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Not long after my arrival, President Bush came to Egypt to see President Mubarak for the second time this year. The visit coincided with the start of the World Economic Forum in Sharm El Sheikh, and represented, I believe, the great respect for Egypt in the U.S. and our enduring ties.

Holding the WEF was an impressive, important event for Egypt business because it reflects Egyptian leadership in the region. More than 1500 participants, including 12 heads of state or government, ministers, leading business figures, leaders from civil society and the media from over 60 countries traveled to the Red Sea. They discussed the impact of long-term global trends on the Middle East. They built networks of collaboration and interaction. And they shared many different perspectives from many parts of the world on the latest political and business headlines of the day.

To people like us, diplomats, government officials, business leaders, academics and journalists, that sounds like a lot of fun.

But it is also critically important. Today, despite – or perhaps because of the inundation of -- email, video conferences and instant communication, we have a greater need for face-to-face dialogue than ever before. We have to see each other in person, seek to understand each other and develop a true respect for each other if we are going to effectively work together to harness these forces of change for the greater good.

This dialogue is also urgent. It is no longer a question of whether things are going to change. It is a matter of how fast. As someone in a session at the Forum said, “It’s not big eats small anymore. It’s fast eats slow.”

President Mubarak warned the gathering that "the world now stands at a crossroad," that developing nations are facing difficult choices weighing "the benefits they gain and the problems and challenges they encounter from globalization." He cautioned that financial turmoil and rising food prices lend support to those who favor protectionist economic policies over those convinced of the merit of free trade and economies led by the private sector.

In his remarks, President Mubarak also recognized that Egypt and her neighbors in the region have what it takes to meet those challenges. I firmly believe that, too. I also believe that many of the men and women who can get us past this crossroad in Egypt and the region are in this room.

You have played a significant part in Egypt's economic accomplishments of recent years. You have created one of the fastest growing economies in the world. You have attracted more foreign investment than at any time in the history of Egypt. You are reaping the benefit of a strong currency, some privatization and a reduction of subsidies. I believe you are prepared to weather the economic challenges ahead.

President Mubarak took justifiable pride in these accomplishments. And, at the same time, he recognized the political component of reform when he said: "We are completing the pillars of our democracy; enhancing pluralism and energizing our political life. In so doing, we are applying home-grown reforms that are sensitive to our society's conditions."

The United States also believes that sustainable economic growth is inter-related to and dependent upon sustainable political and social growth. This includes all indices of human development, such as health, education and standards of living, and the growth of the institutions of civil society. We understand that these developments will look different in every country. This principle has been and will remain a key feature in our policies, not only in Egypt, but around the world. We will continue to support Egypt’s government, business and civic leaders who are engaged in building a prosperous, democratic future for all Egypt.

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The United States also believes in and will remain committed to free trade. Last month, President Bush noted in a proclamation of World Trade Week that open markets increase economic growth among our trading partners and play an integral role in America's economic progress, creating better jobs, expanding consumer choices, and providing increased opportunities for workers and employers.

Nearly 250,000 U.S. firms now export U.S. products. The number of U.S. small-business exporters has more than doubled since 1992. Those businesses have surpassed a quarter of a trillion dollars in annual export sales. This vital and growing constituency for trade ensures that the United States will remain committed to expanding economic freedom worldwide.

We will continue to seek an ambitious outcome in the Doha Round that will reduce and eliminate tariffs and other barriers on goods and open new markets for services trade. The Doha Round provides a once-in-a-generation opportunity to advance open markets, strengthen economic growth, and help millions rise out of poverty.

It is also an immediate opportunity to address a problem people all over the world encounter every day: high food prices. A successful conclusion of the Doha Round will increase market access for agricultural products and reduce trade-distorting subsidies. We can generate new trade flows and give consumers relief by reducing tariffs and trade restrictions that raise food prices. We can help farmers by cutting subsidies that distort markets and discourage agricultural development. Finally, we can broaden global markets which, over the long term, will reduce price volatility.

Regionally, we anticipate the pursuit of free trade will be a hallmark of U.S. policy because it is the right course to pursue. We are firmly on the path from aid to trade, and you know better than I the results we have already achieved.

In 2007, bilateral trade between Egypt and the United States was more than 7.7 billion dollars – a 75 percent increase in just three years. So far in 2008, the growth has continued. The first quarter figures from 2008 show an increase of an almost 19% in bilateral trade from the same period last year.

The United States remains Egypt’s largest trading partner, buying 33% of everything Egypt exports to the world. In 2007, Egypt was the 62nd largest exporter to the United States out of 233 countries. In the last ten years, Egypt’s exports to the U.S. increased by 262% while Egyptian textile exports, specifically, increased by 400%.

We aren’t just trading, but we are also investing. Since 2002, private US direct investment in Egypt has nearly doubled to $6 billion a year.

Clearly, Egyptian and American businesses are forging ahead. We now face the challenge of ensuring that the benefits of trade and economic expansion spread more broadly so that all members of society have a stake in these reforms.

This is not an abstract ideal, but a practical necessity. Despite the strong economic performance of recent years, the World Bank estimates that 17 percent of the Egyptian population, mainly in Upper Egypt and rural areas, lives on less than a dollar a day. The soaring inflation of recent months makes their plight all the more difficult, while persistent unemployment erodes their hope for better days.

This is the crossroad. Or where fast overtakes slow. You can call it many things, but I think we agree that the growth that leaves out a big portion of the people is not sustainable. But I believe if we look to the horizon, this powerful partnership can shape a future of peace, prosperity and opportunity for all Egyptians, as well as Americans and other people of the region.

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Since my arrival in Egypt in April, I have been talking with and listening to many government officials, business men and women, civil society leaders and private citizens. I mentioned to these friends just what I said to you earlier. That is, I believe the fundamentals of the Egyptian-American partnership are strong, but we must start to look at the horizon to shape our mutual goals and ambitions. I wanted to listen to what they thought and what they saw on the horizon. In the course of our discussions, many ideas emerged.

What they said surprised me. Or let me be more specific. It wasn’t exactly what they said as much as the fact that nearly each conversation landed on the same theme: education. What I have heard over and over again is the need for public and private support to prepare Egypt’s greatest resource, its people, for 21st century leadership. Education is essential to creating the leaders Egypt needs to sustain economic growth, political openness and peace in the region.

This idea is not new to you. I know many of the companies and organizations represented here are working on education projects. I also know the Government of Egypt and, especially, First Lady Mrs. Suzanne Mubarak have been on the cutting edge of innovative education reform programs, especially programs that focus on joint public-private cooperation, often with business leaders like you.

Last month at the World Economic Forum, Mrs. Bush and I had the pleasure of celebrating the second anniversary of one of Mrs. Mubarak’s signature programs, the Egyptian Education Initiative. The “EEI” is a great success and a model for how to do things right. The program has put 40,000 computers in more than 2000 schools, universities and computer centers and trained more than 185,000 students, equipping students with the skills that will enable them to participate in our global economy.

The Egyptian Education Initiative has also proven that multi-stakeholder partnerships can be effective when there is a clearly defined interest shared by all parties. Intel, Microsoft, HP, Siemens, Cisco, CA – all AmCham members -- provided the private sector leadership for the EEI. Your partners were three Egyptian ministries – Education, Higher Education, and Communications and Information Technology. I'm also glad to note that USAID is providing support for the monitoring and evaluation of part of the program.

But I strongly believe much more can be done. We are all stakeholders, with vested interests in educational excellence and opportunity. Today, I would like to start a conversation with you and get your views on what role our partnership can play in the area of education. As I mentioned at the outset, I would like us to look to the horizon. In the U.S., in Egypt, and in countries all around the world, school systems are changing to prepare their graduates to compete in the international economy. This is an issue that is important to all of us and area I want to explore, especially about the role of partnerships, private donors and multi-lateral organizations. I would like to hear from you, especially because your experience is so rich.

Looking simply at the efforts of the AmCham and its members, it is clear that Egyptian private business can be a powerful element in educational and other reforms. As AmCham members, committed to your community, your work in education has become a model for the kind of public-private partnerships that make a tangible difference in the lives of Egyptians and a sustainable contribution to U.S.-Egyptian relations. Consider these other examples of AmCham members leading the way:

Vodafone Egypt. You are partnering with USAID and CARE in the New School Program to provide 98 schools with Information Communication and Technology Centers, introducing computer-based learning for students, teachers, administrators and community members.

Demonstrating corporate social responsibility as the lead U.S. investor in Egypt, Apache partnered with the National Council for Childhood and Motherhood and the Government of Egypt to construct 100 one-classroom schools for girls. Apache families and staff continue to make financial and time commitments to these schools to ensure the success of this initiative.

MOBINIL agreed to be the corporate sponsor for Alam Simsim, the Egyptian Sesame Street, for one year as this ten-year program transitions to sustainability without USAID support by 2010.

CIB has been a valued partner under USAID’s School Team Excellence Awards Program – STEAP – a competitive, incentives-based program for improving school quality in support of the GOE’s quality assurance and accreditation movement. CIB along with other corporate sponsors are interested in sustaining this program as USAID transitions out next year. Under STEAP, communities raised 11 million pounds in cash and in-kind donations. For example, residents of Tala Idarra in Menoufia recently raised half a million pounds for a new secondary school.

Injaz, Microsoft, Protor & Gamble, Young Arab Leaders, Vodafone, Alashanek Ya Balady, Mobinil, ExxonMobil, British Petroleum, LinkdotNet, DaimlerChrysler, British Engineering Institute, and others have partnered with USAID and the Education and Employment Alliance (EEA) to create Career Development Centers at the faculties of engineering at Cairo and Ain Shams Universities in order to provide mentorship opportunities, training, workshops, job fairs and other practical experiences for students. To date, over 2,000 students have benefited from the programs.

USAID has also recently launched Technology for Improved Learning Outcomes (TILO). In addition to providing information technology to 280 primary and preparatory schools, the program is looking for partners to test technological innovations to improve student learning.

I would also like to mention that many U.S. companies with no presence in Egypt also contribute to our objectives here through participation in exchange and training programs financed by the U.S. government. One program sponsored by the Middle East Partnership Initiative provides micro-enterprise and business internships for women through a one-month executive MBA program, followed by a three-month internship at a Fortune 500 business.

We already know that the success of these efforts depends on the active involvement of the private sector and civil society in innovative partnerships. In Egypt, private-sector firms – multinationals and, increasingly, Egyptian firms – have already taken up this challenge, and we in the U.S. government want to ensure we are doing our part as well. As our bilateral partnership evolves to one based on trade and private investment and as our assistance programs become more targeted, I think this discussion is as timely as it is important.

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In Cairo, throughout Egypt, and throughout the region, the American Chamber of Commerce in Egypt is a model for civic engagement. While Amcham members are working on many of the projects I mentioned, I know the Amcham itself is a leader in collaboration between the government and private sector.

The Amcham has also been a valuable resource for the Egyptian government as it reforms its trade policy and trade laws, working to complete a process begun here 30 years ago to open the Egyptian economy to the opportunities of the global marketplace.

And the Amcham knocks on doors in Washington. I understand that this year's door-knock mission was as successful as ever, making the case for an expanded QIZ, building sector-to-sector contacts, and affirming the importance of the Egyptian-American relationship, not only for our two countries but for the region as a whole. As President Mohanna has said, “AmCham-Egypt's annual DoorKnock missions help enhance commercial ties with our American counterparts, while building US decision-makers' awareness of Egypt's reform efforts, and its improved investment environment. The aim is to create a forum for exchange of information, ideas and opportunities - in order to increase investment and bilateral trade."

I want to add that Americans appreciate the door-knock program. It is an opportunity for face-to-face contact and to talk about Egypt and the Egyptian-American relationship. It makes politics and business human again and gives a chance for Egyptians to tell Egypt’s story to American leaders. Egypt should be proud of this initiative. It has become a model for the region – Dubai recently followed Cairo’s lead and has started a door knock program now, too. More are welcome, from Egypt and the region, because as I said before, there is no substitute for person-to-person contact to generate the mutual respect and understanding upon which any partnership thrives.

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So let me close by saying the kind of regional leadership you represent is vital now to Egypt and the United States. Egypt has been a leader of nations and peoples throughout history, from ancient times through the present. 100 years ago, Egypt led the region and inspired millions around the world by its struggle against colonialism. 50 years ago, when the United States wanted to talk to the Arab World, we came to Cairo. And 30 years ago, Egypt made the most courageous decision of all, leading the way toward peace.

Today, every day, the region is changing, the world is changing, but the need for Egyptian leadership remains. Maintaining that historic leadership role will require Egypt to make full use of all its resources. And among the nations of the region, Egypt is blessed with the most valuable resource of all: its people.

Egypt has succeeded in recent decades in taking care of its people. Even as the population doubled during the last 30 years, life expectancy soared, infant mortality plummeted, and literacy spread to all corners of the country. At the same time, Egypt reformed its economy and worked to integrate into the world economy. Egypt is now a richer, healthier, and better-connected place than it has ever been in its storied history.

But the rest of the region, and the world, is moving forward as well at a startling pace, economically and politically. Your part in maintaining Egyptian leadership and the Egyptian-American partnership is vital. Of course we in the Embassy look to the Amcham and our other private-sector friends to advise us on economic policy. But beyond that, your organization and other civic-minded groups have a crucial role to play in building the wide-ranging partnerships necessary to promote sustainable economic, political and social development in Egypt.

I have taken your time this afternoon to cite the wonderful work you are doing not simply to offer congratulations, but to emphasize that together we must do more. I look forward to working with you on these partnerships, and now I look forward to beginning our dialogue on these issues. Thank you very much.


Question: What is your stand on the Muslim Brotherhood and are you in discussions with them?

Ambassador: The Secretary made it very clear we do not have a relationship with the Muslim Brotherhood. That said, there have been contacts from time to time with all independent and other affiliated members of your Parliament, so its not that it’s impossible to speak to someone that is a Muslim Brother. As I said, it’s only through Parliamentary members that we may be in contact.

Question: (Inaudible)

Ambassador: Well, certainly its in-line following the debate on this issue in the United States. Just as issues about globalization and protectionism resonate with many people in Egypt, there are also Americans who question some of the premises of these issues. I can make no predictions based on what the next President of the United States will do, but I can say that looking back over the last couple of decades, that those Republicans and Democrats that recognize the value of free trade and that have realized that in order to create economic opportunities for our citizens, for our businesses to grow, we need to be able to export to markets outside of the United States. And we have also learned that free trade can be dislocated in some areas, but the overall balance offers great advantages both to the United States and to trading partners that are with us in any free trade agreement. So, my prediction is that the United States will remain a strong promoter of free trade.

Question: I have several questions here. One of the things we talked about at the AmCham (inaudible) and we kind of see it as a precursor free-trade agreement with the United States. Egypt and Israel have a pretty big (inaudible) Upper Egypt, why is it now stalled in the United States? What has happened next?

Ambassador: To remind you, the QIZ program in Egypt has been a very successful program. Our estimates are that it may have created up to 100,000 jobs for Egyptians and really the growth of Egyptian exports to the United States based on the QIZ arrangements has been phenomenal. We are very much sympathetic and desirous of looking to expand the QIZ. It is under active consideration. It has been a topic of high-level discussion, and we clearly see the benefit of expanding the QIZ to Upper Egypt. So, this is still a very, very active consideration and I hope that at some point we’ll be able to be talking about how to take advantage of QIZ opportunities.

Question: (Inaudible)

Ambassador: I have certainly not encountered what I consider any obstacle to being a woman diplomat in the Middle East in particular. Sometimes I think I have a rare advantage and certain countries where I’ve worked where gender segregation is more with tradition that it is here in Egypt, I found that I was able, literally, to see one hundred percent of society and some of my male colleagues were only able to see half a society and I’m here to tell you that the half they didn’t see was really, really great, contributing as much to society as the other half. So, I like this 360 view I’ve been able to have.

Question: Once again, thanks guys. Have you seen the lines at the US Visa Section? Is this a reflection on a first-world country?

Ambassador: I’ve been in the Foreign Service for 27 years, and ever since I’ve been in the Foreign Service, keeping up with being able to deliver quality, fast, predictable, professional service to our visa applicants is always a challenge. We absolutely welcome visitors of every country to the United States, we want to encourage students to study to the United States, we want to encourage businessmen to travel to the United States, and we want to encourage tourists to come see the United States. I don’t like to hear about lines outside the embassy. We have moved to a point system which should minimize the lines. Sometimes people think that they can get an edge by being in line even though they have an appointment that may be something that isn’t entirely necessary. But I certainly can assure you that we are doing our best to meet the needs. Students should face no delay whatsoever in getting appointments to get in, in getting their visas adjudicated. And any delays you are experiencing are due to staffing challenges. I urge you all to act early to get your application in. I believe the adjudication process is becoming more predictable and most people get their passports returned with visas in a very, very short period of time. That’s our goal, and our goal is professional service to you. As I said, I always regret any delay or inconvenience to any visa applicant, but it remains a very, very high priority of this mission to be able to serve the community of Egypt with fast professional visa services.

Question: Once again, what will be the position of your government in the case Mr. Gamal Mubarak ends up running for office of the President?

Ambassador: Look, the United States will respect the political institutions of Egypt. I don’t know what’s going to happen in the US elections in November. We will work with whoever wins the next presidential election in Egypt. Period.

Question: There’s a call-in question. Do you regard Egyptian elections as being free and fair?

Answer: We have expressed concerns on some elements of Egyptian electoral (inaudible) you’ve seen that in public statements in the past. Where our focus is on, frankly, is encouraging those working in political reform to keep in mind the interest of all Egyptian citizens. We value the institutions of Egypt. Egypt has a parliament that is perfectly capable of addressing its electoral standards as far as the people of Egypt and I think that’s really, who really, should have the final word on Egyptian elections.

Question: (Inaudible)

Answer: I actually believe, and have absolutely observed in even the short-time I’ve been here -- and certainly heard about it before -- about the enormous transformation in Egyptian society in the last several decades. You are clearly a country where its been talked about at some length, the threat of economy, the rights of woman here are outstanding compared to many countries in the world, and you see numerous, numerous Egyptian citizens in government and political life and civic private societies working on local problems and trying to achieve improvements. That sounds a lot, you know, like what we do in the United States. We’re never satisfied with where we are today always think that maybe we can do better. I think the question of how the US judges (inaudible) is how Egyptians judge their own efforts, their own institutions and there are a number of international standards and conventions that we have all signed on to. So I don’t think it’s a question of the US setting standards for the world. It is the world setting out standards for itself. And the peoples of this world, countries, judging where they stand up to it. We certainly have a focused debate in the United States about our own short-comings.