EGYPT: MUBARAK'S AGENDA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP06T00412R000606810001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: May 10, 2012
• Sequence Number: 1
• Publication Date: April 9, 1987
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9
SUBJECT: Egypt: Mubarak's Agenda
NESA M# 87-20037
DISTRIBUTION:
EXTERNAL:
1 - Mr. John Norris (ISA, DoD)
INTERNAL:
1 - DIR/DCI/DDCI/Exec Staff
.1 - DDI
r - ADDI
1 - NIO/NESA
1 - CPAS/ILS
6 - CPAS/IMC/CB
1 - C/PES
1 - NID Staff
1 - PDB Staff
1 - D/NESA
1 - DD/NESA
1 - C/PPS/NESA
2 - PPS/NESA (One copy to analyst to source
1 - NESA/IA
1 - NESA/PG
1 - NESA/SO
1 - NESA/AI
2 - NESA/AI/E
DDI/NESA/AI/E
~9 April 1987
Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9
Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
9 April 1987
Egypt: Mubarak's Agenda
Summary
President Mubarak is engaged in the most delicate
balancing act of his political career: trying to
revitalize Egypt's deteriorating economy without
risking a political upheaval that could topple him. As
he prepares to seek virtually certain reelection next
fall, Mubarak will be preoccupied with securing enough
external aid to resolve Egypt's cash crunch while
resisting donor demands for far-reaching economic
reforms.
Egypt's near term economic outlook has brightened somewhat
with incremental moves toward a more realistic exchange rate
regime, higher oil prices, and financial aid from the Gulf Arab
states, but the basic structural problems facing the economy
remain unaddressed.
--Negotiations for an unusually lenient IMF standby
agreement appear almost complete, according to Embassy
sources. If ratified by the IMF, the agreement would
provide some near term relief but is highly unlikely to
cover all of Egypt's cash needs.
This memorandum was
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by
Egypt-Sudan Branch Arab-Isr 1' of the
Divisio, fie of r Easter
and South Asian Analysis, at the rr
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for Egypt, International Security Affairs, Department of Defense.
Information as of 9 April 1987 wsa used in its preparation.
Questions and comments should be directed to Chief, Arab-Israeli
Division,
NESA M# 87-2007
Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9
--Although Mubarak has agreed to some economic reform
measures--including gradual exchange rate
unification--he believes he can go no further to
accommodate IMF and donor demands, according to Embassy
reporting, and he will probably reverse these reforms
at the first sign-or unrest: Having witnessed Sadat's
assassination at close hand, he is acutely sensitive to
policies that would focus discontent on his leadership
and serve as a weapon against his regime in the hands
of Islamic fundamentalists and other opposition
elements.
Looking for Assistance Abroad
Mubarak's immediate foreign policy concerns are being driven
by the need to protect aid flows. We believe special relations
with the United States--Cairo's most generous aid donor--are
almost certain to remain a cornerstone of Egyptian foreign
policy. His expectations of the level of US support he will
receive, however, appear unrealistically high.
--Cairo is likely to look first to the United States
for additional aid to finance its expected shortfall
after the IMF agreement takes effect.
--Mubarak also appears optimistic that Washington will
find a favorable solution to Cairo's longstanding
demand for FMS debt relief.
Recent Egyptian efforts to improve relations with the Arab
states and the Soviet Union also have an economic rationale.
--Promises of aid from the Gulf states, which could
amount to over $1 billion by the end of this year, have
fostered the impression among Egyptian policymakers
that pressure on Egypt's financial situation has eased
and that hard decisions on reforms can be put off.
--Cairo has successfully exploited Soviet eagerness for
better relations by demanding and receiving what
initial reports from the US Embassy in Cairo suggest is
a generous settlement of its military debt with the
USSR. We believe Mubarak will be reluctant to make
major political concessions to the Soviets in
return--such as reopening the Soviet Consulate General
in Alexandria--for fear of undercutting his US ties,
Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9 25X1
but he may try to use the Soviet settlement as a lever
to prompt more favorable treatment from the United
States.
The,Domestic Political Scene
Mubarak dominates Egypt's political landscape and faces no
serious threat to his continuation in office. Nonetheless, he
appears committed to incremental political liberalization and
"safety-valve democracy" as the best guarantee of stability.
--The ruling National Democratic Party will retain its
large majority in the new People's Assembly elected in
gam} April, according to Embassy analyses. Opposition
representation will increase, but the secular
opposition is too weak to challenge Mubarak's hold on
power.
--Mubarak faces a more serious threat from Islamic
fundamentalist elements. Egypt's security services are
increasingly on guard against fundamentalist activity,
particularly in the military. Increased fundamentalist
representation in the new assembly would encourage the
Muslim Brotherhood to seek recognition as a legal
political party, but Mubarak is not likely to grant it.
Egypt's military--the real source of Mubarak's political
power--remains loyal. Complaints over Mubarak's handling of the
economy may be mounting among junior officers, but we believe the
government will protect the military from austerity enough to
contain dissatisfaction.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/10: CIA-RDP06T00412R000606810001-9