5:00 P.M. EDT
Real Audio of Briefing
MR. DENIG: Good evening, ladies and gentlemen, and welcome to the Washington Foreign Press Center. Welcome, also, to journalists assembled in our New York Foreign Press Center.
We are very pleased to be able to welcome back to our podium the Under Secretary of State for Economic, Business and Agricultural Affairs, Alan Larson. Secretary Larson will have a brief opening statement to make with regard to the upcoming G-8 Summit and, after that, will be very glad to take your questions.
Mr. Larson.
UNDER SECRETARY LARSON: Good evening, it's very good to have a chance to meet with you, and I'd like to give you a quick overview, perhaps we could say a sneak preview of the Sea Island G-8 Summit Meeting.
President Bush is very much looking forward to hosting Prime Minister Koizumi and the other leaders of the G-8 at this meeting in Sea Island. The basic theme of this meeting will be "Prosperity and Security Through Freedom and Cooperation."
The G-8 Summit started as an economic event, and I think it's fitting that the first topic for discussion will be the status of the global economy and what the G-8 nations can do to strengthen the recovery that we're now enjoying. Certainly the United States' economy can continues to be growing strongly, and we welcome the fact that the Japanese economy is also in the midst of a strengthened recovery.
I'm sure the leaders will want to talk specifically about what they can do to give new energy and impetus to the Doha development trade negotiations. We believe that this is a moment of strategic opportunity. It will be important for the leaders to see that on all of the items on their agenda, but in particular, for trade, where their leadership is vital.
We look forward to talking about the role that the private sector can play in promoting development around the world on the basis of a very important report that was done for the Secretary General of the United Nations by a team including the Prime Minister of Canada, Paul Martin, and the former-President of Mexico, Ernesto Zedillo.
It has been necessary in recent years for security issues to play a role in the G-8 Summit. I'm sure that we will want to talk about proliferation; about the efforts that the G-8 countries can do to promote peacekeeping around the world; and our shared efforts to fight terrorists, including by strengthening our transportation security arrangements. Transportation security has been an important topic at the last two G-8 meetings. This year, we hope to carry forward that work in a very important way, in a way that will particularly improve the security of air travel.
We look forward to receiving at Sea Island visitors, including six African leaders: those from Nigeria, South Africa, Senegal, Ghana, Uganda and Algeria. And it will be during this portion of the meeting that we expect to discuss a robust development agenda, including food security, the efforts of the G-8 to eradicate polio from the face of the earth, the ongoing fight against infectious diseases like HIV/AIDS, malaria and tuberculosis, as well as efforts the G-8 are carrying on to promote transparency and to help fight corruption in developing countries. This is a partnership that we have launched in the past and I'm looking forward to some new developments in that partnership at this particular G-8 meeting.
Last year there was a big push to focus on science and technology for sustainable development. There was important cooperation in the areas of energy, of agriculture and of global observation. We look forward this year to moving that agenda forward with some new initiatives. We recognize in particular the leadership of the Prime Minister [of Japan] in issues relating to the recovery, the recycling and the reuse of raw materials and products, something that we think is a very important initiative.
Probably the most discussion in advance of this G-8 meeting has been on the question of the broader Middle East and North Africa. We believe that there have been very important voices of reform in the Middle East, voices that are pointing to the need for societies there to provide more opportunities: more opportunities in terms of economic advancement; more opportunities for educational advancement; more opportunities for citizens to take part in shaping the decisions that affect the future of their countries and of their region.
The most recent example of that voice of reform or those voices of reform came from the leaders of the Arab League themselves, who, in a summit statement last week, gave very, very strong, strong leadership to the effort on reform, including democracy, educational opportunity and economic opportunity.
It's going to be important for the G-8 countries to show that they are prepared to respond and prepared to help in ways where they can, and so we've been working on a G-8 plan of support for reform that has been developed in consultation with the region and would be designed to reflect the priorities that have been identified by the region itself.
In order to have the best possible discussion of this issue of the broader Middle East and North Africa, President Bush has invited a representative group of leaders from the region. He has invited the leaders of Algeria, Bahrain, Jordan, Yemen, and Afghanistan, and he's also invited the leader of Turkey, which is sort of a bridge country, a country that is a democratic partner both of the region and of the G-8 themselves to participate in those discussions.
That would conclude my overview of the themes and the issues that the United States, as host of this meeting, would like to put forward, and I'd be happy, now, to answer your questions.
MR. DENIG: Okay. For our first question, we'll go to New York. New York.
QUESTION: I guess I have two questions. One is, what is it about Sea Island that made -- that is a attractive venue for this summit? And are you taking any special security measures in light of some of the news that came out yesterday? Thank you.
UNDER SECRETARY LARSON: We had the last of our preparatory meetings in Sea Island last week. And having visited there for the first time, I can say that probably its first attraction is the natural beauty. It is a wonderful place, and it is a place where I think the leaders can relax and have discussions that are unscripted, that are direct and candid and outside the glare of publicity. And that's very important.
I think it is a setting, as well, that was chosen with security considerations in mind, and, without going into the details, I can assure you that we have taken great pains to make sure that our guests will be comfortable and secure.
MR. DENIG: All right. Let's take questions from our Washington corps. Let's start up here in the front please.
QUESTION: About the Iraqi debt, could you tell me the current situation of the Iraqi debt relief and what you expect in this G-8 Summit?
UNDER SECRETARY LARSON: The United States has taken the view that finding a way to relieve the burden of the very large debts that were run up by Saddam Hussein is an important priority for the international community. It's an important way that we can show support for Iraq.
We've also taken the view that the debt situation in Iraq is clearly unsustainable and that very, very deep debt reduction will be necessary to give the Iraqi people a chance of achieving the economic future that they want to achieve and that we want them to be able to achieve.
We appreciated very much that during his travels around the world, including to Tokyo, the President's Special Envoy, James Baker III, was able to reach an understanding with the Government of Japan that Japan would support reduction of the vast majority of Iraq's debt owed to Japan, provided other countries are also participating in this debt reduction.
The next stage of the process is for the creditors to have a chance to understand better the details of Iraq's situation through the review of a debt sustainability analysis that's being carried out by the International Monetary Fund. And I think that one of the things that creditors will learn as they study the figures more carefully is that Iraq is a uniquely indebted and impoverished country. It has a debt burden that's 500 percent of GDP or more -- much, much greater than the so-called Highly Indebted Poor Countries. It's a country that's been through three wars, through all sorts of turmoil, and it's a country whose social indicators are, in many cases, below those of the HIPCs.
So we think that the analysis shows a uniquely strong need for very, very deep debt reduction. Whether this is a matter of discussion at Sea Island is something for the leaders to decide, but certainly our position, as the United States is going forward, is to achieve deep debt reduction this year in association with a International Monetary Fund post-conflict arrangement.
MR. DENIG: Okay, let's go to the gentleman in the middle, in the back.
QUESTION: Also with regard to Iraq, beyond the issue of debt relief, what sort of commitment or commitments for cooperation will the United States seek from the other participants for the reconstruction and the further security for the sovereign Iraq?
UNDER SECRETARY LARSON: In his speech on Monday, President Bush outlined some of our major priorities. He outlined, in particular, five main tasks that lie ahead. One of those five tasks was securing strong international support for the work that comes ahead. And I think we can broadly categorize that in two baskets right now.
First of all, it is going to be important for the United Nations and the Security Council of the United Nations to give political support and direction to the work that lies ahead through the Security Council resolution that's being debated in New York right now.
Secondly, as you rightly suggested, it's going to be very important for countries to assist the Iraqi people in every possible way with the task of reconstruction. As you know, Japan and the United States are the two largest contributors to that task. The United States is providing over $18 billion of support. Japan, at the Madrid Donors Conference last year, pledged roughly $5 billion of support, including 1.5 billion in grants and another 3.5 billion or so in soft loans.
What I think is important at this stage is for more countries to get involved in pledging assistance, but also to move quickly with the implementation of assistance. And we're pleased that the recent meeting in Doha that was chaired by the Government of Japan has resulted in increased momentum and support for the World Bank and UN trust funds, which will be one of the mechanisms by which the support can be delivered.
MR. DENIG: Up front again here.
QUESTION: I'd like to ask you about energy price. What discussion do you expect in the G-8 Summit if OPEC countries don't agree on the increase of petroleum production?
UNDER SECRETARY LARSON: Because these discussions are unscripted, the leaders themselves will decide what the discussion is going to be. Our perspective on oil prices is that, at this point, the supply is too low and the prices are too high to meet the needs of a growing world economy. We have seen very, very strong growth in output this year, and that has been associated with strong increases in demand for oil. Much of this is coming from China, which is growing very, very quickly, but there's been increased demand from other places as well, including the United States.
We welcome the fact that the Oil Minister of Saudi Arabia has spoken in terms of increasing Saudi Arabia's output and working for an increase in the production from the OPEC countries. We think it's very important for these indications to be followed up by actions because we think that the oil producers have a stake in the strength of the world economy, and we do believe that supply has not kept pace with demand and that prices are too high and that they will have an impact on the strength of the recovery. You know, certainly Japan and the United States can absorb some of this. There are more vulnerable countries for whom the impact of higher oil prices is much more severe and so we would like to see the oil suppliers follow up on the directions that they have indicated over the last couple of weeks.
MR. DENIG: Okay, let's go here.
QUESTION: Thank you, Secretary.
I have a question about the Middle East issues. Could you update your consultation with the allies in the regions? And I mean Secretary Powell when to Jordan almost three weeks or two weeks ago, and also we got the -- we saw the result of the Arab League Summit meeting, and could you update the present status of the consultation? That's my first question.
And also, you chose the wording carefully today on the broader Middle East and Northern African, so you're not going to use the wording "Greater Middle East Initiative" on the political declaration in the coming summit?
And also, my final question on this (inaudible). Why didn't you invite the key allies in the regions? I mean especially Egypt and the Saudi Arabians? They declined to come to Georgia or you didn't invite them in terms of because of judging the political situation there?
UNDER SECRETARY LARSON: Okay. First of all, it was about two weeks ago tomorrow that Secretary Powell left Washington for consultations in Jordan on the banks of the Dead Sea for the World Economic Forum. I was out with him as well and conducted some consultations the day before he arrived, and then a few with him.
This was really an excellent opportunity for us to meet with ministers from around the region, as well as representatives of business and civil society, and have another opportunity to convey our basic message about this broader Middle East and North Africa initiative.
The first message is, of course, that we recognize that reform and the impulse for reform have to come from within the region. Some have said in the press that we are scaling back our ambitions because we are stressing that reform has to come from within the region. Nothing could be further from the truth. Anyone who thinks seriously about these things recognizes that the impulse for reform has to come from the region, and it has been coming from the region. That's the whole point. Through the Alexandria library project, the work of the Arab Business Council, the Sanaa Declaration, and now, most recently, the Arab League Summit Declaration, it's been absolutely clear that the impulse for reform is coming from within the region itself.
We did have an opportunity in Jordan at this World Economic Forum meeting to have detailed conversations with representatives of the region about some of the ideas we've had for responding to this impulse for reform. And we found that there was a great deal of support from the representatives we spoke with about the types of things that we and other G-8 countries are prepared to do.
On the terminology, we are not particularly attached to any particular formulation of words. The reason we've started to talk in terms of the Broader Middle East and North Africa is, first of all, to emphasize that the North Africans are a full part of this. And, in some cases, they've had their own dialogue going on with the European Union. We have wanted to stress through words like "broader" or "wider" that we imagine an open architecture to this approach. We don't imagine drawing sharp lines and saying, "You're in but you're out."
And it's been interesting because our Japanese colleagues have seen this very much the same way, and it's natural to us because this is the way that APEC has operated. It began with a group of nine or ten and it's expanded to a group of 19 or 20 as other economies have sought to become a part of it. And we tend to think that the efforts in this part of the world could be much the same, and we have no particular interest in trying to draw lines that would exclude others.
Now, on your last question, the basic point is that the President wanted to have a representative group of leaders. There was an early question from New York about Sea Island, and one of the physical realities of the logistics is we don't have room for everyone from the Middle East to come in the first place. In other words, we have the capability of having a relatively small number of guests in addition to the G-8 countries. There was a decision to work with these particular leaders, which are a diverse group representing different strands of thinking, and I think it's going to be a very good conversation.
MR. DENIG: All right. Let's go to the gentleman on the right there.
QUESTION: Regarding North Korea, what kind of conversation do the leaders going to have in regarding with this issue and the North. I'm wondering whether the Japanese and kidnapping issue might be included in some sort of document which would be issued in the final date of this meeting.
UNDER SECRETARY LARSON: Every year, part of the G-8 Summit process includes a session where leaders can talk about the big foreign policy issues of the day, and in a meeting that itself is unscripted, this is probably the most unscripted part of it, because leaders come to this discussion -- sometimes it's over dinner -- really free to bring up the foreign policy issue that are most on their minds.
So I'm not in a position to predict how or whether an issue like North Korea would come up. But if President Bush or Prime Minister Koizumi or one of the other leaders decides to bring it up, then it will be discussed.
I think the good news, from my vantage point, is that in those conversations that I have been a part of, including some that took place in APEC last year when I was representing the Secretary of State, there's been a very, very strong and collegial position supporting the six-party talks, supporting this effort to pull together to achieve the sort of complete and verifiable disarmament on the Korean Peninsula that the six parties have been pushing for all along.
So if there is a discussion, I think it'll be a very constructive one that would just focus on the way ahead. But it will be up to the leaders to decide whether that's what they want to talk about.
MR. DENIG: Okay, next question. Yes, the gentleman in the back again, in the middle.
QUESTION: In the context of the (inaudible) the economic recovery for the United States, Japan and possibly other countries, do you anticipate the issue with regard to exchange rate, particularly regarding Japanese yen or Chinese currency, be raised by any party? Does the United States intend to pursue that?
UNDER SECRETARY LARSON: I think the way that, recognizing again that the leaders will present any issue they want to in their own words, in their own terms, I think, from my vantage point, the issue, the starting point for this conversation, is the importance of having a strong, sustainable, global recovery. And that means, among other things, having the strongest possible growth in each of the major engines of the world economy: the United States, Europe, Japan, and increasingly one looks at countries like China as having a big impact on the global economy.
We believe that one part of having a sustainable recovery is to get growth rates higher in places like Europe and to see the improved growth in Japan continued. So that's certainly a conversation that I could imagine taking place. What sorts of policy measures are necessary for that to be achieved? How can we make sure that this is a long and strong economic recovery that's sustainable?
Now, you sometimes get into questions of exchange rates and issues of payments when you look at issues like current account imbalances. Our own view is that the best solution to the current account imbalances we see in the global economy right now is to get stronger growth in Europe, stronger and continued growth in Japan. Clearly, the United States will have to do some things. We'll have to follow through on the President's initiatives to cut the budget deficit. But, on exchange rates, our basic stance is that they should float flexibly in response to market forces, at least when one is talking about major economies, that that's the best way to ease pressures from the international payment system. And so I think that sort of is an end point for the conversation more than the starting point. The starting point is strong global growth that's sustained over time.
MR. DENIG: Okay. Do we have a final question? Okay, the gentleman up front again.
QUESTION: Could you tell us about the G-8 Plan of Support for Reform a little bit more specifically?
UNDER SECRETARY LARSON: Sure. In the G-8 Plan of Support for Reform, we are trying to pull together initiatives that respond to the priorities identified for by the region itself. And these include creating more jobs, more and better jobs, through more effective support for micro-finance, for small- and medium-size businesses; educational initiatives that try to help the region to achieve its literacy goals and that try to help the region make sure that young people that look for careers in the private sector, whether as entrepreneurs or business leaders or as workers, get the skills they need to have these jobs in a competitive global economy.
We've been looking as well at ways to support the impulse for democratic reform, including strengthening the institutions of free societies: the free and independent judiciary, a professional and free press, supporting parliamentary exchanges, things of that sort.
And we've also been working on some basic economic initiatives, including supporting the accession to the World Trade Organization of countries that aren't already members of it; supporting inter-regional trade, including through the negotiation of free trade agreements; and supporting helping create better climate for business, including foreign investment and domestic investment.
These are all things that G-8 countries are committed to do in cooperation with partners in the region that want help in those areas, and I think those would be some of the things you could expect to see in the Plan of Support for Reform.
QUESTION: Are you going to agree on a plan and present it to the Arab nations, or what's the plan?
UNDER SECRETARY LARSON: Well, we will have a Plan of Support for Reform that will be what I would call the first installment. The United States has been consulting with the region for several months. I've made three trips to the region myself. We've been sharing our ideas with government leaders, business leaders and leaders of civil society. There is a very, very detailed understanding on the part of these leaders as to what our initials plans are. And so I think we already have a great deal of support for this Plan of Support and I think many, many people in the region will see this as something that's very familiar and welcome.
We also do see it as the first installment. One of the ideas we've been working on is the possibility of a forum where the G-8 countries and the countries of the region could work together on an ongoing basis on issues related to reform and opportunity. And so this forum, if it materializes, is a venue in which these initial ideas, this installment, this first installment, could be further developed over time in a totally collaborative way. And I expect that's how it will happen.
I think we've got one more.
MR. DENIG: One more? Okay. The gentleman on the left here, by the pole.
UNDER SECRETARY LARSON: One last, last question. (Laughter.)
QUESTION: I think that President Bush wants to make this G-8 Summit a place to show international unity, G-8 unity, toward successful transfer of power to Iraqi interim government. But are G-8 countries remaining apart over the contents of authority to be transferred to interim government on the role of multinational forces? Do you think -- what do you think of this prospect? Do you think will the G-8 Summit become a place to show G-8 unity on Iraq issues?
UNDER SECRETARY LARSON: I think it will be a place where one will see unity on Iraq issues. I expect that we will have support for a United Nations Security Council resolution on Iraq. It is natural and expected that on an issue this important that there would be discussion and deliberation and questions, and that's the process that's going on in New York at the United Nations right now. And I am certainly not surprised, you know, that this process is going to take a few days to complete. But it will be completed and it will be completed successfully.
I think that on reconstruction for Iraq, countries are coming together. My Deputy Assistant Secretary Tony Wayne just returned from a meeting in Doha where -- as I mentioned earlier in the conversation -- the Japanese Government chaired a meeting of donors that are working together with the United Nations and the World Bank in support of these trust funds. We had representation or participation in that meeting by the governments of France and Germany and Russia, as well as by countries that had been a part of the coalition effort in Iraq.
I believe that with the transfer of sovereignty to an Iraqi government, it becomes absolutely crystal clear, even for those who might have had some doubts in the past, that it is imperative for anyone who wishes the Iraqi people well to come to their assistance at this moment of strategic opportunity.
You know, I mentioned at the beginning of the conversation that we see this summit as occurring at a moment of strategic historical opportunity. There is always a risk that a phrase like that is considered a cliché, but I think when one looks at where we are in the world economy, where we are in the Doha development agenda, where we are in the process of transfer of authority to the Iraqi people, where we are in the process of helping the Iraqi people with the reconstruction of their country, it becomes clear that it is a moment of strategic and historical opportunity, and it's going to be important for countries coming to Sea Island to decide whether they want to seize that moment or not. I think they will. I think it's going to be a very important summit that will break new ground, not only in this area but in areas related to the broader Middle East and North Africa, as well as our ongoing development agenda.
We very much look forward to receiving Prime Minister Koizumi and his delegation, as well as the other leaders. And I'm sure a number of you will be down in Savannah or close by, and we look forward to updating you on the progress that the leaders are making during the course of the summit.
Thank you.
MR. DENIG: Thank you very much, Mr. Secretary. Thank you, ladies and gentlemen.
