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Remarks by Andrew S. Natsios
Administrator, USAID

Progress in Iraq and Afghanistan

To the British North American Committee
October 17, 2003

I want to speak on something beyond humanitarian assistance. I ran the humanitarian function for the President's father in AID at a lower level. Now, I'm the head of AID. It is not widely known, but 80 percent of the money spent in the first supplemental budget, $2 billion, was spent by AID for reconstruction of Iraq.

We are under the CPA, but operationally much of the work is actually being done by us, and I thought you might want to know some of what's happened because -- and I'm not complaining about the news media -- but whenever you're in power, you think the news people are opposed to you. The news media is adversarial by nature. In the last 30 to 40 years, it's gotten worse and worse, but it also reports bad news. It's been doing that for a long time, and that's just the nature of the business. It's not a conspiracy by anybody, but it gives a really seriously distorted view of what's happening.

The second problem, particularly with respect to Iraq, is most of the reporters are in Baghdad, which was the center of power of the Ba'athist Party. If you go to Iraq -- and I was there for six days, and we have 72 people there or AID officers in the AID mission -- you get a profoundly different view of what's happening in the society than what you get from the coverage.

I know some of you probably have sophisticated views on whether or not we should have gone, and that is, for me, somewhat irrelevant. We're there. You can debate whether it was wise. I, frankly, think it was wise, but I have a different view, maybe, of how you feel toward policy. I also take it from the humanitarian perspective. I believe foreign policy needs to have ethical dimensions to it. I don't believe in moral crusades. I'm a realist in international affairs. I have somewhat idiosyncratic views on these issues.

I think Saddam Hussein was one of the most evil and savage political figures of the world, only comparable to North Korea in utter barbarism for 25 years, and the fact the international community let this happen is very troubling to me. I served in the first (Bush) administration, and I think we should have taken him out then, after the end of the war. I served as an officer in the first Gulf War. I was in the Reserves for 23 years. I left the Bush administration to go on active duty to Kuwait during the first Gulf War. So I know the military side of it. I know of this side of it, as well.

Put that aside. We're there. What are we doing to deal with what's going on in that society? I have written a book (U.S. Policy and the Four Horsemen of the Apocalypse) that the CSIS (Center for Strategic and International Studies) published, actually. It was my first book. It was published in 1997.

I think in the next few weeks we're probably going to sign a peace agreement in Sudan, after 20 years of civil war. And when I say "we," I mean the two contenders, the North and the South. But the British, the Norwegians and the Americans formed the committee that has led to the peace process, and the first agreement that was negotiated, interestingly enough, was not on the actual civil war issues themselves, but on getting humanitarian assistance into the Nuba Mountains, which was the center of some of the worst fighting and atrocities of the war.

Roger Winter, who has the job I had in the first Bush administration within AID, and a very close friend of Nancy's and mine, negotiated the accords, not the State Department. The Nuba Mountain Accords were negotiated by Roger Winter, and they called for a ceasefire in humanitarian corridors and a whole series of things. It was the first set of agreements that led to enough trust, not that they trust each other at all, but at least they were talking with each other for the first time, and they actually did something. And they carried the agreement out, which is also very important because frequently things are negotiated, and then they aren't carried out. Implementation is always a problem.

Humanitarian assistance is different than reconstruction, which is different from long-term development. But in Sudan, the accords created a foundation upon which the IGAD (Inter-governmental Authority on Development) talks about a political agreement for the country were based. And I think you can draw a clear connection between those initial negotiations two years ago and what is happening now.

So there is, clearly, a connection between humanitarian assistance and geo-strategic issues. I would argue that for humanitarian assistance, as opposed to reconstruction and development assistance, the moral imperative is always preeminent, which is to say you must save people's lives, you must do that based on need, not based on any other measures or principles.

But it is also naive to suggest that it has no political implications. Humanitarian assistance has profound political implications in any conflict anywhere in the world, under any circumstances. When you feed people, you change the dynamic.

I wrote a book that came out two years ago on the North Korean famine (The Great North Korean Famine), and I was involved as a vice president of a large NGO where I was in between the first and second Bush administrations, and the humanitarian aid program profoundly changed the whole nature or view of the outside world by the North Korean people. I did research on that up along the North Korean border with China. I interviewed refugees escaping the famine, and you could tell what was going on inside of the society. And it's very clear this food aid program, which was simply designed to stop starvation deaths, had profound political implications for the country.

So having said that, let me talk about what we're doing in Iraq first, and then I'll talk about Afghanistan. One thing you haven't read is anything about mass starvation, rising levels of malnutrition, starvation deaths, food riots, demonstrations or disruption of the food system, and that is a major accomplishment. It isn't discussed at all.

The system of food distribution in Iraq was similar to the system that China had or that Stalin had under the Russians. It is a public distribution system, so the state controls sources of food that people use to survive on. That's a means of control. The North Koreans used to use the same system. It's collapsed in North Korea. It's a means of control, and it's also a means of ensuring everybody is supposed to get a certain amount of food, theoretically.

That is the theory that we had prior to the war. The U.N. agencies, which I work with all of the time, had articles in the newspapers in Western Europe and the United States that said that this is one of the best-run food systems in the world. It's very efficient, no corruption, using high degrees of sort of modern computer systems to keep the records on all of this.

What we found when we actually got there, and Nancy's people are on the ground there, is we go to villages and say, "Who is on the ration list? Who is getting a ration?" In some villages, 20 percent of the people were not getting a ration. It's because they were politically regarded as suspect. What Saddam did, as all totalitarian regimes do, is they use the food system as a means of control and a means of punishment. If you misbehave, you simply get shut off, and so there were high rates of malnutrition for many, many years, particularly in the Shi'a areas in the South, not so much in the North because the Kurds were independent in an operational sense. But we found whole neighborhoods where 20 to 25 percent of the people were off the list, and it was not an accident. They were off because their families were suspect. So we put them all back on.

And that whole transition, from the old system to the new system, is running very smoothly, very quietly, with no publicity, and it's worked very well.

We have set up AID missions all over the country in the major cities, in the north, the center and the south. AID tends to move its funding through nongovernmental organizations, private profit-making companies, and U.N. agencies, international organizations like the IOM (International Organization of Migration), universities. We do a lot of work with the universities. We are signing a series of universities that connect American universities, European universities with Iraqi universities. And we will do professor exchanges. Many of these professors that I spoke with had never been outside the country their entire life, even to Saudi Arabia or Kuwait, never, and these are people with Ph.D.s. When they were younger, they got them, many of them, in European universities. Once they came back, that's the last time they ever left the country. They have a desire to see what the rest of the world is like. They have an enormous interest in coming to Europe and the United States, so we're creating this mechanism where they will go to European and American universities, at our expense, and do exchanges.

This was not a country that was rich in NGOs. It was not a country with a lot of civil society, mainly because it was a totalitarian regime, far more like Eastern Europe or the former Soviet states than it was like a typical totalitarian regime.

So we worked through these companies, and through these NGOs and U.N. agencies to attempt to move a lot of money for several things. One was to stabilize the population. What does that mean? It means to provide basic needs, like food, as in the food system, like water, like sanitation and health care, things that are required for the sustaining of life.

Two, we're also doing it in a way that connects our societies, in Europe, the United States, and the Arab World with Iraqi society, which was extraordinarily isolated for a very long period of time, even going back to before the Iran-Iraq War, and we think that connection is very important. This is the first time, in many cases, that people I had met had ever met someone from the West, other than a U.N. official, and many of the U.N. officials were, in fact, Iraqis who work for the U.N.

It also connects our program, the grassroots of Iraqi society with the CPA, and that's a very important connection. We have given out 825 small grants -- $5,000, $10,000, $15,000, $25,000 -- to the newly formed councils, town councils, and they have to make a decision as to how to spend the money. We help them spend it, but they make the decision. They carry the project out, and we make sure, for fiduciary reasons, that the money is properly spent.

But the purpose of it is basically to build in people's minds an understanding of the democratic process because they don't have any tradition of having votes, for example, or having debates or having disagreements. What do you do when you disagree with someone? It may sound somewhat silly for us to talk about things like that, but for the Iraqis there was no such training, no experience with it at all.

One of our staff, a democracy officer, who is a career officer in AID, went to one meeting, and it was kind of amusing. They had a three-hour screaming match at this council meeting on how to spend $20,000. They couldn't decide, and he said, "I'm going to the next village. I'll come back in two weeks because you can't make a decision."

And they said, "No, no, no. Don't leave." And my guy said, "Why can't I leave? I'll just come back in two weeks, and you can make the decision."

And he said, "If you leave, the people will kill us."

And he said, "Well, why? What do you mean they'll kill you?"

He said, "Isn't that what democracy is? If you don't do what the people want, they kill you," and he was quite serious when he said that.

And he said, "No, that's not what happens. If you don't do what you're supposed to do in a democracy, theoretically, you get removed in the next election, but you don't get killed. That's not part of the democratic process."

And he said, "Still, we don't want you to leave because we don't know about this democracy thing yet. We're really not sure what the public reaction will be because everybody in the village will know you left without telling us that we're getting the money."

So they sat down, and they made a decision on what to do. I think it was repairing the well in the town.

It was fascinating for him to see the dynamics of this, but what is happening is there is an emerging civil society developing at the local level. In Umm Qasr, the British went into Umm Qasr first, the troops went in first, and the fascinating thing was that the Shi'a hate the Ba'athists, of course, because of the atrocities they committed against them. There was one school teacher -- he taught English in high school. He was an older man, a devout Muslim, not a fundamentalist or anything, but apparently a group of the men of the city said: "We're going to burn down the houses of all of the Ba'athist Party members." All of them had fled or most of them fled as soon as the British arrived. This is in April or May, very early on, and they had torch lights, and they were going to the houses and burn the houses down.

One of our staff, who speaks Arabic, watched it happen: the guy got up and said, "The Americans and the British are here now. They believe, and we are going to believe, in the rule of law, and that means you don't go and burn people's houses down. You don't execute people. You have to have a trial, and evidence, and lawyers. This is not the old days. It's a new day." And he quoted from the Koran about how we cannot use revenge as a method of governing ourselves. I don't know what the quote was. But he calmed down this large mob, basically. They put the lights out, went home, and no one's house was ever burned down and no one was ever executed.

We actually had an elaborate plan prepared because we thought there were going to be mass atrocities all over the South were the Ba'athists were hung. It didn't happen. Occasionally, here and there things happened. But we were astonished, frankly, that this did not take place.

We're also deeply involved in economic reform, through Bearing Point, which used to be part of Price Waterhouse, which won the contract for what we call economic governance. Bearing Point also won the contract for this in Afghanistan, and we've worked with them in Kosovo, Bosnia and Eastern Europe. They did a lot of the work in the Eastern European countries when they left the Soviet orbit.

In terms of new currency, the central bank, banking regulations, uniform commercial code, deregulation of the economy, micro lending, a budgeting system, a national government, a revenue system to support the government, we've been very successful in Eastern Europe and the Balkans, and we've had some substantial success in Afghanistan with them, and they're doing this as advisers to the CPA in Iraq now.

We have rebuilt the Port of Umm Qasr. It's in the best shape it's been in since 1980. It's now capable of taking large boats, ships. We've removed 19 ships that had been sunk in the port, some of them from the Iraq-Iran war. There's an enormous amount of silt that's been taken out, and we installed a security system. They had looted the grain elevators. So we had to replace all of the grain elevators, and there were also 250 pieces of unexploded ordnance over the last 20 years put in the harbor, and they've all been removed now. So the port is a functioning, modern port facility that would be comparable to anything in a modern country.

We're also building rail links now. We're up to, in terms of electrical generation, what electricity was prior to the conflict, and we now have a goal from Bechtel of getting up to what it was before the war -- 4,400 megawatts.. It's about 4,000 now because we've taken a bunch of plants off-line to do preventive maintenance now that the hot weather is behind us in some areas of the country. But we'll go up, we hope, to 6,000 megawatts by next June because we think industrial production will begin demanding more power by the spring.

We've also disconnected the telecommunications systems, the Baghdad International Airport, which we've just finished, almost finished reconstructing the sewer and water system of the country. Before, every time the electrical grid went down, the water and sewer would go down. That's a big problem in a country that's basically a giant desert. So we're now installing generators each of the sewage treatment plants, at each of the pumping stations, at each of the water treatment plants so that they are independent of the power grid. It also reduces the drain on the power grid.

We're also doing bridge assessments now. Bechtel basically did an entire infrastructure assessment of the entire country. And it's all been allowed to deteriorate over a period of time. Other than the roads, everything is in terrible condition.

In terms of the schools, we rebuilt 1,595 schools, most of which, in fact, had been gutted, either from the period after May or had just been allowed to deteriorate. Many of them are abandoned buildings. No one had been going to school in them for many years. And we did that for several reasons. The schools are very important not just for education, but we have to get the kids off the streets, which will increase security. There will be fewer incidents with troops. It will also mean that the people doing recruitment will have a harder time recruiting young men.

There is a direct connection between violence in any society and the number of young men between the ages of 15 and 30 as a part of the total population and how many of them are unemployed, and that's true in our society as well, I might add. I have two teenage sons, and I try to keep them as busy as possible. And that is our observation from analytical studies we've done of every conflict in the world, literally, from East Timor to Bosnia and Kosovo, to Mozambique, to Angola. Iraq had a lot of young men who are unemployed, even before the war, but they used police state tactics to deal with them then. Now, we have to deal with them in other ways.

And so having as many kids in high school, particularly teenage boys, is very, very important. How do you get kids to school? You have textbooks. Only one child in six had any textbooks at all in Iraq prior to the war. We had the new ones printed through UNICEF and UNESCO, 5.6 million textbooks that have been de-Ba'athified using the traditional U.N. mechanisms for taking hate literature and the propaganda out of texts. We're going to do the whole curriculum, but it will take a little while longer.

We also produced bags, sort of canvas bags, with paper, and pencils, and compasses, and calculators. Every high school student, a million-and-a-half of them, got them before they went to school. As I said, we did the school reconstruction.

Many of the schools had not had water in many years or electricity, and that was a problem because in the South, in the center of the country, the heat is so bad in the summertime, 125 degrees to 130 degrees, that if you don't have ceiling fans, people pass out in classes, and so we had to replace the ceiling fans because they're critically important in keeping kids in the school the whole day.

This has been an interesting undertaking. We've also retrained 65,000 teachers in more Western mechanisms for teaching school. In Iraqi schools, no one ever asks any questions. You have a curriculum, you learn it, you memorize it, and you recite, and then that's the end. It's a Soviet-style system of education. The more democratic means of education where you ask questions, you have debates in class, there are different opinions, is something that's completely unknown. Teachers liked this. There was a very, very warm reaction to the teacher training that we did, and we've done this in Afghanistan and a number of other countries, and it's been very successful, and I would say the thing Iraq has going for it, it has a very large number of highly educated and very motivated people. This is not an undeveloped country. It's more like Poland. Actually, it's more like Romania, more like Romania in 1989, than like Africa or a poor Asian country. Just the size of the educated elite is so large that I think, frankly, if they could stabilize for a while, there's a large number of people from that class of people who will get elected to whatever the new Congress or Parliament is that the constitution determines.

So, also, all of the ministries were all looted and destroyed, I mean, literally burned out and destroyed, and we had to rebuild all of those. We've rebuilt 40 ministries and commissions in Baghdad and provincial cities, which means enough for at least 100 civil servants to go back to work, with fax machines, which they had never seen before, and in most cases, telephones. Only 6 percent of the population had phones in the whole country before the conflict. They don't like phones in Iraq. Totalitarian regimes don't like people talking to each other. So we're having to deal with that issue. But there are now phones in the ministries. There are fax machines, computers, desks, things like that that weren't there before.

The next issue is health care. The health care system in Iraq is the most, from an ethical standpoint, disturbing thing I have ever seen. The budget for health care under Saddam was $10 million a year. The child mortality rates, according to U.N. surveys, were 131 kids dying out of every 1,000 before they were five. The rate in India is 100. The rate in Jordan is 27, just to give you comparable statistics. And the rate in Britain, the United States, and Canada is around 10. So the rate is higher than sub-Saharan Africa.

And I would argue even before the war that there was a deliberate policy of killing off the Shi'a children basically by keeping the water dirty, keeping immunization rates low. There were no oral rehydration salts in large areas of the country. So, if a kid got diarrheal disease, which is a principal killer, they would die. Now, there's a massive infusion of that stuff by UNICEF.

I found it disturbing. I have to tell you, I've worked with the U.N. for 14 years now. The workers at the local level told me stories that were so shocking, but the fact that they told us after the war was over and not before, I found troubling. Most of them are very embarrassed by the U.N.'s role in Iraq prior to the war because they were so compromised by the regime's intrusion into normal U.N. agency functions that they didn't do the work they should have done, and they know it, and they're embarrassed by it, and they're correcting it very rapidly now. There's some very dedicated people, but some of them told me stories that are troubling, very troubling.

We've done four million immunizations of children, and we're rebuilding the health care system as well.

We now have about 55,000 Iraqis working on the subcontracts of the 48 contracts, grants, and cooperative agreements we are using to do the reconstruction work, to spend the $2 billion we spent. We've about 72 staff there now. There are about 600 contract staff, not including the NGOs. The NGOs will not tell us how many workers they have because that's regarded as sort of an intrusion.

MS. : We're mysterious.

ADMINISTRATOR NATSIOS: You're mysterious, right.

We hear that there may be 100 expatriate NGO staff in the country, but we don't know that for sure, Nancy. We think that's true. So it's probably around 700 expatriate staff supervising basically 55,000 Iraqis, and that's a conservative estimate of the number of Iraqis now working for us. Bremer wants to get this up to about 300,000 by next spring, which I think, with the new money coming, we're likely to be able to do.

And so that's sort of a highlight of where we're going. It's infrastructure, it's the water and sewer systems, it's the electrical system, it's the port, the airports, it's the educational systems, it's the universities, it's local government. There's a whole effort to work on the constitution, prepare so we can have elections.

Afghanistan. We've had two years in Afghanistan now, and I am more in charge in Afghanistan than I am Iraq. Jerry Bremer is in charge of Iraq, but the AID mission director in Afghanistan reports to the ambassador, and most ambassadors in our system, you know, know what's going on, and clearly the mission director reports to the ambassador, but I know the ambassador. He said, "Andrew, you tell me what we should do, and we'll do it," and that's what we did. So I've had a lot more influence over designing the program in Afghanistan than I did in Iraq, though I'm pleased with what we've done in Iraq as well.

These are the six objectives, if you're on Page 10 of this document in front of you, in Afghanistan. We designed this two years ago. I have to say that the Western democracies, all of the aid agencies, the U.N. agencies and the banks, no matter what they tell you, got out of infrastructure a long time ago.

They've done two things in the last 25 years, the aid agencies, the whole international system, which I think have been disasters. One is they got out of agriculture, and most Third World countries are agricultural societies. If you get out of agriculture, how is the country going to grow? I cannot believe the decision was made in '86-'87. Once Peter McPherson left, who was the president of Michigan State University, who had been the AID Administrator -- he's one of the great Administrators in our history. He was there for six years, and he left Michigan State to go to Iraq to be the economic czar for the CPA. Peter is one of my closest friends, and Peter is the one that kept agriculture on the international agenda, but once he left, it all collapsed.

I think the reason agricultural productivity has collapsed in Africa or declined in Africa in the last 20 years is because there's been no investment in it. We're putting money back in, and most of the aid agencies now made a decision that they're going to get back in.

But the other thing we didn't do, we didn't do infrastructure, roads and bridges, because it's hard to maintain them in the developing world. I've become very enthusiastic about infrastructure since I got orders from the President and Secretary Powell to build a road. I was given 13 months to build a 365-kilometer road from Kabul to Kandahar and then from Kandahar to Herat, which is called the Ring Road. And if you look later in the presentation, on Page 14, you will see the Ring Road is the black in the middle. The two other lines are 50-kilometer lines on either side. Two-thirds of the population of Afghanistan lives within 50 kilometers of this road, and this road already exists. It's just in horrendous condition.

The U.S. Government built, AID built, in 1959, under President Eisenhower, the road from Kabul to Herat, and the part of it from Kandahar to Herat, the Russians rebuilt with cement and did a lousy job. It's falling apart. But nothing has been done to the road since Eisenhower from Kabul to Kandahar. So it takes two days or it did take two days to get there.

By the way, between Kabul and Kandahar is one-third of the entire population of the country, and it is the center of the Taliban support in the country. That's the subclan of a Pashtun tribe that supported al Qaeda, that had the marriage with al Qaeda. So that area there has a third of the population. It's right through a war zone. We've lost now nine Afghans. They are being shot, or one was crushed to death deliberately, slowly, and another was burned alive by the Taliban, who are attacking our five contractors every day now.

We will have the first phase of this road done by December 31st, and Phase II will be done next spring, which is the second layer of blacktop. We're overbuilding this road so, if there's no maintenance for the next 15 years, we figure it'll be in pretty good shape. It's way over normal international standards because of the political situation of the country. It now takes six hours to get from Kabul to Kandahar, instead of two days. This was the thing that Karzai wanted more than anything else, other than the currency. So we're doing what he asked us to do. The Japanese are helping build part of this, and the Saudis and the Europeans are building, with the World Bank, the Northern part of the road, in other words, the upper half, and we're doing the lower half. And the supplemental bill that's going through now will allow us to go from Kandahar to Herat.

We're finding out and sort of relearning things we'd lost in the '60s and '70s.

We also broadcast the entire Loya Jirga as a control over bad behavior by the people there at the Loya Jurga. And by everybody hearing the representatives they had chosen to speak, literally, the entire country was glued to their radios the whole time the Loya Jurga was meeting, through the radio system.

We're finding, though, that the best thing would be just to have many radio stations that are privately owned and run, and there are some Australian Afghans who set up a chain of some of them. They are really good people, and they're going to be commercially viable. They will not require subsidies.

We're also helping to implement the Bonn Accords in the judicial area, and the area of human rights, and I mentioned the constitution. We've also rebuilt the ministries and many of the schools, the University of Kabul, along with other donors.

I could actually talk for another hour about all of this, but we've spent $800 million in Afghanistan the last two fiscal years. Our fiscal year ends September 30th. And you can see on these maps, this map, which is No. 15, it's difficult to a read, but it shows you the geographic placement of these projects. And if you look on the next page, it shows you what the activities are in terms of money by project. It's designed to spread it out over the whole country.

Are things the way we'd like them to be in Iraq and Afghanistan? No, they're not. They're not where we'd like to be. Are we far better than the appearance is to the outside world? Absolutely. I've been to Afghanistan twice. My staff is there. We have a mission there, as well in Iraq. I would only say that I've been involved in 10 reconstruction efforts, either through the NGO community or in the first Bush administration, and this is more rapid, with more funding in both cases than we've ever had in anything the United States has done, and I suspect, by the donor community.

I am hopeful that over time things will simmer down in terms of the security situation. The more the economy begins to move in both countries, I think the better it will be for getting people away from the warlords in Afghanistan or the militias in Iraq. Getting the economy moving is probably the most critical thing we can do to stabilize the societies. Because when people are working, they're not causing trouble--working I mean at legitimate jobs.

There are two wonderful statistics from Afghanistan. One is that after the war was over they had an 82-percent increase in the wheat harvest. The country had been on the edge of famine for four years. This year, they've had such a large increase in the wheat market that the price is dropping, which we're very concerned about. It's the largest wheat harvest in the history of the country, exceeding the '67. AID had a mission there in '67, and this well exceeds the '67 harvest.

We're trying to help farmers by investing heavy amounts of money into a rural road system, putting $150 million in a rural road system and in agricultural development in the back country in Afghanistan, and the programs are working. The rural economy is coming back now, and the fact the wheat harvest is so good is an indication of that, but the Afghans can also export a lot, and that's what we want to move to in the next phase. The best apples I've ever seen outside of the United States are from Afghanistan. They're enormous. I thought they were imported. I was astonished they were grown in Afghanistan. They have vast vineyards. They used to have wineries there. I don't know why a Muslim country has wineries, but they did. It's not nonalcoholic wine. It's wine, and they told me they're going to be rebuilding the wineries. And so the orchards are being rebuilt, the vineyards, and I think the agricultural system will come back in a major way. We're investing a lot of money with the banks and with the donors.

Karzai is gradually removing the troublesome governors. He's done two now, the worst ones or the most difficult ones. He's put people in who are reliable, and we are supporting the new governors by putting more public services in to show that once the new governor took over, that things improved.

Anyway, those are some highlights of what we're doing. It would take me hours to go through how we're spending. I actually did a database of the 798 projects we have going just in Afghanistan, which are quite astonishing to see the depth and the breadth of, but they don't get reported because most reporters stay in Kabul, and they do not get outside the Kabul city, and most of our work is not in the capital city.

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