Ambassador Ryan Croker Remarks
Ambassador Ryan Croker Remarks at Civil-Military Coordination Conference August 11, 2008
GENERAL OATES: -- to have Ambassador Crocker with us, to open our conference. He served the United States of America with great courage and distinction, as you know, as a career foreign service officer since 1971. And he served as the ambassador to Iraq in the last 17 months. And what a 17 months it has been.
Mr. Ambassador, I left here in late 2006 with the outcome of this war in some doubt. And I know I join everyone here when I say how much we appreciate your tireless efforts in support of the Iraqi people, and your unwavering support of the military and civilian professionals of our government, and your leadership, in particular.
You and General Petraeus really have shown us role models of what great partnership can be in the civil-military relationship, and it's not lost on any of us. Sir, we very much appreciate your appearance here tonight. We are looking forward to hearing from you.
Ladies and gentlemen, please join me in a round of applause to welcome our ambassador.
(Applause.)
AMBASSADOR CROCKER: Thank you very much, General Oates. And good evening to all of you.
I think I can honestly say that, even though this is an inaugural event for this civil-military coordination conference, simply by convening it Colonel Goldman (ph) has already reached the objective, and has got everybody in this room there with him.
This -- we have the right people, military and civilian, right place, right time. And I think this is going to be -- just from the discussions I was part of out front, I think what you're going to produce is some thinking and some assessments that are going to be important to all of us. And I will come back to that in a minute.
We are fond of saying that, "This is a critical moment in Iraq." I've been saying that just about every day for the last 17 months, and it always is. But really, I mean it this time.
Iraq is transitioning, thanks to the extraordinary security gains that our forces and Iraqi forces have achieved on the ground. That is setting in motion political, social, economic forces that we're not able to entirely identify, or necessarily control, neither us nor the Iraqis. But they will reshape this country. And our ability to be able to spot emerging trends, negative or positive, react to them, send word around the area, share assessments, I think is going to be crucial.
Again, the progress has been huge. But there is nothing inevitable about success in this endeavor. There are going to be a lot of hard challenges out there. Again, some we can foresee and some we're not yet able to determine the shape of. What that means is that at this time we have to be, as all of you are, all in on this, everything we've got. And, as General Oates has said, we've got to be all in, all together.
It is very much the case that we have got to be on the same objective. And it's not just a question of civil and military coordination. It's, on the civilian side, coordination among a wide range of agencies that fight like cats back in Washington, because that's how the interagency process works. That is not what we do out here And, again, this gathering will help us synthesize those efforts.
It is also increasingly important that we be fully coordinated with the Iraqis. Because, again, part of this transition, as we have all seen, those of us who have been out here for any length of time, is that Iraq is moving forward, making its own decisions, making its own choices, for better or for worse.
We cannot operate in a vacuum of thinking up great ideas that we then go forth and implement without full partnership with the Iraqis. The landscape of Iraq is, quite literally, littered with the remains of some great American ideas that didn't match Iraqi reality. Never has that been more important than it is right now.
I will make some comments on the economy, rather than talk about the politics. And I do this to ingratiate myself with Ambassador Charlie Ries, who is very fond of telling me that, "It really is all about the economy. The economy will shape politics." I will not concede the point, but this evening a great deal does depend on what the Iraqis can do and how we can assist them in rebuilding, restructuring, reshaping, revitalizing an economy that will carry this country into a stable future.
The engine, if you will, is, of course, the petroleum sector. That's 70 percent of Iraq's gross domestic product, and 85 percent of government revenues. And I am just talking at the national level here, because as you look at regional and local issues, kind of keeping the national -- keeping that within a national frame is important.
Production is increasing. It is up about 400,000 barrels a day, over what it was 11 months ago. But incremental increases are going to be tough without some fundamental decisions, most importantly on a hydrocarbons framework law. That needs to go through, because it sets the stage for the international involvement in the petroleum sector that Iraq is going to need, quite frankly, not simply to further develop capacity, but to ensure that a deterioration doesn't bring capacity down.
Electricity. Some of us were talking about that before we came in here. Production is up by more than 10 percent this year over last. And when you bear in mind that hydroelectric generation has dropped by 10 percent because of the drought, it really is a significant increase.
But we all know there is a great deal more that has to be done. Part of that is dealing with vastly increased demand. And, as some of us were commenting, the fact that people around here, because you're not charged for electricity, it's perfectly fine to leave all the air conditioners and all the lights on all the time.
The electricity ministry is stepping forward to substantially increase generating power. This will take time. And, in the meantime, I think, at both a national, regional, and a local level, we and the Iraqis are going to have to give further thought about how a distribution system, as well as a generation system that has been cobbled together after years of neglect -- and, more recently, a sabotage -- how that can be made to work more effectively. Because Iraq's electrical problems will not be solved solely by an increase in generation.
Budget execution is something that, years from now, most of us will probably occasionally wake up in the night screaming those two words, because it is something that we are all riveted on.
There is good news out there. The Iraqis more than tripled their performance 2007 over 2006 in the capital budget. But oil revenues are increasing their challenges. The $13 billion for capital projects in the regular 2008 budget has now been plussed up by an additional $8 billion, through the supplemental. So, again, the -- they are getting more effective, but the amounts of revenue to be used for the benefit of the people are also increasing, as are the needs.
At the provincial level, thanks to the efforts of you and your colleagues, we are also seeing substantially better budget performance. But again, as you live every day, there is a great deal yet to be done.
Let me say a little bit about private involvement, because that is something that we're focusing on in this conference. Private bank loans increased by $200 million, just between September 2007 and February 2008, which is the last period we have data for. The development of a private banking sector is extremely important to Iraq's overall development. Now they are starting to expand banking services out beyond Baghdad. I would be interested in knowing what signs you're seeing in your AOR of increased private banking.
As they get more experienced, and as conditions generally improve, we're seeing them take more risks with their portfolios, which is important. So there is a good future for private banking here, and it is important to Iraq's own future.
Investment. Investor interest is increasing again, as security gains take hold. Foreign investment increased a little bit in 2007, should do substantially better in 2008. And here I would like to mention the extraordinary efforts of the deputy under secretary of defense, Paul Brinkley, and his team, with the task force for business stability. He has been relentless in pursuing foreign investors, and relentless in pursuing Iraqis to take the steps that will make foreign investment possible. And tomorrow, I think you will be hearing from Paul Brinkley, along with several of those figures from the private investment world that are, thanks to his perseverance, showing an increased interest in the investment opportunities here in Iraq.
Transportation is also key. And there, we're seeing a number of positive signs. The Basra military operations also put Iraq's ports under Iraqi control for the first time in years. And the Iraqi government is moving out, working on revitalizing the Umm Qasr port, and working on a tender for a lease to private interests of the entire south port facility.
The Iraqis now control their air space above 29,000 feet. Mosul Airport has started resuming operations and, as all of you know, of course, the Najaf Airport project is now becoming a reality, with the first couple of flights at the end of last month.
The ministry of trade is doing something important in paying just about world market prices now for the purchase of the domestic grain for the public distribution system. This is a significant step in encouraging the domestic agricultural sector. Although, again, you know, we've got to be careful on -- or they have to be careful as to how central government roles can distort agricultural practice. I will have a little bit more to say about that in a minute.
Debt forgiveness. The vast amount of Saddam-era debt is being written off by a number of nations. In the past year, Russia, Bulgaria, and Serbia stepped forward. And, of particular significance, the United Arab Emirates wrote off a total of $7 billion in combined debt and interest, the first Arab state to do so.
And here I cannot resist getting back into politics, which really does drive economics. There has been a transformation in Iraq's regional relationships. As security has improved, as Iraq's Arab neighbors see Iraqi security forces, the Iraqi government, the prime minister moving forward as Iraqi nationalists and not as sectarian actors, that was the message received domestically, regionally, and internationally from the Basra, Sadr City, and Maysan operations. They have stepped forward, too.
So, in quite rapid succession since the spring, we have seen Prime Minister Maliki visiting Jordan and the United Arab Emirates, we have seen four Arab states name ambassadors to Iraq -- there has been no Arab ambassador in this country since early 2005 -- and today we saw the first visit by an Arab head of state to Baghdad; King Abdullah of Jordan was here this afternoon.
So, Iraq, in the region, is in a very different place today than it was less than a year ago. And when you consider that for most of the last 50 years, since the 1958 revolution, Iraq has been a source of instability in this region, in terms of enmity with most of its neighbors, starting wars with 2 of them and seeking to subvert the rest on a fairly regular basis, the stage is set for an entirely different set of Iraqi and inter-Arab relationships, which will have a fair amount to do with, again, conditions for economic development inside of Iraq.
Now, all of this has been taking place against a backdrop of fairly impressive macro-economic stability. Real GDP is growing, but inflation is staying in single digits, you know, less than 10 percent up through June of 2008, which is the last month for which we have data. And the value of the dinar is appreciating up above seven percent against the U.S. dollar.
So, you know, this is all encouraging news. Your efforts have contributed to these accomplishments, and you will be contributing a great deal more. As conditions change and improve in Iraq, the role of U.S. assistance, in whatever channel it comes, is also changing. As you all know, we are moving away from major reconstruction, bricks and mortar type of work. Increasingly, our focus is on capacity building, providing Iraqis with the assistance and advice that will enable them to carry forward on their own.
You are already doing a great deal in this area. One good example I recently learned of was the disbursement in July of the first loans in Midan by the al-Bashir microfinance institution. This is a great example of the transition from an American program to an Iraqi program that will produce and even multiply the effects achieved, but they are now doing it. And that is exactly what we're aiming for.
I mentioned agriculture. And that will be, rightly, a key focus of this conference. Iraq, historically, has always been about agriculture. General Oates passed on to me just a great line, that Iraq is an agricultural country that happens to have some oil. That, again, historically has been the case, with two great rivers, relatively fertile soil, and people who know how to use that soil and other resources. Iraq, through the 1950s, was the agricultural giant of the Middle East. Even today, something like 25 percent of the work force is employed in the agricultural sector.
So, the focus that M&D (ph) center has brought to agriculture, I think is extremely important, both in this area and for the country as a whole. And the efforts that all of you have made to ensure that, again, that we are coordinated so that we can effectively work with the Iraqis on these challenges has been extremely important.
And the challenges are huge. We are looking at about 30 years of agricultural disaster in this country at every level, including the regulatory environment, land management, and so forth. And helping the Iraqis get to a better place that can be sustained is going to be one of the key responsibilities and challenges I believe we have in this next year or two, going forward.
You have been doing some great work. The Euphrates fish farm, which is now internationally known, thanks to some good PR work, there we've got USAID's INMA (ph) program linking up with M&D center. There is now the beginning of a viable fish farm industry.
You know, in Wasat (ph), the PRT's efforts to link an idle but functioning tomato canning factory with local tomato farmers actually does more than what that factory will produce as an output. It brings in, you know, the guys who really do the work. Helping the Iraqi government at every level relate in an effective, constructive, and supportive way with the people who are actually doing the farming is going to be a key challenge for them, and one in which I think our help can be very, very significant.
Now, INMA is working on distribution of seeds that can hugely increase agricultural output. Texas A&M's Team Borlaug, who I assume are here tonight -- yes, outstanding -- from the briefs I get, you're doing a great job assessing both the opportunities and the challenges that the agricultural sector faces. What's going to be very important is taking your findings and ensuring that those link up to our own ongoing efforts, and most especially, link up to the Iraqi officials at every level that are responsible for the agricultural sector.
Again, to -- for Iraq to achieve its full potential, the private sector has to be revitalized. It's not even a question of revitalization. The private sector was under extraordinary pressure, really, from 1958 on. That it existed at all is a tribute, again, to the courage and the entrepreneurial spirit of Iraqis, particularly after 1968 and the arrival of the Baath. So, the spirit is there.
The efforts that you have led and encouraged the Iraqis to take ownership of in microfinance and micro loans will have an exponential effect down the line. I think that the microfinance programs are among our most effective economic development tools, with the proviso that, as you have shown, that as we carry them forward we've got to be working to hand off. And that, I think, is an overall theme. It's part of the transition. We're handing off in security with the revenues available. We've got to be able to hand off, too, in economic development terms. And that, again, is why the capacity piece is so very, very important.
Again, just walking around, talking to people, hearing new good ideas on things like land tenure and ownership makes me want to emphasize to you that I think what you're doing here really has importance for us, in terms of our national efforts and undertakings. You will be producing some very good ideas over the next couple of days, sharing lessons learned, mapping out new ways, better ways, different ways to do things.
These initiatives will be doubly important to us if we're tracking them so that your successes can be passed on to other parts of the country. And, sitting where I sit, that is something I will be very much focused on as I look at where the next two days -- two or three days -- take you: great ideas that you have already got underway, great ideas that you will come up with, and how those can be applied to your colleagues in different parts of the country.
Finally, I would, again, just emphasize a comment by General Oates. There is a window of opportunity here, and security gains have created a different climate. So there is the opportunity now for us to get after it, make sure our own coordination is working right, that we are indeed advancing to the same objective or objectives, and that those are the right objectives. Because, you know, the window isn't going to stay this way for long. By that I don't mean that, you know, if they don't get budget execution up to 88 percent by November, Iraq is going to spiral back down into chaos and violence. It's simply that things are changing quickly here.
Our posture in this country a year from now, I suspect, is going to be very different than it is today. Our influence right now is at a peak. As the Iraqis grow more capable, as the sense of nationalism and national responsibility become stronger and stronger forces, they will be taking on more, and we will be doing less. And that is as it should be.
But, you know, there are some pretty powerful political forces out there in Iraq, and regionally, that are saying to the Iraqis, "It's been five years. You've got to be in control." And we see this repeatedly at the national level. And I would be interested in what reflections you are getting, again, in your AOR, both in terms of security forces and civilian governments. But it is quite evident at the national level. They will move forward, in a sense, whether they are ready to or not. I mean, this wave is building.
So, it is absolutely imperative for us, given that the momentum is already underway, that we use the time we have, and that we use the influence we have, to get the critical things done for Iraq and the Iraqis. And that's all about ensuring that, when they take full control for their affairs, which they should do and which they will do, they do so with the skills, with the capacity, with the background to do it right.
So, it's going to be -- for those of you newly arrived, it's going to be a heck of a year. Last year was a heck of a year, too. The challenges are different. But the stakes are just as high. And again, General Oates, I commend you and your team for your initiative and bringing this gathering together. And I expect from all of you brilliant thoughts that I will later be able to claim exclusive credit for. Thank you.
(Applause.)
SPEAKER: Ladies and gentleman, that actually -- thank you for your kind remarks, Ambassador. We certainly appreciate the words of encouragement, as we kick this conference off. This actually concludes the official, formal portion of the evening. We encourage everybody to continue to socialize and interact and exchange ideas.