06 February 2002
Text: CIA's Tenet Says al-Qa'ida Still a Serious Threat
(He says terrorists plan strikes across the globe) (7,170)
Al-Qa'ida and other terrorist groups will continue to plan to attack
the United States and its interests abroad, says George Tenet,
director of the Central Intelligence Agency.
"Their modus operandi is to have multiple attack plans in the works
simultaneously, and to have al-Qa'ida cells in place to conduct them,"
Tenet said February 6 in testimony before the Senate Select Committee
Tenet said current intelligence indicates that al-Qa'ida also has
plans to strike against U.S. and allied targets in Europe, the Middle
East, Africa, and Southeast Asia. In addition, he told the senators
that "American diplomatic and military installations are at high risk
-- especially in East Africa, Israel, Saudi Arabia, and Turkey."
Al-Qa'ida may also exploit its presence or connections to other groups
in countries such as Somalia, Yemen, Indonesia and the Philippines,
Terrorist groups worldwide have also shown an interest in acquiring
and developing weapons of mass destruction including biological,
chemical and nuclear weapons and their components, he said. Moreover,
the terrorist threat goes well beyond al-Qa'ida, he said.
"[T]he situation in the Middle East continues to fuel terrorism and
anti-U.S. sentiment worldwide. Groups like the Palestine Islamic Jihad
(PIJ) and HAMAS have escalated their violence against Israel, and the
Intifada has rejuvenated once-dormant groups like the Popular Front
for the Liberation of Palestine," he said.
Tenet said U.S. intelligence officials are continuing to monitor
states such as Iran and Iraq that continue to support terrorist
"Iran continues to provide support -- including arms transfers -- to
Palestinian rejectionist groups and Hizballah. Tehran has also failed
to move decisively against al-Qa'ida members who have relocated to
Iran from Afghanistan," he said.
As for Iraq, Tenet said it has a long history of supporting
terrorists, including giving sanctuary to Abu Nidal.
On other key threats, Tenet said:
-- Weapons of Mass Destruction (WMD) programs are becoming more
advanced and effective as they mature, which is exacerbated by the
diffusion of technology over time.
-- "Russian entities continue to provide other countries with
technology and expertise applicable to CW [chemical weapons], BW
[biological weapons], nuclear, and ballistic and cruise missile
-- Chinese firms are key suppliers of missile-related technologies to
Pakistan, Iran and several other countries.
-- North Korea continues to export ballistic missiles and production
capabilities along with raw materials, components, and expertise.
"Profits from these sales help Pyongyang to support its missile -- and
probably other WMD -- development programs, and in turn generate new
products to offer to its customers -- primarily Iran, Libya, Syria and
Following is a text of Tenet's remarks:
Worldwide Threat -- Converging Dangers in a Post 9/11 World Testimony
of Director of Central Intelligence George J. Tenet Before The Senate
Select Committee on Intelligence
Mr. Chairman, I appear before you this year under circumstances that
are extraordinary and historic for reasons I need not recount. Never
before has the subject of this annual threat briefing had more
immediate resonance. Never before have the dangers been more clear or
September 11 brought together and brought home-literally-several vital
threats to the United States and its interests that we have long been
aware of. It is the convergence of these threats that I want to
emphasize with you today: the connection between terrorists and other
enemies of this country; the weapons of mass destruction they seek to
use against us; and the social, economic, and political tensions
across the world that they exploit in mobilizing their followers.
September 11 demonstrated the dangers that arise when these threats
converge-and it reminds us that we overlook at our own peril the
impact of crises in remote parts of the world.
This convergence of threats has created the world I will present to
you today-a world in which dangers exist not only in those places
where we have most often focused our attention, but also in other
areas that demand it:
-- In places like Somalia, where the absence of a national government
has created an environment in which groups sympathetic to al-Qa'ida
have offered terrorists an operational base and potential haven.
-- In places like Indonesia, where political instability, separatist
and ethnic tensions, and protracted violence are hampering economic
recovery and fueling Islamic extremism.
-- In places like Colombia, where leftist insurgents who make much of
their money from drug trafficking are escalating their assault on the
government-further undermining economic prospects and fueling a cycle
-- And finally, Mr. Chairman, in places like Connecticut, where the
death of a 94-year-old woman in her own home of anthrax poisoning can
arouse our worst fears about what our enemies might try to do to us.
These threats demand our utmost response. The United States has
clearly demonstrated since September 11 that it is up to the
challenge. But make no mistake: despite the battles we have won in
Afghanistan, we remain a nation at war.
Last year I told you that Usama Bin Ladin and the al-Qa'ida network
were the most immediate and serious threat this country faced. This
remains true today despite the progress we have made in Afghanistan
and in disrupting the network elsewhere. We assess that Al-Qa'ida and
other terrorist groups will continue to plan to attack this country
and its interests abroad. Their modus operandi is to have multiple
attack plans in the works simultaneously, and to have al-Qa'ida cells
in place to conduct them.
-- We know that terrorists have considered attacks in the United
States against high-profile government or private facilities, famous
landmarks, and U.S. infrastructure nodes such as airports, bridges,
harbors, and dams. High profile events such as the Olympics or last
weekend's Super Bowl also fit the terrorists' interest in striking
another blow within the United States that would command worldwide
-- Al-Qa'ida also has plans to strike against U.S. and allied targets
in Europe, the Middle East, Africa, and Southeast Asia. American
diplomatic and military installations are at high risk-especially in
East Africa, Israel, Saudi Arabia, and Turkey.
-- Operations against U.S. targets could be launched by al-Qa'ida
cells already in place in major cities in Europe and the Middle East.
Al-Qa'ida can also exploit its presence or connections to other groups
in such countries as Somalia, Yemen, Indonesia, and the Philippines.
Although the September 11 attacks suggest that al-Qa'ida and other
terrorists will continue to use conventional weapons, one of our
highest concerns is their stated readiness to attempt unconventional
attacks against us. As early as 1998, Bin Ladin publicly declared that
acquiring unconventional weapons was "a religious duty."
-- Terrorist groups worldwide have ready access to information on
chemical, biological, and even nuclear weapons via the Internet, and
we know that al-Qa'ida was working to acquire some of the most
dangerous chemical agents and toxins. Documents recovered from
al-Qa'ida facilities in Afghanistan show that Bin Ladin was pursuing a
sophisticated biological weapons research program.
-- We also believe that Bin Ladin was seeking to acquire or develop a
nuclear device. Al-Qa'ida may be pursuing a radioactive dispersal
device-what some call a "dirty bomb."
-- Alternatively, al-Qa'ida or other terrorist groups might also try
to launch conventional attacks against the chemical or nuclear
industrial infrastructure of the United States to cause widespread
toxic or radiological damage.
We are also alert to the possibility of cyber warfare attack by
terrorists. September 11 demonstrated our dependence on critical
infrastructure systems that rely on electronic and computer networks.
Attacks of this nature will become an increasingly viable option for
terrorists as they and other foreign adversaries become more familiar
with these targets, and the technologies required to attack them.
The terrorist threat goes well beyond al-Qa'ida. The situation in the
Middle East continues to fuel terrorism and anti-U.S. sentiment
worldwide. Groups like the Palestine Islamic Jihad (PIJ) and HAMAS
have escalated their violence against Israel, and the intifada has
rejuvenated once-dormant groups like the Popular Front for the
Liberation of Palestine. If these groups feel that U.S. actions are
threatening their existence, they may begin targeting Americans
directly-as Hizballah's terrorist wing already does.
-- The terrorist threat also goes beyond Islamic extremists and the
Muslim world. The Revolutionary Armed Forces of Colombia (FARC) poses
a serious threat to U.S. interests in Latin America because it
associates us with the government it is fighting against.
-- The same is true in Turkey, where the Revolutionary People's
Liberation Party/Front has publicly criticized the United States and
our operations in Afghanistan.
-- We are also watching states like Iran and Iraq that continue to
support terrorist groups.
-- Iran continues to provide support -- including arms transfers -- to
Palestinian rejectionist groups and Hizballah. Tehran has also failed
to move decisively against al-Qa'ida members who have relocated to
Iran from Afghanistan.
-- Iraq has a long history of supporting terrorists, including giving
sanctuary to Abu Nidal.
The war on terrorism has dealt severe blows to al-Qa'ida and its
leadership. The group has been denied its safe haven and strategic
command center in Afghanistan. Drawing on both our own assets and
increased cooperation from allies around the world, we are uncovering
terrorists' plans and breaking up their cells. These efforts have
yielded the arrest of nearly 1,000 al-Qa'ida operatives in over 60
countries, and have disrupted terrorist operations and potential
Mr. Chairman, Bin Ladin did not believe that we would invade his
sanctuary. He saw the United States as soft, impatient, unprepared,
and fearful of a long, bloody war of attrition. He did not count on
the fact that we had lined up allies that could help us overcome
barriers of terrain and culture. He did not know about the collection
and operational initiatives that would allow us to strike -- with
great accuracy -- at the heart of the Taliban and al-Qa'ida. He
underestimated our capabilities, our readiness, and our resolve.
That said, I must repeat that al-Qa'ida has not yet been destroyed. It
and other like-minded groups remain willing and able to strike us.
Al-Qa'ida leaders still at large are working to reconstitute the
organization and to resume its terrorist operations. We must eradicate
these organizations by denying them their sources of financing and
eliminating their ability to hijack charitable organizations for their
terrorist purposes. We must be prepared for a long war, and we must
Mr. Chairman, we must also look beyond the immediate danger of
terrorist attacks to the conditions that allow terrorism to take root
around the world. These conditions are no less threatening to U.S.
national security than terrorism itself. The problems that terrorists
exploit -- poverty, alienation, and ethnic tensions -- will grow more
acute over the next decade. This will especially be the case in those
parts of the world that have served as the most fertile recruiting
grounds for Islamic extremist groups.
-- We have already seen -- in Afghanistan and elsewhere -- that
domestic unrest and conflict in weak states is one of the factors that
create an environment conducive to terrorism.
-- More importantly, demographic trends tell us that the world's
poorest and most politically unstable regions -- which include parts
of the Middle East and Sub-Saharan Africa -- will have the largest
youth populations in the world over the next two decades and beyond.
Most of these countries will lack the economic institutions or
resources to effectively integrate these youth into society.
THE MUSLIM WORLD
All of these challenges come together in parts of the Muslim world,
and let me give you just one example. One of the places where they
converge that has the greatest long-term impact on any society is its
educational system. Primary and secondary education in parts of the
Muslim world is often dominated by an interpretation of Islam that
teaches intolerance and hatred. The graduates of these schools --
"madrasas" -- provide the foot soldiers for many of the Islamic
militant groups that operate throughout the Muslim world.
Let me underscore what the President has affirmed: Islam itself is
neither an enemy nor a threat to the United States. But the increasing
anger toward the West -- and toward governments friendly to us --
among Islamic extremists and their sympathizers clearly is a threat to
us. We have seen -- and continue to see -- these dynamics play out
across the Muslim world. Let me briefly address their manifestation in
several key countries.
Our campaign in Afghanistan has made great progress, but the road
ahead is fraught with challenges. The Afghan people, with
international assistance, are working to overcome a traditionally weak
central government, a devastated infrastructure, a grave humanitarian
crisis, and ethnic divisions that deepened over the last 20 years of
conflict. The next few months will be an especially fragile period.
-- Interim authority chief Hamid Karzai will have to play a delicate
balancing game domestically. Remaining al-Qai'da fighters in the
eastern provinces, and ongoing power struggles among Pashtun leaders
there underscore the volatility of tribal and personal relations that
Karzai must navigate.
-- Taliban elements still at large and remaining pockets of Arab
fighters could also threaten the security of those involved in
reconstruction and humanitarian operations. Some leaders in the new
political order may allow the continuation of opium cultivation to
secure advantages against their rivals for power.
Let me move next to Pakistan. September 11 and the U.S. response to it
were the most profound external events for Pakistan since the Soviet
invasion of Afghanistan in 1979, and the U.S. response to that. The
Musharraf government's alignment with the United States -- and its
abandonment of nearly a decade of support for the Taliban -- represent
a fundamental political shift with inherent political risks because of
the militant Islamic and anti-American sentiments that exist within
President Musharraf's intention to establish a moderate, tolerant
Islamic state -- as outlined in his 12 January speech -- is being
welcomed by most Pakistanis, but he will still have to confront major
vested interests. The speech is energizing debate across the Muslim
world about which vision of Islam is the right one for the future of
the Islamic community.
-- Musharraf established a clear and forceful distinction between a
narrow, intolerant, and conflict-ridden vision of the past and an
inclusive, tolerant, and peace-oriented vision of the future.
-- The speech also addressed the jihad issue by citing the distinction
the Prophet Muhammad made between the "smaller jihad" involving
violence and the "greater jihad" that focuses on eliminating poverty
and helping the needy.
Although September 11 highlighted the challenges that India-Pakistan
relations pose for U.S. policy, the attack on the Indian parliament on
December 13 was even more destabilizing -- resulting as it did in new
calls for military action against Pakistan, and subsequent
mobilization on both sides. The chance of war between these two
nuclear-armed states is higher than at any point since 1971. If India
were to conduct large-scale offensive operations into Pakistani
Kashmir, Pakistan might retaliate with strikes of its own in the
belief that its nuclear deterrent would limit the scope of an Indian
-- Both India and Pakistan are publicly downplaying the risks of
nuclear conflict in the current crisis. We are deeply concerned,
however, that a conventional war -- once begun -- could escalate into
a nuclear confrontation.
Let me turn now to Iraq. Saddam has responded to our progress in
Afghanistan with a political and diplomatic charm offensive to make it
appear that Baghdad is becoming more flexible on U.N. sanctions and
inspections issues. Last month he sent Deputy Prime Minister Tariq
Aziz to Moscow and Beijing to profess Iraq's new openness to meet its
U.N. obligations and to seek their support.
Baghdad's international isolation is also decreasing as support for
the sanctions regime erodes among other states in the region. Saddam
has carefully cultivated neighboring states, drawing them into
economically dependent relationships in hopes of further undermining
their support for the sanctions. The profits he gains from these
relationships provide him the means to reward key supporters and, more
importantly, to fund his pursuit of WMD. His calculus is never about
bettering or helping the Iraqi people.
Let me be clear: Saddam remains a threat. He is determined to thwart
U.N. sanctions, press ahead with weapons of mass destruction, and
resurrect the military force he had before the Gulf war. Today, he
maintains his vise grip on the levers of power through a pervasive
intelligence and security apparatus, and even his reduced military
force -- which is less than half its pre-war size -- remains capable
of defeating more poorly armed internal opposition groups and
threatening Iraq's neighbors.
As I said earlier, we continue to watch Iraq's involvement in
terrorist activities. Baghdad has a long history of supporting
terrorism, altering its targets to reflect changing priorities and
goals. It has also had contacts with al-Qa'ida. Their ties may be
limited by divergent ideologies, but the two sides' mutual antipathy
toward the United States and the Saudi royal family suggests that
tactical cooperation between them is possible -- even though Saddam is
well aware that such activity would carry serious consequences.
In Iran, we are concerned that the reform movement may be losing its
momentum. For almost five years, President Khatami and his reformist
supporters have been stymied by Supreme Leader Khamenei and the
-- The hardliners have systematically used the unelected institutions
they control -- the security forces, the judiciary, and the Guardian's
Council -- to block reforms that challenge their entrenched interests.
They have closed newspapers, forced members of Khatami's cabinet from
office, and arrested those who have dared to speak out against their
-- Discontent with the current domestic situation is widespread and
cuts across the social spectrum. Complaints focus on the lack of
pluralism and government accountability, social restrictions, and poor
economic performance. Frustrations are growing as the populace sees
elected institutions such as the Majles and the Presidency unable to
break the hardliners' hold on power.
The hardline regime appears secure for now because security forces
have easily contained dissenters and arrested potential opposition
leaders. No one has emerged to rally reformers into a forceful
movement for change, and the Iranian public appears to prefer gradual
reform to another revolution. But the equilibrium is fragile and could
be upset by a miscalculation by either the reformers or the hardline
For all of this, reform is not dead. We must remember that the people
of Iran have demonstrated in four national elections since 1997 that
they want change and have grown disillusioned with the promises of the
revolution. Social, intellectual, and political developments are
proceeding, civil institutions are growing, and new newspapers open as
others are closed.
The initial signs of Tehran's cooperation and common cause with us in
Afghanistan are being eclipsed by Iranian efforts to undermine U.S.
influence there. While Iran's officials express a shared interest in a
stable government in Afghanistan, its security forces appear bent on
countering the U.S. presence. This seeming contradiction in behavior
reflects deep-seated suspicions among Tehran's clerics that the United
States is committed to encircling and overthrowing them -- a fear that
could quickly erupt in attacks against our interests.
-- We have seen little sign of a reduction in Iran's support for
terrorism in the past year. Its participation in the attempt to
transfer arms to the Palestinian Authority via the Karine-A probably
was intended to escalate the violence of the intifada and strengthen
the position of Palestinian elements that prefer armed conflict with
The current conflict between Israel and the Palestinians has been
raging for almost a year and a half, and it continues to deteriorate.
The violence has hardened the public's positions on both sides and
increased the longstanding animosity between Israeli Prime Minister
Sharon and Palestinian leader Arafat. Although many Israelis and
Palestinians say they believe that ultimately the conflict can only be
resolved through negotiations, the absence of any meaningful security
cooperation between Israel and the Palestinian Authority -- and the
escalating and uncontrolled activities of the Palestine Islamic Jihad
and HAMAS -- make any progress extremely difficult.
-- We are concerned that this environment creates opportunities for
any number of players -- most notably Iran -- to take steps that will
result in further escalation of violence by radical Palestinian
-- At the same time, the continued violence threatens to weaken the
political center in the Arab world, and increases the challenge for
our Arab allies to balance their support for us against the demands of
I turn now to the subject of proliferation. I would like to start by
drawing your attention to several disturbing trends in this important
area. WMD programs are becoming more advanced and effective as they
mature, and as countries of concern become more aggressive in pursuing
them. This is exacerbated by the diffusion of technology over time --
which enables proliferators to draw on the experience of others and to
develop more advanced weapons more quickly than they could otherwise.
Proliferators are also becoming more self-sufficient. And they are
taking advantage of the dual-use nature of WMD -- and missile-related
technologies to establish advanced production capabilities and to
conduct WMD -- and missile-related research under the guise of
legitimate commercial or scientific activity.
Let me address in turn the primary categories of WMD proliferation,
starting with chemical and biological weapons. The CBW threat
continues to grow for a variety of reasons, and to present us with
monitoring challenges. The dual-use nature of many CW and BW agents
complicates our assessment of offensive programs. Many CW and BW
production capabilities are hidden in plants that are virtually
indistinguishable from genuine commercial facilities. And the
technology behind CW and BW agents is spreading. We assess there is a
significant risk within the next few years that we could confront an
adversary -- either terrorists or a rogue state -- who possesses them.
On the nuclear side, we are concerned about the possibility of
significant nuclear technology transfers going undetected. This
reinforces our need to more closely examine emerging nuclear programs
for sudden leaps in capability. Factors working against us include the
difficulty of monitoring and controlling technology transfers, the
emergence of new suppliers to covert nuclear weapons programs, and the
possibility of illicitly acquiring fissile material. All of these can
shorten timelines and increase the chances of proliferation surprise.
On the missile side, the proliferation of ICBM and cruise missile
designs and technology has raised the threat to the United States from
WMD delivery systems to a critical threshold. As outlined in our
recent National Intelligence Estimate on the subject, most
Intelligence Community agencies project that by 2015 the United States
most likely will face ICBM threats from North Korea and Iran, and
possibly from Iraq. This is in addition to the longstanding missile
forces of Russia and China. Short- and medium-range ballistic missiles
pose a significant threat now.
-- Several countries of concern are also increasingly interested in
acquiring a land-attack cruise missile (LACM) capability. By the end
of the decade, LACMs could pose a serious threat to not only our
deployed forces, but possibly even the U.S. mainland.
Russian entities continue to provide other countries with technology
and expertise applicable to CW, BW, nuclear, and ballistic and cruise
missile projects. Russia appears to be the first choice of proliferant
states seeking the most advanced technology and training. These sales
are a major source of funds for Russian commercial and defense
industries and military R&D.
-- Russia continues to supply significant assistance on nearly all
aspects of Tehran's nuclear program. It is also providing Iran
assistance on long-range ballistic missile programs.
Chinese firms remain key suppliers of missile-related technologies to
Pakistan, Iran, and several other countries. This is in spite of
Beijing's November 2000 missile pledge not to assist in any way
countries seeking to develop nuclear-capable ballistic missiles. Most
of China's efforts involve solid-propellant ballistic missile
development for countries that are largely dependent on Chinese
expertise and materials, but it has also sold cruise missiles to
countries of concern such as Iran.
-- We are closely watching Beijing's compliance with its bilateral
commitment in 1996 not to assist unsafeguarded nuclear facilities, and
its pledge in 1997 not to provide any new nuclear cooperation to Iran.
-- Chinese firms have in the past supplied dual-use CW-related
production equipment and technology to Iran. We remain concerned that
they may try to circumvent the CW-related export controls that Beijing
has promulgated since acceding to the CWC and the nuclear
North Korea continues to export complete ballistic missiles and
production capabilities along with related raw materials, components,
and expertise. Profits from these sales help P'yongyang to support its
missile-and probably other WMD-development programs, and in turn
generate new products to offer to its customers-primarily Iran, Libya,
Syria, and Egypt. North Korea continues to comply with the terms of
the Agreed Framework that are directly related to the freeze on its
reactor program, but P'yongyang has warned that it is prepared to walk
away from the agreement if it concluded that the United States was not
living up to its end of the deal.
Iraq continues to build and expand an infrastructure capable of
producing WMD. Baghdad is expanding its civilian chemical industry in
ways that could be diverted quickly to CW production. We believe it
also maintains an active and capable BW program; Iraq told UNSCOM it
had worked with several BW agents.
-- We believe Baghdad continues to pursue ballistic missile
capabilities that exceed the restrictions imposed by U.N. resolutions.
With substantial foreign assistance, it could flight-test a
longer-range ballistic missile within the next five years. It may also
have retained the capability to deliver BW or CW agents using modified
aircraft or other unmanned aerial vehicles.
-- We believe Saddam never abandoned his nuclear weapons program. Iraq
retains a significant number of nuclear scientists, program
documentation, and probably some dual-use manufacturing infrastructure
that could support a reinvigorated nuclear weapons program. Baghdad's
access to foreign expertise could support a rejuvenated program, but
our major near-term concern is the possibility that Saddam might gain
access to fissile material.
Iran remains a serious concern because of its across-the-board pursuit
of WMD and missile capabilities. Tehran may be able to indigenously
produce enough fissile material for a nuclear weapon by late this
decade. Obtaining material from outside could cut years from this
estimate. Iran may also flight-test an ICBM later this decade, using
either Russian or North Korean assistance. Having already deployed
several types of UAVs -- including some in an attack role -- Iran may
seek to develop or otherwise acquire more sophisticated LACMs. It also
continues to pursue dual-use equipment and expertise that could help
to expand its BW arsenal, and to maintain a large CW stockpile.
Both India and Pakistan are working on the doctrine and tactics for
more advanced nuclear weapons, producing fissile material, and
increasing their nuclear stockpiles. We have continuing concerns that
both sides may not be done with nuclear testing. Nor can we rule out
the possibility that either country could deploy their most advanced
nuclear weapons without additional testing. Both countries also
continue development of long-range nuclear-capable ballistic missiles,
and plan to field cruise missiles with a land-attack capability.
As I have mentioned in years past, we face several unique challenges
in trying to detect WMD acquisition by proliferant states and
non-state actors. Their use of denial and deception tactics, and their
access to a tremendous amount of information in open sources about WMD
production, complicate our efforts. So does their exploitation of
space. The unique spaceborne advantage that the United States has
enjoyed over the past few decades is eroding as more countries --
including China and India -- field increasingly sophisticated
reconnaissance satellites. Today there are three commercial satellites
collecting high-resolution imagery, much of it openly marketed.
Foreign military, intelligence, and terrorist organizations are
exploiting this -- along with commercially available navigation and
communications services -- to enhance the planning and conduct of
Let me mention here another danger that is closely related to
proliferation: the changing character of warfare itself. As
demonstrated by September 11, we increasingly are facing real or
potential adversaries whose main goal is to cause the United States
pain and suffering, rather than to achieve traditional military
objectives. Their inability to match U.S. military power is driving
some to invest in "asymmetric" niche capabilities. We must remain
alert to indications that our adversaries are pursuing such
capabilities against us.
Mr. Chairman, let me turn now to other areas of the world where the
United States has key interests, beginning with Russia. The most
striking development regarding Russia over the past year has been
Moscow's greater engagement with the United States. Even before
September 11, President Putin had moved to engage the United States as
part of a broader effort to integrate Russia more fully into the West,
modernize its economy, and regain international status and influence.
This strategic shift away from a zero-sum view of relations with the
United States is consistent with Putin's stated desire to address the
many socioeconomic problems that cloud Russia's future.
During his second year in office, Putin moved strongly to advance his
policy agenda. He pushed the Duma to pass key economic legislation on
budget reform, legitimizing urban property sales, flattening and
simplifying tax rates, and reducing red tape for small businesses. His
support for his economic team and its fiscal rigor positioned Russia
to pay back wages and pensions to state workers, amass a post-Soviet
high of almost $39 billion in reserves, and meet the major foreign
debt coming due this year (about $14 billion) and next (about $16
-- He reinvigorated military reform by placing his top lieutenant atop
the Defense Ministry and increasing military spending for the second
straight year -- even as he forced tough decisions on de-emphasizing
strategic forces, and pushing for a leaner, better-equipped
conventional military force.
This progress is promising, and Putin is trying to build a strong
Presidency that can ensure these reforms are implemented across Russia
-- while managing a fragmented bureaucracy beset by informal networks
that serve private interests. In his quest to build a strong state,
however, he is trying to establish parameters within which political
forces must operate. This "managed democracy" is illustrated by his
continuing moves against independent national television companies.
-- On the economic front, Putin will have to take on bank reform,
overhaul of Russia's entrenched monopolies, and judicial reform to
move the country closer to a Western-style market economy and attract
much-needed foreign investment.
Putin has made no headway in Chechnya. Despite his hint in September
of a possible dialogue with Chechen moderates, the fighting has
intensified in recent months, and thousands of Chechen guerrillas --
and their fellow Arab mujahedeen fighters --remain. Moscow seems
unwilling to consider the compromises necessary to reach a settlement,
while divisions among the Chechens make it hard to find a
representative interlocutor. The war, meanwhile, threatens to spill
over into neighboring Georgia.
After September 11, Putin emphatically chose to join us in the fight
against terrorism. The Kremlin blames Islamic radicalism for the
conflict in Chechnya and believes it to be a serious threat to Russia.
Moscow sees the U.S.-led counterterrorism effort -- particularly the
demise of the Taliban regime -- as an important gain in countering the
radical Islamic threat to Russia and Central Asia.
So far, Putin's outreach to the United States has incurred little
political damage, largely because of his strong domestic standing.
Recent Russian media polls show his public approval ratings at around
80 percent. The depth of support within key elites, however, is
unclear -- particularly within the military and security services.
Public comments by some senior military officers indicate that
elements of the military doubt that the international situation has
changed sufficiently to overcome deeply rooted suspicions of U.S.
Moscow retains fundamental differences with Washington on key issues,
and suspicion about U.S. motives persists among Russian conservatives
-- especially within the military and security services. Putin has
called the intended U.S. withdrawal from the ABM treaty a "mistake,"
but has downplayed its impact on Russia. At the same time, Moscow is
likely to pursue a variety of countermeasures and new weapons systems
to defeat a deployed U.S. missile defense.
I turn next to China. Last year I told you that China's drive to
become a great power was coming more sharply into focus. The
challenge, I said, was that Beijing saw the United States as the
primary obstacle to its realization of that goal. This was in spite of
the fact that Chinese leaders at the same time judged that they needed
to maintain good ties with Washington. A lot has happened in
U.S.-China relations over the past year, from the tenseness of the
EP-3 episode in April to the positive image of President Bush and
Jiang Zemin standing together in Shanghai last fall, highlighting our
shared fight against terrorism.
September 11 changed the context of China's approach to us, but it did
not change the fundamentals. China is developing an increasingly
competitive economy and building a modern military force with the
ultimate objective of asserting itself as a great power in East Asia.
And although Beijing joined the coalition against terrorism, it
remains deeply skeptical of U.S. intentions in Central and South Asia.
It fears that we are gaining regional influence at China's expense,
and it views our encouragement of a Japanese military role in
counterterrorism as support for Japanese rearmament -- something the
Chinese firmly oppose.
As always, Beijing's approach to the United States must be viewed
against the backdrop of China's domestic politics. I told you last
year that the approach of a major leadership transition and China's
accession to WTO would soon be coloring all of Beijing's actions. Both
of those benchmarks are now upon us. The 16th Communist Party Congress
will be held this fall, and China is now confronting the obligations
of WTO membership.
On the leadership side, Beijing is likely to be preoccupied this year
with succession jockeying, as top leaders decide who will get what
positions -- and who will retire -- at the Party Congress and in the
changeover in government positions that will follow next spring. This
preoccupation is likely to translate into a cautious and defensive
approach on most policy issues. It probably also translates into a
persistently nationalist foreign policy, as each of the contenders in
the succession contest will be obliged to avoid any hint of being
"soft" on the United States.
China's entry into the WTO underscores the trepidation the succession
contenders will have about maintaining internal stability. WTO
membership is a major challenge to Chinese stability because the
economic requirements of accession will upset already disaffected
sectors of the population and increase unemployment. If China's
leaders stumble in WTO implementation -- and even if they succeed --
they will face rising socioeconomic tensions at a time when the stakes
in the succession contest are pushing them toward a cautious response
to problems. In the case of social unrest, that response is more
likely to be harsh than accommodative toward the population at large.
The Taiwan issue remains central. Cross-strait relations remain at a
stalemate, but there are competing trend lines behind that. Chinese
leaders seemed somewhat complacent last year that the growing economic
integration across the Taiwan Strait was boosting Beijing's long-term
leverage. The results of Taiwan's legislative elections in December,
however, strengthened President Chen's hand domestically. Although
Beijing's latest policy statement -- inviting members of Chen's party
to visit the mainland -- was designed as a conciliatory gesture,
Beijing might resume a more confrontational stance if it suspects him
of using his electoral mandate to move toward independence.
Taiwan also remains the focus of China's military modernization
programs. Over the past year, Beijing's military training exercises
have taken on an increasingly real-world focus, emphasizing rigorous
practice in operational capabilities and improving the military's
actual ability to use force. This is aimed not only at Taiwan but also
at increasing the risk to the United States itself in any future
Taiwan contingency. China also continues to upgrade and expand the
conventional short-range ballistic missile force it has arrayed
Beijing also continues to make progress towards fielding its first
generation of road mobile strategic missiles -- the DF-31. A
longer-range version capable of reaching targets in the United States
will become operational later in the decade.
Staying within East Asia for a moment, let me update you on North
Korea. The suspension last year of engagement between P'yongyang,
Seoul, and Washington reinforced the concerns I cited last year about
Kim Chong-il's intentions toward us and our allies in Northeast Asia.
Kim's reluctance to pursue constructive dialogue with the South or to
undertake meaningful reforms suggests that he remains focused on
maintaining internal control -- at the expense of addressing the
fundamental economic failures that keep the North mired in poverty and
pose a long-term threat to the country's stability. North Korea's
large standing army continues to be a priority claimant on scarce
resources, and we have seen no evidence that P'yongyang has abandoned
its goal of eventual reunification of the Peninsula under the North's
The cumulative effects of prolonged economic mismanagement have left
the country increasingly susceptible to the possibility of state
failure. North Korea faces deepening economic deprivation and the
return of famine in the absence of fundamental economic reforms and
the large-scale international humanitarian assistance it receives --
an annual average of 1 million metric tons of food aid over the last
five years. It has ignored international efforts to address the
systemic agricultural problems that exacerbate the North's chronic
food shortages. Grain production appears to have roughly stabilized,
but it still falls far short of the level required to meet minimum
nutritional needs for the population. Large numbers of North Koreans
face long-term health damage as a result of prolonged malnutrition and
collapse of the public health network.
Other important regions of the developing world are test cases for
many of the political, social, and demographic trends I identified
earlier -- trends that pose latent or growing challenges to U.S.
interests, and sometimes fuel terrorists. I have already mentioned
Southeast Asia in this respect, citing the rise of Islamic extremism
in Indonesia and terrorist links in the Philippines.
Latin America is becoming increasingly volatile as the potential for
instability there grows. The region has been whipsawed by five
economic crises in as many years, and the economic impact of September
11 worsened an already bleak outlook for regional economies as the
global slump reduces demand for exports.
In this context, I am particularly concerned about Venezuela, our
third largest supplier of petroleum. Domestic unhappiness with
President Chavez's "Bolivarian revolution" is growing, economic
conditions have deteriorated with the fall in oil prices, and the
crisis atmosphere is likely to worsen. In Argentina, President Duhalde
is trying to maintain public order while putting into place the
groundwork for recovery from economic collapse, but his support base
Colombia too remains highly volatile. The peace process there faces
many obstacles, and a significant increase in violence -- especially
from the FARC -- may be in the offing. Colombia's tenuous security
situation is taking a toll on the economy and increasing the dangers
for U.S. military advisers in the country. Together, the difficult
security and economic conditions have hampered Bogota's ability to
implement Plan Colombia's counterdrug and social programs. Colombia
remains the cornerstone of the world's cocaine trade, and the largest
source of heroin for the U.S. market.
The chronic problems of Sub-Saharan Africa make it, too, fertile
ground for direct and indirect threats to U.S. interests. Governments
without accountability and natural disasters have left Africa with the
highest concentration of human misery in the world. It is the only
region where average incomes have declined since 1970, and Africans
have the world's lowest life expectancy at birth. These problems have
been compounded by the HIV/AIDS pandemic, which will kill more than 2
million Africans this year, making it the leading source of mortality
in the region.
Given these grim facts, the risk of state failures in Sub-Saharan
Africa will remain high. In the past decade, the collapse of
governments in Somalia, Liberia, Rwanda, Congo-Kinshasa, and elsewhere
has led the United States and other international partners to provide
hundreds of millions of dollars worth of aid, and to deploy thousands
of peacekeepers. A number of other African states -- including
Zimbabwe and Liberia -- are poised to follow the same downward spiral.
In Zimbabwe, President Mugabe's attempts to rig the presidential
election scheduled for next month increases the chances of a collapse
in law and order that could spill over into South Africa and other
neighbors. The U.N.-monitored truce between Ethiopia and Eritrea also
Finally, let me briefly mention the Balkans, the importance of which
is underlined by the continuing U.S. military presence there.
International peacekeeping troops, with a crucial core from NATO, are
key to maintaining stability in the region.
In Macedonia, the Framework Agreement brokered by the United States
and the EU has eased tensions by increasing the ethnic Albanians'
political role, but it remains fragile and most of the agreement has
yet to be implemented. Ethnic Slavs are worried about losing their
dominance in the country. If they obstruct implementation of the
accord, many Albanians could decide that the Slav-dominated government
-- and by extension the international community -- cannot be trusted.
United States and other international forces are most at risk in
Bosnia, where Islamic extremists from outside the region played an
important role in the ethnic conflicts of the 1990s. There is
considerable sympathy for international Islamic causes among the
Muslim community in Bosnia. Some of the mujahedin who fought in the
Bosnian wars of the early 1990s stayed there. These factors combine
with others present throughout the Balkans -- weak border controls,
large amounts of weapons, and pervasive corruption and organized crime
-- to sustain an ongoing threat to U.S. forces there.
Mr. Chairman, I want to end my presentation by reaffirming what the
President has said on many occasions regarding the threats we face
from terrorists and other adversaries. We cannot -- and will not --
relax our guard against these enemies. If we did so, the terrorists
would have won. And that will not happen. The terrorists, rather,
should stand warned that we will not falter in our efforts, and in our
commitment, until the threat they pose to us has been eliminated.
Thank you, Mr. Chairman. I welcome any questions you and your
colleagues have for me.
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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