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Press Briefing Aboard Aircraft En Route to Amman

Press Briefing Aboard Aircraft En Route to Amman, Jordan

Robert Zoellick, Deputy Secretary of State

En Route to Amman, Jordan
April 12, 2005

DEPUTY SECRETARY ZOELLICK: One, a couple points from our last stop. I hope all of you know that Norway achieved its independence in 1905, but as you will have seen, I don't know if you saw there was an obelisk as we were coming near the airport, that the Norwegians actually first declared their independence in 1814. This is a good indicator of making a move from one government position to another (inaudible) at an appropriate point.

That was the point right before Waterloo, the treaty of Vienna, the conference of Vienna. A French Marshall named Bernadette was given the crown in Sweden. And since Denmark used to have control over Norway because it was one royal family that had sided with France, Sweden was given authority over Norway. And so the 1814 declaration of independence was stillborn. There was an obelisk as we were coming through that celebrated that. So they were under Swedish control until 1905 when they achieved their modern independence.

So, Iraq. This schedule as you always know going into Iraq has a bit of fluidity to it depending on circumstances. The Secretary asked me to try to add an Iraq stop to one of my early trips because we're obviously, in the aftermath of the Iraqi elections, in a key process of political formation. Fortuitously, this is a point of particular transition in the formation of Iraqi democracy because we're coming in right now at a point where they're moving from the appointed government to the first elected government. Prime Minister Allawi has actually resigned but was reappointed by the Presidency Council as a caretaker which you'll often have in this interim period. So you now have a President and two Vice Presidents, a Speaker and a Prime Minister designate. The way I see my quick trip into this is that the core dimensions of our Iraqi strategy have to have political and economic (inaudible) reconstruction components as well as a military component. So this will be an opportunity for me to meet these new government leaders personally as they're forming the new government. I'll meet President Talibani. I'll meet Speaker Hassani. I'll have a chance to see Prime Minister-designate Jaafari, but we also put on a meeting with Prime Minster Allawi since he's still going to be in office. That's one of the points of fluidity that we added to the schedule.

Part of my purpose is to listen to them to get a sense of their plans, their priorities as we go forward. But, in particular, I want to get their sense of the political follow through because the next stages are to try to create the constitution, then the referendum on the constitution and then going to overall elections. So this is still a transition government. I'll also, on the security side, expect to have a chance to meet General Casey. As you probably know, Secretary Rumsfeld was just coming through today, so he was obviously to be focusing on most of the security issues.

In addition to the political, constitutional process and the formation of the government, I hope to try to get a further introduction with the new players on the economic and reconstruction side because in the aftermath of Secretary Rice's request to Ambassador Dick Jones to conduct an assessment early in her tenure, Dick came back with a series of recommendations which we worked through an interagency process and we worked closely with our Embassy (inaudible). I have been taking a leading role in the Deputies Committee, just to give you a sense of the internal Washington play on this. Deputies Committee meetings can be attended by Under Secretaries or Deputies. Most of ours will be done by Under Secretaries, but I have been doing this one in part to give Dick Jones some special support as we go forward with the process. I've gotten into detail about some of the issues in terms of electricity and fuel; building a legal system; job creation including in agriculture; decentralization of authority because you've got provincial governments now set up with elections, which is not in the pattern since Iraqi governing has been highly centralized.

I want to try to compare notes, particularly with the Prime Minster designate but also others to get a sense of their priorities because what I hope to do in the coming weeks is to combine the preparatory work we've done in Washington and the Embassy, the consultations with the new government here, and the seeds I planted on the prior trip I had to Europe where I was trying to lay the groundwork for some more in depth cooperation particularly with our European partners on the reconstruction and economic support side. Some of you may know when the President and Secretary went to Europe earlier this year one of the positive results was a proposal by our European partners to have an EU-Iraq-US conference. So, the formation of this government has given an opportunity to do that with elected Iraqi officials, but we need to focus on what are the key priorities because there's obviously so much to try to do here. When I was in Europe last week, I discussed this with Commissioner Ferraro-Waldner of the EU. I talked about it with the European Union Parliamentary Committee on Foreign Affairs who I had a hearing with, really. I talked about it with a number of the member states along the way and even today when I met the Luxembourg development minister since Luxembourg is the EU Presidency during this period. And while he is not likely to have a leading role on it I asked him to discuss it with his Luxembourg colleagues. I'm just explaining this so you can kind of see how some of these events that may look like discrete aspects, we hope fit in to a plan.

So, Jones' assessment mission, the work back in Washington, this trip, going on to the conference. And there are obviously other aspects going on. There are meetings that the IMF will make this weekend. Part of, as you may know, there's an economic reform program dealing with budgetary, fiscal targets called EPCA, which is a transition arrangement which would look toward a possible stand by agreement with the IMF later this year, and that's the key to the debt reduction piece. So, its partly the economic element, but this is also a way of, in a sense, evolving the nature of Coalition support for an Iraqi government in addition to the military means. I will also want to try to get some sense of the training of the Iraqi security forces, but that's an item I know Secretary Rumsfeld will probably be focusing on.

While I'm there I will also talk to our Embassy team and I have been in close contact with them through this Deputies process through video conferences. I keep up with them pretty much day by day either by phone or cables, and I want thank them because this is a lot of people making some serious sacrifices going forward. It looks like at the front end we'll take a quick stop in Falluja, which has policy as well as symbolic importance given the fighting there, given the fact that it is a Sunni city. I want to try to get a better sense of the reconstruction process there. We may get a chance to take a little tour, and then I also want to meet with a combined military-civilian team including Iraqi civilians to get their sense of the reconstruction process. What led to this idea for me was that one of the things I've tried to do early in my tenure is to call a lot of members of Congress when they're coming back from these Congressional delegations. You can also often pick up things that you won't just get through formal channels. I've tried to talk with a lot of members of both parties who have gone to Iraq and Afghanistan to get their insights and a number of them mentioned it was good to get out of Baghdad and to try to visit a place and a number of them actually talked about the importance of Falluja in reconstruction.

Frankly, another purpose for me is to try to get a chance with the Iraqis and the Americans to answer questions. I can do it through systems, but it also helps to do a little bit on the ground as those of you in this profession would be well aware. That's kind of a general overview and I'd be happy to take a couple questions.

QUESTION: (inaudible) Can you be a little bit more specific about how you'll get the Iraqi (inaudible).

DEPUTY SECRETARY ZOELLICK: Sure. Well, in each one -- Let's take electricity first. You know, electricity shows up in the polls of Iraqis as always being sort of the item right after dealing with the insurgency. We've actually sent out another team to kind of update our assessment that was just coming back as I was coming out here, so I haven't seen that report. There are a number of elements to this. Let me just give you a flavor. Part of it starts with good pricing. You've got some huge subsidies. About 60 percent of the Iraqi government's budget is subsidies for either food or energy, and that creates distortions because while a lot of people on the supply side, there's also a demand side about how people will be using electricity. Its not only a question of pricing for electricity, it's a question of pricing for fuel because fuel is what generates the electricity sources here. So one of the things I want to get some sense of, and this is related to the commitments they have in their economic reform plan related to the IMF, is their timing in improving some of the pricing mechanisms. It would also suggest that it will be important for their electricity ministry and energy ministry to also work with the oil and fuels ministry because some of the fuels that have been used can be diesel-based, so it partly depends on the prices for different fuels but you probably had some circumstance where people have been buying low priced fuel, taking it out and bringing it back in and reselling it.

Now, on another aspect, and this again goes to your pricing policies, there's been some early development of private generation capacity. This could be important because if you have a centralized system, and much of everything in Iraq has been centralized, well then this can provide targets at least at certain points that for the transmission of either the fuels or the electricity. Private electricity generation systems obviously are more of a distributed network, but you have to get fuel to be able to do that, you have to be able to buy outside fuel. There are also issues related to operation and maintenance. One of the things that they discovered is the operation and maintenance system is that this depends on the quality of fuel that you are using. It was far, far degraded in Saddam Hussein's period and frankly some of that still has to get upgraded in terms of capabilities. Any time you're dealing with a power grid, you've got interconnecting pieces, the demand, supply, the price of related inputs and other aspects.

Take jobs -- we've been doing some efforts on microloans. And in fact there's been some microloan programs in Falluja that I don't know if we'll get a chance to see but the Marines have been very high on. We have some housing rehabilitation programs. That's good for building housing, its also a good job creator. AID has had some community development programs that we look to reallocate some funds to sort of spread to different purposes. We provided some money for essential services, so that's both an increase in quality of life, but also ensures again you get some job promotion. Ultimately (inaudible) in a private economy. That is also going back to the agriculture sector which historically should be a real source for job creation and economic growth in Iraq. Some of these, and this is where obviously we have to work closely and see the way the government wants to lead the process, is different stages. Some things you do to provide better quality of life today but then you have to trade off with infrastructure development for tomorrow. So that gives you some examples.

In the decentralization, we've had provincial councils elected. One of the things I picked up from some of the Members of Congress who had gone to different parts of the country is that provincial councils that sort of want to deal with local problems, the question is what resources and authority will they have. We look to try to reallocate some (inaudible) actually to some of the different provinces so they will be able to take some responsibility and accountability and that's both an economic but also a political benefit because if government is closer to people it tends to be more responsive to people. But this has a history in Iraq. If you compare with our system, ministries in Baghdad have representatives in the provinces. That happens in some countries like Brazil but is not one that we would be as familiar with in the U.S. So, this is partly a sense of where I want to get a feel for the new government and where they're heading. Given their own recognition, the fact that many of these individuals come from outside the traditional Baghdad structure, I hope that they'll be sympathetic to it. Obviously, the Kurds will be and others, some of the Shi'a and others, so that's one of the items I want to try to get a better sense from them on.

QUESTION: Since you're going to Falluja, there are some statistics that I came across. I guess the Iraqi government has estimated that about $500 million is needed to help rebuild Falluja and only about $103 million has been committed by the U.S. government. They say that 32,000 homes have been destroyed but thus far there are only 2,500 (inaudible) homes that have gotten reparations. The unemployment rate in Falluja is 75 percent. Are there specific things that can be done to try to speed up that flow of money?

DEPUTY SECRETARY ZOELLICK: First, we should get you some other statistics. I saw some statistics on some of that and one of the things to keep in mind is when you're looking at the numbers here, there are some direct U.S. funds, but there is also Iraqi government funds I know at least on the order of $100 million that have been committed to that. We can try to, sort of, because I know that in some of my briefing papers I saw something (inaudible) some of that yet.

In terms of the homes, actually, I had some different data because most of the fighting took place in more industrial and commercial areas. You have homes in different states of rehabilitation, but you're right a lot of them were damaged, but I want to check the numbers. I had a slightly different percentage. But then in terms of employment possibilities, I mean, again I don't really know for sure what those numbers can tell you because you probably don't have a full sort of above the board economy. You've got people working lots of different activities. But I don't think it escapes the basic point, and the basic point is, you know, I think Falluja has been a place where people have focused a lot of attention because of the fighting and because it's a Sunni town, and so we'll get a chance for ourselves to see some of the reconstruction efforts and see what people are saying needs to be done. In that way, it's a bird's eye view of the larger question that I am sort of going to try to look at.

QUESTION: It would be useful to get some updated statistics.

DEPUTY SECRETARY ZOELLICK: Yeah. I have some but we'll try to check. I often have to show these guys where in the briefing books it is (laughter), but I'll try to.

QUESTION: Just to follow up on the electricity, isn't there also a concern about the electricity being centralized in Iraq? Is there an effort to try to decentralize that (inaudible)?

DEPUTY SECRETARY ZOELLICK: Well, one of the aspects and, you know, I didn't mention to Carol is that in many countries you have a system that is not designed to be attacked or is not assuming you're going to have insurgents around. I mean this was a very centralized system in terms of the fuel lines as well as the overall electricity grids. So, there are also some efforts to see the role of some particular Iraqi security forces that might help with some key infrastructure aspects. You don't really have to defend 2000 kilometers to be able to sort of deal with many of the attacks, at least from what I've seen. But, as you referenced, one of the main points I mentioned about private generation capacity, we've already seen some of that happen. The wonderful thing as you start to open up market possibilities, people do start to figure out a way to make these things happen, but you've got to create a pricing structure that also does that. Pricing of the raw material, the fuels, ability to import it as opposed to have government controls, and also the pricing of that fuel versus other fuels. So, those are some of the items that I want to try to see what the incoming Iraqi government, how they think about them.

QUESTION: Given how long it took to form this government, do you have any (inaudible) by the end of the summer, having a referendum on it, having elections in December. Do you see that timeline shifting or how important is it that (inaudible).

DEPUTY SECRETARY ZOELLICK: Well, our constitution was drafted in not much longer, less of a period than they have to draft. So--

QUESTION: (inaudible)

DEPUTY SECRETARY ZOELLICK: Pardon? Which way does that go? Anyway, look, we obviously want to encourage the government to try to keep to the August 15 deadline. I think one of the things we've all seen over the past months is the TAL, the Transitional Administrative Law, has been a very useful device. It is kind of a home base for people. Now, one of the items I will want to discuss with the Parliamentary Speaker is to get his thoughts about what mechanism and processes they may be trying to create because remember, just as the government is being created the constitution really comes out of the Parliamentary process. So now that you have a Parliament, now that you have Speakers, you should be able to begin that process, including the outreach. And I think one of the things that has been constructive and does take more time to this process is the outreach to broader communities. One of the elements that even now seems to be affecting the final formation of the cabinet is that what I just learned in recent days is that Prime Minister Allawi has decided that he would like to take his 40 seats and become part of the government. Well, then it's a question of negotiating portfolios to see whether that will work. The outreach to the Sunni community. Well, as we've all seen, while the Shi'a community has had at least its relative coherence but it has its own fragmentation, the Sunni community has taken some time to come together itself. But it did come together for some of these posts and now I think the question will be applied in the formation of this constitution because we'll obviously be urging them to take a constitutional process that is inclusive and transparent but also moves the process forward in that time frame.

I think, you know, from what I have seen and I haven't been there, is that I think one should not underestimate how quickly and effectively Iraqi leaders have taken to democratic politics. The debates that I have watched and read about every day have not been debates of people talking past each other. These are debates of people negotiating very hard. For example, the Kurds shrewdly recognized, in the spirit of a Senator knowing the rules of cloture, that you needed a two-thirds vote for the Presidency council. So that affected their negotiating strategy on some elements that would otherwise come up in the constitutional reform process. On the other hand, you know, they didn't let it get in the way of this eventual formation of the government that you have now. The process of horse trading in any democracy isn't always pretty, but I actually am impressed that it is coming together, given the fact that, you know, is suffering pangs of violence. And look, its history has been one where its had 20 to 30 years not only of a centralized regime, but utter brutality.

When I, as some of you may or may not care to find out my true interest is history so I have lots of historical experiences, but when I actually look at the fact of how the insurgents are trying to provoke the Shi'a and how the Shi'a didn't move forward in the process I actually find this kind of interesting. I mean, even, you know, its interesting, Sadr's demonstration. What does one see in that? Well, obviously, the political messages in the street aren't ones that I subscribe to but I see a non-violent demonstration, I see the numbers aren't quite as big as he would have liked, I see that he is playing in the political process. Again, I don't mean to suggest that this is an easy and smooth process. It will be very hard and very tough all along the way, but the pieces are coming together and, again, what I'm trying to do is get to meet some of the individuals personally so I have a sense of what they think, what their priorities are. And trying to suggest how these political and economic components will be ultimately critical for the success of their democracy and the defeat of their insurgency. If you go back and look at the experiences of other insurgencies like Malaya, or other ones, you need eventually to be able to build in this political and economic support. I think that is recognized by the parties, but now we need to keep moving ahead.

You've seen, for example, its very striking, I mean you know, after the elections, how it started to turn in attitudes. I mean, this Iraqi media network that's been set up, which, again, is still a fledgling operation but the types of things it is showing the Iraqi people. This is a building process.

QUESTION: (inaudible)

DEPUTY SECRETARY ZOELLICK: (inaudible) but I tried to give you a sense of that in terms of the political process, (inaudible), the constitutional process, the Speaker (inaudible), you know how are you looking to move this forward on the sort of the time frame. I've said its some of the political areas, the economic, legal system, decentralization. I've tried to give you a sense of the agenda, but recognize that as you know we're fitting a lot into a day so these are not going to be overly long meetings, either.

QUESTION: In your conversations with CODEL members, some perhaps that had come back from Falluja, what kind of concerns did they share with you or suggest to you that you might want to focus on?

DEPUTY SECRETARY ZOELLICK: Well, first they universally come back with high praise for U.S. Marines, which is a nice thing to see. I think it basically is the same kind of reconstruction effort, the same things we are talking about. The need to demonstrate that after the fighting that people can get back to their homes, you can create the basic social infrastructure. Most people have been encouraging. I'm looking forward to meeting the Marine Major General, Johnson I believe, because again, they've got extremely high praise from the Senators and some of the Congressmen that I've talked to. I've talked to people going to other places, too, Mosul and others.

QUESTION: Would you trip be (inaudible) the first, not only to come out of the Pentagon (inaudible) starting to see shift (inaudible).

DEPUTY SECRETARY ZOELLICK: Well, I'll let Secretary Rumsfeld talk about drawdowns of troops since that is not my area. I think our focus has been, you know, we want to achieve success (inaudible) there is political and economic components as well as the military components. Secretary Rumsfeld would talk about the same things in terms of constitutional formation and others. I think it is inherent in the process. Some of the things I am talking about, as we make progress with the insurgency in military terms (inaudible). Prime Minister Allawi made a start on (inaudible). From the reports that I got from the Prime Minister-designate, I think there's a general shared sense, but you know I'd like to try to hear from him in particular. And, again, the other connection to this is the international one. If we can come out of this trip and the follow up, and Dick Jones has already been there for a couple days, so it's a sense of here's four or five areas that we really want to try to press forward with in the coming months. Well, then, when we sit down with the Europeans, the Japanese and others, we can kind of share the load here. And I think that has critical benefits for the overall success of the effort in Iraq.

(inaudible) because this is the situation (inaudible). There are some extremely dangerous people out there who are trying to disrupt it, and it will continue to have its twists and turns. My job is to try to help build a (inaudible) and the foundation.

Any others? No Airbus-Boeing? (Laughter.) 2005/403

Released on April 13, 2005

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