• Military

• WMD Menu                           

• Introduction
• Systems
• Facilities
• Agencies
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• Intelligence
• Homeland Security
• Space

02 May 2003

Larson Says U.S. Helping Iraqis "Reclaim Their Future"

(Tells of international community's work with people of Iraq) (7880)
The United States is working closely with the Iraqi people, the United
Nations and other donor nations to help Iraqis "reclaim their future
and rebuild their country" says Under Secretary of State for Economic,
Business and Agricultural Affairs Alan Larson.
Briefing a group of reporters May 1 at the State Department's Foreign
Press Center in Washington, Larson said the rebuilding -- a term he
said was preferable to reconstruction -- is helping the Iraqi people
"recover from 20 years of misrule."
He said U.S. Agency for International Development (USAID) Disaster
Assistance Relief Teams (DART), working closely with the Department of
Defense's Office of Reconstruction and Humanitarian Assistance (ORHA),
are restoring electric and water supplies and opening schools and
hospitals in Iraq. The rebuilding effort will intensify in coming
weeks as the United States reaches out to other countries and
organizations to be involved, he said.
Among countries in the region contributing to Iraq's rebuilding are
Kuwait, Morocco, the United Arab Emirates and Egypt, he said.
Fifty nongovernmental organizations are already providing humanitarian
assistance in Iraq, he added.
The international effort in Iraq "demonstrates that the world is
working together" to help the country, Dov Zakheim, under secretary of
Defense and the Defense Department's comptroller, said at the same
briefing.
The primary objective, he said, "is to renew and revitalize the spirit
of Iraqi life."
Zakheim pointed out that through international cooperation, five power
generation plants in southern Iraq are now working at the same time,
for the first time since 1991.
He said the United States has tracked $1,700 million in contributions
from other countries for rebuilding Iraq.
John Taylor, under secretary of the Treasury for international
affairs, said Treasury personnel in Iraq are providing advice to the
Iraq central bank to help stabilize the country's currencies and
prices. Three currencies currently are in use in Iraq -- the
Swiss-designed pre-1991 dinar, the dinar bearing Saddam Hussein's
image, and the U.S. dollar. Fairly elected Iraqi officials ultimately
will decide which currency the country will use, he said.
Treasury personnel also have facilitated payments to workers using
Ba'ath Party regime funds frozen by the United Nations in 1991, he
said.
Larson said the Iraqi oil production infrastructure has been
safeguarded by the coalition, and oil revenues can help the country
rebuild. The "big decisions" about Iraq's oil industry -- such as if
it will be public or private -- should be left to the future elected
Iraqi government, he said.
He said the conditions for United Nations economic sanctions no longer
exist and the United States will urge the U.N. Security Council to
"find a way forward" beyond sanctions.
During questioning, Larson said much progress has been made in
improving road transportation in Afghanistan and much more will be
accomplished in the summer months. Travel on Afghan roads now is
sometimes 10 times faster than before, Zakheim said.
(Note: In the following text, "billion" equals 1,000 million.)
Following is the transcript of the briefing:
(begin text)
STATE DEPARTMENT FOREIGN PRESS CENTER BRIEFING
REBUILDING IRAQ
ALAN LARSON, UNDERSECRETARY OF STATE, ECONOMIC, BUSINESS AND CULTURAL
AFFAIRS
DOV ZAKHEIM, UNDERSECRETARY OF DEFENSE AND COMPTROLLER
JOHN TAYLOR, UNDERSECRETARY OF THE TREASURY, INTERNATIONAL AFFAIRS
THE FOREIGN PRESS CENTER, WASHINGTON, D.C.
MAY 1, 2003
LARSON: Thank you very much and good afternoon. It's a great pleasure
to be here with two colleagues and friends to talk about the work
we're doing together to help the Iraqi people reclaim their future and
renew their country. I speak of renewal rather than reconstruction,
because what we really are talking about here is an effort to help the
Iraqi people recover from over 20 years of misrule.
We believe that this work requires close cooperation with the United
Nations and we have been very strong supporters of the U.N.
humanitarian appeal. One of the good news stories -- one of many good
news stories -- is that we have not seen the degree of refugee
movement that might reasonably have been anticipated. We believe that
the humanitarian situation is very much under control, in part,
because of the very good response to the U.N. appeal.
In the field, we have USAID DART teams that are assisting the Office
of Humanitarian -- of Reconstruction and Humanitarian Assistance, and
have been working very hard on issues like restoring water supply,
helping restore electricity supply, getting schools and hospitals
running again. And those activities will gather even more steam in the
days and weeks ahead.
Another thing that each of us is doing, working together, is to reach
out to other countries and other organizations in the international
community to get their support for the efforts of the Iraqi people.
And I know I can say that we're all very encouraged by the type of
response that we're seeing.
Dov?
ZAKHEIM: Well thank you, Al.  Let me just continue with that.
The Office of Reconstruction and Humanitarian Assistance, which is
sometimes called ORHA, because we never spell anything out in this
country, is run, as you know, by retired General Jay Garner. What you
may not know is not only does it have members as part of the staff
from our sister agencies -- not just the Defense and State and
Treasury Departments, but many other agencies -- we also have an
international staff. This is not just an American organization.
And I think that's terribly important, because what Al and John and I
work on, and we speak almost daily, we meet at least once a week, is
to have an international effort that demonstrates that the world is
working together to renew Iraq.
And we're already seeing success in a number of ways. Just this week,
for example, we have been able, thanks to the work of ORHA, to have
five power plants, generating plants in southern Iraq working at the
same time. The last time that happened was 1991. That is an example of
the level of international cooperation and effort that is going to
yield considerably and increasingly greater results for the Iraqi
people. And make no mistake about it: The only objective -- one
objective only -- is to renew, revitalize the spirit of Iraqi life,
the life of the Iraqi people.
TAYLOR: The Iraqi economy has been declining for 25 years. Twenty-five
years ago the GDP was 128 billion; now it's about 30 billion. While
the rest of the world has grown, Iraq has declined and contracted.
Income per capita 25 years ago was $3,000; now it's half that, at
best. So what we would like to do is to help the people of Iraq
restore economic growth in their country so that they can begin to
prosper like many of the countries in the world have that have not
been under such repression.
We're giving technical advice in the economic and the financial area
trying to make sure there's a stable currency, stable prices, not the
constant inflation and the depreciation that has existed in the recent
past. And one way we're doing that is by sending advisers to work with
the people in Iraq. They have already begun to do that in the
financial area, in the central bank. They're communicating with the
people who have had experience in the country for 35 and 40 years.
We've already begun to pay railroad workers, dock workers, using funds
that are going to go to the people of Iraq. And we're very interested
in working with the people there so that they can prosper and they can
benefit from the talent that they have, from the education that they
have and from the great amount of resources in the country.
That's our objective.
MODERATOR: We'll move to questions and answers. Please, as you ask
your question, identify yourself and your organization, keep your
questions short, and if you are asking a question of a particular
member of the panel, please so state. Here.
Q: My name is Said Arikat. I'm from Al Quds Newspaper. Any of the
panel: There is -- you know the Iraqi oil industry has been
nationalized, and there is talk today that it is going to be de-
nationalized. Could you tell us how this process will take place, and
who will assume responsibility for that?
LARSON: Be happy to take a first crack at that. I think our starting
point is that Iraqi oil is a trust for the Iraqi people, and must be
used for the benefit of the Iraqi people. At this stage, one of the
important things that has happened is that the basic infrastructure,
production, processing and transportation has been safeguarded. There
is very active work underway to do the necessary maintenance and
rehabilitation. This is important because production of oil can make a
very big contribution to the development of Iraq and to the efforts of
the Iraqi people to rebuild their country.
We are going to be working to make sure that the Iraqis who have
expertise in this industry, and there are many of them at all levels,
play a prominent role in this process. I think the big decisions about
the future of the Iraqi oil industry, whether it should be public
sector or private sector, whether it should be larger than it is now,
whether -- what companies -- if companies are invited in should be
invited in. Those are all decisions that should be left to future
elected Iraqi government to make.
Q: Can I have a follow-up. Very briefly, not to belabor the point or
anything. Now, when you say a trust, is it like --
LARSON: No --
Q: -- giving Iraq a portion of the oil --
LARSON: I was using it in a more broader sense, that it is something
that Iraqis ought to benefit from. It is something that belongs to the
country and the people and should be used for their benefit.
MODERATOR: Third row here.  Our friend.
Q: Thank you. Umit Enginsoy with Turkey's NTV television. This is an
Iraqi question for Secretary Taylor and Secretary Larson. Secretary
Snow said yesterday that they planned grants, one billion dollar work
grants, that could be converted to loans or loan guarantees.
The mechanism could be that could be started shortly, soon, once a few
uncertain points are removed regarding the legislation.
Now, how would the whole mechanism start? Would the Turkish government
at some point ask the U.S. government, okay, let's try to begin this?
And you also know that there is a political condition imposed by the
Congress and Turkey should cooperate on Iraq matters. And Secretary
Colin Powell will be the person to decide on that.
How will the mechanism start? And how soon is it? Is it a matter of
weeks or months? And would you expect the Turkish government to begin
with a formal request so that Secretary Powell makes an evaluation and
leaves it to you, or how would this work? Thank you.
TAYLOR: Yeah, just briefly. The $1 billion in grant or grant
equivalent loans or guarantees was part of the bill the Congress
passed and the president signed. And the next step is to work together
to negotiate an agreement that puts down the details of how much will
be grants, how much will be loans. And that remains to be done. It
will take some time. There will be discussions in Ankara and in the
United States. There's no timetable for that at this point.
But in terms of the relationship between the Turkish economic policy
and the grant, we've always stressed that the policy has to be
consistent with the budget rules that the IMF [International Monetary
Fund] has laid out so that there's a good policy in place. And the
Turkish government has been very good, I believe, in laying out a good
economic policy and a good budget policy, and that's important for
economic stability in Turkey.
Q: Mohammed Sotuffe (ph), Nile News Channel, Egyptian Television. Back
to the Iraqi oil. How will you be able to finance all the efforts of
reconstruction in Iraq while you are still limited with the
oil-for-food program and sanctions are still there?
LARSON: Our position is that the purpose for sanctions no longer exist
and that the sanctions should be lifted. More specifically, sanctions
were in place because the international community, as represented by
the Security Council of the United Nations, did not want Saddam
Hussein to use Iraq's oil revenues for the purpose of buying or
acquiring weapons of mass destruction.
Q: So?
LARSON: Since that no longer is the issue, we believe that it's
appropriate for the Security Council to move forward with the
resolutions that would recognize that we're in the new era now and
that it's time for the oil production of the Iraqi people to be used
to generate revenues that can contribute to their economic
development.
Q: Can I follow up, please?
MODERATOR: Go ahead.
Q: This is what you want, but the fact is, sanctions are still there.
And Russia, France and others maybe are still -- they are not ready
yet to lift sanctions. Up until this moment, what will you do?
LARSON: Well again, it is my firm view that no thoughtful person or
thoughtful country is going to want to stand in the way of the
development of the Iraqi people. And so I believe firmly that the
partners in the Security Council will find a way forward to address
this issue.
MODERATOR: In the fifth row.
Q: Gabe Kajian (ph), the Middle East Broadcast Center. Last week Newt
Gingrich was very critical of the State Department, specifically
pointing out the failures, at least in his mind, in Afghanistan,
specifically saying that not one mile of road has been paved in
Afghanistan, that it's been a disaster. What can the State Department
do to make sure that things are more successful in Iraq? And do you
disagree with the assertion that Afghanistan has been a bureaucratic
red tape nightmare?
LARSON: I'll make a quick comment, but I think Dr. Zakheim may have
something to say as well.
Look. Both White House Spokesman Ari Fleischer as well as Secretary
Powell and others have pointed out that many of the things that the
former speaker was criticizing are policies of the president of the
United States. And so the State Department's job is to implement the
policies of the president of the United States. And we believe that we
are doing that in an energetic and effective way.
On Afghanistan, each of us has been working -- each of us before you
has worked very hard on those issues as well, and I think that it has
been an effective process of mobilizing the international community.
It is hard to lay asphalt in winter in Afghanistan, but watch and see
what happens in the weeks ahead now that spring is here. You're going
to see tremendous progress in the construction of that road.
ZAKHEIM: It's true that the roads have not been paved yet. What has
been laid down is gravel. They've been prepared. I'm just speaking to
literally facts on the ground. Go out and look. They've been prepared.
There is already far faster travel on roads now. I'm talking about
literally sometimes 10 times faster than was previously the case. And
that's just on the road side.
I think if you were to speak to someone like Ashraf Ghani, the finance
minister, with whom we all interact, very talented man, he will tell
you that we together, working with him and with others in the
international community -- and I have to stress that -- he's been able
to put out a budget. He has been able to provide funds that will allow
for delivery of services, something that they didn't have before. Do
you know that we and the French are jointly training the Afghan
national army? It continues. The Germans are in charge of training the
Afghan police. The British are in charge of the counternarcotics
program. And when I say, "In charge," they're not in charge in the
sense of somehow being on top of things, and the Afghan government is
out of it. On the contrary, they are the ones who have taken upon
themselves to be the lead support for a central Afghan government.
So I think if you were to go out there, as I have, and just see what
is going on, you'll see that -- well, let me put it this way: A) The
red tape there is nothing like what you might imagine it to be if
you're just sitting here. B) There's tremendous progress. And C) Most
of all, that is a function, again, of the work of all of us jointly
together with others in the international community.
Q: (Inaudible) -- Egypt. Secretary -- I have a question for each
gentleman. (Laughter.) Short one, I mean.
ZAKHEIM (?): Good excuse for three questions.
Q: It's about finance and everything.
Secretary Taylor, how and when you are going to solve the issue of
Swiss dinar and Saddam dinar and American dollars?
Secretary Larson, the issue of international participation, I mean, is
there any part of it for the regional countries, mainly the
neighboring countries, whether they are Arab or not, I mean, including
Turkey, Iran and others?
And Secretary Zakheim, my question is related to the law and order in
the streets. Up till this moment, American troops and Marines are the
ones, unfortunately some clashes taking place. Recently, maybe a week
ago, we heard about that Albanian troops are going to -- or some
people from Muslim countries are going to guard the Islamic centers or
mosques in different places. Is there -- what is the vision of law and
order policemen, not Marines or military with uniforms?
Thank you.
TAYLOR: Sir, on the currency, as you know, there are three major
currencies that circulate and are used within the territory of Iraq --
the old Iraqi dinar used before 1990, sometimes called the Swiss
dinar. The second is the current dinar, and the third is the U.S.
dollar.
And we have emphasized that all three and any other currencies that
are in circulation are acceptable for means of payment. There's a
flexible exchange rate where the exchange rate between those are
determined. As I mentioned before, the dinar has depreciated in value
a lot in the last 12 years. Right now, we've seen some stability in
the currencies, and I think that's very good.
The payments that the United States is making to workers is now in
U.S. dollars -- it's a very stable, acceptable currency and it's
welcome by the people. In a number of cases, we've also made payments
in dinars, if that's more convenient to people.
With respect to what will ultimately be decided about the currency,
that is a decision for the people of Iraq to make. And we will be --
we're going to be very happy to work with the international community
-- the International Monetary Fund has already begun to work on this
-- but to give them the assistance that they need to make it a smooth
operation.
And just one comparison with Afghanistan, if I may -- we also gave
advice to the government of Afghanistan. And when they came in and
they had the interim authority, they decided that they were going to
do a new currency. We assisted them and it was a very successful
operation. That may be how it works in Iraq, but it's really their
decision.
LARSON: On the issue of the potential for a role of regional
countries, there's not only the potential, it's actually underway
already. In the spirit of interagency cooperation, Dr. Zakheim just
handed me his notes, which give a few of the examples: Kuwait
delivering food and medical supplies; Morocco sending a medical team;
the UAE and Egypt having offered medical personnel, equipment,
pharmaceuticals; there's also been help in the financial sector from
neighboring countries. As this process continues, I am confident that
there will be a role for cooperation from Turkey, particularly, for
example, in the construction area, where -- in the same way, really,
that Turkey has been very active in construction in the reconstruction
of Afghanistan
ZAKHEIM: On the security side, there really are four components, if
you will -- different sources for different kinds of security issues.
You mentioned, of course, the troops that are there. The second is the
Iraqi police, who are coming back and beginning to do work in a
variety of towns. And remember, of course, people read about the
difficulties, but in the South, for instance, things are quite stable,
and in the North, they've been stable for 10 years.
So the vast majority of this country is already quite stable. So you
have now the military, the Iraqi police.
You then have what might be called constabulary forces, the equivalent
of the Spanish Guardia Civil or the Carabinieri of Italy. And in fact
those two countries, among others, have already made offers to provide
forces.
Well, one of the things that has to be worked out is, how do you
organize these forces properly? Where do you assign them? How do they
blend in, on the one hand, with local police and on the other hand
with the forces that are moving on to the jobs? And I mentioned
non-Muslim countries, but then there are offers from Muslim countries
as well -- pure police. And there are offers of pure police from other
non-Muslim countries. And then there are offers to train police.
So you have a complex of both sources of support, as well as a demand
that has to be worked in a rational, effective and smooth- flowing
way. And I think, with the passage of time, with each passing day,
quite frankly, you will see more and more of these sorts of functions
handed off from the 19- and 20- and 24-year-old troops to seasoned
veteran professionals who really are in the business of policing, as
opposed to being in the business of fighting.
MODERATOR: Second row here.
Q: Yasim Chunga (sp) with CNN Turk and Milliyet of Turkey. On the
humanitarian aid, I was wondering if any of you can put a figure on
the aid, either in terms of dollar figures and/or quantity of
humanitarian aid and received by how many people.
And then I have a very brief follow-up to a former question, I guess
to Secretary Larson. On the loan package to Turkey, my information was
that there was a text for an agreement being worked out between the
State Department and the Treasury. Is the text ready? What is it --
that -- it's holding up, or when is it going to be sent to Turkey?
ZAKHEIM: Well, let me try that first one. The numbers change daily
because literally every single day there are additional offers of
support. For instance, I just heard -- and I don't have all the
details -- that the Canadians announced further humanitarian support.
It was just announced, I think this morning or yesterday.
Up to now, we have been able to track something in excess of $1.7
billion in humanitarian assistance of various kinds. About 4(00
million) to 500 million, I guess, is going through the United Nations
appeal, the remainder going directly to organizations like the Red
Crescent or the International Committee for the Red Cross, and so on.
The beneficiaries, I haven't taken a head count. We do know that we
have literally tons of grain, rice from Japan, wheat from Australia
and so on being distributed. Medical supplies being distributed. And
so what you are noticing -- and I think Al Larson alluded to it
earlier in a different way -- there are no real refugee crises. There
isn't really a hunger crisis either. And that's terribly important to
bear in mind.
The kinds of dislocations that people kept predicting and predicting
-- whether it's economic dislocations or human dislocations -- just
haven't happened.
LARSON: If I could just add one number from a slightly different
angle, the same statistics that Dov's using: The United States USAID
has obligated over $500 million dollars itself, so out of those
numbers that Dov was talking about, we account just through AID for
over $500 million.
Q: (Off mike.)
LARSON: Yeah. Well, you -- I'm going to let John really handle this.
John and I worked at an earlier stage on very general arrangement. At
this stage, it's really -- the issues are really largely in John's
area.
Q: (Off mike) -- ready -- is it ready to be sent, and if not, why not?
TAYLOR: The loan agreement itself is not negotiated yet. We have to
sit down with our colleagues from Turkey and work on the language,
look on what terms they would like. They have not indicated yet how
they want to transfer the money to grants, if they do even. And so as
they lay out and see their plans for the future, they're going to come
and say this is the kind of way we would like to take some grants and
make them into loans, or vice versa. And we're ready to work with
them, but it will take some time. These documents are complicated, a
lot of legal terms in them. But there's -- it's underway. There is
nothing that's preventing it from happening at this point.
Q: I'm sorry. I don't want to, you know, continue long, but there will
an initial text? No? Like a proposal that's going to go to the Turkish
officials so that they can think about it and come back to you with
some response?
TAYLOR: Well, in many respects that -- that has already been done.
That kind of thing that's been done. You would call that the terms of
reference for an agreement, but the outline, if you like, has been
done. Now it's the details.
Q: Amal Chmouny, Al-Sharq Al-Awsat, Lebanon.
Back to the oil industry. The oil industry include the pipeline also.
And we heard about -- that you find the pipeline to Haifa airport
passing by Jordan. And is that true? And when the pipeline will start,
if it is true. And what about the other pipeline, especially when the
borders are closed with Syria, for example, and the other countries
neighboring Iraq?
LARSON: I think the best way to sort of look at this is in steps. The
first thing that has to be done is to make sure that there is the
appropriate maintenance and rehabilitation. And that's been going on
very, very actively. And there is production underway, and I think we
announced in the last day that the refinery in the south is now up and
running.
There are multiple export pathways. There's the platform in the south,
there's Baku-Ceyhan, there are other pipelines through Saudi Arabia
and Syria. But the issue right now is making sure that this
maintenance of the production and the processing and then the refining
sector for the oil that's used domestically in Iraq is maintained. And
then, subsequent to that, making sure that you have the regime in
place. And it gets back to one of the questions that was raised
earlier: It's very important to move quickly and lift sanctions for
the benefit of the Iraqi people.
MODERATOR: In the front row.
Q: But you didn't answer the pipeline to Haifa.
LARSON: Yeah. I don't have -- I mean, I don't -- I'm not even sure I
understood the nature of the question. I mean, there are -- everyone
-- there are multiple pipelines, and the location of the pipelines I
think is well-known. So I don't understand what you're getting at.
Q: I mean, we heard that there is -- that the pipeline to Haifa
airport (sic), to Haifa, I mean, port, harbor, will begin working --
will be the first one to work after the whole process. And you know --
LARSON: I'm not the person that would even be in a position to give
you an answer. I think you're going to have -- that's a question that
the management team that gets set up in Iraq is going to have to make
a decision on, not anybody that's sitting in front of you today.
MODERATOR: Over here.
Q: Yeah. This is Ossan Hazar (ph), Turkey Daily. What are your
expectations for the NGOs? What should be NGOs' role for humanitarian
aid?
Secondly, are you satisfied with the Iraq people cooperation with the
coalition and the NGOs?
LARSON: Well, 50 NGOs are on the ground now, so that question is
already answered in practice. The NGOs are on the ground and beginning
to do their work already.
Q: (Off mike) -- about NGOs -- (inaudible.) What are you expectations
related from the NGOs?
LARSON: They'll do the sort of work that they customarily do in these
types of situations. Some of these groups are, you know, very
experienced in delivering certain types of humanitarian assistance.
Again, I think the good news is that they're already on the ground
doing the things that they know how to do best.
ZAKHEIM: Let me add to that. The Office of Reconstruction and
Humanitarian Assistance works with them, but you -- you shouldn't just
generalize and say NGOs. There are different kinds of NGOs for
different kinds of activities. For instance, I heard a report, and I
think it's true, that Medecins Sans Frontiers have already left. They
were there. They recognized that the kinds of things they do as
emergency medical assistance turned out not to be necessary. Things
are much better than they anticipated. Other NGOs, presumably, will
come in to do other things.
So the relationship with NGOs is in part the nature of what is being
done at a particular time. But there's clearly a role for them, as Al
Larson just said.
MODERATOR: Hoda, back here.
Q: Are you satisfied -- (inaudible) -- cooperation?
ZAKHEIM: Sorry?
Q: Are you satisfied with the Iraq people cooperation?
ZAKHEIM: Well, that's the central issue. I mean, it's the Iraqi people
we're trying to serve here.
LARSON: One -- if I could just add one comment, which I think gets the
direction you're going.
Our sense is that a lot of Iraqi people in different sectors are
wanting to come back to work, wanting to come back and help, you know,
start this process of rebuilding their country. So the reports that
we've been hearing is that people are showing up and asking what they
can do and how they can help, you know, get the bank operating or get
the refinery operating, things of that sort.
TAYLOR: Just by way of example, the people that are part of the
financial operation in Baghdad, who we're in close contact with, have
been meeting with officials, Iraqi officials from the central bank and
from the finance ministry, comparing notes on how payments are made,
getting records of people so payments can be made to them, getting the
details of how the cash will be distributed. And so there's a great
deal of cooperation on the matters that we are interested in right
now.
Q: Hoda has a question.
Q: Hoda Tawfik, Al-Ahram Newspaper. Again on oil. De-nationalization,
what does it mean? And how it will be implemented? It is a
transitional period in Iraq now. There is no government. There is no
administration, Iraqi administration. Would this liberate the
possibility of having contracts with other countries to export oil?
And who will take these decisions?
LARSON: You started with a phrase that is not my phrase, when you said
de-nationalization. I think the best way for me to describe it is that
our view is that it will be very important for Iraqis -- and there are
many very, very experienced Iraqis in the oil industry -- to play a
very prominent role in the immediate task of making sure that these
oil facilities are repaired, rehabilitated, and can be put into
production quickly and safely. As time goes on, we want to see -- we
hope to work with these Iraqis so that the revenues from the oil that
is sold can be used to pay the salaries of the workers, can be used to
help develop the country. And that's what we have in mind.
We believe that the sort of big decisions that you seem to imply by
the beginning part of your question about what should this industry
look like, what should its future be, should it be public or private,
those are questions that an elected Iraqi government should decide and
will decide. In the meantime, we have what I would describe as a
stewardship role. We need to work with these experts in Iraq on the
oil industry to help safeguard this asset for the benefit of the Iraqi
people.
MODERATOR: Follow-up here -- follow-up here.
Q: Yes? Okay. Who decides -- these experts, they are not elected. Who
decides that these experts will take over?
And also, are you afraid to make contracts with other countries
outside Iraq during the transitional period?
LARSON: Well, as you defined it, it is a transitional period. And
there is no elected official at this stage. The whole purpose of the
transition process and of helping the Iraqi people organize a process
by which they can select their own leaders is to get to that situation
where you have an elected government that's been elected by a process
that has been a representative and fair process. And that's the sort
of activity that even now has begun, through some of the consultative
meetings that already are being held. Between now and then, it will be
the responsibility of the authorities on the ground, and that means
the coalition, working with the Iraqi people and with the appropriate
actions, I believe, of the United Nations Security Council to put in
place together a process for moving this forward and for making the
decisions that you're talking about.
You're asking me a little bit to look into a crystal ball and describe
in detail a process that hasn't yet been totally worked out. And what
I'm trying to do is just give you the basic principles that will guide
the way that those decisions will be made.
MODERATOR: Second row here.
Q: There is no Security Council -- (inaudible) --
LARSON: Well, I think we addressed that question before.
MODERATOR: Second row here.
       Q: Hi, gentlemen. My name is -- (inaudible). I'm from Radio
Fardau (ph). My question is for Dr. Zakheim. Could you brief us on --
what's the update with Mujahideen-e-khalq?
And in the past few weeks, there's been tremendous amount of concern
from the Defense Department regarding the possible Iranian
interference as far as the possible Shi'ite influence and also the
possible Islamic republic. Could you elaborate on that, please, sir?
ZAKHEIM: Well on the first one, it's not -- none of these are really
my turf, per se, so I hesitate to speak too much about any of it.
Generally, the concern about Iran -- I think Secretary Rumsfeld made
it very clear when he was asked about this.
He does not anticipate an Islamic republic Iranian-style. I think
that's pretty evident. It's not clear that that's what the people of
Iraq want either for that matter. But to get into the details, I think
you'd have to ask some of my colleagues who are on the policy side of
Defense.
MODERATOR: Here.
Q: Thank you.  On the reconstruction --
MODERATOR: Would you identify yourself.
Q: Sorry. My name is Abdullah Safih (ph), Abu Dhabi TV. On the
reconstruction, I understand, and I hope you -- you probably agree
with me on that, that manpower is available in Iraq, but what is
needed is technology. Are you prepared to provide U.S. technology, and
how this will be compatible with the existing technology in Iraq? And
on this point, would it be easier or cheaper to depend on Israeli
technology?
LARSON: Well, I think you've asked a very broad question that would
only be answered in very specific circumstances. We certainly see that
there is tremendous expertise in Iraq. I've given the example already
about the oil sector, where we know there is tremendous expertise at
all levels. And we know that the Iraqi oil sector has been maintained
by some very ingenious engineers, who have done some things that may
not have been done other places but managed to find a way to make it
work.
Now, if you sort of answer this question in a very broad sweeping way,
you know, I think you again have to say it will be up to the Iraqis to
decide the extent to which they want to bring in technology in a very,
very large way from outside of the country, and to decide from where
they bring it in.
I think based on my experience in other parts of the world that there
are tremendous benefits to a country that is open, for example, to
foreign investment, where foreign investors can bring in state of the
world technology and managerial techniques, things of that sort. But
that's my view. And the decisions on an issue like this will be
decisions that Iraqis will have to make.
TAYLOR: It's actually -- just to add. It's decisions of the people of
Iraq in the sense of their private decisions about starting firms. You
can't produce just with labor, you need tools for the workers to have;
you need technology, you need capital, you need equipment. And all the
resources to do that are available and they'll be coming -- be very
welcome from the rest of the world, capital coming in. But capital is
right there as well.
I expect, as I was saying before, that growth could be very strong in
Iraq with the right circumstances, where the environment is conducive
to capital investment and to businesses starting up. We've even begun
to see it already, some businesses starting up and entrepreneurs at
work. And I very much expect we're going to see much more of that and
a real thriving economy down the road. I very much hope so.
Q: If I could just make a brief follow up on that. I mean -- what I
meant exactly, we have now existing Chinese technology, Russian
technology, French technology in Iraq. Do you find this a problem in a
very technical terms -- I know it might not be your specialty -- to
implement or to introduce U.S. technology to various areas other than
the oil?
TAYLOR: In telecommunications, food distribution, all sorts of
technologies around the world, and they should have access to the best
technology they can find, and we very much hope they do.
LARSON: Just one sentence further on this. Wherever possible, we have
always favored interoperability; that is to say technical standards
that are open to use by different types of products. That's a
particularly important principle in the area of telecommunications and
cell phones, for example.
Q: My name is Andrei Sitov. I am with the Russian News Agency
Itar-Tass. I guess I represent here the Muslim countries of the former
Soviet Union. (Laughter.) Thank you -- thank you for giving me the
question!
Secretary Taylor, I want to ask you about the monies, Iraqi monies,
vested in this country. Yesterday, Secretary Snow mentioned it's $1.7
billion. And how do you use that? Do you use any of that money for
paying for commercial contracts in Iraq for reconstruction, and if so,
why aren't these contracts distributed through international tenders?
And I also wanted to ask Secretary Larson about his recent comments
about the Iraqi debt. You said that the Paris Club is probably not
enough because it does not cover, for instance, the reparations due
from the Iraqis, which are a big part of their obligations.
What other mechanism do you see to resolve that issue, sir? Thank you.
TAYLOR: Regarding the $1.7 billion, these are funds that were frozen
back in 1990. And what the United States has done is now reserved
those funds for the use in Iraq for the Iraqi people.
So, for example, payments to the railroad workers that have been made
this week are really coming from those funds. It's going right back --
those funds are going right back to Iraq, payments to the Iraqi
people, and that's what we continue to do.
MR. ZAKHEIM: Let me add to that. The payments are made by the Office
of Reconstruction and Humanitarian Assistance. We have a very, very
rigorous, careful system for accountability and visibility of all
those funds. We've worked on that with the Treasury Department, with
the State Department, with others, to make sure that exactly the kind
of question you ask is answered clearly and openly. These monies are
for the Iraqi people.
Q: And it's not used for any other purpose, for contracts for
reconstruction?
TAYLOR: No, it's for payments to the Iraqi people.
ZAKHEIM: Yeah. On the debt point -- and John may have something to say
on this -- I didn't make the comment that you attributed to me.
Q: It was attributed --
ZAKHEIM: Yeah. What I have said -- and it's just a very general
comment -- is that what one does in these debt situations of
post-conflict countries is, you know, first of all make sure you've
got the data right. And then as there is a big discussion, typically
-- and certainly, in the case of Iraq, a discussion already is under
way -- and that has included a discussion of a general nature in the
Paris Club. But the basic concept is to, at the appropriate time, look
at the country's income and look at its total obligations, its debt
obligations to governments, its debt obligations to private banks and
other obligations that it may have. And you mentioned these very
specific obligations that Iraq has in the nature of reparations, and
then you have to figure out what is an appropriate way forward.
And so it's in that context. You know, we probably did point out that
Iraq is a country that has lots of obligations, some of them debts to
governments, some of them debts to banks, and some of them these debts
that have been imposed upon Iraq as a result of the suffering that
they inflicted on Kuwait in their invasion in the first Gulf War.
MODERATOR: Two more questions.  Radio Sawa here.
Q: Samir Nader (ph), Radio Sawa. The Washington Post last week
reported that the NSC [National Security Council] at the White House
decided to present this week a draft resolution to the [U.N.] Security
Council to remove the sanctions. What is the update on this
resolution?
LARSON: Well, I can give you a very general update. As Dr. Zakheim
said in response to a different question, this isn't my turf. It's not
the issue that I work on day to day. But basically what's going on is
that there are very intensive consultations among the members of the
Security Council to discuss informally the very important issues that
would have to be addressed in any Security Council resolution so that
you can identify, before you start putting papers down formally, what
needs to be done, what suggestions and advice and views that there
are. And then after you've done that consultation, that's the right
moment to actually table a resolution.
My sense is that these consultations have been very active, been
useful and constructive, but I don't know of any specific timetable
for the introduction of a resolution.
MODERATOR: Last question here.
Q: (Name inaudible) -- Turkish daily Hurriyet. This is for Mr. Taylor.
Going back to an earlier question, sir, you said, if I'm not wrong,
Turkish government laid out a good program and a budget. Does that
mean you are confident that Turkish government will implement the IMF
program as it is expected by the IMF?
TAYLOR: Well, I very much hope they do. They've indicated that they're
intending to keep the budget commitments that they put forth, and to
do the other things. They have indicated how important it is for
Turkey and for the success of the Turkish economy. The economy grew
very rapidly last year, as you know; over 7 percent. And they were
undertaking some good reforms under this IMF program. So continuing
that growth and good success on inflation is going to require that
they take these good policies and continue with them. And so, what
we've seen is very promising, and I have every expectation that they
would continue with those good policies.
MODERATOR: Is there one last question on Iraq?  (Laughter.)
All right. Right here.
Q: Thank you. This is Said Arikat again from Al Quds. To Dr. Zakheim,
Secretary Powell, yesterday before the Senate Foreign Relations
Committee, I guess, said that we will see more and more people from
State versus Defense running Iraq. How do you react to that?
(Laughter.)
LARSON: More Iraqis -- more and more Iraqis.
ZAKHEIM: I think it was more and more Iraqis, Al tells me, which
sounds quite a bit more accurate.
Q: Not from the State Department?  (More laughter.)
ZAKHEIM: Look, you know, we have every intention to hand over, as
quickly as is feasible, the management of the ministries -- there are
23 ministries -- to the Iraqi people.
It's not a simple matter because the junior officials, of course, were
junior and they can probably be brought back, and are being brought
back quite quickly. The senior officials, the only way they got to be
senior is that they happened to get along with a certain individual
who is no longer in Iraq. And so they're not the kinds of people,
Saddam's people, that you want. But the idea is to move as quickly as
possible to get Iraqis in jobs that Iraqis should conduct.
As for State and Defense, we work together.
LARSON: Yeah.
TAYLOR: Treasury, too.  (Laughter.)
MODERATOR: Good.  Undersecretary --
Q: (Off mike) -- is not in Iraq anymore?
ZAKHEIM: I haven't seen him recently. That's all I can say. (Laughs.)
Q: A question, please.
MODERATOR: Is it a very pertinent question? Because they're running
out of time.
Q: It is.
MODERATOR: Let's see how pertinent it is.
Q: I don't know if it's important or not. But the question is, Dr.
Zakheim, when you say the NGOs are allowed to go there and help, I
mean the question which is raised in the last few weeks, who is in,
who is out of it, I mean, is there a kind of permission, permit? Who
is deciding who can be in or out?
ZAKHEIM: I'm not familiar the process. I don't know, Al, whether you
have a better idea. I'm not sure it works entirely in such black and
white terms as you mention. But I don't have any clear sense of that.
LARSON: I was looking for a list of who, but you're asking a slightly
different question.
MODERATOR: We'll try and fix that.
Anyway, Undersecretary Larson, Dr. Zakheim, Mr. Taylor, thank you very
much. And thank you all for joining us.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)