Abu Dhabi
June 9, 2003
An overview
of regional developments and UAE-U.S. commercial interests
Members of the ABG, Ladies and Gentlemen, Friends:
Thank you for inviting me to once again address the ABG. It is very important to me to maintain a close relationship between the American business community and the Embassy. My staff and I look to you to share your ideas and concerns with us as we develop ever stronger economic and commercial ties between the UAE and the United States.
Given the recent course of events in the region, I would like to begin with an overview of the current situation in Iraq. I will then turn to some of the other initiatives the United States is working on in the Middle East, including the Roadmap, and conclude with some comments about our commercial interests here in the UAE. I look forward to hearing your views and or questions after my prepared remarks.
The United States and our Coalition partners are committed to rebuilding Iraq's infrastructure and supporting the Iraqi people as we work to establish a free and democratic government in Iraq. Since the appointment of Ambassador Paul Bremer as Presidential Envoy to Iraq, there have been a number of significant achievements in Iraq. I would like to describe these because I do not believe they are receiving enough attention in the press.
Ambassador Bremer's primary focus has been on security issues. Currently, more than 10,000 police officers are patrolling the streets of Iraq, and Iraq’s Criminal Court resumed legal proceedings in May. Ambassador Bremer also issued a directive ordering individuals to hand in automatic and heavy weapons or face criminal charges.
Another area where the Coalition has concentrated significant resources is in restoring public education for the children of Iraq. According to UNICEF, before the war the enrollment rate among secondary school students dropped to 33%, and the quality of education was so poor and teachers so unmotivated, that many students do not have basic literacy and numeracy skills. All of Iraq’s primary and secondary schools reopened on May 10, and a new salary structure was established for teachers increasing their pay rate by four times the previous amount. During the summer break, two thousand of the most run down schools will be renovated and made ready for the new term in September.
The Coalition also worked to quickly reintegrate Iraq physically and commercially with the rest of the world. All of the country's major airports reopened to humanitarian aid flights, dozens of which are arriving each day. Commercial air service may begin in six to eight weeks after the repair of the deteriorated runways of Baghdad International Airport, installation of new radar equipment which meets current civilian commercial standards, and the establishment of customs and immigrations authorities.
Iraq's primary seaport, Umm Qasr, was transferred to civilian control on May 23, and Stevedoring Services of America was awarded the contract to refurbish the port. It has enlisted the Dubai Port Authority as a subcontractor in the effort. Most importantly for the future of Iraq, the UN Security Council voted in May to lift trade sanctions and Iraq is now allowed to freely export oil. Iraqi oil production already has risen to approximately 800,000 barrels per day and should reach pre-war production levels of about 2 million barrels per day by the end of the year.
As the immediate humanitarian concerns subside, the administration is focusing more on the long-term development of the country. Saddam's regime greatly neglected the needs of the Iraqi people, especially in the South, leaving the infrastructure decrepit and dilapidated. Iraq will be transformed, but the progress will be slow and gradual.
USAID's implementing partner, Bechtel, issued five orders to immediately upgrade or repair the major stations of the Iraqi power grid -- only one is related to damage caused by the war; the others are to repair and upgrade infrastructure neglected by Saddam’s regime. USAID also awarded seven other major contracts to U.S. companies to address education, local governance and other reconstruction issues.
The Commerce Department recently launched an Iraq Reconstruction Task Force to provide U.S. companies interested in participating in the reconstruction of Iraq with information about business opportunities and commercial conditions. The task force will offer valuable information on key industry sectors, current reconstruction efforts, potential obstacles to doing business in Iraq and information about remaining sanctions on weapons and dual-use goods. Senior Commercial Officer Nancy Charles-Parker can provide information about the Task Force and additional information can be found on the Department of Commerce website.
In addition to the infrastructure issues, the Coalition's focus is to assist the Iraqi people in establishing a democratically elected Iraqi government as soon as possible. Ambassador Bremer meets with Iraqi community and tribal leaders every day, and the Coalition Provisional Authority (CPA) is in the process of establishing the best method to launch a fully representative interim administration.
Last Friday, Ambassador Bremer met with representatives from seven political groups to discuss the political future of Iraq. The CPA has stated that conditions in Iraq are currently too chaotic to hold elections since it would be impossible to have an accurate electoral roll without a census and Iraqis need time to organize politically to ensure fair representation. The Coalition is planning to form a political council of 35 Iraqis that would be selected by the CPA to consult with it on policy matters and appointments of Iraqis to ministry posts under Coalition authority. Ambassador Bremer also has suggested calling a national conference to appoint a commission to draft a new Iraqi constitution which would be ratified by a national referendum ahead of elections that would select the new Iraqi government.
One of the most exciting political projects in Iraq currently is the Neighborhood Advisory Council, which was conceived by the U.S. consulting firm Research Triangle Institute of North Carolina. Eighty-three neighborhoods in Baghdad will select representatives to the City Council, which will serve the needs of the five million inhabitants of the city. I think this is one of the most interesting and challenging projects in Iraq, as it will create a mechanism for political participation at the grass-roots level.
It is impossible to talk about the reconstruction of Iraq without singling out the efforts of the UAE, which have been significant. During the war and afterwards, the UAE Government in response to President Zayed’s directives, focused on addressing food and water shortages in Iraq and the medical needs of the Iraqi people. I am proud to note that the U.S. Embassy in Abu Dhabi was able to facilitate this massive humanitarian effort.
An example of the UAE's leadership role in the humanitarian relief efforts was the UAE Red Crescent Authority's delivery of more than 700 tons of foodstuffs and nine vehicles on April 11. This was the first NGO humanitarian shipment to Umm Qasr. The UAE Government also adopted Uday's Olympic Hospital in Baghdad -- now named the Shaykh Zayed Hospital -- and a 150 person medical team of doctors, nurses and administrators is providing medical care to Iraqi civilians free of charge. They also have adopted eight hospitals in the region to between Baghdad and Basra.
Most recently, the UAE evacuated more than two dozen wounded and sick Iraqis and their families to the UAE for medical treatment on May 21.
Roadmap to
Middle East Peace
Though Iraq is quite rightly the center of attention, current U.S.
efforts in the region extend far beyond the borders of Mesopotamia.
This is a moment of promise for the cause of peace in the Middle
East, with the potential for unity against terror, the birth of
a new Palestinian state, and broader peace among the peoples of
the Near East region. Achieving these goals will require courage
and moral vision on every side, from every leader. We are heartened
by the commitment shown to these objectives as illustrated by the
participation of so many regional leaders at last week's meetings
at Sharm al-Sheikh and Aqaba. At Sharm al-Sheikh, Arab leaders stood
with President Bush and declared their firm rejection of terror,
regardless of its justifications or motives, and committed to use
all means to cut off assistance to any terror group. At Aqaba, Prime
Minister Sharon and Prime Minister Abbas dedicated themselves to
the path of peace by agreeing to move forward with the Roadmap.
U.S. efforts will focus on facilitating dialogue and monitoring the implementation of the Roadmap by both sides, but ultimately it will be up to the parties to carry out the hard work needed to advance the process. It is important to focus on the Roadmap's broad goals and to remain flexible and realistic as we move into the next stage. The Roadmap is a starting point and a framework for progress, and as the President's meetings last week clearly illustrate, the Arab world, the international community and the United States will do our utmost to assist the parties along the difficult road to peace. The President has appointed Ambassador John Wolf as his Middle East Envoy, and Ambassador Wolf will lead a mission on the ground to assist the parties, monitor their progress and clearly affirm who is fulfilling their responsibilities.
We are making clear to Prime Minister Abbas that he has to take important steps to assert control over the Palestinian Authority including demonstrating empowerment in key areas of governance, especially security. The United States has committed to providing training and support for a new, restructured Palestinian security service to assist him. We are encouraged by the public statements Prime Minister Abbas has made that all violence and terror must end and his acceleration of direct contacts with the Israeli Government.
The Roadmap also requires Israel to take significant steps. In his opening statement at last week's summit, President Bush expressly noted that a Palestinian state must be created over a contiguous area of land. We are encouraged that Prime Minister Sharon announced that his government will remove unauthorized settlement outposts. Israel also released $100 million that had been held in arrears, and permitted 25,000 workers to return to their jobs in Israel. Over time, Israel will need to ease restrictions on the freedom of movement within the West Bank and Gaza, end curfews in Palestinian populated regions during daylight hours, and allow regular, unrestricted humanitarian access to all areas.
MEPI &
MEFTA
In addition to the Roadmap, the United States is pressing forward
with the Middle East Partnership Initiative (MEPI) announced by
Secretary Powell last December. This initiative is a broad-based,
multifaceted effort by the U.S. Government to promote the expansion
of economic, political, and educational opportunities for people
across the Middle East. It will also serve as a forum for the US
Government and governments in the Middle East to deepen and broaden
our economic ties, through expanded trade, enhanced strategic policy
dialogue, and the establishment of people-to-people partnerships.
To re-ignite economic growth and expand opportunity in the Middle East, the President recently outlined a proposal to establish a U.S.-Middle East Free Trade Area within a decade. Building on our free trade agreements with Israel and Jordan, the United States will help reforming countries become members of the World Trade Organization, negotiate Bilateral Investment Treaties and Trade and Investment Framework Agreements with governments determined to improve their trade and investment regimes, and launch, in consultation with Congress, new bilateral free trade agreements with governments committed to high standards and comprehensive trade liberalization.
The establishment of this region-wide free trade area will be based on a series of graduated steps which include initiatives already underway. For example, we hope to complete negotiations on a Free Trade Agreement with Morocco by the end of the year and are negotiating a Free Trade Agreement with Bahrain. The United States also provides extensive assistance to build trade capacity and expansion so countries can benefit from integration into the global trading system. This year, we provided funding for trade-related technical assistance seminars in the Gulf and Trade and Investment Framework Assistance to Bahrain.
As part of the President's initiative, the United States will establish the Middle East Finance Corporation, a facility to help small- and medium-sized businesses gain access to capital and generate jobs. We will also continue to promote transparency and accountability in public finances, help countries fight corruption, and support financial sector reforms based on international best practices. Along with our partners in the G-8, we are promoting good corporate governance to facilitate this priority of transparency and accountability. This year we funded a regional corporate governance program, which will be implemented by the Center for International Private Enterprise. Though the site and timing of the training have not yet been determined, the program will help participants develop the legal tools necessary to institute safeguards against corruption and mismanagement, while promoting the fundamental values of a market economy.
As part of the U.S. commitment to economic development in the Middle East and to expand trade relations with the region, U.S. Trade Representative Robert Zoellick and Secretary Powell will participate in an Extraordinary Annual Meeting of the World Economic Forum from June 21st to the 23rd in Amman, Jordan. At the conference, they will elaborate on the Free Trade Agreement initiative.
Commercial
Issues
Finally, on a closing note, I'd like to mention the terrific work
done by the Commercial Team, which is composed of the Embassy Economic
Section and Front Office, and the Foreign Commercial Service. In
addition to the can-do, pro-business orientation of the UAE leadership
and the excellent infrastructure of the country, I think our Commercial
Team is part of the reason why U.S. businesses see the UAE as a
place to establish a regional presence. The Front Office manages
senior level advocacy, the Economic Section handles policy issues,
and the Commercial Service does an extraordinary job of helping
American business succeed in the Emirates.
During the past two-and-a-half years the Foreign Commercial Service facilitated export sales for more than 250 U.S. companies in the UAE, totaling close to $5 billion. One quarter of the commercial sales this year were in the medical equipment sector. The rest were spread out over 22 different areas, including oil and gas, police and military, educational services, engineering, and the hospitality industry. With more than $5 billion worth of projects at different stages of award and completion, the oil and gas sector continues to present the best prospects for U.S. exports into the UAE. Some of the other leading areas for U.S. exports include the market for engineering and construction material, medical equipment and services, environmental equipment and services, consumer goods, and sports and leisure.
Let me take just a moment to highlight some recent success stories: in January 2003, Thuraya authorized Boeing to launch the Thuraya-2 satellite into space and contracted with Boeing to build Thuraya-3. Gulfstream Aerospace, a wholly owned subsidiary of General Dynamics, sold Gulfstream Jets to Abu Dhabi-based Royal Jet that will feature convertible interiors to meet the needs of two very different types of missions: medical transport and executive charter. New York-based Turner International is acting as the project manager on two landmark projects currently under construction in the UAE: the Abu Dhabi Conference Palace and the Dubai International Financial Center. Bechtel is also close to completing the front end engineering and design package on two gas development projects with Gasco.
We as a Mission
strive for your success with relevant UAE Government customers and
in partnership with local businesses. The Commercial Team makes
phone calls, writes letters, and advocates on your behalf. I look
forward to working with all of you to help guarantee that American
business continues to play a prominent role in the economic prosperity
of the UAE.
Thank you, I'd be happy to take your questions now