<html><body>Leave No Continent Behind: U.S. National Security Interests in Africa April 13, 2004 Unedited transcript prepared from a tape recording <TABLE width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="25%"> 8:45 a.m.</TD> <TD vAlign=top align=left width="75%" colSpan=2> Registration</TD></TR> <TR> <TD vAlign=top align=left width="25%"> 9:00</TD> <TD vAlign=top align=left width="75%" colSpan=2> Panel I: Islamic Fundamentalism, Terrorism, and Al Qaeda in Africa</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%"> Panelists:</TD> <TD vAlign=top align=left width="50%"> Douglas Farah, National Strategy Information Center</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="50%"> Phillip van Niekerk, G3</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%">Jonathan Schanzer, Washington Institute for Near East Policy</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="50%"> David Shinn, George Washington University</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%"> Moderator:</TD> <TD vAlign=top align=left width="50%"> Danielle Pletka, AEI</TD></TR> <TR> <TD vAlign=top align=left width="25%"> 10:30</TD> <TD vAlign=top align=left width="25%"> Coffee Break</TD> <TD vAlign=top align=left width="50%">  </TD></TR> <TR> <TD vAlign=top align=left width="25%"> 11:00</TD> <TD vAlign=top align=left width="75%" colSpan=2> Panel II: U.S. Strategic Engagement in Africa</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%"> Panelists:</TD> <TD vAlign=top align=left width="50%"> Gen. Carlton Fulford, USMC (Ret.), director, Africa Center for Strategic Studies</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="50%"> Florizelle B. Liser, assistant U.S. trade representative for Africa</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="50%"> Michael Westphal, deputy assistant secretary of defense for special operations and combating terrorism</TD></TR> <TR> <TD vAlign=top align=left width="25%">  </TD> <TD vAlign=top align=left width="25%"> Moderator:</TD> <TD vAlign=top align=left width="50%"> Thomas Donnelly, AEI</TD></TR> <TR> <TD vAlign=top align=left width="25%">12:30 p.m.</TD> <TD vAlign=top align=left width="25%">Luncheon</TD> <TD vAlign=top align=left width="50%"> </TD></TR> <TR> <TD vAlign=top align=left width="25%">1:00</TD> <TD vAlign=top align=left width="25%">Speaker:</TD> <TD vAlign=top align=left width="50%">Charles Snyder, assistant secretary of state for African affairs</TD></TR> <TR> <TD vAlign=top align=left width="25%">2:00</TD> <TD vAlign=top align=left width="75%" colSpan=2>Panel III: U.S. Energy and Commodity Interests in Africa</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Panelists:</TD> <TD vAlign=top align=left width="50%">James Burkhard, Cambridge Energy Research Associates</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%">David Hale, Hale Advisers LLC</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%">George Kirkland, ChevronTexaco</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%">Alex Vines, Chatham House</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Moderator:</TD> <TD vAlign=top align=left width="50%">Anthony Carroll, Manchester Trade</TD></TR> <TR> <TD vAlign=top align=left width="25%">3:30</TD> <TD vAlign=top align=left width="25%">Coffee Break</TD> <TD vAlign=top align=left width="50%"> </TD></TR> <TR> <TD vAlign=top align=left width="25%">4:00</TD> <TD vAlign=top align=left width="25%">Keynote Speaker:</TD> <TD vAlign=top align=left width="50%">Gen. Charles Wald, deputy commander, U.S. European Command</TD></TR> <TR> <TD vAlign=top align=left width="25%"> 5:30</TD> <TD vAlign=top align=left width="75%" colSpan=2> Adjournment</TD></TR></TBODY></TABLE> Proceedings: MR. DONNELLY:  Good morning to everyone.  My name is Tom Donnelly.  I am the resident fellow in Defense and National Security Policy Studies here at AEI, and it's really quite a pleasure to welcome everybody this morning to AEI and to our conference on U.S. national security interests in Africa entitled "Leave No Continent Behind." Before I begin, I should say I understand we're competing on C-SPAN today with the ongoing 9/11 hearings, and that strikes me very much as an appropriate parallel because in some ways today's conference would be unimaginable in a pre-September 11th world.  If somebody had told me on September 10th that AEI and that I would be organizing an all-day conference on Africa as part of our Defense Studies Program, it would have been counterintuitive, not to say entirely surprising, at least to me, because for the traditional defense policy community the phrase "U.S. national security interests in Africa" has been more or less oxymoronic for far too long.  But I think today's discussion will convince everybody that Africa does have very great strategic importance and that we ignore the continent at our peril. We're all still struggling, to one degree or another, to grasp what the full implications of the post-September 11th world are and the enormous changes the past two and a half years have wrought.  We're still trying to sort of fashion new mental maps, geostrategic maps of the world, and we still have a lot of Cold War mental baggage that informs those maps, in which Europe and the central German plains were sort of the center of gravity from a geostrategic point of view, but we need to adapt to a very different landscape, a different world that we're living in today.  We have to begin to learn anew, if we ever knew in the first place, how ancient caravan routes are of greater strategic importance than the German highway network was or how an American military base in Djibouti is equally important as an air base in Central Germany. We must account for the fact that the United States will soon import a greater slice of its oil from West Africa than from Saudi Arabia, and maybe most importantly, we have to understand that Africa, like Central Asia, like South Asia, like Southeast Asia, has got to be considered part of the greater Middle East. And that's the purpose of today's conference, to try to challenge some of our entrenched assumptions, to help us to think anew about the national security tasks that we face, and, in particular, the way we think about Africa. We do Africans no favors when we work to cure their diseases, to ease their hunger, but ignore their politics.  Africans have suffered from an epidemic of oppression, and they hunger for freedom and fundamental political rights just as much as anybody else on this planet. So, if nothing else, we hope we can provoke some new thinking about these issues.  I'd like to thank everybody for coming this morning.  I want to thank in advance all the distinguished speakers and panelists.  We've put together, I think, a really fine roster of experts, and we're going to cover the waterfront of topics during the course of the day.  In particular, I want to thank General Charles Wald and the folks from European Command who have been really essential in helping us pull this together.  But for their help and his presence, we wouldn't be here today. So, without further ado, I'd like to turn the microphone over to my colleague, Dani Pletka, who's my boss and AEI's Vice President for Foreign and Defense Policy, who will lead the first panel discussion on the threat of Islamic fundamentalism, terrorism, and al Qaeda in Africa.  Dani? MS. PLETKA:  Thank you very much.  Well, I guess I don't have to introduce myself, which is the thing I'm always reminding myself to do. Our first panel is on Islamic fundamentalism, terrorism, and al Qaeda in Africa.  As Tom mentioned in his introduction, when we talk about the war on terrorism, we often leave off a word, which is that it is the global war on terrorism.  And, in fact, the globe is not just the Middle East.  It isn't even just Muslim countries.  It includes every area, and, in particular, it includes what we can call the gray areas of the world, areas where governance is not strong, where there are pockets that can be taken over lock, stock, and barrel, by terrorist groups like al Qaeda, like Hezbollah, and others where they can grow businesses, they can set up networks, and they can operate with impunity under very lax legal systems, without great law enforcement. This is, in fact, an area of the world which seems to provide great opportunities to terrorist groups, and I think that they have seen it.  Luckily, as we will learn today, I think that we have also seen the opportunities.  We really cannot begin to say that we are fighting al Qaeda and fighting terrorism unless we consider Africa as a battleground in that war. I'm going to introduce our panelists.  Each of them is going to be covering a slightly different topic, and I will tell you what that is, with apologies to them if, in fact, it's not strictly accurate.  But we have with us today a really distinguished group. Starting on the end here, Doug Farah is a senior fellow at the National Strategy Information Center.  Before joining NSIC in January of this year, he spent 19 years as a foreign correspondent for the Washington Post and other publications, reporting on conflict zones across West Africa and Latin America.  In November of 2001, he broke the story of al Qaeda's ties to the West African blood diamond trade.  He will be talking today about al Qaeda finance and money laundering in Africa, and especially his investigation of the diamond trade. Phillip van Niekerk is a founder and managing director of the North American Division of the Good Governance Group, a risk assessment company that focuses on the investment environment in Africa, the Middle East, and Russia, and he will be talking today about the threat of Islamic radicalization in northern Nigeria. Jonathan Schanzer is the Soros Fellow at the Washington Institute for Near East Policy, and he is currently working on a study entitled "Al Qaeda's Affiliates:  Exploiting Weak Central Authority in the Arab World."  He's going to be talking about Algerian Salafists and the Islamic terrorism in Northern Africa. Ambassador David Shinn spent 37 years as a Foreign Service officer throughout Africa and elsewhere.  He served as Ambassador to Burkina Faso and Ethiopia.  He was the State Department coordinator for Somalia during the UN intervention and director of East African Affairs from '93 to '96.  He is now an adjunct professor in the Elliott School of International Affairs at George Washington University, and he will be talking about the threat of terrorism in the Horn of Africa. Without much further ado, we will turn to our panelists.  What we're going to do is just go straight down the line, if everybody would hold on to their questions for the end, when we will have a good chunk of time for questions and answers.  And if I may just ask everybody as a courtesy not only to people watching on C-SPAN but to all of your colleagues here, if you would just put your cell phones on vibrate. Without further ado, Doug, thank you. MR. FARAH:  Well, thank you for the opportunity to talk with you today about the extremely important issue of terrorism in West Africa.  I accidentally stumbled on the ties between al Qaeda and the blood diamond trade shortly after 9/11.  Since then, I have continued to work with several people in groups that have uncovered much of what we know about that trade and their ties to terrorism.  These includes the prosecutor and chief investigator for the UN-backed Special Court for Sierra Leone; Global Witness, a London-based NGO monitoring the blood diamond trade; and members of different monitoring groups in the United Nations.  Our discussion today is based on those series of investigations. We have talked to multiple sources who sat at the actual meetings with the al Qaeda operatives in Sierra Leone and Liberia where diamond deals were struck.  We have spoken to minors in the Bush who spent time with the terrorists, and we have spoken to those who escorted them to the meetings with senior Liberian officials and their allies of the Revolutionary United Front is neighboring Sierra Leone.  The RUF is a particularly unsavory group of people known internationally for their signature atrocity:  the use of machetes to amputate the arms, legs, ears, and lips of men, women, and children, often as young as two years old.  They carried out a systematic campaign of rape across much of their country and recruited their troops by kidnapping thousands of children, turning them into killing machines.  We have identified at least four senior al Qaeda operatives who dealt with the RUF in the three-year period prior to 9/11. I say this only to give you a sense of where the information comes from because some of the intelligence community continue to say their information cannot be corroborated. We know there are at least two international terrorist groups operating in West Africa:  Hezbollah, which has longstanding historic ties to the Lebanese diaspora centered in Abidjan, Ivory Coast, and dominating trade throughout the region; and al Qaeda, which has had an interest in the regional diamond trade that extends at least back to the mid-1990s. Why would a group like al Qaeda choose West Africa as a place to operate?  There are multiple reasons, but one of the most important factors is that in states such as Liberia and Sierra Leone, and many others in the regions, governments are weak, corrupt, and exercise little control over much of their national territory.  And some states, like Liberia under Charles Taylor, became, in essence, functioning criminal enterprises.  For the right price, Taylor let al Qaeda, Russian organized crime, Balkan organized crime, Hezbollah, and other criminal elements operate under his protection for many years. There is a wealth of documentary and anecdotal evidence that al Qaeda sought to exploit the diamond business not only in West Africa but also East Africa and Europe.  One of the most interesting confirmations of bin Laden's personal interest in the West African diamond trade came in November 2003.  Sheikh Abdul Mamour, a radical Senegalese Muslim cleric, who was expelled from Italy for supporting al Qaeda, was asked by reporters if he had ever met bin Laden.  "Yes," Mamour replied, he had met bin Laden three times between 1993 and 1996.  The reason, he said, was that bin Laden was financing Mamour's diamond business, which he said "consisted of selling diamonds between West Africa and Belgium." There appear to have been two phases in al Qaeda's diamond activities.  The first started at some point before 1996 when Mamour was involved, when bin Laden lived in Sudan, and it appears that this activity was aimed at financing the al Qaeda organization.  This lasted until the end of 2000.  Some of the evidence has been provided by Wahdi al-Hage, bin Laden's personal secretary, until he was arrested in September 1998.  During his trial, al-Hage's files of business cards, personal telephone directories, and handwritten notebooks were introduced as evidence.  The notebooks contain extensive notes on buying diamonds and chronicle his attempts to buy and sell gemstones across Africa and Europe.  There's a page on Liberia with telephone numbers and names.  His address book and business card file were full of the names of diamond dealers and jewelers, often including the purchasers' home phone numbers. Unfortunately, U.S. and European intelligence agencies paid little attention to what was viewed as secondary documents in this phase of the trial when it happened in 1998.  Most of al-Hage's notebooks, written in Arabic, have still not been translated into English.  Those that we have, we paid for the translation ourselves. It is not clear how profitable al Qaeda's diamond ventures were during this period.  Al-Hage and others did not keep sales records.  But the first known contacts with the Taylor regime came in September 1998, just weeks after the bombing of two U.S. embassies in East Africa.  A group of senior al Qaeda leaders involved in those attacks moved to West Africa, where they intermittently bought diamonds for the next two years. Al Qaeda did not stumble blindly into Liberia in the hopes of acquiring diamonds.  They used their contacts in the region, including a Senegalese soldier of fortune who had fought with the Mujahedeen in Afghanistan in the mid-1980s.  He had been trained in Muammar Qaddafi's terrorist training camps in the early 1980s and then when on to Afghanistan.  When he returned to Libya, he then went on to fight with Hezbollah in Lebanon.  He returned to Libya in the late 1980s and became the personal instructor to the cadre of West African leaders who had wreaked havoc on the region:  Charles Taylor in Liberia; Foday Sankoh in the RUF; Blaise Campaore in Burkina Faso, and others.  In 1998, Bah was a general in the RUF as well as Taylor's chief gatekeeper for diamond dealings.  You could only do business in Liberia if you went through Ibrahim Bah.  He set up al Qaeda, as he did others who could pay the opening price of $50,000 for a piece of the action there. Since Taylor controlled Liberian immigration, the al Qaeda operatives were able to come and go unhindered.  He also used his country to issue airplane registration to Victor Bout, one of the world's largest illegal weapons dealers.  By registering his airplanes in Liberia, Bout was able to fly his aircraft without questions being asked or inspections being conducted.  Bout was later discovered not only to be selling weapons to all sides of most civil wars in Africa, but also to the Taliban and the Northern Alliance in Afghanistan.  He often took his payment in diamonds. The picture of al Qaeda operations in West Africa changes dramatically toward the end of 2000 when senior al Qaeda operatives arrived in Monrovia, Liberia.  They set up a monopoly arrangement for the purchase of diamonds through Taylor with the RUF.  Then al Qaeda buyers went on a spree that lasted several months.  But here the intention was not to make money but, rather, to buy the stones as a way of transferring value from other assets.  This is in the months immediately prior to 9/11 when the terrorists were moving their money from traceable financial structures to commodities in preparation for the aftermath of the attacks.  To do this, the al Qaeda operatives were paying a premium over the going rate for uncut stones coming out with the RUF, leaving the regular buyers without any merchandise. The pace of the purchases picked up beginning in January 2001 and lasted until just before 9/11.  Telephone records from the middlemen handling the purchases show calls to Afghanistan until September 10, 2001.  The available evidence points to al Qaeda purchasing some $30 million to $50 million worth of RUF diamonds in the eight months prior to 9/11. Hezbollah operates in a more institutional manner in West Africa where it has been operational almost since its birth in the early 1980s.  Because of the hundreds of thousands of Lebanese in West Africa, the vast majority being Shiite Muslims, the organization has a natural constituency and family ties that bind the region to the Lebanese conflict.  Hezbollah collects donations from businesses, runs shakedown operations, operates front companies, and is also deeply involved in the blood diamond trade. For a glimpse of how much money Hezbollah raises in the region, consider one recent case.  On December 25, 2003, a flight from Cotonou, Benin, to Beirut crashed on takeoff.  On board were senior Hezbollah members carrying $2 million in cash and contributions to the organization from across the region. In the diamond trade, Hezbollah operates in Sierra Leone, Liberia, and the Democratic Republic of the Congo.  These three countries all provided diamonds as a revenue stream to all factions of the Lebanese civil war.  Hezbollah remains the strongest of the groups involved in the trade. I spoke with Hezbollah loyalists in the diamond trade in Africa, and in one of the most unusual twists, these same merchants do business with Israeli diamond merchants.  The war, they explained to me, is in the Middle East while business is in Africa. In short, al Qaeda and Hezbollah have maintained an active presence in West Africa for a significant period of time.  Al Qaeda does not appear to have an extensive infrastructure in West Africa; rather, the group was able to take advantage of the setting in context to further its cause. I concur with General Wald, who will be speaking later today, who was recently quoted as saying that, "In West Africa, there are signs that al Qaeda may be gaining a foothold.  They are there for a purpose, whether looking for real estate or recruiting or looking for arms.  Whatever it is, there's a presence," General Wald was quoted as saying.  "It may be small, but it's an indicator." Hezbollah uses the region extensively to raise funds, recruit new members, and launder money.  Because it is part of a large community, its presence there is much greater than that of al Qaeda's and more institutional.  Because of that, it is both easier to identify and more difficult to uproot. There are encouraging signs the United States is becoming more serious about dealing with the terrorism threat in Sub-Saharan Africa.  A first step must be to greatly enhance human intelligence on the ground.  Societies in which telephones are rare, Internet communications limited to a small percentage of the population that lives in the capital, and business deals depend largely on familial relationships, our high-tech monitoring systems are of little use.  People must be on the ground, not just in the capital but in the hinterland, to be able to map the connections and trace the financial patterns that can be used by terrorists. The conditions that favored al Qaeda in West Africa--corruption, conflict over natural resources that are little studied or understood, the lack of government control over vast areas, the emergence of sophisticated criminal networks--all continue to exist.  These failed states or stateless regions are the ideal operating ground for terrorists and other groups that pose significant threats to the U.S. national security interests and the stability of Africa. Thank you. [Applause.] MR. VAN NIEKERK:  Thank you.  I think the fact that we are gathered here today at all is part of the growing acceptance that Africa matters in a very fundamental way to the United States, and not only and no longer just from a humanitarian perspective.  Africa's expanding oil and gas production as the U.S. seeks to diversify its sources of energy and indications that terrorist movements have found sanctuary and bases in the failed states of the continent should be of major strategic concern to any U.S. administration. We tend to see Africa as being on the periphery of the global war on terrorism, yet the continent has become a critically important theater in the conflict, inextricably linked to the turmoil in the Middle East.  The embassy bombings in East Africa in 1998, Sudan's role in incubating the nascent al Qaeda organization, Somalia's connections to terrorism, and the role of North Africans in the Casablanca and the Madrid attacks have all been headlined.  Less well publicized in recent months is the fact that a new front is opening in West Africa. Three weeks ago, the U.S.-European Command helped the governments of Niger and Chad track down and kill members of the Salafist Group for Call and Combat, believed to be a splinter of Algeria's Armed Islamic Group with links to al Qaeda.  The conflicts of West Africa and the Sahel are uniquely prone to al Qaeda-type franchising operations in which local grievances and criminality--because many of these groups are, at root, bandits and smugglers--drive a broader agenda. Many West African governments simply do not have the means to stop terrorists operating within their borders.  A very pro-U.S. Government in Mauritania was unable to prevent fighters from Afghanistan finding sanctuary in the country after the U.S. invasion and overthrow of the Taliban government in 2001. West Africa I think is becoming part of a broader network in which recruits can be deployed in and out of hot spots, say Darfur and southern Sudan, as well as providing a fallback position for fighters from the conflicts in the Middle East and potentially for the attacks in Europe. Through much of West Africa, people talk about Pakistanis who have sought sanctuary and recruited amongst local populations.  Conflicts in the Sudan, Mauritania, Sierra Leone, Guinea, Liberia, Ivory Coast, and now in the Sahel are acquiring stronger and deeper religious undertones.  But we have to remember this is not a war against Islam, and that West Africa, apart from the coastal areas, is predominantly Muslim.  Yet the spread of and development of Islam through West Africa is a story of civilization itself on the continent. It is important also, I think, to remember that the Islam of West Africa, aside from a few pockets of militancy, is traditionally accommodating and tolerant and, in fact, very African, and that an important partnership can be sought and won between the United States and the majority in Africa.  However, I think we're reaching a very important tipping point right now.  For decades, Islamic charities, based largely in Saudi Arabia, have been underwriting the spread of a very radical anti-Western message through local Islamic schools and by bringing scholars to Saudi Arabia. Historically, we have tended to see Africa through the paradigm of the colonial and post-colonial periods, which were not robust times for Islamic movements inside Africa.  The intellectual and ideological forces that drove the anti-colonial struggles were nationalism, socialism, and pan-Africanism.  Today, in universities throughout West Africa, Muslim militants have replaced the disciplines of Marx and Krumer (ph) and Nassar.  At the same, amongst ordinary people the return to faith is an incredible phenomenon, and it is not just Islam that is resurgent.  Africa is the world's largest center of growth for Christianity.  The Evangelical and Pentecostal movements of West Africa are spreading like wildfire.  The main highways of Lagos, Accra, Ibadan, sprawling cities of West Africa, are littered with billboards advertising church services and pastors and routes to salvation.  German, American, Swiss missionaries are having a field day with converts, while radio stations adroitly use the airwaves to spread the word of God. The extraordinary growth in the expression of religious sentiment in Africa is an attempt by desperate marginal people to bring some meaning, some hope, and, most crucially, some order into their lives.  However, the combination of weak secular states, disaffected youth with no other way of bettering their lives, the more rigid and doctrinaire form of Islamic teaching, and radical international Islamic movements that speak to their anger is a lethal mix and a challenge to these societies.  Nowhere is this more apparent than in northern Nigeria. To talk about West Africa as one region made up of equal parts today is to misconceive the region.  Nigeria alone has an estimated 133 million people, just less than half of the entire population of the Sahel and the West African coast down to the Cameroon, inclusive.  Almost half of all Nigerians are Muslims.  It's a vast population. Similarly, when we talk of Africa's oil wealth, Nigeria dwarfs the rest.  Of the 3.4 million barrels currently flowing from West Africa every day, more than 2 million are produced in Nigeria.  Nigeria holds about 60 percent of the region's oil wells.  It is a member of OPEC and the political and military key to the West African region.  Yet it is a country that, according to all indicators of poverty and underdevelopment, is going backwards. Despite the infusion of oil wealth, Nigeria is in a state of deep crisis.  If we are to take Africa seriously strategically, Nigeria has to move to the front of the queue.  This is where one encounters the scenario that Cofer Black recently painted.  We are seeing not just a criminal group or groups that can be rooted out, but a movement within an ideology and many followers. Islam in Nigeria has many strands and a tangled history that divides into different shades of religion, political, tradition, and Islamic brotherhoods.  Traditionally, Nigeria's Muslims have been pragmatic.  When the British colonized the emirates of Sokoto and Kano in 1903, the defeated leadership submitted outwardly, yet retained their loyalty to Islam.  The British created the system of indirect rule in which the leadership retained its traditional prerogatives under the British flag. It is important to remember for the current debate in Nigeria that Shariya law and Islamic courts maintained wide jurisdiction during the British colonial period.  But the Islamic faith was never the defining element of the political identity of Nigerians.  This has changed in recent years in northern Nigeria, where a dogmatic and anti-Western outlook has taken root. From the late 1970s, Iranian militants preached a radical Islamist message and picked up scores of adherents.  Wahhabists from Saudi Arabia came in and set up religious schools, paid for by Muslim charities, devoted to preaching an equally hostile anti-Western message.  So conspiratorial and hostile has the view of the West become that some Muslim clerics in northern Nigeria have urged people not to take the polio vaccine because they say the medicine is a Western plot to render girls sterile and is contaminated by the HIV virus.  The result is that a disease that was almost completely defeated is starting to spread once more. In early January, a group calling itself the Taliban rose up in Yobe State, burning government buildings and a police station.  The police and soldiers quickly suppressed the uprising, leaving more than a dozen dead. The growth in militancy is further fostered by the relationship of Muslim communities to their Christian counterparts.  In recent years, there have been increasingly violent clashes between Muslims and Christians that started out at intercommunal pogroms.  One of the issues prompting this is the upsurge in Christian missionary activity in territory which Nigerian Muslims regard as out of bounds and the opposition by Christians to the imposition of Shariya law. The Afghanistan war and the September 11th attacks in the United States led to violent clashes in which Muslims waved banners of Osama bin Laden and Christians flew the American flag.  Churches were burnt and several hundred people died.  I was told in Nigeria last year that the only reason that this was not repeated when the war in Iraq began was because both communities opposed the war. It is important to realize that Nigerians closely follow world events and have strong views on the war in Iraq and the Israeli-Palestine conflict as well. The security threat from the militancy is diminished by the fact that they are in the north and far from the oil fields in the delta and the deep waters of the Gulf of Guinea.  In fact, the civil conflict in Wari (ph) in the delta between the Itzikeri (ph) and Ijo (ph) as well as illegal bunkering by criminal elements, both of which are entirely unrelated to religious strife, are far more immediate security concerns to oil production than the rising militancy of the north.  However, the threat that this militancy poses is potentially even bigger than this. In 2003, after the bombings in Saudi Arabia and Morocco, al Qaeda released an audiotape in which Osama bin Laden identified Nigeria as one of six countries ripe for liberation from the tyranny of the United States and their own  (?)  state governments.  In calling for an uprising against the government in Nigeria, bin Laden showed his hand.  Al Qaeda has marked up some very ambitious plans for Nigeria.  They want to contest the state power.  This is very unrealistic.  As a minority, al Qaeda adherents will face strong and potentially bloody opposition from the rest of the country, Christians and Muslims alike.  But what is of concern is that the Nigerian state is fragile, and law and order is not as firm as it could be.  Only last week, there were reports of a coup plot involving a former senior official of the Abacha regime. Nor is Nigeria in a very secure neighborhood.  Two other neighboring oil-rich states, Equatorial Guinea and Sao Tome, witnessed real coup attempts in the past year.  And oil wealth is exacerbating rather than smoothing over the tensions in these societies. Furthermore, in Nigeria, the Islamist agenda is feeding off the grievance of the north.  Historically, northerners, with their strong representation in the military, provided the ruling elite in Nigeria.  However, since the return to civilian rule in 1999, the far north has felt increasingly disenfranchised and expressed its dissatisfaction when 12 out 36 federal states reverted to Shariya law, in total disregard of the country's constitutional order. In last year's presidential elections, Muhammadu Buhari, the challenger to President Obasanjo, made much of his Islamic credentials.  And though he lost countrywide, he did have majority support in the north. The danger is that increasingly the north feels marginalized and identifies its woes as part of the struggle for an Islamic as opposed to a Nigerian or a northern identity.  How one counters these trends is a huge challenge. The U.S. is providing increased security to weak states through, for instance, the Pan-Sahel Initiative.  As has been seen in wars in countries such as Sierra Leone, Liberia, and Cote d'Ivoire, it took only a few truckloads of AK-47s and grenade launchers to tip countries into chaos and anarchy, and only a handful of properly trained soldiers to restore stability. However, while operations against rogue bands in the desert are important, they do not approach the complexity or the strategic relevance of the problem that is brewing further to the south.  What is required is a long-term commitment to helping Africa in general and Nigeria in particular build itself into a healthy and true partner of the Western world and the United States, a commitment that cannot change or waver with administrations in Washington.  As in any area in the world where foreign powers intervene, the politics are delicate and have to be carefully managed.  There is a natural suspicion on a continent that has been subject to foreign invaders and colonialists for centuries.  Admiration for the U.S., witnessed by the long lines in visa queues at the American consulate, even affection for America, is tempered by resentment of U.S. wealth and power. Probably the most immediate area that needs to be improved in this region is the U.S.'s intelligence capability.  It is shocking that, given the strategic importance of northern Nigeria, for instance, there is no U.S. diplomatic presence in the area. The conflicts of Africa are extremely complex.  If one views them only through the prism of the war on terrorism, local elites can use their proclaimed opposition to al Qaeda as a means of getting the U.S. to overlook human rights abuses or to ignore other legitimate causes of conflict.  It is not hard to see how conflicts in which religion is one underlying theme can be made to appear crudely as if they are simply the creation of al Qaeda to the exclusion of all else. For instance, the Ivory Coast, which is teetering again, after the alleged slaughter of hundreds of dissidents by the Gbagbo regime last month, might very well develop into a Christian-Islamic conflict, exploited by Islamist networks.  But, in reality, there are deeper causes of the war, such as the attempts by the largely Christian majority in the south to denationalize the population in the north and individual power struggles and political ambition within the ranks of the government, the opposition, and the insurgents. I mention Ivory Coast also because there is much scope for working with other European powers, such as the French and the British, who have a long history and knowledge of West Africa.  There is no room for competition because it is in everyone's interests that the secular states of Africa survive, find peace, and prosper. In the case of northern Nigeria, the U.S. simply does not have a military option, and in the long run, there is only one way to go, and that is to systematically tackle the corruption that is weakening the state and helping create the poverty and social disorder that is being exploited by the militants. One last little--there is now a historic opportunity to support President Obasanjo, who in his second and last term is making anti-corruption his flagship issue.  African governments through the NEPAD Initiative are also calling for assistance based on good governance.  There is no more important issue for ordinary Nigerians in the street and no easier way for the U.S. to show its good faith and to wholeheartedly support these initiatives and use muscle in helping fashion a new way of doing business.  I would call this approach "draining the swamp." At the same time, the U.S. and others can help improve the capacity of Nigeria and others in West Africa to enforce law and order inside their own borders.  It's not easy and it's only a start, but it's something.  And I have a sense that people here are waking up to Africa very late in the game.  The U.S. neglects this growing threat at its peril. Thank you. [Applause.] MS. PLETKA:  Thank you.  I've cultivated a reputation for ruthlessness as a moderator that I've now lost.  But I think our speakers are going a little bit longer than they normally do today, and I'd like to beg everybody's indulgence.  I do think that the topic deserves it and is very interesting.  So we'll try and keep it to 10 to 15 minutes maximum, and that way we'll have time for questions and answers. AMBASSADOR SHINN:  East Africa and the Horn, and I include in that Kenya, Tanzania, Uganda, Somalia, Ethiopia, Eritrea, Djibouti, Sudan, are located at the vortex of Islamic fundamentalism, terrorism, and al Qaeda activity in Sub-Saharan Africa.  Terrorists killed 16 people in 1980 at an Israeli-owned hotel in Nairobi.  Al Qaeda-sponsored attacks destroyed the U.S. embassies in Tanzania and Kenya in 1998.  They bombed an Israeli-owned hotel north of Mombasa, Kenya, in 2002, and just missed bringing down a chartered Israeli aircraft in the same incident.  The 2002 attacks near Mombasa have been linked to an al Qaeda cell operating out of Somalia. Sudan has a history of attacks such as the 1973 assassination by Black September in Khartoum of the American Ambassador and Deputy Chief of Mission and a Belgian diplomat.  Sudan also once supported international terrorist organizations.  Osama bin Laden and his deputy lived in Sudan from 1991 to 1996.  Egyptian-based Gamat-al-Islamiyah failed in its attempt to assassination Egyptian President Mubarak in Addis Ababa in 1995. There have been many more terrorist incidents in nearly all of these countries that were perpetrated by local groups for internal political purposes.  There are several reasons why this region has become so impacted by international terrorism.  During the last 50 years, most of the countries have experienced significant internal conflict and instability.  Only Tanzania and, to some extent, Kenya have managed to avoid long-running internal instability or a war with a neighbor.  But even Tanzania once joined Ugandan dissidents to overthrow the Idi Amin regime in Uganda.  Such a security climate is disruptive and makes it easy to procure weapons used by terrorists. Poverty and lack of development are omnipresent in the region.  It seems to be politically correct in recent years to suggest that poverty and terrorism are not related or perhaps only marginally related.  This is nonsense.  Poverty provides an environment that better educated and more prosperous terrorist leaders can exploit, and they do exploit it. In addition, corruption is rampant in some of these states and a serious problem in the remainder.  This makes it easier for terrorists to conduct surreptitiously their nefarious deeds. Governments in the region exercise limited control over some of their territory.  Somalia remains a vacuum that is open to any terrorist with initiative and money.  Sudan is still trying to end a civil war that resumed in 1983.  Uganda has been unable to eliminate the Lord's Resistance Army in northern Uganda.  The security and intelligence services in all of these countries are underfunded and ill-equipped to counter committed terrorists.  The same can be said about American diplomatic and intelligence resources in the region.  Most of these states are located across from and have close links with the Arabian peninsula, the source of most of today's Islamic militants. It is easy to move between the Gulf States and East Africa and the Horn by air and sea.  The lengthy coastline from Eritrea to Tanzania is poorly monitored.  The borders between these states are porous.  Chairman of House Africa Subcommittee Ed Royce, in a briefing two weeks ago on terrorism in Africa, described the entire continent as "a soft underbelly in the war on terror."  If the continent is the soft underbelly, East Africa and the Horn constitute the navel.  Nearly all of the international terrorism in the region has links to Islamic groups. All of these countries are either predominantly Muslim or have important Muslim minorities.  Sudan, Somalia, including self-declared Somaliland, and Djibouti are predominantly Muslim.  Ethiopia and Eritrea are about 50-percent Muslim.  Kenya, Uganda, and Tanzania have significant Muslim minorities, while Tanzania's islands of Zanzibar and Pemba are overwhelmingly Muslim. It is true that Muslim Sufi sects, which tend to resist the philosophy of Islamic fundamentalism, are strong throughout the region.  But it only takes a small number of local sympathizers to accommodate the plans of international terrorists who operate in the area and are relatively well financed. Financing of terrorism in East Africa and the Horn comes from a variety of sources, but high on the list are the charities sponsored by Saudi Arabia and some of the Gulf States.  The money for these charities comes from private individuals and governments.  In the case of Saudi Arabia and, to a lesser extent, Qatar, the charities are closely linked with efforts to promote their fundamentalist Sunni Islam known as Wahhabism.  The Saudis prefer to use the term "Salafism," which has shed some of the extreme beliefs of Wahhabism, although the latter term continues to predominate in the media. Saudi Arabia created the state-financed Muslim World League in 1962 to promote its Wahhabi pan-Islamic vision and ideology.  The league finances mosques, schools, libraries, hospitals, and clinics.  Saudi Arabia's Grand Mufti, its highest religious authority, serves as President. I'm going to skip over parts of this for the sake of time, and my remarks are online, so I'd rather reserve more time for Q&A.  I might be a little bit disjointed from this point forward, but I do want to be sure we hear from you. These Saudi and Gulf State charities have been active in East Africa and the Horn for years.  In addition to encouraging fundamentalist Wahhabi beliefs, building mosques, and implementing useful social programs, some of their branches have funneled money to al Qaeda and associated terrorist organizations, and I document that in my remarks. The Muslim World League has an office in Kenya, for example, and the World Assembly of Muslim Youth conducts occasional activities there.  Following the 1998 bombings of American embassies in East Africa, the Kenyan Government de-registered the local offices of the International Islamic Relief Organization and Mercy International Relief Agency for alleged connections with terrorists.  Several months later, the IIRO resumed activities following approval from the Kenyan Government.  Before the U.S. and Saudi Arabia sanctioned the Al-Haramain branch in Kenya, the Government of Kenya had revoked the office's registration, a move quickly to overturned by Kenya's high court. Three Kenyans are currently being tried for plotting to bomb the U.S. embassy in 1998 and conspiring to attack the new American embassy several years later.  Four other Kenyans have been charged in the terrorist attack on the Israeli-owned hotel outside of Mombasa. The situation in Kenya is complicated by a Muslim minority, perhaps as small as 10 percent of the population, which strongly supports the activities of the Islamic charities and is generally hostile to the United States. Uganda has not been the focus of Wahhabi-related activity.  This may be due to influence in the country by Libya, which supports an ideology that competes with Wahhabism.  The Muslim World League had and may still have an office in Uganda.  The World Assembly of Muslim Youth, which has a representative in Uganda, held in 2003 a course for imams in Jinja, a course that emphasized Islamic training for youth.  Terrorist incidents in Uganda in recent years have been linked to local groups. Ethiopia has experienced more than its share of terrorist attacks, but except for the attempt on the life of President Mubarak, they have been linked to local groups and al-Ittihad in neighboring Somalia.  Although Wahhabi charities such as Al-Haramain and IIRO have been active in Ethiopia, they seem to have focused their efforts on propagating the faith, including the building of Koranic schools and mosques and providing emergency aid.  Some of the practices they encourage, such as destruction of tombstones and burning of non-Wahhabi mosques, have incurred the wrath of the moderate Muslim majority. Ethiopia's Supreme Council of Muslims continues to struggle with Wahhabism among its ranks.  Eritrea, which is located across the Red Sea from Saudi Arabia, seems to have avoided significant Wahhabi attention.  Al-Haramain established a medical center in Eritrea.  During the mid-1990s, the Qatar charitable society reported funded the Eritrean Islamic Jihad Movement, which carried out attacks against Eritrea from neighboring Sudan. Wahhabi activity has also been limited in Djibouti, although the leadership is linked to Al-Islah, an organization engaged in school and clinic construction, and receives funding from Saudi Arabia and the Gulf States. Djibouti has requested additional assistance from the Muslim World League to fight illiteracy and hunger, and the World Association of Youth has a representative there.  Djibouti also serves as the headquarters for 1,800 American personnel assigned to the combined Joint Task Force Horn of Africa, which coordinates counterterrorism operations in the airspace and land area of the region. Sudan is the only country in the region that tried during the 1990s to export Islamic fundamentalism and for years allowed terrorist organizations to operate there.  Sudan has not, however, been fertile ground for Wahhabism.  Although Osama bin laden and his deputy lived in Sudan, bin Laden had poor relations with Saudi Arabia at the time.  The House of Sahd also disliked Hasan al-Turabi, who was influential in Sudan's government until President Bashir removed him in 1999.  Al-Haramain, the Qatar charitable society, and WAMY have had modest programs there. Somalia, because it remains a failed state, offers the largest challenge to those who want to rein in terrorism in the region.  Neither Somalis nor their predominantly Sufi form of Islam are natural allies of Islamic fundamentalism.  A broken state, the temptation of receiving funding for personal or community gain, and the education of a small number of Somalis in fundamentalist institutions outside the country have created the problem. Two Somali Islamic fundamentalist organizations, al-Ittihad and Al-Islah, have ties to Wahhabism and receive funding from Saudi Arabia and the Gulf States.  The more dangerous of the two is al-Ittihad, which has been on the U.S. terrorist exclusion list since 2001.  It has had contact with al Qaeda and probably received some al Qaeda training, although the degree of cooperation between the two organizations is in dispute.  The Muslim World League, IIRO, and Al-Haramain have been implicated with al-Ittihad, which conducted a number of terrorist attacks against Ethiopia in the mid-1990s.  Al-Ittihad also builds schools and mosques, provides free lunches, and supports Islamic courts.  The U.S. believes al-Ittihad had ties with Al-Barakat, the Somali money transfer company whose assets were seized in 2001 for alleged cooperation with al Qaeda.  Al-Islah, a more benign organization, supports Islamic schools and courts, clinics, vocational training at Mogadishu University. Self-proclaimed independent Somaliland has recently experienced terrorist.  In the early 1990s, al-Ittihad had a foothold in Las Anod in the southeastern part of the country.  They were forced out.  The government of Somaliland is uneasy with Wahhabi activity and had poor relations with Saudi Arabia, although it has permitted a representative of Al-Haramain to operate in Burau.  Somaliland seemed to be free of terrorist activities, but the assassinations since last fall of an Italian doctor, two British aid workers, and a Kenyan working for a German NGO have caused the government to conclude recently that either al-Ittihad or al Qaeda was behind these attacks. Because these charities perform useful work, at least for Muslim communities, their forced closure often results in a negative reaction, as happened in Kenya.  Many Somalis reacted the same way after the United States and Saudi Arabia shut down the Al-Haramain operation, which supported more than 2,000 orphans.  The orphanages closed, angering many Somalis and creating new enemies for the United States.  Some way needs to be found to cut off the money for the terrorists while not exacerbating local social problems. African governments in the region must bear the primary responsibility for curbing terrorism.  They know the different cultures, and they speak the local languages.  How many American soldiers and civilian experts on terrorism speak fluent Swahili or Somali and have a solid understanding of the different cultures in Somalia or along the Swahili coast of Kenya and Tanzania?  Precious few, you can be sure.  It is unrealistic for Americans, or other non-Africans, to enter that environment and expect to deal successfully with terrorism.  In order to make significant progress, however, the local governments require significantly increased financial assistance and training to improve their intelligence and security capacity, reduce corruption and poverty, and increase economic development in areas where international terrorists now thrive. House Africa Subcommittee Chairman Royce emphasized at the recent hearing on terrorism in Africa that the U.S. needs to devote more resources for counterterrorism in Africa.  He is correct.  In some cases, African leaders in the region must reassess and redistribute their scarce economic development resources to areas that now provide a receptive environment to Islamic extremists.  Without more assistance from wealthier nations, however, the challenges from international terrorism in this region will only increase. Thank you. [Applause.] MR. SCHANZER:  I want to thank AEI for holding this important event.  I've been following the activities of two Algerian al Qaeda affiliates for the last couple of years and have been wondering why there hasn't been more attention on these two groups in particular.  That's the Armed Islamic Group, otherwise known as GIA, and the Salafist Group for Preaching and Combat, otherwise known as GSPC. I've been looking at these two groups, as well as five others that are active within the Middle East, as some of the al Qaeda affiliates that we need to be watching for in the years to come. I should just note right off the bat that studying the GSPC in particular, which is the most active of the two groups in Algeria, was extremely difficult.  Working from the Algerian press, we get very murky reports.  There's a lot of disinformation, a lot of propaganda.  So it's very hard to separate the truth from what is publicized. I tried to rely on other Arabic newspapers, and that didn't exactly help me a whole lot more.  There's a lot of disinformation being provided to other journalists who are in Algeria as well. There was a little bit of academic work that has been done on the GSPC.  One good analyst is Quintan Wiktorowicz of Rhodes College.  He's done some good work on the GSPC.  But, surprisingly, actually, there wasn't a whole lot of information within the policy community, so I really felt that when I set out to begin to study the GSPC, I was doing it rather blind. I'm glad to see that there is an interest now, and I think that it will be increasingly important to study the GSPC in particular because of the changing nature of al Qaeda itself.  We heard recently from Director of Central Intelligence Tenet a few weeks ago on the Hill about how affiliate groups and splinter groups will really make up the bulk of al Qaeda activity in the years to come.  I really believe that local groups such as the GSPC, along with two others--Ansaro (ph) Islam and Iraq, and Jemaah al-Islamiyah in Southeast Asia--these are probably the big three.  So, as I said, I was very happy to be able to talk about this group today. In order to address the GSPC, I think it's important to just look very quickly at the history of al Qaeda activity in Algeria.  It's safe to say that Algeria was one of the original hubs for al Qaeda in its early years.  A lot of Mujahedeen found refuge there.  People who were Algerian that had fought in the Afghanistan war came back to Algeria and set up groups within the country.  The reason they were able to do it is they were able to exploit the weak central authority.  There was, of course, a civil war underway beginning in 1992.  We don't need to get into that history here today.  But they were able to exploit that weak central authority.  When you have a weak government, you're able to set up terrorist cells and networks. So that first presence actually evolved into what is now known today as the GIA, the Armed Islamic Group.  According to a book by Abu Hamsel Amasry, an al Qaeda spokesman, the GIA was created in October of 1992 by seven Arab Afghan fighters that had returned from Afghanistan.  This group subsequently splintered several times over the course of the next six years, making it highly decentralized but also highly dangerous.  This was the group that was responsible for a number of kidnappings, civilian massacres, throwing acid in the faces of women who were not properly veiled.  We heard a lot about the atrocities of what was happening inside Algeria. At the helm of the GIA was a radical emir by the name of Antar Zuwabri (ph).  This was a man who in 1997 became quite notorious for Byan (ph) or a fatwa that he issued that essentially deemed everyone who was secular or working with the Algerian Government to be a heretic and, therefore, (?)   to violence by the Armed Islamic Group. This actually opened the window for the GSPC.  In other words, what happened was the antics of the GIA became even too extremist for al Qaeda.  You saw a number of leaders begin to disassociate themselves from the GIA.  And, in fact, a lot of sources now corroborate that the al Qaeda leadership worked out an arrangement with one GIA emir by the name of Hasan Hattab.  This guy became the leader of the GSPC. According to a number of reports, this was actually established with the help directly of Osama bin Laden, who may have actually even come up with the name, Salafist Group for Preaching and Combat. The GSPC was designed to be, for lack of a better word, al Qaeda-Lite in Algeria.  This was to be a little bit of a kinder and gentler organization that was only going to attack military targets and government targets as opposed to civilians. The group first announced itself, the GSPC announced itself on September 14, 1998.  It was a simple communique announcing that Hasan Hattab was the leader of the group, and then soon thereafter issued its declaration, or misaqi (ph), essentially listing all of its goals in Algeria.  And it was very Islamist in tone.  It was steeped in the sort of Sunni orthodox rhetoric, the Salafist rhetoric, that we've all grown accustomed to hearing coming from other al Qaeda groups. The GSPC quickly eclipsed the GIA in Algeria.  Shortly after it was formed, an estimated 700 fighters that broke off from GIA joined the GSPC.  And it has since also splintered several times the way the GIA did in the 1990s, making it a bit more difficult to follow. There are three or four clusters under different emirs within the GSPC.  Some people call them commands as if this is a deliberate structure by the GSPC.  I actually wonder if there's a bit of a power plan going on and it's something that I think is worthy of further discussion, and I will address it a little bit later. What's interesting is that the GSPC has become less religious in recent years and more involved in organized crime.  I mean, it really just seems to be a crime syndicate involved in racketeering, bank robberies, hotel robberies, security trucks, et cetera.  And these operations have been necessary for GSPC to simply survive.  They are under heavy fire from the Algerian Government, and for this reason, they've had to evolve and adapt.  So it's been less of a religious tone and more of just sort of a Mafia-type operation. And I also believe that this struggle for power that I mentioned has also played a hand in these groups trying to find money elsewhere; in other words, there's been a lot of internal squabbling.  One leader by the name of Abderazak al-Para--this is a guy that we've been hearing about quite frequently in the new.  He was responsible for the kidnapping of 32 Europeans last spring in Algeria, and they were eventually set free in Mali.  This is one leader that apparently has challenged Hasan Hattab.  And then there is, of course, the announcement that came from another GSPC leader on September 11th of last year, commemorating the September 11th attacks.  This was a man by the name of Nabil Sahraoui, who pledged allegiance to Mullah Omar and the al Qaeda organization of Osama bin Laden and essentially seemed to be taking the organization in somewhat of a different route. There is a lot of question as to whether the GSPC is an al Qaeda affiliate.  I've talked to people within the State Department who are adamant about the fact that it's not.  But then I'll talk to other people, counterterrorism specialists, academics, journalists who've spent significant time in the region, and they are certain that there are plausible links between al Qaeda and this group, notwithstanding the possible help that was given to the group when it was first formed in 1998. There are also some logistical links that have been established between the GSPC and other al Qaeda affiliates, and I think this is something to note.  When we're talking about the morphing nature of al Qaeda, it appears that the GSPC is one node that is working with other groups such as the Moro Islamic Liberation Front in the Philippines.  That was confirmed back in 1999.  Also, more recently there has been some cooperation with Ansaro Islam in Iraq; particularly based out of Italy, there are some nodes that are working together there. This sort of information was what prompted the State Department to declare GSPC a foreign terrorist organization in March of 2002 and for the Executive to list it as a specially designated terrorist group in September of 2003. I think it's fair to say that it is certainly an affiliate group, but it is also important to point out that it has maintained fierce autonomy.  There have been attempts by al Qaeda emissaries to infiltrate the group from outside, a Yemeni most recently, I believe in 1992.  It appears that the group has rejected this outside influence and wants to maintain a general autonomy in the way that it works.  But it's also receiving money and funds from the larger al Qaeda network. One of the interesting things that I've found in the course of my study is a strange dichotomy that has emerged within the GSPC.  Most affiliate groups throughout the Arab world that I've studied will attack the near enemy and the far enemy at the same time.  The Yemeni group, the Islamic Army of Aden-Abyan, is a good example of that where they're attacking local churches, liquor stores, et cetera, but also involved in attacks such as the one on the USS Cole; in other words, having sort of a shortsighted vision and a long-term one in terms of having the war with the West. What we've seen in Algeria is that, by and large, the GSPC has kept their attacks local, almost entirely.  But at the same time, there is a very troubling development, and that is that it has extensive networks in Europe, more than I think most people realize.  Just following press reports, just open-source information from 2001 until today, there have been dozens of arrests of GSPC operatives involved in potential terrorist activities or actual executed terrorist activities, and this activity ranges from the United States and Pakistan to Italy, France, Belgium, the Netherlands, Spain.  It spans all of Europe.  And according to some terrorist experts today, there are two or three thousand GSPC and GIA operatives that essentially make up the North African network inside Europe that is doing GSPC's bidding for them.  And they also, too, have the sort of separation of powers.  These groups seem to be more involved with global activity while the local GSPC has been active only in attacking government targets.  So how this separation of powers came about and how these two sort of groups are linked together I think will be an interesting question to look into in the years to come. I want to just give a couple of positive and negative impressions, just overall trends, before I wrap up. The negative indicators:  European cells seem to be multiplying rapidly.  It appears that just about every month there is some report of an arrest of GSPC cells in Europe or somewhere outside of North Africa.  This is obviously concerning.  This appears to be really the al Qaeda European network, and it is inextricably tied to the Algerian GSPC, which I think makes it more of a strategic liability than I think most people believe. The other question is whether GSPC will go more global inside Algeria.  This is something that analysts are beginning to watch.  The kidnapping of 32 Europeans last spring was really, I think, the first operation against foreigners inside Algeria.  Now, it seemed to be an operation designed to raise money.  They received about $5 million in ransom for that operation.  But it will be interesting to see if there are more attacks that are carried out against Westerners in the future. The other interesting thing to look at is that Abderazak al-Para, who is one of the splinter emirs of GSPC, is now operating along the borders of Algeria, making forays into other countries such as Mali, Libya, Mauritania, Niger.  This is what we're really going to have to look at next.  This is how it is going international.  The group for now really appears to be working through established smuggling routes, exploiting a lucrative cigarette-, gun-, and drug-smuggling campaign down there.  But it will be interesting to see if they spread out into other activities as well in these neighboring states. And, lastly, in terms of negative prospects, it will be very interesting to see if successful counterterrorism on the part of Algerians will actually push the group to go more global.  We saw this in the case of the Gamat-al-Islamiyah and al Jihad of Egypt.  These were groups that were essentially pushed out of Egypt and successfully defeated on the ground, and it forced them into the hands of international terrorists in Sudan and Afghanistan, and today al-Jihad and Gamat-al-Islamiyah are seen as two of the core groups within al Qaeda, with not a whole lot of activity happening inside Egypt itself.  So this is something, I think, to keep an eye on for the future. Positive signs, very quickly.  One, it just appears that violence is slowing down.  The civil war within Algeria seems to be slowing somewhat.  Violence is down by about 50 percent.  The number of people killed is down about 50 percent over the last four or five years.  And, further, there has not been one large-scale terrorist attack in Algeria for the last two years, which, again, is a positive development.  It appears that counterterrorism is working, and this has been, of course, with the help of the U.S. Government, which I think is probably the most positive sign out of everything right now, the increased involvement with the U.S.  Assistant Secretary of State for Near East Affairs William Burns visited Algeria this past October.  Secretary of State Colin Powell went in December, had high-level meetings with the Algerians, and it appears that there is very much increased interest on the diplomatic level.  But, of course, now you have this Pan-Sahel Initiative which is, I think, also a good indicator of increased involvement on a military level. I'd like to see more money invested in some of those military activities.  I know that it's possible to get more money allocated for that.  But I think that just for now, getting some attention in this region that I think has been overlooked for many years is a great place to start. Thank you. [Applause.] MS. PLETKA:  Thank you all very much.  Those were just excellent presentations. Why don't we turn to questions and answers at this point?  What we're going to do, it's now 10:15, I think.  We're normally supposed to end at 10:30.  We do have a time period allotted for a coffee break 10:30 to 11:00, and what we'll do is cut into some of that time.  So if I can just ask you if you would like some coffee, please get up and help yourselves.  And we will now turn to questions. What we're going to do is, as normal, if you would just raise your hand and wait for the young man with the microphone there, if you would identify yourself and your organization, and as ever, please keep your statement in the form of a question.  And if it's addressed to someone in particular, do let us know. Okay.  Questions? QUESTION:  Hi, my name is Leah Ehrmart (ph), ORC Macro.  Every panelist has directly or indirectly called for improved intelligence on Africa.  And I'd like to ask no one in particular:  What kind of intelligence do you feel is most immediately urgent?  And, specifically [inaudible, microphone off.] MR. FARAH:  Well, I think in looking at my experience there, if you have people--and Phil mentioned it, too.  You have nobody in northern Nigeria at all as far as we know, unless there's people under clandestine cover there, no U.S. presence there at all to monitor what's going on. In Sierra Leone, for example, if people--in fact, they were paying attention.  The Ambassador actually wrote a cable back to the State Department saying something's wildly out of whack with the diamond industry because local buyers can't buy anything and there are bad Lebanese--what people were calling "bad Lebanese" were buying up all the diamonds.  And another anomaly was that most of the diamonds weren't going to Antwerp.  They were going straight to Beirut. Somebody sort of picked that up.  It didn't mean anything to most people, and it disappeared into the ether.  But it wasn't hard to figure out that something was really wrong on the ground and that somebody was making a lot of money there. You know, I knew some of the station chiefs in the region.  Some of them cover more than one country virtually by themselves.  And I don't fault the intelligence community for not knowing what's going on because West Africa particularly was slashed after the Cold War where the embassies were usually used to recruit Soviet bloc agents, and they weren't there to really look at the countries in any extensive form.  And when the Cold War ended, those stations were shut down and off they went. So it's not a matter of stupidity or incompetence.  It's a matter of lack of resources in the area.  And as someone here pointed out, I believe the Ambassador pointed out, you also have to have some form of local participation.  I can't go into the diamond fields of Sierra Leone and pretend to be--well, I almost can because I look Lebanese and a lot of people thought I was.  But most folks can't go in there and pretend to be something that they're not, with white guys, generally speaking, not speaking adequate Krio to go into these areas and deal with these things. So I think if you wanted--you need intelligence on the ground and an effort on getting local help in collecting the information that simply tells you what's going on can be of great held and could have provided a key indicator, at least in the diamond stuff. MR.           :  I would just add that the question of outreach I think is critical, and we really have hurt ourselves in recent years.  In part because of the terrorist threat, our embassy operations, our consular operations in Africa are less able today to reach out than they were 10, 15 years ago.  We have closed missions down, on the one hand, but, more importantly, those that we still have are becoming in some cases fortresses where it's very difficult to get into them to talk with people, but it's equally difficult for the people to get out.  And we just don't have the kinds of contact we used to have, and I'm not suggesting it used to be that good.  But it's gotten worse. And until such time as we can grapple with this great fear we have of our personnel overseas, both civilian and military, getting out and really getting down to the ground level in the places where these people are finding sympathizers, we're not going to get a very good handle on it. MS. PLETKA:  Can I just follow up and ask you a question?  I understand what you're saying, but how do you do that?  How do you at once meet the needs of security for our personnel, which are very real, as you read on the front page of the Post every single day, and at the same time get down and dirty with the local population, particularly down and dirty with the terrorists? MR.           :  In the first instance, you take greater risks.  We've become too risk-conscious, and you have to take greater risks than we're taking today.  You have to substantially expand language training.  I don't know how many African languages we're teaching these days at FSI, but I'll bet it's not more than three or four beyond the French and the Portuguese and the Spanish. I don't think we're teaching much Amharak (ph) at all anymore; Somali we stopped 20, 30 years ago.  Swahili, you might have two or three a year that are taught.  This doesn't cut it, and until you get people out who can grapple at the grass-roots level and are willing to go out down and dirty, it's just not going to improve.  So you have to take greater risks.  You have to have the people--more people, better qualified--to go out and do that sort of thing. QUESTION:  I'm Richard Bergosian (ph) from the State Department.  I'll make a statement and then see if we can turn it into a question. MS. PLETKA:  Well, just keep it a quick one, please. QUESTION:  You mentioned intelligence.  I would note that in the Sahel, we have only one country with a bilateral aid mission.  These are very poor countries, and even if you do provide a modicum of military assistance, it's not in balance and you can't begin to achieve your policy objectives with that kind of imbalance in our bilateral relationship.  Any comment you want to make? MR.           :  Basically, Dick, I take your point, and I agree with you.  I was alluding to the problem in my remarks, which I did cut down for presentation here this morning.  You have to be more involved in a combination of trying to defeat the problem of poverty around the continent, on the one hand, and very closely related to that, economic development on the other.  That implies by definition a greater USAID presence in quite a number of these countries, and that, too, has been cut back in recent years.  There's a tremendous focus on HIV/AIDS, and that's fine.  I certainly have no problem whatsoever with that. But in the meantime, some of the old priorities have gone by the boards, and the funding and the people are just not there to do it.  And if you're not going to be doing that sort of thing or at least paying for the World Bank or other organizations to do it, it's going to be a problem.  This has to be addressed. QUESTION:  Hi.  I'm Kathy Ward from the International Crisis Group.  I think this is primarily a question for you, Doug Farah, but if other people want to pitch in on this.  And I hope it's almost a non-issue.  Qaddafi you mentioned, and no one else has mentioned him.  Obviously, he's been a bit of a factor in the past.  What sense--and he's making his sort of triumphant comeback now.  How do you think Qaddafi should be handled now?  What are you hearing in terms of what negative or positive role he's playing in terms of some of the issues that you all have discussed? MR. FARAH:  Well, I don't think I want to get into how he should be handled because I really don't know.  But it's clear that, until very recently, he was deeply involved still in illegal arms shipments.  He flew a planeload of weapons into Liberia in the month or six weeks before Taylor left that was traced by--I don't know if our intelligence services did; other folks did.  And it came out of Libya. At the height of--after 9/11, in November, the end of November of 2001, he flew one of the RUF most notorious leaders, Commander Bockarie, the Mosquito, up to Libya, who spent a few weeks there and came back with another planeload of weapons.  That was November 2001.  This other one was subsequent to that, and one planeload crashed on the air strip in Roberts Field, another one apparently was successful.  So I think there are clear indications that he's not, you know, really reformed. Of course, he did fly President Kabbah of Sierra Leone up to Tripoli recently and sent him back with a bunch of artwork and  (?)  and everything was fine at that point.  So it's hard to know--I don't know what game he's playing now.  I think his influence on the region from the '80s through the '90s was devastating.  I think one of the great tragedies of the Special Court for Sierra Leone, which is charged with finding those--charging those most responsible for the atrocities in Sierra Leone, weren't able to indict him because of his temporal jurisdiction didn't extend back far enough to really get him.  But, clearly, without his help and intense personal involvement with Charles Taylor, with Foday Sankoh, with Blaise Campaore, with a host of others, Sam Bockarie, what happened in West Africa wouldn't have happened. MR.           :  I'll just add one thing about Qaddafi.  I'd be concerned about one thing in particular.  Just to give a little background, back in 2000 there was a kidnapping crisis with the Abu Sayyaf Group in the Philippines, and General Qaddafi stepped in and ended up paying, I think, about a million dollars per hostage in order to have them released through a Qaddafi international charity group. What we just saw recently in the kidnapping of 17 Europeans in southern Algeria that were subsequently released in Mali, Algeria--rather, Libya was involved in that release.  It's possible that Qaddafi could actually be still providing, you know, money for hostages, sort of an aboveboard way of terror financing, and it's one thing that I think has been overlooked in the Qaddafi reform story.  And it's something I think I'd like to find out more about. QUESTION:  Thank you.  Rafael Pearl with the Congressional Research Service.  I wanted to ask each of the panelists if they could in one sentence or very briefly identify what is the most disquieting or disturbing development from their perspective that they see; and then what policy recommendation, concrete recommendation, would they offer to deal with it. MS. PLETKA:  On the easy question front, what's the worst thing you see and how would you fix it?  Do you want to be--perhaps you'd like to define for yourselves the worst thing in what area and-- MR. FARAH:  Well, for me, the most disquieting thing has been, one, the lack of receptivity in the intelligence community to information that they do not generate themselves and efforts to downplay it or dismiss it, which has happened in the diamond story and the tanzanite story and other stories that have happened. To address that, I would say you really need to have people who are on the ground and can look at this, and if they're interested in following up in a serious way, to do it, but gather your own information then.  And I think that to me has been the most disquieting development.  I would get people on the ground there who would look at it and would be somewhat knowledgeable. MR. VAN NIEKERK:  I think probably the development of an ideological basis for what in other parts of--in some parts of the continent are merely sort of bands of bandits or guerrillas.  I think in Nigeria we have a basis for an ideological challenge and a threat which goes beyond anything in a sense we've encountered anywhere, given the numbers and given the importance of the country. I think, you know, go back to the two things:  first of all, much, much better intelligence in order to understand the problem and be able to make proper policy recommendations; but I think, second of all, really dealing with the--draining the swamp, dealing with the questions of corruption and the underlying factors that are causing this enormous disenchantment and this long-term threat in the region. MR.           :  In my view, the most disquieting development is the major focus now is on short-term, to some extent medium-term fixes of the problem:  catch bad guys, do training, which is medium term and good, and catching bad guys is obviously good, but there is relatively little focus on the long term, and that is dealing with the issues of poverty, draining that swamp, making the outreach to the environments where these people are moving around fairly easily, even though they--and some of them are local, some of them are imports.  And until such time as we focus more on the long term, we're basically--and I don't want to overstate a phrase, but kind of swatting flies out there. [Laughter.] MR.           :  I think the most disquieting aspect of what I've seen with the problem of the GSPC has just been the lack of good information I mentioned at the beginning of my speech today. But I think actually there are some good answers to that problem.  More cooperation with the French I think would be a terrific way to start.  The French have an incredible amount of information on the GSPC, and we've had a very difficult time cooperating with the French for obvious reasons in recent months.  This could be actually one way of working together, and I think they could actually help out quite a bit. The other thing that I think could help in terms of the good information coming out of Algeria would be, you know, now that we're actually engaging with Algeria, we need to use that as leverage and really demand more transparency on the part of the Algerian Government.  I think if we actually knew what we were dealing with, we would have an easier time coming up with solutions, and I think we need to press the Algerian Government for more transparency in that regard. MS. PLETKA:  One theme we keep hearing is that intelligence isn't very good, that it needs to be better.  I'm not going to ask anybody to answer this, but it does beg a question.  If we have more intelligence and, as we learned with Iraq, nobody believes it and can't act on it, it really does create a little bit of a conundrum in our foreign policy.  I wonder how we're going to deal with that in the future.  Maybe that's a topic for another conference. The gentleman back there with the pencil in the air. QUESTION:  Thank you.  My name is Alex Vines.  I'm from Chatham House.  Until last year, I was a member of the UN panel of experts on Liberia. My question is exactly about intelligence.  It's that my experience as a UN investigator in sanction busting was that many people tried to feed misinformation, including about the al Qaeda connections, and often they were looking for very significant monetary remuneration, which I know intelligence agencies, both the U.K. and the U.S., had tremendous problems with this with people like Ibrahim Bah that Douglas Farah has mentioned. My question to the panel is:  How do you filtrate out this bad intelligence when you have so many people smelling money if they can provide you, the intelligence agencies, with information that has an al Qaeda sting to it?  How do you deal with that? MR.           :  I think more than money sometimes it's visas, which are the goal of some of these things.  I think it's incredibly difficult, and I think until you have people there who can triangulate and deal with the different facets of information that come along and verify as best you can that you have to be extremely cautious. I think that there is--once something became a hot topic, like al Qaeda, I'm sure there were lots of people who then decided that they had suddenly seen al Qaeda people or that they suddenly new a lot about stuff that they didn't know about. So I think it's important to be extremely cautious, and in order--and I want to emphasize, I don't think, you know, the intelligence community is either stupid or incompetent.  As I said before, I think it's much more a matter of resources than mind-set or willingness to do certain things.  And I think in the post-Cold War era, Africa just simply didn't figure therein, and so the resources were allocated elsewhere, and in an era of finite resources, you have to make choices.  Those choices were made. But I think to deal with that, again, you have to have people there who can assess the situation, and you have to have access to some reliable sources on the ground who can speak the language and penetrate the culture and map out--I mean, I had one guy sit down and map out for me the Lebanese connections to the different clan connections and the different companies in Belgium, the diamond-mining companies.  And it was, you know, this two-page huge thing, which would take me about a million years to investigate.  But there are people who know that who were willing to share the information, and as you check the registries and you find out, in fact, this person is registered there and blah, blah, blah, you can begin to make the connections.  But you can't do that unless you find people who are willing to share these vast, you know, sort of networks and things that they know and understand sort of intrinsically with you. MR.           :  This really is a serious problem, and I've been on the wrong end of that intelligence a couple of times in my career.  I think the best you can do--you're never going to eliminate this problem entirely.  It's always going to be there as an issue.  It's impossible to totally eliminate it.  But until such time as you have more intelligence and more diplomatic personnel on the ground who are well trained to deal with a situation in a particular region or country, you're not going to improve that situation significantly because we are being fed bad intelligence by foreign governments and we have to be able to go out and check for ourselves more often than simply accept what's being fed to us. QUESTION:  Thank you.  I came here to listen, so I had really wanted to just sit on my hands, but I can't stand it, just to stand up a bit. First of all, I think all--first of all, I appreciate the presentations.  I couldn't agree more.  I will say that it's a little bit outdated by a couple days in some cases, sometimes a month.  But I agree 100 percent with the consensus and the topics and what you said was the way ahead.  But last week, for example, on the intel part, I couldn't agree more.  I think good things are happening.  It takes some time, and I'll talk about this later this afternoon. Last week, I had our chief of intelligence for European Command who worked in Central Command for 20 months on both Afghanistan and Iraq, who is now our head of intelligence, travel to Africa with Jim Gibbons, who is the number two ranking member of the House Intelligence Committee, to Africa for a week, mainly Northern Africa, northern Algeria, Senegal, Mauritania, Mali, for example, with the intention of what you're exactly talking about.  I couldn't agree more with you, Doug.  I think you've got it 100 percent.  As a matter of fact, I think you've all got it 100 percent.  Just like I say, it's happening so fast, we've got to catch up on it.  It's a resource issue. But I think the contention is exactly right, and what do we do about it?  And we'll work it.  It's a matter of shifting priorities. But I will tell you that in the European Command, 93 countries--we'll talk about this later today--we're shifting our defense attaches and our Office of Defense Cooperation personnel from places that previously they were in numerous numbers--for example, in France, we have 14 members of the staff there.  We're going to start shifting some of those people to Africa.  It will take a little time to do that.  It's kind of a rotational issue. And on the topic of France, by the way, we work with the French very closely intelligence-wise.  I was with our chief of defense last weeks on this.  But I have to applaud the points, just say that things are happening fairly quick, and some of the data is a little bit outdated. I appreciate it. MS. PLETKA:  Okay.  The lady here at the table.  Sorry, this is how we exercise our interns.  Just a second. QUESTION:  Ariel Howard (ph), U.S. Department of State.  This question is for Ambassador Shinn. You referenced financial assistance to East Africa.  Are you suggesting this with respect to Somalia?  And if so, how do you avoid exacerbating the conflict among faction leaders?  And what entity would be responsible for ensuring that such funding is properly utilized? AMBASSADOR SHINN:  In the case of Somalia, I'd divide it into two components:  Somaliland, which declared its independence in 1991 from the rest of Somalia, but no country has recognized it;.  I think Somaliland is sufficiently stable, although they've had problems in the past year concerning terrorism.  But it deserves more involvement with and participation in and assistance to in a variety of contexts, economic development on the one hand, and intelligence cooperation on the other. The big problem is Somalia, the former Italian Somalia, the southern part of the country, which is still a failed state, which is essentially run by faction leaders.  I assume that we have had contact with some of those leaders.  I've seen things from military sources indicating that we've been in touch with some of them.  Maybe they've had some success, but they're all in it for themselves.  They're all trying to sell their own argument to get support for themselves.  It's a pretty roguish bunch, very difficult to sort out which ones we should deal with and which ones we shouldn't. The problem is really exacerbated because the security situation in Somalia is still so bad that to put Americans in there is, quite frankly, very risky. So I don't have a real good answer at the moment for Somalia except to try to identify those with whom we can work to occasionally have people working with them and try to sort out the good information from the bad.  And that's very, very hard in Somalia. We might also, finally, identify a Somali speaker, an American; that might help us, too. QUESTION:  David Hale.  This is a question for Phillip, but anybody else could contribute.  You focused in the panel on East Africa.  My question is on Southern Africa.  It was revealed last year that Iraq gave one of its oil quotas to a very prominent South African politician, Todio (?)-wale, who could someday be the future President of South Africa.  I've heard speculation in recent weeks from friends in Capetown and Johannesburg that al Qaeda is now reaching out to Robert Mugabe and may try and develop Zimbabwe as a safe haven for its activities. Do you have any comments on how Southern Africa will fit into this larger struggle with al Qaeda and the war on terrorism? MR. VAN NIEKERK:  There was in about '94, at the point when the ANC became the government, there was, in fact, a series of attacks.  There is a very extreme Islamic group based in Capetown, a little bit in Port Elizabeth, who, in fact, they blew up Planet Hollywood in the docks, the waterfront in Capetown.  I think the South African Government, by and large, has neutralized that group. There still obviously are some connections.  I would seriously doubt that there is any real al Qaeda presence in South Africa.  There is amongst the minority Muslim population some sympathy, but I don't think it's very active or operational in any way.  And, in fact, it's one of the sort of small unheralded successes that, in fact, they've managed to stop this group from operating, a group called People Against Gangsters and Drugs, PAGAD, in Capetown, in the late '90s. I have no knowledge about the outreach to Robert Mugabe, though I suspect that there are a lot of disreputable people that find their way to Mr. Mugabe's office. I think at the moment, I don't think that Southern Africa is particularly largely in the frame in this regard.  I know that there are Islamic groups in Malawi.  There's even been talk of Swaziland where there have been connections and contacts and where there are Islamic populations.  But it's not very much part of the mainstream at this point.  That could change. MR.           :  If I could just add to that, I think the reference to Robert Mugabe may stem from the article that was in the last issue of National Interest.  There's a very long article which alleges that Mugabe has had contacts with al Qaeda.  I read the article recently.  I found it very interesting.  I was, frankly, a little skeptical of some of the conclusions, but it certainly merits watching in that Mugabe is a very mercurial person who could be doing some very strange things.  But I would otherwise agree that in terms of South Africa as a unit, it certainly has not experienced the degree of al Qaeda connection or terrorist connections that the Horn and East Africa or probably West Africa has. QUESTION:  Hi, Tony Carroll.  Ambassador Shinn, you've got an esteemed reputation as a real field-oriented Foreign Service officer.  Two questions.  Is there a role for public diplomacy in this problem?  In Kaduna, many years ago we used to have a very successful U.S. Information Service office.  It's been shut down. And, secondly, what type of reward structure do we need to offer Foreign Service officers to serve in African postings?  Because there isn't a long line of applicants for some of these posts. AMBASSADOR SHINN:  Well, there very definitely is a role for public diplomacy if yo mean, by public diplomacy, getting out and meeting the people outside of the capital city.  If you mean issuing press releases from the embassy, forget it.  That doesn't really do the job. But the real old-fashioned kind of public diplomacy is absolutely critical to what we're trying, to what we should be trying to do around the world, not just in Africa. How do you get Foreign Service personnel to go to Africa? Well, you have to increase the incentives to entice them to go there, and that means working on promotion rates, it means caring about their allowances to those countries, just the old-fashioned kinds of things that have been used traditionally and I think, to some extent, they have worked. The real problem is not so much getting them to go there.  It's having a big enough pool to draw from to fill all of the positions that we have around the world.  Colin Powell has done a lot about that in the last 3 years, but I think it still has some distance to go.  We lost a lot of ground in the previous 20 years. MR.          :  I'm sorry, but if General Wald can do it, then I can do it too. Actually, the last question, just a quick factual question, how great a presence are al Qaeda and al Arabiya in Africa?  I'd be interested to know. But a larger question for the panel, you guys did a fabulous job of outlining the problems, both in the region and that we have, lack of language skills and intelligence, but everybody seems to have more or less avoided the policy recommendation question.  I'd like to ask that a little bit more pointedly and try to ask you to define what our strategic goals should be and who our strategic partners might be. MR.          :  Well, on strategic partners, I think, by and large, we've pretty much had that right, at least in that part of Africa that I deal with, which is East Africa and the Horn.  We've identified Kenya.  We've identified Ethiopia, particularly.  More recently, Tanzania seems to be coming on-line in terms of cooperation on this subject.  We've certainly significantly improved the situation with Sudan for different reasons, but I think it's paid off in terms of cooperation on counterterrorism. I don't think that's where we're getting it wrong.  One has to be careful about these alliances or these connections in terms of what the other countries are expecting out of it and whether they're "diddling" us a bit as we proceed with this process, and one has to be very careful about that.  They have their own agendas, and we need to be perfectly attune to those agendas. But simply going back to the overall policy issues for dealing with the problem in Africa, I go back to what I said earlier, and there needs to be more focus on the long-term issues of trying to provide more economic development, particularly in these areas where there has been an impact by the arrival of persons associated with terrorism, where you deal, to a greater extent, with poverty, and where there is more personal outreach by Americans and working very closely with local security authorities. MR. NIEKERK:  The places that I go to, still CNN and the BBC, and South African Sports Channel, and movies.  So having seen a lot of evidence of Al Jazeera, there might be people rigging up satellites and sort of getting it, but it's not on the terrestrial cable, certainly. As a strategic partner, I think one has to be very, I think we have to embrace the current government in Nigeria.  I know there are problems surrounding it.  There are all sorts of issues, but I think that President Mbassi has got 3 more years. We don't know what's going to happen after that, and he's willing to talk about the issues of corruption, he's willing to talk about the issues of law and order, he's willing to talk about the issues of security, and I think that's a very, very important relationship that the U.S. has to engage in.  Because what comes afterwards might not be as conducive to the kind of relationship that could be forged now. MS. PLETKA:  If we have questions back on the other side, perhaps we can just take one of those last. MR. de PONTET:  Hello.  Philippe de Pontet, Intellibridge Corporation. This is a question that's been danced around a little bit, but I'm hoping I can get a little more clarity on this.  Everybody seems to agree there's a need for more U.S. diplomatic presence and engagement, and I assume also from our allies in Europe.  Given the competing pressures in the Middle East, particularly this mega-embassy which will be built in Baghdad, what are the prospects for that? MR.          :  I don't know what the prospects are, but I think that there is at least growing interest, and I think there's also ways to multiply efforts tremendously.  You do have, as folks were saying earlier, you have the French and the British who have vast experience there, and who do cooperate.  I know with the British in West Africa, Sierra Leone, particularly, in Ghana there's a lot of cooperation.  So I don't think it's a lost cause.  I think, if you look at ways to multiply your efforts and really coordinate on the ground, that it's doable. I think, also, in terms of--a little bit of the previous question--you have to be able to engage in countries like Liberia that are starting again and make sure or help them get on a track where you don't end up with another Charles Taylor.  You still have, which as unsavory as Charles Taylor's people were, you have competing pressures from demobilized folks with the RUF who still want to go on fighting.  You have a host of problems there. And I don't know, I haven't been there for more than a year, so I don't know what's happening on the ground there, but I would think that we would want to make really sure that a country, that a functioning criminal enterprise of a different sort doesn't simply emerge to help the Victory[?] Boots[?] and the other operatives of the world out there. MR.          :  Let me just add that obviously, if you're going to have an enormous embassy in Iraq, it's going to draw resources--intelligence and diplomatic--from around the world in order to staff it.  The only way to solve this problem in Africa is someone has to decide to make Africa a priority.  And if you have to make it a priority, somehow or other, those resources will be found.  If it's not made a priority, nothing is going to happen.  It's very simple. MR.          :  My name is [?].  I am from Djibouti Embassy.  This question is to David Shinn, the Ambassador. I don't recognize the way you deferred Somalia into a British or Italian--there is only Somali.  The Somali is only, you see, united. There is conference in Nairobi, which is a peaceful [?] of Somalis.  Why did the United States support that conference? AMBASSADOR SHINN:  Keep in mind, I don't speak for the U.S. government.  I left the government 3 years ago.  My impression is that the U.S. government does support that conference.  I don't know how enthusiastically they're supporting it, but I believe they're supporting it. But I'm simply making the point, for historical reasons, that there were two parts of Somalia, one British, one Italian, and the Somalis themselves or at least those in the former British Somaliland now consider themselves distinct.  And you can accept that or reject it.  That's up to you, but that's the way they see it now. MS. PLETKA:  I haven't missed anybody in the far back where I can't see?  That's my only remaining concern. Well, then, with that, why don't we take a very short break until our next panel.  I want to thank our audience, and particularly our panelists, for really wonderful presentations. Thank you. [Applause.] MS. PLETKA:  We'll resume again at 11:00. [Brief Recess.] MR. DONNELLY:  Okay.  We're going to get going now on the second panel of our conference on the American strategic engagement in Africa. I have to begin with the unfortunate news that Michael Westphal is unable to join us.  Apparently he's been summoned by a higher authority to meetings that he cannot avoid, but he does send his regrets and a rain check for a later event.  He was very much looking forward to this, I know. I would like to take a moment or two before I introduce our very distinguished panelists to sort of summarize what I took away from the first panel, as a way to try to frame the discussion that we're about to have, talking about essentially what America's strategic policy should be towards Africa, towards the continent.  That's almost a mind-blowing leap of the imagination in and of itself. Surely, the first panel demonstrated the necessity of having a comprehensive strategy for Africa.  The panelists were exceptionally good at describing a good number of the problems that the continent faces, whether its from radical Islamists or the inherent weaknesses and corruptions of the governments there, described our own difficulties in trying simply understand what's going on, our shortage of native language speakers, the overall gaps that we have in our intelligence capability, and began to hint at what one can only describe as a policy gap or a policy lack as well. I am hoping that this panel will begin to suggest what the goals of American policy should be, who our partners might be, and some of the practical "how to" questions that need to be answered in order to formulate a strategy, a strategy that will clearly need to employ all the tools at our disposal, all the tools of engagement, be it ideological, diplomatic, economic, cultural and yes, military, tools of "hard and soft power" as Chairman Neim [phonetic] might say, both governmental and nongovernmental. I also sort of charged the panel to try to take a genuinely strategic approach, a long-term approach, as Ambassador Shinn said several times, one that I would hope would avoid some of the penny-wise and pound foolish mistakes that we've made in the Middle East, for example, the search for a false stability.  I, for one, certainly have a question about, say, our approach to Libya in this regard.  It is certainly very good news that Colonel Gaddafi has decided to give up his weapons of mass destruction.  He may, indeed, be a partner against al Qaeda, but that should not blind us from taking account of his other shortcomings. Also, it seems to me that the strategic goals ought to be explicitly political.  We talked a bit in the first panel about the sort of social and economic and cultural swamps that need to be drained, but I think we need to be explicit about our desire to draw Africa more fully into the Western world, as Phillip Niekerk sort of put it, and to bring them more clearly within our security perimeter for our own good reasons and for also the good reasons of the Africans. Clearly, it also has to be part of a global strategy.  We began the conference with the observation that the situation in Africa was inseparable from the global war on terrorism and the war in the Middle East, and that has kind of a reverse set of implications as well.  So success in the Middle East, or failure of American policy in the Middle East,. will clearly have an effect in Africa as well. A couple more points that I took away from the first panel.  Again, Phillip Niekerk suggested that we needed to set priorities, particularly the weight of Nigeria and perhaps others, and finally, the need to build a more institutional approach to this.  Clearly, this effort is going to require American leadership and probably, in cases, American "unilateral action".  But as we are discovering in the Middle East, or it should make us ask questions about whether the international institutions that now exist are appropriate to achieve the goals we want, whether they can be changed, whether we need new ones, who our allies should be, both in Africa, in Europe and elsewhere, and also, as I have suggested, whether there are nongovernmental organizations who can help us achieve our goals. I want to conclude with an observation that it seems also there is no avoiding the security dimension to these problems, and there is no avoiding the necessity for military engagement.  I don't want to steal General Wald's thunder, but since the purpose of this panel is to describe a strategic approach, I think we should deal directly with that in the traditional tools of engagement, training and education. But we've begun to talk about changing our basing pattern and patterns of operations overseas, not only in Europe but globally, and that clearly would include Africa in my mind, and also reforming and changing our own force structure to enable us, it seems to me, the kinds of problems described in the first panel cannot be regarded from an American strategic point of view, as I said, of lesser included cases, as say past defense planning or strategic planning exercises have regarded so-called contingency operations. Finally, I would hope that the panelists would consider and that the later speakers would also, think of some possible discontinuities.  Certainly prior to September 11th, as the 9/11 Commission is now making abundantly clear, it was nearly impossible to imagine a war in Afghanistan that involved an American invasion and a continued reconstruction project there.  It wasn't predicted; it wasn't planning for; and we didn't structure our forces for either the war itself or what has come after it.  So perhaps we ought to think more openly about what the future might bring in terms of discontinuities that would compel a deeper American engagement in Africa than even we have foreseen based on the problems outlined in the first panel. So, with that rather long and windy set of charges to my colleagues here, I would like to introduce them to you. Our first speaker will be retired General Carlton Fulford, who, clearly from his biography, was both a very great soldier and a serious diplomat.  I won't read his entire CV to you, but he is currently Director of the African Center for Strategic Studies.  He was deputy commander of EUCOM, director of the Joint Staff, commander also of the Fleet Marine Force of both Marine Expeditionary Forces and was also commander for Task Force Ripper in the first Gulf War. His list of decorations is quite significant:  the Purple Heart with gold star, Distinguished Service Medal, Silver Star, Legion of Merit, and Bronze Star.  In other words, a highly-decorated warrior and also a man of great strategic sagacity. Our second speaker will be Flori Liser, who is the Assistant U.S. Trade Representative for Africa in the Office of the U.S. Trade Representative.  She leads trade efforts for sub-Saharan Africa and I think really crucially oversees the implementation of the Africa Growth and Opportunity Act.  She serves as chief negotiator for free trade agreements with the members of the South African Customs Union. She has essentially done that job for quite a while, because her previous title was Assistant U.S. Trade Representative for Industry Market Access and Telecommunications.  I'm not sure what else it is we would be trading beyond that.  So clearly she is deeply experienced in these matters and is ideally placed to complement the presentation that General Fulford will give and describe perhaps the elements of other than military power that we might bring to bear in order to achieve our goals in Africa. So, with that introduction, I turn first to General Fulford.  We will follow the same procedure as we did in the first panel, with the presentations followed by questions. Thank you. GENERAL FULFORD:  Thank you, Mr. Donnelly, for that introduction, and the opportunity to participate in this program. I want to commend the American Enterprise Institute for putting together this timely and important event and salute the U.S. European Command and General Wald for their initiative behind this.  General Wald followed me as the deputy commander at EUCOM, and he has done more in a year than I was able to do in three.  So I have great admiration for the effort that he's leading, he and General Jones, the commander. A little over a year ago I retired from the Marine Corps, after almost 37 years of service.  I had great visions of my gold game, which needed a lot of work, and becoming a serious threat to the trout population in the United States of America.  Instead of following that dream, however, I came to work for the Africa Center for Strategic Studies, which is a cooperative engagement center of the Department of Defense.  I did this because I deeply believe, like the theme of this conference, that we should pay more attention to Africa and its strategic implications for the security of the United States of America. We at the Africa Center seek opportunities to elevate awareness of security interests in Africa without being perceived to be overzealous advocates with an agenda.  This conference allows me the opportunity to make those points, and I'm very grateful. A confluence of events have elevated attention to Africa in the past couple of years.  Valuable minerals have always been important to the United States, and now growing energy resources, both oil and liquified natural gas, are important to our economy as well as to other energy consumers around the world.  You have several panelists who will talk about this in great detail, so I won't dwell on energy, expect as it impacts other topics that I want to raise. Likewise, post-9/11, we realize that parts of Africa could become sanctuaries, training grounds, experimental stations, and/or sources for financial revenue for terrorist organizations.  You have already had some discussion of this in the first panel, and there will be more discussion later on today. At this point I only want to say that this threat of terrorism is real.  It is not just Africanists trying to gain more attention for Africa.  It does pose real threats to the interest of the United States, as well as to the security and stability of the African countries involved.  This concern, as well as the nexus of terrorism with established criminal and smuggling networks, demands our attention. What I want to spend my time talking about are some major challenges I see and what we, the African Center, the United States, and the international community are doing, or should be doing, to help. First, the seminar title, "Leave no Continent Behind," gives me the opportunity to make a couple of points.  Typically, Americans refer to Africa as if it were a country.  Granted, there are great historical issues associated with the establishment of countries and boundaries within Africa, but there are 53 countries in Africa, to include six island nations, two in the Atlantic Ocean and four in the Indian Ocean.  Africa is immense in size.  You can fit the Continental United States inside the boundaries of Africa three times and still have room left over.  There are vast deserts, dense jungles, extensive waterways, and coastlines. The issues in Morocco are vastly different from the issues in Madagascar.  If we all had a deeper understanding about African nations and regions, this would help us make better policy decisions. As I travel throughout Africa, I meet those who say that the problems that exist there exist because of human and economic exploitation, colonialism, cold war conflicts, things of this nature.  Then there are others who say that most countries in Africa won their independence 40 years ago and the problems exist directly as a function of corruption and poor governments. There is a legitimate question.  How can you seek to help a Nigeria or an Angola, whose people are desperately poor, yet they have received billions of dollars in oil revenue over the last two; decades?  I think the answer is yes, there is blame to go around.  Europe, America, and Africa itself, are at fault for where Africa sees itself today.  We are where we are, however, and we cannot allow this to continue, for humanitarian, political, and economic reasons, and especially for purposes of this panel, for our own security reasons. Instability in Africa poses great security concerns for the United States.  In days of instant communications and globalization, the flow of good and bad forces across borders is much easier.  Terrorists trained in the Sahel could be in Europe or the United States within hours.  The e-boli virus, developed in Gabon, could be in the water supply in St. Louis.  Civil war in Nigeria could cause major disruptions of the world's production of crude oil.  In short, there are real and growing threats to our national security and we must pay more attention. Let me just highlight security related issues in three countries that worry me the most.  Two are among the Bush administration's four anchor countries.  Nigeria, which you heard Phillip talk about in the first panel, is my most urgent concern.  It has been independent since 1960, but governed by one corrupt military leader after another.  It elected its current president, a former general, in 1999, and reelected him last year in a flawed election, which was characterized by the international observers as "fair by Nigerian standards."  Transparency International, by the way, ranks Nigeria as the most corrupt nation in the world, so by Nigerian standards leaves a lot to be desired. Today, Nigeria accounts for 130 million people, 20 percent of the African population.  About 70 million are Muslim, making it one of the largest Muslim countries in the world.  Half of its population subsists on about 75 cents a day.  Its GDP has declined by two-thirds in the last 15 years. It does possess Africa's richest oil producing fields, accounting for about 70 percent of Africa's oil exports.  Nigeria is ripe for turmoil.  Just last week, President Obasanjo ordered his military officers to their barracks, for fear of a coup.  His Easter Sunday speech addressed his concern about the military taking over the democratically-elected leadership in Nigeria. Sharia law exists in half of this country.  Every week, there are reports of 100 or so deaths from fighting between Christian and Muslim groups.  We just can't continue to fence compounds and offshore drilling rigs and keep our heads in the sand.  If Nigeria explodes, we will feel it. Nigeria, in my estimation, needs to be at the very top of U.S. security concerns in Africa.  We should use every bit of leverage we have, diplomatic and military and economic, but also hold Nigeria's feet to the fire.  I believe the millennium challenge concept is the right idea.  Don't lower that bar.  We must be firm in the message that corruption will not be tolerated. Corporate America, especially our oil industry, should be more transparent in their revenue payments to Nigeria, and Nigeria should be held accountable to use its wealth to better its own society. Today, we cannot conduct military-to-military activities with Nigeria because of human rights sanctions.  Yet we depend on them to provide the preponderance of peacekeepers in countries like Liberia, Sierra Leone and Cote d'voire.  Nigeria must clean up its act and we must help.  We should be on the inside helping to professionalize their military. In West Africa, the Mono River region, there are three UN-chartered missions conducting peacekeeping operations.  The common neighbor to these three is Guinea.  A Soviet client during the cold war, Guinea has been ruled by a former military leader who seized power in 1984 and has ruled ever since.  Refugees have moved across Guinea's borders into and out of Liberia, Cote d'voire and Sierra Leone for years.  Rebel groups have been providing sanctuary and support.  President Conte has ruled with an iron hand and has quickly put down several coup attempts. But now he is in very poor health.  I fear that there will not be an orderly transition with his death, and that the turmoil in the Mono River basin will come home to Guinea.  We need to pay strategic attention. Lastly, I will talk about South Africa, a beautiful country, with great promise, this week celebrating its tenth year of black majority rule, a country that has made some very positive changes in the recent past but one with huge challenges. Just a couple of years ago, South Africa was very inward looking and reticent to be seen as anything but nonaligned.  Most South Africans either blame the U.S. for pulling the rug out from under apartheid or for supporting apartheid for much too long.  Therefore, it was very hard to work military relationships. Fortunately, that has changed.  Yes, South Africa's approach to dealing with its neighbor Zimbabwe has not been impressive, but South Africa has three battalions today in peacekeeping missions in Burundi and in the DRC, and is increasingly showing itself to be a leader in Africa. Yet, there are at least six million HIV positive citizens among the 45 million citizens of South Africa.  For a variety of reasons, South Africa was very slow in acknowledging the pandemic.  Now people are dying by the thousands.  How can a society of this size lose six million of its citizens over the next decade--policemen, firemen, school teachers, soldiers--without undergoing immense pressure on its governmental structures? We need to pay attention.  We must keep a very close eye on South Africa, and do all we can to help, when and where we can. The Africa Center, of which I'm a part, focuses on the promotion of dialogue and the longer term issues of research and study in the areas of military professionalism, civil/military relations, counterterrorism, and security resource planning.  We do this to help Africans build capacity, so that they can deal with their challenges. You will hear from General Wald and the U.S. European Command who will detail their efforts to build capacity among African countries to face the security challenges I have highlighted.  Likewise, the U.S. Central Command focuses on the Horn of Africa and the real threat of terrorism there. Yet, in all honesty, our efforts throughout Africa could be described as economy of effort programs at best.  Our intelligence was thin--and you talked about that in great detail in the first panel.  But it was thin throughout Africa before 9/11, and since then, much of what was there has been moved elsewhere. I believe we should focus hard on rebuilding our intelligence capability and our cooperative engagement military-to-military activities.  Where we have done this, the outcome has generally been positive.  The forces do adequate peacekeeping jobs; we have seen the will to fight terrorists, and under professional leadership, I don't believe these are threats to their own population. We can and should redouble our efforts  with regional and subregional organizations.  The African Union is not your father's old organization of African unity.  It's not yet a roaring tiger, but it is an organization that is seeking to do the right things and we should be more engaged and encouraging. The Economic Community of West Africa, ECOWAS, has done much of the heavy lifting in Liberia, Cote d'voire and Sierra Leone.  In 1996, when they went into Liberia, it was less than stellar.  Today, it's going a good job by all reports, in large part due to the training and assistance of DOD, the Department of State, EUCOM, and our European partners.  I believe we should continue to help ECOWAS build its capacity to respond to crises in West Africa and hold it up as a model for other subregional organizations throughout Africa.  It is in America's security interest to see that the African continent is not left behind. I have just talked about a few challenges.  You will hear more today about many more--Sudan Chad, Somalia, Congo.  I commend AEI for focusing on this topic, and I look forward to learning much more in this conference. Thank you all. [Applause.] MR. DONNELLY:  And thank you, General. I have already given Flori Liser's curriculum vitae in very truncated form, and now I'm happy to give her the microphone. MS. LISER:  Thank you, Tom. First of all, I appreciate the opportunity to be here with AEI, and I was really pleased when I was invited to participate in this discussion today on strategic issues, to know that AEI and all of you consider trade and economics to be an important part of that picture.  Not everyone does.  So I thank you for that. I hope that all of us can appreciate and work together as we try to fit trade in as one of the tools that one of the previous speakers spoke about in terms of addressing our strategic interest, our national interest, both here and in Africa. Again, the title of "Leaving no Continent Behind" also reminds me that, even though many Africans are now more engaged in trade globally--you see many more ministers involved and committed to making trade an important part of their economic development plans--I think many of you also know that Africa's share of global trade is actually less today than it was a decade ago.  So if we're talking about not leaving continents behind, and if we're talking about the importance of trade as one of a number of tools that we have to address our strategic interest, then we have to be focused on the fact that Africa is not as engaged in the global trading system as they need to be and as we need them to be. With that said, I wanted to tough on three things this morning:  the link between Africa's economic security and U.S. national security; why Africa's greater participation in the global economy and in global trade is in our mutual economic and security interest; and what we're doing in the U.S. Government to advance this objective. Linking Africa and U.S. national security interest is nothing that's new.  This is not a new exercise.  During the cold war, I think many of us know that the U.S. was involved in many African countries for national security reasons.  In addition to the ideological battle that was then being waged between the West and the former Soviet bloc, the U.S. also had important oil and mineral interests in Africa.  This is no less true today. Africa provides more than 15 percent of overall U.S. oil imports, and this figure is expected to rise to about 25 percent in the next decade as new fields come into production. Africa is also an important source of strategic minerals, such as chromium, platinum, and coltan, which is used in the electronic circuitry in our computers and in our mobile phones.  But rather than focusing on the types of goods that are coming out of Africa, I would like to focus on how the overall economic health of African countries relates to U.S. national security. Some have argued that poverty is an incubator for terrorism.  Now, there may well be some truth in that, but in my mind, it's not so much that Africans or others in the developing world might become terrorists because they are poor, but that countries whose economies and people are struggling for survival are vulnerable to the type of civil conflict and political unrest that, in turn, makes them targets of opportunity for terrorists. So if you take Sudan, Somalia, and Liberia, just as three examples, each of these countries, in addition to being among the poorest in the world, and beset by long-standing conflicts, have also made the news recently as past or present sanctuaries or revenue sources for al Qaeda.  In short, poverty causes the civil disorder, weak infrastructure and inadequate security mechanisms that make African countries vulnerable to exploitation by international terrorist groups. That is why strengthening the international trading system and Africa's participation in it is so important.  A more prosperous economically secure Africa is not just good for Africans; it's also good for the U.S. interest and it's also good for the global interest, more broadly. By helping African countries to increase and diversify their trade, we help to reduce their isolation from the world, to enhance their political and economic stability, and to reinforce the values of the open market and good governance. Moreover, as we have all become increasingly aware, our own economic growth here in the U.S. depends in large measure on growth elsewhere in the world, so helping Africa to boost its capacity for greater production and trade will, in turn, help the American economy.  Supporting African countries' efforts to participate more fully in the multilateral trading system strengthens that system as more and more countries agree to reduce tariffs, eliminate barriers to trade, and abide by the agreed rules that have led to the surge in global trade that benefits all of us. We believe that the American trade agenda in Africa serves our security interest.  The hope and opportunity that trade can bring is a strong defense against the poverty and social fragmentation that can make African countries targets of opportunity for terrorists. I would like to highlight five major elements of our trade policy toward Africa.  They are, AGOA, the African Growth and Opportunity Act; secondly, the U.S. SACU free trade agreement; thirdly, integrating Africa more fully into the global trading system and what's happening in the WTO; fourth, trade capacity building, which is really key if African nations are going to take a greater role and play a greater role in world trade; and finally, cooperation between ourselves and Africans in terms of the dialogue that we have established under AGOA. In terms of the impact of AGOA--and this is first and foremost the key pillar of our strategic engagement with Africa--trade is one of the key pillars there, and AGOA is important for that.  AGOA provides eligible countries, African countries, with the most generous access to the 11 trillion U.S. dollar market of any country or region of the world, other than those with which the U.S. has a free trade agreement.  Under AGOA, almost all products from eligible African countries enter the U.S. duty free, including apparel, which has been a traditional point of entry for many developing countries interested in export growth. By any measure, AGOA has been a success.  U.S. imports under AGOA, everything from automobiles to apparel, to fresh cut roses, are rising substantially and bringing tens of thousands of new jobs and hundreds of millions of new dollars in investment into sub-Saharan Africa. In just three short years, AGOA has made a significant impact on U.S./African trade.  U.S. overall imports from sub-Saharan Africa increased by 43 percent over the past year, and AGOA imports have risen by 55 percent and are now at $14.1 billion. We have a number of countries that we can point to that have made some successes.  I don't want to go into the details, but it's very interesting to look and see which are some of the countries, apart from those that export oil and petroleum-based products to the U.S., that are benefitting under AGOA.  I'll just touch on a few.  Lesotho has attracted over $150 million in new investment in just one year, five times the amount of its annual foreign aid.  As a result of the new jobs created by AGOA, for the first time ever there are now more jobs in Lesotho in the private sector than in the public sector. South Africa.  South Africa exported more than $1.7 billion in goods to the U.S. under AGOA last year, including automobiles, processed foods, clothing, various steel products, and so South Africa is doing well. Namibia has also welcomed over $300 million in new investment related to AGOA since April, 2001, and they estimate that about 11,000 jobs have been generated. Not just looking at it from that perspective--because we are talking about a partnership--U.S. firms have also benefitted from AGOA, mainly by improved trading and investment environment in the AGOA countries, and also by sales of machinery and components for African-produced AGOA goods. I would also like to note that U.S. exports to sub-Saharan Africa were up 15 percent in 2003, driven in large part by growth in products such as oil field equipment, motor vehicles, and telecom equipment. While I cannot attribute the growth of U.S. exports directly to AGOA, I do believe that AGOA has significantly enhanced our overall trade relationship and opened the door to increased U.S. exports. In the process of implementing AGOA, we have discovered areas where the law can be enhanced.  As a result, we successfully pressed for the passage of AGOA II legislation as part of the Trade Act of 2002, and we're now working with Congress, U.S. business and African governments on an AGOA III bill.  I think many of you know that most recently another AGOA III bill was introduced with bipartisan support and we're very much hoping that this bill will be passed in the very near future. The second area is the U.S./SACU Free Trade Agreement negotiations.  I think all of you know that this is the first free trade agreement that we have ever negotiated with sub-Saharan Africa.  It is with the Southern African Customs Union, Botswana, Lesotho, Namibia, South African and Swaziland.  We are building on AGOA.  In fact, this is an outgrowth of AGOA because the original AGOA bill called on the administration to pursue trade agreements with Africa.  So we're thankful that that's there as a basis on which we can begin.  This is the first one.  As I said, it's the first time we have ever negotiated with a least developed country, Lesotho, and we're hoping that the free trade agreement that we will conclude with the SACU countries by the end of this year will be a model for future free trade agreements with sub-Saharan African countries. We also believe that this FTA can serve as a wider engine for regional growth, so we're hoping again that we will build on this free trade agreement with the SACU countries and expanding trade overall with the other countries in sub-Saharan Africa. I would also like to talk about the fact that this particular FTA covers a wide range of issues.  It's not just market access but it covers intellectual property issues, it covers labor, environment, government procurement, a wide range of areas.  We're not going to leave any stone unturned in really modeling this particular FTA and making sure that we've opened up trade for those five countries with us, and us with them. We also have noted that they have capacity constraints.  We have seen this in the negotiations already, so as a result of that, we have been making every effort to provide trade capacity building to the SACU countries, even as we proceed with the negotiations. The third area and element of our Africa trade policy is engagement with the African countries in the WTO and integrating them more fully into the global trading system.  Africa has a huge stake in the successful outcome of the current round of world trade negotiations.  Multilateral trade talks through the WTO are really the only opportunity for African countries to achieve some of their objectives, such as the global reduction of agricultural subsidies. We worked closely with several key African countries in launching the Doha Round, and in consultations leading up to the Cancun Ministerial, and still believe that we share common interests in these negotiations.  And while we were disappointed that many African countries did not play a more constructive role in Cancun, we have had a more constructive dialogue with them since that time.  I think many of you know that Ambassador Zoelick, my boss, visited a number of countries in Africa very recently, in February.  We were in Capetown meeting with Minister Erwin and then in Mombasa, Kenya, meeting with about a dozen African trade ministers or their ambassadors to the WTO.  So we're looking to continue reaching out to the African countries in the coming months as we try to put the Doha agenda back on track. The fourth area, which is very important, is trade capacity building.  We know that market access alone is not enough for many African countries, especially those with little history or expertise in producing value added goods.  Consequently, we have sought to make available the tools and training these countries need to maximize their opportunities under AGOA, and to participate more fully in the multilateral trading system. We have invested about $345 million in technical assistance and training programs in sub-Saharan Africa, including about $133 million last year.  This technical assistance does things such as helping African businesses and farmers to identify market niches here in the U.S., addressing quality and standards issues, and gaining more access to timely market information which will help them to export more, not only to the United States but to other countries, also. Finally, the fifth element of our Africa trade policy is high level dialogue.  AGOA has helped institutionalize this dialogue, and in addition to the market access provisions, AGOA requires the administration to hold high level annual meetings with African officials of various sorts, ministers of trade, finance and foreign affairs, and we sit down with them every year and continue to look at ways that we can enhance our relationship in terms of trade, economics, and investment. We have held three of these AGOA forums.  The first was here in Washington in 2001.  The second was in Mauritius in January, 2003, and the third was here again in Washington in December of 2003.  We're looking forward to the future forums that we can hold with these countries. I would be remiss if I didn't mention one key area, which is the impact on African economic security of the HIV/AIDS pandemic.  This is of great concern to them, their own ability to have their people healthy, that they can then do all of the things that need to be done in terms of their economy.  We have found that this is a critical area that we have to pay attention to, even as we are talking about trade negotiations.  We are pleased that President Bush has pledged $15 billion towards the fight against HIV/AIDS, and we believe that expanded trade and economic empowerment will also be crucial parts of the overall response to this epidemic. In conclusion, what I hope I have touched on, which is this whole point that we're not just talking about national security from our narrower definition of that, but we're talking about national security and strategic interest from a broader perspective, looking at economics and looking at trade as a part of that whole package of things that we need to be paying attention to in sub-Saharan Africa.  We hope that this has demonstrated how Africa's participation in the global economy is a really critical part of their economic and their national security and of our relationship with them on a strategic level. The administration recognizes this fact, particularly in the aftermath of September 11th, and has pressed forward with our efforts to strengthen U.S. Africa trade and economic ties and to facilitate Africa's fuller integration into the global trading system. We have sought to accomplish these objectives through a number of areas, both bilaterally and multilaterally, enhancing and implementing the African Growth and Opportunity Act through trade capacity building programs, and generally helping Africa to play a more meaningful role in the world trading system, and to use trade as a tool to address the poverty and the situation in their own societies that may, in fact, help them to be more secure environments, ones that are not vulnerable to terrorism. We are then hoping that as we continue to move forward with these trade efforts, we can also work more closely on the U.S. side in coordinating our efforts as others look at the normal and the usual strategic side of these issues as well. We are hoping then to continue on that path and look forward to working with our African colleagues in this area, as well as coordinating within the U.S. Government. Thank you. [Applause.] MR. DONNELLY:  While we're waiting for the microphone runner, this is a great step forward, these two presentations.  It is both useful to remember that Africa is not an undifferentiated whole, and likewise, that trade policy is not an undifferentiated whole.  A dollar of trade that goes to an emerging democracy or a struggling democracy in Africa is not identical to a dollar that goes to a repressive government, either in Africa or elsewhere, and that we ignore the political implications of our trade patterns as much as a greater peril, as being desensitized to the individual nations with whom we are trading. Questions?  Yes.  Again, remember the ground rules.  Please a question, not a statement, and identify yourself and address your question to a particular panelist, if you want to. MR. LANDY:  Steve Landy, Manchester Trade.  A question--not a statement, but at least a little background, because trade and economics you can't just shoot a question quickly and then, of course,. a question and so on. AGOA is extremely important.  AGOA is one of the few foreign policy initiatives that has the bipartisan support of both Clinton and of Bush, a continuation of Republicans and Democrats in the House. I know that Flori, under Federal law, cannot recommend what I'm going to say now, but we really need your help, because this conference basically says that this is a national security issue.  And it is.  We do not renew AGOA and we lose our whole credibility in one important area.  I'm not sure that's a question or a comment, but I would simply say that I hope, when this meeting is over, the message that is delivered to the military and the diplomatic side here is that AGOA must pass and we need your help to pass it. My point is, or the question I was going to ask is, what after AGOA?  AGOA III is a good bill, but with all due respect, the European Union is somewhat ahead of us.  The European Union is now suggesting entering into regional economic partnership agreements with all of Africa, which will be one basic free trade agreement that will cover everyone in one level.  The U.S., as you know, bills our FTAs and so on. Do you think that the European model will, say, perhaps for the next administration, 2004 or 2008, is the correct model to go after we get an AGOA renewed and after we pass and accept SACU, specifically a regional economic partnership agreement between the United States and Africa, which will see trade barriers disappear and will cover the many subjects as you are covering in SACU? Thank you very much. MS. LISER:  Thanks, Steve.  I think first of all, all of us recognize how important it is to embrace AGOA and build on it, so we're also pleased that a bipartisan bill has recently been introduced and do hope that it will get quick action on it, as I said earlier. In terms of what the model is, you know, it would be easy for me to try to compare what we're doing under AGOA and our future policy to the Europeans.  But rather than put it forward as a competition, which it's really not, I think what we need to do is to take the strength that we have of each of the approaches and to really use those to try to help Africa. If the EU is doing it well through these regional partnership agreements, then I think that's good.  That's a good thing and we want to support that.  I think also what we're doing in terms of having AGOA apply to a broad number of countries, given them duty free access, has an a considerable impact thus far.  We want to build on that, and we want to use SACU and a free trade agreement there as a way to also build on AGOA as well. So I don't know that we have to choose which way will work best.  I think we're often in contact with the EU, and I think it's up to the Africans to also tell us what works best for them, to remember that they also have their own views about how to proceed and building a stronger continent, both economically and otherwise.  I think that's what NAPAD is about.  So we applaud that and would like to work closely with them on that. We are open to hearing how they believe we can build on AGOA and what's the best way after AGOA III.  I think first we need to focus on getting AGOA III passed, and then we can look to the future and see what needs to be done next. MR. DONNELLY:  I'm just a political hack, so I can be a little more provocative perhaps, although I would defer to Flori's expertise and not disagree with her recommendations. Look, there have been disagreements about the strategic importance of trade between the United States and Europe that have grown, that have become very difficult to resolve in the Middle East, for example.  The question is whether a broader approach that sweeps in a bunch of "bad actors" is acceptable to the United States.  So I am less concerned about the framework of it, or the wiring diagram of the organization, or the particular vehicles under which trade is expanded, as again whether this gives greater leverage to create greater stability and greater ability in African governments.  I mean, I think if we extract that out of the equation, which again from an American perspective and based on past disagreements, one would have to be very watchful about what the European priorities were.  That's a big hurdle that would have to be resolved before you could get to your agreement. Let's try the guy in the back. QUESTION:  I would like to ask two trade related questions.  One, do you honestly think that we're going to be ready to reduce subsidies to cotton farmers?  I know this is a big issue for some of the Sehelian countries, but it's also a domestic political issue here.  I would be interested in whether you think it's possible. The other thing is that I recently was on a speaking engagement out west, and on the way out I was reading about AGOA and how many jobs it created in Africa.  This was at a time when the political situation here was concerns about jobs in America. Has the debate over jobs in America affected the debate about AGOA and so forth?  Has any of the political steam run out of this in light of the concern over protecting jobs in America? MS. LISER:  Maybe I should start with the second question first. I think that's an excellent question.  Here's the perspective that we need to put this in.  I think that all of us understand that we have sensitivities here in the U.S. in terms of outsourcing of jobs, sensitive sectors such as textiles and the apparel sector, largely the textile sector, and that we all have to be concerned about jobs here. We don't see this as a zero sum game.  If you're putting an African perspective and you're talking about how important it has been that many tens of thousands of jobs have been created actually in the apparel sector in Africa, what you also want to know is their share of U.S. apparel imports is 2.1 percent after all the growth, after all the tens of thousands of jobs.  It was about, I think, 1.2 percent when we first started AGOA.  So yes, they have doubled their share of our import market for apparels, but they are still just 2.1 percent of our market, almost nothing. QUESTION:  [Inaudible - no microphone.]   MS. LISER:  Actually, what I was mentioning was that because of that perspective, knowing that it is such a small part of our market, and has such a minimal impact here in our market--and there are 17 countries that export apparel to the United States who individually send more apparel to us than all of the African countries combined.  You know, they rank 18th cumulatively. So the point I would make in response to your question is that it's clear, given the bipartisan support for this, that despite the concerns that people have about jobs, despite the fact that it is a political year, an election year, people recognize that Africa's growth is important, that their jobs in those sectors are particularly important, but that it's not having the kind of impact on the market here.  Therefore, we should proceed with an AGOA bill that basically supports them going down that road. On what was your first question on the issue, I think that this is again a sensitive area and what we would like people to focus on is the fact that the U.S. has put forward a very ambitious proposal to reduce domestic support and subsidies in the WTO talks, the Doha Round, and that we've not taken anything off the table in terms of doing that. The key will be for all of us, the Africans, the cotton poor countries, other Africans, the U.S., EU, Japan and others who have domestic supports in cotton and many other products, agree on how we can move forward, and as quickly as possible, hopefully by mid-summer, coming up with some sort of a framework in agriculture that we can deal with the domestic supports and subsidies.  Cotton will be a part of that. MR. DONNELLY:  I want to stay on this side of the room.  We have two questioners on either side of General Wald, and maybe we could get them both at once. MR. COHEN:  I'm Hank Cohen of Johns Hopkins.  I have a question for General Fulford. General, you mentioned, almost in passing, the UN operation, the peacekeeping in Liberia, Sierra Leone and the Congo.  It seems to me that if you look at the problem of nation building, which is really important for eliminating poverty, don't you think there's a natural partnership between Africa and the UN and that we should be doing more to promote UN activities?  I'm thinking of East Timor, Cambodia, Namibia and Mozambique.  The UN record is not too bad and they probably know more about nation building than we do. But yet, even in this distinguished institution where we are today, there is a lot of skepticism about the UN.  But don't you think the UN should be supported more in Africa? GENERAL FULFORD:  Let me take this opportunity to do one thing on trade before I get there.  Trade is not my bag, but I would say AGOA goes beyond agricultural and products of that nature.  Those of you who drove your Mercedes C series in here today, that was made in South Africa.  Uganda just signed a $50 million pact under AGOA, or AID supervision, with Sysco to start developing Sysco riders.  So AGOA has a broader option than just making cotton products.  We need to keep that in mind. As to the partnership for peacekeepers and nation building, there are now several programs that I'm aware of--the United Nations, the African Union, the United States--under a program called the Global Peacekeeping Operations Initiative to build and develop the capacity for Africans to bring stability and peace to their continent. The European Command is doing a great deal as a clearinghouse to try to bring these concepts together, because my perspective right now is that there are a lot of well intentioned ideas out there but they are not as coordinated as they need to be. I think the United Nations does have a role, and I think we can partner with UNDPK and other United Nations organizations, as well as the African Union that I talked about, as well as European countries who are focused on building capacity. There is a lot to be done, and we shouldn't be focusing on who's in charge.  We should be focusing on let's band together and get it done.  I think partnership with the UN is one way to do that. MR. DONNELLY:  I will very briefly defend the honor of this august institution. I agree that the process is not nearly as important as the purpose.  Surely we need help in achieving our goals in Africa, just as we need help achieving our goals in the Middle East.  The question is whether we will have to so compromise the strategic goal in order to achieve the cooperation of others that we essentially "toss the baby out with the bath water." Even if we do succeed in getting either through the UN or on an initially ad hoc basis, or in any way greater international cooperation in Africa, we have to be very clear about what the purpose of the exercise is.  A UN operation, you know, that is going to be essentially dealing with member states whom we might regard as illegitimate governments is going to be problematic.  So again, the important thing is to fashion the appropriate tools to achieve what we want, not to begin with the tools that we have and be satisfied with them and then just build whatever we can build with the tools that we have, to overextend the metaphor. A second question. MR. SNOW:  I'm Terry Snow.  I'm from the State Department, but at the moment I'm serving as the political advisor at EUCOM with General Wald here. I have a question, speaking of partnership, about another partner, or potential partner.  I guess the question is for Flori.  That is, American business, large American businesses that are investing in Africa, is there some relationship you're aware of between the administration, your office, Commerce, State and elsewhere, and American businesses, oil companies and others, to encourage a partnership of, let's say, corporate good citizenship, corporate responsibility, that would encourage those businesses to meet or address Africa's needs in certain regions, while at the same time serving their own needs or their own interests in regional stability and prosperity? MS. LISER:  Actually, that's a good question.  I think that no one would want to mislead about the AGOA numbers while we have a lot of success in AGOA in extending beyond the petroleum exports that are coming to the U.S. duty free, under GSP or AGOA.  The fact is that it's expanding beyond that.  But we can't ignore how important that has been. We have a number of U.S. companies that are petroleum companies that are in African nations.  What I have learned is that the issue of jobs is important for them as well, and I think all of us know that petroleum companies and industries don't generate a lot of jobs.  So we have actually been speaking with and discussing with some of the companies other things that they are doing, taking the benefits of being there and partnering with the Africans, and doing things that expand into other areas. A number of the companies are, indeed, beginning to do just that.  They're going into areas such as agribusiness and looking at what can be done with some of the gas that's being burned off now from some of the new gas that's coming on line, the natural gas.  They are also looking at petroleum-based industry as possible areas where they might be able to expand. One of the ones that I've encouraged them to look at, but I don't think any of them are doing it quite yet, are synthetic textiles, because obviously, if you have oil, that's something you might be able to develop and the African countries need to develop their textile industry as well  So this is something that we're hoping they will do.  Actually, when you look at some of the projects that some of the oil companies have, our U.S. oil companies have, they are doing quite well. Then we have other big exporters, other big investors I should say, in Africa, Coca Cola and others, who have a whole range of community-based projects that they're involved in, efforts that they're making in terms of expanding beyond their narrow areas and making sure that it really is a partnership with the Africans meeting a whole range of needs.  So I've been pleased with some of the things I have heard when they've come in to talk to us about what they're doing there. MR. DONNELLY:  I not only want to make the intern dance, but I want to make sure that we give people on the far side of the room a fair shot for questions.  So if there are any hands from around the corner, I want to try to get to those and then I'll come back to the center. Was there one way in the back there?  Yes, let's go to that gentleman, and then up front. MR. GARY:  I am Ian Gary from Catholic Relief Services.  My question has to do with the eligibility requirements for AGOA and sort of the soft diplomacy aspect of AGOA, especially in those natural resource rich countries. I was wondering if you could comment on the specific case of how the eligibility requirements were applied to Angola recently.  Angola is more known for poverty and corruption rather than good governance, and yet it has become an AGOA-eligible country.  I wonder if you could comment on that discussion as well as the broader question about how AGOA can be used to promote transparency and accountability in resource rich countries. Thank you. MS. LISER:  Actually, I think the AGOA criteria that were originally put in have actually done a very good job of helping to support some of the policies that we have seen in a number of these countries, not just economic reform and trade policies in terms of open markets, but also in terms of good governance, human rights policies, et cetera. So each year, when we have the annual review, we look at the criteria and we look at this concept of continual progress.  It is not black and white that you absolutely must, but there must be continual progress in meeting the full range of AGOA criteria. In the particular case of Angola, in past years we did not believe they were making continual progress, but as we did the review this past year and we had all of the agencies involved who have a sense of what's happening on the ground in Angola, those who have been working with them on some of their policies of transparency, some of the issues related to the oil revenues and how they're handling those, the consensus was that there had, indeed, been progress, and that there was sufficient progress in meeting those criteria that we could at this point make them eligible. Now, that doesn't mean that they have fully and completely addressed all of the criteria, but because of the progress that they had made, there was a certain level of comfort with that and assurances that we got from them as we were finalizing this process and making a recommendation to the President about Angola's eligibility.  So again, the key here was had they made progress in meeting the criteria, and our assessment was that they had. MR. DONNELLY:  All the way in the back.  Yes, you sir, and we'll do another one over here. QUESTION:  [Embassy of Ghana] in Washington.  The theme for this important seminar is "Leave No Continent Behind."   It is suggested as a long-term U.S. policy in Africa, or a renewal of a long-term U.S. policy in Africa. How is this going to affect progress in the future with Africa? MR. DONNELLY:  Could you repeat the last part of the question? QUESTION:  This is suggestive of a new interest in Africa.  How is this new interest going to affect AGOA, because sooner or later AGOA will come to an end, even if there is a renewal of the desired status. MS. LISER:  I think first of all, even as we're looking at trade policy with Africa, we have to put it in the larger context, which is what this is about, leaving no continent behind.  I think we're all aware of a number of criteria, a number of measures within Africa, whether you're looking at infant mortality or whether you're looking at share of global trade or share of FDI. I think the point is that we have a range of interests in Africa that we really have a strategic interest in advancing.  My thought would be that AGOA is one part of that.  It's an important part in terms of our trade policy, but it's one part of what is an overall and long-term interest in Africa. I think the fact that we are now looking at legislation that will extend AGOA to possibly 2015 I think is key, so that there is certainty that is provided, not only within Africa as to their access, duty free access to the U.S. market until 2015, which is key, but that also will signal investors--and that's not just U.S. investors but also foreign investors--that will then know that if they go to Africa, they invest there, they create jobs, they develop an economic environment that is both profitable to them and also helpful to the Africans, that they can be guaranteed duty free access to the U.S. markets for almost all products that Africa makes--all products that we import, actually.  They still are not making many of these products yet, but we hope that they will, and that they will have that access to the U.S. market for a considerable period of time. I think it is true, that at some point it's a unilateral preference program that is likely to end.  But I think we should be focusing on how to help Africa take full advantage of AGOA.  There are a lot of countries that have not yet really begun to take advantage of AGOA access to the U.S. market.  We want to help all of them to do that.  As we get to the end of AGOA in 2015, assuming that a bill passes soon, then we can begin to look at whether or not we need to extend it again, or what are the circumstances that we need to now address in terms of our growing trade relationship with Africa.  But we would have to see where are we at that point. My view would be that if Africa still needs to have duty free access to the U.S. market, or some do and others don't, that is the kind of debate and dialogue that we'll have at that time.  But in the meantime, we really need to be making sure that we get full utilization of AGOA benefits and access to this market by as many of the countries in sub-Saharan Africa as possible. MR. DONNELLY:  General Wald. GENERAL WALD:  I hate to steal somebody's questions here, but first I would like to mention it's great presentation by General Fulford because he keyed all this stuff up for me during the three years he was there.  So I appreciate that. To Ms. Liser, I would like to just make a comment about, first of all, I think what you're talking about is exactly part of one of the real keys to the success here in this multifaceted approach to Africa that's going to be key.  So I am impressed with your presentation. Number two, as General Fulford said, in East London there's a Mercedes factory, of all things, and in Stuttgart where my headquarters is is the home of Diamler-Chrysler.  We have partnershipped with Diamler-Chrysler on some issues. One of them is we traveled to East London --this has to go with AGOA, so to speak.  It has to do with the fact that sometimes we get the kind of tone, not from you but from others, that we're doing Africa a favor by giving them AGOA.  In fact, the fact of the matter is in East London the Mercedes plant there has the highest quality production of any plant in the world.  As a matter of fact, it has taken over for Mercedes in Stuttgart at 2.33 defects per two cars. The reason I bring it up is that the Germans in Stuttgart are worried about losing production capacity based on the competition.  So what I would say is it's not all easy or maybe not as simple as it sounds, but I'm telling you, if the United States doesn't wake up, we're going to lose a huge market there.  A lot of the stuff we're talking about, we need to forget about the past and get on with the future. Thank you. MR. DONNELLY:  I would like to ask very briefly a question, in order to yank the discussion about as far in the opposite direction as possible, because I want to make sure I can drive a wedge between you two, particularly because I have some questions about what engagement in Africa means in really hard core military engagement terms. I would like General Fulford to put on not just his field commander hat but his Marine institutional hat and recall that we have a quadrennial defense review coming up next year.  I'll give you a blank sheet of paper to assume the strategy that you would like to have, but if there is to be any sort of "meat to the bones" of the strategy, there has to be a slice of American force structure that is at least in some sense, under some circumstances, allocated to African contingencies or African engagement, or define how you will.  I would like to hear that, and just as a warning to General Wald, I will ask this question later. Give us some sense of what that might mean over the long haul, and by your standards, how it would be expressed, say, in the upcoming defense review. GENERAL FULFORD:  I almost think that's a softball, so thank you for that one. I mentioned capacity building and a focus on intelligence earlier.  I also am a fan of training, and training at the soldier-to-soldier level.  We have several programs ongoing in the European Command, the Central Command, today for which they are contracting out the training because there are not soldiers available.  That is not to say that institutions who do this kind of training on a professional basis are not good.  They are. But my observation is that when that young lance corporal or sergeant is on the ground with his counterpart building relationships, it's vastly, vastly superior to any other kind of program that we have ongoing in Africa.  For a long time, the 3rd Special Forces Group was the lead dog in Africa.  They developed relationships, they did the training, they were our experts, and now we've taken them somewhere else.  So in this economy of force effort, we are having to try to use other forces who don't have the expertise and capability, or we're contracting out in order to conduct training throughout Africa. I think we need to revisit that.  We need special forces.  We need Marines, we need soldiers, we need airmen who can go down with their counterpart and not only train effectively, but also provide that mentorship on what it means to be a professional military in a democratic, civilian-controlled society.  The U.S. military are the only ones that can carry that message effectively, and I think we need to rebuild that capacity. MR. DONNELLY:  Thanks. Yes, sir, let's go one and then two.  I promise I'll get you.  This gentleman right here. MR. COBB:  Yes.  I'm Charlie Cobb with allafrica.com.  This is directed to you, General Fulford. We understand there's been some discussion in the ongoing discussion about the U.S. military and Africa, about what command operations in Africa will fall under.  Given EUCOM's role in Europe, growing both in size and complexity, how do you respond to the suggestion that we understand has been made, that really Africa should be largely placed under CENCOM as opposed to EUCOM? GENERAL FULFORD:  I spent a great deal of time--I was the Marine component commander of CENCOM, working the Horn issue, so I'm not just speaking for the European Command.  I also served as Director of the Joint Staff and have seen this issue come up and debated several times. It's interesting that the Unified Command plan division of Africa, which by the way several African island nations are under the Pacific Command, so there are three regional commanders who have direct involvement and interest in African security issues.  But it's interesting that everybody focuses on the Unified Command plan and the military relationship, and yet other organizations in our government divide Africa in different ways that also create problems, and we never hear any dialogue about that.  That's just a point of interest. I think my experience is that the people in the European Command, the Central Command, and the Pacific Command work very, very hard to make sure that those seams between them are transparent and that the countries involved do not feel the influence of those seams.  I personally believe it's a spurious argument. Having said that, would it be better to have an Africa Command?  Maybe.  But you've got to do more than just anoint a commander as a CINC Africa and put him in charge.  You've got to rebuild intelligence; you've got to provide forces; you've got to do a lot of things that would be very expensive and time-consuming.  I'm not sure, in the greater sense, this is the best course of action for our nation. So my answer to you is I believe the relationships and responsibilities as they are laid out by the Unified Command plan are appropriate and that participants just need to work harder to make sure they do cooperate and that seam is transparent. Specifically in the area of East Africa--and that's where the issue most often comes up--should Tanzania, should Uganda, should Rwanda, be part of the Central Command.  There's a great argument for that.  But I would say that, if they do, you resolve perhaps some of the focus of effort in East Africa, but what about the Congo?  What about Central Africa, which is germane to the peace and stability in Africa.  If you make East Africa a little bit more coherent, what do you do to the problems in Central Africa?  So there are no easy answers.  If there were, they would have been done. My belief is that people are working very hard to make it transparent, and maybe we ought to focus on the North/South Division and other bureaucracies a little bit more than we are. MR. DONNELLY:  In other words, it's always better to buy NCOs, captains and battalion commanders than four-stars. [Laughter.] There is a woman right here, and then I promise I'm going to get this guy down in the front.  Okay, how can you pass up the microphone.  I owe this gentleman from about ten minutes ago. MR. MUELLER:  [Catholic University.] Ms. Liser, you mentioned trade as a tool.  Is the United States considering tourism as a tool, too?  U.S. travel warnings are hurting African countries' economies and the tourist industry, which is very important for many African countries.  As a former East Africa resident, I first hand saw the disastrous result of the travel warning and the decline of the tourist industry.  It has created poverty and a breeding ground for trouble. Is the United States considering lessening travel warnings and improving tourist relationships to stabilize African countries? Thank you. MS. LISER:  I think that's a perfect example of how we need to address issues in a more coordinated fashion.  I think we have two pieces of a puzzle and I would certainly, from my position, acknowledge that there are lots of other pieces. We obviously support the growth of tourism and other tourism related services in Africa.  This is a key part of them becoming more integrated into the global trading system.  It's an area where they have a comparative or competitive advantage, and we certainly want to see that happen. I'm fully aware.  I've been to Kenya.  I've had discussions with the trade minister there, as well as others, and we are aware of the impact that our travel advisories have had.  But we recognize that we have to address the problems that cause us to have the travel advisories.  We can't just say there should be no travel advisories because of the impact it has had on tourism there. Again, the concept would be that, even as we support the growth in tourism in Africa, helping them to develop their services sectors--and that's a very important one for them--what we really need to do is to make sure--and I leave that to the experts who understand this a lot better than I do --we need to make sure that they are getting the kind of technical assistance in addressing the particular issues that have been causing or leading to the advisories that are issued by the State Department. My understanding is that several things have happened, that we have been working with Kenya in particular--I'm sure there are other countries as well--in trying to help them address some of the tourism threats and other security threats that are there, specifically so that we can make sure these advisories will no longer be necessary.  But we've got to address the fundamental issue. The second thing that I had read recently was that actually tourism had been coming back in Kenya specifically.  I was reading about that.  It's very interesting to me.  So I would just say that some of what's already being done is apparently starting to work. MR. MUELLER:  I just got back from Kenya, from Lamu, that's Kenya, and there were only four people in the whole hotel, and there were only two people at the beach.  So it's empty. MS. LISER:  Well, if I could just respond, I was in Mombasa in February, and my hotel was quite full, and there were people walking on the beach.  I didn't get to walk on the beach, but there were people walking on the beach.  So it's coming back. I certainly can't speak to every single region and every single area, but clearly, in Mombasa, we have indications that it is on the comeback now. MR. DONNELLY:  Let me get two more questions.  This gentleman right here, and then you, sir, and then we'll break for lunch. MR. WALL:  Gregory Wall, Department of State overseas security advisor counsel. I just returned from Zambia and South Africa and it seems that, among the American companies that are operating there. they have a large concern about the new international maritime security regime that's going to be beginning on July 1st.  No doubt that's going to help security in the long term. But I was wondering, how do you think this initiative will help U.S./African trade relationships in the short term, and if you have any recommendations for U.S. companies that are looking either to invest in Africa or are already in operation there, on what they can do to minimize any negative effects they might feel an increased chance for, and security costs or initial delays in shipping times. MS. LISER:  Obviously, Africa does not need any additional hurdles to jump in terms of maintaining their competitiveness, and more importantly, improving it.  Certainly in the area of transportation, from my DOT days, we've had an issue about Africa being able to ship its products here competitively.  What we're looking at now is to make sure Africa gets the assistance it will need in terms of these new regulations. My briefing that I got from the Homeland Security folks and others at the Department of Transportation, and various customs people who are involved in this, I was told that there are some pilots that have been developed for particular ports and that there are several in Africa that are participating in these pilot programs, that there will be an opportunity, once those pilots have been in place for a brief period of time, other ports in Africa will be eligible to also be a part of the program that will get the kind of focus and technical assistance that's needed so they can actually develop the plans that meet with these new security base regulations. So I was most concerned that it not have a negative impact, obviously, on trade, so I reached out to the people who were the experts and are the experts on this, to have them come and tell us exactly what was going on.  We also had some trade ministers who had asked questions of Ambassador Zoelick and myself and we wanted to be able to answer them. So everything is not yet in place.  I don't want to give that impression.  But I've been told that several African key ports are on the list of the pilot program. MR. DONNELLY:  One final question from the gentleman at the front table. Mr. Ambassador. QUESTION:  [Embassy of Cape Verde??] One of the factors of stability in Africa, generally we have state before nation, so the issue of nation building is a huge issue in Africa.  There we don't see any effort really in nation building.  You spoke of nation building when you travel.  You go to Sierra Leone, to Cote d'voire, but a lot of other countries who are not now in trouble because of the nation building. What are you doing for nation building, first leadership, what you are doing for developing real strong leadership in Africa, democratic leadership, so it's an issue that's very important.  What are you doing to support the conflict resolution technique? We see in South Africa to have this shift between apartheid and now, in at least NGO universities, very noticeable in conflict resolution technique.  There is nothing doing.  So we have a lot here of nothing in Africa.  So what are you doing for this. The other issue we spoke about is intelligence, the lack of intelligence.  At the same time, the U.S. is creating a lot of problems for Africans to come to study here in the U.S.  How can you have intelligence if you have people in the future not knowing your language and that you can rely on maybe when they come back to Africa. MR. DONNELLY:  Why doesn't everybody take a stab at that.  General? GENERAL FULFORD:  The Africa Center, of which I'm a part, is a very small organization, but I think is a very important organization within the Department of Defense, just for the reason you mentioned. I'm leaving here next week to go to Cameroon, where we will conduct a seminar on nation building and conflict management with 14 Central African nations, bringing together both civilian and military leadership, have them talk among each other about what works and what doesn't work, and why.  DDR has been successful in some countries and in some countries it has not.  Our own government is very concerned about the expense of DDR.  Why?  What are the differences?  What are the implications?  We go and we discuss that with African nations to help them find solutions that they can build on. The entire issue of capacity building in the long run, building statesmen in Africa, there are a number of institutions, European and the U.S., who are working on that issue.  Building a respect and a capacity for a civilian government, and in a professional military that will respond to that government.  Those are all part of democratic concepts that the Africa Center is very privileged to work with under the leadership of the Department of Defense, the European Command and Central Command.  So we are doing things, and we will continue, just for the reasons you mentioned. I have asked for more resources, so that drop will be bigger. MS. LISER:  I think the only thing that I would add--and I'm certainly not the expert on this--but I think that it's really important that African leadership on these issues--You know, there are so many things that at least to me reflect a wind of change in Africa.  We have a number of strong African leaders now who have made commitments to certain principles that have to do with exactly the things that you're talking about, democratic institutions, building good governance, all of the things that, as I said earlier, reflected in NAPAD. In my opinion, no external assistance can take the place of--it can certainly complement, it can supplement, but it cannot take the place of having on the continent a commitment at the very highest levels to improving the situation there and, as you said, having states before nations and taking on the very difficult task of nation building once you have a state. I just think we want to first commend the people who are taking leadership on the continent, Africans that are taking leadership, and then I think the key is for them to let us know how we can help them.  I think that is really a key in providing what will be long term, significant structural, institutional support for building nations.  I think that's really fundamental. MR. DONNELLY:  That's a perfect comment to conclude upon.  I'm not sure I can "guild that lily" and make it more profound than it was. We will take about a half-hour break so that people can have some lunch before our lunch time speaker begins his address at 1:00 o'clock promptly.  If you have any other tasks, please take care of them in a timely fashion so we can reconvene precisely at 1:00. [Luncheon Recess] A F T E R N O O N  S E S S I O N MR. DONNELLY:  We're going to continue now with what is really turning out to be, in my mind, a parade of superstars of greatest hits, not only by virtue of their titles, but also by virtue of their experience and the substantive contributions they're making to our discussion. About to address us now is Acting Assistant Secretary of State Charles Snyder.  Before being named as Acting Assistant Secretary, he was Principal Deputy Assistant Secretary and  essentially managed the Bureau of African Affairs on a daily basis.  So the good Senate willing, I'm sure it'll all come out fine in the end. More importantly, he was also the central policy person for the ongoing Sudan peace process and has provided policy focus for the Southern African region as a whole. Mr. Snyder is a career Africanist, in the most positive sense of that word, working not only in senior positions in the State Department, with the Central Intelligence Agency, serving as National Intelligence Officer for Africa in the early 1990s, and prior to that, he spent 22 years in the Army, where again his principal career focus was Africa, running military training and assistance programs in the region. So that is just really a brief introduction and a summary of the highlights of Mr. Snyder's career.  And with no further delay or ado, please welcome to the podium Charles Snyder. [Applause.] MR. SNYDER:  I requested the luncheon slot so you'd all be docile, and I wouldn't have to take any hard questions because, believe me, the Sudan thing is driving me crazy and preoccupying me.   It's actually refreshing to be able to come out and speak a bit about broader African issues and Africa in the long run because I am a career Africanist, and I've always thought Africa matters, and I'm glad to have this opportunity to put it in a bit of a strategic context. I appreciate, in particular, AEI doing this for us.  I think often there's just not enough focus on Africa in this town, especially the strategic level.  It used to be kind of a cruel joke 20 years ago when some of us tried to pretend Africa might rise to the level of a strategic interest, but thanks to the oil deposits we're finding every day in and near Africa, I can say with a straight face 30 percent of our oil will come from there, and I promise you it is a strategic interest, but let me get back to the formal cleared remarks by the great master-- [Laughter.] MR. SNYDER:  --before I get in trouble again.  This is not going to be UCLA, I promised the management, but you can get me to go there during the question and answer sessions. [Laughter.] MR. SNYDER:  When President Bush was elected in November 2000, some questioned whether a Republican administration would take an active interest in Africa.  Many doubted the depth of our commitment to addressing the myriad challenges facing the African Continent.  I believe we actually proved the skeptics wrong. Our policy over the last 3 years has demonstrated that the Bush administration is committed to an engaged and an active African policy.  From the highest levels of government, to President, to Secretary Powell, Africa remains an important priority, and we've demonstrated both with resources and diplomatic engagement. Nearly every day the Secretary asks me about Africa.  Now, 9 out of 10 times it's Sudan lately, but even before that he was asking me about Liberia.  It is a subject of discussion around the Secretary's morning meeting on a regular basis  and, frankly, if you've been a State Department bureaucrat for a long time, that really is the measure of whether or not it's getting attention.  And I can assure you, on a personal basis, it is receiving more than adequate attention in this administration. He and the President care about what happens in Africa and understand the continent's importance to long-range strategic U.S. interests.  In partnership with this is the paid commercial announcement of, "What's Our Africa Policy."  In partnership with the African government, we've made significant achievements in our four focus areas, which are encouraging trade and investment, promoting democracy and human rights, encouraging development, and protecting the environment. But you can't do any of that, despite our passion, unless you address the crosscutting issues, the issues that you have to treat before you can get down to development of democracy.  Those include fighting HIV/AIDS, countering terrorism and ending regional conflict.  Obviously, the last two of those are more important to this conference than the preceding, but I think they all have to be confronted in the global war on terrorism. As we confront these challenges, we're finding that the traditional ways of pursuing our African goals may not be the most effective in today's world.  The challenges we faced in Africa, as in the rest of the world, are new, thorny, and constantly evolving.  We must view these challenges with fresh eyes, and search for novel, creative approaches to solving them. Today, I'll focus on security interests in Africa and share our thoughts on pursuing the strategic interests in ways that address that new environment.  Before I get to the security interests, per se, let me say a word about what's changed in Africa post the Cold War. One of the things that's happened is, absent the superpower competition, the ideological competition in Africa between us and world communism, the Africans are now struggling over African issues.  Many of the wars and combats we're seeing are not being fought for external reasons any more.  These are being fought for reasons that matter to the Africans.  It's an evolution that needs to change the way we approach them. They do look to us as the major superpower, the principal military power on the face of the earth, and therefore an example of what they might be interested in ultimately in security, but they are now engaged in combat over resources, land management and other things that matter to them. What was called the first World War in Africa in the Congo was fought over African interests.  It was a conflict for who would rule and who would dominate the great prize of Zaire--now, the Congo once again.  It was fought over by several African armies coming in, one after the other, on one side or another because of their national interests, not because some superpower was pushing them into it. The Angolans, the Namibians, and the Zimbabweans came in on the side of the Congolese Government of Kabila because they were not about to see external regional actors, and that's how they viewed some of the Great Lake States dominating what was the Northern edge of the Southern zone of interest to them.  They weren't about to see Rwanda and Uganda decide who ruled in Kinshasa.  That is a very African concern.  It's the kind of thing we didn't see during the Cold War days or we saw only in a distorted fashion. And so we need to approach African strategic interests with African eyes for the first time.  We need to say why we care, and I'll say that shortly, but we need to remember that the Africans are now reacting for African reasons.  The Ethiopian-Eritrean War, bloody and pointless though it was, was about African issues.  It was about old rivalries that go back a long way.  It was about friendships that changed, partnerships that changed, but it was about African issues.  It was not about what the West thought. We didn't intervene to try and end it, as we do elsewhere, but the underlying causes are very African, and we need to address those causes.  It's no longer a case where we can step into these situations and merely throw money and manpower at it.  We need to be more sensitive to what's driving these issues in the longer run, especially in the context of the global war on terrorism. Back to the paid text. U.S. national security interests.  As a  number of speakers at this conference have made clear, the United States has real interests in Africa.  We ignore the continent at our peril.  Africa will provide up to 30 percent of U.S. oil in the next 10 years.  The petroleum is coming from traditional suppliers like Nigeria, Gabon and Angola, but from emerging producers such as Equatorial Guinea, Chad, Sao Tome and Principe, and still more I think that are only beginning to come on-line. More and more businesses are paying attention to Africa.  During President Bush's trip to Africa, he referred to Africa as the last great emerging market of the world.  It is.  And my predecessor, Walter Kansteiner, is back in that business, and Walter is many things, but he's a shrewd businessman, and he's making his living in Africa.  There really is a large emerging market there, a serious one, maybe the last one that's open for grabs in any real sense that doesn't have preexisting patterns that can't be broken at this point. Infectious disease knows no borders.  Public health officials warn of the possibilities of emerging infectious diseases that could spread to the U.S. and Europe, the comeback of TB in many places.  The failure of the global eradication program against polio goes to the difficulties we've had getting to the last couple of pools of polio, one of which was in Sudan. And one of the things we've gotten out of the peace talks, thanks to the quietude we brought into the South, is a chance for WHO to get in there and do that.  But now we're faced with new outbreaks in Nigeria, where the global war on terrorism may have bled back a bit.  One of the myths that's being spread is that somehow this polio vaccination that's being given is some kind of Western plot to harm the population which is largely Islamic up in the North of Nigeria. This insidious lie is causing us real problems.  The outbreak has now spread into Burkina Faso and other places in the immediate area near Nigeria.  Kofi Annan and the Secretary have talked about this constantly.  This is one of the pernicious side effects of this global war on terrorism, that someone would believe this kind of myth.  It's in our interests to stamp out these diseases, and it's in our interests globally. The African get it, the Nigerians are doing what they can, but this risk of infectious disease coming back is very real.  It's not an idle comment.  It's not a way to try and build a case for strategic interests in Africa.  It's very real.  If we can't eradicate it there, it's going to come back, whether it's polio, whether it's tuberculosis, whether it's river blindness.  It is a strategic interest when you can get on a plane in Capetown and get off that plane in Atlanta.  It's just a simple fact of global life the way it is today, and it is a strategic interest. Finally, of course, terrorists and extremist groups find sanctuaries in Africa and have conducted attacks against U.S. and allied interests there.  The continent's crises and conflict, as well as the brutal HIV/AIDS pandemic breed instability which opens new safe harbors for our enemies. In short, for these reasons and others, what happens in Africa impacts the United States, and our policy needs to reflect this reality. Let me talk a bit about what we're doing on the global war on terrorism, why Africa matters in that context. Following 9/11, and the subsequent military operations in Afghanistan and Iraq, many asked whether Africa was the next front line on the war on terrorism.   While the scale of threat from Africa is not clear, we know that terrorists who mean harm operate in Africa.  Indeed, al Qaeda and allied terrorists have attacked U.S. interests there long before 9/11, with the August 1998 bombings in Nairobi and Dar es Salaam. To address these challenges, President Bush announced the East-African Counterterrorism Initiative, a $100-million effort to enhance our foreign partners' capabilities to fight terrorism.  We're working to help equip and train countries like Kenya, Ethiopia, and Djibouti, and others to improve their border security capacities, enhance law enforcement skills and reach out to marginalized communities to improve perceptions and awareness of the U.S. and its policies. Other areas of Africa, such as the Sahel in Northern Nigeria, are also of concern.  Both areas are home to disadvantaged Muslim populations, where some may be sympathetic to fundamentalist organizations.  Parts of their regions also have loose ties, at best, to the central government and could be safe havens in which terrorists can operate and transit. The Pan Sahel Initiative is also an effort to engage governments in this region and build their capacity to effectively monitor their borders.  Improving African capacities to monitor their coastlines is also a critical part of our strategy.  We need to revive, and we will revive the old African Coastal Security Program, which helps African security forces to protect their shores, as well as their marine resources.  And as I pointed out earlier, a lot of this new oil is actually off-shore.  There is no one to protect it, unless we build up African coastal fleets, et cetera. Just like the old African Coastal Security Program had a twist, one of the things it was meant to do was jack up the price, frankly, of protein to the Soviet Union, one of the principal overfishers.  One of the side benefits of this African Coastal Security Program when we revive it is there will be some kind of competent Navy, some kind of competent Coast Guard to answer the mail in the events of threats to off-shore drilling rigs and other kinds of operations. Right now, the only one that can answer the mail, other than occasionally French ships passing that way, are our own.  There are really no African coastal Navies, in the sense of having large capacities.  This, again, is an American strategic interest.  It's a small program, but it can make a big difference, and we do mean to revive it and push it quite heavily in the next year. While the East-African and Pan Sahel Initiatives and Coastal Security Programs are critical elements of our counterterrorism strategy, they address short-term challenges.  The foundation of an effective, long-term strategy is not security assistance by itself, but rather programs that promote justice and the rule of law, encourage agricultural production and force their lasting economic development.  These programs, when they're effective, create strong stable states that are much more effective in dealing with counterterrorism issues and in denying havens for terrorist organizations. With that in mind, the Millennium Challenge Account, which the President announced 2 years ago, represents creative new approach to foreign assistance that will form a critical part of our long-range counterterrorism strategy.  The truth of the matter is we have to answer the mail in terms of the threat that faces us now, and that's what the East-African Counterterrorism Program is about, that's what the Pan Sahelean Initiative is about, that's what that new capacity, in the form of the CGA TFO is about. But in the longer run we have to drain the swamp, and draining the swamp in this war on terrorism needs the things that the Africa policy has been about, the foundation of the African Bureau, which is development, democracy and institution building.  We have to take away the reasons that people are susceptible to the approach by the fundamentalist hard-liners.  We've examined this problem, and the fertile ground for this kind of recruitment follows where failed government or where government doesn't reach out. What these people provide, in many cases, is some system of justice where there is none.  It might be in the form of an Islamic court, but when there is no justice, that sometimes is an attractive thing.  They provide basic medical assistance in places where the governments don't get as a recruitment device.  They provide food, in some occasions, where agricultural programs have failed. So, if we don't drain the swamp, this will begin endless war.  That's why the Millennium Challenge Account is, in fact, part of the global war on terrorism.  It's going to change behavior if we succeed in this program, and it's large enough to make a difference. The MCA provides development assistance to those countries that rule justly, invest in their people and encourage economic freedom.  Congress has provided $1 billion in initial funding for FY '04, and President Bush has pledged to increase the funding for MCA to $5 billion a year, starting in '06, roughly a 50-percent increase over current U.S. core development assistance. We've held the basic program harmless.  The traditional aid program has been held harmless.  This is additional money, and this is meant to reward good behavior, not because we can save one country at a time, but because we need to prove, once and for all, that big bucks will make a difference, that development may be because the West has not done enough, but it's a combination of not doing enough and having the fertile ground to plant the seed money in. And if we can get some of these states to stand up and begin a pattern of the dominoes going in the right direction in terms of development, we can make a difference.  And that's got to underpin this war on terrorism in Africa.  That's not a universal solution.  This war is going to take different forms in different places.  But, in Africa, this is one of the critical concerns that we have to follow up on. I mentioned one of our crosscutting problems was preventing and ending conflict.  A common theme in our approach the Africa understands that Africans must take the initiative, no less so in the security arena as in others.  As partners, we can support them, but change must begin on the continent. We have worked with the Africans to increase their capacity to respond to internal problems.  Modest investments in these areas provide improved U.S. access, increased U.S. leverage to press the parties to fulfill commitments, open the way for American participation in international coalitions, and more importantly make it more likely that capable African forces will respond regionally, reducing a potential need to deploy U.S. troops. The United States is pursuing a multifaceted assistance program to promote African security and stability.  The African Contingency Operation's Training and Assistance, a ACOTA program, trains and equips African units so that African militaries are better able to deploy and operate in peace support operations and other complex humanitarian situations. ACOTA also assists partner militaries in building a trainer cadre from women in their own ranks.  This provides training sustainment and continuity.  Our ACOTA partner contingents are currently serving in U.N. peacekeeping missions in Sierra Leone, Liberia, the Democratic Republic of the Congo, Ethiopia, Eritrea, and the African Union's mission in Burundi and with ECOWAS' mission in Cote d'Ivoire. An effective program has to include counterinsurgency training to confront the new realities in Africa.  Africa has many weak states where defense and security institutions can be vital instruments for protecting and improving the performance of legitimately elected governments.  Training and counterinsurgency tasks, including improving human rights, winning hearts and minds, and other things that help with that kind of performance, will help the Africans build societies that can weather the storms of economic and political development. We've also learned that providing new, expensive and hard-to-maintain equipment is not the solution to the African security challenge.  The Achilles Heel in Africa is logistics.  Providing high-tech toys that African infrastructure can't maintain and that already overindulgent African defense budgets can't afford is a prescription for technological disarmament, not national empowerment, but a sharing of information and other low-tech kind of force multipliers are the real answers. We are working closely with our colleagues in DOD on developing our security policy towards Africa.  Hence, I'm reading a clear text. I, for one, believe that the U.S. military, not just contractors, should play a role in these programs.  We multiply the effectiveness of our training programs when we use military trainer to work with the Africans.  While we have excellent contractors, the Africans feel short- shrifted when they see military trainers in other places in the world.  They respect U.S. military personnel greatly, and placing military trainers in key programs has an exponential impact on our training efforts. I've long believed that Africans for the African Union and subregional organizations need to develop and implement a common security policy.  Such a policy could set out African priorities for the regulations of arms flows.  Much like the Africans are playing a key role in the African Nuclear Free Zone, an African-initiated policy on arms flows would be much more effective than any international proposal. One of the real problems we have day-to-day, and one of the things we have to constantly fight, is that somehow we're spending huge amounts of time and money on military assistance, military equipment to Africa.  The truth is the Africans are buying a lot of equipment that they don't need and a lot of corrupt deals, in many cases, but one of the reasons is there is no global standard in Africa.  There is no OECD equivalent that could rationalize African procurement. One of the problems we face on a day-to-day basis is someone will come to us and say, "The neighborhood has just got a whole shipment of brand-new MiG-29s in the Ukraine.  Can't you do something about it?" We'll go to complain to someone, and we'll discover they have an export license that was granted by another African country.  Until Africa steps up, and I can say that you have to have an African Union license, and then I can go to the government of Ukraine or I can go to the government of another European power and say, We have all got to enforce this African standard.  I don't care that you have a license from Togo.  The African Union didn't put its stamp on this, and therefore this is an inappropriate and potentially dangerous exploitation of African military needs and maybe an escalation of defense needs beyond what's necessary. But we need the Africans to step up, and one of the things we intend to take the lead with the AU on is helping them be sure that they don't become the OAU, ineffective in the military area.  We need to do more to work with this committee.  It's very ambitious.  It's proposing an African army, very hard to do, but they've got the right idea, and I'd rather have them aim high and fail than not aim high at all and give us no chance to push them to where they need to go. So you're going to see us come back and ask for assistance on other things for the African Union, despite our lack of success with the OAU, because, for one thing, they seem to be wanting to step up to the plate, and we have to be there with them on that.  There has to be an African standard.  We can help them enforce it, but they have to set the standard. Regional organizations are a key part of this strategy.  Organizations, such as the Economic Community of West African States to oversee and support regional peace, to respond to requirements and to encourage African solutions for African problems on a regional basis are the key.  ECOWAS has been a key player in Liberia, Cote d'Ivoire, and elsewhere in West Africa to help maintain post-war peace. The AU, under its current leadership of Mozambique President Chissano, is active in responding to potential and actual crises.  For example, Chissano has strongly called for restraint and avoidance of violence in the crises in Sao Tome and in Equatorial Guinea.  His voice has been invaluable in resolving these tensions before they escalated to regional conflict.  We are working constructively with the European Union and its member states in Africa. In cooperation with the U.N., the U.K. is playing a lead role in Sierra Leone, France and Cote d'Ivoire, and we've taken on that role in Liberia ourselves.  The EU is also establishing a 250-million euro peace facility designed to support African training of African peacekeepers and African participation in peacekeeping and other crisis activities.  The U.S. will coordinate closely with the EU to ensure this synergy. Our objectives of democratic governance, robust market economies, competent health systems, environmental awareness cannot be achieved when conflict and instability affects African states.  The U.S. must work long and hard to ensure that our African policies work towards the long-term security.  We cannot constantly be putting Band-Aids on a crisis.  We don't have the money, and the Africans don't have the bodies and the capacity to suffer in the 21st century at the level that that kind of approach would demand. Africa's importance in the world and to the United States will only increase in coming years not only as a source of growing natural resource, but as a source of allies and friends willing to help us fight on the front lines on the war on terrorism.  Their security and stability affect ours.  Through attention to security assistance, promoting economic development, democratization, good governance, we must do what we can to make sure our African friends have the resources and the will to be effective partners in the global community, and we must find them new partners. I've often thought one of the failings we've had over time is not to encourage more synergy between countries like Brazil and some of the other Latin American states that are at a stage in their development, both military and otherwise, in which some of the lessons they've learned are much more applicable in time and space to Africa than some of the European and American examples.   This needs to be a case where maybe we introduce them to new friends.  The Indians may have an important role to play in this.  Again, the stage of their economic development matches more closely where Africa is and yet their military development is quite promising.  They stood up as a world power.  They may have lessons to learn.  Simply because it's a place we haven't looked for lessons to use in Africa doesn't mean we shouldn't, and I think we're going to take a hard look at moving out beyond those traditional parameters. Now, you have heard the paid advertisement and a few excursions.  I'd like to save the rest of the time for questions, and anything on the continent except North Africa. General Wald? GENERAL WALD:  I don't have a question.  I just want to thank you for the leadership you're providing in the I think new cooperation between State and DOD, at least at our level on this, and I appreciate it.  Thanks a lot. MR. SNYDER:  I'll have them put that in my efficiency report.  I appreciate that, General. [Laughter.] MR. DONNELLY:  If you're on the side, if you could please step forward so Mr. Snyder can see you. MR. VINES:  Alex Vines, from Chatham House in London. MR. SNYDER:  I don't want to see Alex. [Laughter.] MR. VINES:  It's about the G8.  The G8 is having its summit under the U.S. presidency at Sea Island coming up.  What role is Africa going to play in the kind of U.S.-led G8 agenda?  What are we going to see? Thanks. MR. SNYDER:  I think you'll see the Africans play the same kind of important, but collateral, role they've played recently.  We don't want to turn the G8 into frankly an Africa debating society and make it the principal preoccupation of G8.  That's not what the G8 is about. But because of NEPAD, and other kinds of activities, and other kinds of African initiatives, clearly, there's an ongoing dialogue with Africa on this subject.  And I think you'll see at Sea Island that that dialogue continues.  It won't get the spotlight, but it will have some light shown on it during that period.  Again, it's about economics and global community, and Africa clearly is part of that.  And the NEPAD initiative gives us all a lot to talk about, and the G8 is an appropriate enough forum to engage them in that. So that's the dodgy answer.  We haven't fleshed it out fully, but the Africans will have a role to play, Alex. Dick? PARTICIPANT:  Charlie, this morning, one of the light motifs of the morning discussion was the need for more engagement, more staffing, more intelligence and so forth.  I asked a question earlier, but given your role I'd like to ask it again.  I don't see how we can talk with a straight face about helping Africa develop when, in the Sahel, for example, in four countries, among the poorest in the world, there's one full-fledged AID mission.  I think, on the continent as whole, only about half of the countries have AID missions.  That's old news. Is there any effort underway, any serious effort to ramp up our AID presence in Africa?  I just don't see how we can be taken seriously in that situation. MR. SNYDER:  I think, Dick, you put your finger on a problem, as you know, is along-running concern because the AID budget was essentially capped between $800 million and $1.1 billion over the last 10 years.  But, more insidiously, their capacity to put manpower in the field was denied them for a number of reasons. I think one of the ways we're trying to answer that challenge is, frankly, this Millennium Challenge Account.  It's designed, frankly, not to pay attention necessarily to whether there's a mission presence or not, although obviously expediting and carefully resourcing large sums of money is always enhanced by having AID experts on the ground, but it won't be bound by that.  If the country is a good performer, whether it's Niger, Mali or someone else, and they meet the standards of MCA, they'll be eligible under MCA for significant resources. One of the reasons we can do that is MCA is not meant to be an intensive, hands-on, U.S.-managed effort.  It's meant to say that I've selected you because you are a competent government.  Some of your institutions function well.  You do invest in your people.  And so I'm going to say to you I want to put $20- or $25 million into your health care situation or into your educational situation.  And what I'm going to ask you is not programmatic performance of the classic kind, where I'm going to line out a bunch of projects for you to do and have people watch them very closely. I'm going to say things to you like I want to see doubling of the number of girls and women that graduate from higher education, for instance, or I want to see a doubling of primary school enrollment from 10 percent to 20 percent, and we'll agree that that'll happen over 2 years, and we'll agree that that's a $50-million program, and then we'll come back and look in 2 years.  We'll provide expertise where it's needed to help keep the program on track, but the day-to-day, projectized, heavily dependent on outside advice is what we're trying to avoid in this MCA partially is a solution to that. An alternate solution, and one that might happen the next time somebody takes a look at this, would be to expand AID presence on the ground.  That's not in the cards right now.  I'm a cynic, and I'll say that since we're about to be replaced by Connie Newman, who has run the AID program, I can make the case she's about to take all of the State Department personnel and reorient us in that direction.  So maybe the help is coming in a different way. But the truth of the matter is that the importance of our AID program is reflected by that fact, that this is a critical issue.  And there are many places where we have fallen out for lack of manpower that we might have been able to stay in.   But there is a critical management issue here.  When the programs get down below $3- and $4 million, the overhead to run them becomes a major issue, and so AID rightly pulled back. Now, AID has refocused, as well, as you know, and tried to intensify its focus on several areas, as opposed to being all things to all people.  That should, over time, also enhance the manpower.  They're focusing more on education, agriculture and obviously HIV/AIDS, but a couple of key areas like that which should give them more manpower and more cutting edge in those areas they choose to approach.  Not the answer that we bureaucrats love, but that's where we're going. PARTICIPANT:  Charlie, how broad is the context in which you made the statement earlier that we need to look at Africa's strategic issues with African eyes?  You used a particular example to talk about African strategic issues, but I wonder how broad the context is.  What are some of the things that we are doing or could be doing in terms of our behavior in Africa to indicate that we're, in fact, doing that--looking at strategic issues through African eyes? MR. SNYDER:  I think the mention I made of a return to looking at counterinsurgencies is really one piece of that.  The problems, frankly, that we face in terrorism are of that nature in Africa.  It's the areas in the periphery that are out of control, and that's not a traditional military campaign where you're talking about maneuvering divisions and battalions. It's more the hearts and minds campaign that our own Special Forces are oriented for, and over time we've moved a bit away from that.  We still have heavy Special Forces concentration, but we haven't spent enough time, in my view, on that side of the house in Africa.  It needs to be tied to a renewed police training program. These are really the areas in which, if you're looking at a security focus, you need to look with African eyes because it's the policeman that's going to make a difference in the global war on terrorism for us, but it's also the policemen that is going to represent the new institutional reality that African governments are now beginning to act on behalf of their people's interests, and the police, the beat cops, that we have to get to is part of that. So, when I'm refocusing on security, we need to step back and look at these things that we've given up over time.  We're starting to get back into the police business after a long period in which we were away from it because of bad experience back in the Cold War days.  But the truth is that's what Africa needs.  It needs its institutions strengthened. One of the things we have to do is to make the Defense Departments in these countries, and their parliamentary committees, understand how this works in an open system so that the corruption and other things that we're seeing in too many places in Africa start to be brought back to ground.  That's going to take a very different approach.   It's an approach much like what General Fulford's institution is about, bringing together high-level Africans, talking to them about the way these things work.  How do you do budgeting?  How do you do budgeting in the context of if I get an extra $10 million for tax, that's $10 million that doesn't go to basic education?  Where are the tradeoffs?  How do you argue effectively, in a political sense for that?  Because security needs are real.  It's part of the basket you need.  But how do you argue effectively, politically--rather than saying I've got the guns, and I've got the manpower, and damnit I want my $20 million--which happens all too often, not that crudely, but in terms of how the systems work.  And so we need to get in there. And so the military programs need to be linked much more carefully to our broader development programs and our institution-building programs.  We're doing a lot more work on justice, the military justice systems which, in many cases, are actually fairly uniform and serve as an example for some of these systems, not in terms of the law and enforcement techniques, but in terms of the how. And so some of the military money we put in there can be multiplied when we take rule of law ideas and Ministries of Justice and how they apply their own laws out in the periphery, where the military might be stationed, and somehow get a synergy going.  We need to build all of these areas and look at with African eyes.  The answer may not be the mega-bucks answer that we'd come up with.  Maybe the answer isn't a high-tech communication system.  Maybe it's something more primitive.  Maybe it's a more open-law system and more interpretation, less centralized.  Maybe that's the answer.  We have to look at it from an African perspective, which means the country teams are going to be much more important, but they need to be fully country teams. And one of the things that I'm very much in favor of over the last few years is DIA and DOD, per se, have stepped up their presence in Africa.  That military insight, that security insight, is an invaluable tool, just like the AID insight, to a country team. And if we're going to approach Africa in any real fashion that gets us where we want to go, both where Africa wants to go and where we would like to see Africa, these country teams need to be more fulsome than they are in many places.  There needs to be the security perspective, there needs to be the development perspective and, yeah, there needs to be the political perspective. And so when I say "looking at African eyes," our eyes on the ground have to be improved as well. Thank you. PARTICIPANT:  Charlie, I was very happy to hear that you were reviving the coastal security thing, which I remember.  It dates back to 1980.  You might want to call it the James L. Woods Memorial Coastal-- But my question for you is do you feel that we've come to the end of proxy wars in Africa? MR. SNYDER:  I know better than to ever say something that grand into a microphone. [Laughter.] MR. SNYDER:  But I think that the truth of the matter is that we're getting close to that.  That's not to say that there won't be the occasion when African regional powers will now choose to act through their allies in an area indirectly.  I think the point I'm trying to make here is proxy wars in the sense of somebody acting on the U.S.'s behalf, on Russia's behalf, on China's behalf, yeah, I think we've seen the end of that. But proxy wars in the sense of somebody acting in a place where maybe South Africa is reluctant to be seen as the 800-pound gorilla, and then one of the members of SADIC who shares their view and is smaller and less-threatening can act, that's possible, and that's still acting through a proxy, but it'll be African proxies for African reasons. That's not the best example.  In Nigeria, West Africa, there's some other examples where you're going to see that synergy develop, just like we do it ourselves.  There are occasions when we like Canada to lead, as you know. I'm going to see if I can't slow the questions down by having you go back and forth. MR. HONLEY:  Steve Honley, Foreign Service Journal and former FSO. We've talked appropriately today mostly about the crises, but what about sort of countries--I'm thinking of Cameroon and Gabon, for which I was Desk Officer a decade ago, that are doing okay, but they're stagnating.  They've got basic democracy, they're not starving, but they're not really moving.  What are we doing to nudge them?  What can we do?  And there are a lot of other countries like that.  So can you just talk a little bit about that. MR. SNYDER:  We have all of the traditional tools of diplomacy.  Everybody wants to see the United States reach out and be its partner, and so by encouraging good behavior on things like no third terms in some places, not necessarily applicable in Gabon and Cameroon, but in Africa more broadly.  We can encourage that kind of performance. In the case of Cameroon and Nigeria, the Bakassi Peninsula is a case where just being there, being a basic building block and supporting African initiatives, including with money, and not a lot of money, the Africans worked through what was a very ugly problem.  And instead of getting a kind of clash, which for a long time I thought we might get, we seem to be at the edge of a successful, negotiated, African-led deal that's going to solve the Bakassi Peninsula problem, with all of the high risk that was involved--disproportionate military power on one side, oil stakes, et cetera. But it was a case of the Africans giving the system to work, and working in it themselves, and us being there behind the scenes, and the French being there behind the scenes, but more importantly, African institutions being there behind the scenes: the AU lending its good offices, regional entities lending their good offices, African heads of state talking to each other, encouraging this movement at the right moment, giving credit in African forums for doing this right thing.  All of that will bring Cameroon and Gabon a little closer. More directly, the MCA program is meant to do that.  I think, if we are successful in this, and we put some serious money down, and we see some serious results, it'll be a real incentive for populations in this gray area that could, with a little work, meet the MCA criteria to move that way because we'll have the successful examples, and that's when we'll get to the Cameroons, and the Gabons and others. The traditional AID program will stay in place.  We're doing a lot of work with them.  The Cameroonians have worked with us carefully in international fora.  There are rewards for that as well.  We still stay at that level of engagement.  President Biya had a trip to see President Bush.   So we're engaging them with all of the traditional tools, but we're hoping this MCA thing will be the sea change that will make that radical difference.  Why hasn't Africa taken off?  We don't know.  The MCA is another attempt to answer that question.  Maybe it's a lack of resources.  So let's put the resources on the table, but let's also take our idea that says good performers are going to do better and do that, not dissimilar to NEPAD.  The big difference I would say is we're saying we'll pick proven performers and put the money in.  I think NEPAD is arguing we'll make the reforms and put the money in now, and so there's a little bit of hard bargaining going on there, but that's what applies to these peripheral states. We're engaged with them all.  One of the big advantages we have is almost universal representation in Africa, so that we can work on these programs day in and day out, and it's not a circuit rider that comes through.  It's somebody who's spent a couple of years in Cameroon--ideally, somebody that was there once before as a junior officer--so we get continuity over time, which is one of the big advantages we have.  It's an expensive advantage, but it's a real one.  I don't know if I should ask a lawyer.  I'll take a chance. [Laughter.] MR. SNYDER:  Then, we'll have let the general ask a real question.  I'm getting on the general while I'm ahead.  He said something nice. MR. CARROLL:  In this town, lawyers outrank generals. PARTICIPANT:  We outnumber them. MR. CARROLL:  We certainly outnumber them.  Well, I don't know about that. Charlie, Tony Carroll, Manchester Trade.  Can you give us an update on the Sudan situation since you've been so deeply involved in it. MR. SNYDER:  You know, it's one of those occasions when they know what the prize inside the box is.  They know the shape of the prize, and they just can't bring themselves to tug on the ribbon at the same time.  They are 90 percent of the way there. The issue that's left is tough.  It's got to do with the capital, and Sharia in the capital, how that's interpreted in a way that the Southerners won't be subject to human rights and other kinds of problems that flow from overenthusiastic and so on.  How you solve that, without undercutting one of the basic agreements, was that in the North that remains the law, the basic law. Lawyers are involved.  You probably asked that question because of that, and we're hoping that they can come up with a formula that will meet everyone's needs.  But after 18 years of war and 2 million dead, to have it come down to this I think that, as the Sudan Peace Act says, men of reasonable good will can find a way to cross that last mile, especially since the world is watching.   I mean, you saw what happened in Darfur.  I mean, Kofi Annan went so far as to say, if this doesn't stop, we need to look at military action.  You saw what General Haaglund said the other day, that the  European Union would be prepared to step into this potentially, if it came to that.  With that kind of interest, the argument is you can take a chance for peace now, and you need to do it. There's one other minor issue on the table, but I think it's being held there as a trading material for this big one.  So they're that close.  The question is can they walk that last mile in what's an unstable situation?  This Darfur thing destabilized it and forced us, frankly, from the U.S. perspective, to escalate the pressure because there are other restive populations in Sudan, and until the new regime and the transformation begins to take place, there is no effective way to address this, and it could flare elsewhere. And we cannot, in good faith, whether the President or anybody else, came to have negotiated some wonderful success if 100,000 people are being displaced and killed in Darfur.  It immediately says, "You fools.  How can you trust the government like this?" And so all of these things have complicated the problem.  They are still right there.  We have a cease-fire in Darfur.  They have agreed to make it real in the sense of external monitoring.  We're holding them to that.  A case again where the AU is stepping up.  The AU is hoping to have a meeting in Addis to make this real. We said we will do what we can, including lending people we already have on the ground.  We'll sign an MOU with the AU, so it's not the U.S. and you can add five or six or ten of your people immediately so we have some capacity while you gin up your own capacity.  We're not saying this is the case where Big Brother knows best, and Big Brother is going to do it.  What we're saying is somebody's got to do it, and somebody's got to do it now. So there's huge pressures on them, and this Darfur thing complicated that matter.  I still think, at the end of the day, we're going to get them to blink. The Sudan Peace Act requires us to report by the 21st of April.  We're on our 99th draft.  Every day I write it and change the ending.  I think we're going to be writing it on April 19th.  Senator Danforth and I are in constant contact, and Senator Danforth, the Secretary of State, and the President have been engaged in this, making phone calls and pushing people.  So we're 90 percent of the way there, but ultimately they're the ones that have to pull the ribbon.  But we will call them on it, because after 18 years and 2 million dead, there is no reason, and given the pledges, we, not just "we," but the European Union and the U.N. in general are willing to make that they can't walk that, knowing that they have a partner and a friend beside them. General, I skipped you before. GENERAL WALD:  The question I had is, first of all, a kind of a comment.  I agree with you on the high-tech solutions to the military.  There is no reason whatsoever for anybody in Africa, it doesn't matter, Eritrea, Ethiopia, all of the way to South Africa, to have anything high-tech.  They do need the capacity to take care of themselves.  Airlifts is one of those things, not complicated strategic, but just general medium airlift.  As a matter of fact Angola has, and I'm going to talk about it later today. But the question I have is how do you break the cycle of the "carrot and stick" issue?  And at some point people have to come out of the penalty box for what they've done in the past.  I'll give you an example.  We talked about Nigeria a bunch today.  And I agree Nigeria is very critical.  I was in Nigeria a couple of weeks ago, in Legos, I talked to their--in this case it happened to be an air base, which doesn't matter, since I'm an airman, it just happened to be--they had one C-130 that works.  They have 17,000 people in their military. The question here is, and I asked him why haven't they done something about, you know, the other 9 or 10 airlift aircraft they have.  If you look at what Nigeria did in Liberia, and you followed that closely, their performance this time was totally different than it was in '96, and they deserved to be punished for that, but we still have sanctions on Nigeria, and we can't provide them help for their airlift aircraft--very simple, not high-tech, a simple solution.  How do we break that cycle and how do we get people to actually come off that so we can help Nigeria help themselves? MR. SNYDER:  Let me make one point of clarification, and then I'll answer the question directly.  We're not talking about technological disarmament.  In a country that has an airline, a domestic airline providing them aircraft assistance and support, it makes sense.  The capacities are there on the ground.  It's institutionalized.  And so when I'm talking about high-tech, I'm talking about what they've got on the ground, and some places don't have airlines.  So we've got no institutional issue on technology in terms of C-130s.  It's more of where and so on. The same thing with helicopters, where they maintain helicopters, that's fine.  Not everybody does that. But on your real question, I think one of the things we're going to have to work with the Hill on and sell the Hill on over time is we need to take a more regional approach to this.  This is why I would like the African Union to step up and set continental standards and, failing that, to at least have the region step up so that they would agree on a plan in which, in this particular region, Nigeria may be responsible for airlift and something else.  Maybe South Africa is responsible for communications and artillery. So that we can then go to the Hill and say, we put them in the penalty box in ways that make sense in terms of some things--maybe high-ranking officers coming to talk to General Fulford, but something like that--and yet the regional capacity is at stake here.  The region is moving in the right direction.  We are not going to deny this particular assistance in this country because it's part of a regional entity.  We'll punish them for what they've done when they deserve it.  Benowa State is an outrage more recently. But we need to get away from that, you're right, in terms of damaging the institutional capacity that the larger Africa needs and the larger U.N. needs. I know I'm overtime, so I'm going to quit there, but that's where I wanted to go with that.  And I appreciate your attention, and after lunch, most people stayed awake.  That's good. [Applause.] MR. DONNELLY:  I would like to, on behalf of AEI, thank the Secretary for a very impressive performance.  I know when people know more about their subject matter than I do, and this was certainly the case. We've got our next panel coming up in about 10 minutes.  The subject will be American Energy and Commodity Interests in Africa, another high-powered group. Again, let's try to do this in as quiet and as orderly a fashion as possible, so we can keep right on rolling. Thank you very much.  See you in ten. [Brief recess.] MR. CARROLL:  [In progress.]  I'd like to add to the comments earlier that just a few years ago, when many of us started doing work in Africa, it would have been unthinkable to have a venue like this on African security relationships in the United States, but those days are clearly over, and I'm glad that AEI has taken the lead in being able to foist upon or lead and inform Washington decisionmakers, the media and the country on the important strategic relationship that we now have with Africa. The panel that we've assembled here this afternoon I think will give us a bit of a matrix of interests and perspectives on our African relationship.  I've thought long and hard about assembling not only a diverse panel from the standpoint of perspectives, but an exciting panel from the standpoint of participants. Many of the speakers are long-time friends of mine, and I've had, with the exception of Alex, an opportunity to hear all of them speak in various venues before, so they've been somewhat shopped or at least evaluated in objective forums.  So I'm happy to attach my credibility to their presentations. I'd like to start by looking at the sort of circumscribing economic environment in which Africa finds itself and its relationship to the United States.  Clearly, two of the driving interests at stake in our relationship with Africa are in the oil and gas area. We have Jim Burkhard, from Cambridge Energy Research Associates in Boston, who has written extensively--the bios are contained in your materials--on the topic of our energy and security relationship with Africa and oil and gas. Jim is, in reference to an earlier panel this morning, one of the other people in this room who may speak an indigenous African language because we were both Peace Corps volunteers in Africa at the earliest points of our careers.  And I'm happy to say that I still draw upon that experience 27 years later, and Jim, whose experience isn't quite as dated, I know still draws upon that unique experience of being in Africa, on the ground, and really knowing Africa from the inside out.  I think that's a perspective that we can all benefit from no matter where we go in our careers. But Jim, who's written extensively from one of the real premier think tanks on this issue, will be speaking first. Then, it's my great pleasure to introduce David Hale, who for the years is a distinguished economist.  He's written extensively on trade issues not only in Africa, but on a global basis.  I've had the opportunity to listen to David give the keynote speech every year for the African Mining INDABA in Cape Town, which is the largest venue in the mining industry in Africa. David fills the room, and people leave satisfied.  His perspectives are valuable.  He brings an important aspect to this presentation on Africa, its commodity relationship with the United States. We'd like to follow from David's presentation with George Kirkland, who is the President of ChevronTexaco Exploration.  Not only does George bring the perspective of a company that is one of the leading companies in examining and expanding our energy relationships with Africa, but George also knows from the ground up.  George was President and Chairman of Chevron Operations in Nigeria.  So he understands from the standpoint of being a manager in the field, as well as looking from a major company in enriching and enlarging its relationship with Africa. And, lastly, I'd like to, for the first time meeting Alex Vines, who I think many of us who consider ourselves Africanists have followed over the years.  He's had a brilliant career in working with nongovernmental organizations, the British government, and informing and educating all of us on the important relationships in Africa, as they pertain to human rights, economic interests and so forth.  So, Alex, I am especially pleased for you to make the trip from the U.K. here. I'd like to turn to table over to Jim to commence our panel this afternoon. Jim? MR. BURKHARD:  Thank you, Tony. Africa has long been perceived as a marginal player in the global economy and also in global politics.  That's been the perception for many for decades, but that perception is changing.  And two of the reasons why it's changing, we can put two of those reasons in a negative category and also a positive category. The negative category is failed states.  In this post-9/11 world, we are all aware of the dangers that failed states pose to the global economy and the global political order. I want to focus more on the positive aspect of Africa's rising prominence in the global economy and also global politics.  That's energy.  Twenty percent of the growth in global oil production capacity between now and 2010 could take place in West Africa.  So about 1 out of every 5 barrels of new production growth.  It's not guaranteed that that will happen.  There are obstacles that could prevent West Africa's potential from being realized, but it's not a question of whether the oil is in the ground.  We know it's there.  The question is the time frame in which it will be developed.  Nonetheless, the potential for Africa to increase its oil production is enormous and critical to maintaining a diverse supply of oil to the global market. Another aspect to the Africa energy story is natural gas.  Oil often gets the big headlines. It's very important.  West Africa has been a very large supplier of oil for many decades, but due to the developments in the natural gas industry in United States, we are going to become increasingly important on imports of natural gas from around the world, and West Africa is one region that's well-placed to supply that natural gas. So it's clear that from an energy perspective, the U.S. and global interests in West Africa are increasing.  But let's look at how this growing interest ties specifically to U.S. interests.  Two specific ways that we can make what's happening in Africa relevant to Americans is in terms of energy security and also the natural gas story, which I just alluded to. I'll talk about energy security first.  In 1911, Winston Churchill was contemplating switching the British Navy from coal to oil.  Now, before too many of you wonder why I'm talking about British naval policy of almost a century ago, I'll make a connection here in a minute.  But this was a very strategic decision that Churchill made about 90 years ago.  The decision to switch from coal to oil was very critical because coal was domestically supplied. There is a lot of coal in England.  Whereas, making the move to oil would make the Royal Navy dependent to oil supplies from distant lands in and in lands where stability was a question mark, but the advantages of oil won out.  Oil was much easier to handle than coal.  It also made ships go much faster.  And in the burgeoning naval buildup that Great Britain was--which the arms race, with regards to navies, that Great Britain was engaged with and Germany at the time, these attributes carried the day. But it also highlighted, for one of the first times, the importance of energy security.  How was the British Navy to secure supplies of oil when there is none produced domestically.  Well, after the decision was made, Churchill articulated an energy policy which still has great relevance today.  This is what Churchill said back in 1913: "On no one country, on no one route, and on no one field must be dependent.  Safety and certainty in oil lie in variety and variety alone."   This was one of the first articulations of supply diversity as a cornerstone of energy security.  Given what we see happening in West Africa in terms of oil production growth, over the next decade West Africa will become an important, an increasingly important cornerstone of oil supply diversity.  This will be particularly important given the decline in U.S. oil production and also the expected decline in North Sea oil production.  So the gains that we see from West Africa will help offset some declining production elsewhere and will help to maintain supply diversity to the global oil market. As I mentioned before, the energy story in West Africa is not simply about oil.  The growing supply of oil production capacity, again, very important to energy security because of how it helps optimize oil diversity, but West Africa will become an increasingly important supplier of natural gas. Let me explain the natural gas story in the United States.  Oil prices today are about $37, $38, and that's one of the key factors that has led to high gasoline prices.  And for anyone who's following the presidential campaign, high gasoline prices have captured a few headlines in recent weeks. So imagine for a moment if the price of oil, which is about $37, $38 today, what if oil hit $400 a barrel, would that ignite a political firestorm?  I suspect that it might, but that's what happened in the natural gas market earlier this year.  The price of natural gas at the New York City gate, for a day in January, hit the equivalent of about $400 a barrel.  And the reason for this--this was an anomaly.  Prices did go back to more typical levels in the following days--but, nonetheless, how many people were aware of $400 natural gas in New York City in January?  Probably not too many people in this room.  But if oil prices had hit, say, $45 a barrel, I suspect just about everybody in this room would have been aware of that. This new era of high natural gas prices is due to the decline in North American production capacity for natural gas.  We're simply not producing as much natural gas we consume. The U.S. has made a bet on natural gas that is similar to the bet that the British Navy made on oil about 90 years ago.  The British Navy made an explicit bet on oil, but the U.S. has made an implicit bet on natural gas.  And the reason for that is most of the growth in power generation capacity in the United States over the next decade, the vast majority of that growth, is going to be gas-fired power generation.  The concrete has been poured, the turbines are going to be built.  This is predetermined that we are going to continue to consume rising volumes of natural gas.  This is occurring in an environment where North America's ability to produce natural gas is declining, and this has led to the new era of natural gas prices. Gas for much of the '90s, and when I say "gas," I'm talking about natural gas and not gasoline, gas prices for much of the '90s were about $2 to $3 per million Btus.  Gas is priced differently from oil.  It's priced in a million Btus.  It was about $2 to $3.  Now, gas, in SIRA's view, the gas playing field has moved to a higher level, about $4 to $6 per million Btu.  In other words, we're seeing a doubling in the price of natural gas.  This is not going to go away any time soon. This has important ramifications for consumers.  Up in Boston where I live, I paid a heck of a lot more for natural gas this past winter than I did for gasoline, I mean, than I pay for gasoline to drive my car.  It's also important for the petrochemical industry.  We're seeing signs where employment in the petrochemical industry is being affected because natural gas, which is an important feedstock, is at new higher levels and is putting significant pressure on the U.S. petrochemical industry. But given what we're seeing in the power industry, where we will see increasing volumes of natural gas consumption, we will need, the U.S. will become more dependent on imported natural gas.  Now, importing natural gas is a little different from oil.  You can develop an oil field off Equatorial Guinea, put the oil in a tanker and ship it anywhere in the world. Natural gas is a little different.  If you want to ship it across an ocean, you have to build a special tanker, which is essentially a giant refrigerator that liquifies the natural gas and then sends it to a specific market where a contract has been arranged to buy the gas on specific terms. Between now and 2010, the U.S. will become much more dependent on imported natural gas.  Forget about oil for a moment.  The U.S. will become much more dependent on imported natural gas to 2010, and certainly even beyond that out to 2020. Right now, the U.S. imports relatively small amounts of LNG.  This is Liquified Natural Gas.  This is the gas that's imported from overseas.  It's liquified.  We import a small amount of LNG, and most of it comes from Trinidad and also Algeria.  Between now and 2010 or 2015, given the growing demand for natural gas, we will need more imported gas from places like West Africa. West Africa is not the only place that LNG is going to be coming from.  There are countries in the Mediterranean basin.  We could see LNG from South America.  Norway is contemplating an LNG facility.  The Middle East, especially Qatar, we are going to see large volumes of LNG come into the United States. But West Africa is very well-placed to supply LNG to both Europe and also to the United States.  Nigeria already has one operating liquefaction facility.  There are other facilities that are under study.  Equatorial Guinea could, in coming years, join the ranks of LNG producers.  We could see something from Angola in the not-too-distant future. So the story about energy in West Africa is not simply about oil, although oil is the biggest part, it grabs the headlines, it's very important.  I don't want to diminish the importance and the relevance of oil in the West African energy story.  But underneath the radar screen is this really important story about natural gas because it affects every American consumer who heats their home with natural gas.  It affects the petrochemical industry.  It's affecting employment in the petrochemical industry. So I'll close up, I'll conclude my remarks here by just going back to Churchill's articulation of a credible energy security policy, and that is with diversity we have better security.  If we have more producers of oil and gas, then we will be more secure.  West Africa cannot replace Saudi Arabia in the oil market.  No country or region can.  That's clear.  But with growing output of oil and gas, West Africa can be an increasingly important player in a policy that sees energy diversity as a key component of energy security. I know we have a number of other speakers here, and we want to allow time for some questions and answers.  So I'll just cut my remarks there and turn it back to Tony. [Applause.] MR. CARROLL:  David Hale. MR. HALE:  Thank you very much.  It's a great pleasure to be here to take part in this conference. Mark, I think it would be fair to say that Churchill quote you gave us 5 minutes ago was actually the foundation of U.S. foreign policy today.  The fact is the British carved Iraq and Kuwait out of the Ottoman Empire 80 years ago to guarantee a supply of oil for the British Royal Navy.  The roots of our current foreign policy crisis go back to Churchill's decision to convert the Royal Navy in 1911-- [Laughter.] MR. HALE:  --from coal to oil.  Our foreign policy is very much a legacy of the British Empire 80 and 90 years ago. My assignment today is to talk about Africa, the commodity markets and why Africa matters, and I will say this is actually, for me, a very unusual task.  Because, typically, when I confront my audiences, which are global fund managers and multinational corporations, what I talk about is why Africa is very marginal and, in many ways, irrelevant. Just a few numbers to put this in perspective: Africa represents only $500 billion of the world's $28 billion of GDP.  During the 20th century, Africa's population has grown from 200 million to 800 million.  And over the course of 100 years, Africa's share of global output has hovered in the range of 2 to 3 percent.  Indeed, it's less today than it was in 1920. In 1980, Africa accounted for 30 percent of global foreign direct investment in developing countries.  Last year, it only had about 7 percent of FDI in developing countries.  It has been totally uncompetitive in the modern period in attracting foreign investment, and therefore also its share of global trade is very, very modest, no higher than it was 30 or 40 years ago. Now, why have we had such a dismal economic performance?  The answer, of course, is political leadership.  At the end of the second World War, the colonial civil servants in London and Paris who ruled Africa thought they would need 50 to 100 years to prepare Africa for effective self-government, but because of political changes in their own countries, the collapse of the idea of empire, Africa became independent in the 1960s, when it wasn't really ready yet for self-government. Now, the result, of course, was chaos, civil war.  In the period 1960 to 1990, 108 military coups.  Indeed, before the year 1990, there was only one peaceful transfer of power in the whole of African history.  That was Mauritius in 1982, and Mauritius really is an Indian community, not an African community. But there has been a positive change here in the last 10 years.  We've now had several peaceful democratic transfers of power: Zambia, Ghana, Mali, a few others.  And there is an attempt now in Africa to promote better governance, rule of law and to engage in the global economy through both trade and investment.  So policy, after 30 years of chaos and civil disorder, is now moving in the right direction. I think there are two very critical reasons why we should care about Africa, why we, as Americans, should focus on this continent and give it more attention than we have for most of the modern period. The first is our self-interests in Africa's very large natural resource endowment.  The fact is Africa accounts for a very large share of the world's supply of gold, diamonds, platinum, chromium, bauxite, copper and other raw materials.  As the previous speaker mentioned, it also has lots of oil. Africa has about 8 percent of the world's oil reserves.  It accounts for about 11 percent of global oil production.  Its oil production will increase in the next 4 years from currently about 3.5 million barrels to something close to 5 million barrels.  Nigeria is the biggest with 2.5 million, Angola is number two at 1.5, but we also have new production from countries like Mauritania, Chad, Cote d'Ivoire and so on. So Africa matters a great deal to the commodity supplies of the world.  I believe commodity supplies will become a more concern than they have been, over the last 30 or 40 years, because of the rise of China now as a major economic power. The fact is that in the last year we have passed a major historic watershed in world history, which has gotten almost no attention in the American financial press.  That watershed is very simple.  China now represents a larger share of consumption of global output of copper, platinum, nickel, aluminum and other raw materials than the United States.  This is the first time in hundreds of years a developing country has overtaken North America and Europe as the dominant market for raw materials, and the result has been, over the last year, a very large and broad-base increase in most raw material prices. This is just the beginning.  Because even though China now consumes more of the world's metal than we do here in America, it's per-capita consumption is just 20 percent of America's consumption, meaning, as Chinese living standards and incomes rise, this consumption will have further dramatic gains.  By 2020, China will probably represent 40 or 45 percent of global consumption of copper, iron ore, aluminum and other raw materials.  This is a very, very dramatic change, and it will, looking out 20 years, have profound consequences for geopolitics, military security and other foreign policy concerns. Indeed, we can already see China becoming a more active player in Africa as a consequence of this need for raw material.  Last month, President Hu Jintao visited Egypt, Algeria and Gabon to discuss purchasing more petroleum there.  Last summer, the Chinese National Oil Company bought three oil refineries in Algeria. China, 5 years ago, built a pipeline in the Sudan, with Petronas in Malaysia.  In the last few years, it's deployed 4,000 troops in the Sudan to protect this oil pipeline.  There's been no publicity about this in America, but the fact is China has a military presence in Africa because of its need for raw materials.  This is, I think, a very, very important foreign policy development and a harbinger of things to come. So we've got a major change going on in the global commodity markets.  We're not going to have a scarcity of commodities, but we are going to have higher prices.  And if we look out 15 or 20 years, scarcity could again be an issue.  The world has 80 years of iron ore, at current levels of output.  It only has 15 years of copper supplies, at current levels of output.  So there will be concern, looking out 10 or 15 years, about the overall availability of raw materials. And this need for commodities, this big increase in the price is going to be, for Africa, a great growth opportunity because of higher export prices, but also, for us, a new concern vis-a-vis our economy and vis-a-vis national security. The second great development in Africa, which I think warrants our attention, is the sheer rate of its population growth.  This is one of the few places left in the world where population growth is still relatively high.  Africa, today, has just over 800 million people.  According to United Nations' forecasts, it will, by 2050, have 1.7 trillion people. This is still a very high growth rate.  That's despite the fact the U.N. is forecasting population declines in Southern Africa.  There's a falling population for South Africa, for Zimbabwe, for Swaziland and Botswana because of AIDS.  But elsewhere on the continent, growth rates are still quite high.  Indeed, Nigeria, in 50 years, could have close to 300 million people. This is, also, I would add, in very striking contrast to what's going on in the neighborhood.  The population of Europe is now about to decline.  The ancient nation states of Europe are now embarking upon a course of voluntary self-extinction because of low birth rates.  Germany, today, has 80 million people.  It will have, in 50 years, 50 million people and, by 2100, 25 million people. The cities of Frankfurt, Madrid, Rome, Hamburg will be, in 50 years, cities consisting largely of elderly women cared for by young Africans and people from the Middle East.  This is a very, very profound historic change.  It will change the balance of power in the world, and it means again that Africa will be much more important just by necessity.  Indeed, Africans will represent, in 2050, almost a quarter of the world's population.  So whether we take it seriously today or not, the fact is Africa will become more important simply because it has a high level of population growth. So what does this all mean for public policy?  Well, we've had a good discussion I think this morning about some aspects of this policy.  I will just review it again very quickly.  We need new ways to engage Africa, and I think both the AGOA legislation, plus the new free trade negotiations with the South African Customs Union are a very useful first step because they do incentivize countries to have outward-looking economic policies to engage the world, to not be protectionist and to try to attract investment and to promote employment growth. But in a country like Lesotho, the effect has been very, very dramatic.  There are now 10,000 Taiwanese people living in Bloemfontein in the Orange Free State who commute every day to Maseru, the capital of Lesotho, to run a big $100-million investment in textile bills. And the fact is all of the AGOA countries should now try and also persuade Taiwanese countries to come and use their territory, to use their cities and so on as a base for further developing this export trade.  The fact is, with Africa's very low labor costs, there's no reason why it shouldn't have a market share in this country of 4 or 5 percent, not just 2 percent. Secondly, the Bush administration did, at the Monterrey Summit Conference for the U.N. Development Conference, in March of 2002, announce a major change in U.S. foreign aid policy.  The Bush administration announced it would double the foreign aid budget over the next 4 years with a special focus on Africa.  This is something Republicans normally don't do, but what drove this change in policy was very much the events of September 11th.  The events of September 11th brought home to this administration, to this government, that we could not ignore poor, backward developing countries because they could be a breeding ground for terrorism. I was at the Treasury yesterday visiting with John B. Taylor, who is the Under Secretary for International Policy.  He told me he spent 10 days in February visiting Senegal, Niger, really isolated, backward countries where the U.S. Treasury never before had a visitor.  This is unprecedented.  Why was he there?  To study this AID program, to discuss the implementation of the AID program, to make sure that people in the Treasury, at the highest levels of government, were on top of what was going on.  This, I think, means they do take this kind of program very, very seriously. It would have been unthinkable 5 or 10 years ago to have the Under Secretary of the Treasury go to a country like Niger--maybe to South Africa, maybe to Nigeria, but certainly not to a place as backward and as isolated as Niger. Finally, there's been no mention at all today of what I think is also a very important development in Africa in the last 2 or 3 years, and that's the initiative by President Mbeki called NEPAD, the New Partnership for African Economic Development. This is potentially a very historic development because it's an attempt by the Africans themselves to promote better political governance, strengthen the rule of law, and again create a framework for effective engagement with the global economy.  Mbeki announced this at Davos 3 years ago, and he has spent most of the last 2 years traveling around the world, including the G8 conferences, to promote the idea. The one problem with it, of course, is that he himself has somewhat violated his own promises by not taking more effective action to challenge President Mugabe in Zimbabwe.  All of the principles that NEPAD espouses, all of the critical themes that drive NEPAD have been totally violated by Mugabe, the rule of law, democracy and so on, and the fact that South Africa tolerates this does create credibility problems. With that said, the basic goals of NEPAD I think are very, very attractive, and it's very encouraging to see that the Africans themselves now recognize the need for improvement in governance, changes in how they conduct their affairs and to have in the future more potential for self-criticism to address these issues more effectively. So NEPAD is very, very important.  In this conference here today, we should not overlook it.  We should recognize it as a very encouraging development to improve the performance of Africa's economy and its political systems. Thank you. [Applause.] MR. CARROLL:  Thanks, David. George? MR. KIRKLAND:  Thanks, Tony.  And thanks to all of you for attending.  And I really do appreciate, really, our host, the American Enterprise Institute. One of the dangers of being third is many times your prepared remarks get taken.  I'll try to do my best not to repeat too much, but reinforce what has been said where I have similar views. I'm here uniquely on vacation.  I was in Florida taking a little bit of time for some sunshine and a little bit of fishing, so I'm not going to keep you too long today. Actually, I'm very grateful to have this opportunity to speak.  The topic of security of energy supplies is something that's of vital importance to our company and, I'm convinced, vital importance to this country.  It's also important when you look at Africa, that the policies that this country has--that reinforces, I think, the security of energy--are crucial for our future, both our near-term future and our long-term future. To reinforce what was said earlier, I think diversity of supply for the United States is absolutely critical.  More than ever before, Africa, I believe, is central to that diversity. African imports help ensure America's sources of crude remain diversified.  Today, according to the U.S. government estimates, Africa accounts for about one in every six barrels of U.S. oil imports.  Over the next 10 years, that figure on imports is expected, from Africa, to be one out of every four barrels.  So from an energy company's perspective, Africa represents one of the world's brightest prospects as a source for new oil and gas.  It also, for this country, is of great importance for its diversity. To appreciate Africa's contribution to America, let me put that picture in a little bit closer context.  Without African crude oil, each year the U.S. would need an additional 10 billion gallons of gasoline--that's about enough fuel for 14.5 million cars and trucks.  It's about the same number of registered vehicles in the state of New York.  We'd also have nearly 300 million fewer barrels of crude oil for heating, electricity, and manufacturing. So for our own vital interests, I believe the U.S. government must continue to view Africa as a region of strategic importance.  To ensure continued growth and stability of these African energy supplies, U.S. government policies must be supportive of broad-based African economic development.  They must create an enabling environment for building African capacity--capacity for individuals, communities, and institutions.  We must always recognize that economic growth is the key to African social and political progress.  I am convinced, without economic success there cannot be stability. Ultimately, I believe a stable African energy industry is also fundamental to America's energy security.  By itself, its proximity to U.S. market gives African oil and gas an advantage over many other sources of supply. The industry I'm in is, of course, investing heavily in Africa's principal theaters of energy activity, namely, its established oil and gas reserves, its vast deep-water potential, and its new, exciting prospects for natural gas.  ChevronTexaco, for example, with our partners, plans to invest $20 billion in African projects over the next five years--a significant sum of money. Let's take a look at these three areas that I mentioned.  Let's start off with the existing resources.  Principally these are near-shore or on-shore oil fields that have been strong for many years.  Because of their proven value, they'll continue to draw a big share of the industry's capital and technology.  These areas include Angola's Block Zero, the Niger Delta, Gabon, the DRC--the Republic of Congo.  All those will continue to get technology and money [inaudible].  Our industry believes this solid core of conventional operations will continue to pay big dividends for Africa and for the countries that are there while we build the future, the deep-water and the natural gas. Deep-water Africa is destined to become one of the world's most important off-shore provinces.  Investment in this frontier area is expected to top $5 billion this year alone, and the figure could double from there.  By 2008, for example, ChevronTexaco intends to produce 250,000 barrels per day from one field in Nigeria, Agbami.  By decade's end, we expect to build on our discoveries in Angola Block 14, and with those additional developments we'll be producing 200,000 barrels a day of new production--a bright future, I believe, for Africa in the deep-water. But there's something new out there.  It's called natural gas for Africa.  For years, Africa's natural gas has been a resource looking for a market.  That's changing in a big way.  Over the next 20 years, natural gas replaces coal as the world's second most utilized fuel.  In the U.S., natural gas demand provides yet another reason why Africa is destined to play a bigger role in energy security for the U.S.  While U.S. natural gas demand is expected to increase by nearly 50 percent by 2020, traditional North American supply sources will be able to meet only 75 percent of the nation's long-term needs.  Indeed, demand for imported gas is expected to surpass that of Japan, today's leading importer.  And that will happen within only 10 years. Liquefaction--turning natural gas into a liquid--with a plant, not just a refrigerated vessel, is a huge investment.  But it provides the potential to meet the energy demands of the United States.  In the case of Africa, Nigeria--with both on-shore and off-shore gas reserves and arguably one that can boast of one of the world's largest growing businesses on the LNG side--is very, very important.  Other African countries are also trying to get into the business. You heard a few of them--Angola, Algeria, Equatorial Guinea, and Egypt.  All of them are trying to expand or get into this LNG business. The point?  Africa is rapidly expanding natural gas development and America is rapidly expanding on its demand.  This offers powerful reasons to strengthen U.S. relationships with Africa. I believe our government should pursue three complementary objectives to make certain America receives adequate supplies of African oil and gas.  These are physical security of African oil and gas assets and facilities, open markets, and good governance.  All of these will help drive that economic development I talked about earlier. I'll use my own company to illustrate the first point.  In the Niger Delta in Nigeria, we currently have shut in more than 140,000 barrels a day of production because of security issues.  That's more than 70 percent of the entire daily crude output for the state of Oklahoma.  In addition, Nigeria at times loses tens of thousands of barrels to outright theft, so-called illegal oil bunkering.  Each year, bunkering puts millions of dollars into the pockets of racketeers.  The U.S. government can help by assisting African governments in promoting the rule of law, by supporting African law enforcement with training and equipment, and by helping law enforcement officials respond humanely to civil unrest.  A good example was a recent $2 million grant by the U.S. to train Nigerian police in handling unrest and also in confronting organized crime, especially money laundering. A second U.S. objective should be to continue and expand policies that encourage open trade.  Freer trade does not just benefit the petroleum business.  As a matter of fact, the direct benefits to us are quite small.  It helps all the other enterprises in these countries we operate, particularly manufacturing, agricultural, textiles, and many others.  Although it's only three years old, the African Growth and Opportunity Act offers a good example of such policies.  Basically, AGOA greatly expands duty-free entry for goods from African nations in return for civil reform.  The results have been impressive. For us who don't benefit so much directly, we benefit greatly, though, by the expansion of the economies in these countries in which we operate.  Diversifying the industries, whether it's in Angola or Nigeria, greatly improves any business that's in those countries.  It takes a little bit of pressure off us, to be honest, and we like that.  And it's good for the people. If you look at the initial results of AGOA, imports under AGOA have risen by 10 percent, to $9 billion, and U.S. investment has climbed nearly 6 percent, to $10.2 billion.  So I think at this point, we have to say AGOA has been very successful.  Thirty-seven of 48 sub-Saharan African countries are now eligible under the act.  AGOA II revisions liberalized its provisions, especially on apparel goods.  And I'd really like to see, and our company would like to see, AGOA III legislation that is being backed by Senator Lugar be passed.  That would extend AGOA until 2015. By nurturing commercial relationships with the U.S. and by promoting economic growth for eligible African countries, AGOA signals America's willingness to reach out in ways that improve the lives of many Africans.  Initiatives like AGOA also expand Africa's economic diversity and increases the stakes held by our African trading partners.  I'm a firm believer that, in terms of economic success, nothing is a bigger motivator than having skin in the game. I'd like to switch a little bit now and talk about another African nation, Libya--Libya's opening dialogue with the U.S.  I think they've recognized its own need for greater direct foreign investment.  I believe economics helped drive Libya to choose investment over isolation.  The result, light shining through a crack in the door with regard to U.S. sanctions.  Indeed, some experts believe that with American expertise and capital, Libya could restore its oil production to 30-year-old levels, something north of 3 million barrels a day.  The bottom line here is renewed relations can mean greater stability and economic growth for Libya and potentially greater energy security for the U.S. The third objective that I will talk about is that I think the U.S. government should continue to support good governance and transparency in African countries.  Like open trade and physical security of assets, good governance and transparency strengthen the foundation for economic growth.  Within developing nations, they level the playing field for the local enterprise.  And internationally, they build investor confidence. I'm proud my company helped draft the Voluntary Principles on Security and Human Rights in 2001 and that we joined U.K. Prime Minister Tony Blair in launching the Extractive Industries Transparency Initiative in 2003.  Last December, I'm very happy to report, Nigeria became the first country to officially pledge its participation in EITI.  That was welcome news to the petroleum industry.  ChevronTexaco praised President Obasanjo for that commitment to transparent government.  I'm also heartened by the G8 countries' 2003 declaration supporting greater transparency by government and companies. Secure assets, open trade, good governance--these are the three areas where America's political leaders can help African leaders make their nations stronger and our own energy supplies more secure.  There's every reason to hope for additional payoff as well, namely, improved international stability, greater understanding, and increased trust. As a fisherman, I can tell you there just aren't that many days when you get a chance to land one of those big ones.  The opportunity to improve Africa's economic well-being and, at the same time, increase America's energy security is a catch we shouldn't let slip away. Thank you. [Applause.] MR. CARROLL:  Thanks, George. Alex, you're up. MR. VINES:  Thank you, Tony, and thank you to the American Enterprise Institute for inviting me to come over from London to this meeting. One correction--I haven't actually been a member of the British government.  I hate to admit it, but I've worked for the United Nations.  That's where I've been. MR. KIRKLAND:  You're in trouble around here. MR. VINES:  Well, we've already heard in the last three presentations the importance of the diversification of oil supply and why Africa's important, especially to the United States.  Of course, it's also important to the West in general.  France, Germany, Italy, Spain are all looking to diversify their energy supplies.  Japan is very active at the moment in looking at diversification.  Indeed, it sees Angola as a possible priority and is considering opening an embassy in Angola purely to try and enhance its access to Angolan oil. The United Kingdom and Norway, of course, are also looking to diversify their supplies.  Norway and the U.K. also share common experience in the North Sea, which, as we have already heard, is on the decline, so the Gulf of Guinea--with their expertise in the deep and ultra-deep--becomes particularly attractive. If you go to the Houston of the United Kingdom, Aberdeen, it is full of British companies and others looking to expand into the Gulf of Guinea.  I was there just a few weeks ago, and this was seen as a new frontier, the place where there might be money and opportunity and where expertise and skills could be transferred. The money that's going to be made out of African oil in the next few years is very large for African standards.  Nigeria, for example, the estimates between 2004 and 2010 are $110 billion; Angola, it's $43 billion.  Equatorial Guinea, which has got less than a half-million in population, is $10 billion.  This is an enormous amount of money that's going to be generated. And then there's a whole host of countries that are claiming that they have oil or they will have oil very soon.  Gambia, for example, made an announcement very recently to tremendous media interest, in Banjul.  And then there are a few countries, like Guinea-Conakry, where President Conte has said very clearly that he isn't interested in exploring for oil just now because of some of the problems that oil can bring.  Guinea, I think, is in a lucky situation in that it does other primary commodities that can generate revenue there, in particular bauxite, which is a world leader, but also diamonds. The bad news, though, is that oil revenue does not necessarily equate with greater stability or prosperity.  Africa's two largest oil producers, Nigeria and Angola, are far from being pillars of social stability.  The recent reports of a coup plot in Nigeria doesn't enhance credibility or confidence.  Both countries have indeed become brand leaders for corruption, a result of weak institutions, a lack of credible government procurement and auditing systems, and a lack of transparency about revenue.  Under such conditions, corruption and rent seeking can thrive, as we've seen in Nigeria and, indeed, in Angola.  International Monetary Fund reports even report that there are billions, several billion dollars are missing from Angola or unaccounted for.  These are becoming key political issues and domestic issues in Angola today. And although we have good public speeches and signals--for example, recently in Washington a very spirited presentation by the finance minister of Nigeria at a conference on oil in Africa at CSIS--there are very fundamental problems behind Nigeria that still need to be done.  We just heard about the illicit oil bunkering issues.  This is a tremendously difficult challenge for Nigeria.  It is one of the key sources of revenue for criminality, gun running, and other illicit activities that are causing such problems in the Delta.  These groups are the closest that you get to Mafia-like criminal groups in West Africa that I have seen.  The problem is that these groups are tied with political figures at the most senior level.  It will take tremendous political will, both by President Obasanjo but also by friends of Nigeria, including the United States, to deal with such issues. New oil producers, like Equatorial Guinea and Mauritania, are also joining this elite club.  Both countries are also not cradles of stability but have been marked by successful and failed coup attempts over the last three decades.  In March 2002, President Obiang Nguema of Equiquitorial Guinea reported to have thwarted a coup attempt.  Two years later, in March 2004, two groups of alleged mercenaries were detained in Malabo and Harare in Zimbabwe charged with trying to overthrow Obiang.  Although the country nominally embraced democracy in 1991, it has remained de facto under the tight grip of President Obiang and his supporters. If you read the publicity of the Equatorial Guinea government, they describe themselves as a centralized democracy.  That may give you an idea of the type of problem we're dealing with.  Presidential and legislative elections are marked by irregularities, and the authorities have had a tendency of jailing or intimidating opposition supporters close to elections.  According to the International Bar Association, the country lacks a functional judiciary and trials are often carried out by the army or the national assembly. Yet Equatorial Guinea today is sub-Saharan Africa's third producer of oil, with an output running at 350,000 barrels per day--and with a tiny population, as I've already mentioned, of less than half a million.  While the tiny elite grow significantly richer, the living conditions of ordinary Equatorial Guineans do not improve.  According to the World Bank, income per capita was as little as over $2 a day.  The lack of democracy, and widespread poverty coupled with massive growth in wealth of a small number of individuals, has contributed to the already very visible intrigue and factionalism over succession of President Obiang, who is of ill health.  This is not going to change.  In fact, the recent coup attempt will have exasperated things further.  And an ingredient to the coup attempt that was recently thwarted was this perception of growing oil wealth and the need to diversify access to it. Reported coup plots or attempted coup plots in Nigeria and Equatorial Guinea, unfortunately, are not unique in this neighborhood.  In July 2003, President Menezes of Sao Tome and Principe and his government were deposed for a short period by a group of former apartheid South African elite soldiers known as the Buffalos.  Sao Tome and Principe is expected soon to join the regional oil club and is to receive an estimated $100 million in cash from signature bonus payments later this year, when acreage for an off-shore series of blocks called the Joint Development Center is awarded.  The sniff of such cash has been a contributing factor to the decision-making to stage the coup attempt in July 2003.  My own institute did field research in both island of Sao Tome and Principe, and this is a clear conclusion of the field research.  "There was a sense that there was an enormous amount of money coming into the country, but where would that money go?" With a population of 137,000 and an income per capita of $290 and development assistance per capita at $236, this is a very poor state indeed.  President Menezes in recent months has developed an increasing number of enemies.  He has distanced himself from the family of his predecessors, who was key to his rise in power, and he is thought to have benefitted from the renegotiation of oil contracts.  That is a widespread perception through the islands.  There are still rumblings of yet more discontent, and indeed scandals, such as one related to a company called DiamondWorks recently, are ongoing and not yet concluded.  It's not by coincidence that, when asked at the CSIS meeting, President Menezes was extremely defensive about "le scandale" of DiamondWorks. In 2003, as Mauritania announced that it had started oil production, there was a coup attempt there, too, as in Equatorial Guinea, Nigeria, and Sao Tome and Principe.  Happily, it failed.  Like all other countries, Mauritania shares with them grinding poverty.  According to the United Nations Human Development Index, Mauritania ranked 139 of 162 in 2002, and the majority of its 2.5 million citizens live in poverty.  Current revenues are about $200 million, but the prospect of oil production could generate a further $100 million per year from oil sales and taxation.  Mauritania has some similarities to Equatorial Guinea.  It's ruling elite gained power through a coup attempt, both have tiny populations, and both are militarized and patronage based. On current record, oil abundance does not appear to offer much chance for poverty reduction.  The direct economic benefits of the industry to ordinary citizens are limited.  You see this also feeding into areas of discontent, for example, the oil-rich enclave in Angola called Cabinda.  There is an oil compound there managed by ChevronTexaco called Malongo, but there is increasing frustration by the population in Cabinda of the lack of benefit of oil and the lack of investment in that particular province. The key to the Cabinda problem, I think, is the management of the oil revenue itself and the benefits, rather than a small group, which are separatists, who are claiming independence.  The paradox of the Cabinda situation is that the most radical people tend to be from the Catholic Church.  They are the priests themselves, who are so frustrated over years of trying to see social justice in the province that they have become more and more attracted to the separatist ideal. The oil industry, as we heard this morning, is a capital-intensive industry that employs few people and requires skilled labor.  Indeed, major oil companies operating in Nigeria, Equatorial Guinea, and Angola face a tremendous challenge in trying to increase their local content.  That means hire national staff.  This is due to a shortage of a pool of skilled and well-educated local work force.  International oil companies operating in these countries prefer to invest in high-profile and [inaudible] projects, such as health clinics, malaria education programs, or cultural sponsorship, than engage in some of the harder issues.  Indeed, the diversification of the economies in these countries to ensure that they employ larger numbers of people are absolutely critical for the success of these countries. A key challenge is that the oil industry should encourage investment and development in the countries that it operates.  Oil companies are not agents of social change, and are best at pumping oil and generating profit.  That's absolutely true.  These companies are not, though, isolated in these countries from the communities that surround them, and the revenue that they generate should be used for the benefit of the whole community.  Corruption and poor management of the oil wealth has deprived these societies of most of the benefits of these revenues.  Companies can assist by supporting education and training and encouraging a non-oil-industry entrepreneurial middle class to develop and diversify the economy. West Africa's new oil producers also lack the human resources to effectively manage the highly complex oil industry.  This is a key area that the international financial institutions can assist in.  Indeed, they are already doing that in Sao Tome and Principe and in a number of other locations, and are trying to reach an agreement with the Equatorial Guinea government at the moment. Governments, such as the U.S. government, can also assist the process by encouraging political pluralism and nurturing independent and democratic opposition voices.  The reopening of a U.S. embassy in Malabo--that's the capital of Equatorial Guinea--in late 2003, is a welcome development in this regard.  But the messages are important, and the opening of the embassy shouldn't have also be, then, a whole series of other rewards; they should be tied to benchmarks and to performance-related improvements.  For example, the Equatorial Guinea government would like the Military Professional Resources, Inc., a private military company, be employed for the Equatorial Guinea government.  I would argue that this is premature, given the situation in Equatorial Guinea at the moment, to rush forward on this.  The reopening of a U.S. embassy at this moment is a welcome-enough signal, and these things should be thought through strategically and chronologically, related to when performance is achieved. Helping oil revenue to be properly harnessed is absolutely essential.  I completely agree with General Fulford, who made an earlier comment related to this and to the point that oil companies shouldn't just ring-fence themselves in stockades or enjoy believing that they're secure in off-shore oil rigs.  The companies are integral to the economies that they're involved in, and therefore they are part of the community that they're working in. In this regard, having a widespread alliance of institutions like the International Monetary Fund, the IFC, the World Bank, and the initiatives that we've heard of already, such as the Extractive Industries Transparency Initiative, but also the Publish What You Pay Campaign, which was launched by George Soros, the Nepad Initiative, and the Evian Declaration on Fighting Corruption and Improving Transparency, the G8, are all very important and all need to be supported.  It would be very good if there was an echo of the Evian statement in the G8 summit at Sea Island, coming up in Georgia in June, to strengthen the very good language that came out of Evian. Oil revenues, as I've said, need to be properly harnessed.  In Equatorial Guinea, Sao Tome and Principe, and in Mauritania, if they were properly harnessed, these countries could be transformed into lion economies, joining success stories that we've heard of elsewhere, such as Botswana, or even countries that many of us don't necessarily regard as fully African, such as Mauritius.  This would be good for Africa, but it would also be good for the U.S. and for the West in general.  With the exception of Nigeria, as again we've heard this morning, these countries are non-OPEC and they also produce high-quality oil and gas.  Consistent oil production by stable and open African [inaudible] should be a premium worth investing in.  Consistency of production requires stable governments.  What I've tried to outline to you, in the cases of Mauritania, Equatorial Guinea, Sao Tome, Nigeria, and, in a sense, Angola is that they are not predictably stable in the long term unless we deal with some of these core issues. Thank you very much. MR. CARROLL:  Does somebody need a watch?  Or does somebody want to buy one here? MR. VINES:  It's just worth $10. MR. CARROLL:  Okay.  Well, there it is, broad and engaging presentations by each of our panelists.  It was referenced earlier, in Alex's statement about the CSIS conference that President Menezes spoke at just a couple of weeks ago, CSIS has written a report on the African-American energy relationship co-authored by Steve Morrison and David Goldwyn.  I was a member of that task force.  That report is available from CSIS.  I believe it may be on their Web site.  Otherwise, you can give me a business card, and I will certainly forward to you electronically a copy.  So you might want to take a look at that.  There's a series of well thought out recommendations on our relationship with Africa, a number of policy recommendations which I think you'll find salient to today's discussion. But I'd like to throw it open now to some questions.  We've got about a half hour of questions before we prepare for General Wald's presentation.  So I'd like to start off with our host, Tom Donnelly. MR. DONNELLY:  Tony, one last thing.  Ix-nay on the CSIS-nay, okay? MR. CARROLL:  Okay, certainly. MR. DONNELLY:  I have a question.  David Hale piqued my antennae when he started talking about increasing Chinese dependence on material resources from Africa.  I would be very interested to know whether we can see anything remotely resembling a Chinese policy strategy or other presence besides Sudan on the continent.  Feel free to make one up or forecast one if there isn't one. MR. HALE:  I think this is a big question, what will happen in the next five or 10 years with Chinese foreign policy and security policy as a consequence of the country's new dependence on external commodity and raw material supplies. I can tell you from my conversations in Beijing over the last year, the Chinese themselves don't yet have a clearly defined policy.  If you talk to the foreign policy writers that are doing academic articles in China today, the overall mandate they have from the government is to talk about the theme of peaceful coexistence and China engaging the world in a very constructive way. The fact is, I think it's in their self-interest to collaborate with us and not to compete with us.  The fact is, the American navy does guarantee open sea lanes, does guarantee the rule of law, the international seas, and does try and protect private property.  There's no reason why China has to compete with us.  And similarly when we go to developing countries, where they've got not investments and so on, we also respect the rule of law, we also want to promote private property.  There's no reason why we have to compete. There can be commercial competition, of course.  A few weeks ago, Saudi Arabia gave rights to its natural gas project to a Chinese company over an American company.  But that was viewed as a commercial decision.  There might have been a foreign policy dimension to it, but it was viewed as a commercial competition.  Three weeks ago, the government of Papua New Guinea asked China to take over a big multi-hundred-million-dollar nickel mine.  Why?  Because it couldn't get enough finance from the Australians, who historically have dominated Papua New Guinea in the modern period.  PNG's also trying to build an oil pipeline from Port Moresby to Queensland.  It lost a major sponsor among the international oil companies; it's offered that shareholding to the Chinese. So China will be invited, I think, increasingly to play the role of an investor, not just a buyer.  Indeed, the Chinese do like to own things.  Twenty-five years ago they bought harvesting rights over thousands of acres of American timberland in Washington and Oregon.  Why?  Because they felt it was important to own things and not just buy the cutting rights. So the answer is we don't yet know all the consequences of this.  I'm writing an article right now about the foreign policy implications of China's need for commodities and external raw materials because I think we should begin the discussion about it.  But I can tell you that the issue's only being engaged right now.  It's a brand-new issue.  The developments I mentioned a minute ago--China's emergence now as the biggest consumer of copper, nickel, aluminum--has all happened in the last 12 or 18 months.  And quite simply, governments, academics haven't caught up with it yet.  The only people who know about this in detail are commodity traders because they live with the consequence every day as they and price cooper, aluminum, and other raw materials.  The larger consequences are still evolving, and it will take us, I think, five or 10 years to figure out all these side effects and all these consequences. MR. CARROLL:  Let me just add a point here.  First of all--I think, David, unthinkable, perhaps, just a few years ago--there's going to be, at the end of this year, there's going to be the expiration of the Multifiber Agreement.  That agreement is the mechanism in which quotas were placed upon the export of apparel.  There's been some dialogue, incipient as it might be, between the Africans and the Chinese--led by the South Africans, I'm glad to say--that will look at some sort of an extension of the preference agreements that Africans now enjoy in shipping apparel to developing world markets. Now, whether that can be completed or whether that can be material by the time the MFA expires in less than a year's time, I'm not so sure.  But at least there's some sort of a dialogue that Africa--there's a strategic relationship that China wants to protect and a recognition that Africa needs to enjoy certain market preference agreements that they now have, to continue. And Tom, as far as your concern about my mentioning that other organization, in the interests of being ecumenical, the next time I speak at a CSIS event, I promise I'll mention American Enterprise Institute so that we'll all be even.  All right?  Is that fair enough? MR. HALE:  Let me just add one point.  There was a conference in December in Addis Ababa, Ethiopia, of China and all the African countries to talk about trade and investment.  And at that conference, they committed themselves to doubling and tripling trade over the next five years, to go from $14 billion recently to $30 billion of trade by, say, 2008.  So there is a political dialogue going on.  And as you see, with China now beginning to invest in countries like Zambia, Gabon, Algeria, if the investment does flow and develop, this of course will also help to facilitate and to enhance the development of trade relations. MR. CARROLL:  Here, and then Daniel. QUESTION:  Cathy Ward [ph], International Crisis Group.  It's a follow-up, actually, on the last question.  Given the fact that it looks like China is going to be increasingly investing, and you mentioned earlier the voluntary codes of conduct, efforts to increase transparency, one of the things we've seen in Sudan is companies like ChevronTexaco or the Western companies are much more susceptible to international pressure to do certain things, can make the Chinese look a heck of a lot more attractive to governments that don't want to go through all that.  Are there steps that we as a government or we as a nation should be taking now in terms of engaging the Chinese in the sorts of thinking and planning so that as they come up in the marketplace we don't end up in a situation where there's sort of a race to the bottom or our desires to diversify our energy resources are undermined by the fact that the Chinese just end up looking much more appealing? MR. HALE:  That's a very interesting question.  There was two years ago a Canadian oil company based in Calgary, called Talisman, that was a major investor in the Chinese project, in the pipeline, in the oil field that China developed five years ago also with Petronas.  And what happened was, because of horrible publicity, demonstrations outside the shareholders meeting, Talisman sold out.  And guess who they sold out to?  The Indians--to another developing country where, again, there's no great political or social pressure on corporate behavior and corporate governance. So the bottom line is many African countries like Beijing as a partner because issues like human rights don't come up.  When you deal with American and British and Australian companies, Canadian companies, those issues come up all the time.  And needless to say, these companies hate to have to deal with angry shareholders and very adverse pressure in their own countries. So there could be a race for the bottom.  What's the solution?  There's no simple solution.  We obviously have to engage China and try and persuade them it's in their self-interest to help promote better governance and, you know, a good workplace environment and things like that. Let me just add that five years ago, we had very difficult negotiations with China over the issue of arms sales to Iran.  And China was obviously making these arms sales because it felt, looking out five or 10 years, it would need Iranian oil.  Indeed, Japan had a good relationship with Iran over the last 20 years, in part because of its need for oil.  But we did tell the Chinese very clearly in the late 1990s, in the days of the Clinton administration, that we thought this was an inappropriate policy.  We challenged it very directly.  And China did, in the end, withdraw.  And then last night China announced that it's going to sign this nuclear nonproliferation agreement to try and police the sale of nuclear technology to all developing countries, not just those in the Middle East. So I do think we can engage the Chinese and persuade them to engage in the right kind of behavior.  But because this issue has all happened so suddenly, it's happening so quickly, the fact is the process has just begun and it will take awhile. But many of these Chinese companies now are going on the New York Stock Exchange.  The three leading Chinese oil companies are now listed in New York and Hong Kong.  Because they're listed in New York, they're subject to the kind of scrutiny that American companies have to go through.  They have to have shareholders meetings.  They have to report.  This will create a new constituency in the global marketplace to affect their behavior.  The mining companies in China are not yet public; they're still all government-owned.  But in time, they'll probably go public as well, and that will again create an opportunity to apply pressure to them. So the whole thing is still evolving, and all we can really do is stay tuned. MR. CARROLL:  Alex, you had something to add there? MR. VINES:  Yes.  In my institute, we've had a Chinese lady who has been sent to the U.K. just to understand what the Extractive Industries Transparency Initiative is, what the Publish What You Pay Campaign is, what are reputation risks, how do the oil companies such as BP and some of the smaller majors and independents, how they operate.  So clearly, there is an information-gathering exercise taking place, which I think can only be but welcomed, to try and understand this. The other point I'd make about Sudan is that the Sudanese officials saying, well, if there's an agreement and companies like ChevronTexaco can go back in, or [inaudible] or whoever, they would much rather have Western oil companies there than some of the companies that they're experiencing at the moment, because they don't think they're getting a good deal.  So that may be a part of the incentive in the peace process, I would hope. MR. CARROLL:  Daniel? QUESTION:  Tony, thanks.  I think my question has been answered.  I wanted to take issue with Alex's assertion that companies and corporations are not agents for social change.  Because for a long time Africa has been, you know, exposed to people with whom you really had to count the number of your fingers after you shake their hands in the oil industry and in the mineral industry.  And I just wanted to see--but David has answered that to a large extent.  Thank you very much. MR. CARROLL:  Any other questions?  Charlie Kahn's [ph] back there hiding somewhere.  I'm sure he's got something. QUESTION:  I was wondering if the speakers could comment on the relative success to date and prospects for the Chad-Cameroon pipeline project actually producing tangible public sector transparency reforms.  There are a lot of plans related to that and a lot of great hopes, but frankly some see the prospects as not that great. MR. BURKHARD:  It's a work in progress.  Chad just starting exporting oil in the fourth quarter of last year.  The revenue has just started to flow in.  And so I'd say it would be very unfair and misleading to provide a definitive judgment on how that revenue is being managed, since it's just now starting to hit the government coffers in Chad.  It is a pioneering program, there's no question about that.  The involvement of the World Bank in trying help Chad manage its oil revenue is unprecedented.  I think it's a positive precedent, but again, in my view, it's certainly far too early to see how that's going to take place. One event that did occur a couple of years ago, some of the early oil money was used to purchase arms and, because of the agreements that were in place with international financial institutions, that sum of money that was spent on arms was made public.  And if these arrangements had not been in place, perhaps that acquisition of arms would have been swept underneath the rug and not made known.  So I think there are at least some minor but tangible positive aspects to that plan, but it's far too early. QUESTION:  Reed Cramer [sp] from Oil Africa.  Charlie assigned me to ask the question for you, Tony.  I'm also from oilafrica.com. I wanted the panel to address a little bit more the issue that both George and Alex referenced on enclave economies and their impact particularly on the strategic issues that we've been discussing-- [Tape flip.] QUESTION:  [Continued]-- from the extractive industries is huge, [inaudible] should get away from the enclave economies.  I mean, when you fly to the Cabinda facility by helicopter, as I've done, or the other facilities in Nigeria, it's very stark how separate these have been historically and that's why they've been able to operate successfully in very difficult circumstances in both Angola and Nigeria. So looking forward, how much, really, can we hope for, a spillover effect, if you will, from these extractive industries, particularly oil and gas, impacting in a positive way on African development? MR. KIRKLAND:  Let me start off--the first direct impact we can have is the number of hires in our organizations that are Angolans or Nigerians.  And in our case, over 90 percent of all our employees that work in those countries are Nigerians or Angolans.  It's very consistent with our practices around the world, is to as quickly as possible maximize the number in the right means for the right number of national employees.  And that takes training and development.  I think some of the panelists said earlier you can't find people in these countries.  That is not the case.  You can find very intelligent people that can be trained and developed.  And for companies that are in the business we're in, our business is typically 30-, 40-, 50-year periods that we're looking to be in these countries, as a minimum.  We've got every interest in the world in developing people--and, as a matter of fact, even going the next step, finding Angolans and Nigerians and Argentines and others working for us around the world in different countries. So from that perspective, that's the first step.  I think we have done that piece fairly well and are taking actually the next step, where some of our ex-patriots working around the world in other locations are from the other countries in which we operate. Encouraging local businesses is consistent through every country we work in, whether it's Africa or it's Asia or Latin America.  Everyone wants to maximize the amount of local content.  In many of the places we operate, there are strict requirements on percentages of local content, and in many locations we have really good success in construction, fabrication, assembly of equipment that we will actually use in our operations. So we've had limited--and I would say limited--success in some areas and more success in others.  It has a lot to do with, I think, what's available in the countries, the entrepreneurial spirit and capabilities in these countries, all those things can be different.  But I think overall we've seen greater focus all through the world on local content, and we have some pretty tight constraints to meet almost consistently around the world. MR. HALE:  The critical factor really is the government's economic policy and how it allocates resources.  Let's face it, an oil deposit or a big gold mine give you an exogenous wealth endowment which can be very benign, or it can also lead to corruption and capital flight.  In the case of a country like the Congo in the days of General Mobutu, all it led to was capital flight.  When Abache was the president of Nigeria, the same thing, capital flight. There's one, I think, very good role model for Africa to look at within the continent, and that's Botswana.  Botswana became independent in the mid-1960s--it was called Bechuanaland in those days.  Its only endowment was a couple million cattle and half a million people working the gold mines of South Africa.  But it had a very, very competent and very, very wonderful prime minister, Seretse Khama, who gave the country good government, gave it competent leadership, until he passed away in 1980.  And during the '70s there were some big mining discoveries--first some copper mines and then the biggest diamond deposit in the world, the [inaudible] deposit, that produces $3 billion a year of exports, a huge, huge endowment for a country of one and a half million people. And that money has been used very effectively to promote economic development.  There's been no capital flight, the money is there.  Two much of it goes to employ civil servants, but the fact is it's created in the capital and a few other towns a very large middle class.  And I think Botswana now, because it has a good government and good institutions, will have some capacity to diversify and develop other industries in other sectors as we go forward.  And indeed, lots of new mining companies are coming in now to look for other things, be it diamonds or be it copper or be it gold and silver.  And there will be a new gold mine opening in just a few weeks. So I think we should all study Botswana very, very carefully.  It's an example of how you turn natural wealth into economic development and keep the money at home, not to finance the capital flight that characterized many other African countries over the last 30 and 40 years. MR. CARROLL:  Alex, anything to add to that? MR. VINES:  Well, two points.  One about local content.  One of the problems in, say, Equatorial Guinea, but in Angola would be also an example, is the tremendous competition between oil companies and the service providers for skilled labor.  So in fact, you have a terrible draining, including of school teachers, nurses, other people with skills.  So in fact, the wider pool in society is losing some of the most useful people to the oil industry.  So unless there's some compensation in that regard, this can also be very destabilizing.  It might be very good in the short term for the oil company, but it won't be good for the state itself. The other point related to enclave economies, I mean, the Malongo example is one where even the physical nature of the compound doesn't enhance cooperation of the community.  And Malongo is protected by a barrier minefield of antipersonnel mines and razor-wire fences.  This isn't a way to necessarily enhance local community cooperation. MR. CARROLL:  And I think it's important to note, Reed, that enclaves vary greatly because of Africa's economic landscape.  The importance of oil revenue to Nigeria I think reduces itself to about $100 per capita per annum, whereas obviously it's much different in Equatorial Guinea or in Sao Tome/Principe.  So I think, again, we have to differentiate among African countries to look at the impact of that enclave factor. We had a question back here? QUESTION:  Hi.  Sean Sunderland [sp] with the Canadian Embassy. Another industry that has similar challenges to the oil and gas industry in Africa, of course, is the diamond industry, as my good friend Alex knows quite well.  And it also faces similar issues relating to social equity and good governance.  Recently we've seen the development of something called the Kimberly process that has brought together both industry participants, governments, and civil society to create benchmarks, modalities, best practices and a mechanism for monitoring how governments go about developing, moving diamonds. I was wondering if possibly something similar to that could be developed in the oil and gas industry in Africa, and whether this Extractive Industries Transparency Initiative that some people have referred to might possibly serve as a model. MR. CARROLL:  Alex, can I throw that one to you? MR. VINES:  Well, the closest scrutiny at the moment between Kimberly and the oil industry is actually related to illicit oil bunkering in Nigeria and trying to work out a way of [inaudible] the produced oil there and so able to trace its origin, and therefore to see whether it is a legitimate barrel of oil or an illegitimate one.  So there are some serious discussion and thought and investigation going on at the moment in those terms. The wider production of oil, I don't think at the moment that there much that Kimberly can offer.  Having said that, Kimberly itself is very important, and as an extractive industry, there are tremendous lessons that need to be learned from it for the mining industry.  And indeed, the Kimberly process itself has variable success, depending on where you're looking.  Angola would be an area that would need still a lot of investment. QUESTION:  Ian Garry [sp] from Catholic Relief Services.  Two questions for Mr. Kirkland. The first question has to do with how your company assesses the risk of on-shore political instability to risks for your off-shore production.  How do you factor that into your calculations? And the second question is related to the Extractive Industries Transparency Initiative.  It's obviously welcome, and the steps that Nigeria has taken are obviously welcome.  But it remains a voluntary initiative.  What steps can ChevronTexaco take in countries where the leaders have chosen not to volunteer to participate?  How can ChevronTexaco contribute in increasing transparency and accountability of revenues in those countries such as Angola, where the Angolan Catholic bishops have recently called on oil companies to be transparent in their payments? MR. KIRKLAND:  With the first question, we try to assess in some qualitative manner when we look at any investment the risk perspective.  And there's no doubt that we would see in some cases a greater risk on-shore than off-shore.  Likewise, you have to recognize also that off-shore developments in themselves, on a technical risk, can have a different risk profile than an on-shore one, namely higher capital development cost.  So you tend to find around the world, all these risks tend to balance often between technical, political, and what I would say would be the fiscal risk of the country.  So all those tend to have some balancing effect into which order you invest your money--which is the way economics is supposed to work in the real world, I would say. On the case of transparency, our views on that, first, are very importantly that this has to be dealt with government-to-government.  And that has to be consistent.  If you get it dealt with government-to-governments around the world, then the playing field is consistent for every company no matter where they come from. The second part of that is changing an existing contract term is not a unilateral thing we do.  One thing we say everywhere we go around the world is we expect, country or company, for you to abide by your contracts and likewise you have every right to expect the same performance from us on any contract.  If we've got nondisclosures that were written into a contract, we cannot unilaterally change them.  We would like to see the governments, and the U.S. government can play a huge role in helping get a consistency around the world on disclosures.  We are not at all against disclosures.  Companies that operate from the United States have very strict performance requirements around Foreign Corrupt Practices Act.  We have to document everything we do.  It is in our books.  We are very willing with, once again, contractual terms that allow us to disclose, but we do need and we do think it's important around the world that it be consistent.  It needs to be a level playing field. QUESTION:  My name is [inaudible].  I work for the Institute for Defense Analysis in Alexandria here.  My question is to Mr. David Hale.  You did comment on a demographic trend in Africa and in Europe.  I absolutely agree with the EU--when I look at EU, on average, total [inaudible] rate is 1.35.  And you also mentioned about the population trend in Africa.  But I want to take advantage of your experience in France.  When I look at the French [inaudible], it's 1.9.  However, when you look at Muslim population in France, it's 3.5.  And now with 5 million Muslims in France, there is [inaudible] how they integrate Muslims in French society.  A, do you see how the French government is concerned about Muslims' interest in [inaudible] foreign policy?  And B, looking at [inaudible] for EU, at the moment EU [inaudible] countries are quite concerned about welfare [?] tourists from a number of countries.  Do you foresee any change in [inaudible] policies, in EU [inaudible] countries? MR. HALE:  Well, this issue of immigration and the role of Islamic minorities in Europe is just going to be a progressively larger issue because of these differences in birth rates.  The Moslem population in France is 5 million; in 25 years it could be approaching 10 million both because of a higher birth rate as well as continuing immigration from countries like Morocco and Algeria, which have a lot of unemployment and a lot of surplus labor. The French response to this is schizophrenic.  There's no doubt the fact that they have a large Moslem population played some role influencing their foreign policy.  But a few months ago, the French National Assembly also passed a bill forbidding girls from wearing head scarves because they were concerned about Islamic symbolism, Islamic statements when they went to school.  So the French state said we're no longer going to allow people to display religious symbols and things like that when they appear in public.  This also, by the way, applies to Jewish yarmulkes.  It's a policy which applies to all groups, not just the Moslems.  But what drove the policy was concern about this head scarf issue. So I just see in the European context a long period of schizophrenia.  But the very fact that you have a growing Moslem population in Europe and the fact it will probably expand dramatically going out 20 or 30 years means it will become a source of more controversy and more contention.  There will also be a significant growth, I think, in the African population, for the simple reason that the countries of West African historically have had lots of immigrants in Paris and because they're right nearby and have a lot of surplus labor.  And Europe will need these people because of its own shrinking population. The French situation isn't that serious.  The really extreme declines in population are going to be in Spain, Italy, Germany, and now also some Eastern European countries where the birth rates where the birth rates have collapsed compared to 15 or 20 years ago.  In the 1980s, 20 percent of all the babies born in Europe were born in Poland, which had a very high birth rate.  But now the Polish birth rate's fallen to German levels, so they also may need immigrants in 15 or 20 years, something unthinkable 10 or 15 years ago. QUESTION:  Thank you very much.  I'm a colleague of Tony's.  Mr. Hale, you mentioned the Nepad Initiative and, I think, suggested, maybe, that some of Mr. Mbeke's attitudes towards Robert Mugabe haven't helped it.  But actually, from any of the panelists, I'd be very interested in their views on whether the Nepad initiatives, for instance, the peer review mechanisms, have lost steam or whether they are a viable player in trying to move toward some of the goals that have been mentioned on this panel. MR. VINES:  In a sense already there has been some de facto peer review actions that have taken place.  For example, who would have thought a few years ago that you would have had a lineup of African presidents ensuring that another African president, Charles Taylor at the time, would leave the country and go into exile to Kalibar in Nigeria?  So I think already one sees a bit of a change from past practice. The formal peer review process is being set up.  Ghana is meant to have a peer review of itself.  It was about to announce a week ago what the composition was of the peer review group, which is a mixture of civil society and other government people in Ghana.  I think we need to see how these processes develop and see what the results are before criticizing them. MR. HALE:  South Africa did do something, though, quite positive a few months ago despite the passivity on Mugabe.  Back in January, there was a debate on Malawi about the current president going for a third term.  His predecessor, Hastings Banda, had of course been president for life, until he became so ill he was removed from office in the mid-1990s.  And the South African government sent an emissary to tell the president of Malawi you should not go for a third term, and he's now announced his retirement.  So there you had an intervention that was quite positive.  What might have been a new dictatorship, with the same man staying in power for three or four terms, will now be a two-term presidency. Also, the leader of Southwest Africa is about to retire.  He could have been a dictator indefinitely; he's about to retire.  So these are all, I think gestures in the right direction.  And again, we have had in the last 10 years several elections in Africa with a few changes in government where people gave up power--unthinkable in the 1970s and 1980s. MR. CARROLL:  One more question, then I have a question. QUESTION:  Sahai Haptu Miriam [ph] from the Eritrean Embassy.  My question is directed to the gentleman from Chevron.  I just want you to look inward and tell me how you feel--not you personally, but those of you who are engaged in other countries, developing countries that are rich in oil or other resources, where you see the resources that are being generated for the government but the people live in poverty all the time.  And I'm sure you're caught in dilemmas between, you know, seeing how much money is going and the people not benefiting.  So how do you feel?  Also, what's your role when you combat [?] with the Department of State or DOD or other government institutions? MR. KIRKLAND:  First, our very first role is to do what we contracted with or what we committed to in those governments, and that's deliver the best possible costs and the most monies to their government coffers.  I think that's our first responsibility.  We've got to do that.  We've got to deliver at the very best cost, most efficiently, economic results for them. We then need to encourage them to use that money wisely, and that's our great hope and example, the case of Sao Tome, that we see a country starting that way.  Hopefully they will do the right things with their monies. I think, third, what we try to do at the local government level and I'd say the community level, we try to impact that community in as positive a manner as we can.  We do a lot of community development projects.  Some places, they have worked extremely well.  What we have done in Angola recently with our Angolan Partnership Initiative has been a real highlight.  We committed $25 million of monies not related--once again, not related directly to our Cabinda operations but related to trying to make improvements in the country as they move into, hopefully, long-term peace.  And we've had great commitments from NGOs and the U.S. government, USAID, UNDP, and, really, turning $25 million into a much larger program.  At this point in time, we'd estimate that program would be in the 50-to-75-plus million dollars all through Angola--things from agriculture to other developments, banking, type of developments that will hopefully spur development through the whole country. So we always try to do those type of things within the limits of what a company's responsibilities are.  We go much further in the developing world than what we would do in a developed country.  The difference in the way we work with communities and government is quite different than what we would see in the U.S. or Australia or the U.K. The capacity of the country itself in knowing how to do the right things with the money is hugely important.  And that's where we'd always like to see other agencies, other governments help these countries in using their money.  And that's one of the reasons we have lots of hope with the U.N. efforts in the Chad-Cameroon pipeline and in Chad in particular with the oil development there, as a good example of, hopefully, a new way to do business there. MR. CARROLL:  I'd like to take the prerogative of the chair and ask the last question.  David, you mentioned in your presentation the Millennium Challenge Account as being a different way of looking at how we can engage Africa economically.  I concern myself about two issues.  Firstly, some of the criteria, which we've discussed earlier, and we may not necessarily reach any conclusions today.  It seems like some of the countries that need the greatest amount of engagement are some of the countries which we will exclude from the list--Nigeria being one of those countries that concerns me the most. But secondly, I think the possibility of using the Millennium Challenge Account as a lever to bring leverage to private investment.  David, you speak to CEOs of companies, not only in petroleum but in other extractive industries and manufacturing.  Do you envision a way in which the Millennium Challenge Account money can be used to mitigate certain risks, to try to encourage companies to come into Africa, where they might not otherwise go? MR. HALE:  That's a very good question.  And that's really a question, historically, as the domain of OPIC, the Overseas Private Investment Company, which has a traditional role of providing political risk insurance, but also in recent years has actively promoted the creation of what I would call venture capital funds or private equity funds to then attract yet more private capital to go into African countries.  And indeed, of course right now, OPIC's trying to help launch a venture capital fund for Iraq, a country which would have had no venture capital a year ago. So the answer is yes, I think we can probably find ways to use government money to incentivize the private sector to do more, and the activity of OPIC with these funds and so on is one way to start.  Needless to say, for many major companies the issue of political risk insurance is also very, very critical.  If you go to a country like Nigeria, a country like Malawi, a country like Sierra Leone, you just see political risk that you wouldn't have in North America, Australia, or Wester Europe, and you want some guarantees.  So there's no doubt this government insurance program can play a very, very important role. So yes, we can experiment and we can find, I think, new ways to incentivize the private sector.  The fact is, the world has an abundance of capital.  You know, we have in this country alone over $10 trillion in pension funds, we have globally close to 20.  One of the problems in Africa is we don't really have developed capital markets to beckon this money.  South Africa has a very developed capital market; it goes back 130 years.  But in the rest of Africa, the capital markets are tiny, they are liquid, they lack transparency.  It would be very, very hard to mobilize large pools of savings that we have in the old industrial countries to go there. So the creation of new, highly specialist funds that can do private equity and can have some kind of political risk insurance will be a way to overcome these barriers and, over time, hopefully, incentivize these countries to develop effective capital markets to then beckon these very, very large pools of retirement savings we now have in North America, Europe, and Japan. MR. CARROLL:  Unless there are any concluding remarks from our other three panelists, I'd like to wrap up this extraordinary panel that we've had.  I'd like to remind all of you that in 15 minutes or so we'll have General Wald up here making a presentation, and if it's similar to the one that he made at another organization a couple of weeks ago, I can assure you that it's worth the wait. So I'd like you to join me in thanking our panelists for this event, and thank you very much. [Applause.] MR. DE MUTH:  [In progress.]  --to have a four-star general of his distinction being with us all day has been a great honor for AEI, and I'm very grateful to him both for his advice and that of his staff in putting together this affair, and for being willing to stay here all day and to give this keynote address. General Wald is an F-15 pilot, with an immensely distinguished career.  He has over 3,200 flying hours and 450 combat hours over Vietnam, Cambodia, Laos, Iraq and Bosnia, and he has also been one of the most forward-thinking strategic officers in the United States Air Force.  He is, as I think we all know, currently Deputy Commander of the U.S. European Command in Stuttgart. Before assuming that position, among his important posts in the U.S. military, was Commander of the 31st Fighter Wing at Aviano Air Force Base in Italy.  He was Commander of the 9th Air Force and U.S. Central Command Air Forces at Shaw Air Force Base. He is, as I mentioned, a veteran of many important military campaigns.  He has also served as Director of Strategic Policy and Planning at U.S. Air Force Headquarters and was on the Joint Staff, as the Vice Director for Strategic Plans and Policy. In his current position, he is, of course, particularly interested in and responsible for developments in Africa.  There could be no better man to be with us today or to deliver this keynote address. Would you please give a warm welcome to General Charles Wald. [Applause.] GENERAL WALD:  Thank you, Chris and Tom.  Thank you for doing a great job today and having us here and actually being somewhat objective.  That's a good thing.  It's too bad Danielle had to leave, but I appreciated her being here.  I think General Fulford is still here.  I appreciate that, too.   But it's a good group, and I'll tell you I was impressed all day.  I've been to a lot of these activities in my career in different jobs, and this is, without a doubt, the best group of presenters I have ever seen at any of these things.  And it's kind of unfortunate because I think most everybody here probably agrees with the general strategic direction I think the United States, at least we see, we're going in Africa, and definitely most people here do. But I think there's a lot of other people in the United States, and even in our government, for that matter, but internationally that would really benefit from hearing some of this.  So part of our job is to proselytize.  I couldn't do that when I was in the Middle East.  It was against the Saudi rules, but we're doing it here. So what I thought we'd do is, first of all, I'd like to tell my wife, this is the first time she's ever been to one of these events, that I'm glad she's here, and she's been taking copious notes.  For those that don't know, in the military, you get two-for-one, so half her pay is mine. [Laughter.] GENERAL WALD:  But she goes to Africa with us periodically, and the spouses in the United States military do a great job and have a great sacrifice for what we all do, and I appreciate that.  As a matter of fact, I'll talk about it just a little bit here, one of the things the United States military does are things that you wouldn't traditionally think they do. For example, in Africa, the European Command has opened up 30 AIDS clinics, 24 orphanages, and we provide, every time we do a trip down there, through donations and contributions, clothes to orphanages, et cetera, and the spouses travel to those organizations and spend time there as kind of I guess a freebie from the standpoint of international relations and winning of hearts and minds.  So I appreciate that. Ambassador Lloyd Hand is here, as well as Dr. Jackie Davis, from EUCOM's Strategic Advisory Group.  We're glad they're here and really particularly pleased with that. So what I thought we'd do is spend a little time talking about how we see European Command's strategic way ahead for the Continent of Africa, particularly, but generally how we got to where we are in the European Command and why we're doing what we think we're doing is right and what we're doing.  And by the way, all of the presentations we had today, as I said earlier, are tremendously supportive of what we think we're doing in EUCOM and how we're going ahead. You've got to put things in a strategic context for us.  You all know this, but I'll tell you how we've kind of gone through the rationalization for our strategic approach for Africa in EUCOM. One is, after the Berlin Wall fell in 1989, I will tell you that there were a lot of people that thought they knew the strategic way ahead at the time.  I will contend, as you look backwards, none of us knew what we were doing very well, and we didn't have a very good plan.  It kind of evolved over time. As a matter of fact, as was mentioned earlier, Africa was never really a big part of the strategic plan for European Command or the United States of America.  It was always there, but it wasn't a strategic "there," and so we really didn't recognize it.  We kind of moved along down the road. As things changed in the Soviet Union, we focused on the new Warsaw Pact or the previous Warsaw Pact countries that were evolving into democracies and spent a lot of time on that. As a matter of fact European Command, as well as NATO, and General Jones, who is the Commander of both of those organizations, spent a lot of time--NATO did--on nurturing the former Warsaw Pact countries to become more democratic through Partnership for Peace programs and things like that.  That actually was a pretty good idea at the time.  As a matter of fact, it was brilliant, but we didn't spend a lot of time looking South, and we didn't really think we needed to from a strategic standpoint.  There were a lot of humanitarian issues going on, but the strategic value had not evolved yet.  And, once again, NATO spent a lot of its time--the European Command, in this case, as the United States part of NATO--working on three new countries that came into NATO in 1999--Czech, Poland and Hungary--and then moving into actually expanding off toward the Soviet Union or the former Soviet Union, Russia. And then on September 11th all of a sudden we all had the wake-up call.  We know this, but it's worth probably looking back on what changed.  And you know there's been a lot of discussion and debate in Washington, over the last few weeks, particularly, of what is 9/11 all about?  What should we have known?  When should we have known it?  What does it really mean? And to European Command, it meant that our life changed, as far as what was important in European Command.  It changed  as far as what our new strategic environment was.  And, in fact, it was there, and we just didn't recognize it, to tell you the truth, in the European Command, and I think General Fulford, my predecessor, would admit the same thing.  It's easy, in hindsight, to go back and say, "Why didn't we understand this better?"  But the fact of the matter is it wasn't really clear yet, but it was evolving. And, in fact, I spent--as was mentioned in the introduction--a couple of years working in the Middle East as the Central Air Forces' Commander, and spent 24 months in that job, traveled to the Middle East 24 times, and really spent a lot of time thinking about the Middle East.  I will tell you I thought nothing about Africa at the time, and I thought nothing whatsoever about the Caucasus region. At the time, I thought about the Middle East and all of the important issues there, whether it had been the Palestinian-Israeli issue or just the Middle East in general, the Iraqi issue, and that was our center of gravity.  That was our world.  That's what we thought about.  And, in fact, it still is extremely important, but the fact of the matter is there's these peripheral wings that I'm going to talk about that were evolving that none of us really recognized at that time. And one of the things that I found out in this job so far, besides the fact that I like it, and I've got a great boss in General Jones who lets me do my thing, is that there are a lot of people, as we start talking about Africa and our interests in Africa, in European Command that actually resent the fact that we're doing it. In fact, I think there's actually an appreciation for most of it, but there's a little bit of resentment, to say, "Where have you been for the last 50 years?  How come all of a sudden you're interested in Africa now?"  And people kind of look at you like, you know, "Give me a break.  You know, this is a little late to come here." But, in fact, it has changed, and the importance has changed not just from the standpoint of it was always there because it really wasn't always there.  And you heard Mr. Hale speak and some other folks a minute ago about the evolving economic importance of Africa, but there are other importances, as well strategically, that we'll talk about. Once again, what's happening to European Command is an expansion of NATO.  On the 2nd of April this year, we had another 7 countries come into NATO--26 countries--moving to the East.  So the focus in Europe has really been kind of an East-West, you know, kind of a horizontal look.  And during that period of time things have been happening in Africa that really haven't necessarily hit the hit parade from a strategic standpoint, but they are for us, and I'll tell you why in just a minute. We have a big area in European Command.  This is Russia here, obviously.  It goes all the way to Greenland, down to the Southern tip of Africa.  This is Central Command.  This is actually, as you know, Saudi Arabia, Iraq, Iran, Afghanistan, et cetera.  The reason we put Central Command on there, there has been some discussion--and I think General Fulford answered the question very well earlier.  I couldn't agree more--about why is Africa not a separate command, and by the way, why are these 10 countries here not part of European Command? I am not going to belabor that.  As a matter of fact, I thought General Fulford answered it brilliantly, but the fact of the matter is, I will also add here that, although on the map you see a line here, you see lines here, and those are euphemistically called "seams."  The implication is that the United States military people can't work with each other, and they have a "rice bowl" issue in mind.  And the fact is that General Abizaid, in Central Command, would not let us do anything here, and we wouldn't let him do anything over here. I am here to report to you that is totally false.  We work with Central Command on a daily basis, habitually, through video teleconferences, particularly in the Horn of Africa, through the JTF Horn of Africa, routinely about issues that are of common interest to both of us, particularly from a terrorism standpoint, in Uganda, Tanzania, Kenya and other areas.  And these seams really aren't there.  What they are is a manifestation of people that want to have problems or cause problems.  They are people that really don't understand how the United States today is addressing the strategic issues.  It's not a problem, I will tell you here today. The other issue was should there be a separate command for Africa?  The answer is no, no, no, no, no, no.  And the reason is we can't set up a new headquarters.  We already have a headquarters at European Command that does all of these countries here.  That's fine.  We can handle it.  We're big boys. But if we were to set up a separate command for Africa, we'd do just exactly what people don't want to have happen, and that's cause a seam right here, potentially, between commands.  In fact, this is the way the world needs to be looking right now--is up and down instead of this way.  Because of all of those people in Africa--because of demographics and other issue--are going to go right there into Europe. Now, the fact of the matter is, if we had a separate command, it wouldn't do any good. Number two is, in this day and age, we need less headquarters.  We don't need to build a new one.  It takes a lot of effort, at a headquarters level, to do this type of activity with 43 countries in Africa.  So the fact of the matter is it doesn't make any sense.  As a matter of fact, General Jones lets me do my thing down there on a daily basis.  It's not a problem. We break it up into regions because it's so big.  The United States European Command is a misnomer.  One of the things we're working on is trying to figure out what should the name of the command be because this is not Europe, I'll guarantee you.  So the fact is we always say to ourselves shouldn't we be called Eastern Command or something like that?  I don't know what the answer is, but it's definitely not just European Command.  European Command is a big misnomer because we have Russia, as I said earlier, and then 43 countries in Africa.  So we're looking at that. But we do treat Russia somewhat separately.  It's a huge country, very important, and you have to ask yourself, why is Russia even a part of this topic today.  And the answer is all of the things happening down here cannot be done just by the United States.  We need other countries to help us, multinational countries that have an interest in those areas, not only there, but in the Caucasus Region, as well as the Middle East. Russia was a separate country up until 2 years ago.  As a matter of fact, when General Fulford was the Deputy Commander, most of the time Russia reported to the Joint Staff, the United States JCS as a separate issue because of its importance as a bipolar issue with the United States. Two years ago, they were placed into, under the Unified Command Plan, the UCP, European Command.  That was kind of a catharsis for Russia.  They didn't like this because they thought it was demeaning, the fact that they would be part of a geographical commander's area of responsibility. I am here to report, over the last few months, Russia and the United States European Command have developed a relationship.  We're actually moving forward now, and it's because they see the benefit of this on common interests around the world, particularly terrorism.  It's a huge issue.  To me, it will be one of the major strategic issues over the next 5 years for the United States, as our relationship with Russia and the evolution of that relationship, based on President Bush and President Putin's relationship, frankly, and the importance that will play in our efforts around the world on terrorism. If you look at the Caucasus Region, there's only three countries: Georgia, Armenia and Azerbaijan.  Very important.  Some of our petroleum friends have left for the day, but I will tell you that in the Caspian Sea, if you think the Gulf of Guinea is important--which I do, by the way.  I'm going to talk about it--the Caspian Sea is important as well.  And British Petroleum has a consortium of 20 different countries and agencies that are developing the oil in the Caspian Sea, $20 billion over the next 5 years, which is the diversification issue that was talked about by Jim Burkhard, by the way--very important. We think that's an important area.  As a matter of fact, we have a lot of initiatives going on in the Caucasus Region that was actually started before I ever got to EUCOM.  And I think the initiatives--one is called the Caspian Guard, which is a security initiative over the Caspian Sea, that will include Kazakhstan and Azerbaijan.  It's funded by DITRA and is a counterproliferation issue by the United States of America.  It's one of the most brilliant strategic issues that the United States has pulled off in the last 20 years, a brilliant program.  We're well behind it. We also are training the military in Georgia, under our Georgia Train and Equip Program.  That has also paid big dividends during the "Rose Revolution" recently, when Shevardnadze was taken out of power, the soldiers that we trained--and General Fulford alluded to the training just a little bit ago--were actually a part of the fact that they would not rise up in support of Shevardnadze during that period and showed their support for democracy and civil leadership, a very important program. Central and Eastern Europe.  We just talked about some of the countries that just came into NATO, hugely important on the war on terrorism.  As a matter of fact, out of the 33 countries in Iraq today, 27 of them come out of European Command.  That's pretty important, I think. And the fact of the matter is those are a lot of those countries that used to be part of the Soviet Union, the Warsaw Pact are actually in Iraq today supporting the Coalition effort there--countries like Bulgaria.  As a matter of fact, Azerbaijan has offered up 400 more troops for Iraq recently, which we'll help them train to do that.  Now, where do you think that would have ever happened 10, 12 years ago before the Berlin Wall fell?   It never would have happened. Western Europe and NATO.  Good place.  We consider those countries enablers.  We don't think we need to do anything for Western Europe and NATO or Western Europe, particularly.  NATO, yes, but not Western Europe, from the standpoint of training, and equipping or anything else.  They are capable countries.  They need to help us with the rest of the problems in the word.  So we consider those important partner enabler countries, that they should help now instead of have us actually provide the security for their economies that we have for the last 50 years.  It's time for them to step up and help the United States, as far as I'm concerned. North Africa and the Middle East, hugely important.  It was talked about earlier by a couple of the speakers this seam here.  Now, if you look at North Africa, it's Arabic countries--Morocco, Algeria, Tunisia, Libya, Egypt, particularly.  It kind of fits into this area here.  The problem is, in our area, it's in Africa.  In the State Department, it goes this way, and then you've got sub-Saharan Africa.  So there's a little bit of a seam there and, in fact,somewhat problematic. But I will tell you that sub-Saharan Africa and North Africa have huge connecting tissue.  Two weeks ago, in European Command, we had the first meeting ever between Chiefs of Defense from the North African states and the Sahel states, and they came to the European Command at Stuttgart, nine of them, from Morocco, Algeria, Tunisian, Senegal, Mali, Mauritania, Chad, Niger.  And we spent time talking about this area here and this problem here from the standpoint of ungoverned areas and terrorism. I'll talk about this later, but the Chief of Defense from Niger met the Chief of Defense from Chad, and that's the first time they'd ever talked to each other in their lives.  They're next-door neighbors.  As a matter of fact, they coordinated operations against a guy named al-Para, which you probably read about, and I'm going to talk about a little bit later, with us sitting there in the room together in this meeting, real time together, and actually helped each other on a attacking this GSPC leader. As a matter of fact, the CHoD from Mali was there and also went up into my office and actually called back to Mali to start up coordinating operations.  But that's the type of thing we need to do.  Nontraditional, who'd ever think it before.  We've got to do different things.  We're in a new environment. This is what some people have referred to as "Old Europe," but it's not meant to be pejorative.  It's the original Europe, and it's very stable right now.  If you look at the Marshall Plan and what happened after the 50 years of the World War II, the biggest economy in the world today, all of you know this because you're all knowledgeable about this, but the United States has 25 percent of the world's GNP today.  The European Union has 23 percent.  Europe, that's what happened after the Marshall Plan.  The United States put in originally over a million people.  Up until 1989, we had 315,000 troops in Europe mainly securing Europe so they could have a better, stable life, their economies could grow.  That's happened. NATO, General Jones' major thrust today for NATO is to transform NATO.  "Transformation" is a buzz word that people sometimes overuse, but it's a fact.  In NATO, after 2 April, they have 2.7 million, not counting the United States, 2.7 million men and women under arms--2.7 million.  If you add the United States, it's over 4 million.  The 2.7 million men and women in NATO, they can mobilize and move 3 percent of those folks--3 percent.  The United States military, I would venture to say, could probably get up to about 85 percent, at least, mobilized. Europe needs to change their military.  They need to be more out of region.  They need to be more mobile.  General Jones is doing that via what's called the NATO Response Force--very important.  They need to start moving out into these regions here, this ark of instability, that we, the United States, see as a strategic security issue for not only the United States, but Europe and the world. I talked about Caspian Guard.  If you look here, this is the Mediterranean, for example.  As we talked about earlier, out of the North Arabian Gulf comes, what?  A lot of oil, through the Straits of Hormuz, a very dangerous line of communication, a lock here, down through the Red Sea, through the Suez Canal, through the Mediterranean and out through the Strait of Gibraltar.  Right there is seven miles across, very difficult, very difficult security issue for those oil ships that are coming out through the North Arabian Gulf. During the latest Gulf War, most of the ships actually passed through Europe--that had both arms and soldiers on it for Iraq--and through the Suez Canal.  We've had 350 ships go through the Suez Canal in support of the war in Iraq.  That cost us $80 million to go through there.  That's what it cost the United States of America just to go through the Suez Canal, not counting, if they had closed that Suez Canal by shipping one ship, it would have stopped the whole thing, and we would have had to go South.  It would have cost a couple of weeks, a lot of money, and it wouldn't have made it. This is a very huge important area right here that this NATO Maritime Intercept Ops that I've talked about here is a NATO mission that's securing what I consider the most important line of communication in the world. Now, if you look down here in the Gulf of Guinea that was talked about by Mr. Kirkland, and Mr. Burkhard and others, that in the next 10 years, we'll get 30 percent of our oil from that area.  For example--now, this is not the only issue in Africa, but it's a huge issue.  As a matter of fact, we get more oil from Western Africa today than we do the Middle East.  It's a huge, important area. As a matter of fact, the Caspian Sea, another issue that Mr. Burkhard talked about was the diversification of hydrocarbons, and Mr. Burkhard talked about the fact that the United States is going to become very dependent upon natural gas from the Western part of Africa. Three weeks ago, the Russians turned off the natural gas to Belarus.  I don't know if many of you read this, but it's pretty important.  Today, Europe gets 90 percent of its natural gas from Russia.  Russia is the largest exporter of oil in the world.  When they turned that natural gas off to Belarus because Lukashenko and the Belarussian Russians weren't paying for their gas properly--they were tapping off--that shut off the gas to Europe, by the way, for a day.  And everybody in Europe had a stiff upper lip.  They wanted to make sure, that's no big deal.  Let me tell you what.  If that gas had stayed off for any length of time, it would have been hugely important.  As a matter of fact, when they turned it back on, it would have blown half the pipes out.   But they did turn it back on.  What it really showed you was the geostrategic importance of the Russian gas coming into Europe and the dependency they have on Russia, for example, on natural gas.  That issue, when you talk about the Caspian Sea, they're going to have a pipeline come out of there that's going to go direct through Azerbaijan, through Georgia, and through Turkey in the next year.  Actually, the hydrocarbon, the actual oil pipeline will open up next spring in June, and then a year later, they'll open up a gas pipeline.  That gas will go down in into, directly into Europe. As you know, gas going through pipes is not fungible.  It's going to go wherever it ends up, unlike oil tankers with fuel that could be sold and paid for a thousand times before it ever gets to the final destination.  Natural gas has to go where it's going to go and be paid for.  That becomes a strategic issue for Europe, by the way.  That's a strategic issue for us as well.  The European Union economy helps drive the United States economy. In Germany, in Stuttgart, where we are, we're in a state called Baden-Wurtemberg.  There are 16 states in Germany.  Baden-Wurtemberg is where Stuttgart, Germany, is.  Baden-Wurtemberg has 250,000 Germans working in the United States today.  It's a $38-billion economic impact on the United States.  And the reason I say that is we're connected.  We're connected with Europe economically.  We all have the same interests.  Whether we like it or not, we're interconnected.  The United States has 50,000 people working in Germany, Baden-Wurtemberg, the state I'm in.  It's an $8-billion impact economically on the state we're in.  These things are all connected. We think NATO and Europe needs to get out here and start protecting some of its interests.  There's a political issue with Russia, valid.  They're concerned about the buffer zone along their border. We feel, and we've worked with the Russians on this over the last few weeks, and we'll continue to, that we have a common interest in that area, and the common interest is security in the Caspian area in the Caucasus area. The Middle East, as you all know, in the Istanbul Summit, the United States, with the rest of the NATO countries, are going to talk about Middle East security, the Mediterranean Dialogue, better known as the Barcelona Initiative in the European Union, and the Greater Middle East Initiative that's been proposed by the President of the United States.  That's important. And the reason I talk about this is those two areas are still on our scope.  But what hasn't been probably publicly talked a lot about is the instability, and the resourcing, and all of the other issues in Africa that we'll talk about in just a second.  In the European Command, we consider this the belt of instability that we have to look at, and it's all connected. Africa is big.  I think General Fulford said, you know, a lot of people in America look at Africa, and they say, "Boy, that's a big country," and, in fact, it's a big continent.  And 53 countries later, of which we have 43 of them, if you talk about from our headquarters in Stuttgart to the tip of Africa, Capetown, it's 5,800 miles, the same distance to Los Angeles from Stuttgart.  That's big. This area here, this halfway line, this is a strategic airlift, unrefueled distance from Stuttgart to here or, a matter of fact, it's the same distance from here, this is from New York to Stuttgart, right here, that distance, huge areas.  You can see the United States on here.  This border here, Niger, Chad or Niger, Mali and Algeria up to Morocco is the same distance as from Tampa, Florida, to Sioux Falls, South Dakota. Those are huge areas there, and they're ungoverned.  If you have never flown over here before, which I have a lot, it looks like Saudi Arabia.  There's nothing there but sand and basically hardly anything to define the territory.  It's open spaces.  As a matter of fact, this whole area here we'll talk about a little bit later is definitely a belt of ungoverned space.  It's going to take a lot of effort, and we'll talk about some of the things we're doing to control that space.  But big, big long distances, huge areas, huge expanses. Some of the challenges we see in the European Command, and you could go on forever on this.  One is migration.  It was talked about earlier, the demographics in Europe, for example.  Europe is losing population.  You know, I think it's pretty interesting.  If you look at immigration, which is an important aspect of security for the future, the United States today has more immigration than all of the other countries of the world put together.  Now, that's pretty interesting.  The United States of America has more immigrants today than all of the other immigrants of all of the other countries going to all of the countries in the world put together, and that's important, demographically. Demographics are what runs economies.  Europe's demographics are going south.  Their growth rate is going down.  As a matter of fact, in Russia, because of various reasons, over the next 20 to 30 years, if nothing is done, the population of Russia will go from 145 million to 75 million people.  Think about it.  It's going to be half unless something is changed.  Some of it has to do with health issues.  A lot of it has to do with just basically birth rate. In Europe, as we talked about, their demographics are going to go South.  Right now the European Union has 23 percent of the economy of the world.  Unless they do something about demographics, they are not going to maintain that stature.  They've got to have people in the work force.  And where is it going to come from?  A lot of it's going to come from here.  That's a good thing. The problem in Europe is they've got a thing in the European Union called the Schengen Rule.  And the Schengen Rule says that if you're in the European Union, you don't have a border.  If you're a part of the European Union, you can travel back and forth between countries without a passport, without a visa, it doesn't matter, and you can get jobs wherever you want.  It's the ultimate NAFTA, really. The problem with that is, once you get in Europe, there aren't borders in the 10 countries.  You can travel freely.  And right now my contention is Europe is basically a safe haven logistics area for a lot of terrorists.  They like it there.  They can live there.  They can grow there.  They can recruit there.  They can go to the mosque there.  They can have logistics, you name it.  And that's going to be more and more of an issue. So the question is, is that 800 million people in Africa today or 1.3 billion 20 years from now, is that going to be a curse or is that going to be a benefit for Europe?  And I think it probably could be a benefit, but it's got to be handled right.  But it's a huge issue here.  And not only that, a lot of the oil or gas, actually, the other 10 percent of the natural gas in Europe comes from Algeria and other places under pipeline, so this is a huge security issue for not just the United States, but particularly Europe.   And we're trying to work with our European partners to go ahead and do a multinational approach to Africa from the standpoint of where are we putting our effort, where are we putting our resources. On May 22nd, we're going to have what's called a Caucasus--actually, it's the 12th of May--a Caucasus African Clearinghouse meeting in Luxembourg.  The Luxembourgese are going to actually host it, and we're going to bring all comers from Europe and other places that are interested in going ahead and pooling resources in Africa to make sure that we actually have a synergy and focus of effort. There's a lot of things going on in Africa, and one of the major issues we've talked about today, particularly, is we're resource limited.  We don't think Africa right now, from a military perspective and a crisis standpoint, competes with Iraq.  It shouldn't.  Iraq is a huge issue for the United States.  We're going to win in Iraq because it's the most important thing we're doing militarily.  We will win in Iraq. On the other hand, there are other issues going on as well.  And we, as a global GCC or a Geographic Combatant Command headquarters, are doing our part to make sure that the future is in a preventive maintenance standpoint.  And I'll talk about what we think we're going to do to prevent problems in the future in Africa. Our theme in the United States European Command is help Africans help themselves.  That's what we want to do.  As a matter of fact, in Liberia last year, the ECOWAS countries, the Economic Community of West-African States, that was alluded to a little bit earlier, 15 countries, that is the model, as far as I'm concerned, for the way Africa ought to go in the future.  Fifteen countries actually went into Liberia and did a fantastic job of taking care of problems that Africans took care of themselves. In 1996, when they had a problem when Charles Taylor first took over in Liberia, the Nigerians went into Liberia as part of a peacekeeping force, and weren't paid.  And a lot of people in here know what happened.  The Nigerians didn't perform very well.  They looted, they pillaged, they plundered, and they caused a giant problem which basically they're paying for today from the standpoint of sanctions. This time, in Liberia, the ECOWAS countries went in, led by two battalions from Nigeria, led by a Nigerian general that was trained via what used to be called ACRI, now today, ACOTA, as you've heard about earlier--the African Contingency Operations Training Assistance Program--and went in and did a fantastic job.  They took care of themselves. And led by people from, like Seth Obeng from Ghana, who is a three-star general and one of the best leaders I've ever met in my life, actually did a great job taking care of a problem in a regional area that Africa can do for itself.  There's a lot of benefits to that. Number one, we didn't have to go in there.  Although we had a Marine amphib ship, the Iwo Jima, off the coast of Liberia during that point, with 2,600 Marines on there assuring the security of the ECOWAS team, they actually went in there themselves, the ECOWAS folks, and did this job.  To me, that's what we need to do in the future. As you know, Secretary Rumsfeld has a program for global peacekeeping initiative, where we're going to train other countries to help take care of themselves.  And, to me, the ECOWAS example is a classic of how we could do it in the future, where we could start taking countries that actually want to do things for themselves because it's just  the way countries are.  There's a lot of pride.  The fact is they want to take care of their own problems.  They just need to be trained properly, and that's one of the things we'll do. If you look at this area, uncontrolled spaces, basically, whether you like it or not, Afghanistan is a huge success.  I mean, Afghanistan, for 30 years prior to October 7th, 2001, when we started attacking Afghanistan, was a total basket-case country.  As a matter of fact, there probably wasn't any worse country in the world from the standpoint of taking care of their people or governance than Afghanistan. Today, Afghanistan has a shot at becoming a democracy.  You can say what you want to, all of the critics out there, I'll tell you this, the United States has done a hell of a job in Afghanistan, is doing a great job of actually bringing a country back from what was just a terrible situation to what, in the future, will probably potentially be a democracy.  That's a good thing. The real good thing about that is al Qaeda doesn't have a place to live in Afghanistan any more.  They have to go other places.  There's still a few terrorists running around there, and they'll get them, but the fact of the matter is we think that al Qaeda trains somewhere between 30- and 50,000 terrorists in Afghanistan during the time they were there.  That's not hyperbole or overexaggeration, 30- to 50,000.  They're all over the place, and the fact is they don't have a place like that they can train with impunity. When we started bombing Afghanistan on October 7th of 2001, there were three major--at least three major--terrorist training camps that were huge in the middle of Afghanistan that could have been Fort Bragg.  It could have been someplace like that in the United States.  It wasn't quite that sophisticated, but it was huge.  And that country now is a place where that isn't occurring.  It's not a safe haven.  The problem is they've got to go someplace else. Iraq had a little bit of a problem with that, but necessarily not so big, but they're starting to go through the Caucasus or down through the Horn of Africa.  We've talked about the JTF Horn of Africa and the fact that European Command is coordinating with CENTCOM on that problem, and we know these areas are a place for them to want to travel, and where do they want to go?  Right into Europe. Now, the Europeans have a problem, and they're recognizing it.  The European Union the other day appointed an antiterrorism czar, a guy named de Vries from the Netherlands, that now is going to start focusing the corporate and the cumulative efforts of Europe on terrorism.  It's an issue.  They're in Europe, I will guarantee you, and they're coming through this area. The other part is all of this semi-permanent conflict that goes on.  Actually, if you look at Africa, it's a near, mid and long-term issue, and there's a multifaceted approach to the problems there.  It isn't one thing or the other.  I guarantee you it's not just the military.  Africa's problems are not going to be solved by the United States military.  They can't be. Africa's problems are going to be solved by a unique different, creative, visionary approach to a continent that needs a lot of help.  And if you talk about it, it goes all the way from humanitarian assistance, and we'll talk about HIV/AIDS in just a little bit, from a strategic standpoint, to multinational corporation assistance, to multinational government assistance, to military assistance, to all of those things that are going to have to all be coordinated for this problem to be resolved.  And if it doesn't happen, I will guarantee you that we're going to be looking back at this place 10 years from now and saying how in the heck did we get here?  It's going to be a problem. So, anyway, you look at all of these issues here.  We're worried about all of them.  That 800 million people, curse or benefit?  We think it should be a benefit.  If we don't do something about it, it's going to be a problem. The irony of all ironies is that Moammar Qadhafi, at the African Union meeting in Tripoli, about a month ago or so, recommended a 1-million-person standing army in Africa.  Now, I think that's a crazy idea, don't get me wrong.  A 1-million-person standing army in Africa probably isn't the answer.  But what it did do is it forced the African Union and African countries to say we have got to have a more regional approach.  This is ECOWAS right here, the Economic Community of West-African States.  It started out as an economic community, political, and built into a military community.  It's a great thing. The United States military, the European Command in this case, before ECOWAS deployed into Liberia sent six special operations teams into some of these countries--nine of them to be exact--and actually did an assessment of those countries' abilities to send troops into Liberia.  The assessment included equipment, training, and, oh, by the way, whether they had had the ACOTA training or not, and the fact is they had to have it to go into Liberia, and they did, and they went in and did a great job. Now, there is a center in Accra, Ghana, called the Kofi Annan Center, and there's a building there built by the Germans, opened by Chancellor Schroeder, in January, with the CEO from DaimlerChrysler was with him, a man named Schrempp, which I think is an interesting approach. Now, first of all, the Germans, I think, and I'll tell them publicly, could do a lot more with us in Africa, for example.  But they are, in fact, protecting our bases in Europe today, as we speak, with 2,000 German soldier, as our folks are in Iraq.  That's a good thing. But the fact of the matter is this, ECOWAS program in Ghana is a brilliant, I think, example of what we ought to do in the future, and they've got an operational-level school in Accra, Ghana, called the Kofi Annan Center, where they take African leadership from the ECOWAS countries primarily and train them at the operational level on the art of war in Accra, Ghana.  They also have a tactical-level in school in Bamako, Mali, and they have a strategic-level school in Abuja, Nigeria.  That is a good thing, and we want to emulate that and encourage more of that in Africa.   Now, the African Union has said they're going to have five regional areas of security cooperation, based primarily on existing organizations in Africa, and those five different security organizations will have a 3,000-person-standing brigade, that's ready to go to respond to regional problems anywhere in that particular security region.  That's a great thing.  We need to help encourage that.  We need to help train with that. As a matter of fact, we talked about CMAC with Gabon, for example, President Bongo, and they're willing to take the lead for the Central African Countries, called CMAC, in setting up this security organization.  We're going to help them with intellectual capital.  Intellectual capital costs nothing.  Now, somebody was here earlier, I think it was one of the lawyers, Tom, is actually a--not, Tom, I'm sorry. Where is he?  There he is, right there, Tony.  He's an intellectual capital lawyer.  I read that today.  You know what?  That's important.  It really is.  And we're not just talking about stealing CVs here.  We're talking about minds. And you know what Africa needs more than anything is intellectual capital and help and help from people like us that know how to do this.  It's not that they're bad people or dumb people.  You know, the United States military got this way through ten decades, hundreds of years of actual training, particularly since the Vietnam War.  We worked our tail off to get the best military in the world.  It didn't come easy.  And I'll tell you one thing, a lot of people with smart brains kind of figured out how we finally got here, and we need to share that with Africans. Now, they're never going to be like the United States military, and they shouldn't be.  Somebody mentioned earlier they don't need all of the high-tech capacity, and I agree with that.  But they certainly can learn from our ethos from the standpoint of how we do operations.  And I can tell you right now, at the low end of the spectrum, the United States military is as good as they come fighting those kind of wars.  We're going to help Africans with that. Because you have to have some kind of a context to put things in, and so far we're doing pretty good.  Now, some may say, Is this naive or what?  And the answer is, no, it's not.  In South Africa, as somebody mentioned earlier--I think General Fulford, actually, the South Africans did not want to participate militarily with the United States for various reasons--a lot of history there.  President Bush made a visit to Africa last year, visited with President Mbeki, and after that all of a sudden the relationship started to become better.  It thawed.  We've been to South Africa three times. They've been to my headquarters once in the last 6 months.  We've made an agreement.  We're going to start working together.  We've done special operations training together.  We're helping them train themselves. Now, personally, South Africa made a big mistake about 1996 in what they invested in.  They're investing in high-tech fighters.  They're investing in submarines and some coastal frigate ships.  The frigates are good.  They need coastal defense.  South Africa does not need fighters and doesn't need submarines.  Unfortunately, that's where they are. What they do need is medium airlift and basically an ability to go out and do peacekeeping in the Southern Region of Africa.  Now, the interesting part is a couple of weeks ago, at an institution that I can't say publicly because I know it's swearing in public over here-- [Laughter.] GENERAL WALD:  But they had another conference.  And I was there, and the Angolans were there.  The Angolan Finance Minister was there on the panel.  The Angolan Ambassador to the United Nations was there, and the Angolan Ambassador to the United States was there, amongst a whole bunch of other people. And afterwards I told them, you know, I'd been to Luanda, Angola, not too long ago.  And Luanda, I'd never been there.  I was very interested.  As a matter of fact, ironically, I did my master's thesis for my master's degree in 1982 on the conflict between Angola and South Africa.  I thought I was brilliant.  I wasn't.  It turned out all different than I thought. [Laughter.] GENERAL WALD:  But I did learn a lot about the importance of the area there from a resource standpoint.  And one of the things I was always interested in was Angola, you know, the Cuban connection, the Russian connection.  So we landed in Angola to get some gas. Now, I will tell you that I was in Lagos, Nigeria--Marilyn was with me--the day before.  We had to divert in there.  We were going to Abidjan.  We couldn't get in for weather.  If you haven't been to Lagos before, it's unbelievably breathtaking.  Seventeen million people in destitute poverty.  It's unbelievable.  Can't believe it. Nigeria, 130 million people, has the second or third, depending on how you want to look at it, gross national product in Africa, right after probably South Africa and Algeria.  It's got wealth.  It's got a terrible governance.  The wealth distribution in Nigeria, 5 percent of the people have 95 percent of the wealth.  They have a military that's pretty good size.  Now, I'll tell you, on the ground side, they did a good job in Liberia. But I told you earlier in one of the questions, I saw their Air Force.  They have one C-130 that works.  When we took them into Liberia, frankly, the United States of America had to pay for the airlift.  We did.  Through the State Department, bless their hearts, brilliant move on State's part.  The United States paid for the airlift of ECOWAS to go to Liberia.  Now, there is no reason for that to be that way.  There is no reason.  So they had one C-130, out of nine of them, that worked.  The next day we went out, after we stayed overnight, to leave, and they said they were going to fly the 130.  It broke.  So they don't have any. Then, I landed at Luanda, Angola, and we could not taxi on the ramp.  There were so many airplanes there.  They had 8 IL-76s, 12A and 12 Cox, 8 Hip-8 helicopters, and 7 HI 24 Hind helicopters.  That was the military part that was just on that one base.  There must have been 30 U.N. aircraft flying there.  It looked like Chicago O'Hare field. And you've got to ask yourself, okay, let's get with the world here.  South Africa, Africa, in general, has similar problems.  So I asked the Angolan Ambassadors, both of them, and the Finance Minister: What do you think of South Africa kind of joining up with you; you do the airlift, they provide the troops? That's a good idea.  We like it.  I asked the South Africans.  They said, yeah, we like it too. You know what?  I'll bet you there's not one person in this room, if you said, what about South Africa and Angola joining up together, you would vote they would do it.  You know why?  Because we think we know everything.  You go ask the "goddang" people that are doing it, and they say, "I'll do it.  I'll do it."  And you know what that's a manifestation of?  Old think.  The world has changed, and we've got to change with it.  All of us in here need to start thinking in those terms.  Great stuff, great opportunity.  The South Africans want to help in Africa. I'll tell you another thing.  I was sitting with one of the individuals, one of the colleagues over here earlier today talk about Rwanda.  I met Kagame three days before his last election in Rwanda, and I know General Fulford met him as well. We had dinner with the Chief of Defense from Rwanda the night after I saw President Kagame, and we were talking about Liberia.  It was right in the middle of when Liberia was starting to bubble up, and the Chief of Defense for Rwanda, named Kabarebe, was telling me about the Rwanda military.  Now, Rwanda has got a history.  They've got some problems in East Congo.  We know about that. But the fact of the matter is he said, "Hey, Chuck--General Wald--you know what?  We'll offer some troops for Liberia."  We were out looking for them.  You know, we had a tin-cup thing going on looking for troops.  He offered a thousand.  Kabarebe offered a thousand troops on the spot to go to Liberia. And I said, "What do you need from us for help?  Do you need anything?" He said, "We don't need anything."  We marched 120 clicks into the Congo and fought without resting.  We'll get over there. I said, "But do you need some weapons?" "We don't need anything.  We'll do it for free."  What he did say, though, is, "We want one thing.  We want the South Africans to go with us because we want the top cover.  We believe in the South Africans." Now, that tells you something.  You know what?  Our paradigm is not their paradigm.  What America thinks is not what South Africa thinks or Africa.  They've got it different than we do.  And I think most of us in here kind of have predetermined notions about Africa, et cetera.  They've got it.  We don't.  It's time for us to start listening. This is what we think could happen in Africa.  This would be the five brigades, where they would be potentially, and we think that's probably where they're going to go.  Now, once again, it's up to Africa if they want to do this.  I think it's a brilliant idea.  I think it's the way ahead in Africa.  I think it's the only thing we can do. We can't afford to send troops to Africa, the United States can't, any more than we had before.  It's too big.  We've got too many things going on in the world.  And, by the way, NATO and the rest of the world needs to help with this problem because it's all connected, and these resources that we've been talking about today are all going to benefit everybody sitting in here, some day, some time.  So it's in our best interests to go ahead and promote this type of activity. We're not here to talk about Europe, but I want to give you an example of some things we're doing in Europe at our European Command, a little bit I guess unique, out of the box.  Now, once again, most of what we're doing in Africa today does not cost a lot of resource.  It doesn't cost a lot of troops, it isn't very expensive, it doesn't take a lot of deployment time.  It's mostly intellectual capital, and advocacy, and proponency as far as participation and cooperation. This program, started by General George Joulwan, when he was the SAC European Command, in 1993, called the State Partnership Program.  It is one of the smartest things I've ever seen.  And the idea is to match up states in the United States with countries in Europe, with the Air National Guard and Reserve forces.  For those Air National Guard and Reserve--or not Air National--the National Guard, excuse me.  I almost defaulted to my Air Force thing there. The Guard, the National Guard and Reserve forces in those states actually traveled to those countries and developed relationships with them from the standpoint of interoperability, common standard practices, et cetera.  In fact, if you look at these, some of them are kind of interesting.  Like Poland, for example, is with Illinois.  As you know, a large Polish population in Chicago, for example.  Georgia is with Georgia.  Fancy that. [Laughter.] GENERAL WALD:  But the fact of the matter is these countries get out there, and eventually the governors and other people come.  As a matter of fact, the economies started growing together.  And there's some fantastic relationships that have spawned. We're starting to do that, there are actually 21 different countries involved in Africa now, 37 worldwide.  It was started in Europe.  It is becoming a worldwide program.  I was in South Africa last year when New York showed up, a two-star general from New York, and actually signed a relationship with South Africa.  Now, New York is a state partner with South Africa. The good news for us is the Guard, in this case, the Air Guard from New York, has C-5 aircraft.   It's the only Guard unit in the United States, the only state that has actual strategic lift.  All of the rest of the actual strategic lift is in the active duty.  They also have tankers in New York.  They have fighters.  They have ground guys.  They've got the whole thing.  As a matter of fact, New York has a full military. Our point is they're going to go down to South Africa and start a relationship with them, and they're going to help South Africa train to be better at what they're doing.  It's a great think.  I'll bet you Governor Pataki is down there in the not-too-distant future, and he'll meet with Mbeki, and you know what will happen?  They'll start doing an economic relationship. It's a brilliant idea.  It's a great way to do things.  The Guard and Reserve have to train.  Now, granted, they're busy right now with Iraq.  But generally speaking, when we aren't as tied down as we are in Iraq with the Guard and Reserve, they have to do training days.  They have to practice.  Why not practice doing something useful like this, like training people in Africa, for example?  So we'll see how that works out. As a matter of fact, the other country we already have is Morocco is a partner with Utah.  And during the latest earthquake in Morocco, the Utah Guard filled up an aircraft with humanitarian medical supplies and flew them into Morocco, into Rabat.  The Moroccans thought, well, this is really unbelievably nice.  That made an impression.  It was a good thing. So now we're trying to get Ghana, Tunisia and Senegal state partners, and that'll happen.  And they're very interested.  And by the way, this is at the behest of the Ambassadors in those countries.  They love the idea.  It's working like a Champ.  And what this is, is a unique way to go ahead and influence a continent where we don't have to spend a lot of resources, and we can make a huge difference. Al-Para.  This guy here, al-Para, named "a parachutist," is a former Algerian parachute SOF, Special Operations Forces, guy.  And earlier today the Salafist Group for Preaching and Combat, the GSPC, was talked about in an earlier discussion. The GSPC is actually Algerian based.  It was a former splinter group off the GIA and has been in Algeria trying to overthrow the secular government in Algeria for the last 10 years and have killed, so far, or are responsible for the deaths of over 120,000 Algerians.  That's not hyperbole.  You can print it in the paper.  You can check wherever you want.  The fact of the matter is 120,000 Algerians have been killed because of this terrorist group.  Now, some people would say it's an internal insurgency.  You name it what you want to do.  I call them terrorists.  As a matter of fact, the Algerians have done a fantastic job of getting rid of most of them. But last February, al-Para and his group of merry men kidnapped 32 Europeans in Southern Algeria.  They were out there doing what's called extreme tourism or adventure tourism, riding around on motorcycles out in the wild territories of Algeria, which is a wonderful thing.  It's a huge tourism issue in Algeria. Unfortunately, this guy is smart enough to know that.  And he needed money, and he needed financing and support.  So he kidnapped 32 of them, and then a few months later, they basically they were ransomed off for 5 million euro.  And, actually, all of them turned back in, out of the 32, as a matter of fact, 31 made it back.  One died in captivity, unfortunately, a European female, 42 years old. But this guy then had 5 million euros to roam around in this area here, Mauritania, Mali, Niger and Chad and recruit and buy arms.  That was his purpose.  Now, 5 million euro in Africa is like 50 million at least, maybe more than that, maybe 100 million in Europe, I'll guarantee you.  That's a huge amount of money in Africa. So this guy had a lot of money.  As a matter of fact, we know that he gave out a lot of it to his lieutenants, and they've been out recruiting.  He recruited over the last year about 200 jihadists, at least, and he's been roaming around this area for about a year. As a matter of fact, went from here, down through this area.  And here, as many of you have heard of, the Paris to Dakar Road Rally went on last year.  As a matter of fact, he was in the vicinity there, and actually they had to stop the road rally for 2 days of the leg and actually fly the cars past this guy to the other part of the road rally because of the threat. He's actually robbed two other groups since that time--one German, one French, one in Niger--and he's out recruiting and picking up arms and trying to get surface-to-air missiles, et cetera. So we've been tracking him.  We've actually helped the Algerians, the Mauritanians, the Malians, the Chad, the Niger Ljaw in Chad, militaries go after this guy--nontraditional. Somebody talked about intel earlier.  There's been a lot of criticism about the United States not having enough intel in Africa.  Well, I'll tell you right now we don't have enough, but I'll tell you we're doing a lot about it.  I told you what we had with those Chiefs of Defense in this area not-too-long-ago meeting, and we've discussed with them how we can share intelligence.  Our intelligence is basically from the information standpoint, and we're helping those governments actually try to find these guys. Al-Para then slipped into Niger.  The Niger military went after al-Para.  This area here, from here to here, is about 1,400 kilometers, which is about a thousand miles almost.  I mean, you can do math probably as good as I do, but it's a little less, it's about 900.  The Niger military chased al-Para and his folks all the way across Niger, a thousand miles.  They killed a couple of them on the way, and eventually al-Para got into Chad. Now, the reason I'm telling you this, this is a real terrorist threat.  And part of his group that eventually got attacked by the Chadian military a couple weeks ago, and actually 43 of them were killed, 18 captured, some got away, were made up of Nigerians, Niger Ljaw, Chadians, Malians and some Algerians.  And by the way, this GSPC group, Libya is terrified of.  They hate them.  This is a bad group of people. I read yesterday a transcript of an interview with the new leader of the GSPC, a guy named Abraham Moustafa, and they've declared allegiance to al Qaeda.  He wants to be part of al Qaeda.  He believes in the jihad.  Now, whether al Qaeda has agreed for them to join up, I don't know.  But the fact of the matter is they have the same intentions as al Qaeda.  They have the same manifesto.  They have the same purpose.  Their main purpose is to overthrow the government of Algeria, but number two is to go after any Westerner, the United States included. Now, are they al Qaeda?  No.  But are they a problem?  Yes.  Do we have to do something about it?  Well, I'll tell you one thing, I think the United States learned a lesson in Afghanistan.  You don't let things go.  You can't let it happen.  So we're working with these countries to go ahead and try to have some capability for their militaries to do a better job of solving the problem of ungoverned spaces in that area.  They're very dangerous. This has been beaten to death, but we believe it in strongly.  If you look at the Gulf of Guinea, for example, and the oil revenues, and the hydrocarbons that are going to come out of there over the next 10, 12 years, it's going to be more than we get out of the Middle East.  Now, that's fine.  I don't need to belabor what Mr. Kirkland or Mr. Burkhard or anybody else talked about earlier.  But the nice thing about, first of all, there's a lot of good things about it.  It's good for this area.  It's good for the continent.  It's good for the countries that are going to get the oil.  Hopefully, they'll have good governance and make sure the oil is distributed properly and the wealth is distributed properly in their governments--that would be a good thing--in their populations.  But if you look at this right here, and they talked about deep-water drilling, Mr. Kirkland did, deep-water drilling is a new technology that's allowed now the ability for oil companies to dig right now through the seabed and pump the oil right straight into a ship that's sitting off the coast.  You don't have to put it into a refinery.  You don't have to put it into a pumping station.  You pump it right to the ship. And what else do you do here?  You go like this "pffft."  There's no Straits of Hormuz, there's no Red Sea, there's no Suez Canal, there's no Tunisia, Sicily, there's no Straits of Gibraltar.  There's just this.  You go that way.  That's a good thing because it's easier and more secure. Number two is this crude oil that's coming out of here is called sweet crude.  It costs one-half the amount of money to refine that oil that it does out of the Middle East.  This is a hugely important issue for the United States and the rest of Europe.  This is going to take security.  We're going to try to help with that from the standpoint of advice.  They're going to have enough money in those areas to provide their own security.  That's why CMAC and these regional groups are going to be very important for Africa itself, and Europe and the United States. And so what we're going to do is recommend to them--intellectual capital is free--how to set up a better security capability for themselves in the Gulf of Guinea.  It's important to the United States and Europe.  By the way, this isn't just the United States.  This is hugely important for Europe.  And all of these mineral reserves, by the way, that we talked about earlier are all important to not just the United States, but the rest of the world.  So there's a security issue there as well. HIV/AIDS.  Who would have thought a military person was going to talk about this?  But I'll tell you, first of all, we all know it's a humanitarian issue.  Don't get me wrong, it is.  But it's a strategic issue to European Command, particularly, from the standpoint of what's it going to do to those militaries, first of all; number two, what's it going to do to demographics; and three is, when you have a major crisis on your hand internationally, whether we like it or not, we're going to have to respond in some way. If you look at the numbers, they are kind of daunting.  Thirteen percent of the world population lives in Africa, 800 million people.  They've got 70 percent of the AIDS.  Somebody in here mentioned Botswana as a great example of a good democracy that's emerged based on good leadership.  I couldn't agree more. You know what the bad news for Botswana is?  Their life expectancy is going to go from 70 years old today, in the next 10 to 12 years, to 33 years old.  Sixty percent of the people in Botswana have AIDS, estimated.  You can say what you want to about it.  Botswana has a great democracy, which I agree is a good example.  It's a great example.  Their great economy is going to be devastated by this problem. Now, here is an anchor country in Africa that we think would be a great example for Southern Africa to show stability, and they're not going to have the wherewithal to do that because their population is going to be devastated by AIDS. The South African military has 75,000 men, mostly, and some women in it, and they can deploy 3,000 people at one time because they publicly admit 20- to 25-percent incidence of AIDS in their military and probably, privately, probably have up to 30 percent in their military. In the U.N. missions, by the way, if you are HIV-positive, you cannot deploy on a mission, which is a good thing because they spread it like crazy. By the way, if you think it's only an Africa problem, it's not.  The Ukraine, Russia and Belarus have a huge HIV/AIDS problem.  The military in Russia is a conscript military, the old draft issue.  When they bring a new person into the military in Russia, they do a test on them for HIV/AIDS.  Somewhere between 30 and 50 percent of all of the conscripts tested have HIV/AIDS in Russia--HIV at least--30 to 50.  That's a strategic issue.  Because you know what we were talking about earlier, we're trying to get them to help themselves build militaries to take care of local problems.  They aren't going to have the manpower. The estimate is from the economists that in the next 20 to 30 years, in Africa, there will be 20 million HIV/AIDS orphans.  Now, the bad news is all of those orphans are going to have HIV/AIDS.  The real bad news is it's like Zimbabwe multiplied by about 50.  Zimbabwe was a great agro economy, and all of a sudden Zimbabwe's economy just went South because basically there's nobody out there farming--a different reason than HIV/AIDS, but the same output, and the output is no economy. The same thing is going to happen in Africa. Now, we talked about demographics moving North, we talked about international crises.  We're going to have them on our hands.  The good news is a lot of people are doing a lot of good things about it.  As you know, President Bush has pledged $15 billion for HIV eradication around the world in the next 5 years.  There are 15 countries that are going to benefit from that.  Thirteen of them are in Africa. Bill Gates has offered $1 billion for both malaria and HIV/AIDS eradication in Africa.  It's a good thing.  And the United States military in Europe, by the way, is putting in--actually, it's the Department of Defense, but we're helping manage it--$28 million into different militaries this year in Africa. We have a program with the South African military.  Our Surgeon General at European Command, with the South African Military Surgeon General, to do a comprehensive program on AIDS eradication, prevention and identification.  That's a good thing, and it sounds like something that a military wouldn't traditionally do, but we have to do it because of these issues I've just told you about.  It's going to be a huge strategic issue that we can't not face, and it's got to be an international approach. I just told you what the United States is doing.  The rest of the world puts about $6 billion a year into HIV/AIDS eradication.  This is a huge issue that we all have to think about strategically and do something about. This is one of my favorites.  This is what you call, to me, "penny wise, pound foolish."  Now, I'm not criticizing anybody.  This is just the United States, but you could put the whole world in this category.  We put about $50 million or so a year into programs like the education and training of militaries. By the way, Secretary Powell said, "If I had one more dollar to invest in anything in the State Department overseas, it would be in IMET," which is the Military Education Training program, where we take military folks from African countries all over the world, as a matter of fact, and send  them to military schools in the United States, the Command and General Staff College the Army has in Fort Leavenworth, et cetera. By the way, recently in Africa, and Liberia, for example, is a good example, but every place we've ever had anything good happen in Africa, led by in this case a Nigerian general officer in Liberia, was a graduate of the Command and General Staff College.  This General Seth Obeng from Ghana I was telling you about is a graduate of the General Staff College. The people that go to military schools in the United States go back and do good things for their countries because our military schools teach respect for civil control and also a good ethos, as far as what militaries do.  So that's a good program.  We do IMET, foreign military funding, which means people can buy things like C-130s, which they don't get enough of that, and then ACOTA.  That's how much we put into those programs over that period, 5 years. And these crisis response, you can see the number.  Now, to me, I'm not out here, you know, tin cup in hand, advocating for more money, but I can tell you that a little bit of investment preventively in Africa would make a huge difference, we think, in what could happen there, and we go back and respond. Now, in Liberia, the United States has been criticized, I think, for a late response with U.S. military folks in Liberia.  I think that is specious, incorrect criticism, and I think the United States has stepped up to the plate in Liberia.  As a matter of fact, there are monies in the budget right now for us to train the Liberian military.  I will tell you that I think the U.N. needs to get off dead center and start doing the disarmament and reintegration, fast, in Liberia.  But from a governmental standpoint, I think the United States has done a great job. So that's kind of what we're doing.  And we could talk about all of this for, I could talk to you for days on this.  But our approach is basically help Africans help themselves.  Use creative approaches to do that.  Use nontraditional approaches that most people pretty much gag on, get over the stovepipes, quit worrying about who gets the credit, all cooperate together, and we can make a difference.  If we don't, 10 years from now, you're going to be sitting here saying this is the worst crisis I've ever seen. So thank you very much. [Applause.] GENERAL WALD:  Should we do some questions? MR. DE MUTH:  Yes, do you want to do about 10 minutes' worth of questions? GENERAL WALD:  Okay.  Anybody? MR. DE MUTH:  You-- GENERAL WALD:  I can hear.  Go ahead.  Right here.  Okay.  Go ahead.  We'll get a--I'll stay here all night.  That's fine. MR. HERSHEY:  I'm Bob Hershey.  I'm a consultant. You mentioned the state two-country programs of Eastern Europe and Africa.  Are you doing other things that parallel from the two parts of things that you've done with Eastern Europe that worked for Africa, also? GENERAL WALD:  Yes.  Well, we're just starting with--the one you're talking about is Partnership for Peace, for example.  In Istanbul, and once again this is at the political level, so I haven't had any input yet, but I think there's a thought, on General Jones' part and European Command, that some of the programs that were previously initiated in the former Warsaw Pact Eastern Europe, Partnership for Peace, et cetera, would be very good models for Africa, where European countries could actually help through exercises, training, and presence to actually bring those militaries up to speed. I think that's a good thing. We do joint training together all of the time.  As a matter of fact, our Special Operations group in Europe, called SOCEUR, which is stationed in Stuttgart headquarters, next year, and they do an exercise annually called FLINTLOCK, which is a major special ops exercise, and next year we're going to do it with the nine countries I pointed out earlier in North Africa, for example, and actually have them all have the benefit of some synergy. But we think, to answer your question, Europe and the United States, but Europe, particularly, should do a lot more of the type of training they did prior to these seven countries on 2 April ceding it to NATO, the same thing they did in those countries, PFP exercises. As a matter of fact, the George C. Marshall Center in Garmisch, Germany, is a fantastic example.  And I know General Fulford has talked about some of these from his perspective of where right now the George C. Marshall Center, of mostly European countries, but as a matter of fact, it's expanded to bring in individuals from Mongolia, as a matter of fact, from the Middle East and other areas, where they actually learn civil military relationships and civil control and how to actually develop an ethos, is a great example.  There are 700 students in that course, as we speak today.  It's huge.  But we think we can expand into Africa with something similar to that. But, yeah, we could do a lot of that stuff.  It doesn't cost a lot of money.  It just takes a little bit of creative energy and some forethought. Right here. PARTICIPANT:  General Wald, thank you for that wonderful presentation. After the concerns you expressed with regard to African security, how do you explain the United States yanking military assistance from programs such as IMET because of differences over policy issues, such as Article 98? GENERAL WALD:  Well, I think there's a "carrot stick" approach for anything.  I think, personally, if the countries in the world would really think about Article 98, other than feeling pressured by the European Union or France, for example, they would probably join and sign up to Article 98.  Article 98 really doesn't change anything, but the United States has got to take care of our people. The one thing I'll say, the United States government takes care of the military.  They take care of them overseas.  They watch them.  Now, an example would be Belgium indicting Secretary Powell, Schwarzkopf and Tom Franks for war crimes--and most of you probably don't realize this--because of the law they had passed in Belgium that any person any place in the world that's a Belgian citizen could claim a court suit against any individual.  That type of stuff is crazy. There's no way the United States military is going to be able to go out to places like Africa or any place else and help solve crises problems and then be susceptible to somebody's precipitous notion that they can send you to the Hague for some kind of war crime.  So that's number one. Two is I think we have to look at things in a new, creative way, though.  I will say that after 9/11, the world, the environment changed, and we have to look at things in a more unique way.  We have to have nontraditional relationships.  I will tell you that before 9/11, I don't think anybody in here would have thought that the Chief of Defense from Algeria and myself would become good friends.  I mean, we have a relationship with Algeria right now, a good one.  We're working on terrorism together, as a matter of fact, all of these countries down there. I'm taking our group of general officers from European Command to Algiers in May to do what we call a train walk.  The traditional train walk for the military is to go to a place like Gettysburg and have somebody talk about the history and learn from the lessons. We're going to go to Algeria and learn about the Battle of Algiers.  We're going to learn about urban warfare.  They're going to take us around Algiers and show us how that worked and how they're fighting against GSPC.  That's different.  I don't think anybody would have thought of that a couple of years ago.  We have a new environment. So I think we need to have nontraditional partners.  I think the world is different.  I think countries that are traditionally against things like Article 98, some of them are being pressured by the European Union.  We're going to have to face up to the fact that we have to set some of those aside, and we have to actually partnership up if we're going to win this war. This war on terrorism, this euphemism, the "war on terrorism," is not a euphemism.  It's a reality, and it's going to get a lot worse before it gets better.  And it's going to take all of the countries, the free countries of the world, to do something about it, including Africa.  Africa.com. You know, we're setting up a--while we're waiting--during the Kosovo crisis and the Bosnia crisis, the United States government set up what was called the Balkans website, and it's basically an open-forum website that takes people from the Balkans that write articles, they put it on there, and it gives people access to open literature, free society issues, democracy, that they sometimes wouldn't have access to.  Today, they have 5 million hits a month on that website, 5 million.   Do you know what we're doing?  We're setting the same thing up starting in a couple weeks in Africa.  So we're going to be in competition with you.  You know what ours is?  We're going to have both sides of the issue, not just one side, like you guys. [Laughter.] PARTICIPANT:  I'll leave all of that alone.  With regard to your--meaning the "institutional" you--your recognition that Africa, you needed a strategic plan for Africa, which you've talked about at some length, I'm interested in where NATO fits in this.  Does it, too, have a strategic plan for Africa?  Are you lobbying NATO for really an expansion of NATO's mission to the South, and what are the implications of that? GENERAL WALD:  This is my personal opinion. First of all, the good news about European Command is General Jones is SACEUR, and he wears both the Strategic Allied Commander of Europe hat, as well as the European Command hat.  And what he's doing in NATO, basically, we're part of NATO.  You know, we talk about NATO and the United States like it's an out-of-body experience, but the United States is part of NATO. So, first of all, de facto, NATO has a mission in Africa because we have a mission in Africa.  But number two is I certainly believe NATO has a mission in Africa, a big mission, basically, because of the security of Europe, and NATO's interests are not now sitting in garrison, in Germany or France or the U.K. or someplace like that, waiting for a million Russians to come across the border and fight.  That ain't going to happen. It's gone.  It's over.  Forget about it. What is going to happen is all of these new environment threats, these transnational threats, these kind of nontraditional threats, are going to be a threat to Europe.  And the problem is there are people in the United States that mix up preemptive with preventative sometimes.  And preventative medicine needs to be there.  We have to have it.  Europe has to have it as well.   And Europe needs to get out of theater and go forward and do some prevention.  It's in their own interests. We talked about the Caspian hydrocarbons.  We talked about demographics from Africa.  We talk about transit through Europe because of the Schengen laws.  You aren't going to sit back in Europe and do that in a defensive crouch.  You've got to get out and do some preventative maintenance.  Whether it be near term, mid or long term, Europe has a part of it.  NATO definitely has that mission. PARTICIPANT:  Could I just follow up?  Is NATO given to this at this point? GENERAL WALD:  Well, I think they will be.  Here's the way I look at it.  Everybody's going to come to the same conclusion at some point.  Some will get there faster than others, but you're all going to get to that conclusion, I contend--which of course we wrote the briefing, so I think I'm right--but I think this briefing is the issue.  And I think everybody will come to that conclusion eventually, whether it be threats to Europe or whatever else. Now, there's been some huge wake-up calls lately, and I'll tell you the United States is not interested in having another 9/11.  We're not going to let it happen.  So we're not going to sit back in the United States and just wait for it to happen.  You just had the President say that, the Secretary of Defense, a bunch, and Europe has to go down the same path, I think. MR. DE MUTH:  General, I won't come to the microphone, but I want to thank you very much for concluding what has been a hugely productive day.  I would just, for myself, thank you on behalf of AEI.  I would like to thank the audience as well for hanging around after a long and I hope educational and useful day for everybody.  I can promise you there will be follow-on events, but please join me in a round of applause for General Wald. [Applause.] MR. DE MUTH:  We are adjourned. [Whereupon, the proceedings were adjourned.]</body></html>