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    This is a rush transcript from "On the Record," February 7, 2011. This copy may not be in its final form and may be updated.

     

    GRETA VAN SUSTEREN, FOX NEWS HOST: Secretary of State Hillary Clinton is calling for democratic change in Egypt. Now, she's at the center of the Obama's administration plans to convince the Egyptian government to make critical reforms. We caught up with Secretary Clinton at the 47th annual Munich Security Conference.

    (BEGIN VIDEOTAPE)

    VAN SUSTEREN: Madam Secretary, nice to see you.

    HILLARY CLINTON, SECRETARY OF STATE: Great to see you, Greta.

    VAN SUSTEREN: All right, now, expected that this conference would be about the START treaty, and indeed, it was. You exchanged the documents, the ratification documents with Russia. But Egypt has sort of gone to the top of the topics. President Mubarak says that the protests and revolution will destabilize, leading to a radicalized, fundamentalist government there. Scare tactics, or possible?

    CLINTON: Well, Greta, first I think it's important to recognize that for 30 years, American governments, both Republican and Democratic administrations, certainly, this administration under President Obama, have urged the government of Egypt to do more on economic reform and political reform because we believe that that kind of effort to democratize and create economic opportunity is in the best interests of long-term stability. So it's not a choice between democracy, open markets and stability and security. It does have to go together.

    So what we're seeing now is that the Egyptian people themselves are, particularly motivated by young people, demanding more rights. And the United States stands for democracy. We stand for human rights and for freedom. And we want to see an orderly transition. We want to see the process that has begun realize concrete steps that will lead to constitutional reform, the establishment of a set of political laws and regulations that will end in a free and fair election for a new president.

    The United States is not, like any other country from the outside, making the decisions. But we are very clear, no violence by the government, peaceful protests, orderly transition. And we know the outcomes we seek.

    VAN SUSTEREN: Two issues with that. And I realize it's a very complicated problem. But the protesters -- they're not anxious to have this sort of orderly transition. I mean, they want orderly, but they want it now. They don't want President Mubarak to be in office until September and run. That's the first thing. The second thing is, as we sort of publicly state that we support the protesters and their quest to get orderly transition, we send a message to our allies that, well, you know, if -- you know, we don't necessarily always stick with you. So how do you walk that line?

    CLINTON: Well, first of all, I think that Egypt is a great country with a very storied past of 7,000 years. And this is one of those moments in its history where the Egyptian people must themselves determine their future. And we have made it one of our principles in responding to what they themselves are doing that the voices of the protesters demanding freedom are legitimate and should not be suppressed, and in fact, should be listened to.

    But we recognize, as do many of those who are now stepping forward from the opposition, civil society, political factions, that the country has to come together and reach an agreement about how best to proceed because there are many ways this could go that are not in the best interests of Egypt, the region or the United States. At the end, we know we want to see a peaceful and orderly transition. How we get there is going to be up to the Egyptians themselves.

    With respect to our allies in the region, you know, last month in Doha, before Tunisia, before Egypt, I said that we saw the foundations of a lot of these governments sinking into the sand in the region because what was possible for them to maintain authoritarian regimes 10, 15, 20 years ago is no longer possible. Technology has changed that. People are communicating. They know what goes on far beyond their borders, and particularly young people.

    And what's so remarkable and what I called a perfect storm in my remarks here in Munich is that you have technology communication with a youth bulge. Some of these countries have 50 percent to two thirds of their population under 35, under 30, with a very clear problem in the economies of these countries. They're not producing enough jobs. So young people get out of college, they can't find work. That is a recipe for unrest. It's not motivated by any ideology or any extremism -- yet. This has been organic.

    It came initially in Tunisia from a young man, a college graduate whose only job that he could find was selling fruits on the streets, and then he was harassed by the police. And he set himself on fire. That literally ignited a revolution in Tunisia.

    That spread to Egypt, with young people looking at each other, saying, I can't get a job. There's so much corruption. I can't find my way in anywhere because the elite won't let me. People then went to the streets.

    So this is something I talked about a month ago. It is now being acted out in real time. And the United States very much supports the aspirations, but we do know that each country will have to find its own path forward. And obviously, we want to see end results that are not destabilizing, not giving safe haven to extremism, that actually produce a better outcome for the people who are asking for it.

    VAN SUSTEREN: But how do we do that? I mean, the big elephant in the room is that if -- you know, if the protesters -- let's say that they got what they want today, Mubarak leaves, they have an election and they elect some one that is not something that is in our strategic interests. And suddenly, we've got a situation like Iran. Number one, is that a probability or a possibility? And number two, then what do we do because that certainly (INAUDIBLE) very destabilizing in the region, especially of Israel.

    CLINTON: Well, we care deeply that what comes next in Egypt respects international agreements, including the peace treaty with Israel. That peace treaty has kept Egyptians and Israelis from dying and from, you know, having to wage continuous war for 30 years.

    VAN SUSTEREN: Yes, we love it -- I mean, we like it, and we think it's important. But what if the next group doesn't?

    CLINTON: Well, but, you know, I think -- I think, number one, we obviously would like to see responsible leadership in Egypt that recognizes it's not in their interests to tear up a peace treaty while they're trying to rebuild an economy, try to open up opportunities for young people and engage in political reform that...

    VAN SUSTEREN: How do we do it?

    CLINTON: ... leads to democracy.

    VAN SUSTEREN: But how do we do that?

    CLINTON: Well, you know, look, we have a choice. We can pretend this not happening and wish that, you know, Twitter and Facebook and all those things had never been invented. That is not an option. We can turn our backs on our own values. We do stand for democracy. We do stand for human rights. We always have. We do business with lots of governments who we do not see eye-to-eye on, but there are strategic reasons that we do and we will continue to do so.

    Or we can do what I think President Obama has very well done, which is to say, Look, here are the principles that we believe should be followed during this transition. We cannot reach in and move the players around on the chessboard. That has to be an Egyptian-led, Egyptian-run process. Everybody recognizes that. But we can hold out the promise of what does lie in the future.

    Most of the people who began to demonstrate in Egypt were driven by a desire for more political freedom and economic opportunity. The United States is very good about helping countries realize economic opportunity, and we think we can offer that. We're also very good at helping countries, as we did after the Berlin wall fell, in moving from authoritarianism to democracy.

    It's not perfect. It is not predictable. But I think it's a better course for us to follow.

    (END VIDEOTAPE)

    VAN SUSTEREN: Now, there's more of our interview with Secretary Clinton, and you will see more in the days to come.