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State Dept. Daily Press Briefing May 2, 2006


Daily Press Briefing
Sean McCormack, Spokesman
Washington, DC
May 2, 2006

INDEX:

IRAN
Iran's Claim That It Has Discovered Uranium Deposits
U/S Burns, A/S Silverberg in Meetings in Paris / P5+1
Chapter 7 Resolution / Compelling Iran to Suspend Enrichment
Other Potential Options / Sanctions / Diplomatic Levers / Security
Council Action
Iranian Threats to Attack Israel / Pause to International
Community
Discussions Center on Tactics
Public Opinion in Iran

SUDAN
Deputy Secretary Zoellick's Meetings in Sudan / Need to Make Hard
Decisions
Efforts to Deal with the Security Situation / Transition to UN
Force
Abuja Talks a Mechanism to Deal with Political, Security Situation
Possible NATO Role / Discussions
Secretary's Conversation with the Foreign Minister of Morocco

DEPARTMENT
Donation Pledges from Hurricane Katrina
Report on "Failed States" / Difficulties in Iraq and Afghanistan /
Hopeful Future

QATAR
Katrina Pledge
Pledge to Hamas and the Palestinian Authority

ISRAEL/PALESTINIANS
U.S. Increase of Humanitarian Assistance to the Palestinian People
Hamas Has Failed to Make Important Decisions For Governing
Reaction of the International Community / Cupboard is Bare
Palestinian Government Not a Partner for Peace

TURKEY
Requests to Pursue PKK Into Iraq / U.S. Call to Respect Iraq's
Sovereign Borders

IRAQ
Meetings of Ambassador Khalilzad / Efforts to Bring People Into
Political Process

BOLIVIA
Morales' Decree of Intention to Nationalize Bolivia's Oil and Gas
Industry
Potential Effects on Contractual Obligations

EGYPT
Possible Extension of Emergency Law / U.S. Disappointed

MOROCCO
Secretary's Meeting with Foreign Minister Mohamed Benaissa


TRANSCRIPT:

12:20 p.m. EDT


MR. MCCORMACK: Good afternoon. It's a little chilly in here. We'll try to turn up the temperature.

QUESTION: (Off-mike)

MR. MCCORMACK: Thank you very much. I don't have any opening statements, so I'll be pleased to get right into your questions.

QUESTION: Is Iran's announced discovery of uranium a new cause for alarm?

MR. MCCORMACK: Iran's announced discovery --

QUESTION: Discovery of uranium deposits.

MR. MCCORMACK: More uranium. I think they discovered that they had more uranium or they said they have more uranium -- they're throwing up all sorts of chaff in the air right now to divert attention to try to make threatening statements to the international community. So this is all indication that they're feeling increasingly uncomfortable, I think, with their current status, which is verging on their being subject to a Chapter 7 resolution.

Right now, Under Secretary Nick Burns, Assistant Secretary Kristen Silverberg are meeting in Paris with the political directors from the P-5+1. Under Secretary Burns has already had some individual consultations. He's met with French officials. He has met with the EU-3. He has had a meeting with his Chinese counterpart and also had a consultation via phone with his Russian counterpart. They all are now meeting in a plenary session of the P-5+1 and then I think they're going to be going on to a dinner later on tonight.

So that's what we know about the status of the discussions right now. A big part of what they are talking about is specific language of a Chapter 7 resolution. And I would expect that those discussions would continue even after this set of meetings in Paris, but we are going to be looking for and pushing for a Chapter 7 resolution in the not-too-distant future.

Yes, Sue.

QUESTION: Russia and China are saying publicly, again, that they do not support sanctions and that they wouldn't -- they're not going to follow you along that route. So where does that leave you in terms of the P-5? It looks like there's a growing sort of division within the P-5 as to how to tackle Iran.

MR. MCCORMACK: No, I think that they have made their concerns known previously about sanctions and this gets down to a tactical issue of what they think might work to pressure the Iranian regime into changing its behavior. We have a different view of that. That is one of the subjects we are going to be talking about, but I want to point out that the focus of this current resolution is not one on sanctions. It is a Chapter 7 resolution that would compel Iran to comply with the previous requests of the Security Council in the form of a presidential statement, as well as the IAEA Board of Governors statement. That had a series of things that it asked Iran to do.

Previously, the international community was asking Iran to do these things. Once you get into the realm of a Chapter 7 resolution that is compelling, demanding and that Iran is then obligated to follow through with what the international community has laid down for them. Part of that is suspending their enrichment activities.

So we'll see how the Iranians react once there is a Chapter 7 resolution with these demands on them in which they are compelled to follow through on what has been demanded of them. And then if -- certainly the issue of sanctions and other diplomatic levers are out there, either through the Security Council or individual states or likeminded states acting together. But one does not preclude the other; individual states certainly can act outside a Security Council resolution. That certainly is their prerogative. But if individual states do that, that doesn't prevent the Security Council itself from considering sanctions or asset freezes or travel restrictions itself down the road. So those are both possibilities down the road and they are two separate yet parallel -- two parallel paths.

QUESTION: Also, Iran has indicated that if the U.S. launches any sort of military action against Iran, even though that may be a long way off, if ever, that they would hit Israel immediately.

MR. MCCORMACK: Again, we are pursuing a diplomatic path. Secretary Rice and the President have made very clear that that is not on the agenda at this point. Look, this is more of the same, Sue, of threatening, hateful statements coming out of this regime. Previously, President Ahmadi-Nejad had talked about wiping Israel off the map and describing it as a tumor that needed to be removed. So this is again another string of these kinds of statements coming out of Iran.

And what the statements do is the net effect is to really give pause to the international community and cause people to think: Do you really want to have this Iranian regime in possession of a nuclear weapon? And I think the answer to that is no, and these statements put in high relief exactly why you don't want that to happen. That is why it is so important for the international community to stay united and to act in a strong manner in confronting Iran when it continues to defy the international community. We are talking about what diplomatic steps we could take to compel them to change their behavior, so that's where our focus is right now.

QUESTION: That the Chapter resolution you're working on -- and you were asked about Russia and China not going along -- maybe we're missing each other. Maybe what they are objecting to is not something you're proposing. In other words, Chapter 7 isn't a sanctions resolution.

MR. MCCORMACK: Not necessarily.

QUESTION: Here's the second question. How can you require them to do something without having teeth in the resolution?

MR. MCCORMACK: Well, it does -- again, there are a few things, Barry, here. They have worked very hard to avoid being before the Security Council. They now find themselves before the Security Council. This is another step along the diplomatic pathway. Our approach has been to build a consensus to gradually increase the diplomatic pressure on Iran, to give them every chance, every opportunity to come back in line with mainstream behavior in the international community with regard to this question of their nuclear program. They have, thus far, chosen not to do so. So we are going to continue to ratchet up the diplomatic pressure that a Chapter 7 resolution, which comes with the force of international law behind it, is the next step.

Now you rightly point out that a Chapter 7 resolution can contain sanctions. That is not what is under discussion at this point. But that is certainly a possibility that is out there, along with other diplomatic steps, should Iran choose not to change its behavior and continue down this pathway of seeking a nuclear weapon.

QUESTION: Is it your understanding that Russia and China do not object to that approach?

MR. MCCORMACK: Well, we'll see. That's what we're discussing right now, Barry, in Paris and I'm not going to try to prejudge the outcome of those discussions. But everybody agrees on the fact that Iran should not be allowed to obtain a nuclear weapon. Everybody agrees that that is important and that the international community needs to act through diplomatic means to prevent that. The question is a matter of diplomatic tactics and that's where we are. That has been the discussion all along, Barry, is what tactics do we use to compel that change in behavior.

Teri.

QUESTION: You've often said that you're not sure how much information the Iranian public is getting, whether they know what their President is doing and why the implications or what the implications are.

MR. MCCORMACK: Right.

QUESTION: But people have done a lot of reporting out of Iran now, including presently, and it seems that the people do know what's happening and that they support Ahmadi-Nejad's actions. Does that change your calculus at all, or is that something that you're taking into consideration?

MR. MCCORMACK: No, no. I've read a lot of news reporting out of Iran as well, and what it does is it talks about a nuclear program -- the reporting that I have looked at. So it's not clear that the distinction is being made between a peaceful nuclear program and a nuclear weapons program. And it's not clear to me that they have made clear to the Iranian public that they are abrogating their international agreements, that they are now -- that they now find themselves further and further away from the mainstream of behavior in the international community. And it is also not clear to me that they have explained to the Iranian population the opportunity costs involved here, and the opportunities that they are giving up is the possibility to have a peaceful civilian nuclear program to generate electricity while providing objective guarantees to the international community, and at the same time, realizing a different kind of relationship potentially with the rest of the world. Now, the European-3 have made very attractive offers to them as well as the Russian government, and it is not clear that the specifics of what has been offered to the Iranian regime have been laid out clearly to the Iranian public.

QUESTION: They get satellite television and they get the internet, why wouldn't they know?

MR. MCCORMACK: Well, again, that reaches certain segments of the population; it doesn't reach the entire population. This is also a place where newspapers get shut down when the government doesn't like what gets printed in them. So this is not a society in which there is certainly perfectly flow of -- open flow of information. Yes, they do have satellite TV and, yes, they do travel. But you're also only talking about certain segments of the population there.

QUESTION: New topic?

MR. MCCORMACK: Sure. Anything else on Iran? Okay.

QUESTION: Have you heard from Deputy Secretary Zoellick in Abuja? Is there any progress in his meetings?

MR. MCCORMACK: I do have an update on with whom he has met. Right now, I talked to members of his delegation, and right now he's engaged in a process of listening to the concerns, listening to what are the various stumbling blocks in the views of the different parties to the talks and hopefully listening to some of the ideas they may have to overcome any differences, to overcome these obstacles and to move the process forward. So that's right now what the point in the process that he finds himself. So he's in listening mode.

He landed there, I think, about 4:30 in the morning Eastern time, so he got an early start. He first met with the U.S. delegation, who was -- there's John Yates on the ground there, there's Cameron Hume and he's also traveling with Roger Winter, who is his special representative on this issue. He also is traveling with Jendayi Frazer, who is the Assistant Secretary for African Affairs here.

So they had a team meeting, he got the lay of the land there. He also -- he then met with Salim Salim, who is the AU negotiator who is there on behalf of the AU to try to move the process forward. Then he met individually with the rebel leaders, Minni Minnawi, he also met with Mr. Wahid, and then representatives of the Justice and Equality Movement. So these are all representatives of the various rebel groups that are a part of these discussions.

And right now he is currently meeting -- so he's already had those meetings and he's currently meeting with a member of the representative of the Government of Sudan, not Vice President Taha. So there is a representative there. It's not at the level of vice president. President Bush did speak with President Bashir last night to urge him to send a high-level representative back to Abuja so that it is possible to bring these discussions potentially to a conclusion.

I can't predict what the outcome is going to be, but as you heard from Secretary Rice yesterday, as long as they are continuing to talk, that is good. But it is time for the international community to make it clear to all these groups that they need to make the hard decisions. They need to make the hard decisions for peace so that the killing can be stopped and that the people of that region of Darfur and of Sudan -- can start to work on a better way of life for themselves.

QUESTION: I know you -- the Secretary spoke very forcefully yesterday about the need to get the force in there, and I know the hope is by the U.S. and the others in the negotiating that if you can get an agreement, then that could pave the way for the force to come in. If you're not able to reach agreement or the negotiations continue to drag on, are you prepared to put any extra pressure on the Sudanese government to at least in the meantime get a more robust force in right now while negotiations --

MR. MCCORMACK: Well, we believe it is important to have a more robust force there to deal with the security situation. I think everybody agrees on that. The question then is how do you go about accomplishing that and who is doing that. Is it the NATO force, NATO supplementing the AU force on the ground or -- and then is it the UN force? So our view is clear. We'd like to supplement the AU mission there, make it more robust with the assistance of NATO, then transition that into a UN force.

So the questions of how exactly to accomplish that I think are open. There's a pathway that's very clear via the UN and the Security Council resolution, and we are encouraging the Government of Sudan to invite in these forces and the AU also to work with NATO as well as the UN on developing a more robust presence, security presence, in those areas.

So at the moment I think we are focusing on the Abuja talks as a mechanism to not only move the political process forward but also to move forward on the deployment of a more robust security force in Darfur. So at this point, Elise, certainly the international community is prepared, yes, to bring more pressure to bear on the Government of Sudan, but we are doing that at the moment via the Abuja process and getting them to move forward on that, without losing sight of the fact that the UN -- the UN process in terms of planning and identifying the forces needs to move forward and then the NATO process also needs to move forward as well.

QUESTION: But if this deadline passes and the political process which you're hoping will lead to, you know, some extra reinforcements right now continues, are you -- and if the deadline passes, are you prepared to -- what are you prepared to do to ensure that the government allows someone in an emergency capacity until you can work through the political process?

MR. MCCORMACK: I think I'm not going to try to talk about various other contingencies, what we might do on the political front. I think we're just going to talk about the political process at the moment. It is a fluid situation and the negotiations are ongoing and this changes, you know, from minute to minute, hour to hour, so we'll try to keep you as updated on as best we can on that. If we are not able to move forward on the political process in Abuja, then we will deal with that when the moment arrives.

QUESTION: Something else?

MR. MCCORMACK: No, Sue has one.

QUESTION: The Secretary when we asked yesterday said that you needed to shake the trees and get things moving. When would you foresee NATO being able to send in some more logistical support or to provide air support to the AU troops which are really, really struggling on the ground? Because I think you said previously that it would be unlikely to be sort of ground troops coming in from NATO and that it would be more likely to be logistical support. So when do you think that they --

MR. MCCORMACK: Headquarter support. Let me check for you, Sue. I know that it was a topic of discussion in Sofia while the Secretary was there. They had moved the process forward basically from the realm of the diplomats and the politicians to the military planners and that is, to my knowledge, where it stands now, but I can -- I'm happy to try to get you more information as to exactly where the process stands and when they have a rational expectation that it's going to come to an end.

QUESTION: So has the Secretary followed through since her meetings in Bulgaria?

MR. MCCORMACK: Well, for instance, just today she met with the Foreign Minister of Morocco and she underlined to him how important it was for the AU as well as the Arab League to speak with one voice on this matter and to urge the Government of Sudan to bring in a blue-hatted force as well as to allow a more robust AU presence. So, yes, she is following through.

QUESTION: It's been several months since the State Department provided a breakdown of contributions and pledges for Katrina relief. There were a lot of pledges -- commitments, but we're in the dark as to whether there was a follow through. Would it be possible -- Foreign Policy magazine has something but that is two months old. I tried it by telephoning and I haven't succeeded. So let me formally ask, can the State Department -- I know it's a chore but I would like -- I would hope you could provide -- someone could provide an updated tally of pledges and follow through. And there are some specifics now, a newspaper has Qatar designating how some money should be spent. Anything along those lines would be very helpful.

We're approaching hurricane season again and it's nice to know if these pledges are empty or if they're actually been delivered.

MR. MCCORMACK: Okay. That's a reasonable question and we'll try to give you a reasonable answer. I understand that on the question of Qatar that they have pledged, I think in the neighborhood of a $100 million, that 60 million of this is now in the process of being delivered via private organizations, NGOs, educational institutions, et cetera.

QUESTION: It's not new but the breakdown may be new.

MR. MCCORMACK: It's a reasonable question, Barry, and we'll see what we can find for you.

QUESTION: On the subject of Qatar, did you ever get an answer from them, and I apologize if you've already given this, as to their decision to hand over funds to Hamas. It's about 50 million bucks, I think.

MR. MCCORMACK: I believe that they were working through the Arab League to make that pledge. The last I checked on this, which was within the past couple of days, that money had not been delivered to the Palestinian Authority.

QUESTION: And did you voice your complaint? Did you complain about it or say that this wasn't the right way forward?

MR. MCCORMACK: Look, individual states will make their own decisions in this regard. We've made that clear. You've heard that statement over and over again. We would call upon individual states, however, to follow the guidelines that are outlined in the London Quartet statement. We ourselves are not going to provide any money to a Hamas-led government. We are, however, going to increase our humanitarian assistance to the Palestinian people. We understand the Palestinian people have legitimate needs, legitimate humanitarian needs. Nobody wants to disadvantage young children or new mothers, anymore than they might otherwise be.

But it is important in having this discussion to understand that the reason why the Palestinian -- this Hamas-led government finds itself in potential difficulty in terms of paying salaries to Palestinian Authority civil servants and employees is because they have failed to make the hard choices of governing. They have failed to make the choice to recognize the state of Israel, failed to make the choice to turn away from terror, failed to make the choice to turn away from violence. So as a result of their failure to make those choices there are consequences. And those consequences are that members of the international community, the vast majority of them, aren't going to provide money to a terrorist organization. They're not going to provide money to a group that sends 16-years-olds out with bombs strapped to them to go kill other 16-years-olds; that's pretty clear.

Again, individual states will make their own choices about that. But they should make those choices with the thought in mind that that is potentially where their money is ending up.

QUESTION: But you say that you don't want to disadvantage young children and mothers, et cetera, et cetera. But by blocking off salaries, say to teachers, because the ministries won't be able to pay their teachers, then in effect, it might mean that children can't go to school. So the net effect of your not giving, or encouraging other countries to not give direct aid, means that children and mothers and others are disadvantaged.

MR. MCCORMACK: Well, we want to try to provide for the humanitarian needs of the Palestinian people. But you said -- you just pointed out the "net effect of our decisions." I would disagree with that characterization. It is net effect of the failure of Hamas to join the mainstream of the international community in turning away from terror.

The Palestinian people, we believe, want a peaceful life. They want to send their kids to school. They want to be able to start up businesses, and to prosper and to have a better way of life, to live in a state of their own. Well, that is not going to happen as long as a Hamas-led government fails to recognize a partner for peace, the State of Israel, and fails to renounce terror.

The international community -- certainly, we -- are not going to provide money to finance terror. And that is the choice that Hamas has made. I know that they'd like to turn it around to the international community, but that's not the choice that has been made. It is the international community that has told them we would like to continue along the pathway to peace. We would like for you not to break with more than a decade's worth of precedent in terms of seeking peace with the State of Israel through a negotiated settlement. It is Hamas that has broken with that precedent. And as a result, the international community has reacted. And they are now facing with the hard -- faced with the hard choices of governing. They are now faced with the fact that the cupboard is bare, in terms of being able to pay some of these salaries. That's a consequence of the choices that they have made, not that the international community has made.

QUESTION: The Palestinian people voted. They elected Hamas. Hamas wasn't a coup. They elected Hamas. I would imagine you take soundings and measure sentiments. Is there any reason to believe that the Palestinian people have realized that it was a mistake so far as getting what they want, which was more land from Israel?

MR. MCCORMACK: Barry, I don't know that anybody has taken any polls in that regard. And the last poll that I saw coming out of the Palestinian elections had, you know, had Fattah winning a majority, so I'm not going to place too much stock in polls.

QUESTION: I don't mean to quibble, but this has been going on for months, sounding as if something had been pulled -- some trick had been pulled on the Palestinians -- on the poor Palestinian people. Well, they voted for Hamas and that's their government and we know that result of that is that the government is being boycotted by, so far, by the U.S. and the European Union. So I just wondered, you know, with all sort of theories. Maybe they'll get sick and tired of their government and do something to change it.

But you the State Department has no feel for whether this message is somehow getting through and some hope -- that there was some hope that the Palestinians will have a change of heart about who they want to represent them.

MR. MCCORMACK: Well, we -- Barry, the Palestinian people have made their choices and it was in a free and fair election. We will see what happens in the future. I would just -- the only point that I would make to you is that Hamas did not run on a platform of, "hey, we're going to send your kids out to blow up other kids."

QUESTION: Right. Social --

MR. MCCORMACK: They ran on a platform of cleaning up corruption and that we are going to be responsive in providing for the needs of the Palestinian people. So again, Barry, we'll see how this evolves. But again, this is -- the situation that the Palestinian Authority faces is a result of the choices that Hamas has made and some of the ones that they have failed to make. We continue to be in contact with President Abbas. We believe that he is a figure moral authority as President of the Palestinian Authority. He is man that has sought peace. He is a man who has previously been a partner for peace with the State of Israel. We would be very pleased if someday we could return to that state in which there was Palestinian government that does recognize the State of Israel that would be a partner for peace. That's not the situation we have right now.

QUESTION: Another subject?

MR. MCCORMACK: Anything else on this? Yes.

QUESTION: The Turkish Army said today that they reserve the right to get into northern Iraq to pursue any PKK militant who would try to seek refuge there. It is exactly what the Secretary asked them not to do last week. Do you have any comment on that?

MR. MCCORMACK: Well, this is a topic on which we have a continuing dialogue with the Turkish government. We would call upon all of Iraq's neighbors to respect Iraq's sovereignty and to work with the Government of Iraq on any issues that they may have regarding borders and that anything that is done is done in a transparent manner and through mutual agreement.

The issue of the PKK and going after safe havens for the PKK or areas of operation of the PKK I know is a very sensitive one for the Turkish government, rightly so, because the PKK is a terrorist organization. It is responsible for the deaths of many, many innocent civilians. And it is a topic that Secretary Rice spoke with, the leadership of the Turkish government about, on her recent trip and that we are hopeful that in the wake of the formation of an Iraqi government that we can reactivate in a trilateral mechanism that we have with the Turkish government, the U.S., and the Iraqi government to work on the issue of how to go after these terrorist elements.

QUESTION: But you are not sure they will respect that?

MR. MCCORMACK: Again, we've -- you know, I think I made clear where we stand.

QUESTION: I have another question on Iraq.

MR. MCCORMACK: Okay.

QUESTION: There is this "failed states index," an index which was published today by the Foreign Policy Review. And -- well, the first failed state is Sudan. But Iraq is in fourth position and Afghanistan in tenth position. Afghanistan is considered as a success story by the Secretary. So I was wondering why it still counted as failed?

MR. MCCORMACK: Well, you know, people can apply whatever terms they want, using whatever definitions they want to different places. Without having looked at how they would characterize a "failed state" I couldn't answer that question. So I don't know. I have no idea what their methodology is for, you know, this categorization.

In terms of Afghanistan and Iraq and these other places, look, these places that everybody -- it's very clear that they are facing very difficult challenges, many of them unique to each of those states. But they do have the prospect for a brighter future and if the international community can help support these new governments, these nascent democracies in the case of Afghanistan and Iraq, then certainly we believe that they will one day be able to realize a more stable, peaceful, prosperous future in which they are important contributors to stability in the region as well as the world.

Just take the example of Afghanistan. Afghanistan is no longer a safe haven where al-Qaida roams with impunity and is able to plot and launch attacks from Afghan soil against various countries around the world. So these are states that are making progress from where they were. Saddam Hussein was a brutal dictator who repressed his people, who was a threat to other states in the region and was a threat to the United States. So while there are difficulties in both of those places -- you know, I'm not going to undersell them -- I think that certainly they're a much different and better place than they were previously and they also have the prospect of a hopeful future for their people. And I think that if you talk to the leaders of Afghanistan, the new leaders of Iraq, they will tell you that they are determined to build that more hopeful future for themselves and that they will take dealing with the current difficulties they face with the hope of a more -- with the hope of a better future than their previous existence.

QUESTION: Are you aware of reports that detail supposed meetings between Ambassador Khalilzad and insurgent groups? They've got specifics like that he met as many as ten groups in Amman, Jordan, in the middle of January and held later talks with them in Baghdad as well. Are those reports accurate?

MR. MCCORMACK: I know that Ambassador Khalilzad has met with a variety of people. I think it's been reported inside Iraq as well as outside Iraq. And I don't have the roster of everybody with whom he's met or their resumes, but we have made it clear that we are interested in talking to people who know somebody who knows somebody who might be involved in insurgent activities in an effort to bring these people into the political process, to get them to invest in the political process. And I think the trajectory that you have seen over the past year in terms of certainly the Sunnis, they have more and more bought into that political process, to the point now where you are going to have a government of national unity that includes all of these groups. That has been the strategy for ultimately dealing with this insurgency and ultimately at trying to reduce any sectarian tensions that exist in Iraq.

QUESTION: But you don't --

MR. MCCORMACK: They're there. We can see them. But all of this takes place within, you know, that political context, bringing more and more people into the political process. And there certainly at some point will be a process of -- led -- a process led by the Iraqis of reconciliation. There needs to be at a certain point. But again, that will be an Iraqi-led process and a process that takes place within the larger political context of building the democratic institutions that will form the foundation of a more stable, prosperous Iraq.

QUESTION: Well, you don't need to tell me who they were, but can you confirm that he did meet with insurgent groups out the country, that he traveled to Amman to meet with them? Are you aware of that?

MR. MCCORMACK: I think it's been reported that Ambassador Khalilzad has traveled in the region. He has had meetings in the region. I can't tell you exactly with whom he has met. Like I said, I don't have an exact roster of with whom he's met.

QUESTION: What about did you get anything on questions that arose over the weekend that U.S. officials were present in meetings with insurgents, that Jalal Talabani said --

MR. MCCORMACK: Yeah, I don't have any confirmation of it.

QUESTION: Still none. Okay.

MR. MCCORMACK: Elise.

QUESTION: A new question. The President of Bolivia, Morales, has announced that he's going to nationalize the country's oil and gas. And you've said in the past that you don't necessarily -- are not concerned about leftist countries per se, but are you concerned that there's a movement to -- a leftist movement in the region to move away from free market economies and more towards the kind of government-owned entities that you are trying to move them away from?

MR. MCCORMACK: Well, certainly we believe in opening markets. It is an important aspect of a rising tide for everybody in the hemisphere. You have to couple that with good governance in order to realize all the benefits of free and open markets.

You're right in saying that we don't say, look, we have a problem working with a particular kind of government, a left-of-center government or a right-of-center government.

We've seen the reports about Bolivia and the decree that was issued. Now, we're still looking at the specifics, the details of the decree, and exactly what steps the Bolivian government intends to take in the follow-up to that decree, but we don't have that information yet.

I could say now, however, that certainly we will watch very closely any potential impacts on the atmosphere for private sector investment in Bolivia and in terms of the Bolivian government's adherence to its contractual obligations as well. So I think right now we don't have a complete picture of the situation. It's one that we're going to be watching closely, but I'm not going to try to dictate a particular course of action for the Bolivian government or any other government in terms of the judgments that they make about what is best for their people and the development of their country.

We do, however, put a marker out there in terms of potential effects on contractual obligations and how that might affect the overall investment climate in the country.

QUESTION: But you don't -- are you necessarily concerned that while you say you don't have a problem working with any type of government, that in this region that this type of leftist government is moving away from free market economies? Or you just see this as an isolated case?

MR. MCCORMACK: I'm not going to try to draw a link among -- you know, among the various governments. I'm going to assume that each individual government will make its own decisions based on what it believes is best for the people of that country.

Now, we are, of course, of the idea that opening markets, increasing trade, coupled with good governance, is a way to help improve the lives of people in the hemisphere as well as to get at issues of social justice that are talked about quite a bit within the hemisphere. So but I'm not going to try to draw any particular linkages or make some broad-brush statements about various types of governments and their political orientation and the economic policies they're going to pursue -- they might pursue.

QUESTION: A follow-up on this. He has done so far already is to order troops to occupy the fields and to tell foreign contractors that they need to renegotiate within 180 days. Are not even those moves enough for you to make some initial -- do you have some initial reaction to it?

MR. MCCORMACK: Well, I'm not sure what practical effect actually deploying troops might have. I don't know how that affects the day-to-day operations of these particular facilities; you know whether or not it affects the operations of the individual contractors.

Now, if in terms of renegotiating contracts, this is something that from time to time comes up around the world, not necessarily just in Bolivia, and I don't know what the particular contractual obligations are in these contracts, whether or not that falls within the agreement. When the issue of privatization does come up or renegotiating contracts, certainly our concern is that any government meet or fulfill its contractual obligations; that the private sector companies aren't disadvantaged by the moves of a national government with respect or in the context of their contractual obligations.

QUESTION: Have your diplomats in La Paz been instructed to get more details on the program or are they just going to wait it out?

MR. MCCORMACK: No, they're looking into it. It's something that we're looking into.

QUESTION: But how would you characterize your initial reaction, more of curiosity than alarm or --

MR. MCCORMACK: I think we're looking -- we're trying to analyze it, you know, but we're going to be watching the situation closely.

Mr. Gollust.

QUESTION: I'm a day late with this one, but I wonder if you have any reflections on the extension of emergency rule essentially in Egypt, which has been going on for a quarter century now?

MR. MCCORMACK: It's a disappointment. It's a disappointment. We understand that Egypt has certainly facing its own issues related to terrorism, but President Mubarak during the presidential campaign had talked about the fact that he was going to seek a new emergency law, but one that would be targeted specifically at fighting terrorism, counterterrorism, and that would take into account respect for freedom of speech as well as human rights. Certainly we would like to see President Mubarak and his government follow through on that pledge. So with respect to this particular action, I can only say that we're disappointed.

QUESTION: Does the structure of this legislation sort of conform to what you were looking for, do you know?

MR. MCCORMACK: Again, I don't have the particulars of it at this point and I think that it is, at this point, prospective -- is at some point out in the future and we would have hoped that the Egyptian government would have used this time between the elections that they have had to do a lot of different things, but to also work on this legislation. But it appears that it is now going to extend -- this emergency law is going to extend far out into the future, at least for a couple of years, and I think that -- I would characterize that as a real disappointment to us.

Samir.

QUESTION: Can you tell us more or give us a readout about the meeting the Secretary had with Foreign Minister Benaissa of Morocco?

MR. MCCORMACK: Yes, they had a good meeting. They talked about issues in the region. They talked about -- as I pointed out before, they talked a little bit about Sudan. They talked about cooperation between Algeria and Morocco, the potential for finding a solution to the Western Sahara conflict. I know that the Moroccan government has talked about some proposals that it has in mind. I don't think that they have tabled those as of yet. We ourselves support the parties working through a UN-sponsored process to find a solution that is equitable for everybody, that they can all agree on. That was really it.

QUESTION: He said they talked about Iran also.

MR. MCCORMACK: They did talk about Iran, yeah. There was a discussion about Iran. And UN reform also came up, the importance of following through on UN reform.

QUESTION: The six-party talks -- have you heard about a Chinese proposal to hold an unofficial meeting in Shanghai at the end of May with the six parties?

MR. MCCORMACK: No, I hadn't heard that.

Anything else? All right, thanks, guys.

(The briefing was concluded at 12:57 p.m.)

DPB # 73

Released on May 2, 2006

ENDS


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