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U.S. Humanitarian Relief and Reconstruction

On-the-Record Briefing: U.S. Humanitarian Relief and Reconstruction Efforts

Andrew S. Natsios , U.S. Agency for International Development Administrator Released by the Office of the Spokesman Washington, DC March 25, 2003

Moderator: Good afternoon, ladies and gentlemen. Welcome back to the State Department.

As you know, we have a special briefing for you this afternoon on the subject of humanitarian relief and reconstruction efforts for Iraq. We have the director -- the Administrator, pardon me, of the U.S. Agency for International Development, Andrew Natsios, whom you are familiar with. We also have the Assistant Administrator from U.S. Agency for International Development (USAID) for Asia and the Near East Ambassador Wendy Chamberlin, as well as the Director of the Office of Foreign Disaster Assistance at USAID Mr. Bernd McConnell, and the State Department s Deputy Assistant Secretary of State for Population, Refugees and Migration Issues. That s Rich Greene.

All of these officials and experts are here to answer your questions, but we ll begin by asking Administrator Natsios to give you a brief introduction and then we ll go ahead and take your questions. We ve got about 35 minutes this afternoon to go through this. Thanks very much, and I'll turn it over to Andrew.

Administrator Natsios: Thank you very much. I d like to talk just a couple of minutes before we answer questions about what the current situation is in terms of humanitarian response.

As I m sure you know, the focus is in the southern region of the country right now. Our teams are in place. They have been there for a couple of weeks. The Disaster Assistance Response Team has 40 people now on it, and the rest of the team is heading for the region. The team is operational. They have done some assessments in the port region. The port seems to be in very good condition physically.

We have, through the World Food Program (WFP), pre-positioned 130,000 tons of food. The United States now has made commitments of 610,000 tons of food: 500,000 tons from the Emerson Trust of wheat and rice; and 110,000 that we ordered a couple of months ago that is on its way to the region. The Australians just announced 100,000 tons last week of wheat. So we think we have the food situation between the U.S. Government, which is the bulk of the commodities, WFP s own resources, and then the Australians.

In terms of the water situation, we have in the region equipment, in terms of reverse osmosis devices, that will provide water to upwards of a million people if we should see internal displacement. At this point, we don't see any large-scale refugee movements or internally displaced people yet.

Now, Saddam Hussein has a history of attacking his own people. Of course, he has used chemical and biological weapons against the Kurds in the emphasis 1988 Adfal campaign, and then against the Shias when there was a revolt in the south after the Gulf War. So we do know he will do that. He has done it before to the two populations that are not particularly strong supporters of his.

The second concern we have had all along is that there would be population displacements. We are seeing a few thousand here and there, maybe up in the north in some of the Kurdish areas, but no large-scale movements at this point.

There has been a water issue, and I am not sure everybody entirely understands this. It predates the war. Water and sanitation are the principal reasons children have died at higher rates than they should have for a middle-income country. The child mortality rates for Iraq are not a function of an absence of food. The food distribution system provides enough food for the population.

Generally, it is not a function of food. It is a function of a deliberate decision by the regime not to repair the water system or replace old equipment with new equipment, so in many cases people are basically drinking untreated sewer water in their homes and have been for some years.

Most people in the elite drink water from Jordan that is bottled. And in fact, we have a large contract that is about to be granted to bring in bottled water for the whole population while we repair, after the war is over, the water and sanitation systems of the country.

Seventy percent of the population of the country is urbanized. This is not a rural population primarily, and so public services like sewer and water systems make a great deal of difference. People were particularly destitute in the Shia areas of the south. The Kurds, because they have been relatively independent in the north, have actually built a robust market economy, and their agricultural system produces so much in terms of surpluses that they can export it.

The real poverty, the most severe poverty is in the south, in the Shia areas along the border with Iran, Kuwait, and Saudi Arabia. So we are certainly concerned about those people because they were vulnerable prior to the beginning of the conflict.

We have between 20 and 30 nongovernmental organization (NGO) grants that we have received for humanitarian relief. Within the next week, we will be awarding $30 million worth of grant proposals.

Now that the President has submitted the supplemental budget to the Congress we have, potentially a large pool of money: $2.4 billion both for the relief and the reconstruction of the country. We have awarded as of yesterday the contract for the management of the port, and four people have headed out this weekend from that company to set up shop and begin to recruit people in order to manage the port when the British military turns it over to us for civilian purposes.

If anybody has any questions, we would be glad to answer them.

Question: Hi, good afternoon.

Administrator Natsios: How are you?

Question: Very well. How are you doing?

Administrator Natsios: Good.

Question: A couple of questions.

First, how much is in the supplemental for food specifically? And in your plans for post-Saddam Iraq and managing the country and so on, have you hired any people who are experienced in managing cities, any city planners? Or are they mostly retired military, retired diplomats?

Administrator Natsios: The civil administration side of this -- in other words, the people who will coordinate with the Ministry -- are managed by Jay Garner; you would have to ask him that. Lew Lucke is the Mission Director of the USAID mission. They are out in the field right now. They are actually managing the program side of it, but the civil administration side of it is something you should talk to Jay Garner about.

In terms of the food, there are two pots of resources we look for in terms of food. The 500,000 tons of food that we announced late last week is not in the supplemental. That is in the Emerson Trust, a trust fund that was created in the 1990 s for major unforeseen emergencies that are outside of the budget process. So that s one pot of money.

The second is in the budget itself, and there is $60 million that we have provided to WFP for fuel, trucks, logistical support and warehousing. In other words, it s not food, but it s all you need to do to get the food to where it belongs. We have asked WFP to run the food system of the country, the public distribution system, and they have been working on this since December. We have been cooperating with them, along with other donor governments. So this is not just an American effort; I want to emphasize that. Other donors are working on this. We are the largest donor by far, but I have been in extensive contact with the British aid agency and with other donor governments, with the embassies and the Development Ministers in other countries.

In addition to the $60 million to the WFP for logistics, there is another $320 million for food purchases that is in the supplemental in addition to the money to WFP and in addition to the Emerson Trust.

Question: (Inaudible) award the capital construction contract, and would that be awarded to a team of engineering firms or to one individual firm?

Administrator Natsios: I don t actually know, and I m not supposed to know who the companies are that are in the final because there were I think seven companies in the initial list, and then it s reduced to a couple. I don t know what they are; I m not supposed to under federal procurement law. We stay out of that. The people conducting that are career officers in AID who do this and have been for many years, We re taking a hands-off the senior people in the Agency are leaving the career people to make those decisions based on the merits and based on the federal procurement law that we operate under.

We expect the engineering and construction contract will be awarded later this week or early next week.

Question: Mr. Natsios, you said that your team has already made an assessment of the port.

Administrator Natsios: Yes. Not an in-depth assessment because the question is how safe it is in that area for relief workers. Our people are not soldiers, as you know.

Question: Can you give any idea I know you can t say how battles will turn out, but once you get the go-ahead, how quickly would -- I believe it s the Sir Galahad off port -- how quickly can you start to unload the ships and start sending the food out?

Administrator Natsios: If the population is safe and it s safe to work in Basra and in Umm Qasr, then we can act within a day. We are in Kuwait City right now and in Qatar, and we have people in Jordan as well, and in Cyprus, where the UN headquarters is. So we can act almost immediately.

Our relief commodities are warehoused in Qatar and in Kuwait City, so they are there already; and we are working very closely with the British Government and the Australian Government on this.

Question: Immediately meaning, how much could you then unload? Enough to feed x number of Iraqis for --?

Administrator Natsios: Let me focus for just a second on the question of food. I have seen some comments in the newspaper.

The fact is that the people have been getting a double ration since last October. So there is more than enough food in people s homes, we believe, to last about a month if there are no food distributions at all.

Now there may be some very poor people in some areas who sold all their food. Some people sold their food, took the cash, and are hiding it because they thought they might have to move and it s easier to walk with cash than it is with food. In either case, they have resources. So we re not worried that the food situation is serious. The most serious situation right now in Basra is the conflict itself, and the water situation.

Question: What are you doing about the water situation?

Administrator Natsios: The International Committee of the Red Cross (ICRC) is working overtime. We are, by the way, and have always been the largest donor government to the ICRC -- I think over 60 or 70 years as a matter of fact and we are in this emergency as well. The PRM office, the refugee office in the State Department, has already awarded $10 million to the ICRC. They have been in there the last two days. They have restored water to 40% of the population, and they are working to restore it to the rest.

It is interesting that the electricity, which is the problem the water system is okay, it s just there s not enough electricity the Republican Guard or the Iraqi military headquarters which is next door has electricity, but the water plant does not. The reporting we re getting is they shut off the water deliberately for the city, the Iraqi military did. This is a very calculated thing to increase the suffering of the population by the Iraqi military, who are obviously turning in a subtle way against their population already.

Question: The $320 million in the supplemental, what would that buy, and would that be U.S.-source food, or bought more locally?

Administrator Natsios: We are working with WFP now to determine what their needs are. We will have to do some purchases of pulses, which is for protein, and oil, which is for fat. To have a complete food basket, you have to have cereals, which is about 85% of your caloric intake, about 10% protein, and 5% you require fat from oil.

We will work with them. To the extent that we can use American commodities, we will do it. But if we have to do local purchases in the region through WFP -- I think all of the donor governments have agreed we need maximum flexibility -- we will do that. But ships are on the way now.

Yes, sir.

Question: Some American-based NGOs have been saying they have been having trouble getting relief over there due to regulatory burdens from sanctions previously imposed against Iraq. Is going through this DART team going to alleviate those kinds of burdens, and how is that going to shake out?

Administrator Natsios: A blanket Office of Foreign Assets Control (OFAC) license was granted to all NGOs that have grants with the U.S. Government, and they are now able to function. The DART teams, part of their function is to facilitate humanitarian aid organizations' activities, whether they are a UN agency or whether they are an NGO. One of their functions, if there are any continuing problems of any kind -- there were some initial problems with the Kuwaiti government, which I believe have been cleared up now -- but that is one of their functions.

Question: When was that one granted?

Administrator Natsios: I think it was a month ago.

Yes, sir.

Question: Could you give us a sense -- there has been much attention is paid to the aid contracts that are out there now, and the fact that they are going primarily --

Administrator Natsios: Do you mean reconstruction contracts?

Question: Reconstruction contracts.

Administrator Natsios: That's different than the relief. They are two separate things.

Question: Right. Is there some way that you could describe what portion of the actual work that s likely to happen, say, in the first year, would be accounted for by those participants? For instance, the electricity work isn't included in there. And I think there is a lot of things --

Administrator Natsios: No, it is included in there, as a matter of fact.

Question: Oh, it is?

Administrator Natsios: Yes, it is.

Let me just sort of explain the Federal Procurement Law. We operate on not -- there is no separate law for AID. There is a Federal Procurement Law that has been on the books for many years. We must comply with that law, and we are doing that. There is a shortened process in order to do procurements more rapidly. A normal procurement for a contract would take 6 months. We were told in January, "You have 2 months."

And so we used the national security provisions of the existing Federal Procurement Law in order to speed this process up so we could support the President's decision, whatever that decision was going to be. In January we frankly, other than the British, did not know who was going to join us. We did not know what UN agencies were going to be involved in this and which not. In some ways, some of the NGOs were not clear as to whether they were going to act or not. We had to act early.

So we had a process that took about 2 months. The federal law requires us to source our contracts through American companies. That's a federal statute, Congressional law. There is a provision in the law that allows us to waive the provisions in the national security interest of the United States. So in January, we decided to waive the law, particularly for subcontracts. More than 50% of the money that goes to the contracts will, in fact, go through subcontracts because these projects are so big and the time that they have to carry out the requirements of the contract is so short -- a 12-month period is the planning period for what we are doing here that they have to hire subcontractors.

In any country that is not on the terrorist list -- I mean Libyan companies and North Korean companies are not going to be bidding as subcontractors, I can assure you -- any country that s competitive that wants to bid can bid, regardless of whether they are British or European or what.

Now, let me just fine, last question.

The companies that bid are companies that had security clearances because the information that they had to have to make judgments was classified information. Companies do get security clearances, and we couldn t this is not like rebuilding Mozambique after the civil war because there was not a security issue that involved American troops or American diplomatic personnel or AID officials.

There is a lot of security information that is classified. These companies have to deal with it. It takes a while to get a security classification, so we asked for companies that had security classifications already, that knew how to bid federal contracts, work through the existing accounting system for the federal government, so we could move this very rapidly. Speed is of the essence in this whole thing.

Question: My question was a little bit different.

Administrator Natsios: I m sorry.

Question: It was more, if the pie of what there is to be done is like this, when you look at reconstruction in Iraq over the next year, what portion of it might conceivably fall within these contracts?

I mean, there is the impression out there that all work will be accounted for by these American companies doing this work when there is obviously much other kind of work that might have to --

Administrator Natsios: Well, other countries will be contributing. I can tell you that my European counterparts and the Japanese and Canadians are talking privately now about what they will contribute, and many of those countries also have laws that say you can only hire companies that are from their countries. It s not just the United States that has these statutes. Many of these countries that contribute toward the reconstruction will be providing contracts to companies from their countries. Is that the question you re asking?

Question: Yeah, I m just curious. What s left over to do? What else might these companies --

Administrator Natsios: Oh, I see what you mean. A lot of work to be done.

We re covering a broad array because we have a large amount of money, but the construction contracts are not going to rebuild the whole country. I can tell you $600 million is not going to rebuild the whole infrastructure of the country, much of which has deteriorated over a 10-year period and has had no preventive maintenance at all over a very long period of time.

Question: On this very early release date, I wonder if you could lead us through how you see the first few days developing once you re cleared to go in and once you ve got some supplies, what sort of projects you ll be looking to do, where you hope to be operating, what you think the needs are?

Administrator Natsios: Well, the first thing we do is we send in a rapid assessment team and we work with the NGOs on this. There is a standard format we use.

Everybody uses the same format, whether they are private NGOs , UN agencies, or AID, and so we speak a common language and we can understand that we are comparing applies to apples in our assessments.

We ve done a lot of planning based on secondhand information, intelligence information of what the conditions are in the country. It may turn out that things are worse than we expected or better than we expected, and that happens frequently in these emergencies.

So we have to check what the reality is on the ground because you don t want to design a project for something that you had wrong intelligence on.

The second thing you do -- and you have to do this very rapidly, this will happen over a matter of a couple of days in the case of the south the second thing you do is you look at those things that are most immediate threats to human life. Water, in my view, is one of the most serious.

And so we would look at the quality. We have people from the Centers for Disease Control on the Disaster Assistance Response Team. We have water experts. They will test the water to determine, probably with the ICRC who have the same kind of technicians on their teams, to see whether the water supply in Basra meets the minimum requirements for human consumption. If they don t, then we have to go in and either chlorinate the water to a greater degree, or we install new equipment, which we have on reserve. We may need more electricity. There may be no generators; we have a stock of generators that we can install very rapidly that are in warehouses in Kuwait City. That is the kind of thing we will do.

In terms of food, there is an existing food distribution system; 55,000 agents distribute food. They are basically local grocery stores. They have commercial stuff they sell, but they also distribute the government's ration to the population, which 100% of the people get; 60% are entirely dependent on the ration system for survival. Many of those people are Shias in the south, where the poorest populations tend to be.

We need to stand up that system rapidly. WFP will do that. They know where all of these shops are that do the distribution, for example, in Basra. They will go there. There is a computerized list of everybody in the country of who gets what kind of rations. They will go back to the system that operated just a couple of weeks ago.

Question: Just to follow up. You mentioned Basra. Do you see that as being the focus of your attention, or do you imagine Basra will be one of several places --

Administrator Natsios: Oh, it will be one of several places.

Question: In the early days?

Administrator Natsios: Yes.

Question: And then to follow up, can I ask how much of an impediment is the current debate at the UN over whether to give authority over Oil-for-Food to the Secretary General? Is this going to hold you up in any way in terms of immediate relief?

Administrator Natsios: No, it's not. That debate is over the intermediate term.

Question: When would you need access to that escrow account and the materials that are in the pipeline?

Administrator Natsios: Four months from now, 3 months from now. We need it now because when you order food or other supplies it takes 2 months to deliver, 2 to 3 months. So we need the Security Council to make a decision on the humanitarian side of it.

The reconstruction issue is more complex, and I am not an expert in that at all.

On the Oil-for-Food and for medical supplies, the decision needs to be made in the next few days, the next week, because in order for us to order food and supplies, it will be available in two or three months. But we have enough to supply the population between now and the time those supplies arrive.

Question: Are you concerned that politics are getting in the way of this decision being made?

Administrator Natsios: Well, I have read some stuff in the newspapers that was a little concerning. We are pushing very hard. There is unanimity of opinion on that resolution among the allies, but everybody in the UN is not an ally, so.

Question: Can you straighten out something that I am still, at least, unclear of?

Your DART team, you say, were there now. Are you talking about in Kuwait City, or are you talking about in Umm Qasr, or with the military?

Administrator Natsios: In Kuwait City,

Question: So you are not in Iraq yet?

Administrator Natsios: Bear, come on up.

Bernd is the Director of the Office of Foreign Disaster Assistance, of which the DART team came out of operation.

Mr. McConnell: The core of the DART -- and there are 47 people there right now is in Kuwait City. We have field offices initially in Amman. We have people in Ankara. We have another floater team still in Kuwait, as well as some liaison people in Doha with the Central Command.

To be precise, the assessment that has been done at Umm Qasr has been done by military. We are not yet in Iraq. We will rely upon a military assessment of security, which we expect quite soon in the port, to let us know when it is time to go in and do our own assessment.

Administrator Natsios: Yes, sir.

Question: Mr. Natsios, what you were saying about security clearances for contractors and speeded-up awarding of contracts would ring alarm bells I know in Britain and in probably many other countries. They would see this as some kind of carve-up for U.S. companies. What assurances can you give them that that is not the case?

And in a related question, how do you see the UN's role in the reconstruction process?

Administrator Natsios: We have waived the Federal law, the procurement laws, to my knowledge, three times in the last 10 years. One was in Bosnia, in the reconstruction of Bosnia. I waived it for the reconstruction of Afghanistan. There are a number of British firms actually working for AID in Afghanistan right now. And we waived it in January for Iraq.

So, I gave actually the two British Ministers who called, Mike O'Brien and Patricia Hewett, both British Ministers -- I think they are Secretaries of State in the Foreign Office; one for Economic Affairs, and one is Jack Straw's deputy I guess. One came to visit, and one -- we talked over the phone. I provided them actually with a document showing that we had waived the law January -- I think January 17.

We don t do this very often. Normally, we source American companies because it s American taxpayers money. However, in this case we decided we would do it differently to speed up the process and increase the competition, particularly for subcontractors.

The prime contractors will be American companies. But let me just give you an example of how we re doing the road in Afghanistan, this famous road, you know, that goes from Kabul to Kandahar. The prime contractor is Louis Berger Company. It s an engineering company. They re not doing any construction work. The construction work is being done by an Afghan-Turkish Company, which is clearly not American. They are doing all of the construction work at the local level as subcontractors to Louis Berger.

Louis Berger knows what our accounting requirements are, they know what the audit requirements are, they know what Federal law is and how to report to us, and they could do it, and they won the prime contract. But they re not going to do any construction work. It s local contractors that are primarily from the region that will actually do the work.

We expect the same sort of thing will happen. We are using Crown Agents right now in the Gulf to do our purchasing for us, which is, I believe, a British company. And we are using, as I said, a bunch of private sector British companies in Afghanistan right now to do work. We expect the same template to obtain in Iraq.

Question: Could you explain to us what your position is on who should arrange the oil sale contracts during this interim period before Iraq has a recognized government?

Administrator Natsios: Well, that is a question, it would seem to us, that would not be in the resolution on humanitarian assistance. That would be the resolution on reconstruction, and I m not an expert in that. I ve been following it from our staff s perspective, but that is under discussion now and negotiation.

The question before us, this very immediate -- this is a resolution we would like in the next few days, in the next week is there s already $8 billion in the UN trust fund that could be used to purchase food and medical supplies for immediate use in Iraq. So you don t buy or sell anything because the oil was already sold and the money is in the account. We can t have access to that account without a resolution because the consignee of that account had been, through the UN, the Iraqi Government. Kofi Anan declared that null and void Monday of last week, and so the Oil-for-Food Program basically stopped functioning about 10 days ago.

Question: One point of clarification. I was told there s $2.5 billion in the escrow account.

Administrator Natsios: No, that s how much is needed to pay for food for a year. The escrow account has $8 billion in it.

I think there are different pots in it.

Question: I was told that $8.5 billion has been contracted for in some form or fashion and --

Administrator Natsios: Yes, but the money has not been disbursed.

Question: But there are contracts that have been signed?

Administrator Natsios: Well, the contracts -- some of the contracts have been signed for 3 or 4 years and never executed, so a signed contract is somewhat irrelevant unless there is money that has changed hands. We have actually billions of dollars worth of food contracts, but no one has paid the money out of that fund for them, and that is why the food hasn t arrived. So you have to make a distinction between payment and contract.

Question: Mr. Natsios, following up on a previous question, can you say what role you think the UN or other multilateral institutions would have in the reconstruction of Iraq?

Administrator Natsios: The UN will clearly have a role. The question is what the role will be, and that is what s being discussed. I m not going to go into the details of the nuances in that discussion, but they are already involved. At least four or five agencies of the United Nations are involved, and they ve got pre-positioned people in the area.

We have given grants going back to December to some UN agencies. Some of them have been nervous about mentioning their names publicly because they have local staff who are Iraqis who still live in the country, and there is a fear of retribution by the Iraqi regime against international staff or NGO staff in the country, so we have been very reluctant, even though we ve been criticized for being anti-internationalist or the NGOs say we re not working with them, when the fact of the matter is they asked us, the ones who are active inside the country asked us to say nothing specifically because they didn t want to put their staffs at risk

Question: Well, just to follow up, I mean, can you give us a better sense of how many, of what kind of number you re talking about, or can you go into any more --

Administrator Natsios: For what?

Question: For these NGOs that you re --

Administrator Natsios: There are 20 to 30 NGO grant proposals we have before us right now that we are reviewing and we expect within the next week to make $30 million worth of humanitarian relief grants.

Question: And you can t say anything more about the UN or other multilateral I mean, you said that the question is what the role will be and you don t want to get into it at this point.

Administrator Natsios: That s for reconstruction, not for the relief.

Question: Okay, well fair enough. That s my original question for reconstruction. Can you say anything just in terms of -- as the Administrator for USAID --

Administrator Natsios: Let me also say something, though. If you look at how the UN has worked in reconstruction efforts, it is not primarily UN agencies that do reconstruction work. UNDP does some work, but the major UN agencies that you know so well, the World Food Program, they do not do reconstruction work. They re a food agency.

UNICEF does primary schools and they do children s and women s health. That s what their mandate is.

But in terms of reconstruction of port facilities and airports, that s the banks, the international banks, and it s big donor contracts the EU, the United States, the Japanese. That s who s doing it.

The UN is not doing any large-scale reconstruction in Afghanistan right now. They are coordinating efforts, but the banks do the infrastructure, and many of the actual social services in terms of standing up a ministry so it s functional, like the finance ministry, the UN is not involved in building up the capacity of the finance ministry. It s the Treasury Department of the United States, the State Department, and AID that are funding the contractors to help them put that together, along with the EU and the Japanese.

So this is a complex system we use to do this work in the aftermath of a conflict. But we should not get carried away with the UN running everything. It seldom runs everything, and certainly doesn t have the capacity to do it in some sectors like infrastructure.

Question: Some of the biggest NGOs that are going to help with this effort are complaining that you ve actually wasted 6 months, that they could have been well prepared, much better organized, and recruited Iraqi staff and so on, but that they didn t get any money and they didn t get the licenses from the Treasury. How do you respond to that?

Administrator Natsios: Well, if we had given them grants of $30 or $40 million for a conflict that no one had decided was going to take place, I would be dragged before the IG and asked why I wasted $30 or $40 million, since we didn t know last September. Maybe someone knew. I certainly didn t know, and I don t think the President made any decision last year.

It would also have had political implications. It would have implied that decisions had already been made. We had to be very careful that what we did in our preparatory work for this emergency did not appear to be an endorsement or that a decision had already been made, because it hadn t been made. We didn t want to politicize our relief and reconstruction activities because it would have appeared something had been decided when it really hadn t.

Moderator: I think we have to wrap this up now, to get you to your next appointment.

Administrator Natsios: Thank you all very much. [End]

Released on March 26, 2003

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