Transcript
MR. JAMES STEINBERG: Good morning and welcome to Brookings.
For our friends from the White House press corps, the lineup here this morning may look a little familiar. It's G-8 time again, and the only difference is we're sitting here relaxed and casual as opposed to harried as we get ready for the plane, and there's no seal of the President in front. But we're very fortunate this morning to have a lineup of veterans from G-8s, past and present, including two of my colleagues from the White House who served in key capacities of preparing Presidents before for G-8 summits. So you have a chance to get some insight not only into the specifics of what is going to go on in Canada next week, but also to the extent you're interested some insights on what it means to get a President ready to go and do a summit.
One of the things that's going to be interesting about this, and which I have great envy and admiration for our successors as Sherpas, perhaps the most notable thing about the summit from my point of view is that there will be no communiqué. Since most of what Sherpas do in preparing for summits is labor in agonizing ways over communiques, this is a major breakthrough which I applaud the leaders for having achieved.
But in other respects I think the summit will be very similar to what we typically see in G-8 summits, which is a lot of preparation for issues that leaders want to cover, most of which will not be discussed in great detail because overtaking events will become the dominant feature of the discussions. That's obviously one of the reasons why we're glad to have Martin Indyk here to join us today, because I think it's indisputably the case given what's going on in the Middle East that however much it figures on the formal agenda, that issues like the Middle East will figure prominently in the leaders' discussions.
The organization of the summit is designed to focus on three basic issues: counterterrorism, global growth in trade, and Africa and development issues. I'm going to talk a little bit about the terrorism issues on the summit, then I'll turn to Lael Brainard and Gene Sperling to talk about the economic and development issues, then Martin will talk about the Middle East.
On terrorism, it's not surprising given the Administration's focus on this, counterterrorism will be a central theme at the summit.
I think we're going to see several elements of the discussion. First, there will be some form of a high level statement, perhaps in the form of a chairman's statement reiterating the common commitment to fighting terrorism in all its forms and cooperation and the like. There will be a ratification of a rather longer statement that came out of the Foreign Minister's meeting at Whistler two weeks ago which goes into more detail about areas of common cooperation including commitments to the process that was started in the UN under Security Council Resolution 1373 where all the countries are supposed to report on their efforts to deal with terrorism and perhaps moving forward on what some have been calling the Adopt A Country approach to building the war against counterterrorism where the more advanced countries that have intelligence, law enforcement, financial expertise can work with countries that have a greater problem in dealing with counterterrorism, take them under their wing, share technical assistance and the like.
One notable initiative on the terrorism front will be what is called the Transportation Security Initiative in which the G-8 countries will make commitments and probably in a fair degree of specificity, and perhaps with a time table on specific measures that they are going to undertake to deal with securing the transportation system including aviation security and cargo and other elements of the transportation network.
Related to the terrorism problem but an issue which goes back to many G-8 summits in the past, there will also be an initiative on trying to accelerate the effort to dispose of excess plutonium in Russia. The formula that has been talked about is called the 10+10+10 formula which is designed to get all the countries of the G-8 together to provide $10 billion over 10 years to accelerate the plutonium disposition efforts. Although I think that it's unclear at this point whether that will be the formula that's adopted. Some in the Administration have been talking about simply trying to get an up-front $1 billion pledge of new money to move forward with this.
It's an old issue, it's been around for a long time, there have been a lot of commitments in the past by the G-8 to deal with this so it remains to be seen whether this represents a real fresh infusion of commitment and funds, but it certainly is and ought to be a priority.
Let me stop with that on the counterterrorism front and turn to Lael.
MS. LAEL BRAINARD: The general nature of G-8 summits is they're usually a mixture of laboriously planned initiatives and late-breaking news associated with crises.
In the crisis category it's no doubt going to be more in Martin and Jim's realm. The more laboriously planned initiatives are really on the economic side.
This G-8 meeting intends to place major emphasis on addressing poverty and disease in Africa. Just in terms of the nature of the G-8, this represents an important shift. Back in the mid 1970s when the G-8 was initiated, the real focal point on economics was coordinating macroeconomic policy among the leading economies of the world who were grappling with this really difficult problem of inflation and unemployment.
As we went into the 1990s the center of focus really became how to integrate Russia and to help the transition in Europe and the former Soviet states.
What we saw starting in 1998 with a very significant debt forgiveness initiative is that the G-8 has been increasingly moving closer to addressing the activist critique of globalization, even as they distance themselves from the activists in physical terms.
So this year what you see is Prime Minister Chretien has invited leaders of five African nations to sit down for a full day and brainstorm around the New Partnership for African Development.
The process of inviting African leaders was initiated actually in 2000 at President Clinton's last G-8 summit and it's been continued ever since. This is the first time that you see a full day.
What clearly Mbeki and others from Africa are hoping, is that they are initiating a Marshall Plan-like process, where they come up with their own internal commitments to reform, where they work amongst themselves to deepen regional integration, and in return the West and the richest nations come forward with money, with investments, with greater trade access.
The G-8 promised last year to respond to this initiative with a plan of action, and the question this year will be how much is actually on the table.
One of the most interesting features of the plan in terms of the African side is they have developed their own set of governance criteria and a peer review mechanism, and that is really quite innovative. There's a question as to whether the G-8 will be happy to live with the Africans' own self-review or will develop their own criteria. The latter seems to be more likely at this point.
In terms of initiatives that we've already started seeing, at the G-7 Finance Ministers' meeting, agreement was finally reached on replenishing IDA, the International Development Association, which is the part of the World Bank that loans to the poorest countries, in return for a pledge to convert between 18 and 21 percent of the money into grants from loans. The Americans agreed to a replenishment that could make $2.2 billion available. So that was important.
Secondly, the infectious diseases crisis in Africa will be addressed, no doubt. Last year the G-8 promised to make significant contributions to the Global Fund. Already we saw President Bush yesterday announcing an additional $300 million into the next fiscal year over and above the $200 million that has already been appropriated in this year's supplemental. It is intended to be focused on mother to child transmission. I think you've seen the response from the activist community has been that's good, but it's really not enough compared with the estimates coming from Kofi Annan of $10 billion cost per year. So far it looks more on the order of $1 billion from the donors.
There was also an agreement at the Finance Ministers' meeting to finalize funding the HIPC Initiative, the debt relief initiative for the Highly Indebted Poorest Countries. That is essentially fulfilling past commitments rather than going further.
One area that is quite front and center this year is universal education, which Gene will talk in greater detail about. Here we have a pattern that we've seen in recent years, which is that international organizations, Jim Wolfensohn in this case, came forward with a plan to really address the set of goals that the international community has embraced as being effective important goals. They have embraced the goal of getting all children in the developing world into primary education programs, girls and boys alike, because it has such a multifaceted impact on development.
Wolfensohn is coming forward and saying this is how much it's going to cost me to fast track 23 countries. In this case $3 billion. The estimates overall have been $5 billion. We have heard word of a Bush Administration announcement that falls far short of that. It's good, it is a commitment to this area, but again, the gap between what is needed to really achieve the millennium development goals and what is on the table so far is somewhat disappointing I think to the activist community.
The good news here is that there's an emerging consensus among the international community about what are the things that should be funded, that are effective to be funded. There's a multifaceted set of development goals that are mostly in the social sector, health, education, clean water, sanitation. And at the G-8, the summits are being used to focus energy and attention around getting them funded.
The bad news is the funding falls far short, and there's likely to be squabbling this year with some of the members of the G-8 trying to encourage the Bush Administration to earmark half of the $5 billion increase that he's announced for development funding to go just to Africa. There will be resistance on the part of the Bush Administration to do that kind of earmarking.
A final issue is the world economy. Under that rubric leaders generally discuss everything from recovery in their own economies to exchange rates. Don't expect them to come out of their meetings and talk about exchange rates, although no doubt there will be some talk about what's going on with yen-dollar and euro-dollar rates in the meetings. But where we might hear some controversy coming out of the meetings is on the trade issue. And in particular with some other members of the G-8 and African leaders both questioning the Bush Administration. We had a very strong result in November, a commitment to go forward with a Doha Development Round which would really address developing nations' concerns in a more central way than has been done before. And subsequent to that we have seen in the United States both a steel safeguards measure, which puts the Bush Administration at odds with the European Union and Japan, and big new funding for the agricultural sector in the United States, which really puts the Bush Administration at odds with many of the developing countries that we had worked with to improve the agricultural negotiating terms in Doha.
So the Bush Administration is going to be a bit on the defensive on these issues in these meetings and we may hear a little bit of that coming out.
MR. GENE SPERLING: I'm going to focus on one of the areas Lael mentioned which is education.
As Lael said, there has been great anticipation, particularly among the activist community that the Canada summit would be for education for all, what essentially Cologne was for debt relief which was the moment that the developed countries really converted on a very clearly defined global compact. There's been considerable activity and I'd say at this point there is still considerable uncertainty as to how much that will take place.
Just a tiny bit of background, 1990 was the first time the world came together in Thailand and said we should reach universal primary education by 2000. As it became clear that that was going to be a failure, the world reconverged in Dakar in the year 2000 and reset the goal for 2015. I think it also reflected more of the kind of compact, social compact or global contract that Lael was referring to where the countries would come forward with their own plans that they take ownership up with monitorable goals, and that assistance would follow a commitment to reform.
Following Dakar, however, the concern was that there was again no active financing framework as it existed in debt relief to make this a very certain or to encourage developing country head or state to think that if they move the ball forward in education they would get assistance.
Into that breach came the World Bank which therefore tried to, as Lael mentioned, lay out a financing framework. So I think one has to mention probably the after-effects of September 11 in having motivation on this. The world watching the Taliban banning girls going to school, the Madrasas in Pakistan, I think all of these put increasing momentum behind the importance of universal education.
So what the World Bank did was come forward with a financing framework in which they tried to talk about what the developing country essentially contract would be, how much of their own domestic resource mobilization they would have to do, and they put forward certain frameworks that they would have to put 20 percent of their budget into education. Half of that would go to primary education. Other kinds of standards like that.
The big thing that they did was to actually, as Lael mentioned, fast track a certain number of countries. The idea there was to try to make this global compact real by actually showing a particular number of countries with progress, so that that would provide incentives to the other countries as well.
One of the things the World Bank did which I think drew universal applause was they focused on completion instead of enrollment. When they focused on how many children were actually completing school they found that 88 developing countries were lagging behind. So what they did is they chose 18 of those 88 countries that they thought were ready to be fast tracked and then an additional five large countries that includes Nigeria and Pakistan which were kind of put on the on-deck circle for larger discussion.
So the big question that kind of emerges was would the G-8 follow up on that momentum. And the real question that people are looking at really comes two-fold. One is would there be a kind of major contingent funding commitment? Would they put up enough funds to both fund these initial 18 fast track countries and to show that there was a commitment to doing the other countries as well, assuming that they made the substantial reforms that were necessary.
The second major area is would there be coordination. In debt relief there has to be coordination by design. You can't do debt relief unless the developed countries coordinate. In education this has been much more controversial so far.
Each of the countries has expressed an interest towards education, [Trathian] put it on the agenda. As you know Blair's campaign theme was education, education, education and his focus on Africa. And obviously in the United States President Bush and Secretary O'Neil and Secretary Powell all have expressed a particular lifelong passion towards education.
Nonetheless, the clear question for the global contract is would they actually get together and coordinate their bilateral contributions? Nobody at this point is looking for them to pool money together into a single pool such as the Global Health Fund. The question is would the countries all say we're going to put up a certain amount of money and coordinate to make sure that all of these 18 fast track countries are coordinated, are funded, and that has really been the major question.
I would say that probably, as Lael said, among the activist community there is a bit of disappointment at the moment. The Bush proposal that is expressed in The Washington Post would only go for Africa from 100 million to 200 million over five years, just to give you a sense. That's 20 million additional a year. Twenty million is about what it costs to build a major high school in the United States. And it's probably about 1/20th or 1/30th of what the World Bank estimates is needed for Africa for universal education.
So again, the real question going forward is that each of these countries have expressed an interest in development and education. What is less clear at this moment is whether they will use the G-8 as it was used in debt relief in Cologne as a moment to come forward and have a very clear global compact.
And let me say the reason why this is considered important by many of us who work on this issue is that most developing country head of states, unlike debt relief where they know exactly what they have to do and believe if they make certain reforms they will get assistance, education is the other extreme. There's quite a bit of skepticism. Very few head of states believe that if they take reform efforts they will get assistance. So the reason this becomes important is whether or not you get a very clear global compact going forward.
As Lael said, there's been quite a bit of momentum going with the World Bank meeting, and the question now is whether the G-8 will kind of seize that or whether each country will kind of individually express its kind of bilateral concerns but not actually come together and endorse something like the World Bank education for all plans.
MR. STEINBERG: Thank you Gene.
As Lael said there's the planned part of the program and then there's a breaking events part of the program, and here to lead on breaking events —
MR. MARTIN S. INDYK: It wasn't meant to be like this. The President was to give a straightforward speech providing some structure to the vision of a viable Palestinian state living alongside a secure Israel. The G-8 was then supposed to endorse its principals, the launching of diplomatic efforts by the Secretary of State to convene a Foreign Ministers conference, not a summit, which would it was believed suffice to put the Israeli-Palestinian conflict back in the box and allow the President to get on with the real work of toppling Saddam Hussein.
But the Israeli-Palestinian conflict doesn't fit into a neat box and the Bush Administration finds itself yet again in the position of playing catchup, doing too little too late and then facing the hard choice of doubling its engagement or being blamed for the failure of its half-hearted efforts.
It happened with the Tenet plan, it happened with the Mitchell recommendations, it happened three times with General Zinni's initiatives, it's happened twice with the Secretary of State's visits to the region, and now it will happen with the President if he gives the speech that the press is talking about today.
I think the problem was captured perfectly in a piece by Aluf Benn in this morning's Ha?Aretz which you can look up on the web page. He quotes Shimon Peres describing the Bush Administration as constantly wavering between the Arab oil barrel and the Jewish vote. As a result, the speech is turning out to be an attempt to be all things to all sides in the conflict. Yes to a Palestinian state, which is an Arab demand, but no to defining its borders, which is an Israeli demand. The result is a new concept, which no international lawyer has ever heard of before, a provisional state. In the context of the current round of terrorist bombings, talk about creating a Palestinian state in the immediate future would be, as Congress is now reminding the President, a reward for terrorism.
So the President, if he gives the speech, will have condition this supposed carrot of hope for the Palestinians with so many requirements — to stop terrorism and to reform Palestinian leadership — the President?s speech will no longer have any attraction for the Palestinians.
Meanwhile, whatever territories the state would be established on are now in the process of being reoccupied by an Israel which has no other way to try to defend its citizens, a move which, by the way, the President's spokesman yesterday endorsed as Israel's right to defend itself.
So if the speech is given now, the Administration and the President will find themselves in a situation of offering too little to satisfy the Palestinians and too much to satisfy the Israelis.
Moreover, the next terrorist attack will doom such an initiative to the fate of all other similar American speeches. Those of you who can remember will recall the Rogers Plan of 1969 or the Reagan Plan of 1982, or dare I say the Clinton Parameters of December 2000.
In my view the best thing to do is not to give the speech. At least not in the form it appears to be taking and not now.
Instead, the Administration should continue to develop the answers to the two gaps that now exist and have to be filled before any initiative by the United States can have a chance of succeeding.
The first gap is that there isn't a responsible, accountable Palestinian interlocutor that any Israeli government would be prepared to deal with and reach an agreement with.
The second gap is that there isn't an infrastructure on the ground capable of stopping the terrorism and violence from the Palestinian side, and therefore, to serve as a substitute for the operations of the Israeli army in response to these terrorist attacks.
People will be quick to say, and they'll be right, that you also have to have a political process. In other words you have to have three tracks: a security track, a reform track, and a political track. They'll be right. But we can't launch a political initiative unless the other two tracks are actually moving forward in a way that changes the dynamics on the ground.
What will happen is what has happened every other time we've tried to do something since this Intifada broke out almost two years ago and that is that the dynamic of violence will swamp the political process.
So in my view it's much better to continue to prepare the ground, to work on the reform efforts, to work on the restructuring of the Palestinian security services. And to continue to consult with the parties about a political initiative.
The consultation process has a real advantage. For the first time in 18 months the President himself is actually getting exposed to the issues and to the players. Middle East diplomacy has always required Presidential involvement because it is so personal and it is so complicated that it requires more than just the efforts of the Secretary of State. It has to be a sustained involvement and it has to be a personal involvement with the key leaders who have to take the real risks involved in making something happen.
Therefore, I think what is needed is for the President to prepare for a different speech. It should be one that reflects a much more serious initiative, to be launched either at a time when the processes of reform and restructuring of security services have advanced, and he has a better grasp of what is necessary for us to do and what the parties must do to make political progress possible. Or, he should launch the initiative when the crisis has deepened to the point when American led international intervention becomes essential to protect our strategic interests, and when the parties are likely to be more amenable to the kinds of tough decisions necessary to resolve this crisis.
In the meantime the G-8 summit becomes a place to discuss serious international intervention with the key players — our partners in the EU and Russia, but also Japan and indeed Canada — to lay the groundwork for the kind of international intervention that will eventually be necessary to resolve the crisis.
Thank you.
MR. STEINBERG: Let's go to questions.
QUESTION: Hi, Randy Mikelson with Reuters.
I'm wondering what sort of discussion you think will be given to the President's first strike initiative he seems to be laying out, or first strike policy, and whether that will be entangled with the Middle East diplomacy and the talks there.
MR. STEINBERG: I don't think there will be an explicit discussion of the preemption doctrine but I do think that there's likely to be some general, in the context of the terrorism discussion, effort to get the President once again to commit to greater consultation, greater involvement with the allies. This has been an ongoing discussion, there's been anxiety for some time in Europe. I think the West Point speech has deepened that anxiety because it does not only have strong overtones of the possibility of unilateral U.S. action but it also goes to this deeper question about international law, the role of sovereignty, the role of individual states, and the background of this dispute which is now brewing in the Security Council about whether peacekeepers should be subject to the new International Criminal Court.
So the dynamic of these things is that leaders are very loathe to challenge one another in these kinds of contexts, but I think that there will be sort of background efforts to try to get the President in these meetings to be reassuring once again that what he meant by the West Point speech does not necessarily mean that there won't be consultation, that of course trying to sort of in effect round off the edges in this context. I think there are different audiences at different times, and in a situation like this the President's goal has been to try to be reassuring to try to show a common front on terrorism and to try to quiet the potential anxieties that the West Point speech may have created.
QUESTION: Finley Lewis, Carpe News Service.
Jim, you mentioned the 10+10 over 10 in the context of plutonium, but when they meet in a plenary session or during the bilateral between the two Presidents, won't the agenda be somewhat broader as well, involving safeguarding unsafe nuclear facilities in the former Soviet Union, and also proliferation in the context of Russian sales to Iran?
MR. STEINBERG: The 10+10 obviously is a broader issue than plutonium. It deals with a whole set of risks potentially, although I think it's still ambiguous as to whether it's exclusively nuclear or whether it might potentially involve chemical and biological as well, but it is certainly the broader initiative of 10+10+10 would encompass all of those challenges in Russia.
What is not clear to me at this point is whether they will actually be able to move forward on concrete commitments there as opposed to what I sense is the somewhat greater likelihood and greater focus by the Administration on the plutonium piece where there is a framework that has been put in place by the United States and EU countries to actually take the plutonium and develop it as a commercial fuel or for storage.
So I think there will be a general discussion about the problem.
I think the President is not likely to have an extensive conversation with Putin about this. They've sort of put it in a track with the Russian Minister of Energy and Spencer Abraham. The Administration reports that there are very constructive conversations going on on the Iran issue, and I think the President is likely to prefer, if they feel there is some traction in that channel, to keep it there rather than have it be an irritant in what he's trying to do in developing a positive relationship with Putin.
It's clearly in the background. I'm sure the President will feel the need to reiterate the fact of the importance that he puts on these Ministerial level discussions, but I would be surprised if it got to be a more detailed discussion of that.
So I would look for the most concrete initiative most likely to come on plutonium with perhaps some general discussion of the 10+10+10. Precisely because they don't have a communiqué, though, it's going to be less clear on how the results of these discussions actually get reported and what the strategy will be, in effect, to announce any specific agreements that are going to be actually reached during the discussion.
QUESTION: [inaudible]
MR. STEINBERG: The Iran thing is in — After the last summit with Putin, Putin and President Bush agreed to have their Minister of Energy and Secretary Abraham engage in specific discussions about this. I have not heard more from the Administration other than the fact that they say these discussions are going well, that they're encouraged, that progress is being made. Those of us who have been dealing with the technology transfer to Iran problem for a long time remain a bit skeptical. We've heard a lot of good statements from the Russians. Sometimes one questions whether even the will is there, but certainly the question of whether the capability of getting hold of this is there is a big question.
Part of the problem in the past has been even when there's a commitment by first Yeltsin then Putin to do it, it's not clear whether the bureaucracy and the relevant semi-private/semi-public sector entities are really on board and whether they're prepared to exert the kind of efforts that would be necessary to crack down on it.
QUESTION: Sean Sunderland with the Canadian Embassy, the host of this summit.
I'd be curious to hear the panelists' views on to what extent they think the current Administration buys into the partnership agenda that's implicit in the [NEPAD] and how they would structure this peer review mechanism if they were involved in this.
Thanks very much.
MS. BRAINARD: I think the Bush Administration clearly has come a long distance in terms of its views on development assistance. Part of that I think was in the wake of September 11th, recognizing that there are connections between poverty and despair and security challenges; recognizing that having asked the international community to join the U.S. in a coalition to fight international terror, that international expectations that the U.S. do more to fight international poverty were entirely legitimate.
More recently we have seen Secretary O'Neil on a fact-finding tour to Africa with Bono, the lead singer of U2, where again somebody who I think in his first days in the Administration made some blanket statements about aid failures, came around to a much more sympathetic and somewhat more nuanced view of the challenges and the importance of the challenges.
So I think they buy into the imperative of addressing African development challenges. Where I think there are going to be big differences is that the Bush Administration has put great emphasis on establishing a set of criteria and on having measurable results, and administering those through bilateral funding. That puts them at some odds with the desire on the part of other members of the G-8 including, I think, your own Prime Minister to perhaps earmark funds as a group for Africa, and perhaps at odds with the African leaders who want to take the criteria, the review mechanism, the accountability more into their own hands.
MR. SPERLING: I would agree. I think on one hand there's been a lot of progress. We can argue about whether the money in the Millennium Challenge Fund was enough or not, but it was a bit of a breakthrough event to have a Republican President essentially asking for more aid for development. It was I think a kind of Nixon goes to China type of event for development assistance.
And I think as Lael said, they are right now struggling internally to find what their exact vision is.
As Lael said, a lot of the talk that goes on with the Administration would focus on picking a relatively small number of countries who they feel have the right macroeconomic policies and conditions so that aid that goes in they feel will be part of a growth strategy.
I think what they haven't quite figured out yet, and I think you're seeing this in the issue I talked about in education is how to fit in their bilateral efforts in a multilateral context. And I think they are going to insist on bilateral control. I think the real question is will they find ways to coordinate these so that they can be part of a [NEPAD] effort or part of an education for all effort.
I think that there is not as much distance between, I think the Administration often exaggerates the distance between themselves and others. For example in education, the goals very much are monetoral goals. Most of the Education Ministers very much want to be audited, are willing to do those things.
So I think that they're still I think a bit struggling with how to do their Millennium Challenge Fund, but I think the thing they're going to have to deal with is that to the degree they care about aid effectiveness, part of the problem with aid effectiveness has been fragmentation among donors, not creating a clear sense of how money would be used and making sure it's coordinated well.
So I think they're going to need to find how they can use, as Lael said, their bilateral sense with effectiveness, but I think they need to figure out how to do that in a multilateral context.
I think on education they're missing a historic opportunity to play a rather leadership role in forging the different countries together, but this is part of the issue. Countries like to have their own initials on their own proposal, on the one hand. On the other hand everybody recognizes theoretically that things are better coordinated, and I think they're a bit still struggling to find that.
I will say that Secretary O'Neil did come back with a very clear sense that he wanted the focus to be on three areas — clean water, HIV/AIDS prevention, and primary education, and has been actually encouraging that the Millennium Challenge Fund kind of orient towards them.
But I think what you're seeing is that as the G-8 comes and there is this great desire for coordination either on [NEPAD] and then on education, the U.S. is probably not far enough along so it may be a bit of a stumbling block for [Cretian] and others who are hoping for a more coordinated response on development and education specifically.
MR. STEINBERG: I would just add that one dog that hasn't barked yet is Congress. We talk about the $5 billion and the like but there has been very little serious discussion on the Hill as to what attitudes are up there, whether there's congressional support for the Administration's overall approach. I think that's something that we have to watch for and the Administration I think needs to pay some attention to it if it wants to carry this forward.
QUESTION: Bob Dees with Cox Newspapers.
Jim, I have a bit of a two-parter for you on what the President's looking for from these G-8 partners in the next step in the anti-terror campaign.
The first relates to what Ambassador Indyk said earlier about the Middle East situation. It is can the President afford to have his Iraq goals held hostage to the Middle East problem indefinitely? Would you see him making an effort to sort of bifurcate those issues in the minds of the G-8 partners? And maybe Ambassador Indyk can comment on that as well.
And second, Jim, as you know the NATO ambassadors are here, they met yesterday with Rice and Cheney, and they're talking about what's being viewed now in the Administration as sort of a desperate need to improve the European capabilities to combat the terrorist threat. Do you see a place for that on the G-8 agenda? Or do you see that as something that has already broad agreement separate from?
MR. STEINBERG: It's a matter of the greatest speculation around town as to whether the Administration is on its Iraq policy.
I do believe, this is a personal judgment and it's not based on any specifics, but I think it's the general sense that the President does and will need to do what you've identified which is to begin to make the break between what's going on in the Israel-Palestinian problem and the need to pursue the Iraq policy. I think we saw that, again, in the West Point speech. I think there's a clear sense of a limited time table and windows of opportunities. I think that the debate continues to go on within the Administration about precisely how to structure the run-up to the necessity of actually using substantial U.S. military forces as a part of the Iraq strategy.
So I do think the President is going to be looking for opportunities to try to get more support from other countries about the fundamental problem of Saddam. I think what he will be largely trying to urge at this point is to say I haven't made any decisions about military force and how to proceed, but I do believe that this is a great risk. I want you to understand why this is such a great risk, and I think we all need to speak with one voice on this.
I would be surprised, again, if it's a major subject of the group debate but I think it will certainly be in the minds of others and I think in the margin conversations in the bilaterals this is something that is likely to come up, because the President I think does need to begin to move in that direction, particularly since as Martin suggested, there is no near term confidence right now that the Middle East problem can be gotten under control in such a way that the Administration can be confident that it can solve it in the sequence of getting the Israel-Palestinian problem done and then moving on to Iraq.
So that business of making the break between the two and preparing others for the potential of U.S. action I think is a process that's beyond going forward.
On the capabilities initiative, I think that the Administration feels that it's making good progress in the lead-up to the Prague summit this fall on getting commitments on a focused effort by the Europeans to take on certain commitments on improving conventional capabilities.
I think the challenge there is that the Administration still needs to convince the allies that it takes NATO seriously and that they ought to increase capabilities in NATO because NATO is a forum and an alliance which is going to be used in this context for future operations.
So I think there's a clear anxiety among Europeans about that. I think that there is, if you listen to the reactions to the meetings that have been taking place over the last day or so here in Washington, I think certainly there is still some skepticism and anxiety among NATO ambassadors as to how serious the Administration is about using NATO as a tool, and therefore how important it is for them to really undertake these kinds of capability improvements.
I think this is something that's more in the process that's leading up to the Prague summit rather than something that we're going to see a discussion of in Canada.
MR. INDYK: I'd just add one thing on the bifurcation question.
I think that it's less of a problem in the G-8 context than it is in the Arab context. That is to say, I think the G-8 partners are much more concerned with a plausible justification issue when it comes to Iraq. If they're going to go along, or sit quietly, or in some way cooperate on the Iraq agenda, than they're going to want to see that there's a justification. Since The President can?t make the connection with September 11th, he is going to have to make a more convincing argument as Jim has already suggested about the need for preemption.
The Arab-Israeli dimension is far more important to get the Arabs on board, because they fear that George Bush is going to be occupying Baghdad at the same time as Ariel Sharon is occupying Ramallah. This would create a serious problem for their own regimes in the Arab world.
The G-8 will essentially go along with what we want to do in the Middle East. They want us to play an active role. They know they can't be effective without the United States taking a lead, but they can surely understand the difficulty in dealing with the situation, and they can no longer accuse us of not being engaged and not trying. It's a question of degree, whether we've tried hard enough. But I think that can be dealt with in terms of this process that I've tried to outline, as preparing for a more serious initiative and working with them to give the reform process and the security restructuring process some greater impetus.
QUESTION: Jim Gerstensang of the Los Angeles Times.
The dynamic between the President has certainly changed from the last summit since September 11th. I'm wondering how that will affect his relations or how it's affecting his relations with the others, what position it puts him in, and in a broader sense what does he want to emerge with from Calgary?
MR. STEINBERG: I think what you can see coming up in almost any summit is that the very fact of the meeting becomes an important conditioner of how both the President himself and the Administration tries to position itself in relationship management, as it were. And for the President, you've heard Lael talk about evolution on the development policies. I think there's no doubt that one dimension of this was the fact that the President was trying to develop support for the antiterrorism effort and the more muscular side of it. That he saw real value in making a gesture to those important friends and allies who thought that there needed to be a second prong to their overall strategy which is dealing with the underlying problems of development.
I think what you're going to see here, again, it's extremely important for the President to come out of this meeting, as it was important for him to come out of the APEC meeting last fall right after September 11th, with a clear sense that this is a fight of all civilized countries against a very extreme movement that is not acceptable to anyone. So this has got to be a summit that for him has a strong element of concourse. It's not a place where he can afford to have big disagreements about issues. We really need to show that there's momentum behind the common challenge.
So all of these things that are being leaked out now on the broader development assistance, on education, I think are part of conditioning us so when the President goes in he will have a better response from his colleagues. See, the President is being responsive to their issues, and I think a lot of what people say and do in the meetings is to try to reinforce this, reinforce the sense of consultation, the wanting others' input, again continuing to develop the personal relationships.
We've seen over time, although the President was somewhat critical during the campaign and in his early going about depending on personal relationship for conducting foreign policy, he's obviously invested a lot in that. Each time they meet these relationships become deeper.
So I think there is going to be a strong overlay here of trying to show a common front, and that means on the one hand getting the clear and very vocal support from others about the centrality of the war against terrorism and the commonness of the fight, but also showing some sensitivity to these issues that others are going to be raising.
MS. BRAINARD: One thing I would add to that is this; the atmospherics around this meeting are quite different than around the G-8 meeting last year. As you'll recall going into the G-8 last year, President Bush was at odds with most of his colleagues over big issues like Kyoto, NMG. He and his Russia counterpart, Putin, were really sizing each other up and so there I think it was more of a defensive stance. As Jim suggests, he's much more comfortable, there is a common agenda, they've been working together on real challenges that everybody acknowledges are in their common interests now for many months. He's covered a lot of ground with Putin. So I think there's a very different feeling going into this meeting.
MR. SPERLING: On the development side, these relatively modest initiatives, or education where it's clearly going to be rather disappointing, would seem to suggest that they're trying to not focus, do more bilateral, perhaps if they have something bigger save it for the Africa trip. But one could imagine whether there's something up their sleeves more on the development side, whether this is a big of a head case. But right now it doesn't seem that they're putting forward initiatives that would rally a lot of support on the development side. The educational is small, disappointing to others, going forward, but there's always the possibility that there's a lowering of expectations to try to do something larger on the development side that would rally much more support for the U.S. role. But at the moment it looks more like it's a little bit more of a bilateral focus, doing their announcement separate, maybe saving other things for later trips to Africa or something else.
QUESTION: Howard Witt from the Chicago Tribune. A question for Ambassador Indyk.
Did I understand you to say earlier that you believe the situation in the Middle East needs to get much much worse before President Bush attempts an intervention, and that it would have to get so much worse that some kind of international force would have to be sent in to try to pry the two sides apart? How much worse than what we saw during Operation Defensive Shield are you talking about?
MR. INDYK: I didn't want to suggest for a moment that I'm proscribing that as something that needs to happen. Far from it. What I was saying is that there are two alternative scenarios for when the President should launch a more serious and more sustained initiative than the speech idea out there at the moment.
Either the other two processes that I was describing move along in a way that produce some answers to the problems of who's going to stop the terrorists and who's going to be the negotiating partner with Israel. Or, as a result of the dynamics that you see on the ground, the situation itself gets far worse.
By far worse I'm not talking about the kind of continuation of what we've seen, but a situation in which for instance Yasser Arafat is evicted, something that's very much on Prime Minister Sharon's agenda these days, and there?s a reaction to that which could lead to Hezbollah attacks on Israel's northern border, an Israeli-Syrian confrontation, some major turmoil in the Arab world, etc. That kind of worsening creates a situation where our strategic interests are engaged in a way that they're not directly engaged at the moment. We would then have a very strong incentive to assert our interests over the local interests that tend to dominate in this situation.
Now as far as the international intervention is concerned, it's a spectrum of things depending on which way the situation develops. You already see various parties in the international community developing a kind of custodial role over the Palestinians. You see it in terms of the Egyptians now working with us to restructure Palestinian security services. You see it in the way the Egyptians and the Saudis are doing something that as far as I can remember they have not done for more than a decade, which is to move out ahead of the Palestinians in terms of the political process that they are promoting. That is to say, Egypt and Saudi Arabia are calling for a state first and the borders to be negotiated later. This is a position which the Palestinians have repeatedly rejected and are criticizing at the moment. And you see the custodial role in international intervention to create more transparent financial institutions and to oversee the political reform process on the Palestinian side.
So that process of the greater assumption of international responsibility for the Palestinians can develop in terms of more dramatic intervention. And it can develop all the way up to a "trusteeship" over the Palestinian territory with a U.S.-led international force that takes on the terrorists in place of, or in partnership with, Palestinian security services, in the context of trying to build credible, accountable, responsible, transparent institutions for the Palestinian state.
MR. STEINBERG: Another word on the dynamics of how I think this will play out in the G-8. Martin has given a very thoughtful answer to the question of what should be done.
From a European point of view I don't think they care much specifically what is done, they just want something to be done by the United States. So if the President has not made the speech by the time of the meeting I think there will be a great deal of anxiety about this and Europeans will be looking for some kind of clarity from the President about it, in fact how he's going to take this forward. I think they very much would like to have something launched. Even if they disagreed privately with the specifics, simply because I think they feel there is a great vacuum now. They accept the fact that there needs to be U.S. leadership but they would like to see almost anything on the table.
QUESTION: A couple of trade-related questions.
The European Union recently entered an agreement with Iran expanding commercial relationships. Will that become an issue of discussion or protest by the United States?
And will President Bush at this meeting somehow have to acknowledge a long term weaker dollar in relation to the yen or the euro?
MR. STEINBERG: I'm sure the Administration is not happy about the decision to strengthen economic ties with Iran, but as was suggested in response to Jim's question, I don't think the President's looking to pick a lot of fights at this meeting. I think there are other channels for those things to be pursued. I think it is going to be important for him to show that notwithstanding some critics about unilateralism and the like, that he does get along well with others.
So I think there are going to be few places where the Administration and the President are going to go out of their way to say I really oppose what you do here. It just opens the door to other things. Particularly, and Lael can comment more broadly on the trade things, I don't think the President wants to start on discussions about who's doing the right things or the wrong things on trade right now.
MS. BRAINARD: I think on the dollar, my guess is that several of the leaders will want to avoid the discussion altogether. They'll certainly want to avoid having to tell people outside the room that they talked about it, because it is an area where you can only do harm but no good.
But going into the Finance Ministers? meeting there was a little bit of firing back and forth between the Japanese and the U.S.. The Administration is in a slightly knotty position. On the one hand,manufacturers are screaming and sending letters saying we can't compete in this environment. The dollar is simply too strong.
On the other hand the few statements that have been made by the Administration which have been seen as playing into the weakening of the dollar have been roundly criticized as an abandonment of the strong dollar policy and giving up tremendous advantage that the U.S. derives from having such strong investment into the United States over the past several years.
So I think the Bush Administration will be very careful to stay away from this issue to the extent that they can.
On the trade issues I think Jim is exactly right. No desire to pick fights given that they will be mostly on the defensive. I've sure that President Bush would have liked to go into this meeting having already gotten a strong vote on trade promotion authority. As you know, that's held up. He probably doesn't want to go into the meeting and spend a lot of time defending the Agriculture Reform Bill, doesn't want to spend a lot of time talking about steel, and yet we know that Secretary O'Neil did spend a lot of time on those issues with his counterparts.
MR. SPERLING: I agree with Lael. Nothing to gain, everything to lose. If I were still there I'd say don't say a single word on the dollar. Everything to lose, nothing to gain.
QUESTION: Barry Wood, Voice of America.
What are your own thoughts about the summit process? Having experienced so many. Is this a good idea that it be cut by one full day? Is it satisfactory that Russia is still half in and half out? And is the informality a good thing? Any other countries come in? What are your own recommendations?
MS. BRAINARD: These issues come up time and time again. The reality of summits is that it is very difficult mold them each year to the geostrategic reality. Does it make sense to have four members of the European Union plus the European Commission still represented at a meeting so many years after we have seen so much advancement on integration in the European community? Probably not. Does it make sense for the Russians to be there but the Chinese not to be there? Yes, if you think democracy is a huge criteria; no, if not.
So these questions are really quite difficult to answer on principle. Pragmatically speaking, the reality is once you've got an international organization everybody wants to keep their seat at the table.
I do think it is working in that the whole set of globalization issues have come to put pressure on the G-8 each year. I think that's a good thing. I think that has played into the way the IMF does business and the World Bank does business in a very positive way, and I think it?s important that developing country leaders are coming — the leaders from the part of the world that have benefited least from globalization so far. I think it's entirely appropriate for them to be sitting and talking in partnership with the richest nations of the world. So I do think that's very useful.
MR. STEINBERG: I agree with Lael. It's easy to criticize these things as being expensive and not very productive, but I think that it allows a moment of reflection on some issues which often would not get the same kind of attention were these meetings not to take place. It does allow outside forces to gather around and have an impact. And the leaders do have the kind of discussion that they don't have in other contexts. It's a different kind of meeting when you have seven or eight or nine of them sitting around together than it is in bilateral meetings or in big conferences where each speaks for a very brief period of time and they're all in sort of marginal conversations on the side.
You can tell there's a desire to find some way to broaden the dialogue to other countries. The fact that the African leaders have been invited. Most of the leaders I think would like to find a way to involve China. Recognizing that it would have to also be a different kind of arrangement perhaps as was the transitional arrangement with Russia because of China's political situation. But everybody recognizing that there needs to be a way to have China feel more a part of the setting of the international agenda as part of the group rather than as something outside.
And if it's going to go in that direction probably a few other important developing countries including Brazil and India. I think that will be the next evolution. To find some way, perhaps without abandoning the eight by itself as part of it, to try to see whether there is a way to have a more sustained and regular meeting with key developing countries.
I'm sure that if you asked the leaders to vote in a secret ballot they would vote to do that. They just can't quite figure out how to get from here to there and to deal with the difficult problems of picking who should be in.
I think on Russia, Russia is in. Lael can speak to this better from the economic side, but there is a kind of strong sense that creditors, dominant nations have to have this little mini-meeting by themselves to talk about IMF and other issues. But I don't think the Russians at this point feel that they're not fully in, and I think the way it's proceeding is pretty satisfactory. I think that time has proven that it was the right decision to move in that direction. That it was worth the stretch to try to do it. That's why I say I think the next stretch will be to try to figure out how to accommodate some of the others.
As I said before, I think it's a real plus that they've gotten away from the communiqué writing which is an incredibly thorough exercise and very painful for those involved, and I think that the world ought to be prepared to tolerate leaders of key countries going off to discuss things that are on their mind, to get a better sense of each other's concerns without expecting big deliverables and big results on every issue under the sun
MS. BRAINARD: Let me just echo, I think all of us who have been involved in the communiqué process think that Canada has done a great service for the world by doing away with these turgid, lengthy, generally meaningless documents.
QUESTION: I'm Urich Koskino, Kyoto News.
The Japanese government has said the economy has bottomed out, but is Japan's economic situation still a concern for a sustainable global growth and will Japan come under strong pressure from the eight leaders to fix its economic problems?
MS. BRAINARD: I think there will be continued focus on Japan, because there is a real question mark as to whether the second quarter figures will look anywhere near as strong as the first quarter. But equally there will be a big focus on the U.S. economy, because it's so central in terms of regenerating growth, particularly in Asia and Latin America. And there's also concern about a potentially weakening recovery here.
So I don't think Japan will be singled out, per se, as the only concern among the G-8. It's clear that the Bush Administration does want to keep the pressure on the Japanese government to undertake real reform, which they don't see happening, as opposed to relying on currency-induced recovery. So to some extent there will likely be a little bit of focus on the structural issues for that reason. But I don't expect it to be greater, certainly, than it was last year, and perhaps a bit diminished.
QUESTION: Al Milican, Washington Independent Writers.
Do any of you see the science that has come forth since last year affecting G-8 political or government thinking and action about Kyoto?
MS. BRAINARD: It appears that our government's position has been little affected by any new news or even by what was already known, so I don't think there will be any greater meeting of the minds this year than there was last year. The fact that we've moved a little further from the commitments made last year I think makes this less of a hot button item, but I have no doubt that the Europeans will want to raise this issue as they do consistently every year using the G-8 forum.
QUESTION: Mary Mullen, I work with the Bosnia Support Committee.
I wanted to ask Mr. Indyk, do you feel that the U.S. will still, I know that it's mainly Congress that will decide this, but if Sharon does exactly what he wants to do, he doesn't take any advice from Bush, will the U.S. still give him, give Israel all the aid they've been giving them? Will they continue with the aid?
MR. INDYK: Of course it's a hypothetical question you're asking me. It's not at all clear to me that the President has taken a very strong position on the issues that Ariel Sharon has most on his mind. The signal that the Administration sends to him in this situation is that Israel has a right to defend itself.
So the Prime Minister will interpret that as he will.
Secondly, of course, Congress has a mind of its own when it comes to this issue. In all Congresses there's a bipartisan commitment, that's been the case for decades now, supporting Israel economically and more essentially in terms of military assistance. The military assistance is far more important now. The economic assistance is declining each year as part of an arrangement that will zero out economic assistance by 2007, I believe. Congress believes very strongly that the United States has a commitment to the security and well-being of the Jewish state and this is a very important manifestation of that commitment, a necessary manifestation. And I have to say that Democratic and Republican Administrations alike have adopted exactly the same position and certainly in these circumstances when Israel's security is on the line in a very tangible way, that kind of support I think is going to continue.
QUESTION: [inaudible]
MR. INDYK: Again, there isn't a good solution to the problem of suicide bombings, that's very clear. The use of military force can only provide a partial solution to it. In the absence of a international intervention led by the United States to provide some kind of effective political alternative, then I think that essentially Sharon is going to do what he has to do and the Israeli people will support him in that overwhelmingly. In those circumstances it's clearly not a good solution, but unless there is something that changes the parameters of this dynamic that has unfolded over almost two years, I don't see that there's going to be an alternative to Israel using force to deal with the terrorist attacks.
MR. STEINBERG: Thank you all very much.