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Press Briefing, Feb. 26, 2007

Multi-National Force-Iraq

Monday, 26 February 2007

Paul Brinkley, Deputy Undersecretary of Defense for Business Transformation

BRIEFING BY PAUL BRINKLEY, DEPUTY UNDERSECRETARY OF DEFENSE FOR BUSINESS TRANSFORMATION LOCATION: THE COMBINED PRESS INFORMATION CENTER, BAGHDAD, IRAQ TIME: 4:00 A.M. EST DATE: MONDAY, FEBRUARY 26, 2007

MR. BRINKLEY: Thank you for taking the time to join me this afternoon. I have a brief statement, and then I'll just take questions and answers.

My name is Paul Brinkley. I'm the deputy undersecretary of defense for business transformation and the director of the Task Force to Improve Business and Stability Operations in Iraq. For the past several months, our group has been working in collaboration with Iraqi ministries and with our commands, as well as our Department of State and other agencies, U.S. agencies working in Iraq, to engage in an in- depth review of the Iraqi industrial base in an effort to revitalize and restart, where appropriate, idled Iraqi industry.

I'm pleased to announce that we've been coming to Iraq now for several months, and for the past few months bringing sizable groups of business executives from outside of Iraq into Iraq, going around the country meeting with Iraqi businessmen, working with one objective, and that is to restore economic opportunity and create a sense of potential economic growth for the Iraqi people.

I'm pleased that on this month we have in country several dozen American and international business executives. They're here in Baghdad today. They're meeting with both government of Iraq officials as well as U.S. agency and government officials, getting an understanding of the situation here from the government perspective. And for the rest of the week, we will be out and about the country in different cities engaging with the business community, again, in an effort to connect the Iraqi economy to the global economy to drive demand and opportunity to Iraqi business, and to, again, create a sense of economic hope and prosperity.

Included in this contingent, as a result of our prior engagements, we have a stellar group of agricultural and agribusiness representatives from major American universities and from international business who are here and are going to be working to ensure that we synchronize our industry revitalization efforts with the agriculture sector, which is obviously a major part of the overall Iraqi economy. That effort is a collaboration with the U.S. Department of Agriculture, who does have representation with us on this team.

Additionally with us this month are representatives from our U.S. Department of State and the U.S. Agency for International Development.

And so we're going to be in the country. I'll be here for an extended time, as usual, but the team predominantly will be in country for most of the week, will be out and around. Some are staying on for a following week. We will be doing another press engagement as a larger group next Saturday, so if you'd like to ask questions about what people have seen, they will be here and will have a much better sense of the situation. This afternoon, there's a large reception being hosted by Deputy Prime Minister Barham Salih, including many senior business leaders from the Iraqi business community engaging with this group, and that will take place this afternoon. I believe there's some press availability at that as well.

So with that, I will be happy to take any questions you have. And again, it's a pleasure to be here, and I thank you for your time.

Q Could you give us a sense of, let's say a couple of -- could you give us a sense in several of the provinces -- Anbar, the city of Baghdad, Diyala -- how is business going so far? What kind of industries are you getting up and running again?

MR. BRINKLEY: Sure. I'll take those three in sequence.

You mentioned Al Anbar. Al Anbar's industries were predominantly mineral intensive -- cement, phosphates and industries that utilized the mineral wealth in Al Anbar province, so things like glass, ceramics. In those cases, much of the constraint that's keeping the factories from getting back on line -- those are very large power- consuming industries. They require huge amounts of steady, continual electrical power, and so in those cases, we're working closely with the minister of Electricity and our own reconstruction organizations to identify the most rapid path to power restoration which will enable the re-employment of people in the Al Anbar region.

Here in Baghdad, there's a wide range of industries. And we're working in collaboration with our commands as the Baghdad Security Plan unfolds to ensure that we are working to revitalize industry in areas as security is restored.

You mentioned Diyala province. Diyala province has several factories that we're looking at. And again, in that area, there's greater stability and I think a more rapid path to re-employment and reinvigoration of the industrial base there. So I think those three examples kind of illustrate what we see around the country. Every factory has a unique set of constraints, a unique set of issues it confronts. Some are up and running, some are idle, and by going case by case, site by site, doing the hard work to identify those constraints and work to resolve them, that's the focus of the team, and that's the effort we have under way.

Q Can you give us a sense of -- in Anbar --

MR. BRINKLEY: Yes.

Q I was out in Ramadi a couple weeks back. They hope to get the ceramics --

MR. BRINKLEY: Yes, we're very excited about that potential opportunity.

Q Well, can you give us a ballpark -- when you hope to get some of these up and running? Is it --

MR. BRINKLEY: In a matter of weeks we're hoping to have the Ramadi ceramics factory, which you mentioned you'd visited -- that's obviously a target. It employed hundreds of citizens there in Ramadi. And so we're hopeful, then, in a matter of weeks that we can see progress on that particular site.

Q Any others?

MR. BRINKLEY: It's an electrical -- by the way, on that one, it's an electrical registration issue.

Q And then the others --

MR. BRINKLEY: The others -- every factory has its own timeline. We're working as aggressively as we can with the minister of Industry and Minerals, as well as Deputy Prime Minister Barham Salih's office, to address the constraints.

In most cases, it requires a small amount of investment. We're working with the government of Iraq to get those investments made to deal with, in some cases, maintenance, spare parts; in other cases, power restoration. But each factory has a timeline that we're working to address as aggressively as we can.

Q How many jobs are we talking about overall in terms of the amount of idle capacity --

MR. BRINKLEY: Sure.

Q -- idle factories there? MR. BRINKLEY: We -- the numbers, if I add them bottoms up, we end up with a neighborhood of 300(,000) to 350,000 Iraqis who worked in large enterprises, factories, that were state-owned, declared state-owned.

The official statistics go as high as 5,000, so -- 500,000. So let's just round -- 300(,000) to 500,000 Iraqis, which is a sizable percentage of the population.

But I want you to think about it now in a different context, and coming from the States, I'll use that analogy. I mean, about 10 to 12 percent of the American workforce works in manufacturing today, which makes you think: Okay, well, if we didn't do manufacturing, would that be such a big deal? Well -- and it would, because if manufacturing as a sector we're suddenly not able to execute or were shut down, we would have a far higher unemployment level than just that 10 to 12 percent.

And so here in Iraq we view these large enterprises as part of the engine that made the whole economy work. Some of these factories made fertilizers that supported the agricultural sector. Some of them did food processing, which also consumed agricultural produce. Many of them made transportation equipment, irrigation equipment, pipeline equipment. All of these things had secondary and tertiary economic effects. And the optimism we have is that as we restore these industrial operations, that will create immediate uplift to other parts of the economy.

There were sizable numbers of private-sector companies here that did business with the public-sector companies. And so -- which is a pretty typical situation. So by restoring the public-sector corporations and putting them on a path to being privatized, in conjunction with the direction of the minister of Industry and the Iraqi government, we're also stimulating and re-enabling the private sector, and helping get it up and running again.

And we don't talk as much about it because it's something that doesn't attract as much attention, but we have a significant effort underway with the private sector industries here, as well. We've registered hundreds of Iraqi companies that we're working to open up their visibility to global economic opportunity, global demand, in conjunction with both trade associations and just the industry folks that we're bringing in and out of country. So it's not strictly focused on the large state-owned enterprises, but a lot of our effort is focused on getting them up and running.

Q Of the 300 to 350,000 people, how many of those are currently, I guess, drawing a paycheck today? And a quick second question, as well, you mentioned privatization. I had understood that that had become less of a priority in the past few years, and that then job creation was sort of becoming more of a priority. If you can talk about the --

MR. BRINKLEY: Sure. Well, I think we'll take those in order.

So the policy in terms of whether -- the employees of former state-owned enterprises draw a stipend, and it ranges from 30 to 40 percent of what their original pay was, given a different pay scale that was implemented after 2003. In any other economic situation, I think we would consider those people unemployed and on social welfare, right? So it's kind of a social welfare payment, a safety net.

The second question --

Q So are all 300 to 350,000 only drawing a stipend? Are none of them full-time employed at this point?

MR. BRINKLEY: Full-time employed -- there are factories that have begun and are operating either at very low capacity, or factories that we have already begun to restart, where significant numbers of people are going back to work. But generally speaking, the majority of the 300 to 350,000 are drawing a stipend but not working anywhere near a full-time engagement.

Q Do you know how large that majority is?

MR. BRINKLEY: I wouldn't have the exact statistics. We could probably dig them up.

Q Right.

MR. BRINKLEY: So the second question -- now I've lost it. You asked me about the --

Q The second question was, I had understood that the Iraqi government had backed away from --

MR. BRINKLEY: Oh, the privatization, right. Well, I would characterize, think of it as two different approaches. So the initial approach to privatization was kind of a rapid disempowerment of state- owned industry in an expectation that in a secure, stable environment, private industry would quickly emerge, okay, which is a model that was seen effective in Eastern Europe in some ways, after the fall of the iron curtain. I would think about what we're doing instead as a different approach, which I think is more consistent with what one sees in the Asia-Pacific region, where large, state-owned industries have been privatized in a more transitional way.

And so I actually have a great deal of optimism based on the industry leadership we have brought into Iraq to date. When we take them to working, functioning factories, where there are skilled workforces doing complicated work, discussions immediately ensue about opportunities for joint ventures, potential investment. Whereas when you bring industrialists to empty, idle equipment, to see empty, idle plants and equipment, there's no discussion to be had. And so I actually have optimism that the approach we're taking, which is a transitional approach -- get these factories up and running, get them engaged with the global economic community -- as those factories are up and running, the private sector begins to get uplifted again. And where we bring in outside industry and they engage these factories and they see skilled workforce and they see an opportunity to invest, then that puts them on a more rapid path to actual privatization than we had seen in the prior effort.

And another important factor I'll cite here. The factories that were in Iraq between 1991 and 2003 under U.N. sanctions, other than what could be imported around the sanctions regime, we find these factories, a surprising number of them -- more than I expected, given what had been written -- are in good condition and made a variety of goods and services that were consumed by the Iraqi economy, and they were sold across Iraq.

And this was part of the web that held together -- created social cohesion. There were products produced in certain parts of Iraq that were sold in other parts of Iraq, sold nationally. And so as those relationships and those trade relationships were severed -- it is certainly a beneficial factor in any national stability, inter- relationships, relationships, business relationships, people trading with each other, intra-Iraqi trade.

So another area I talk about, bringing in businessmen from outside and from the region -- we have several people representing regional business interests and international and American businesses interests, but also to recreate and foster the reestablishment of intra-Iraqi trade and business relationships as these factories come online has the potential to create a greater social cohesion here in the country. And there's some optimism that that may, in fact, occur over time.

Q What is the real hold-up when it comes to getting these up and running again? Is it the electricity? Is it security? What's the main hurdle?

MR. BRINKLEY: It's an absolute -- if I were to go through -- there were just under 200 factories in Iraq that fall into this category. If you go through -- we've done detailed -- our team, which is based here in Baghdad but spends most of its time out in factories around the country -- when you go to these sites, it's a mixed bag. Sometimes there are security issues in terms of getting supply in or distributing goods, shipping things out. sometimes it's electricity. Sometimes it's after two or three years of idleness or four years of idleness, they need maintenance, there are small investments to make in spare parts. So it's extremely site-specific, and so it's very hard for me to give you a standard answer. It's a mix.

The time it's taking to get them up is strictly a question of identifying the constraints, documenting, hey, this is exactly what we need to get up and running, and then partnering with the Iraqi government to get an infusion of relatively small amounts of investment to address those constraints so that production operations can be restored.

Q And just one last thing with the electricity.

MR. BRINKLEY: Sure.

Q What is the main problem with the electricity? Is it maintenance? Is it sabotage? Is it all of that?

MR. BRINKLEY: Well, I'm not directly responsible for the electrical sector, so I would probably defer for detailed questions on that. But I will say that our problem in terms of electricity, the restoration of grid-based, broad, widely available electrical power is a key element of long-term economic development here. There is obviously a lot of small generation taking place in the country, with factories, especially some of the larger factories that do mineral processing, for example -- they are very large consumers of power. We are working to identify how to rapidly restore power to those factories, and in most cases, that's going to require generators to be installed.

But those factories cannot run at profit. They will not be profitable in they're running on locally generated electricity with, you know, having to purchase their own fuel to run. You can't run profitable businesses that way. So in those cases, it's critical that the broader electrical grid is restored and a broad-based power distribution is restored in the country, and that's just a key element of economic development anywhere in the country -- in any country, rather. And so I think that's something -- again, working with the minister of Electricity and with other groups that are partnered with the minister of Electricity -- identifying the fastest path to restoration of grid-based power is a key element of making these factories economically viable after they're up and running and we get the employment base restored.

She's had a question. She's been very patient.

Q How much of a problem are goods that are coming from other countries that have sort of filled the vacuum since -- I mean, and what is being done about it -- I mean, illegally?

MR. BRINKLEY: Well, I actually am not so sure how much is illegal. I would defer to the Iraqi government for detailed statistics on that. All I have is anecdotal information. But we do hear anecdotally that the flood of goods and services that came into the country created economic instability in terms of producing goods within the country vis-a-vis what could be imported at very low cost, and the economic shocks that that created in different sectors were significant.

We have not analyzed that, per se, at this point on a broad scale. But as we look at each factor, we want to identify how we get them back up and how we get people back to work. Identifying their price points vis-a-vis the globally competitive market is part of the analysis that we're doing, and we think again is forming the basis of long-term privatization strategies for these factories as they identify how they can compete. And I know this is front and center for the minister of Industry, for example. This is a major element of his thinking in terms of how he approaches this problem.

Q Yeah. You were referring to the 350,000 former employees as being largely unemployed. Would you say that the U.S. industrial policy so far has failed?

MR. BRINKLEY: I don't know that I would characterize the U.S. necessarily as having had an industrial policy here. That sounds very planned or structured. I think that a set of assumptions that were made early, as things have evolved, no longer necessary fit the situation very well.

And so I think where we are today is that we have -- when I say unemployed, I mean these are workers who are drawing a stipend that prevents, I think in most cases, any kind of hunger or social suffering, but they are not working. I characterize them as -- my view is they would be in other country unemployed and on a social welfare program, which creates idleness and frustration. And so if the objective is stability and stabilization, which is a key element of U.S. strategy here in partnership with the government of Iraq, then restoring employment, giving people a sense of economic hope and opportunity is key to that, and that would be our policy today.

But I wouldn't necessarily want to criticize or characterize this as failure. I mean there's a lot of assumptions that have had to adapt over time in the past three or four years, and I think this is just another case.

Q What did the model of disempowering the factories originally sort of consist of, and when did that shift to -- I mean, models of -- (off mike)?

MR. BRINKLEY: When did it shift -- I'm sorry -- to -- ?

Q When did it shift to what you described as the new model?

MR. BRINKLEY: I can speak to the second question. The first question I think is something that hasn't been totally clear to me. I think the policy mindset from an economic perspective early, again, looked at what worked most effectively in Eastern Europe, the economies that were able to take off and move the fastest in Eastern Europe were the ones that disincented state-owned industry to encourage private industry to emerge fast. And that's a perfectly rational way to look at the problem. I mean, I think at the time that was the way this was seen and that was how people addressed it.

In terms of when we shifted to this, this really began -- for us, we became engaged -- I can only speak to that -- was beginning last summer when we began to engage here with some business folks, not necessarily dedicated to industry assessments, but we were asked to go look at some idle factories. And the folks -- myself and the team that we had, had worked, especially in the Asian Pacific region, had seen large operations. And when we saw the factories here, we saw an opportunity to essentially address some of the sources and causes of instability. And the commanding generals here at the time had a strong sense that restoring employment and economic vitality in some of these areas where these factories were located would help undermine insurgent activity; that they had seen insurgent activity fostered by people being paid, for example, to set IEDs and things like that. There were cases like that. So the command was very motivated to have us look at this, and we saw an opportunity and we've pursued it since.

STAFF: Sir, a question on this side of the room.

MR. BRINKLEY: Yes, sir?

Q (Through interpreter.) What did you provide for the small factories?

What will you plan for the small factories -- for example, generators, fuel -- in cooperation with the Ministry of Oil and Ministry of Electricity?

MR. BRINKLEY: Yes. The question's about small factories and what is the plan for small factories. The answer we had was the -- there's two categories, because there's a significant base of small private factories in Iraq that we are working with and we've registered, and many of those factories sold to state-owned industry. And so we revitalize former state-owned industries and get them up and running, we believe that will invigorate smaller private-sector operations. This is consistent with what one sees anywhere in the world. Large factories are typically surrounded by smaller factories that supply goods and services to them. And so by restoring the larger factories, we help uplift the private-sector economy.

The second question is, where needed and where electricity is a constraint for those smaller factories, those really do lend themselves to rapid reemployment by placement of generators and things that are necessary just to restore the small amounts of power required to enable basic operations to take hold. And so in those cases, they really lend themselves to generation in the short term. But in every case, long term, the partnerships that will take place in this country on the ministries to ensure grid-based power is restored are going to be critical to the economic development of both large-scale and small- scale business.

Next question.

Q You talked about how in some cases just a small amount of reconstruction money from the Iraqi government can get something up and going again. You talk to commanders in Baghdad and particularly in Anbar, and they're concerned that not enough money from the Iraqi government is getting out, particularly to Anbar.

MR. BRINKLEY: Right.

Q Can you talk a little bit about that?

MR. BRINKLEY: Sure.

Q And I know 10 billion is supposed -- has been set aside, supposedly by the Iraqi government. MR. BRINKLEY: Right.

Q What indication, what hope do you have that that will actually be spent?

MR. BRINKLEY: I have a -- there's a lot of different points of view, so I'm going to share mine with you. Having spent time in all of the regions of the country going in, early on we spent a lot of time in Al Anbar, and we heard many of the same things -- so much frustration that funds were not flowing to Al Anbar. Then we started spending a lot of time in the south, and we heard the same thing. And then we spent time in the north, the Kurdish north, and we heard the same thing. And what we really have, in my opinion here, is just a maturation of a new bureaucratic capacity that has to exist in the government in order for it to efficiently execute its budget. The policies implemented in de-Ba'athification removed the technocratic/bureaucratic workforce from the government that executed bureaucratic transactions.

Our sense is in our meetings with the ministries a huge amount of desire to execute their contracts and their budgets, but as I can speak, in any government that is a cumbersome process, and it's no less cumbersome here. And it's made more difficult, again, by the fact that a lot of the government employees are new to their jobs and they've just begun doing these jobs, and the ability to train.

Q You don't see any sectarian base for this; it's more of an inefficient bureaucracy?

MR. BRINKLEY: My belief is that -- I won't offer an opinion about the sectarian base because I believe the lack of bureaucratic capacity is a significant impediment, and until those issues are addressed, I'm not inclined to blame a sectarian bias in terms of budget execution. I think if you had a flawlessly executing bureaucracy and then money wasn't flowing, then I'm more sympathetic to the concerns about sectarian bias, but given we don't have that yet, and given that I don't find anyone in the country of any sect who feels like money is flowing efficiently, that it doesn't resonate with me. There are those who it does resonate with, the sectarian, but my personal view is in the engagements we've had I've never sensed a sectarian bias in the discussion. It just seems to me to be a struggle for a very young government to mature its ability to execute its bureaucratic processes well.

Q I know local commanders, at least since, like, 2004, local U.S. military commanders have been pushing for the revitalization of not factories per se but large job-creation programs in their districts. I mean, have hey sort of run into ideological resistance from -- either on our side or the Iraqi side -- from people who are reluctant to sort of get involved with large factories?

MR. BRINKLEY: I think that I would characterize it this way. Early on, a lot of the job creation efforts were focused on projects, large projects, which create jobs but they only create jobs for the duration of the project. And so a lot -- there was funding set aside for reconstruction, project-based reconstruction, and so a lot of the energy around job creation had to do with -- "We're doing these large- scale construction projects and let's put people back to work."

As that budget has been expended, I think that contributes to a lot of the shift in focus among the commands because we're not doing large-scale reconstruction. There's still Commander Emergency Response Program funds and that kind of investment that goes on, and that does create jobs. But there is an understanding that the need to create sustained employment here in the country is critical. And that opens up -- I think that contributed to the discussions that took place last summer that resulted in us getting engaged in terms of how to revitalize industry and to create sustained employment for people.

And so that's how I would characterize it.

Q But they are increasing the CERP funds, correct? Aren't they?

MR. BRINKLEY: I believe the budget and the supplemental requests do have a significant amount of CERP. CERP is a critical, critical program in terms of its effectiveness.

Q Any sense how much they're going to increase the CERP? Will it be double, triple?

MR. BRINKLEY: I'm not sure. That data would be -- that would be readily available, though, I think, that's --

Q But that would be used for the same thing, job creation and small --

MR. BRINKLEY: I think it's -- I think even the commanders -- job creation, but also just local infrastructure, dealing with local infrastructure challenges -- sewer, water, electric -- those kind of things which continue to be a challenge here. The amount of investment required -- and the statistics are cited -- I think the World Bank estimated at the beginning of 2003 a $60 billion investment would be required to modernize the net infrastructure of the country. And, you know, the U.S. dedicated $18 billion which has been invested here, but that leaves a large balance. So there's still a lot of work to do. And the commanders' ability to quickly allocate those funds to address local issues has been a critical element of their ability to engage with the Iraqi population and to demonstrate progress to the Iraqi people. And the job creation is obviously a net benefit of that, that that creates.

Yes, sir? In the back. The gentleman in the blue shirt.

Q Thanks. I'm Sa'ad Azi (ph) from The Washington Post. Sir, I came late --

MR. BRINKLEY: That's okay.

Q -- so I don't know if you have addressed this or not. I would like to ask you about the oil sector, what has been done on that sector especially to bring many revenues to the Iraqi economy. And also, just lately, the oil law has been drafted. So could you shed more light on that, if possible? MR. BRINKLEY: We're not directly engaging in the petroleum sector in this effort, primarily due to your second question. The hydrocarbon law and the state of the hydrocarbon law in the country is really gaiting any investment or desire of international business to engage. And I know that's just a huge priority for the Iraqi government.

And so our effort right now is predominantly on reemployment and restoration of economic opportunity here and the stimulative effect that will have on a variety of industrial sectors. But petroleum is not one we're looking at at all right, and again, we probably won't going forward. I think -- my sense is once a hydrocarbon law is passed, no one's going to need any help stimulating the economy here in terms of petrochemical investment. There's just going to be a huge convergence of intra- and extra-Iraq investment into the country to develop the petrochemical sector; they won't need any help. Whereas these other industry sectors that are currently either dormant or semi-dormant are areas where we think we can assist directly and are trying to focus our energy.

Q When you do identify these needs or when you do identify areas in which money could be spent to get factories up and running, who's going to pay for it? Is it going to be primarily out of USAID, the Iraqi government or --

MR. BRINKLEY: Strictly the U.S. -- I mean, oh, boy, I got to get that answer right, so rewinding --

Q (Laughs.)

MR. BRINKLEY: -- strictly the government of Iraq at this point. We are working with the government of Iraq. This is Iraqi government money. We're working in close partnership.

Q That 10 billion (dollars) that President Bush --

MR. BRINKLEY: I actually don't know how much -- what the total pool of that fund is, but it's the, you know, the Iraqi governmental budget, however -- where they come from, we don't -- we're partnering with them. We meet weekly with the Iraqi ministers in a very structured meeting to look at, hey, these are the factories, this is what we found, these are areas of opportunity; they're very committed to working with us to make these investments. They're small investments, but they have a strong desire to do this, and so that's the fund source.

Q The listing of the factories --

MR. BRINKLEY: Yes.

Q -- I mean, could you make that available, the list of what you're looking at in what province? Could we get that?

MR. BRINKLEY: We try not to circulate that and just generally distribute site-specific factory information in terms of prioritization. We don't want to create or encourage any kind of insurgent energy being focused on those particular factory operations. We're kind of trying to balance our desire to get people re-employed against a security constraint.

But the general list of the former state-owned enterprises is readily available in the public domain, and we could definitely point you to that. Our prioritization of that is something we're not generally distributing. We'll share that with you on background, but we'd prefer not to have that distributed in public. Q Yeah, but presumably the insurgents would see you putting generators in --

MR. BRINKLEY: Well, they absolutely do. But broadcasting it in the general media, to me, has been a decision we've decided to align with the commands on this and not publicly be quite as overt about the publicity on specific sites and priority.

Q (In Arabic.)

MR. BRINKLEY: Oh, I couldn't comment. I mean, I am -- if I just look at the electricity sector, obviously this is an area of collective frustration in terms of the ability to restore grid-based electrical power in the country, and the investment required there continues to look like a significant go-forward amount of money. I couldn't begin to comment on whether the 60 billion (dollars) is accurate or not. It's outside of our direct area of responsibility.

But there are people here, I know, that they could connect you with who would be able to tell you in both the embassy and the Corps of Engineers who work those big reconstruction projects and have a very good understanding of the scale of the challenge in terms of getting basic infrastructure restored here in the country.

(Pause.) Anyone else?

Q Maybe you could just talk about, you know, what do you see in moving ahead are the biggest challenges here. What do you worry about?

MR. BRINKLEY: The discussion everyone has right now is one of time. There's a strong sense that the sooner we are able to restore economic opportunity, the better. And so we have a huge sense of urgency. The issues I spoke about with, obviously, the struggles with bureaucratic capacity in the government of Iraq are a concern given that we're partnered so tightly with the government of Iraq to make the investments necessary to restart factories, for example. So these are the things we deal with on a day-to-day basis.

And again, we've been really -- I would use the word "humbled" in terms of going out in every area, every region, sect, and finding a uniformity of desire among the Iraqi people to see economic vitality take hold in their respective areas. And so our concern is our ability to move quickly to provide that to them. After a few years there's a strong sense of urgency to make that a reality for them.

Q Would you say this year is key in --

MR. BRINKLEY: Absolutely. I would say the next several months are key to our ability to -- just to demonstrate to the Iraqi people a sense of optimism and to give them hope in a brighter future. And again, I think this year that's going to be a huge amount of our energy is dedicated to that.

(Pause.) Anyone else? (No response.)

Well, I thank you very much for coming. Again, we'll do another press availability at the end of this week, and we'll probably make some of this -- a significant number of the folks who are traveling with us representing international business available at that event as well, so you can follow up with questions and get their thoughts. I thank you very much.

END.



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