Egypt, Long Shunned by Arab World, Starts to Reclaim Lead Role

If good things really do come to those who wait, then for Egypt the long period of waiting may soon be over.

Officially shunned by most of the Arab world for making peace with Israel and forced by its economic predicament into an ever deeper and, to many Egyptians, humiliating dependence on the United States, Egypt has been sitting on the diplomatic periphery of the Middle East for the past eight years, biding its time and waiting for its luck to change.

That change now appears to have come, at least on the international level.

Egypt’s President Hosni Mubarak has just returned from a whirlwind tour of Arab countries that recently resumed diplomatic relations with Cairo severed since 1979, when Egypt signed its peace treaty with Israel.

He leaves again Monday for Europe and the United States, with stops in Bonn and London en route to Washington, where he arrives Tuesday for his first U.S. visit in more than two years. On the way back, he will stop in Paris and Rome and may hop over to North Africa to visit Morocco and Tunisia, which on Saturday announced immediate resumption of diplomatic relations with Egypt after a break of almost nine years.

“Mubarak is on a real diplomatic roll,” says a Western diplomat.

Over at the Foreign Ministry, a faded rococo mansion huddled behind a rusted iron fence in the middle of Cairo’s downtown chaos, officials speak about regional issues with a new sense of optimism and confidence. Some of it may be misplaced, for the region’s major issues--the Iran-Iraq War, the Palestinian problem and the challenge to the status quo posed by the spread of Islamic fundamentalism--seem no nearer to solutions. Still, there is a new sense of self-esteem, a buoyancy that is almost palpable, as Egypt sets about reclaiming the leading role in Arab affairs that it relinquished after the peace treaty.

If the nearly heroic welcome given Mubarak on his regional tour affirmed Egypt’s position as king of the Arab world, officials clearly are hoping his Washington visit will be the jewel to cap the crown.

No breakthroughs are expected, but the trip is still important to Mubarak in light of Egypt’s return to regional pre-eminence. Mubarak is not going to Washington now merely to “pick up the checks,” as one cynical diplomat put it, but as the spokesman for the moderate Arab states and for their concerns about regional issues ranging from the fighting in the Persian Gulf to the current unrest in the Israeli-occupied territories.

This should give his voice more authority in Washington, even if his message is essentially the same one that he came with in 1985. Now, as then, Mubarak will be trying to sell President Reagan on the importance of the United States’ becoming more earnest about the Middle East peace process--a message the Egyptians believe went largely unheeded the first time around.

This time, however, the Palestinian uprising against Israeli rule in the West Bank and the Gaza Strip has given the Egyptians another chance to argue their case.

“The Israelis have presented the Egyptians with a golden opportunity,” said a Western diplomat. “They are going to take the ball and run with it.”

Mubarak, senior Foreign Ministry officials say, will tell Reagan that the unrest in the occupied territories reflects Palestinian anger at the hopelessness of their situation. A peace settlement, he will argue, must be achieved before the territories’ inhabitants become too radicalized to accept a compromise.

To make his argument harder to ignore, Mubarak has formulated what he says will be a “new initiative” to jolt some life into the moribund peace process. In recent interviews, the president indicated that his initiative would include an appeal for a cooling-off period in the territories, a freeze on Jewish settlements there and a new call on Israel to agree to an international peace conference that would serve as the prelude to direct negotiations between Israel and Syria on the one hand, and Israel and a Jordanian-Palestinian delegation on the other.

In fact, none of this is new, and the likelihood that the international conference idea and a settlement freeze will be rejected by Israeli Prime Minister Yitzhak Shamir, who is adamantly opposed to both, leads some observers to view Mubarak’s proposal as less of an initiative than a maneuver to buy more time for peace efforts.

A senior official conceded that Mubarak’s proposals do not constitute a “new initiative” so much as “an attempt to keep hopes for the peace process alive until the elections”--in Israel in October and in the United States in November.

Privately, this and other Egyptian officials express frustration at what they regard as Reagan’s lack of interest in the peace process and Secretary of State George P. Shultz’s pro-Israel bias. But, while their expectations are not high, the Egyptians hope Reagan will at least endorse the notion of an international peace conference during Mubarak’s visit, thereby giving “the next Administration something to pick up on,” the official said.

“The Egyptians have no illusions about breakthroughs, but they argue that just because you can’t make progress doesn’t mean you shouldn’t push,” says a senior Western diplomat. “So Mubarak is going (to Washington) to urge and cajole in his new role as a regional leader.”

While the peace process is Mubarak’s showcase issue--the one that will most enhance his stature as a regional leader if he can prove to be an effective spokesman for the Arabs in Washington--a number of bilateral issues are also on his agenda.

Most of these revolve around money or military cooperation, with the Egyptians serving notice before Mubarak’s departure that they want Reagan to forgive the $4.5 billion that Egypt owes the United States for military purchases between 1979 and 1984.

Legislation recently passed by Congress will allow Egypt to refinance most of this debt, but officials say it is extremely unlikely that Mubarak will be able to get the United States to forgive it.

One major irritant in bilateral relations was removed last May when the International Monetary Fund, under strong American pressure, concluded an agreement allowing Egypt to reschedule $8 billion of its $44 billion in total foreign debt. That agreement has since come under strain, however, with Egypt falling behind the IMF timetable for implementing promised economic reforms.

Mubarak, in an interview last week with The Times, affirmed that Egypt intended to fulfill its agreement with the IMF but would implement it at its own pace to avoid a social “explosion.”

Inflation in Egypt is officially said to be running at 20%--but is widely reckoned to be at least 30%--and a senior banking official predicted recently that it will rise to 60% as prices are increased and subsidies are lowered.

The specter of 1977’s bloody riots over price increases remains fresh in the mind of many Egyptians, and Mubarak, who must now also contend with rising Islamic fundamentalism and other challenges to his regime, made it clear he does not want to risk a repetition of those disturbances.

“Instead of doing these reforms over two years, I have to do them over three or four. . . . The IMF can ask for more, but I know my people,” Mubarak told The Times. “I’m not going to put more pressure on them than they can bear, or there will be an explosion.”

Already, cutbacks in imports have resulted in shortages of a number of key commodities, among them sugar, which has been unavailable in the stores for at least two weeks.

A Foreign Ministry source said officials are hoping Mubarak’s recent diplomatic successes will help distract attention from such mundane hardships of domestic life by bolstering “the people’s sense of pride in their country’s achievements.”

But officials also realize that, in the long run, pride is a poor substitute for sugar. Thus Mubarak, the source said, will argue in Washington that he is reforming the economy as fast as he can and that the United States “should do more to get the IMF off our back.”