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Video: USAID Administrator Andrew S. Natsios

Briefing at the Foreign Press Center
March 26, 2003

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Transcript:

MR. DENIG: Good morning, and welcome to the Foreign Press Center.

I'm sorry we're running a little bit late today, but we are pleased to have a special briefing for you today on US humanitarian relief and reconstruction efforts for Iraq. And to give this briefing we're delighted to welcome Andrew Natsios, the Administrator of the US Agency for International Development.

He'll have some opening remarks for you, and then we'll be glad to take your questions.

ADMINISTRATOR NATSIOS: Thank you very much.

What I'd like to do is to give you an update on the current situation with respect to the Gulf right now.

The Umm Qasr port is now under coalition control. A team, an assessment team from the disaster assistance response team of AID went in with civil affairs officers yesterday and did an assessment of the condition of the port. The port is in very good condition physically, the cranes are in good condition, and the warehouses -- there are very large, empty warehouses that could be used for relief commodities.

A British ship, Sir Galahad, loaded with 232 metric tons of emergency food, water, medical supplies, and blankets is now ready to unload in the port. As soon as the minesweeping is complete, the ship will begin offloading.

The Government of Kuwait has begun moving relief supplies across the border into Iraq. A convoy of seven trucks departed for Umm Qasr on March 26th, and each truck contains an estimated 25 metric tons of rice, bread, lentils, and other foods. Coalition military personnel will do the distribution of the food for now.

The Government of Japan today announced a $112.5 million contribution for emergency humanitarian and reconstruction assistance for Iraq.

The President also submitted the supplemental budget to the Congress, and in that is $2.4 billion for the State Department-AID effort that we are undertaking in Iraq, both for humanitarian relief and for reconstruction.

We have never spent this much money in one year in one country in the 40-year history of AID. This is unprecedented for us. The only thing comparable would probably be the Marshal Plan in the 1940s, although the Marshal Plan was for many countries all over Europe after World War II.

We have, in that budget, money for the immediate relief needs, the rehabilitation of the country, and then large-scale reconstruction in the country.

What we've done already on the relief side is we have committed 610,000 metric tons of food, some of which has already been purchased and is on the high seas now.

We have put $200 million in the supplemental budget, and we have begun moving that through our system to transfer to the World Food Program to purchase food in the region. In other words, it'll be purchased in the Gulf and in neighboring countries that have surplus food stocks.

We've also, over the last couple of months, given the World Food Program $60 million -- 40 million already, 20 million in the pipeline -- to be distributed shortly to purchase fuel for their food aid trucks, to rent trucks, and to rent logistical systems like warehouses.

In addition to that, we also have relief supplies that are not food, like blankets, medical supplies, tenting material, reverse osmosis systems that purify water; and so far, we've spent $206 million prepositioning these supplies in the Gulf for use in Iraq.

The situation in Basra is that the most serious, immediate requirement is water. As of yesterday, the principal responder was the International Committee of the Red Cross. The United States, through the State Department, has contributed $10 million toward their international appeal. Other countries have contributed, as well. A team of British soldiers has secured the water pumping station, which had apparently been shut down by the Ba'athist party, who shut down the water system in the city, by cutting off the electrical supply for the plant. The ICRC has succeeded in getting it partially stood up, and so as of last night, about 50 percent of the city now has water, and they're hoping in the next day or two they're going to be able to restore sufficient electrical power to allow the entire city to resume water supply. Right now, that's our major concern.

The Government of Iraq had been providing a double ration of food to gather public support for its efforts since last October, and so many families have stockpiled at least, according to the UN agencies, a month's worth of food in their house. We are not in immediate need of food in most areas of Iraq because of this double ration that's been provided over the last six months.

Our problem at this point is the water and sanitation systems, which were in a serious state of disrepair over a period of 12 or 14 years now, and to have them collapse entirely is dangerous.

So we believe that the ICRC's efforts, which we want to applaud, will result in the next couple of days in a restoration of electrical power in the city.

I can answer questions, if any of you are interested.

Yes, sir. Yes. This gentleman.

QUESTION: Andrey Surzhansky, ITAR-TASS News Agency of Russia.

Mr. Natsios, do you expect participation in this effort of the traditional Iraqi partnership with Russia and France, and have you received any formal request from the Russian authorities to provide access to the Iraqi ports?

Thank you.

ADMINISTRATOR NATSIOS: To -- say that again, now? I'm not quite sure -- the last part of your question?

QUESTION: Have you received any formal request from the Russian authorities if they want to provide some supplies --

ADMINISTRATOR NATSIOS: Oh supplies.

QUESTION: -- of the humanitarian aid, the access to the Iraqi ports. Thank you.

ADMINISTRATOR NATSIOS: They have not, so far as I know. They may have contacted the State Department in the last day, and I have not been informed as yet, but I'd have to check with our staff in the field specifically. It may well have been. But we have not received word here in Washington, as yet. We typically work with the committee on extraordinary situations in Russia, in emergencies. They helped us, for example, during the Afghan war in Central Asia.

We have been in discussions for some time now, several months, doing contingency planning, should a conflict occur with my counterparts, the development ministers of other countries, and many contingency plans have been put in place by other donor governments over a long period of time.

I know the Japanese Government, I spoke with the Deputy Foreign Minister a month ago, and I know their plans were announced yesterday. I'm told the EU has announced plans.

So I think the international humanitarian aid community for the immediate humanitarian requirements of the country are moving into higher gear now with their supplies.

QUESTION: Emad Mekay with Inter Press Service (inaudible).

(Inaudible) help us do some math here. I understand USAID is involved in two parts here, first the humanitarian --

ADMINISTRATOR NATSIOS: Right.

QUESTION: -- effort and then the reconstruction.

ADMINISTRATOR NATSIOS: Right.

QUESTION: How much, overall, has USAID penciled for the humanitarian effort, and tentatively for the reconstruction; and also, how much of that money comes from the Iraqi funds that the [Department of] Treasury receives? I understand that some of it may be used for the humanitarian relief, if that's correct or not.

ADMINISTRATOR NATSIOS: None of our funds come from any money that's been seized. It comes from a supplemental budget, which will go -- has gone to the United States Congress, so it is not from Iraqi funds, it's from US taxpayer funds. The amount in the budget is about $2.4 billion total, and this money is fungible, which is to say if we need a little bit more for relief or a little bit more for reconstruction, we can move money between accounts. But the estimate at this point, the breakdown will be $543 million for humanitarian relief, including for UN agencies. We will be providing funding to the major humanitarian agencies of the United Nations to help us run this response. We've been in conversation with them. Some of that money will go out through the State Department to UNHCR, some through AID to WFP, to UNICEF, WHO, other UN agencies. So we're in discussions now with these agencies about the level of funding in terms of the breakdown.

There's an additional $200 million that we've added to the budget that's before the Congress for cash to the World Food Program to purchase food in the region. That $200 million is in addition to the 610,000 metric tons that I mentioned earlier. So it's 610,000 metric tons, and then $200 million to purchase food in the region, through the World Food Program, from local stocks, from surpluses in neighboring countries. And then the total amount is $543 million, at this point.

QUESTION: Hello. I'm Alex Brummer from the London Daily Mail. Could you talk a little bit about the reconstruction program? I mean, there's been a lot of controversy, as you may well know, in Europe already about the way that the tender was done for certain of those reconstruction contracts, that they appeared to be exclusively to American companies, and beyond that, that many of those companies -- it was a very narrow group of American companies, and that's caused some concern among potential contractors or subcontractors in Britain and in Europe generally. I wonder if you could address that question?

ADMINISTRATOR NATSIOS: Sure. The first is that Federal law requires us to use US companies. That's a statute in the United States. American taxpayer funds will be used for competitive bids on a contractual basis in the profit-making sector and will go to American companies. I can, if the national security interests of the United States are at risk, suspend that law. In the last decade we've done it, I think, three times. Once was the reconstruction of Bosnia; the second was the reconstruction of Afghanistan; and the third time we've done it is the reconstruction of Iraq. So it is not normal for us to suspend the law, but in this case, we did.

We expect that at least 50 percent or more of the funding for reconstruction will be done through subcontracts, and those subcontracts are open to any country anywhere in the world that can competently do the work and bids on it. For example, in Afghanistan, we are building a road with the Saudis and the Japanese between Kabul, Kandahar, and Herat, and the prime contract went to Louis Berger, an American engineering and construction company, but the subcontract to actually do the construction work was a Turkish-Afghan company. So just to show you, we have evidence, not a guess or an estimate, of what we're actually doing right now. There ares no American construction companies to be found doing this work right now. It is an Afghan-Turkish company doing the work for us with American funds, as a subcontractor to the prime.

The prime contractor is responsible for understanding Federal procurement rules, Federal accounting standards, standards of the Inspector General and the General Accounting Office. We needed a prime contractors who also had security clearances. When we started these discussions earlier in January, we had to have a company that had a security clearance already, since some of the information at that point was classified. It takes a while to get a security clearance, and the decision had not been made to send troops in at that point, so we had to do this very quietly and discreetly. And so we went through the existing Federal law, and the Federal law says you can reduce the normal six-month time it takes to do a bid using the Federal contract law, you can collapse it to two months, and that's what we did, under the Federal procurement law. And under that provision, we short-circuited the six-month time delay that it normally takes to two months, because we wanted to be ready as soon as the war concludes. The prime contracts were actually bid to a list of companies that already had had some AID contracts in the past, had a security clearance, and knew these regulations and these accounting systems.

Actually, it's not a narrow group of contractors and construction -- they're the largest contractions and construction companies in the United States. Seven of them bid on the big engineering contract, but of course, there are eight other contracts that are on the website. These scopes of work, by the way, are on the website. Anybody who wants to see what's in them, in each of the different sectors, whether it be the education sector, the health sector, local government, or, in this particular case, the engineering contract, [can check our website].

We expect that we will use the subcontractors from other countries. There are several British firms, for example, that are now doing work for us in Afghanistan under the waiver that I signed for the Afghan effort. We are now using British Crown agents to do our purchasing in the Gulf, so there's a British company already working for us that was not part of that particular bid. So it is open. We will probably use a number of local contractors or subcontractors, not only under this contract, but under several other contracts, as well.

QUESTION: Nadia Tsao with the Liberty Times.

Can you give us an idea, you know, the 50 percent, how much money will go to the 50 percent? And also, you just announced that Japan pledged humanitarian aid yesterday.

ADMINISTRATOR NATSIOS: Right.

QUESTION: And could you give us the total of number of how many countries? For example, I know Taiwan also pledges, you know, 100 -- maybe $15 million to humanitarian aid. So how many countries and what's the total amount of the money that you already know that many countries pledged?

And third, the question is that the reconstruction work, is there a role for UN to play? Because it sounds, you know, it's just the US.

ADMINISTRATOR NATSIOS: You've got a number of questions.

So the first question is -- let me write them down now -- 50 percent rule --

QUESTION: And for the subcontractors you have --

ADMINISTRATOR NATSIOS: -- right. And --

QUESTION: -- and how much money --

ADMINISTRATOR NATSIOS: Right.

QUESTION: -- actually that --

ADMINISTRATOR NATSIOS: What's the second question?

QUESTION: And second question, how many countries actually already pledged --

ADMINISTRATOR NATSIOS: Countries, okay.

QUESTION: -- the humanitarian aid.

ADMINISTRATOR NATSIOS: Okay.

QUESTION: And then the amount they already pledged.

ADMINISTRATOR NATSIOS: Okay, yep.

QUESTION: And the third question is the UN's role in --

ADMINISTRATOR NATSIOS: UN's role. Okay.

QUESTION: Yes. Thank you.

ADMINISTRATOR NATSIOS: In terms of the 50 percent, the reconstruction contracts amount to, I think it's 1.5 -- 1.5 billion -- $1.9 billion, and so 50 percent of that would be around $900 million to go in subcontracts, and the reason for that is very simple. There are such large amounts of money over a short period of time, it's impossible for even the biggest company to spend that money alone without subcontractors.

In terms of the countries, I don't have a list that's complete of very country, and if I mention some countries and not others, they'll get upset with me. I can tell you at least six other countries' ambassadors have come to see me in the last three weeks. Clare Short is a friend of mine. We have -- she was here for lunch last week. We discussed what the British Government would be doing. A number of Nordic countries have indicated they'll be doing humanitarian assistance work. The Japanese Government has announced (inaudible) that the Australian Government has contributed 100,000 tons of food aid for Iraq. So there are a number of countries that have helped, and the Kuwait Government has been very generous with assistance, as well. But there are other countries that I haven't listed because we haven't got a complete list yet, so I don't want to -- that's not an inclusive list.

The third question is the role of the United Nations.

We actually gave a grant to UNOCHA, the Office for the Coordination of Humanitarian Affairs of the UN that reports to Kofi Annan, the Secretary General, led by Mr. Oshima of Japan, who is an Under Secretary General in the UN system, and I believe the grant was something like $1.5 million. We gave it to them late last year for contingency planning. So they have been doing coordination work and planning work for three months now, very quietly, with other donor aid agencies, not just with the United States, but with the Europeans, the Canadians, the Japanese, the Australians, et cetera. We expect that the United Nations will have a role. The question is what the role will be, because there is not one single model for the United Nations' involvement in the aftermath of a war or a civil war. There are many different models. In some cases, the United Nations runs the whole country, as was the case in East Timor and Cambodia 15 years ago. Other cases, it's a coordination role, as is the case with Mr. Brahimi in Afghanistan. The UN is not running the Afghan reconstruction. They are coordinating parts of it. So it depends on the model, and the debate that's going on among the member states of the United Nations is which model is the appropriate one.

QUESTION: Amal Chmouny from Al Anwar newspaper, Beirut.

ADMINISTRATOR NATSIOS: The atrocities that have been committed over the years by the Iraqi regime against the Iraqi people has meant that a very large number of very talented, very educated Iraqis have left the country, and so the diaspora is unusually large, as it was for Afghanistan. We have been, as other donor governments have been, in contact with members of that diaspora. I met with some of them months ago, quietly, just to ask them what their opinions were as to what we should be focusing our attention on.

Iraq belongs to the Iraqi people, and the Iraqi people have to be involved in the reconstruction of the country. The question is how that will be structured, and that's being discussed now. For our part, we do tend to do our work at the grassroots level, so a lot of reconstruction at the village level will involve village leaders. Women and men, older people, younger people, will be asked in community settings.

I come from New England, from Boston where we have what is called the town meeting. Any registered voter can go in and vote and decide what to do. But the rule that we work through when we work with NGOs is that the village or the neighborhood, the people who live there, have to make the decisions themselves or the project does not belong to them, it belongs to the NGO, and we don't want that. We want the projects we run in reconstruction to belong to the people who live in the neighborhood or in the village. And so they will be involved, they will be making the decisions on whether a health clinic will be restored or the school or a road or the water system. They will make the decisions on how the resources will be allocated at the local level.

And I might add, since they don't have that power now, because the regime is highly centralized and very autocratic, this is one way of beginning the democratic processes of people voting, debating, disagreeing, and discussing the future of their communities. So we believe the best way to build democracy is at the grassroots level, at the village level, which is the way the international community has done it in many countries around the world that do not have a history of democracy.

QUESTION: Hi. It's Peter Morton, Financial Post of Canada. Just to come back to the subcontracting for a sec, is it the role of the prime contractors to award all the subcontracts, or would USAID play a role in that?

ADMINISTRATOR NATSIOS: My memory is -- and I'm not an expert in the Federal procurement law -- that the prime contractor has the authority to make the awards, and the prime contractors are interested in the lowest price for the best value, and the reason for that is they make more money if they get a lower price. And so anybody that's competitive, they can meet the standards, because the scopes of work have very specific technical standards that have to be followed, whatever the area that we're working in. And so any company that's competitive that meets these standards, and that has a good low price and high quality, will get the bids; but we don't award those. Those are awarded by the contractors themselves.

I'd just tell you a story about one of the prime contractors who came into the procurement office, an American company, but of the eight people in the room, only one of them was an American citizen. The other seven were from seven other countries around the world, because many of these companies, as our companies in your countries, are now multinational in their scope, and their workforce is from everywhere in the world.

So in fact, the notion -- globalization has got a little past some of this in terms of the company may be located in one country, but the workforce who works for them comes from everywhere in the world.

QUESTION: Matt Fer from the BBC. Sorry to go on about these subcontracts.

ADMINISTRATOR NATSIOS: Sure.

QUESTION: Who will oversee whether this is done fairly, and how will you make sure that 50 percent of those contracts go to non-American companies if the decision is with the prime contractor?

ADMINISTRATOR NATSIOS: Well, one, there's no legal requirement that it be 50. It can be 60 percent, or it can be 70 percent.

QUESTION: Or 20?

ADMINISTRATOR NATSIOS: Or 20 percent. But our contracting staff, who are experts in this, who have done this for decades, say, given the amount of money that has to be spent and the capacity of these companies, and the conversations they have had with the companies that have been bidding, the general estimate is they will only be able to do about 50 percent of the work internally. They will have to subcontract the rest of it. There is a Federal procurement law as to how you do the subcontracting. We've put money in the budget for the Inspector General for USAID, who is very strict. He will probably set up an office in Iraq and oversee this, to ensure Federal law is complied with.

QUESTION: If I can ask a blunt supplementary, to the accusation that exists out there that the reconstruction of Iraq is being carved up by American companies, what would you say to that?

ADMINISTRATOR NATSIOS: Well, one, we're not the only ones who are going to be contributing money to reconstruction. There are many other countries who will be doing that, as well, and the same laws exist -- I don't want to mention the countries and embarrass them -- but they also have laws saying, in their countries, that they have to hire [their own nation’s] companies.

We've waived that law so that countries that have companies that can compete can also bid. I would urge other countries, in Europe, to also suspend their laws to allow American companies to be subcontractors, so this is genuinely competitive. This is not -- I mean, this is not unusual in terms of the way we're doing this, except that we sped up the process.

We've worked on this many years. This is not the first reconstruction effort. We've done Bosnia, we did Kosovo, we've done Afghanistan now, we did Cambodia, we did East Timor, we did -- we're doing Angola right now -- Angola is not in the news, but there's a reconstruction effort down there, too -- and we did it in Mozambique after the civil war was over.

And it is a system that works, that is fair, and that involves all of the international players and all of the companies working together in a constructive way.

QUESTION: Just one more (inaudible).

ADMINISTRATOR NATSIOS: Yes.

QUESTION: Last one. Doesn't this depend on what kind of government runs Iraq after the liberation (inaudible) --

ADMINISTRATOR NATSIOS: Not in terms of these contracts.

QUESTION: -- protectorate?

ADMINISTRATOR NATSIOS: Not in terms of these contracts, it doesn't. The perception, I think, in some countries, is that somehow the United Nations does this reconstruction work. The United Nations coordinates reconstruction. They don't actually do big construction projects. Those are done by the banks and by bilateral aid programs. The European Union, and DFID, which is the British counterpart, do their reconstruction work themselves, and the UN coordinates a lot of this, so it's not all done through actual money going to the United Nations agencies to do that, and infrastructure generally, in the past, has been something that the banks will do, but the banks require you to borrow money to do it.

This is not loan money. This is from our national treasury. It's going for the people of Iraq.

QUESTION: My name is Go Gwang Chul from the Korea Economic Daily.

You are talking about $2.5 billion of US taxpayers' money for human aid and reconstruction, but as the war continues on, I see more and more deconstruction and casualties, so it seems to me that the money might not be enough. How are you going to get more funds if you need more?

ADMINISTRATOR NATSIOS: Well, more funds can come from more budgets, but our own view is that, first, the amount of money we put in there is far beyond anything we've ever done before. The budget for Bosnia, for example, was maybe $200 million. I think our budget, the first year, for reconstruction, not for relief but just reconstruction, in Afghanistan was $300 million. This is on an order much greater.

But the second thing I want to say is, most of this money is not for war damage, because the weapon systems being used by the United States are very precise. We are targeting military facilities and facilities of the Iraqi regime, like Saddam's palaces, which happen to be nerve centers for the war effort. We are avoiding civilian infrastructure, because we are aware we're going to be involved in rebuilding it. A lot of the infrastructure for civilian services, like the water system, the sewer system, schools and hospitals, have been neglected over a period of a very long time, because the regime has used -- and this is in UN reports, this is not American propaganda; it's in the UN reports, if you read them, over a period of years -- has been spent primarily to rearm the country, even though it's surreptitiously rearming it.

So the fact is that these systems have deteriorated to a very substantial degree over 14 years.

The primary reason, according to the United Nations, for the high death rates of children under five is not from a lack of food. It's because the water system is so terrible in Iraq. People in many cities basically drink open sewer water, because the sewer treatment plants don't work. The Tigris-Euphrates River is an open sewer. They just pump the water, the sewage, in without treating it, because the sewer plants don't work, because there's been no preventive maintenance on those plants in many, many years. The water pumping stations pump water, but there's not enough chlorine, frequently, in many of the plants, according to the reports we've seen, and the actual purification systems don't work anymore because the equipment has not been replaced.

So one of the things we're going to do -- there's 250 water treatment plants in the country -- one of our first requirements is to rebuild those plants, not structurally, but the equipment in them, which we think we can do very quickly, and to provide sufficient chlorine, and that will cause the death rates among children -- which is, as I said, high -- to dramatically drop over a couple year period.

If you look at the UNICEF reports and the nutritional surveys and health surveys of Iraq, public services have suffered over a very long period of time, because the regime has not invested the money in those social services.

MR. DENIG: Okay. Thank you very much, Mr. Natsios. Thank you, ladies and gentlemen.

ADMINISTRATOR NATSIOS: Thank you very much.

Last updated: Wednesday, 28-Mar-2007 11:22:54 EDT

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