee a free and fair election, equal time for the campaigners, and so forth?

We are not going to reinvent the wheel, but we think we can come up with our own brand of democracy that the world can respect. I believe that on fronts, we are passing through an exciting time. As I said, we still have a lot of challenges, but we do value the strong relationship we have with the U.S. That relationship has been of a strategic nature all over history. Egypt is a regional leader; the U.S. today is the global leader. We see eye-to-eye on many of the objectives that we want to see the world [inaudible]. We believe in peace and stability. We believe in democracy. And we believe in the utmost importance of ending terrorism. We believe in peace, stability; we believe in democracy; and we believe in the utmost importance of ending terrorism.

As you know, Egypt was one of the first countries in recent history to be the target of terrorism. We had the unfortunate experience of having our president assassinated. We had, at some time, frequent incidents of terrorism, terrorizing the Egyptians and their visitors, and thereby affecting our economy profoundly. This is no joke. We work very hard on the war on terrorism. We started it even before the world [inaudible] it. We will continue to do so. We will continue to work with the U.S. and with world leaders to make sure that we can succeed and overcome a period that I feel is a very difficult one. One of the reasons for that, of course, is that, unfortunately, that terrorism has been identified with our region and with our religion—an unfortunate incident that we need to remedy and change.

I do believe that the efforts that Egypt is doing in this respect, and in bringing peace to the region, must be following our efforts to bring peace between the Palestinians and Israel. We’re very active in this respect, and we’re asking the U.S. and others to come in and support the process more strongly than they have been in the past. The reason is, today we have a real hope and a real chance. We have a new Palestinian leader who’s in place, and we have a process in place. We have relative calm that was, again, I think, thanks to the efforts of President Mubarak, personally bringing both [Israeli] Prime Minister [Ariel] Sharon and [Palestinian Authority President] Mahmoud Abbas to Sharm el-Sheikh [last February] in order to get to that calming-down process today.

There’s still a lot to be done, a lot of courageous decisions to be taken on both sides. But we’re hoping that this process that has started in Sharm el-Sheikh this time will continue and will lead to a more progressive operation towards peace. Having said that, it would take more than just good hope and intentions to do it. It will take hard work. I believe we can do it. Thank you very much. [Applause]

SANGER: Well, thank you very much. Thank you, Mr. Prime Minister, for those comments.

I thought that I would start the ball rolling with a couple of questions to the prime minister. I could spend this entire time asking him about his fascinating time as the minister of communication and industry, a time of great flowering of internet service—free internet service and other communications in Egypt—but I will put those aside for another moment and try to ask you about a few things that were in your speech.

You said at one point that you were coming to a moment of creating your own brand of democracy. I know that you were just with the [U.S.] president this morning, and I’m sure this subject came up, because he, more than almost anybody, has been discussing the need to spread democracy, particularly in your region of the world. There’s been a lot of criticism of the way the rules have been written in Egypt on these elections, or at least the way some of the rules have been proposed. We understand that they haven’t—you haven’t actually formulated the law. But there has been concern about whether or not independent candidates would be able to truly get on the ballot or whether they would have to surmount insurmountable hurdles and so forth. So first, can you tell us, did you discuss this with the president this morning? Did he express concerns about how this election unfolds? And what did you tell him?

NAZIF: I had a very good meeting with the president this morning. He first of all commended us on the efforts we’ve been doing on the economic front, on the government-reform program in this respect. He also had very good words to say about President Mubarak’s initiative to change the constitution. He did give us some advice. His advice was that Egypt should be able to show the world that it can have a free and fair election—presidential election—in September. And he genuinely believes that what Egypt will do will be an example for the rest of the region. And he thought that this is a real opportunity and chance—

SANGER: Did you interpret that, that he was saying that it is very important that you design more liberal rules than the kinds that we have heard about and read about in recent weeks—that you make sure that political dissidents are not rounded up, that you make sure that it’s easier to get on the ballot?

NAZIF: The president didn’t go into that type of details. I think that he just wanted to assure us of the support of the U.S. in the reform process as it’s been going on, and to just say very clearly what the expectations of the world and himself is in terms of seeing Egypt running a fair elections. We didn’t go into details. We didn’t discuss at all the rules for selecting candidates or other things.

But I would like to comment on that because I think there’s a lot of misconception about that. The current amendment to the constitution that is being put out for the vote on May 25th says very clearly—in fact it gives an exception for the next September election, an exception in favor of the opposition parties. It says very clearly that any opposition party in Egypt can field a candidate for the presidency, no other restriction except being a legitimate political party. That, in Egypt, we have 19 of. We have 19 political parties. We can have 19 candidates. No other restriction whatsoever. And I think that you can’t get easier with that.

Now, you referred to independent candidates. What the rule says about independent candidates—and that has nothing to do with September or the other September; we’re doing the exception for the political parties because they were not ready. It’s sort of a surprise change too close to the election. But for independent candidates, what it says is you need to collect 250 signatures from elected representatives out of a pool of 6,000 people. The math comes down to less than 5 percent. It used to be 300, which is 5 percent. We got it down. So it’s less than 4 percent now. And I think that—and that rule, by the way, exists in many other countries. It exists in Germany, in many democratic countries. That’s to make sure that an independent candidate can garner the support that he needs. If somebody feels he can run for the presidency and can’t collect 250 signatures—he can’t convince 250 out of 6,000 that he is presidential material—why should he run?

SANGER: And those 6,000 you don’t consider to be so much in the government’s camp that it would be a challenge to get—

NAZIF: Well, if they are now, they won’t be later. I mean, we’re not looking just under our legs. I mean, they might be today, but in fact this gives an incentive to other opposition parties to improve their representation in elected places. Many, many of those parties that you see don’t even run candidates for those elections, for municipal elections, for example. Some of them run in parliament. Parliament has 454 seats. You find some of those parties running in 10 [inaudible]. These parties need to build themselves up. Now they have an incentive—a better incentive to do so. If they can’t do it by September, well, more elections are coming.

SANGER: You said to Tim Russert on Meet the Press the other day that there’s a thin line between receiving advice and orders from the United States.

NAZIF: The president must have heard it, because he said that “I’m giving you advice.” [Laughter]

SANGER: Yeah. [Laughter] As the world listens, particularly the Arab world, to the way the president phrases his democratization initiatives, does it look more like advice or does it look more like orders? Are there ways that the U.S. could be presenting this program that you think would be more constructive, or do you think that the tone is just right, right now?

NAZIF: Well, I would say that I felt sincerity in the president’s remarks today. He really means what he says. He thinks that it’s important, it’s imperative, to be pro-democracy and to see countries, and especially Egypt, a leader in the Arab world and in the region, set an example for democracy. That he’s sincere in.

The problem comes when you talk about what to do about it. I mean, we agree with the president a hundred percent. But—and I think the president would agree as well, and I think he said that, not in so many words, but he did—I mean, that’s the meaning that I got from him, that “This is up to you.” At the end, it’s up to each country to come up with its own solutions. No country in the world has the exact same way it conducts democracy like any other country. And, you know, in the U.K. [United Kingdom], one of the old bastions of democracy so far, one of the houses [of Parliament], is not even elected. So, I mean, each country sets its own rules and it’s up to that country to deal with its own constraints as well.

SANGER: I wanted to ask you briefly about Iran. The European Union right now is engaged in this fairly tense negotiation with the Iranians over the future of its nuclear program. The U.S. and the Europeans have demanded jointly that Iran give up all of its fuel-cycle capability. Egypt has a different idea; it is that there should be—if I understand it correctly—a regional non-nuclear zone, and that that would also mean disarming Israel as well. Would you support an effort in the next few months to force Iran to give up its entire fuel cycle?

NAZIF: I think if we go into this vicious cycle again—not the fuel cycle, but the vicious one—in the sense that, you know, what happened with Saddam Hussein, you know, just saying that we will force him to give up his weapons of mass destruction, send people there, and do things like that, doesn’t work. What we need to do is to look at the underlying reasons for what’s happening. The underlying reasons, the underlying cause that is mentioned often by Israel, others, Iran, is insecurity. If you remove insecurity, you remove the reason for these people to pursue [their weapons programs].

The other thing is the people who are advising you not to build nuclear weapons themselves have nuclear weapons and have not fulfilled their promises in reducing their nuclear armament. So it’s very, you know, difficult to preach to somebody when you’ve not actually practiced it.

SANGER: And so you think the U.S.--the ball is in the U.S. court to show that it’s moving much more quickly to disarmament before it could approach Iran or the rest of the region on this?

NAZIF: Yeah. I think a global leader should set the example.

SANGER: And one more question, and then we will open this up to you. Egypt, of course, has been the recipient of a number of the prisoners obtained by—captured by the U.S. and taken in what we call renditions to Egypt for questioning. There’s been a perception in the United States—right or wrong—that they are taken to your territory because the interrogation techniques are harsher than they would be allowed in the United States. First, is that correct? And secondly, are you comfortable with Egypt being a point of destination for these prisoners?

NAZIF: First, that’s not correct. What we’ve been receiving are Egyptians, first of all; it’s not any prisoners, because that gives the sense that we’re getting—you know, we’re trying to collect all the terrorists in the world, you know, and make some museum with them. [Laughter] If they’re terrorists, or if they’re being accused of being terrorists, to be more exact, and they are Egyptians, we are willing to take them back and deal with them. Now, “deal with them” sounds in a Mafioso way [laughter] like we’re going to torture them or something. That’s not the case. We’re not torturers. We’re a very civilized society—one of the oldest in the world. We don’t condone torture in any way.

Now, torture happens sometimes—it happens everywhere in the world—by some misconceptions by security forces or others. It happened in Iraq. It happens in many other places, and we deal with it, as the U.S. has dealt with the Abu Ghraib prison intolerances. So, having said that—so, you might ask the question, why are they sending them back? Well, I mentioned that we—Egypt has been a very successful country in dealing with terrorists. And instead of just throwing accusations at our security people, we should commend them for being one of the most successful security forces in the world to take care of terrorists.

SANGER: We will now open the floor to questions. We ask that when you are asking questions, please wait for one of the microphones, which should come around. Please stand and tell us your name and affiliation, and if you could keep your questions as concise as possible, we [will] try to get in as many questioners as we can. Gentleman straight in the back, there. Gentleman to the left, I’ll have you next. Yes, sir?

QUESTIONER: Mr. Prime Minister, you have—

SANGER: I’m sorry—your name and affiliation, please?

QUESTIONER: My name is Tarek Rashed, from Middle East News Agency. And my question for Mr. Prime Minister—in fact, he has left no stone unturned during his—all his interviews. And I have just one question that hasn’t been asked about the technology future in Egypt, which you are specialized in and you have been a pioneer in that. My question—just—you didn’t address a new emerging sector that Egypt has embarked on. That is the outsourcing business, by which Egypt plans to compete with India and Pakistan. First, where is Egypt now from that business? Second, what are the potential markets that you are targeting to promote this service? Thank you.

NAZIF: OK. Well, this is an area that has been growing and emerging in Egypt very quickly. We have the ingredients. We have, as I mentioned, the human resource—the human base. We had a very good experience when I was minister of CIT [communications and information technology] in building a capacity into that base. We—in four years, we trained about 30,000 professionals. And that added very much into the workforce.

And second, the advantage is that we already have the infrastructure for it. Egypt is a very well-connected country. We have, you know, all the fiber-optic cables coming from the Far East through Europe and the states in the west literally pass through our land. So, it’s a very good opportunity for us to use that kind of infrastructure, especially that we’ve invested in our own internal networks as well. With that, we needed to open up the markets. And I believe that our targets would not be to compete with India and others in the Far East, we’re primarily targeting and outsourcing the United States. We will be more mellow with the U.S. We’ll target Europe.

One reason for that is we have a competitive advantage. We’re in the same time zone, and at the same time, we are multilingual, so we can outsource in Italian or German or Spanish, in addition French and English. So I think that that would give us a competitive advantage. We already have a strong outsourcing component that’s emerging in Egypt; the call-center business. And I invite you to come sometime and have a look at our Smart Village, which is really a very close place to my heart, where—it’s a business park that we have constructed, the private sector has constructed—near Cairo that now holds the likes of Microsoft, Vodafone, Alcatel—all the big names in IT and telecom. And, as I said, it is becoming the host of the call-center business in Egypt.

SANGER: Thank you. The gentleman straight ahead here, who—trying to indicate before.

QUESTIONER: Yes. Mr. Prime Minister, my name is Khaled Dawoud from Egypt’s Al-Ahram newspaper. I was wondering, sir, whether you raised with President Bush this morning the issue of a few Egyptian prisoners who are kept in Guantanamo. I mean, in following up the controversy that we’re having here in the United States about the torture of prisoners, and whether you’re seeking them to be taken over to Egypt like the others that you’ve mentioned in the earlier report. Thank you very much.

NAZIF: No, that problem didn’t come up in the meeting with the president today, but it’s being dealt [with] through other channels.

QUESTIONER: But do you want the six Egyptians or seven Egyptians there back to Egypt, sir?

NAZIF: Excuse me?

QUESTIONER: Do you want the six or seven Egyptians—

NAZIF: Do I want them?

QUESTIONER: Yes, do you want them—

NAZIF: Depends how they look. I don’t know. [Laughter]

SANGER: Marvin?

QUESTIONER: Marvin Kalb with the Shorenstein Center at Harvard. I’m curious, sir, about Egypt’s attitude toward the insurgency in Iraq. In your judgment, who are these people? Where do they come from? What do they want? And could Egypt be in a position, perhaps, to help the United States crush the insurgency?

NAZIF: Well, that’s a tough one, because I frankly don’t see this as such a simple thing, such a—you know, like a struggle between good and bad. It’s a little bit more than that. You know, in many cases, you’ll find a mix between people who are taking advantage of a situation—terrorists around us that are trying to come into a country and, you know, just—a country like Iraq, in a turbulent environment, as it’s changing—and trying to seize that opportunity to, you know, build up their own agendas of violence or whatever.

But also, we have to remember that they are using something of a reason that seems legitimate. They say that they are Iraqis that are fighting for freedom, freedom from what they think are occupying forces. So it takes you back to that, you know—how do you call it?--stereotype of freedom-fighters versus terrorists, on one side, and on the other side, occupier versus liberators. It’s a very difficult thing to deal with. The reason I say that is that the insurgency has two things that are feeding it that are very difficult to cut off: the cause and the ample supply of terrorists and opportunity-hunters in the world, in a country like Iraq, with so much borders around it.

So, I don’t think the problem will be just to go in and destroy the insurgency. In fact, it probably complicates things more. What we need to do is to try to hit it at the roots, remove the cause and at the same time cut their supply line. That, to a certain extent, is what we did in Egypt when we fought terrorism. We—how we did get to move from very turbulent, violent times in the ‘80s and early ‘90s to such a stable and peaceful situation? We had—we knew that the terrorists in Egypt were being supplied from outside Egypt. In that case, it was Afghanistan and those places. What we did is, we were able to come in—and again, commending our own security forces—and getting to the roots of things and cutting that.

On the cause side, they were using, again, Islam, in that case, as their reason for doing what they’re doing. And I think, again, society itself, with the help of some measures that we took, were able to expose this.

Remember one single incident that happened that changed things totally around. It was an [assassination] attempt on the previous Prime Minister [Atef Obeid]. During that attempt, the prime minister escaped safely, but a little girl sitting in the window in a school was killed. She was 10 years old. That incident alone turned the whole sentiment of the community and the society against them. And that was the beginning of the end. It’s not a simple matter, sir.

SANGER: If I can follow Marvin’s question, because when you say “hit at the roots and cut at the supply lines” in this specific case of this insurgency, what would you advise the president to do in that?

NAZIF: Well, I’m not a military expert, but I would say that we need to, first of all, in some cases, open up back doors, channels, to try to understand what’s going on. Not put it in a sort of a confrontational way only. That helps. Once we understand, we can deal with it, either violently or nonviolently, but we can deal with it.

SANGER: Other questions here? In the very back corner over there.

QUESTIONER: Thank you. Jim Berger with Washington Trade Daily. Mr. Prime Minister, based on your conversations this week, can you give us prospects for starting free-trade agreement negotiations this year?

NAZIF: Well, I can tell you we got really a very good response from the administration about it. I think that basically this administration stands for free trade. We haven’t gotten to the point where we can announce the start of negotiations on a free-trade agreement. I think the administration already has other agreements that it is trying to conclude. And I think that we have, I would say, agreement on the principle, but we don’t yet have a process in place.

SANGER: The gentleman in the back on the other corner there.

NAZIF: There was something in the White House release about that you might want to look at.

QUESTIONER: My name’s Said Arikat from Al-Quds daily newspaper. Mr. Prime Minister, did you discuss with President Bush the necessity to help [inaudible] Mahmoud Abbas when he comes and meets with the president next week?

NAZIF: Well, I had, you know, a message from President Mubarak to President Bush urging him to help Mahmoud Abbas. I think he deserves our support—all our support at this point in time, and I believe that the U.S. can do a great deal in this respect.

SANGER: The woman in the back there.

QUESTIONER: Thank you. This is Nihal Saad from the Egyptian Television. And my question is about—actually, it’s about foreign policy. It looks like the U.S. administration has been focusing over the past few months on preaching democracy in the Middle East while abandoning its role as a peace broker. There is a sense that maybe the administration is working on Arab governments—on domestic issues with Arab governments to distract them from its main role as a peace-broker in the Middle East. You mentioned, Your Excellency, that you talked with President Bush and with other officials that you met earlier on yesterday on foreign-policy issues like Iraq and the Middle East, but you didn’t elaborate on exactly the details of the talks. And it seems that the domestic issues in Egypt have been pretty dominate in these talks. Thank you.

NAZIF: Is that a question or a comment? [Laughter]

QUESTIONER: Both.

NAZIF: Well, Nihal, I think that I’ve been very clear about it. The—our talks with the administration were very balanced. They did go into all aspects. I don’t think there was one aspect that was really taking over others. We talked about our economic-reform program, our economic relations with the U.S.--that took a good chunk of our talks; about the possibility of a free-trade agreement. We talked about the Middle East, about Iraq, and we talked about political reform in Egypt. But it’s—I would not say that political reform really took much. In fact, in the president’s meeting this morning, I would say it took less than 10 percent of time.

SANGER: Right back here. Yes. Yes.

QUESTIONER: Allan Wendt. Mr. Prime Minister, you spoke at length to us about economic reform in Egypt, and towards the end you mentioned the issue of subsidies. But you didn’t exactly say what you planned to do about them. I wonder if you could tell us a little more about your plans in that area. And I ask the question because 25 years ago I served at the American embassy in Cairo. And one of the issues that we constantly talked to the Egyptian economic authorities about was massive subsidies to basic agricultural products, which interfered with domestic agricultural production and greatly complicated balancing the budget. It seems that that issue is still with you. Is there anything more you can tell us about it?

NAZIF: No. As I said, that issue is not with [us] any more. We’ve removed agricultural subsidies completely. The subsidies I was referring to are the food subsidies we give to the poor, energy subsidies on the price of energy and gasoline to the homes, to the homeowners and to the consumers—that kind of social subsidy. That’s not economic subsidies. Actually, our agricultural system is being deregulated completely. There are few less things in there that we are taking care of right now in fertilizer, but that’s going to go away again in a little while. The liberalization of the agricultural sector in Egypt has taken place over the last 10 years. And it’s been doing very well. The social subsidies need a lot of restructuring. And that’s the one we will be focusing on.

SANGER: The young lady straight ahead, there. Over—I’m sorry, the other table. Yes. Yes, you, ma’am.

QUESTIONER: Hi. [Inaudible], International Herald Tribune daily, Cairo bureau. Prime Minister, I was wondering if, in your talks with President Bush, the issue of the conflict and, later on, peace process in Sudan came up, and whether Egypt will play a role, maybe as a big brother, in ensuring stability in that country. Thank you.

NAZIF: No. In fact, it didn’t come up at all.

QUESTIONER: No? OK. [Laughter] Thank you.

NAZIF: Very good question.

SANGER: Right here. The gentleman in the front.

QUESTIONER: Henry Precht. I want to ask about two seemingly unrelated issues. One is population growth, and the other is the complaint of judges, that they suffer from interference of other Egyptian authorities. Do you plan to repress the former and to liberate the latter? [Laughter]

NAZIF: What was the former? I forgot.

QUESTIONER: The former is population growth.

NAZIF: Population. Yeah. Of course, we have a plan to try to control population growth in Egypt. It has gone down. We had a rate of growth—at one point, it was 2.8 percent, I think. Now it’s 1.94 [percent], the last number I have. It’s still high, but going down. And hopefully we will be able to continue on that track. The idea we’re doing, is family planning through health care, and we are installing healthcare units across the country, to the primary healthcare units that are dealing directly with the family. And hopefully this, when completed, will have a profound effect on family planning.

On the judges, they have been asking for more independence. That has to happen through the changes in the legislation that govern their profession. The changes have to come from the judges, by constitution. So it’s really up to them to complete the process, send it back to the government, the government will then turn it into a law and send it to parliament. It’s a process in progress.

SANGER: The gentleman in the back there.

QUESTIONER: My name is Tamam al-Barazi from [inaudible] magazine. Did you discuss the Syrian issue and Lebanon, and, because, you know, Syria’s President [Bashar] Assad came to Mubarak lately, and we heard a report that he asked that Egypt mediate with the United States about the situation.

NAZIF: We had a brief discussion about Lebanon, not much about Syria, but mostly about the progress that should happen there to make sure that there is—that the political process would continue and that we can get to a conclusion of the problem in Lebanon. Syria did not come up.

SANGER: The gentleman right next to you. Yes.

QUESTIONER: Thank you. Garrett Mitchell from the Mitchell Report. Mr. Prime Minister, you made quite clear earlier in your remarks about the need for the United States to—to use one of our phrases—to walk its own talk on its own nuclear behavior if it intends to be the world leader on that subject.

Using that same test, I want to come back to the brief discussion on Egyptian political reforms and ask whether—if Egypt is in fact going to continue to play the role of regional leader, whether you think in this latest amendment you have gone as far as you need to go in order to claim the mantle of regional leader, and if that amendment is truly political reform or quasi-political reform. Is there need to strengthen the amendment, or is there a need to more clearly define what it is that’s really in the amendment? I assume you’ve either seen or had your attention called to the editorial in the Washington Post this morning that sees that amendment differently than you’ve described it here.

NAZIF: Well, everybody’s entitled to their own opinion. I think I explained exactly what we’re doing with that amendment. And I believe that it is sufficient, providing us with a platform, a platform that is comparable to what exists in many of the much older democracies that exist in the world. I gave the German experience as an example of that.

I don’t see why there is so much skepticism about the amendment. The amendment is very clear. It says clearly what political parties have to do to field candidates. It says what independents have—to field candidates. The same rules have been applied and are applied in very democratic countries. So why the skepticism? That’s No. 1.

No. 2, I do believe that this is not the end of the line. We are in a process. We still have the constitutional amendment. We still have—take care of the rules of the elections, and then we have to conduct the elections. And I think that, again, the president’s initiative deserves to be applauded, not met with skepticism.

Third thing: Is Egypt a leader? Yes, sir, Egypt is a leader in this area. And just to sound a few things in democracy, we have the freest media and the freest expression. We allow demonstrations in the streets. We have already a political process in place, a multi-party system in place. I want you to compare that to other countries in the region and tell me if we are a leader or not.

SANGER: Last question. We have time for one more. Ken?

QUESTIONER: Thank you. Ken Bacon of Refugees International. One area where Egypt has tried to assert leadership is brokering peace in Sudan. And I wondered, since this—the problem in Darfur is spreading to other areas—great concern in Chad, Libya, and now Egypt—if you could bring us up to date on the latest meetings and what President Mubarak’s next initiatives will be to bring peace to Sudan.

NAZIF: I think that the very recent meeting that happened in Libya yesterday is a part of a series of things that have been going on. We had a meeting in Sharm el-Sheikh earlier last—in last month. And the idea is, we’re trying to bring in all the parties concerned because, as you rightly said, the process is spreading over borders. And it’s very important to try to get all the parties concerned—not just, you know, the locals, but also the countries that are involved—into the process. It’s very early to say that we are succeeding in this. But I think at least we have good will and good intention in place. People are willing to sit and talk, and that’s a good first step.

SANGER: Well, Mr. Prime Minister, thank you very much. It’s been a very good session. We appreciate your spending the time. We could—as you can see from the hands out there, we could fill another hour of your time with questions. And we appreciate your coming by to talk to us today.

NAZIF: Well, it’s been a great pleasure. Thank you. [Applause]

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