BIG WAVE
05-02-2007, 07:12 AM
Had to chop it up abit, it was too long.
Secretary Condoleezza Rice
En Route Sharm el-Sheikh, Egypt
May 1, 2007
And the idea essentially is that Iraq lays out in the compact -- this is the compact document right here -- its economic reform plan with the goal of reaching financial independence and economic self-sufficiency within five years; and in return, the international community pledges new support either in the form of economic or technical assistance or debt relief.
And the document will be presented on Thursday by Prime Minister Maliki and UN Secretary General Ban Ki-moon, probably comments also from Deputy Prime Minister Barham Salih who led the effort on the Iraqi side, and the former Under Secretary General of the UN Ibrahim Gambari, who has been the Secretary General's Special Representative on this since the start of the year. And then I would imagine that Secretary Rice and other heads of delegation will comment on the document, indicate what their new forms of support might be. I think right now there are 60 countries, 30 of whom will be represented -- I'm sorry, 60 countries and organizations, 30 of which will be represented at ministerial level.
At the end of the day, which I think will be sort of in the 5 o'clock range, Barham Salih and Ibrahim Gambari as the working group co-chairs will present a resolution that basically summarizes what is in the compact document, ask each of the delegations to either in a roll call vote or by acclamation agree to the resolution, thereby formally adopting the compact itself.
Why don't I stop there and take any questions you have.
QUESTION: Hi. Barbara Slavin from USA Today. What are you expecting besides debt relief? We've been told there will be announcements on debt relief. Do you expect any additional aid or promises of investment? And how realistic is this whole strategy given the deteriorating security situation in Iraq?
DEPUTY SECRETARY KIMMITT: Well, let me take the second part first. I mean, everybody is mindful of the security situation in Iraq, also the political situation in Iraq. And there are specific strategies around national reconciliation on the political side, around the surge and other efforts led by the Iraqis, the U.S. and other coalition forces on the military side.
But throughout there's been an economic component. It started first with the work that the Iraqis did with the International Monetary Fund, World Bank and others, starting with their emergency post-conflict agreement and now a standby agreement. And my own view is the compact brings that particular process to a strategic level in the sense that if this compact is approved, as I think it will be, and implemented properly, effectively what it does is ensures that Iraq's wealth is shared among all segments of the population, that the government commits to a series of steps it will take to ensure that it can not only run its operations but provide essential services to reconstruction. I think it could have a very important economic/financial sense -- I mean financial effect, but it could also, I think, help significantly on the political and security side.
The first part of your question: What do we expect? I think that there will be from each of the delegations either pledges of new assistance -- that assistance could be financial, it could be technical -- and then I think some delegations, particularly those who have outstanding debt from Iraq, will address that point.
So we'll wait to see what people have to say, but I also just think that the political significance of having 60 countries there, again half of which are headed by ministers, in what I think will be the first international agreement between Iraq and the world community in decades -- our research, it could be technical -- and then I think some delegations, particularly those who have outstanding debt from Iraq, will address that point.
So we'll wait to see what people have to say, but I also just think that the political significance of having 60 countries there, again half of which are headed by ministers, in what I think will be the first international agreement between Iraq and the world community in decades -- our research certainly hasn't found one since the 1950s -- I think itself is a moment of political significance quite apart from whatever economic/financial result it might entail.
And the one thing that's very important is this is really led by the Iraqis. As some of you know, I used to be at this Department rather than Treasury Department. I've negotiated a lot of international documents. None is tougher than multilateral documents. This is a quality piece of work led by the Iraqis, strongly supported by the UN, the World Bank, the IMF and others. I think that they have good reason to be proud of what they're putting on the table and I think that one of the reasons you have the number of countries that you do attending is (a) they've participated in the preparation of this, but (b) I think they realize that this document is a document that focuses on what's right for the Iraqi people as a whole.
QUESTION: Could you estimate roughly how much debt is going to be forgiven? Do you have any of those kinds of statistics? And also, you said that new aid or new assistance would be pledged. Do you have any figures that you could provide on that? The U.S. is pledging $10 billion, which I think is the same money that you had already requested Congress for, but maybe if you had any more details on that.
DEPUTY SECRETARY KIMMITT: I really wouldn't want to get ahead of the other delegations. But you know, I think it would be fair to say that there would be billions of dollars both of new assistance and in debt relief. I think right after the conference I'd be glad to come out and give you something more specific.
QUESTION: The compact agreement talks about moving forward with the various components of revenue-sharing, and in particular Iraqi oil. Mr. Satterfield said the other day, I guess it was -- I'm losing track, yesterday -- that he felt this was -- would have to be -- looking forward, that this would be accomplished within a matter of weeks. And yet there seems to be very little progress and the parties involved are as far apart if not farther than they've been in the past. How realistic is it that this is actually going to happen and the Iraqis are going to be able within an effective period of time to fulfill this particular promise?
DEPUTY SECRETARY KIMMITT: Well, I knew that David and Ahmed Saeed from the Treasury had a briefing yesterday. I didn't see the actual transcript and I can't really talk therefore to what David said about the timetable.
Certainly, I think there's been considerable progress already on important pieces of legislation, not least the investment law. I think they've moved the hydrocarbons law a good distance, but clearly more needs to be done. And again, I'd defer to David in terms of any timetable he has in mind.
One thing I'll say though is that the Iraqis, as I say, have lived for the past couple of years under two agreements with the International Monetary Fund. One is called EPCA, an emergency post conflict agreement, and the other is the IMF standby agreement that's been in place since roughly December of 2005. Those agreements had some very tough requirements that the Iraqis had to meet in order to qualify for IMF precautionary lending and also to keep the Paris Club debt relief moving forward.
They've met every one of those standards, not least steadily reducing the fuel subsidies by raising gas prices. That has not been easy. That has a political and security as well an economic dimension.
One of the things that they've been able to do is to use the IMF standby agreement and the EPCA very effectively within their own body politic to move pieces of legislation and to make tough decisions because they have an international obligation. Therefore, I would think a successful launch of the compact, taking that compact back home with new pledges of assistance, debt relief and other forms of support, can not but help accelerate the process. How quickly, again, I'll defer to David.
QUESTION: We've been told that the Saudis are going to offer some substantial assistance, but we also understand that there are a lot of countries that are key debt holders that are still having a problem here. Could you talk about those key countries and what their situation is? I mean, I guess the Kuwaitis, for example, maybe the Chinese and the Russians as well?
DEPUTY SECRETARY KIMMITT: I think I can get this right. I think the countries who still hold in excess of a billion dollars in debt would be the Saudis, the Emiratis, Kuwaitis, Russia, China, Turkey, Jordan, Egypt, Bulgaria -- interestingly -- which had quite a bit of Saddam era construction activity and therefore a good bit of debt.
I would point out that Russia is the only Paris Club member that has not yet reached an agreement on Paris Club terms, which as you probably know is an 80 percent debt relief program. None of the others is a member of the Paris Club, but in our discussions -- and we've talked with all those countries -- their goal is to move forward in their discussions with the Iraqis on addressing the debt issue mindful of the Paris Club example that has been set by other creditors.
Again, I think I'll have to wait to see what people actually say at the conference and importantly what this resolution says on the issue of debt relief. But I don't know if any of you have ever covered Treasury. The Paris Club debt relief is a very complicated matter. There have been, for example, several technical missions recently from Iraq into Saudi Arabia to work on the technical details, determine what the debt stock is, how much is principal, how much is interest.
And those discussions are going on with each of those other countries that I have mentioned. Some are a little bit further along than others. I think what they say on Thursday will be an indication of both where they are and where they intend to go.
QUESTION: You spoke about Russia. Did you give -- did you receive any sign from Russia that they are ready to make an effort on debt relief? And do you know who is going to lead their delegation?
DEPUTY SECRETARY KIMMITT: I'm sorry, I don't have the list of delegation members. I know that there was a complication with their Foreign Minister being there on the first day because there was a long-planned visit, I think, of the Japanese Foreign Minister to Russia on that day. I think they're coming later the first day. I don't have the name of the Russian representative.
But we had very good discussions with the Russians during the IMF-World Bank spring meetings in Washington. Certainly, the meeting that I had with Russian representatives indicating that they were making progress on the debt issue. I think we'll find out Thursday exactly where they are.
Again, there are a lot of technical details on this. The first movement was to get the Paris Club deals done. Those have all been done except for the Russian piece, and now there's progress being made on the others.
QUESTION: Just very quickly, are there any foreign oil companies investing in Iraq at this point?
DEPUTY SECRETARY KIMMITT: There is significant interest being expressed by foreign oil companies. We've had a pretty significant rise in the number of approaches that we've gotten from American oil companies. There are oil companies engaged in discussions now in Iraq, but they are still waiting for two things: the implementing regulations under the investment law, which has passed the parliament; and then also the passage of the hydrocarbons law to include the revenue-sharing and other provisions to make sure they know with whom they should be contracting, what the rules of the road are, and importantly for them what the dispute resolution mechanisms are.
What they've said to us is, look, Iraq is a tough place to do business, security is a real concern, but we drill oil in a lot of places where security is a concern. What we really need to know is what the rule of law is, what the rules of the road are for investment. A lot of discussions taking place. I think that if they are able to get the hydrocarbons law complex passed, I think you could see some fairly significant movement. The Oil Minister, Minister Shahristani, has been traveling fairly extensively and there are quite a number of countries, not surprisingly including those who used to operate in the oil sector, who are very interested in coming back in once those rules of the road have been set.
Thanks, everybody.
http://www.state.gov/secretary/rm/2007/may/84119.htm
Secretary Condoleezza Rice
En Route Sharm el-Sheikh, Egypt
May 1, 2007
And the idea essentially is that Iraq lays out in the compact -- this is the compact document right here -- its economic reform plan with the goal of reaching financial independence and economic self-sufficiency within five years; and in return, the international community pledges new support either in the form of economic or technical assistance or debt relief.
And the document will be presented on Thursday by Prime Minister Maliki and UN Secretary General Ban Ki-moon, probably comments also from Deputy Prime Minister Barham Salih who led the effort on the Iraqi side, and the former Under Secretary General of the UN Ibrahim Gambari, who has been the Secretary General's Special Representative on this since the start of the year. And then I would imagine that Secretary Rice and other heads of delegation will comment on the document, indicate what their new forms of support might be. I think right now there are 60 countries, 30 of whom will be represented -- I'm sorry, 60 countries and organizations, 30 of which will be represented at ministerial level.
At the end of the day, which I think will be sort of in the 5 o'clock range, Barham Salih and Ibrahim Gambari as the working group co-chairs will present a resolution that basically summarizes what is in the compact document, ask each of the delegations to either in a roll call vote or by acclamation agree to the resolution, thereby formally adopting the compact itself.
Why don't I stop there and take any questions you have.
QUESTION: Hi. Barbara Slavin from USA Today. What are you expecting besides debt relief? We've been told there will be announcements on debt relief. Do you expect any additional aid or promises of investment? And how realistic is this whole strategy given the deteriorating security situation in Iraq?
DEPUTY SECRETARY KIMMITT: Well, let me take the second part first. I mean, everybody is mindful of the security situation in Iraq, also the political situation in Iraq. And there are specific strategies around national reconciliation on the political side, around the surge and other efforts led by the Iraqis, the U.S. and other coalition forces on the military side.
But throughout there's been an economic component. It started first with the work that the Iraqis did with the International Monetary Fund, World Bank and others, starting with their emergency post-conflict agreement and now a standby agreement. And my own view is the compact brings that particular process to a strategic level in the sense that if this compact is approved, as I think it will be, and implemented properly, effectively what it does is ensures that Iraq's wealth is shared among all segments of the population, that the government commits to a series of steps it will take to ensure that it can not only run its operations but provide essential services to reconstruction. I think it could have a very important economic/financial sense -- I mean financial effect, but it could also, I think, help significantly on the political and security side.
The first part of your question: What do we expect? I think that there will be from each of the delegations either pledges of new assistance -- that assistance could be financial, it could be technical -- and then I think some delegations, particularly those who have outstanding debt from Iraq, will address that point.
So we'll wait to see what people have to say, but I also just think that the political significance of having 60 countries there, again half of which are headed by ministers, in what I think will be the first international agreement between Iraq and the world community in decades -- our research, it could be technical -- and then I think some delegations, particularly those who have outstanding debt from Iraq, will address that point.
So we'll wait to see what people have to say, but I also just think that the political significance of having 60 countries there, again half of which are headed by ministers, in what I think will be the first international agreement between Iraq and the world community in decades -- our research certainly hasn't found one since the 1950s -- I think itself is a moment of political significance quite apart from whatever economic/financial result it might entail.
And the one thing that's very important is this is really led by the Iraqis. As some of you know, I used to be at this Department rather than Treasury Department. I've negotiated a lot of international documents. None is tougher than multilateral documents. This is a quality piece of work led by the Iraqis, strongly supported by the UN, the World Bank, the IMF and others. I think that they have good reason to be proud of what they're putting on the table and I think that one of the reasons you have the number of countries that you do attending is (a) they've participated in the preparation of this, but (b) I think they realize that this document is a document that focuses on what's right for the Iraqi people as a whole.
QUESTION: Could you estimate roughly how much debt is going to be forgiven? Do you have any of those kinds of statistics? And also, you said that new aid or new assistance would be pledged. Do you have any figures that you could provide on that? The U.S. is pledging $10 billion, which I think is the same money that you had already requested Congress for, but maybe if you had any more details on that.
DEPUTY SECRETARY KIMMITT: I really wouldn't want to get ahead of the other delegations. But you know, I think it would be fair to say that there would be billions of dollars both of new assistance and in debt relief. I think right after the conference I'd be glad to come out and give you something more specific.
QUESTION: The compact agreement talks about moving forward with the various components of revenue-sharing, and in particular Iraqi oil. Mr. Satterfield said the other day, I guess it was -- I'm losing track, yesterday -- that he felt this was -- would have to be -- looking forward, that this would be accomplished within a matter of weeks. And yet there seems to be very little progress and the parties involved are as far apart if not farther than they've been in the past. How realistic is it that this is actually going to happen and the Iraqis are going to be able within an effective period of time to fulfill this particular promise?
DEPUTY SECRETARY KIMMITT: Well, I knew that David and Ahmed Saeed from the Treasury had a briefing yesterday. I didn't see the actual transcript and I can't really talk therefore to what David said about the timetable.
Certainly, I think there's been considerable progress already on important pieces of legislation, not least the investment law. I think they've moved the hydrocarbons law a good distance, but clearly more needs to be done. And again, I'd defer to David in terms of any timetable he has in mind.
One thing I'll say though is that the Iraqis, as I say, have lived for the past couple of years under two agreements with the International Monetary Fund. One is called EPCA, an emergency post conflict agreement, and the other is the IMF standby agreement that's been in place since roughly December of 2005. Those agreements had some very tough requirements that the Iraqis had to meet in order to qualify for IMF precautionary lending and also to keep the Paris Club debt relief moving forward.
They've met every one of those standards, not least steadily reducing the fuel subsidies by raising gas prices. That has not been easy. That has a political and security as well an economic dimension.
One of the things that they've been able to do is to use the IMF standby agreement and the EPCA very effectively within their own body politic to move pieces of legislation and to make tough decisions because they have an international obligation. Therefore, I would think a successful launch of the compact, taking that compact back home with new pledges of assistance, debt relief and other forms of support, can not but help accelerate the process. How quickly, again, I'll defer to David.
QUESTION: We've been told that the Saudis are going to offer some substantial assistance, but we also understand that there are a lot of countries that are key debt holders that are still having a problem here. Could you talk about those key countries and what their situation is? I mean, I guess the Kuwaitis, for example, maybe the Chinese and the Russians as well?
DEPUTY SECRETARY KIMMITT: I think I can get this right. I think the countries who still hold in excess of a billion dollars in debt would be the Saudis, the Emiratis, Kuwaitis, Russia, China, Turkey, Jordan, Egypt, Bulgaria -- interestingly -- which had quite a bit of Saddam era construction activity and therefore a good bit of debt.
I would point out that Russia is the only Paris Club member that has not yet reached an agreement on Paris Club terms, which as you probably know is an 80 percent debt relief program. None of the others is a member of the Paris Club, but in our discussions -- and we've talked with all those countries -- their goal is to move forward in their discussions with the Iraqis on addressing the debt issue mindful of the Paris Club example that has been set by other creditors.
Again, I think I'll have to wait to see what people actually say at the conference and importantly what this resolution says on the issue of debt relief. But I don't know if any of you have ever covered Treasury. The Paris Club debt relief is a very complicated matter. There have been, for example, several technical missions recently from Iraq into Saudi Arabia to work on the technical details, determine what the debt stock is, how much is principal, how much is interest.
And those discussions are going on with each of those other countries that I have mentioned. Some are a little bit further along than others. I think what they say on Thursday will be an indication of both where they are and where they intend to go.
QUESTION: You spoke about Russia. Did you give -- did you receive any sign from Russia that they are ready to make an effort on debt relief? And do you know who is going to lead their delegation?
DEPUTY SECRETARY KIMMITT: I'm sorry, I don't have the list of delegation members. I know that there was a complication with their Foreign Minister being there on the first day because there was a long-planned visit, I think, of the Japanese Foreign Minister to Russia on that day. I think they're coming later the first day. I don't have the name of the Russian representative.
But we had very good discussions with the Russians during the IMF-World Bank spring meetings in Washington. Certainly, the meeting that I had with Russian representatives indicating that they were making progress on the debt issue. I think we'll find out Thursday exactly where they are.
Again, there are a lot of technical details on this. The first movement was to get the Paris Club deals done. Those have all been done except for the Russian piece, and now there's progress being made on the others.
QUESTION: Just very quickly, are there any foreign oil companies investing in Iraq at this point?
DEPUTY SECRETARY KIMMITT: There is significant interest being expressed by foreign oil companies. We've had a pretty significant rise in the number of approaches that we've gotten from American oil companies. There are oil companies engaged in discussions now in Iraq, but they are still waiting for two things: the implementing regulations under the investment law, which has passed the parliament; and then also the passage of the hydrocarbons law to include the revenue-sharing and other provisions to make sure they know with whom they should be contracting, what the rules of the road are, and importantly for them what the dispute resolution mechanisms are.
What they've said to us is, look, Iraq is a tough place to do business, security is a real concern, but we drill oil in a lot of places where security is a concern. What we really need to know is what the rule of law is, what the rules of the road are for investment. A lot of discussions taking place. I think that if they are able to get the hydrocarbons law complex passed, I think you could see some fairly significant movement. The Oil Minister, Minister Shahristani, has been traveling fairly extensively and there are quite a number of countries, not surprisingly including those who used to operate in the oil sector, who are very interested in coming back in once those rules of the road have been set.
Thanks, everybody.
http://www.state.gov/secretary/rm/2007/may/84119.htm