[Senate Hearing 109-21]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 109-21

    STRATEGIES FOR RESHAPING U.S. POLICY IN IRAQ AND THE MIDDLE EAST

=======================================================================

                                HEARING



                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                      ONE HUNDRED NINETH CONGRESS



                             FIRST SESSION



                               __________

                            FEBRUARY 1, 2005

                               __________



       Printed for the use of the Committee on Foreign Relations


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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

  
?

                            C O N T E N T S

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                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware...........    77
Boxer, Hon. Barbara, U.S. Senator from California................    98
Chafee, Hon. Lincoln, U.S. Senator from Rhode Island.............    96
Coleman, Hon. Norm, U.S. Senator from Minnesota..................    90
Cordesman, Anthony H., Ph.D., Arleigh A. Burke Fellow in 
  Strategy, Center for Strategic and International Studies.......     3
    Prepared statement...........................................     8
    Iraq: Strategy Versus Metrics: The Case for Information-Based 
      Policy.....................................................    12
    ``Playing the Course:'' A Strategy for Reshaping U.S. Policy 
      in Iraq and the Middle East................................    18
Dodd, Hon. Christopher J., U.S. Senator from Connecticut.........    87
    Prepared statement...........................................    89
Feingold, Hon. Russell D., U.S. Senator from Wisconsin...........    93
    Prepared statement...........................................    95
Hagel, Hon. Chuck, U.S. Senator from Nebraska....................    84
Khalil, Peter, Visiting Fellow, Saban Center for the Middle East 
  Policy, the Brookings Institution..............................    69
    Prepared statement...........................................    73
Lugar, Hon. Richard G., U.S. Senator from Indiana................     1
Martinez, Hon. Mel, U.S. Senator from Florida....................   100
Nelson, Hon. Bill, U.S. Senator from Florida.....................   103
Newbold, Gregory S., Lieutenant General, U.S. Marine Corps 
  (Ret.), Managing Director, Globesecnine........................    60
    Prepared statement...........................................    65
Voinovich, Hon. George, U.S. Senator from Ohio, prepared 
  statement......................................................    92
                                 ------                                

              Additional Material Submitted for the Record

Natsios, Andrew S., Administrator, USAID:
    Letter to Senator Lugar......................................   118
    Enclosure to letter: ``USAID's Iraq Reconstruction Program''.   118

                                 (iii)

  

 
    STRATEGIES FOR RESHAPING U.S. POLICY IN IRAQ AND THE MIDDLE EAST

                              ----------                              


                       TUESDAY, FEBRUARY 1, 2005

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:03 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Richard G. 
Lugar presiding.
    Present: Senators Lugar, Hagel, Chafee, Coleman, Voinovich, 
Sununu, Martinez, Biden, Dodd, Feingold, Boxer, Bill Nelson, 
and Obama.

 OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM 
                            INDIANA

    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order. The Committee on Foreign 
Relations meets for our first hearing on Iraq in the 109th 
Congress. In the last Congress we held 23 hearings on Iraq, a 
level of scrutiny demanded by the critical impact that the 
progress in Iraq has on United States national security.
    The remarkable elections held in Iraq over the weekend 
demonstrated the courage and the commitment of the Iraqi 
people. Despite threats and acts of violence, reports indicate 
that millions of Iraqis voted. The results will not be 
certified until February 15, but there is little doubt that the 
election provides a basis for moving forward with Iraqi self-
government.
    Most importantly, the election can strengthen the 
legitimacy of Iraqi officials. The impact of having properly 
elected leaders in Iraq for the first time could be 
substantial. Insurgents may find it tougher to sell their 
propaganda that the government has no legitimacy and the United 
States is merely an occupying power. In addition, parties and 
groups in Iraq that participate in the government will have a 
growing stake in its success.
    The election, however, does not guarantee that the path to 
democracy will be an easy one. The security situation in the 
Sunni areas of Iraq will remain extremely tense. Protecting the 
newly elected 275-member Transitional National Assembly must be 
a security priority. Methods also must be found to include 
Sunnis in the government without being unfair to the winners of 
the election.
    The Iraq election will be viewed by some as the first step 
in the United States exit strategy, but we should recognize how 
much work is left to be done. The coalition must assign 
priority to training Iraqi security forces. Ultimately, our 
success at training Iraqis over time will determine how long 
United States forces will need to be in Iraq. We must be 
prepared to provide stability while Iraqi troops and police 
develop their capabilities, particularly during this time of 
Constitution-building.
    We must also be prepared for the Iraqi Government and the 
Iraqi Constitution to develop in directions that are sometimes 
not in perfect harmony with our expectations. The election 
moves the Iraqis a step closer to achieving democracy, but that 
also means that they will be making more decisions about their 
future. We anticipate and hope that the new government will 
work closely with the United States and embrace democratic, 
pluralistic principles. Inevitably, however, it will make some 
decisions that we do not like.
    Our Embassy in Iraq must work closely with the Iraqi 
Government to establish a positive counseling relationship. We 
also must undertake a diplomatic offensive in the Middle East, 
Europe, and elsewhere to encourage constructive relationships 
between the Iraqi Government and other nations.
    The President is reportedly seeking an additional $80 
billion for support of operations in Iraq and Afghanistan. 
Congress should be prepared to take up this proposal when it 
arrives and debate it soberly. We do not expect the request to 
include more infrastructure reconstruction funds, but we do 
expect it will include money to build and to operate the 
Embassy in Baghdad and to meet the urgent needs of training and 
equipping Iraqi security forces. Passage of such a bill would 
be a strong signal to the world and to Iraq about United States 
staying power.
    We are pleased especially this morning to welcome back to 
the committee Dr. Anthony Cordesman, holder of the Arleigh A. 
Burke Chair for Strategy at the Center for Strategic and 
International Studies. Dr. Cordesman has testified before this 
committee on many occasions. We are grateful we can draw on his 
knowledge once more today.
    We also welcome retired Lt. Gen. Gregory Newbold, Managing 
Director of GlobeSecNine and Executive Director of the Potomac 
Institute of Policy Studies. Before retirement, General Newbold 
was the Director for Operations on the Joint Staff.
    Finally, we welcome Mr. Peter Khalil, who was the Director 
of National Security Policy for the Coalition Provisional 
Authority in Iraq from August 2003 to May 2004. He is now a 
Visiting Fellow at the Saban Center for Middle East Policy at 
the Brookings Institution.
    Today the committee will use Dr. Cordesman's exceptional 
paper, ``Playing the Course: A Strategy for Reshaping U.S. 
Policy in Iraq and the Middle East,'' to provide a framework 
for our discussion of policy issues in Iraq. Following Dr. 
Cordesman's testimony, the committee will ask that General 
Newbold and Mr. Khalil provide commentary and remarks on Dr. 
Cordesman's conclusions and prescriptions.
    The committee has taken no position on the contents of Dr. 
Cordesman's paper. Rather, it is our hope that by using this 
format, our members can have a more productive and focused 
dialogue with our witnesses.
    When the distinguished ranking member, Senator Biden, 
arrives, we will call upon him for his opening statement, but 
for the moment we'll proceed with the testimony. Dr. Cordesman, 
would you please proceed.

  STATEMENT OF ANTHONY H. CORDESMAN, PH.D., ARLEIGH A. BURKE 
  FELLOW IN STRATEGY, CENTER FOR STRATEGIC AND INTERNATIONAL 
                            STUDIES

    Dr. Cordesman. Thank you very much, Senator, and let me 
thank the committee for the opportunity to testify. I think it 
is clear that our strategy toward Iraq is today our most 
important foreign policy issue and I hope the committee will 
forgive me if I take just a few extra minutes to outline some 
of the views in ``Playing the Course,'' which I do request be 
included in the record.
    In that paper, I pointed out that the odds of success in 
Iraq are roughly even if we pursue the right policies and that 
the definition of success is going to be a pluralistic Iraqi 
Government that can work its way through years of difficulty 
without direct American support and continuing large American 
military presence. But I also pointed out that, while the 
United States must be prepared for failure in Iraq, exiting is 
a tactic and it is not a strategy. It can eliminate the costs 
of the war, it can eliminate casualties, but it will inevitably 
create at least as many problems as it solves, unless we exit 
under conditions that do define success. If we leave a legacy 
of political failure, chaos, or civil conflict in Iraq, that is 
not a strategy.
    Regardless of what we do, we will need to reassess and 
rebuild our entire position in the Middle East and Southwest 
Asia, restructure our security policy and regional posture in 
the area, deal with problems like energy and the problems of a 
nuclear Iran.
    Let me also say that, while cut-and-run may ultimately be a 
necessity, it too is not a strategy. It is a massive defeat. 
That is why I am going to argue that we really do need to do 
our best to salvage the situation in Iraq. We should not stay 
at any cost. We should not abandon Iraq as long as there is any 
hope of success.
    I think, though, to understand what we can and cannot do in 
Iraq we have to begin by admitting that we have to build on the 
climate left by past mistakes, and I see nine major mistakes 
that we now have to deal with. One is going to war on the basis 
of the wrong intelligence and on the basis of a rationale we 
have not been able to defend to the world or to the Iraqis.
    The second is to bypass the inter-agency process during the 
planning and preparation for the war, which has left a legacy 
of difficulty in terms of intelligence, the role of State 
Department, and civil-military relations.
    The third is that we fought the war without any meaningful 
plan for stability operations and nation-building and we 
allowed political and economic chaos to take place as we 
advanced and in the immediate aftermath of Saddam's fall.
    Fourth, we did not prepare our military forces for civil-
military missions, to develop human intelligence capabilities 
and deal with terrorism and insurgency, to play the role of 
occupier in a nation with an alien religion, language, and 
culture. As a result, we have forced our military to adapt 
under pressure and in the face of a growing enemy.
    For a year we assumed that a proconsul in the form of CPA 
could govern Iraq and plan its future rather than Iraqis, and 
we staffed much of the CPA with inexperienced ideologues, many 
of which spent virtually all of their time in a secure enclave 
and on 3- to 6-month tours. For a year we developed idealized 
plans for political reform that did not survive engagement with 
reality, and we focused far too much on national elections and 
drafting a constitution and not on effective governance. For a 
year we had military leadership that would not work closely 
with the leadership of the CPA, and we lived in a state of 
denial about the level of popular hostility we faced and a 
growing insurgency. For a year we made no effort to create 
effective military, security, and police forces that could 
stand on their own in dealing with the growing insurgency, 
terrorism, and lawlessness. Instead, we saw such forces largely 
as a potential threat to our idealized democracy and felt our 
forces could easily defeat an insurgency of some 5 to 6,000 
former regime loyalists.
    Finally, for a year we tried to deal with an Iraqi economy 
that was a command kleptocracy as if it could quickly and 
easily be converted to a modern market-driven economy. Again, 
we sent in far too many advisers with no real area expertise 
and with far too little continuity. We created a long-term aid 
plan without a meaningful understanding or survey of the 
economic problems Iraq faced, without an understanding of 
Iraq's immediate needs and expectations, and without the talent 
in either the United States Government or the contract 
community to implement such a plan or to develop the kinds of 
plans and programs that should have been focused on the short- 
and medium-term requirement that Iraq actually needed.
    Many of the problems we face could have been avoided and I 
think it is to the credit of the people in Iraq today that the 
past does not have to be the prologue to the future. We have 
moved Iraq policy beyond the policy cluster in the Pentagon, we 
have weakened the hold of neoconservatives and we have begun to 
implement a serious inter-agency approach. We now have an 
ambassador and a general that can work together and function as 
a civil-military team. We have given sovereignty to the Iraqis 
and let them take over the political process. We have begun to 
accept the true complexity of the political problems in Iraq 
and the level of popular hostility and tension we face.
    We have reorganized the U.S. and coalition military posture 
to fight a serious counterinsurgency and counterterrorist war. 
In fact, we have begun to rethink our entire process of force 
transformation to focus on these threats. We have begun to 
train Iraqi military, security, and police forces for the 
threat they actually face and not for a secure, stable, and 
democratic world.
    We have, at least partially, understood that our initial 
aid plans were unrealistic and that priority has to be given to 
short- and medium-term stability and to using dollars as a 
substitute for bullets. We have also begun to understand that 
USAID in Washington is incompetent in dealing with the 
challenge it faces, that outside contractors cannot manage an 
effective aid program in Iraq, and that dollars need to go to 
Iraqis and not outsiders.
    We need to give the Americans now serving in Iraq, and 
especially the civilians and military in the field, credit for 
these changes. But more does need to be done. When we talk 
about this, one problem we face is the lack of meaningful 
reporting coming out of the U.S. Government on the nature of 
what is happening in the military program, in the insurgency, 
and in the economic aid program.
    Mr. Chairman, I have put a short paper together on the 
metrics that should be provided and I ask again that this be 
included in the record.
    The Chairman. It will be included in the record.
    Dr. Cordesman. Thank you, sir.
    I do believe, however, that there are clearly five steps we 
do need to take and that these steps could increase our chances 
of success well beyond 50-50 during the coming year. First, we 
need to do everything we can to demonstrate the independence of 
the emerging Iraqi political structure, while encouraging 
inclusiveness and some form of federalism and while moving 
beyond a focus on elections and the constitution and providing 
the full range of support for governance that is needed in the 
field and outside the Green Zone.
    We cannot measure legitimacy in terms of elections. Iraqis 
do not. They measure it in terms of the ability to govern, to 
give all Iraqis a fair share of wealth and power, to provide 
personal security, employment, and economic opportunity in 
terms of education and health service and basic utilities. They 
also measure it in terms of the ability of their government to 
disagree with the United States and the coalition, to act 
independently, and to take over the kind of roles that an 
independent government must perform. They look for our 
cooperation in terms of international institutions as well as 
within the process of the coalition.
    Our fascination with elections needs to be matched with a 
focus on aiding governance, while we steadily phase down high-
level intervention and pressure on the Iraqi Government. Every 
other thing we do will fail if the Iraqis cannot stand alone 
and visibly do so. We cannot save a government from itself and 
we will destroy it if we try to do so.
    Second, we need a clear plan to create the kind of 
independent Iraqi military, security, and police forces that 
can replace United States and coalition forces except when they 
are needed in an advisory role. We do not have 127,000 useful 
or meaningful men in today's forces. We have somewhere around 7 
to 11,000 that are beginning to have the necessary training and 
some of the equipment to deal with an active counterinsurgency 
campaign and the threat they face. We have something like two 
to three battalions today that can actually stand alone in the 
face of a serious insurgent attack. The first battalion with 
the kind of armor necessary to survive serious attack went into 
service on the 15th of January and its first actual appearance 
was during the course of the elections.
    I prepared a detailed analysis of what has gone wrong and 
right with this effort and if I may impose on the committee I 
again ask that it be included in the record.
    The Chairman. It will be included in the record.
    Dr. Cordesman. Thank you, sir.
    The key point in this analysis, however, is simple: Once 
again, we will fail in Iraq unless we develop a convincing plan 
to create Iraqi forces with the leadership, experience, 
equipment, and facilities they need to secure their country 
without us and actually implement it. This is the sine qua non 
for American action and there is no more devastating critique 
of the ongoing failures in United States policy than the lack 
of such a plan in a public forum if one exists at all; a plan 
that will show the Iraqi people, the region, the Congress, and 
the American people that we can actually achieve a meaningful 
form of victory in Iraq.
    Let me say here too that equipment and facilities are not a 
casual issue and they are a major problem in all of the public 
reporting on our progress to date. We do not see any indication 
that Iraqis are being given any of the equipment we see as 
vital to actually conduct operations in high threat areas. In 
fact, as an American I often find it contemptible that we so 
often criticize Iraqi forces for their behavior when they send 
them out to isolated facilities that cannot be protected or in 
vehicles without armor or protection when we talk about up-
armoring HMMV's or replacing them with M-113's.
    I find it equally strange that we do not report on Iraqi 
casualties and that we do not treat their losses as being 
important in the way we treat ours. If I may ask an obvious 
question, would any Senator or Congressman send their son or 
daughter out with the vehicles, with the combat equipment, and 
into the facilities where we send Iraqis? Would they expect 
them to stay, to defend and operate under these conditions?
    Third, we need to complete the reorganization of our aid 
effort, to focus on bringing short- and near-term stability in 
dealing with the counterinsurgency campaign. Let me make it 
clear, I have nothing but respect for the USAID and contract 
personnel in the field, who have actually implemented useful 
projects and often done so at the risk of their lives. I also 
appreciate that the almost mindless focus on long-term aid 
efforts that shaped our initial aid request has been replaced 
with substantial reprogramming. However, anyone who looks at 
the USAID web page sees nothing but a long list of plans and 
project efforts that are not tied to any meaningful measures of 
effectiveness or to any defendable requirements.
    USAID seems to live in a Panglossian fantasy world where no 
problems and challenges really exist and no public strategy 
plans and metrics of success are needed. We need economic 
stability for a nation of nearly 26 million people with an 
infrastructure better suited to 16 to 18 million. We need jobs 
for a 7.8-million-person workforce that now has at least 30 to 
40 percent unemployment. What we have is an aid program based 
on American decisions about what is necessary, run largely by 
foreign contractors, with far too much money going to non-
Iraqis, much of it to protect projects that end up being 
sabotaged or dysfunctional.
    The good news is we have only disbursed about $2.5 billion 
out of the $18.4 billion in fiscal 2004 aid. The bad news is 
that money desperately needed to be spent. What we have seen is 
an aid program that hires all of 121,000 Iraqis out of a labor 
force of 7.8 million and where the total of Iraqis hired under 
the aid program has recently been dropping by about 9,000 
Iraqis a week.
    I would urge this committee to demand an immediate 
appearance by the director of USAID to explain the details of 
our aid program, to provide a clear plan for transferring funds 
and responsibility to the Iraqi government, to show how our 
projects meet valid requirements, and to prove that USAID's 
leadership is competent. Unless he can meet every such test, 
that leadership should be changed and the aid program should 
immediately be transferred to more competent hands.
    Fourth, we need a clear declaration of our goals and 
principles for Iraq. We need clear and unambiguous statements 
from the President and Secretary of State that refute the key 
conspiracy theories that poison our relations and undercut the 
legitimacy of the Iraqi government. To be specific, we need a 
clear statement from the President that we will leave the 
moment the Iraqi government asks us to, that we will phase our 
forces down as soon as Iraq forces are ready to do the job, 
that we will not maintain permanent military bases, that we 
will not exploit Iraqi oil wealth or the economy, and that we 
will shift our aid funds to Iraq control and to benefit Iraqis, 
insisting only that the uses be validated and there be no 
corruption or waste.
    Fifth, we need to have a regional strategy to support what 
we do in Iraq. We must give settling the Arab-Israeli conflict 
top priority and make our efforts fully visible. We must act 
through the Quartet whenever we can. In spite of our 
intervention in Iraq, survey after survey shows there is no 
single issue which causes more anger toward the United States 
than the Israeli-Palestinian conflict or does more to aid 
extremists and terrorists like bin Laden than the lack of 
visible high-level United States efforts to revitalize the 
peace process and the perception that the United States fights 
terrorism, but does nothing to halt settlements and occupation.
    I do not for a moment advocate we halt any aspect of our 
struggle against terrorism or do anything to compromise the 
security of Israel. But we can only adopt the right policies 
toward Iraq if we adopt the right policies toward the Arab-
Israel conflict.
    Finally, Mr. Chairman, we also need to have a strategy that 
deals with the gulf region and with the Middle East that goes 
beyond rhetoric about democracy and reform. Far too much of our 
recent rhetoric has actually been used by our opponents to 
argue that we seek to overthrow governments in the region or to 
impose our own leadership. What we need now are practical, 
country by country efforts to quietly and steadily support the 
reformers in those countries, not noisy outside exiles. We need 
to press for achievable evolutionary progress steadily and 
without pause. We need to give human rights, the rule of law, 
economic reform, and demographic reform the same priority as 
democracy. And we need to recognize that democracy cannot work 
unless there are meaningful political parties and preparation 
for democracy to work.
    Thank you very much, Mr. Chairman.
    [The prepared statement and related material of Dr. 
Cordesman follows:]

Prepared Statement of Anthony H. Cordesman, Arleigh A. Burke Fellow in 
 Strategy, Center for Strategic and International Studies, Washington, 
                                   DC

    Several months ago, I laid out the basic elements of a strategy for 
dealing with Iraq in an analysis which I called ``Playing the 
Course''--a paper that I now request be placed in the record of this 
hearing
    In doing so, I pointed out that the odds of success in Iraq are at 
best even--if one accepts the fact that in the real world the only 
definition of success we can actually hope to achieve is some form of 
pluralistic Iraqi government that can work its way through years of 
political and economic difficulty without direct American military 
support.

                       AN EXIT IS NOT A STRATEGY

    I also pointed out that the U.S. must be prepared for failure in 
Iraq, but that exiting is a tactic and not a strategy. Exiting Iraq 
would eliminate U.S. casualties and the cost of war fighting, but 
create as many or more problems as it solves.
    Leaving a legacy of political failure, chaos, or civil conflict in 
Iraq is not a strategy.
    A strategy means that we must reassess and rebuild our entire 
position in the Middle East and Southwest Asia, restructure our 
security policy and regional posture in an area with some 60% of the 
world's proven oil reserves, deal with what Islamist extremism will 
claim as a massive victory, cope with a nuclear Iran, and find some way 
to reestablish credibility in the world.
    ``Cut and run'' may become a necessity, but it can never be a 
strategy; only a massive defeat.
    This is why I have argued that we must do our best to salvage the 
situation in Iraq, and to correct our past mistakes. We should not do 
this at any cost; but we should not abandon Iraq as long as there is 
any serious hope of success.

              FACING THE CONSEQUENCES OF OUR OWN MISTAKES

    We also should recognize that we are where we are today as much 
because of nearly two years of avoidable failures in U.S. policy and 
leadership as because of the inherent difficulties in helping Iraq 
become a stable and successful nation.
    In summary, we have made nine major mistakes:

   We went to war on the basis of the wrong intelligence and 
        with a rationale we could not defend to the world or the 
        Iraqis.
   We bypassed the Interagency process. We ignored warning 
        after warning by U.S. intelligence experts, State Department 
        officials, military officers with experience in the region, and 
        outside experts that we would not be greeted as liberators 
        fighting a just war, but by a highly nationalistic and divided 
        people who did not want outsiders and occupiers to determine 
        their destiny.
   We fought the war to remove Saddam from power without any 
        meaningful plan for stability operations and nation building. 
        We allowed political and economic chaos to take place as we 
        advanced and in the immediate aftermath of Saddam's fall.
   We did not prepare our military forces for civil-military 
        missions, to deal with terrorism and insurgency, to play the 
        role of occupier in a nation with an alien religion, language 
        and culture, or have the mix of HUMINT and weapons they needed 
        for the ``war after the war.'' As a result, we forced our 
        military to slowly adapt under pressure and in the face of a 
        growing enemy.
   For a year, we assumed that a proconsul in the form of the 
        CPA could govern Iraq and plan its future, rather than Iraqis. 
        We staffed much of the CPA with inexperienced political 
        appointees and ideologues that spent virtually all of their 
        time in a secure enclave and only served for brief three to six 
        month tours.
   For a year, we developed idealized plans for political 
        reform that did not survive engagement with reality. We focused 
        far too much on national elections and drafting a constitution 
        without having a similar focus on effective governance at the 
        national, regional, and local levels.
   For a year, we had military leadership in Iraq that would 
        not work closely with the leadership of the CPA, and which 
        lived in a state of denial about the level of popular hostility 
        we faced and a steadily growing insurgency.
   For a year, we made no serious attempt to create Iraqi 
        military, security, and police forces that could stand on their 
        own in dealing with a growing insurgency, terrorism, and 
        lawlessness. Instead, we saw such Iraq forces largely as a 
        potential threat to our idealized democracy and felt our forces 
        could easily defeat an insurgency of 5,000-6,000 former regime 
        loyalists.
   For a year, we tried to deal with an Iraqi economy that was 
        a command kleptocracy as if it could be quickly and easily 
        converted to a modern market-driven economy. We sent in CPA 
        advisors with no real experience and no continuity. We created 
        a ridiculous long-term aid plan without a meaningful 
        understanding or survey of the economic problems Iraq faced, an 
        understanding of Iraqi needs and expectations, and the talent 
        in either the U.S. government or the contract community to 
        implement such a plan or develop the kind of plans and programs 
        focused on short and medium-term requirements that Iraq 
        actually needed.

          THE PAST DOES NOT HAVE TO BE PROLOGUE TO THE FUTURE

    This past does not have to be a prologue to the future. During 
2004, we began to correct many of our past mistakes.

   We have moved Iraqi policy beyond the disastrous policy 
        cluster in the Pentagon, weakened the hold of failed 
        neoconservatives, and begun to implement a serious Interagency 
        approach.
   We have an ambassador and a commander that can work 
        together, and much more of a true civil-military team. We still 
        lack the civilian elements that can support nation building in 
        high-threat areas, but the U.S. military has found ways to 
        partially compensate.
   We have given sovereignty to the Iraqis and let them take 
        over the political process.
   We have gradually accepted the true complexity of the 
        political problems in Iraq, the level of popular hostility we 
        and our forces face, and the seriousness of the insurgent 
        threat.
   We have reorganized the U.S. and Coalition military posture 
        in Iraq to fight a serious counterinsurgency and 
        counterterrorist war, and we have begun to rethink our entire 
        process of force transformation to shift from a Cold War focus 
        on advanced technology to fight conventional forces to one that 
        can deal with the very different asymmetric, political, and 
        ideological threats we actually face.
   We have begun to train Iraqi military, security, and police 
        forces for the threat they actually face, and not for a perfect 
        secure, stable, and democratic world.
   We have partially understood that our aid plans were totally 
        unrealistic, and that priority must be given to short and 
        medium term stability and to using dollars as a substitute and 
        supplement to bullets. We have at least begun to understand 
        that USAID in Washington cannot deal with the challenge it 
        faces, that outside contractors cannot manage an effective aid 
        program in Iraq, and that dollars need to go to Iraqis and not 
        outsiders.

    We need to give the Americans now in Iraq--and especially the 
civilians and military actually in the field outside the Green Zone--
full credit for these changes. They have not stood idly by, failed to 
adapt, or failed to challenge the many failures in leadership they 
received from Washington.
    America's ``neoconservatives'' may be an unmitigated national 
disaster in shaping policy towards Iraq, and in virtually every other 
aspect of foreign policy they have managed to affect. We have seen, 
however, that realists, true area experts, and adaptive military 
professionals can produce far better answers and have already begun to 
compensate for many of our past mistakes.

                           WHAT MUST BE DONE

    The question now is what must be done to reinforce the steps we 
have already taken.
    I should stress that my proposed answers have had to be formulated 
in a climate where there is remarkably little realistic U.S. government 
reporting of the metrics necessary to understand the true nature of the 
insurgency.
    We have little meaningful data on the results of our efforts to 
create effective Iraqi forces, the economic problems Iraq faces, and 
the actual impact of our aid. We have substituted self-serving polls to 
justify our positions rather than to seriously and objectively poll 
Iraqi perceptions.
    I have prepared a short paper on what needs to be done to improve 
the quality of the reporting to the American people and the Congress, 
and again, I request that it be included in the record.
    Yet, I believe that enough data are available to show that there 
are five steps that might well increase our chances of success well 
beyond the 50-50 level, and that clearly need to be taken immediately 
if we are to move towards success during the coming year:

 We must do everything we can to demonstrate the independence 
    of the emerging Iraqi political structure while encouraging 
    inclusiveness and some form of federalism, and aiding in the 
    process of governance.
    Our fascination with elections needs to be matched with a practical 
focus on aiding governance while we steadily phase down any high level 
intervention or pressure on the Iraqi government.
    Iraqis do not measure legitimacy primarily in terms of elections. 
They measure it in terms of the actual ability to govern, to give all 
Iraqis a fair share of wealth and power, to provide personal security, 
to provide employment and economic opportunity, to furnish education 
and health services, and to provide water, electricity and sewers.
    They also measure legitimacy in terms of the ability of an Iraqi 
government to implement independent policies, to disagree with the U.S. 
and outside powers, and visibly take decisions without anyone looking 
over the Iraqi government's shoulder.
    We cannot cease to advise, but we must cease to impose. Where 
outside support is needed, it also will always be better if it comes 
from the U.N., the British, or some broader international effort and 
not from unilateral action by the U.S.
    Every other thing we do will fail if the Iraqis cannot stand alone 
and visibly do so. We cannot save a government from itself, and we will 
destroy it if we try to do so.

 We need a clear plan to create the kind of independent Iraqi 
    military, security, and police forces that can replace the U.S. and 
    Coalition forces except when they are needed in an advisory role.
    We need to stop lying to the Iraqis, the American people, and the 
world about our efforts to create Iraqi forces.
    We do not have 127,000 useful or meaningful men in these forces of 
the kind needed to fight an aggressive, experienced, and well-armed 
threat. We have somewhere around 7-11,000 that are beginning to have 
the training and some of the equipment necessary to directly engage 
insurgent forces. We have about two to three battalions that can 
honestly stand alone in the face of serious insurgent attack, and the 
first battalion with the armor necessary to survive went into service 
in mid-January.
    I have prepared a detailed analysis of what has gone wrong and 
right with this effort, and again, I ask that it be included in the 
record. The key point of this analysis, however, is simple: Everything 
we do in Iraq will fail unless we develop a convincing plan to create 
Iraqi forces with the leadership, experience, equipment, and facilities 
they need to secure their country without us and actually implement it.
    Creating effective Iraqi forces to replace the Coalition forces is 
the sine qua non for American action. There is no more devastating 
critique of the ongoing failures in U.S. policy than the lack of such a 
plan in public form--if one exists at all. Furthermore, it must be a 
plan that shows the Iraqi people, the region, and the Congress and 
American people that we can achieve a meaningful form of victory in 
Iraq.
    Equipment and facilities are not a casual issue. Nothing we have 
done to date has begun to be adequate. In fact, as an American, I find 
it contemptible that we so often criticize Iraqi forces for their 
behavior when we send them out to facilities that cannot be protected 
in unprotected vehicles that no American would willingly use with 
weapons inferior to their enemies. We then refuse to accurately report 
Iraqi casualties along with our own, treating their losses as less 
significant than ours.
    Would any Senator or Congressman send their son or daughter out 
under these conditions if they were Iraqi? Would any member of Congress 
expect their son or daughter to stand and die without purpose?
    The time has come for the Administration to explain exactly how our 
current plans will meet the need for strong and independent Iraqi 
forces, and when Iraqi forces will be given the equipment, facilities, 
and capabilities they really need to defeat the insurgents on their 
own.

 We need to complete the reorganization of our aid effort to 
    focus on bringing short- and near-term stability and to support the 
    counterinsurgency campaign, and seriously consider replacing 
    USAID's leadership of the Iraq aid effort.
    Politics, governance, and security are critical, but so are 
economics. We need a program to meet Iraq's immediate economic needs, 
to help bring security, and that is run and implemented by Iraqis in 
ways that provide virtually all of the money to Iraqis.
    Let me make it clear that I have nothing but respect for those 
USAID and contract personnel in the field in Iraq who have actually 
implemented useful projects, and done so at the risk of their lives. 
Many have become combatant ``noncombatants'' in a world where armed 
peacekeeping, nation building, and humanitarian intervention have 
become all too common.
    I also appreciate the fact that the almost mindless focus on long-
term aid efforts that shaped our initial aid requests has been replaced 
with substantial reprogramming for short-term projects that meet Iraqi 
needs, give the money to Iraqis, bring stability and support security 
efforts.
    Anyone who looks at the USAID web page, however, sees nothing but a 
long list of plans and project efforts that are not tied to measures of 
effectiveness or defendable requirements. USAID in Washington seems to 
live in a Panglossian fantasy world where no problems and challenges 
really exist and no public strategy, plans, and metrics of success are 
needed.
    We need economic stability for a nation of nearly 26 million people 
whose overall infrastructure is better suited to 16-18 million. We need 
jobs for a 7.8-million-person Iraqi work force that now has 30-40% 
unemployment. What we still have is an aid program based on American 
decisions about what is necessary run largely by foreign contractors 
with far too much money going to non-Iraqis--much simply to protect 
projects that end up being sabotaged or dysfunctional.
    The good news is that we have so far only disbursed $2.5 billion 
out of $18.4 billion in FY2004 aid. The bad news is that the money is 
desperately needed in Iraq, and that our projects only hire around 
121,000 workers out of a work force of 7.8 million and the total has 
recently dropped by 8,000-10,000 a week.
    I would urge this Committee to demand an immediate appearance by 
the Director of USAID to explain the details of our aid program to 
Iraq, to provide a clear plan for transferring the funds and 
responsibility to the Iraqi government, to show we actually know how 
well our projects met valid requirements, and prove that USAID's 
leadership is competent.
    If he cannot answer these questions to the Committee's 
satisfaction, the aid program in Iraq should immediately be transferred 
to different hands.

 We need a clear declaration of our goals and principles. We do 
    not need declarations of American values or general good 
    intentions.
    We need clear and unambiguous statements from the President and 
Secretary of State that refute the key conspiracy theories that poison 
our relations and undercut the legitimacy of the Iraqi government.
    To be specific, we need a clear statement from the President that 
we will leave the moment the Iraqi government asks us to; that we will 
phase down our forces as soon as Iraqi forces are ready to do the job; 
that we will not maintain any permanent military bases; that we will 
not exploit Iraqi oil wealth or economy in any way; and that we are 
shifting our aid funds to Iraqi control and to benefit Iraqis--
insisting only that the uses be validated and there be no corruption 
and waste.
    These are obvious points, but we have either made them poorly, in 
passing, or at too low a level to be meaningful.

 Finally, we must give settling the Arab-Israeli conflict top 
    priority, make our efforts fully visible, and seek to act through 
    the Quartet of the U.S., EU, U.N., and Russia wherever possible.
    In spite of our intervention in Iraq, no single issue creates more 
anger and hostility towards the U.S., or does more to aid extremists 
and terrorists like bin Laden, than the lack of visible, high-level 
U.S. efforts to revitalize the peace process and the perception that 
the U.S. fights terrorism but does nothing to halt settlements and 
``occupation.''
    We must not halt our struggle against terrorism, or do anything to 
compromise the security of Israel. We can only establish credibility in 
Iraq, the Arab world, and Islamic world, however, if we both adopt the 
right polices towards Iraq and towards the Arab-Israeli conflict, and 
if we show the same balance in our dealings with Israel and the 
Palestinians as we did at Camp David and Tabah.

                        PLANNING FOR WITHDRAWAL

    Let me conclude by saying that neither the positive actions we have 
taken during 2004, nor the proposals I have just made can guarantee 
success. We are beginning late and we have wasted precious time we did 
not have. Success was always uncertain, and the idea Iraq would 
suddenly emerge as a success that would transform the Middle East was 
always a fantasy that did little more than prove just how decoupled 
from reality America's ``neoconservatives'' could be.
    We may well have to leave Iraq without achieving the limited 
definition of success I gave at the beginning of this testimony. If an 
elected Iraqi government asks us to leave, we must do so as quickly and 
with as much integrity as possible. The same is true if we are asked to 
compromise our military effectiveness or the integrity of our aid 
process.
    Failure is an option, and will scarcely be the only time the U.S. 
has faced defeat.
    Abandonment, however, is not an option. If we are forced to leave 
Iraq, we should not do so in bitterness or in anger. We should be 
prepared to offer aid and assistance. We should make it clear that we 
will do what we can regardless of the circumstances. As Vietnam and 
China have shown, history endures long beyond anger and frustration, 
and so do our vital strategic interests.
    In any case, even under the best conditions, we must leave in the 
next two to three years, and as soon as Iraqi forces can replace us. 
This is not a choice. Being an advisor and a friend is both possible 
and desirable. However, no policy in Iraq, this region, or the world 
can succeed where the U.S. seeks to keep bases or remains an 
``occupier.''
    We need to prepare for this contingency now, and the key to that 
preparation is two fold:
   First, it is to deal with the Israeli-Palestinian conflict 
        in ways that can ease the anger against us in the Arab and 
        Islamic worlds, and ultimately give Israel true security.
   Second, it is to rebuild and strengthen our relations with 
        the Southern Gulf states and our other allies in the Arab 
        world.
    This second key to success is the subject for another hearing, but 
that we need to act now to make it clear that we will ensure the 
security of our Southern Gulf allies in every way we can regardless of 
what happens in Iraq. We will not withdraw; we will not leave them 
without protection against a nuclear Iran; and we fully understand how 
vital they are at a time when 40% of all the world's oil exports pass 
daily through the Strait of Hormuz and our Department of Energy 
projects that that percentage will raise to nearly 60% by 2025.
    Finally, it would be to our vast benefit if the Administration and 
the Congress government could be far more cautious about talking about 
political reform and democracy in ways our enemies use to say we seek 
to overthrow governments in the region and impose our own leaders. What 
we need are practical country-by-country efforts to quietly and 
steadily support the reformers actually in those countries--not noisy 
outside exiles.
    We need to press for achievable evolutionary progress. We need to 
give human rights, the rule of law, economic reform, and demographic 
reform at least the same priority as democracy, and we need to 
recognize that democracy cannot work without meaningful political 
parties and preparation.
    To be blunt, we need a lot less lofty rhetoric, and a lot more 
pragmatic action. We need country-by-country strategies and plans that 
move progressively towards balanced and stable reform. We need country 
teams in each Embassy that can work with both friendly governments and 
local reformers on a quiet and steady evolutionary basis. We need to 
work with regional experts and media, our allies, and international 
institutions.
    We don't need slogans; we need meaningful action.
                                 ______
                                 

  Iraq: Strategy Versus Metrics: The Case for Information-Based Policy

    It is as easy to propose a strategy for Iraq as it is easy to have 
a strong opinion. The problem is to substantiate any such strategy with 
something approaching facts. At this point, ``experts'' are proposing 
everything from quick withdrawal to staying the course regardless of 
cost. The practical reality, however, is that ``experts'' must rely on 
media reports; unclassified, public relations-oriented government data; 
or sheer seat of the pants guesswork.

                1. A FLOOD OF OPINION; A DROUGHT OF FACT

    No one who served during Vietnam can fail to notice that there has 
been a polarization of the information people do choose to use out of 
the limited information available. Those who oppose the war and 
continued intervention choose every negative press report convenient to 
their case. The supporters of the war ``mirror image'' the opponents by 
choosing the favorable data.
    The U.S. government has responded by suppressing past reporting 
that has proved to be embarrassing, and by avoiding reporting 
information that might be negative and ``spinning'' data. This bias in 
official reporting is compounded by operational problems. Streams of 
individual data requests hit overburdened military and civilian staffs 
on the scene without any coherence and coordination. The end result is 
no time for structured data collection and reporting, plus the feeling 
such exercises are a waste of time.
    The end result is confusion, rather than insight. The problem for 
policy making is not a lack of strategies, it is a lack of facts. It is 
the lack of metrics that can shed some light on what is really 
happening and the level of progress, problems, and risk.
    Granted, no war ever has perfect metrics, but it would be far 
easier to know what strategy the U.S. should propose if an objective 
effort was made to pull together the data that are available in ways 
that would allow some coupling between strategy and a knowledge of the 
facts on the ground.

                 2. LOOKING AT GOVERNANCE AND POLITICS

    The elections to come will help provide a much better picture of 
the level of polarization and religious alignment of the Arab Shi'ites; 
Arab Sunnis, Kurds, and other minorities. The elections in the 
governorates will also be useful, and will the post-election power 
brokering and new allotment of government positions.
    Metrics of governance, however, may be more useful than metrics of 
politics.

   One key indicator of stability in Iraq is to map where the 
        government is in full control, where it has a limited or 
        insecure presence, and where it is largely absent or 
        ineffective. It is obvious that in at least four provinces, the 
        Iraqi government is only partially functioning.
   Maps by governorate and city that show the scale of the 
        insurgency are key measures of the level of risk and 
        improvement/decline--this is particularly true if such maps 
        show the population in the area involved. It is obvious that in 
        some half-secure areas, the government does not meet a key test 
        from Vietnam days, it cannot operate at night or when 
        insurgents are in the area.
   Similar mapping of government services adds meaning to the 
        security test. Secure police presence is one key test. Ability 
        to make government offices secure and functional is another.
   It is equally important to map out the actual distribution 
        of key government services like pensions, economic aid, office 
        services, etc. Most Iraqis, like most people in the world, need 
        government services every day. Elections and politics are an 
        episodic luxury.

    All of the above options would be more effective if there was a 
census. The rough estimates that say the population is 60% Shi'ite, 20% 
Sunni, 15% Kurd, and 5% other are guesstimates first made over a decade 
ago. Having an accurate picture of the ethnic and sectarian mix would 
greatly aid in understanding how the insurgency tracks relative to such 
factors, as well as the true nature of the population size in 
threatened areas.

            3. PUBLIC OPINION POLLS AND POLITICAL ATTITUDES

    Sophisticated, properly structured public opinion polls can be of 
great value in understanding Iraqi views and needs. Public opinion 
polls based on small samples using limited questionnaires are little 
more than statistical drivel. The sample base may be ``statistically 
valid'' within a limited range of percentage error in the mathematical 
sense, but far too often, the methodology and results are empirically 
absurd.
    The sample base in many recent polls is far too small and excludes 
too many areas and insurgents. Moreover results that cannot be broken 
out by area, ethnicity, religion, and social background lump together 
so many disparate groups that they provide few insights or no controls 
on who is really being surveyed with any adequacy.
    The answer, however, is not to avoid public opinion polls. It is 
rather to see them as a critical metric worth funding at a high level 
of repeated activity with as much data on given localities and areas, 
and as much data on attitudes by ethnicity and sect as possible. Some 
past polls have provided much of the scope for this, but few recent 
polls seem to have made such an effort or to have credible 
transparency. A key metric is being ignored or misused.
    A key tool is being misused or not used at all.

                         4. MAPPING WARFIGHTING

    It is obvious that the U.S. government is making steadily more 
detailed classified efforts to understand the patterns in the fighting 
and the nature insurgents at a time what it has virtually suppressed 
all meaningful public reporting. Its daily incident reports are no 
longer made available on background; the Iraqi government no longer 
provides meaningful public estimates of Iraqi casualties, and even the 
broad monthly incident totals vary so much from U.S. spokesman to U.S. 
spokesman that they seem to have uncertain credibility.
    There are several types of summary reporting that would provide far 
more insight into the nature of the conflict, some of which the U.S. 
provided on a background basis until the fall of 2004:

   Providing daily incident breakouts by type and effect by 
        major city and governorate with national totals. These data 
        were available in the past. Their censorship does not build 
        confidence; simply confusion.
   Providing meaningful casualty reports by location, cause, 
        and for all those being attacked by category. The totals of 
        U.S. killed and wounded are an important measure, but totals 
        are no substitute for pattern analysis by location and cause. 
        It is also a serious reflection on the U.S. that it does not 
        provide any meaningful reporting on Iraqi government, military, 
        police, and civilian casualties, much less the kind of pattern 
        and trend analysis that would help show what is happening in 
        the war.
   Reporting on insurgent captures and kills. This again needs 
        to be by governorate and major city, and show the nationality 
        and ethic/religious character of those involved where possible.
   Estimates of insurgent strength by group and location. These 
        do not have to be precise, but would both show the scope of the 
        threat, and whether progress is estimated to be made in 
        defeating it. The inevitable lack of precision is not an 
        embarrassment, it is a warning.
   Summaries of U.S./Coalition military action. Like all of the 
        metrics suggested these should not be so precise as to risk 
        compromising operational security. The various press releases, 
        however, give no picture of the level of overall military 
        activity or activity by region, and no picture of the level of 
        intensity in operations or the resulting trends.

5. REALISTIC METRICS FOR PROGRESS IN CREATING EFFECTIVE IRAQI MILITARY, 
                      SECURITY, AND POLICE FORCES

    U.S. efforts to create capable cadres of effective Iraqi military, 
security, and police forces seem to be gathering momentum at a time 
that the U.S. has again suppressed virtually all meaningful reporting. 
Some areas where meaningful metric would be extremely useful are:

   Combat effective military, security, and police forces in 
        terms of manning and unit strength: The kind of meaningless 
        totals for training and equipped manpower now being issued 
        produce misleading totals with no correlation to war fighting 
        or self defense capability. Leadership and quality are the 
        issue.
   Capable forces versus goals over time: The key projection 
        for strategy is how many effective forces will be created over 
        time, and is there a stable set of goals to measure progress 
        by.
   Trained manpower by service/type of force showing different 
        levels of training: ``Trained'' becomes milspeak for 
        ``meaningless'' when it is not tied to a clear definition of 
        exactly what training is involved.
   Equipped by type of equipment: Like ``trained,'' 
        ``equipped'' is meaningless when there are no data defining 
        what this means, and whether it meets valid requirements. For 
        example, send Iraqis out in unarmored vehicles is not a winning 
        move if the U.S. needs uparmored Humvees.
   Facility metrics: Sending men into soft or undefendable 
        facilities is a way to either get them killed or see them break 
        if attacked. Metrics of the adequacy of facilities are as 
        important as metrics of equipment levels.
   Patterns in casualties, and in desertions and defections: 
        These are simple metrics of how well the Iraqi forces are, or 
        are not, doing.
   Chronologies and maps of Iraqi force engagements and 
        outcome: These display how well the Iraqis fight.

                          6. ECONOMIC MAPPING

    This may be a need for nation wide economic data focused on long 
term planning in the future. To have a future, however, the government 
and Coalition needs detailed economic mapping that looks at jobs, 
economic activity, and how aid is flowing by major city, by 
governorate, and by key area.
    It often will not be possible to assemble comparable or complete 
data, but this is not operationally necessary. A mosaic of disparate 
data will often red flag key problems and areas. Unemployment, access 
to health care, and functioning education are key metric. So are power, 
sanitation, water, and secure roads. The breakdown of past existing 
services in any area is a major warning.
    There are critical overlays to such data that help measure the 
realities in the war:

   Mapping sabotage and economic attacks. Iraqi officials have 
        issued guesstimates like a $10 billion loss to sabotage. 
        Incident records need to be used to take a hard look at 
        economic impacts of both insurgent and Coalition action. 
        Sabotage that deprives areas or services, cuts or restricts 
        nation building, and hits at key revenues or economic activity 
        needs to be mapped and analyzed. The economic impact of the war 
        should be known.
   Understanding the value and impact of aid. From the start, 
        the public reporting by USAID has been a self-congratulatory 
        sick joke. Even the FSU only counted actual project starts as 
        success. Even the Communist system was not bold enough to count 
        funds obligated or contracts signed as progress. Aid is a key 
        weapon in counterinsurgency, but the real metrics for judging 
        its success are:

     How well Iraqi expectations and requirements are being 
            met, not simply whether things are as good or better than 
            under Saddam, and by area and by group of Iraqis--not by 
            some national total.
     How money is being dispersed in the field by location, and 
            particularly in high threat or insurgent areas.
     How sustainable project completions are in terms of 
            surviving attack and continuing to function to meet a need 
            once ``completed.''

   Linking aid to counterinsurgency impacts. The reprogramming 
        of aid has tied substantial funds to local efforts to use 
        dollars as a substitute for bullets. Mapping this short term 
        aid flow in insurgent areas is a metric of how aid impacts on 
        warfighting.

                         7. THE LIMITS OF DATA

    One final, and hopefully obvious, point needs to be made about the 
above suggestions. A flood data may produce a flood of analysis but 
there is no reason it should produce a flood of wisdom. Every metric 
suggested above has limits and can produce confusing and sometimes 
contradictory result. No one set of metrics is likely to be decisive, 
and trend analysis will be critical.
    Nevertheless, any one who has to analyze the current insurgency in 
Iraq has to be struck by how many strong opinions have been built on so 
weak a foundation of facts.

  Iraq: Strategy Versus Metrics: The Case for Information-Based Policy

    It is as easy to propose a strategy for Iraq as it is easy to have 
a strong opinion. The problem is to substantiate any such strategy with 
something approaching facts. At this point, ``experts'' are proposing 
everything from quick withdrawal to staying the course regardless of 
cost. The practical reality, however, is that ``experts'' must rely on 
media reports; unclassified, public relations-oriented government data; 
or sheer seat of the pants guesswork.

                1. A FLOOD OF OPINION; A DROUGHT OF FACT

    No one who served during Vietnam can fail to notice that there has 
been a polarization of the information people do choose to use out of 
the limited information available. Those who oppose the war and 
continued intervention choose every negative press report convenient to 
their case. The supporters of the war ``mirror image'' the opponents by 
choosing the favorable data.
    The U.S. government has responded by suppressing past reporting 
that has proved to be embarrassing, and by avoiding reporting 
information that might be negative and ``spinning'' data. This bias in 
official reporting is compounded by operational problems. Streams of 
individual data requests hit overburdened military and civilian staffs 
on the scene without any coherence and coordination. The end result is 
no time for structured data collection and reporting, plus the feeling 
such exercises are a waste of time.
    The end result is confusion, rather than insight. The problem for 
policy making is not a lack of strategies, it is a lack of facts. It is 
the lack of metrics that can shed some light on what is really 
happening and the level of progress, problems, and risk.
    Granted, no war ever has perfect metrics, but it would be far 
easier to know what strategy the U.S. should propose if an objective 
effort was made to pull together the data that are available in ways 
that would allow some coupling between strategy and a knowledge of the 
facts on the ground.

                 2. LOOKING AT GOVERNANCE AND POLITICS

    The elections to come will help provide a much better picture of 
the level of polarization and religious alignment of the Arab Shi'ites; 
Arab Sunnis, Kurds, and other minorities. The elections in the 
governorates will also be useful, and will the post-election power 
brokering and new allotment of government positions.
    Metrics of governance, however, may be more useful than metrics of 
politics.

   One key indicator of stability in Iraq is to map where the 
        government is in full control, where it has a limited or 
        insecure presence, and where it is largely absent or 
        ineffective. It is obvious that in at least four provinces, the 
        Iraqi government is only partially functioning.
   Maps by governorate and city that show the scale of the 
        insurgency are key measures of the level of risk and 
        improvement/decline--this is particularly true if such maps 
        show the population in the area involved. It is obvious that in 
        some half-secure areas, the government does not meet a key test 
        from Vietnam days, it cannot operate at night or when 
        insurgents are in the area.
   Similar mapping of government services adds meaning to the 
        security test. Secure police presence is one key test. Ability 
        to make government offices secure and functional is another.
   It is equally important to map out the actual distribution 
        of key government services like pensions, economic aid, office 
        services, etc. Most Iraqis, like most people in the world, need 
        government services every day. Elections and politics are an 
        episodic luxury.

    All of the above options would be more effective if there was a 
census. The rough estimates that say the population is 60% Shi'ite, 20% 
Sunni, 15% Kurd, and 5% other are guesstimates first made over a decade 
ago. Having an accurate picture of the ethnic and sectarian mix would 
greatly aid in understanding how the insurgency tracks relative to such 
factors, as well as the true nature of the population size in 
threatened areas.

            3. PUBLIC OPINION POLLS AND POLITICAL ATTITUDES

    Sophisticated, properly structured public opinion polls can be of 
great value in understanding Iraqi views and needs. Public opinion 
polls based on small samples using limited questionnaires are little 
more than statistical drivel. The sample base may be ``statistically 
valid'' within a limited range of percentage error in the mathematical 
sense, but far too often, the methodology and results are empirically 
absurd.
    The sample base in many recent polls is far too small and excludes 
too many areas and insurgents. Moreover results that cannot be broken 
out by area, ethnicity, religion, and social background lump together 
so many disparate groups that they provide few insights or no controls 
on who is really being surveyed with any adequacy.
    The answer, however, is not to avoid public opinion polls. It is 
rather to see them as a critical metric worth funding at a high level 
of repeated activity with as much data on given localities and areas, 
and as much data on attitudes by ethnicity and sect as possible. Some 
past polls have provided much of the scope for this, but few recent 
polls seem to have made such an effort or to have credible 
transparency. A key metric is being ignored or misused.
    A key tool is being misused or not used at all.

                         4. MAPPING WARFIGHTING

    It is obvious that the U.S. government is making steadily more 
detailed classified efforts to understand the patterns in the fighting 
and the nature insurgents at a time what it has virtually suppressed 
all meaningful public reporting. Its daily incident reports are no 
longer made available on background; the Iraqi government no longer 
provides meaningful public estimates of Iraqi casualties, and even the 
broad monthly incident totals vary so much from U.S. spokesman to U.S. 
spokesman that they seem to have uncertain credibility.
    There are several types of summary reporting that would provide far 
more insight into the nature of the conflict, some of which the U.S. 
provided on a background basis until the fall of 2004:

   Providing daily incident breakouts by type and effect by 
        major city and governorate with national totals. These data 
        were available in the past. Their censorship does not build 
        confidence; simply confusion.
   Providing meaningful casualty reports by location, cause, 
        and for all those being attacked by category. The totals of 
        U.S. killed and wounded are an important measure, but totals 
        are no substitute for pattern analysis by location and cause. 
        It is also a serious reflection on the U.S. that it does not 
        provide any meaningful reporting on Iraqi government, military, 
        police, and civilian casualties, much less the kind of pattern 
        and trend analysis that would help show what is happening in 
        the war.
   Reporting on insurgent captures and kills. This again needs 
        to be by governorate and major city, and show the nationality 
        and ethic/religious character of those involved where possible.
   Estimates of insurgent strength by group and location. These 
        do not have to be precise, but would both show the scope of the 
        threat, and whether progress is estimated to be made in 
        defeating it. The inevitable lack of precision is not an 
        embarrassment, it is a warning.
   Summaries of U.S./Coalition military action. Like all of the 
        metrics suggested these should not be so precise as to risk 
        compromising operational security. The various press releases, 
        however, give no picture of the level of overall military 
        activity or activity by region, and no picture of the level of 
        intensity in operations or the resulting trends.

5. REALISTIC METRICS FOR PROGRESS IN CREATING EFFECTIVE IRAQI MILITARY, 
                      SECURITY, AND POLICE FORCES

    U.S. efforts to create capable cadres of effective Iraqi military, 
security, and police forces seem to be gathering momentum at a time 
that the U.S. has again suppressed virtually all meaningful reporting. 
Some areas where meaningful metric would be extremely useful are:

   Combat effective military, security, and police forces in 
        terms of manning and unit strength: The kind of meaningless 
        totals for training and equipped manpower now being issued 
        produce misleading totals with no correlation to war fighting 
        or self defense capability. Leadership and quality are the 
        issue.
   Capable forces versus goals over time: The key projection 
        for strategy is how many effective forces will be created over 
        time, and is there a stable set of goals to measure progress 
        by.
   Trained manpower by service/type of force showing different 
        levels of training: ``Trained'' becomes milspeak for 
        ``meaningless'' when it is not tied to a clear definition of 
        exactly what training is involved.
   Equipped by type of equipment: Like ``trained,'' 
        ``equipped'' is meaningless when there are no data defining 
        what this means, and whether it meets valid requirements. For 
        example, send Iraqis out in unarmored vehicles is not a winning 
        move if the U.S. needs uparmored Humvees.
   Facility metrics: Sending men into soft or undefendable 
        facilities is a way to either get them killed or see them break 
        if attacked. Metrics of the adequacy of facilities are as 
        important as metrics of equipment levels.
   Patterns in casualties, and in desertions and defections: 
        These are simple metrics of how well the Iraqi forces are, or 
        are not, doing.
   Chronologies and maps of Iraqi force engagements and 
        outcome: These display how well the Iraqis fight.

                          6. ECONOMIC MAPPING

    This may be a need for nation wide economic data focused on long 
term planning in the future. To have a future, however, the government 
and Coalition needs detailed economic mapping that looks at jobs, 
economic activity, and how aid is flowing by major city, by 
governorate, and by key area.
    It often will not be possible to assemble comparable or complete 
data, but this is not operationally necessary. A mosaic of disparate 
data will often red flag key problems and areas. Unemployment, access 
to health care, and functioning education are key metric. So are power, 
sanitation, water, and secure roads. The breakdown of past existing 
services in any area is a major warning.
    There are critical overlays to such data that help measure the 
realities in the war:

   Mapping sabotage and economic attacks. Iraqi officials have 
        issued guesstimates like a $10 billion loss to sabotage. 
        Incident records need to be used to take a hard look at 
        economic impacts of both insurgent and Coalition action. 
        Sabotage that deprives areas or services, cuts or restricts 
        nation building, and hits at key revenues or economic activity 
        needs to be mapped and analyzed. The economic impact of the war 
        should be known.
   Understanding the value and impact of aid. From the start, 
        the public reporting by USAID has been a self-congratulatory 
        sick joke. Even the FSU only counted actual project starts as 
        success. Even the Communist system was not bold enough to count 
        funds obligated or contracts signed as progress. Aid is a key 
        weapon in counterinsurgency, but the real metrics for judging 
        its success are:

     How well Iraqi expectations and requirements are being 
            met, not simply whether things are as good or better than 
            under Saddam, and by area and by group of Iraqis--not by 
            some national total.
     How money is being dispersed in the field by location, and 
            particularly in high threat or insurgent areas.
     How sustainable project completions are in terms of 
            surviving attack and continuing to function to meet a need 
            once ``completed.''

   Linking aid to counterinsurgency impacts. The reprogramming 
        of aid has tied substantial funds to local efforts to use 
        dollars as a substitute for bullets. Mapping this short term 
        aid flow in insurgent areas is a metric of how aid impacts on 
        warfighting.

                         7. THE LIMITS OF DATA

    One final, and hopefully obvious, point needs to be made about the 
above suggestions. A flood data may produce a flood of analysis but 
there is no reason it should produce a flood of wisdom. Every metric 
suggested above has limits and can produce confusing and sometimes 
contradictory result. No one set of metrics is likely to be decisive, 
and trend analysis will be critical.
    Nevertheless, any one who has to analyze the current insurgency in 
Iraq has to be struck by how many strong opinions have been built on so 
weak a foundation of facts.
                                 ______
                                 

 ``Playing the Course:'' A Strategy for Reshaping U.S. Policy in Iraq 
                          and the Middle East

                           EXECUTIVE SUMMARY

    The odds of lasting U.S. success in Iraq are now at best even, and 
may well be worse. The U.S. can almost certainly win every military 
battle and clash, but it is far less certain to win the political and 
economic war. U.S. success is also heavily dependent on two variables 
that the U.S. can influence, but not control. The first is the 
emergence of a government that Iraqis see as legitimate and which can 
effectively govern. The second is the ability to create Iraqi military 
and security forces that can largely replace U.S. and other Coalition 
forces no later than 2006.
Improving the Odds in Iraq
    This paper argues that U.S. success in Iraq is too important for 
the U.S. to withdraw in spite of the present odds and that it should 
``play the course'' as long as it has a credible chance of success. It 
also argues that there are a series of steps that the U.S. can take to 
improve the odds of success, many of which build on initiatives that 
the U.S. already has underway.
    These suggestions affect five separate areas of U.S. effort:

   Providing a clear statement of U.S. intentions that will 
        make it clear the U.S. is seeking to create a viable and 
        legitimate government in Iraq, and will not stay in Iraq once 
        this occurs. This statement will address the major conspiracy 
        theories that undermine U.S. efforts, and be backed by tangible 
        actions.
   Stepping up aid efforts to develop effective governance, and 
        placing a new emphasis on local as well as national governance.
   Giving even higher priority and resources to the effort to 
        develop effective Iraqi military and security forces.
   Altering U.S. methods of warfighting to strengthen the 
        political content of U.S. strategy and tactics.
   Recasting the economic aid effort to focus on Iraqi internal 
        stability during 2005-2006, and transferring responsibility for 
        planning, management and execution to the Iraqi government, 
        while phasing out U.S. contracting efforts as soon as possible.
Know When to Hold Them, Know When to Fold, and Know When to Run
    Taking these steps does not mean that the U.S. should ``stay the 
course'' if such measures do not work. The U.S. faces too much Iraqi 
anger and resentment to try to hold on in the face of clear failure, 
and achieving any lasting success in terms of Iraqi political 
acceptance means the U.S. must seek to largely withdraw over the next 
two years.
    To paraphrase an old country and western song, the U.S. needs to 
know when to hold them, know when to fold them, and know when to run. 
If the U.S. is asked to leave by an Iraqi government, it must leave. 
The same is true if Iraqi efforts at governance decisively and/or if 
the U.S. cannot create effective enough Iraqi security forces to 
largely replace U.S. and coalition forces. Fighting a counterinsurgency 
campaign is one thing; the U.S. must not stay if Iraq devolves into 
civil war.
    There are, however, different ways to leave and some are much 
better than others. Stating and demonstrating that the U.S. has the 
right intentions will make it clearer to the world that the U.S. made 
every effort to succeed and help to defuse the impact of U.S. 
withdrawal. Efforts to strengthen the Iraqi government as much as 
possible as soon as possible not only raise the odds of success; they 
raise the odds that stability will eventually emerge even if the U.S. 
is forced to withdraw. Efforts to strengthen the role of the U.N. and 
to multilateralize as much of the aid process as possible will have the 
same effect.

The Regional Dimension
    At the same time, the U.S. must make every effort to strengthen its 
position in other parts of the Gulf and the Middle East. Virtually the 
same strategy is needed whether the U.S. succeeds or fails in Iraq. 
Even ``victory'' in Iraq will be highly relative, and defeat will force 
the U.S. to reinforce its position in the entire region. The specific 
steps the U.S. needs to take are:

   Give the settlement of the Arab-Israel conflict the highest 
        possible priority in the most visible form possible.
   Rebuild U.S. ties to friendly Gulf states like Saudi Arabia 
        and strengthen ties to all of the GCC states, emphasizing 
        cooperation in dealing with terrorism and Islamic extremism.
   Adopt a more flexible policy in dealing with Iran.
   Prepare for the potential impact of problems in Iraq in 
        dealing with the fighting in Afghanistan.
   Recast U.S. energy policy to deal with the reality that the 
        U.S. will have growing strategic dependence on Gulf and Middle 
        Eastern oil exports for the next 20 years, and their security 
        will become steadily more important.
   Adopt a realistic approach to political reform in the region 
        that will improve U.S. relations with both moderate regimes and 
        with the peoples of the area.
   Give the political dimension of counterterrorism a new 
        priority, addressing the many aspects of the way in which the 
        U.S. now fights the war of terrorism that needlessly hurt 
        relations with the Islamic and Arab world, and restrict the 
        educational, business, and other relations necessary to create 
        a common effort to deal with terrorism and extremism.

    Almost all of these steps are necessary regardless of the outcome 
of the U.S. intervention in Iraq, but they become far more urgent if 
the U.S. is forced to withdraw or Iraqi governance fails. In short, the 
U.S. strategy for Iraq must be part of a broader strategy for the 
Middle East, and one founded on pragmatism and not ideology.
    Regardless of how we got into Iraq, and regardless of our mistakes 
to date, we are there. Our strategic interests are now linked to both 
our success and that of the Iraqis. We can certainly survive withdrawal 
and failure, but the result will be seen as a serious defeat unless an 
Iraqi government emerges that is clearly better than Saddam Hussein's 
regime, unless Iraq holds together, and unless Iraq makes progress over 
time.
    We have set the rules of the game to the extent we can, we hold the 
cards we are going to get, and we have made our bet. The most we can do 
at this point is hold, fold, or raise the ante. We do not need to rush 
towards some form of exit strategy before it is clear whether we will 
win or lose.
    At the same time, we do not need a pointless ideological commitment 
to ``stay the course,'' simply carrying on with what we are already 
doing. We need detailed and tangible ideas about how to make things 
better, and improve the odds of success. The challenge is how to best 
``play the course.'' It is how to take a bad to mediocre hand and 
increase the chance of getting a productive outcome.
    The fact remains, however, that the odds of success are now at best 
even, and may well be worse. Popular anger and hostility towards the 
U.S. and Coalition forces has grown steadily since the spring of 2003. 
Some 11% of Arab Shi'ites and over 33% of Arab Sunnis saw attacks on 
Coalition forces as justified by early 2004.\1\ The vast majority of 
Arab Iraqis never saw the Coalition invasion as legitimate, and some 
70% wanted Coalition forces to leave Iraq when sovereignty was returned 
to the Interim Iraqi Government in June 2004. More than 80% of the 
Iraqi Arab's surveyed this summer expressed deep distrust in Coalition 
forces.\2\ Iraqis still express hope in the future, but they do not 
feel the Coalition is capable of bringing either security or economic 
welfare. While no reliable polling has emerged since a new surge in the 
fighting in September 2004, it seems virtually certain that Iraq 
resentment of the U.S. and Coalition has steadily increased in recent 
months.
    We must do what we can within very tight time limits, knowing that 
we may well fail. Iraq may divide, there may be civil war, and the 
Interim Government may fail without leaving a viable option. The end 
result of the series of elections to come may well be that the U.S. is 
asked to leave, asked to stay on Iraqi terms that largely consist of 
our providing aid, or tied to a government that does not have adequate 
popular support and legitimacy. ``Playing the course'' does not mean 
the U.S. can count on winning, and certainly does not mean staying 
beyond the point where ``playing the course'' is no longer productive. 
It also means that U.S. programs must be carefully tailored to the 
limits imposed by the ``art of the possible.'' Trying to implement the 
``art of the desirable'' is an almost certain road to failure.
    Accordingly, we need to consider both whether there are steps we 
can take to improve the current odds and when and how to leave. To 
paraphrase a country and western song, we have to ``know when to hold 
them, know when to fold them, and know when to run.'' We also need to 
understand that any strategy to ``play the course'' in Iraq must be 
tied to a regional strategy that will both increase our chances of 
success and our ability to leave under the best circumstances possible.

     ``AND KNOW WHEN TO HOLD THEM:'' SEEKING AN ACHIEVABLE VICTORY

    One key decision has to be made to have any real chance of winning. 
This is to define ``victory'' in narrow and pragmatic enough terms so 
that we have a credible hope of achieving it. By this standard, success 
can be measured as the emergence of an Iraqi government that holds the 
country together, offers more in terms of pluralism and the rule of law 
than did Saddam and the Ba'ath, which is seen as broadly legitimate by 
most Iraqis, and which can establish conditions for economic 
development.
    As a corollary, we need to recognize that we cannot overcome many 
critical forces affecting the situation after more than a year of war 
and occupation. These forces include the present level of Iraqi 
resentment of the invasion and occupation, Iraqi nationalism, and 
cultural and religious tension. Success means the U.S. must transfer 
power to an Iraqi government that the vast majority of Iraqis see as 
legitimate, and leave Iraq as soon as this is practical--at least to 
the extent that the U.S. does not maintain significant military forces 
or military bases, and does not maintain the Green Zone and an 
``imperial'' Embassy. The U.S. can, at most, stay in Iraq for one or 
two more years and it must do what it can as quickly as possible.
    Moreover, we need to preserve a sense of history. Iraq has massive 
political, security, ethnic, religious, and economic problems that will 
take a half a decade to a decade to play out. The chances are that it 
will undergo several periods of crisis and instability after we leave. 
We can continue to influence this situation, but we can scarcely hope 
to control it. We need to understand--and make clear to Iraq and the 
world--that the transition to full independence, and American military 
withdrawal, place the responsibility for Iraq's future clearly in Iraqi 
hands. We must not claim either levels of success or responsibility 
that will allow critics to blame the U.S. for future problems it cannot 
control.

Defining Success as Narrowly as Possible
    A future Iraqi government does not have to be favorable to the U.S. 
in any narrow sense. The U.S. does not need Iraqi dependency; it needs 
Iraqi success. A neutral government that distances itself from the 
U.S., or even one that is aggressively independent, will be perfectly 
acceptable. The key test of success is that such a government can hold 
the country together, gives every ethnic and religious group a 
relatively fair share of wealth and power, does not represent extreme 
factions, has no broader regional ambitions, and creates a climate 
where both internal stability and the welfare of the Iraqi people is 
likely to improve over time.
    In fact, from both an Iraqi and regional viewpoint, the stronger 
and more independent the Iraqi government becomes the better. The U.S. 
does not need a client or dependent, and its best chance for being seen 
as having conducted a ``just war'' (or at least an excusable one) is to 
show that it leaves when it is asked to and leaves Iraqis clearly in 
charge. Put differently, the key in Iraq to knowing how long to ``hold 
them'' is having a clear plan to ``fold.''
    As a corollary, ``playing the course'' means that there are several 
objectives the U.S. not only must not pursue, but also must 
conspicuously and openly reject:

   One is to try to use Iraq as a tool or lever for changing 
        the region. The Iraqi example may have some impact over time, 
        but nothing could be more destructive to regional efforts at 
        reform than any deliberate effort to use Iraq as some kind of 
        springboard for change in other countries. A meaningful reform 
        strategy must be a country-by-country U.S. effort to encourage 
        the positive evolutionary trends inside each country. Moreover, 
        the U.S. must accept the fact that any foreseeable government 
        that is legitimate in Iraqi eyes will sharply oppose present 
        U.S. policies in dealing with the Israeli-Palestinian conflict 
        and will be hostile to Israel's present government and 
        policies.
   Iraq must not become a U.S. military base. The U.S. may well 
        need to maintain a strong advisory effort, but if the U.S. 
        tries to maintain combat forces and bases under any conditions 
        other than the broadest-based demand from Iraqis as a whole, it 
        will do even more to alienate the Iraqi people, the region, and 
        Islamic world. This does not, however, preclude U.S. efforts to 
        create a regional security structure--building on institutions 
        like the GCC--which could tie Iraq to a more stable regional 
        security posture where the U.S. could both act as the ultimate 
        guarantor of Iraq's security and work with Iraqi forces in a 
        regional context.
   The U.S. must establish Iraq's independence in terms of its 
        politics, economics, and above all oil. Iraq may well need 
        continuing U.S. aid in its political and economic development, 
        in addition to its military and security forces. The U.S. must, 
        however, avoid even the image of seeking to continue to 
        dominate Iraqi politics, and one key aspect of U.S. policy 
        during 2005 and 2006 must be to relocate the U.S. Embassy and 
        Green Zone as quickly as possible, and shrink the U.S. Embassy 
        to something around 20% of its present size. The CPA will be a 
        lasting model of how not to do things, and its imperial image 
        has left a legacy that the U.S. must distance itself from as 
        soon as possible. The U.S. mission in Iraq must be sized to 
        meet key needs, but the goal must be to make it an equal among 
        equals, not a center of political power.
   Establish total transparency in showing that the U.S. has 
        not taken any economic advantage of Iraq and has taken no steps 
        to give U.S. firms a lasting advantage in any aspect of the 
        Iraqi economy. This does not mean that the U.S. should not 
        encourage U.S. foreign investment, in oil and in every other 
        area. It must do so, however, purely in market terms. The U.S. 
        government, and especially the U.S. Embassy, must be extremely 
        careful not to lever influence to the unfair advantage of U.S. 
        firms, and it must cut itself loose from aid contractors as 
        soon as humanly possible. It must exert Draconian ruthlessness 
        in stopping any past ORHA, CPA, or U.S. military personnel from 
        exploiting their past positions.

Clearly Stating U.S. Goals and Intentions in Terms Acceptable to Iraq 
        and the Region and Demonstrating the U.S. Will Make Good on Its 
        Policy
    The U.S. needs to openly demonstrate to Iraqis, the region, and the 
world that it defines success in terms of Iraqi interests, not some 
effort to directly serve its economic and strategic interests. So far, 
the U.S. has not made this sufficiently clear or even done a good job 
of articulating its intensions in ways that reach Iraqis and the 
region. President Bush has spoken in generalities, and his senior 
officials have either failed to define U.S. intentions and objectives 
or have done so in ways that had had little practical impact--such as 
speaking in U.S. press conferences.
    President Bush should take the opportunity of his reelection and/or 
the coming Iraq elections to make a statement to the Iraqi people and 
the world that clearly defines U.S. intentions and refutes the most 
dangerous conspiracy theories affecting Iraqi and regional behavior. To 
be specific, he should state that:

   The U.S. will only stay in Iraq until the insurgency is over 
        and the Iraqi people have chosen a legitimate government, and 
        will leave immediately if asked to do so by an elected Iraqi 
        government;
   The U.S. has no intention of interfering in Iraqi elections 
        or internal politics. It will accept any elected government as 
        legitimate;
   The U.S. is training and equipping Iraqi forces to take over 
        both the defense of the nation and internal security missions, 
        and will phase out its military presence as Iraqi forces show 
        they can perform these missions. It will do so earlier, if 
        asked by the Iraqi government.
   The U.S. is bound by the policies set by the Iraqi Interim 
        Government, and will not conduct military operations that have 
        not been approved by that government.
   The U.S. have no interest in controlling Iraqi oil resources 
        and exports, and is firmly committed to aiding the Iraqi Oil 
        Ministry in developing Iraq's resources through open 
        competition on global market terms. All decisions over the 
        future development of Iraq's petroleum resources will be made 
        by the Iraqi government.
   The U.S. is not seeking any other economic interest in Iraq, 
        or any favoritism for U.S. companies.
   The U.S. believes that Iraq must have modern, professional 
        military forces strong and well equipped enough to defend the 
        nation without relying on U.S. and Coalition forces. The U.S. 
        will actively aid the Iraqi government in achieving this role. 
        It will encourage the development of regional security efforts, 
        possibly including the expansion of the GCC. It will provide 
        future military support to Iraq only if requested, and will 
        consult with its regional allies and the U.N. in doing so.
   The U.S. will not maintain any permanent military bases in 
        Iraq, and will transfer all facilities to the Iraqi government 
        upon U.S. withdrawal.
   The U.S. will continue to provide military assistance and 
        training if the Iraqi government requests this, but actively 
        encourages other nations to join it in this role.
   The U.S. is not seeking to dictate the modernization and 
        restructuring of the Iraqi economy. It is removing the strings 
        from its aid process, and will begin to transfer the management 
        of all U.S. economic aid to the Iraqi government, and allow the 
        government to use such funds for its own projects using Iraqi 
        contractors. It will only act to ensure that the projects are 
        legitimate and are honestly and effectively implemented.
   The U.S. will fully withdraw from the Green Zone once Iraq 
        is secure and an Iraqi government is in place, and will shift 
        its mission to the size and role of a conventional Embassy.
   The U.S. is seeking full debt and reparations forgiveness 
        for Iraq, and is committed to providing long-term assistance if 
        this is needed.
   The U.S. believes that the role of the U.N. and other 
        nations in ensuring free and fair elections, providing aid, and 
        helping to train the Iraqi government and security forces 
        should be steadily expanded. Its only concern is that the 
        expansion of multilateralism must be accompanied by effective 
        plans and the consummate resources.

    President Bush not only needs to formally state such goals, he and 
U.S. officials will need to regularly repeat them and aggressively 
refute conspiracy theories and charges as necessary.

                 MAKING IRAQI POLITICAL LEGITIMACY REAL

    There are two critical variables in Iraq over which the U.S. still 
has considerable influence, but no direct control: The first is how 
well Iraqis do in shaping their own government, executing governance at 
the national and local level, and giving the new Iraq true legitimacy 
among all of the key elements of Iraq's population. The second is the 
ability and willingness of Iraqi military and security forces to 
largely--if not totally--replace U.S. and other Coalition forces no 
later than the end of 2006.
    Past U.S. actions have helped to create an extraordinarily 
demanding political schedule, and which ensures political tension, 
turmoil, and a constant risk of turnover in key officials and decision 
makers:

   November-December: Parties and candidates emerge, party 
        lists are made public, platforms emerge; polling systems are 
        defined.
   27-31 January (30 January election day): Elections for 275-
        person National Assembly.
   February-March: Iraqi Transitional Government takes power.
   15 August: National Assembly completes draft of permanent 
        constitution.
   15 October: Referendum for permanent constitution.
   15 December: Elections for government completed--if 
        constitutional referendum approves constitution.
   31 December: Elected government assumes office.

    There are four critical risks that both Iraqis and the U.S. will 
face throughout this process, and that Iraqis will probably continue to 
face for up to a decade after the U.S. and other coalition forces 
withdraw:

   The risk that a majority of Arab Sunnis will not participate 
        in the political process or will be actively hostile to the 
        U.S. and evolving Iraqi government. The fighting in Fallujah 
        and other areas may create a more secure climate where Sunnis 
        see participation as both necessary and desirable. This, 
        however, is highly dependent on the quality of the aid and 
        governance that follows the fighting and Sunnis seeing the 
        government as providing valid political options. The battle for 
        Fallujah in November 2004 provoked a major increase in attacks 
        in other areas, and widespread Sunni anger and resentment. 
        There is a significant risk the Sunnis will not join in the 
        process and remain actively or passively hostile.
   The risk the Shi'ites will divide and see a return to the 
        kind of violence and insurgency al Sadr has carried out in the 
        past. It seems likely that the majority of Shi'ites will 
        support the political process because it is to their advantage. 
        This does not, however, mean Shi'ite support for the U.S. role, 
        or that a significant minority of Shi'ites will not be 
        alienated or follow more radical leaders like Sadr. There is a 
        natural dilemma in Shi'ite politics. Including leaders like 
        Sadr can radicalize them, excluding them can lead to violence.
   No compromise between Kurd, Arab, and other ethnic factions 
        can please everyone. The Kurdish leadership has so far been 
        pragmatic in compromising its demands, and the leaders of the 
        Iraqi Interim Government have been equally pragmatic in 
        accepting limited autonomy and de facto federalism. However, a 
        constitution still has to be written and implemented, oil 
        revenues and other economic problems must be dealt with, and 
        serious ethnic problems over land and repatriation must be 
        dealt with. Above all, the evolution of the Iraqi government 
        must produce a political process the Kurds trust and are 
        willing to participate in.
   The political and electoral process will either break down, 
        or--more probably--produce a set of political compromises that 
        keep the existing leadership in power without allowing for 
        legitimate opposition, debate, and electoral contests. As of 
        late November 2003, the Iraqi Electoral Commission had approved 
        some 156 political parties out of requests by a total of 2l2. 
        As of that time, no party had had a chance to campaign or 
        declare a clear program, and many were brand new. The Interim 
        Government was divided. For example, the Iraqi National Accord 
        party led by Prime Minister Ayad was opposed by the new 
        ``Iraqi'' party of President Ghazi al-Yawer. The leading 
        established parties include the KDP and PUK Kurdish parties; 
        three Shi'ite parties, and no Sunni parties.
          The dilemma is that Iraq does need strong and coherent 
        leadership, but also needs a transparent enough political 
        process to have legitimacy in the eyes of the Iraq people and 
        allow minorities and factions to feel they can be heard, 
        participate in the process, and have a credible hope of being 
        represented now or in the future. The need to shape an 
        effective Iraqi political process through the elections in 
        January, the constitution referendum, and the full elections in 
        late 2005 would pose an immense challenge in a divided nation, 
        with little real political experience, even in peacetime.

    The Iraqis urgently need as much outside aid as possible in both 
learning how to create a political process that can minimize these 
risks and making the new Iraqi government as effective as possible. At 
the same time, an Iraqi government can only become legitimate and 
effective if the U.S. and the international community recognize that 
Iraqis and the evolving Iraqi Government must make as many decisions as 
possible and that the existing political process must become far more 
inclusive and popular in character.
    The U.S. cannot reinvent the wheel by trying to change the current 
political calendar. No form of U.S. interference can substitute for 
Iraqi progress, and the U.S. cannot constantly interfere without 
discrediting Iraqi efforts. The U.S. is no longer the decision-maker, 
it is an ally.
    One of the hardest tasks the U.S. faces over the next two years is 
to restrict U.S. actions to aid and advice, and to preserve a proper, 
steadily growing, and visible distance between the U.S. team in Iraq 
and a sovereign Iraqi government. One method is to try to expand the 
role of the U.N. and other nations in providing political advice and 
support so that the U.S. is not seen as dictating or as the only 
advisor. This could include expanding the role of Britain and other 
Coalition states and give them the lead wherever possible. Turning to 
other nations, however, is likely to offer only limited help, and will 
sometime do little more than introduce new complications.
    The most important way to strengthen Iraqi capability to govern, 
and Iraqi legitimacy, is to give the Iraqis control over as much of 
every aspect of the nation building and security effort as soon as 
possible, and let them control and manage their aid resources. It is to 
let the Iraqis make their own choices and own mistakes. In general, it 
will be far better to have Iraqis do things badly than have Americans 
do them badly--and some times even well.

U.S. Aid in Governance: Doing Too Little, Too Late
    In this context, it is deeply disturbing to note that as of 
November 3, the U.S. had dispersed only $96 million in aid funds for 
``democracy'' as part of the Iraq Relief and Reconstruction Program 
(IRRP). The U.S. Embassy Weekly Report states that the 2207 Report goal 
for the program was originally $831 million, of which the Congress 
actually apportioned $541 million.
    Even these totals may be misleading. An analyst from the 
Congressional Research Service notes that there was no ``recommended'' 
program (Admin request) for democracy-building activities in the 
original FY2004 supplemental, although other activities, such as civil 
society and rule of law in the original request could be interpreted as 
having something to do with ``democracy.'' Congress added $100 million 
for this specific purpose in the enacted legislation. By January 2004, 
after the June 2004 transition plan was announced (November 15, 2003), 
the Administration shifted funds around to make the democracy sector 
larger--it became $458 million, later $451 million. The September 2004 
Administration re-allocation request to Congress would have raised 
``democracy'' by $180 million to $631 million. It is unclear why the 
figure for ``democracy building'' has gone up to $831 million, but it 
appears that either Congress moved more money to the justice/democracy 
category than the Administration requested or the Administration did a 
quick re-think of needs in mid to late-September. As of 11/17/04, the 
Administration has only obligated $473 million and spent $118 million 
of the $831 million available in ``democracy building'' funds.\3\
    Similarly, the U.S. had dispersed only $33 million out of an 
apportionment of $290 million in funds for education, refugees, human 
rights, and government. (The 2207 Report goal was $379 million.) It had 
dispersed only $56 million out of $979 million in funds for justice, 
public safety, and civil society. The 2207 Report goal called for 
$1,122 million.\4\
    If one ignores the fact there are conflicting data, and combines 
all of these programs as reported by the Department of State on 
November 3, 2004, the U.S. has dispersed a total of only $185 million 
out of $1,800 million in apportioned funds, with an original 2207 
Report goal that called for $2,332 million. Given the scale of 
requirement to prepare for pluralism and some form of federalism, and 
the desperate urgency imposed by the political calendar, the current 
level of effort simply cannot support anything like the program needed. 
The U.S. effort to aid Iraqi governance is not playing the course; it 
is staying on the sidelines.
    As in every aspect of the U.S. aid program in Iraq, there are many 
people in the field doing a good job with the resources they have, and 
taking serious risks in doing so. To put it bluntly, however, the U.S. 
either has a meaningful program it can actually implement or it does 
not. If the U.S. does have anything approaching an adequate program, it 
needs to develop a coherent statement of what that program is, 
establish clear metrics and milestones, and constantly reexamine its 
scale and content separate from other aid activities. If--as seems more 
likely--it has incoherent good intentions--and bits and pieces of a 
program actually in the field--the entire aid program affecting 
governance needs to be recast to suit the level of urgency in Iraq and 
the political calendar the U.S. is trying to make work.

The Problem of Local Government
    The problems involved are further compounded by the past history of 
U.S. mistakes and failure in creating effective local governance 
documented in the International Crisis Croup (ICG) report of October 
27, 2004. It will be extremely difficult to work out a political 
process of power sharing at the top of the central government, and it 
will almost certainly be years before the national lists and parties 
learn how to work together effectively and develop practical national 
political agendas. Effective and legitimate local government at the 
provincial, city, and town level is one way to both give each area and 
faction representation and to shape the broader democratic process.
    As the ICG report describes in detail, basic reforms are needed in 
the way the Interim Government deals with provincial and local 
governments, in creating effective provincial councils and local 
governments, in the role played by the U.S. and its Coalition allies, 
and in the role played by the U.N. Creating an effective national 
consensus and government also requires that this progress be made in 
parallel with the national political process--particularly if Iraqi 
political leaders choose lists and rig a national government in the 
January 2005 elections which many Iraqis do not regard as legitimate.
    Some form of revenue sharing may also be critical if various 
regions and factions are to be convinced that they will get a fair 
share of the nation's wealth. This is particularly true of oil 
revenue--which for the foreseeable future will underpin the national 
budget instead of tax and other income sources. It is easy to mistake 
``federalism'' as being a matter of political power. It is a matter of 
financial power as well, particularly in almost exclusively Sunni areas 
like Al Anbar and in the Kurdish dominated north.
U.S. Transparency and the Role of the U.N. and Other Nations
    The U.S. needs to publicize its efforts to help Iraq achieve 
success in governance and make it clear that its aid program is 
designed to help the Iraqis make peaceful pluralistic choices, not 
create a U.S. sponsored government. It needs to describe what it is 
doing to show it does not favor a given mix of ethnic and religious 
groups, and report problems and failures as well as success.
    At the same time, the U.S. should make it clear to Iraqis and the 
world that when there are problems in governance, U.S. aid and 
influence cannot directly alter or correct them. As is the case in 
every area of U.S. action, Iraqis must not only be in charge, but be 
held publicly accountable. The constant effort to spin every minor 
accomplishment into success is precisely the wrong approach. 
Transparency and accountability serve three key purposes: (a) the 
independence and legitimacy of the Iraqi government and political 
process is clear, (b) the U.S. is not held accountable for Iraqi 
failures if it stays or withdraws, and (c) Iraqis are pressured to take 
responsibility.
    The U.S. must demonstrate through its actions that it will actually 
begin to leave as soon as the Iraqi government, military, and security 
forces can do the job. It needs to demonstrate it through phased 
withdrawals and changes in its role. The U.S. should not set rigid 
deadlines, which will become targets for insurgents and opponents of 
the Iraqi government, but it should seek to do as much as possible 
during 2005 and if it does not succeed by the end of 2006, it seems 
likely that it will have effectively been defeated. More than 70% of 
Iraqis polled wanted the U.S. forces out as early as the fall of 2003, 
and the figure was well in excess of 80% by mid-2004.
    This is one of many reasons why the U.S. needs to aggressively and 
openly seek to expand the role of the U.N. and other nations in helping 
Iraq develop its governance and political process. Just seeking 
multilateralism expands the legitimacy of the U.S. effort. Achieving 
it, particularly if the country becomes more secure, will be much more 
important. It will show Iraqis and the world that the U.S. is serious; 
that its efforts are designed to create an independent and legitimate 
government and that it is seeking to improve, not dictate, Iraq's 
future. It will also create an important process of continuity as the 
U.S. phases down its effort and if the U.S. has to withdraw rapidly in 
a crisis.

 REINFORCING THE CURRENT EFFORT TO CREATE EFFECTIVE IRAQI MILITARY AND 
                            SECURITY FORCES

    The second critical variable is the ability and willingness of 
Iraqi military and security forces to largely--if not totally--replace 
U.S. and other Coalition forces no later than the end of 2006. As has 
been touched upon earlier, it has been clear since early 2004 that 
Iraqis bitterly resent U.S. domination of the military security effort, 
and polls in 2004 put hostility at well above the 80% level.
    At the same time, poll after poll shows Iraqis see physical 
security as the most important single issue in their lives, followed by 
economic and educational security. Equally important, the same polls 
that reflected the unpopularity of Coalition forces reflected great 
popular confidence in the Iraqi army and police--although far more out 
of hope for what they might become in the future than their 
capabilities at the time the polls were taken.\5\
    There is no question that creating the kinds of Iraqi forces that 
are required is a high risk effort that will have to be rushed forward 
under adverse circumstances. It is also almost certain that if polls 
were taken now--after Najaf, Baghdad, Samarra, Fallujah, and Mosul--the 
Iraqi people would show far less confidence. Nevertheless, the only 
practical solution to popular hostility to coalition forces is to 
create strong Iraqi military security forces as soon as possible, and 
to keep up the effort regardless of any near term problems and 
reversals. ``Iraqiazation'' either has to be made to work, or Iraq will 
become a mirror image of the failure of ``Vietnamization'' in Vietnam: 
Coalition military victories will become increasingly irrelevant.
    The U.S. military and U.S. Embassy now seem to clearly understand 
this, as does the Iraqi Interim Government. The failures at the policy 
levels of the U.S. government, CPA, and shadow Iraqi government that 
gave General Eaton a hopeless mix of tasks and resources through May of 
2004 seem to have been corrected. General Petraeus and the Multi-
National Security Transition Command (MNSTC-I) may now be getting much 
of the support they need.\6\
    It is disturbing, however, that the U.S. has stopped issuing 
meaningful public information on the equipment and training effort, and 
has cut the content of the Iraq Weekly Status Report to the point where 
it has limited value. Like the empty measures of success contained in 
USAID reports, the end result is that there is no way to relate what is 
happening to any meaningful picture of actual requirements and the 
measures of accomplishment that are provided are the kind of empty, 
self-congratulatory statements typical of public relations exercises.

Resources to Date
    The only data on expenditure cover the Iraq Relief and 
Reconstruction Program (IRRP), but do not reflect reprogramming. Taken 
at face value, they indicate that the U.S. had dispersed $798 million 
for its Security and Law Enforcement Program at a rate of only $8 
million a week.\7\ This compares with an original program level of 
$3,235 million, which was raised to $5,045 million program for the 
FY2004 fiscal year because of reprogramming on September 30, 2004 
($1,808.6 million was reprogrammed to ``security and law 
enforcement.'')
    The true total for such spending is higher, because the figures 
just quoted only cover the FY2004 program. Some $51.2 million was 
allocated to the Iraqi army in PL-108-11 April 2003. At the urging of 
the U.S. Embassy, an additional $1,808.6 million out of the FY2004 
total funding for IIRP was reprogrammed to ``security and law 
enforcement'' in September 2004.
    Unfortunately, the way in which the U.S. government has reported on 
aid expenditures in Iraq is so dysfunctional as to be almost totally 
misleading.\8\ For example, the Inspector General of the CPA reported 
on October 30, 2004 that, ``As of March 2004, the U.S. had obligated 
about $58.5 billion to stabilize the security situation in Iraq: About 
$57.3 billion for the U.S. military operations and $1.2 billion for 
Iraqi security forces.'' These figures dramatize the slow pace of the 
U.S. effort to create effective Iraqi forces at the time, although they 
also reflect the disparity between a large Coalition force presence in 
Iraq and the initial buildup of Iraqi Security Forces, and the problems 
in trying to rapidly create effective Iraqi forces in a country with 
poor infrastructure, limited administrative capabilities, and in the 
midst of an insurgency.

The Status of the Military Training and Equipment Effort in September 
        2004
    As for manning and equipment, the U.S. used to provide reasonably 
detailed data on progress in training and equipping Iraqi forces. The 
Department of Defense provided the following data as of September 22, 
2004.\9\

----------------------------------------------------------------------------------------------------------------
                                                                  Manning                    Training
                                                          ------------------------------------------------------
                         Service                                                                In
                                                            Required    Actual   Untrained   training   Trained
----------------------------------------------------------------------------------------------------------------
Army.....................................................     27,000     12,699          0      7,910      4,789
National Guard...........................................     61,904     41,461          0      2,189     39,272
Iraqi Prevention Force...................................      6,584      4,417          0      5,489      1,928
Iraqi Special Ops Forces.................................      1,967        651          0         75        576
Air Force................................................        502        182          0         39        143
Coastal Defense Force....................................        409        412          0        130        292
                                                          ------------------------------------------------------
      Total..............................................     77,175     62,822          0     15,832     46,990
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                        Weapons            Vehicles         Communications        Body armor
                                 -------------------------------------------------------------------------------
                                  Required   On-hand  Required   On-hand  Required   On-hand  Required   On-hand
----------------------------------------------------------------------------------------------------------------
Army............................    23,606    15,432     2,298     1,768     3,596     1,021    20,949     6,137
Nationa Guard...................    68,760    37,636     2,142       727    11,209       427    62,032    23,320
Iraqi Prevention Force..........     8,850     3,300       583       152     1,789     1,583     6,584     2,741
Iraqi Special Ops Forces........     1,898     1,274       180        67     1,212       115     1,620       605
Air Force.......................       383         0        34         4        21         0       502         0
Coastal Defense Force...........       486        12        15        15       156         1       409         0
                                 -------------------------------------------------------------------------------
      Total.....................   103,983    57,653     4,421     2,753    13,764     3,157    71,152    32,803
----------------------------------------------------------------------------------------------------------------

    These data reflected serious problems in the progress made as of 
September:

   The manpower totals do not reflect the fact 25-33% of men 
        were on leave or in training at any given time. Many men are in 
        units deployed a considerable distance from their home, and 
        must travel to give their families their pay, and deal with 
        family issues.
   Figures for training were uncertain, since all men are 
        trained or in training, but training was often very limited or 
        did not prepare them for demanding aspects of their mission.
   Total armed forces had 55% of weapons authorized for prior 
        force structure, half of authorized total of 4,421 vehicles, 
        28% of communications, and 46% of body armor.
   The weapons data shown were for small arms and crew served 
        weapons, and do not reflect Iraqi and U.S. plans to create 
        heavier forces with armor.
   Some armor was being delivered; including at least 35 
        reconditioned Iraqi tanks, AFVS, and APC and 50 armored cars 
        from the UAE.
   Hoped to get armor for more Iraqi mechanized units from 
        Jordan and UAE.
   DoD stated totals for communications equipment totals were 
        misleading, because: ``Some radios are on-hand, but they are 
        interim capability only.'' U.S. advisors feel that civilian and 
        other radios bought as part of CERP program are adequate, and 
        communications are much better than statistics show.

    The Army then had 12,699 actives of 27,000 man authorized force.

   Of active strength, 4,789 are defined as trained (3 weeks 
        for former military and 8 weeks for new recruits; the vast 
        majority go through the 8 week course). This total was roughly 
        18% of authorized strength and 38% of men actually on duty.
   Equipment holdings, as of mid-September, were 65% of 
        authorized weapons, 77% of vehicles, 29% of communications, and 
        30% of body armor.
   Training sufficiently limited so new forces normally need 6-
        8 weeks of working with U.S. forces. Were exceptions where 
        units were rapidly formed out of experienced army personnel and 
        fought well.
   Iraqi commandos had proven to be a well training and 
        effective source of manpower.

    The Iraqi National Guard was Iraq's largest force, but most of it 
was not a ``combat ready'' force to fight insurgent battles on its own.

   41,461 actives vs. requirement for 61,904. Claims that 
        39,272 are trained and 2,189 are in training ignored the fact 
        such training is limited and generally does not prepare most 
        forces for demanding counterinsurgency and counterterrorism 
        missions. Their training does prepare them to conduct 
        ``framework operations,'' which do play a significant role in a 
        counterinsurgency conflict.
   Were some effective, combat ready elements.
   40 of 44 National Guard Battalions operating with Coalition 
        forces throughout country. All except those in Fallujah-Ramadi 
        area were carrying out joint operations with coalition on daily 
        basis.
   Equipment holdings, as of mid-September, are 55% of 
        authorized weapons, 34% of vehicles, 4% of communications, and 
        38% of body armor.

    The Iraqi Prevention Force had 7,417 men active for a force with an 
authorized strength of only 6,584.

   DoD reported that 26% have some training.
   Equipment was 37% of authorized weapons, 26% of vehicles, 
        86% of communications, and 41% of body armor.
   The creation of such specialized counterterrorism/
        counterinsurgency elements was underway, but the force was 
        anything but ``combat ready.''

    Iraqi Special Operations Forces had 651 men active for a force with 
an authorized strength of 1,967.

   DoD reports that 88% of actives have some training, and that 
        29% of full authorized force is trained and fielded. This force 
        will grow once the conditions for doing so are in place and 
        properly set.
   Equipment of 67% of authorized weapons, 37% of vehicles, 10% 
        of communications, and 37% of body armor.
   The creation of such specialized counterterrorism/
        counterinsurgency elements is underway. This force was more 
        combat experienced and proven than any other force in Iraq.

    Air Force and Coastal Defense Force were only token forces.
    Air Force had 0% of authorized weapons, 12% of vehicles, 0% of 
communications, 0% of body armor.
The Status of the Military Training and Equipment Effort as of November 
        2004
    The data the U.S. has made public on Iraqi force development since 
September have been cut to the point where they do no longer indicate 
whether the serious problems in equipment delays that existed as of 
early September are being corrected; all equipment delivery data have 
been deleted from the report.
    The same is true of data on trained manpower. All breakouts have 
been eliminated from public U.S. reporting from the Embassy, Department 
of Defense, and Department of State. The only heading in the Weekly 
Status Report is now ``Trained/On-Hand.'' This figure has some value, 
however, since it reflects the manpower that have been trained and are 
still on duty, to avoid the problem of reporting those who are trained 
and are not on duty for whatever reason.
    Useful data have, however, been provided by the Coalition training 
command in Iraq, MNSTC-I, although such data cannot go into the detail 
needed to distinguish between the total number of men trained and 
equipped, and what are sometimes much smaller numbers of men with fully 
adequate training and equipment for counterinsurgency and combat 
missions, or show the rapidly increasing size of the cadres of fully 
trained officers and NCOs.
    These data are current as of November 18, 2004, and are shown 
below: \10\

----------------------------------------------------------------------------------------------------------------
                                                                                    On duty,
                         Force element                              Current        trained and        Total
                                                                    strength        equipped        authorized
----------------------------------------------------------------------------------------------------------------
Police........................................................          87,133           47,342         135,000
Special Police Commando Battalions............................           2,019              900           2,019
Border Enforcement............................................          16,237           14,593          29,360
Highway Patrol................................................             925              370           6,300
Bureau of Dignitary Protection................................             484              484             500
Intervention Force............................................           6,584            1,816           6,859
Emergency Response Force......................................             168              168             270
Civil Intervention Force......................................           1,091            1,091           3,720
National Guard*...............................................          43,318           41,409          55,921
                                                                       (41,261)               ?         (61,904)
Special Operations Force......................................             604              590           1,967
Army..........................................................          16,634            4,507          27,000
Air Force.....................................................             206              167             502
Coastal Defense Force.........................................             409              536             582
                                                               -------------------------------------------------
      Total...................................................         173,903          115,882         275,708
Military Forces...............................................         (17,249)         (5,210)         (28,084)
Military and Elite Paramilitary (less National Guard).........         (29,124)        (10,491)         (49,719)
----------------------------------------------------------------------------------------------------------------
* Data from MNSTC-I are not clear. Data in parenthesis are taken from U.S. Embassy Weekly Status Report of
  November 3, 2004.

    While the Iraqi security and military forces continue to experience 
problems in terms of retention and performance, these totals do reflect 
significant progress since the summer of 2004 and a number of Iraqi 
combat forces have performed well in the fighting in Najaf, Samarra, 
and Fallujah. The performance of the police has been less satisfactory, 
but the cadres of properly trained and equipped units is beginning to 
increase in significant numbers.
    According to MNSTC-I, nine more active Army battalions should 
complete their training by the end of December, and all 27 Regular Army 
or Intervention Force battalions (including six more from the 
Intervention Force) are planned to complete training by the end of 
January. This schedule has been maintained despite attacks on training 
bases, infrastructure delays due to unexploded ordnance discovered at 
one planned base, and forces being deployed to major combat operations 
earlier than initially planned. Some battalions have had a number of 
AWOLs due to intimidation attacks, and MNSTC-I is working with the 
Iraqis to adjust its numbers to reflect those. MNSTC-I is also taking 
measures to reduce the likelihood and impact of these in the future, 
and to assist them in recruiting of combat veterans.
    Two battalions from the Iraqi Intervention Force conducted 
operations in Najaf. These same two battalions plus another are 
conducting effective combat operations in Fallujah together with two 
regular battalions, an Army Commando Battalion, a Police Emergency 
Response Unit, and Shewani Special Forces trained by 1st MEF. These 
constituted 2,700 Iraqis at their peak. Although not all Army 
battalions were at full strength, soldiers who are in the battalions 
fought effectively and are certainly ``combat ready,'' with most being 
``combat proven.'' The last six battalions from the Iraqi Intervention 
Force will complete initial training (fourteen weeks) in the next 30 
days.
    Sixteen National Guard battalions are conducting operations 
effectively at the company level or above, with a number conducting 
operations effectively at the battalion level. Many Iraqi National 
Guard (ING) units have conducted combat operations. Current plans are 
to expand the National Guard from its previous authorized strength of 
45 battalions and six brigades to 6 Division HQs, 21 Brigade 
Commanders, and 65 battalions.
    The number of trained police now include over 31,000 former police 
trained in the three-week Transition Integration Program. Over 15,000 
police have been trained in the 8-week Academy program of instruction. 
Capacity at the 8-week academies in Jordan, Baghdad, and other regional 
academies should soon exceed over 3,000 graduates per month.
    The numbers for trained border enforcement personnel reflect 
training done by major subordinate commands (divisions). Capabilities 
among border enforcement personnel vary widely. MNSTC-I has established 
a centralized program of instruction for border personnel, presently at 
the Jordanian Police Academy with Department of Homeland Security 
Instructors. Will move this instruction to Iraq in the near future.

Key Iraqi Force Components
    While detailed data are lacking on the progress in training and 
equipment, the U.S. military team in MNSTC-I does provide useful data 
on the structure and type of training and equipment in key elements of 
the emerging Iraqi forces: \11\

   Special Police Commando Battalions: The Special Police 
        Commando Battalions represent the Iraqi Ministry of Interior's 
        strike-force capability. The commandos--ultimately to be 
        comprised of six full battalions--are highly vetted Iraqi 
        officers and rank-and-file servicemen largely made up of prior 
        service Special Forces professionals and other skilled 
        servicemen with specialty unit experience.
          The Special Police Commando Battalions represent the Iraqi 
        Ministry of Interior's strike-force capability. The commandos--
        ultimately to be comprised of six full battalions--are highly 
        vetted Iraqi officers and rank-and-file servicemen largely made 
        up of prior service Special Forces professionals and other 
        skilled servicemen with specialty unit experience. All members 
        of the unit are chosen based on loyalty to Iraq and its new 
        democratic model. The unit focuses primarily on building raid 
        operations, counter-terrorist missions including anti-airplane 
        hijacker, kidnapping and other similar missions.
          The force resembles more a paramilitary army-type force 
        complete with heavy weapons, rocket-propelled grenades, AK-47 
        assault rifles, mortars, and 9mm Glock pistols. The commando 
        battalions give the MOI a high-end strike force capability 
        similar to Special Forces units and was quickly stood up to 
        capitalize on previously existing skill sets in Iraq.
   Iraqi Police Service Emergency Response Unit: An elite 270-
        man team trained to respond to national-level law enforcement 
        emergencies. Team members undergo a robust eight-week 
        specialized training course spawned from the current wave of 
        anti-Iraqi forces actions.
          The mission of the emergency response unit is to provide a 
        national, high-end, rapid-response law enforcement tactical 
        unit responsible for high-risk search, arrest, hostage-rescue 
        and crisis response operations. The emergency response unit is 
        the predominant force for national-level incidents calling for 
        a DELTA/SWAT capability and will only be used in extreme 
        situations by local and national authorities.
          The $64.5 million effort is part of a larger mission to 
        create a nation-level law enforcement investigative and special 
        operations capability within the Iraqi Ministry of Interior to 
        counter terrorism and large-scale civil disobedience and 
        insurgencies throughout Iraq. The capability will eventually 
        include a Counterterrorism Investigative Unit and Special 
        Operations Unit. Volunteers for the force must first complete 
        the standard eight-week basic training course or three-week 
        transition integration program course for prior service 
        officers before entering the specialized emergency response 
        unit training modeled after the U.S. State Department's Anti-
        Terrorism Assistance and Bureau of Alcohol, Tobacco and 
        Firearms training programs.
          Of the total force, 235 eligible candidates received rigorous 
        instruction based on the Anti-Terrorism Assistance Crisis 
        Response Team training program while the balance of 35 recruits 
        are part of the Special Operations Explosive Ordinance Team, 
        based on the State Department's Anti-Terrorism Assistance 
        Explosive Incident Countermeasures training course.
          Team members receive instruction on terrorist incidents, 
        kidnappings, hostage negotiations, explosive ordnance, high-
        risk searches, high-risk assets, weapons of mass destruction, 
        and other national-level law enforcement emergencies. Officers 
        also have an opportunity to receive supplementary training in 
        hostage negotiation, emergency medical procedures, and 
        counterterrorism task force coordination.
   Iraqi Intervention Forces: The Iraqi Intervention Force is 
        the counter-insurgency wing of the Iraqi army. Ultimately to be 
        comprised of nine battalions, organized into three brigades, 
        forces negotiate the standard eight-week basic training all 
        Iraqi soldiers go through learning basic soldiering skills such 
        as weapons, drill and ceremony,
          Soldier discipline, and physical training skills. After 
        graduation, IIF battalions spend several weeks and months in 
        intensive ``military operations in urban terrain'' follow-on 
        training--otherwise know as ``MOUT'' training. In this period, 
        soldiers work through instruction in the art of street fighting 
        and building clearing operations typical to anti-insurgent 
        operations in cities and towns. Units work in close 
        coordination with other IA battalions and will be completely 
        stood-up to the nine-battalion force by early 2005.
   Iraqi Special Operations Force: The Iraqi Special Operations 
        Force--the Iraqi Armed Forces--high-end strike force resembling 
        U.S. Special Forces units--continues training and operations in 
        the country with multinational force assistance. The Iraqi 
        Special Operations Force--the Iraqi Armed Forces' high-end 
        strike force resembling U.S. Special Forces units--continues 
        training and operations in the country with multinational force 
        assistance.
          Consisting of two trained battalions, including the 36th 
        Commando Battalion--an infantry-type strike force--and the 
        Iraqi Counterterrorism Battalion, the force has been involved 
        in many operations throughout the country fighting anti-Iraqi 
        forces with great distinction while continuing the stand-up 
        effort of the unit. The force will add a third ``support'' 
        battalion to its ranks in the coming months. Training is 
        conducted at an undisclosed location.
          ``Selection'' for the force begins in the Iraqi National 
        Guard and Iraqi army units already operating in the country, 
        much like typical multinational Special Forces' recruiting 
        efforts in their own countries. Outstanding recruits 
        successfully negotiating the vetting process, including 
        exhaustive background checks, skill evaluations, and unit 
        evaluations along with literacy, psychological, and physical 
        tests, are run through various team-building and physical 
        events meant to lean down the recruit pool. The selection 
        process runs roughly 10 to 14 days.
          The Iraqi Special Forces undergo intense physical, land 
        navigation, small-unit tactics, live-fire, unconventional 
        warfare operations, direct action operations, airmobile 
        operations, counterterrorism, survival, evasion, resistance, 
        and escape training. Special Forces soldiers are an army's 
        unconventional warfare experts, possessing a broad range of 
        operational skills. The unit was formed based on a conversation 
        between the Prime Minister Ayad Allawi and multinational force 
        personnel to give the Iraqi Armed Forces a high-end strike 
        force in its ongoing security mission against anti-Iraqi forces 
        operating in the country.
   Iraqi Army: Iraqi army soldiers negotiate standard eight-
        weeks of basic training including basic soldiering skills 
        instruction in weapons, drill and ceremony, Soldier discipline, 
        and physical training. Iraqi army soldiers negotiate standard 
        eight-weeks of basic training including basic soldiering skills 
        instruction in weapons, drill and ceremony, Soldier discipline, 
        and physical training. Units negotiate advanced follow-on 
        infantry, land navigation, and other operational training after 
        graduation before deployment.
          The Iraqi army will ultimately be comprised of 27 battalions 
        of infantry--including nine special Iraqi Intervention Force 
        battalions--and three transportation battalions. The army will 
        be organized into nine brigades and three divisions. The bulk 
        of the force is slated to be in place by early 2005. Plans to 
        create heavier and better armored forces are still in flux, but 
        there are now 259 soldiers in the 1st Mechanized Brigade, 
        preparing to train with 10 MTLB armored personnel carriers. 
        These vehicles were drawn from a pool of over 300 armored 
        vehicles that the Iraqis intend to make ready as the unit 
        grows. The brigade has 50 T-55 tanks, 48 BMP-1s, 57 MTLBs, 36 
        Spartans, and 30 BTR-94s already. MNSTC-I hopes to have a 
        combat ready armored battalion by the end of January and the 
        time of election, with others to follow.
   Iraqi Coastal Defense Force: The Iraqi Coastal Defense Force 
        is the Iraqi Armed Forces' naval component. Ultimately to 
        number just more than 400 servicemen, the force also includes a 
        land-based Coastal Defense Regiment resembling western-type 
        ``Marine'' infantry forces. Land and sea based forces negotiate 
        IAF eight-week basic training courses before moving on to 
        follow-on training and sea training for the boat crews.
          Boat crews learn the basics in seamanship before moving on to 
        instruction in advanced seamanship, towing, gunnery, sea 
        rescue, chart reading, navigation, anti-smuggling, operations, 
        and rigid inflatable boat integration and small boat drill 
        instruction. Training is put in the context of a democratically 
        based maritime sea force.
          Primary duties include protecting the country's roughly 50-
        mile coastline from smuggling and foreign fighter infiltration 
        operations as well as the port assets at Umm Qasr in Southern 
        Iraq and oil assets in the Persian Gulf. The force patrols out 
        to the 12-mile international water boundary in the Persian Gulf 
        with five 27-meter long Chinese-made patrol boats and various 
        other support craft.

Setting the Right U.S. Short and Long-Term Objectives in Aid to Iraqi 
        Military and Security Forces and Providing the Necessary 
        Transparency
    These numbers and force descriptions show that the Iraqi military 
and security forces are now far too weak to take over the security 
mission and will almost certainly remain so well into 2005. They also 
indicate that the U.S. may be moving too slowly in creating military 
forces that can deal with the insurgency problem by 2006. While the 
U.S. is seeking to help Iraq build a three division force, it seems 
clear that it is not yet committed to creating the kind of national 
military forces that can defend the country and give the government 
legitimacy and respect.
    In practice, the U.S. can only succeed in ``playing the course'' of 
the program for training and equipping Iraqi military and security 
forces meets the following key short-term and longer-term objectives:

   Create effective police and security forces capable of 
        operating on a nation-wide basis.
   Create a suitable mix of military and specially trained and 
        equipped security forces that can help defeat the insurgencies 
        in Iraq and come to maintain security without Coalition 
        assistance.
   Create the structure and cadres that will allow an Iraqi 
        government to expand the Iraqi military to the point where it 
        is capable of defending the nation and with the size, 
        professionalism, and equipment to act as an effective, modern 
        military force for national defense.

    This latter objective means creating a longer term U.S. aid and 
advisory plan that will give Iraq the modern, professional military 
forces it needs for defense and deterrence without risking a return to 
either a political role for the armed forces or the kind of military 
buildup that could lead to an arms race and a destabilization of the 
region.
    More broadly, U.S. needs to carefully reexamine the level of effort 
it is making in each area. There are serious tradeoffs in force quality 
if the training, force building, and equipment effort is rushed. The 
end result could be a failed force. Yet, the U.S. can only ``play the 
course'' effectively if it works out goals and plans with the Iraqi 
Interim Government that go far beyond the 28,000 man armed forces--and 
the roughly 40-55,000 man total of military, paramilitary, and National 
Guard--the U.S. currently says are ``required.'' This may well mean 
scaling up a much larger training and equipment program over time than 
the U.S. currently plans.

U.S. Transparency and the Role of Allied Forces
    Finally, the U.S. needs to communicate a clear plan for achieving 
all three of the previous objectives to the Iraqi people and the 
region. Once again, it needs honest and transparent reporting that is 
detailed enough to be convincing, while pushing Iraqis towards 
responsibility and accountability.
    It needs to show that it is truly dedicated to creating legitimate 
forces for a legitimate government, and creating the conditions 
necessary for a phased U.S. withdrawal. It needs to go back to 
reporting systems that are detailed and transparent enough to show the 
progress it is making, and minimize the impact of the various 
conspiracy theories rampant throughout the country.
    The U.S. also needs to keep seeking as much allied and outside 
support in the training effort as possible. The U.S. will not get 
significant numbers of additional combat troops. In fact, it will be 
almost impossible for its current allies to maintain their present 
troop strength unless it articulates a clear strategy for both 
improving the legitimacy of the Iraqi government and phasing out 
Coalition troops. It is one of the many strategic ironies in Iraq that 
any serious increase in foreign troops requires a level of internal 
security in Iraq that makes them largely unnecessary.
    At the same time, an NATO or other country that plays a role in the 
training process not only aids a critical mission; it also adds a 
degree of transparency and legitimacy to the military effort. Their 
presence and activity will make it clear that the U.S. is creating real 
Iraqi capabilities, and does intend to leave.
    The U.S. State Department announced on November 19, 2004, that 
NATO's decision to send military trainers to Iraq was the first 
collective, consensus decision the alliance had made on Iraq in two 
years, and would substantially increase the number of military trainers 
in the country from around 65 to as many as 400. Not clear, however, 
exactly when such manpower will arrive and it will require an 
additional 1,000 to 1,200 personnel to support the trainers by 
providing force protection, logistics, and communications--creating a 
mission total of between 1,500 and 1,700 people, some of which will be 
drawn from the United States. Most of the new military personnel were 
scheduled to be in place within 5 to 6 weeks, and the U.S. military 
personnel contributions will come from outside Iraq.\12\

        SHAPING THE POLITICAL DIMENSION OF U.S. MILITARY ACTION

    The U.S. has already learned that it can win virtually any direct 
military battle or clash, but it cannot secure the country. Moreover, 
U.S. and Coalition forces are so unpopular that their presence can 
create added hostility and new insurgents. This is one key reason for 
creating effective Iraqi military and security forces. Winning the 
military action is only part of the story. As in Vietnam, if the 
interim Iraqi government cannot win the political battle, U.S. 
victories in the military battles become irrelevant.
Interoperability, giving the Iraqis the Lead, and Replacement of U.S. 
        Forces
    The very professionalism of the U.S. military often makes it 
reluctant to give allied forces major responsibility or a lead role. 
There are also very tangible limits to how quickly Iraqi forces can be 
trained, equipped, and gain enough experience to be fully interoperable 
and take over from U.S. forces.
    The key to political and military success will, however, be to 
create a pattern of operations where Iraqi forces are as visible as 
possible, become truly interoperable, and take over as many security 
and military missions as possible. This involves more than the training 
and aid effort that has just been discussed. It requires detailed, 
ongoing U.S. efforts to transform operations into joint U.S.-Iraqi and 
then Iraqi operations as quickly as this can be done with the proper 
level of effectiveness.
The Sunni Side of the Political, Military, and Economic Battle
    The political and economic battle is very different from the 
military one. It will be fought over several months, not days or weeks. 
It will extend far beyond the bounds of cities like Fallujah. Barring a 
revival of the kind of Shi'ite insurgency led by Al Sadr, it will be a 
struggle to give the Iraqi Interim Government enough control over the 
Sunni Arab-driven aspects of the insurgency in Iraq to achieve the 
following seven objectives:

   Defeat insurgents without alienating the Sunnis to the point 
        where political compromise is impossible: A battle conducted in 
        a political context in which a coalition and interim government 
        victory does not become a convincing image of martyrdom in 
        Iraqi Sunni and Arab eyes. Civilian casualties and collateral 
        damage should not create convincing images of another Jenin in 
        the Palestinian West Bank or the massive use of excessive 
        force.
   Establish sufficient security and control to deny Sunni 
        insurgents and terrorists any major sanctuary and ``no-go'' 
        areas in Fallujah, Anbar province, and Iraq generally. Not only 
        defeat the insurgents who stay in Fallujah, but prevent their 
        dispersal or their going under cover to the extent that they 
        cannot control any major populated area, during daylight and at 
        night.
   Ensure that Iraqi military and security forces demonstrate 
        enough credibility so that they play a major role in the 
        battle, can be the most visible security presence in the area 
        after major fighting is over, and can erase the impression of 
        failure left by Iraqi forces in April. Further, they should 
        provide a credible picture to the Iraqi people, the region, and 
        the world that government forces can--in time--take over a 
        fully sovereign role from U.S.-led coalition forces and lead to 
        the coalition's withdrawal.
   Establish sufficient security in every high threat area so 
        that Iraqi security forces and administrators can function in 
        Fallujah and key cities and towns in Anbar province.
   Establish sufficient Iraqi Interim Government political 
        control over Fallujah, Anbar, and the ``Sunni triangle'' to 
        give the government a major boost in legitimacy and make 
        polling and elections possible in the area.
   Give the Sunnis incentives to join the political and 
        electoral process. A significant number of Arab Sunnis must be 
        persuaded to participate in the political process and January's 
        election to avoid creating a Shiite- and Arab-Kurdish-dominated 
        Iraq. The Sunnis controlled Iraq during Saddam Hussein's rule.
   Create conditions where there is immediate aid and 
        compensation and longer-term economic hope. The military effort 
        must be accompanied by U.S. and Iraqi Interim Government 
        efforts to institute an effective public-assistance and 
        economic development process that offers jobs, hope and 
        incentives to join the interim government as a functioning and 
        tolerated entity.

    This struggle may not be as difficult as it seems, but its course 
highly uncertain. The good news is that there is no rigid separation 
between Arab Sunni and Arab Shi'ite, and the estimates saying that Arab 
Sunnis are 20% of the populations and Arab Shi'ites are 60% are decades 
old and are not based on a census. Many Sunnis intermarry and live with 
Shi'ites, and most past clashes were the result of attacks by the 
Ba'ath regime and not the result of popular tensions. Sunni insurgent 
numbers still seem relatively small, perhaps some 12,000-16,000 full 
time actives plus perhaps twice to three times that number acting as a 
pool of part time insurgents or ``instant'' volunteers. This is 
scarcely an insignificant number, but is a small fraction of the more 
than five million Arab Sunnis in Iraq.
    The bad news is that the U.S. military victory in Fallujah probably 
only affected 10-20% of the full time Sunni insurgents in Iraq, and 
many seem to have escaped. Other Sunni insurgents attacked throughout 
Iraq during the fighting, and had considerable success in starting an 
uprising in Mosul. The decision to attack Fallujah was opposed by 
Iraq's Sunni president, its leading group of Sunni clerics, and a 
number of other Iraqi politicians. Sunni Arab media coverage was almost 
universally hostile both inside and outside Iraq, and these negative 
images were compounded by TV coverage that appeared to show a U.S. 
Marine killing a defenseless, wounded prisoner and then a devastated 
and deserted city.
    Fallujah illustrates the fact that U.S.-led military victories--
regardless of how convincing in military terms--can only be the prelude 
to an ongoing Iraqi-led political and economic struggle mixed with 
ongoing efforts to establish security in every part of Iraq. Iraqis, 
not Americans, will have to shape the most critical part of their 
destiny. U.S. forces can only give them the opportunity to succeed. 
Consequently, the Iraqi Interim Government's performance in achieving 
all of the above political and economic objectives during the course of 
2004-2006 will be the key litmus test of whether the military actions 
in the war have meaning and offer Iraqis and the Americans hope of 
lasting success.
    No one in the United States, the Coalition, and Interim Government 
can afford to forget this for a moment in the heat of the fighting. 
This is particularly true because the interim government failed to 
perform effectively in establishing governance, establishing aid, and 
providing security after the U.S. victory in Samarra, and after the 
fighting in Najaf and Sadr City. If the interim government does not do 
better in Fallujah, Anbar province, and Iraq as a whole, the insurgents 
will recover and return, the Sunni Arabs will reject the interim 
government and political process, and the political process will be 
seriously discredited.
    Put differently, it is critical to give the Iraqi Interim 
Government help in ``stability operations'' and nation building after 
each battle, and give it as much of a lead and visibility as possible 
in both the fighting and its aftermath. It is not the U.S. that has to 
win in terms of Iraqi and regional perceptions, it is the interim 
government.
    This ``Iraqi first'' aspect of successful military operations means 
highlighting Iraqi military and security operations, not U.S. 
operations, and steadily expanding the military security role of Iraqis 
over time. It means pushing the government into more successful civil-
military operations and downplaying the U.S. role. It means giving U.S. 
commanders large discretionary (CERP-type) aid funds to both ease the 
backlash civilian casualties and collateral damage cause to the U.S., 
and to back up Iraqi government civic action programs and cover for any 
failures. It also means educating U.S. forces to be extremely sensitive 
about the need to build up the interim government's credibility and to 
defer to it in ways that reinforce its legitimacy.
The Shi'ite Side of the Political, Military, and Economic Battle
    The political and economic battle also requires the U.S. to make 
every effort to help the Iraqi Interim Government maintain the support 
of the Arab Shi'ite majority, and of the Kurds and other minorities. 
This balancing act is now largely Iraqi, but the U.S. does retain 
significant influence, and can allocate and reprogram economic aid to 
this end.
    ``Playing the course'' also means supporting the interim government 
in its efforts to pressure Sadr to join the political process and 
avoiding new clashes driven by his militia. Here again, giving Iraqi 
leaders and forces maximum visibility in decision-making and any future 
fighting is critical. The most efficient way may be the U.S. military 
way; the way to achieve political victory (and minimize any backlash 
against the U.S.) will be the Iraqi way.
    The U.S. must never forget that losing the Iraqi Shi'ites means 
losing the war in terms of any ability to create a representative 
government of the kind the U.S. is seeking to create. Like civil war or 
being asked to leave by an elected Iraqi government, it is a key 
indication the U.S. must leave. This, however, means accepting that a 
Shi'ite majority may well emerge with values and goals from those of 
the U.S.
    It also means exercising care in dealing with Iran. The U.S. cannot 
shape its Iran policy around the risk that Iran may challenge the U.S. 
and interim government far more directly than it has to date; it 
scarcely, however, can ignore this risk.
The Kurdish Side of the Political, Military, and Economic Battle
    The U.S. should make it unambiguously clear to the Kurds that it 
will support them and the protection of their legitimate rights as long 
as they remain part of the Iraqi political process, and will not 
support them at all in any effort at separatism or ethic cleaning in 
dealing with Iraqi Arabs and other minorities like the Turcomans.
    So far, the Kurds have shown they understand the political 
realities involved, although they naturally push their cause to the 
margin. The U.S. must do nothing to change this perception. It must 
also make it clear to the Kurds that if things go wrong in Iraq, it 
will not support or protect them as it did with Saddam, either against 
their fellow Iraqis or from pressure and threats from Iran, Syria, and 
Turkey. The U.S. has no future strategic interest in the Kurds, and no 
humanitarian obligation to protect them from the consequences of their 
own mistakes.

The Civil Side of U.S. Military Operations and the Need for New Kinds 
        of Jointness
    U.S. troops in Iraq face a serious and dangerous mix of insurgency 
and terrorism. The U.S. can subordinate military effective and force 
protection to civil and political concerns. At the same time, it seems 
clear that some elements of the insurgency will continue indefinitely 
into the future, and that the U.S. cannot delay many civic action and 
aid activities until something approaching local security is 
established.
    The U.S. military has already established that it understands the 
need to use dollars as well as bullets. It has used the Commander's 
Emerging Relief Program (CERP) with considerable effectiveness, and has 
since used the reprogramming of aid funds in similar ways. As of 
October 2, 2004, the U.S. had dispersed $578.3 million in CERP funds. 
Some $150.4 million had gone to police and security services and the 
facilities protection service, but the rest had gone to civic action. 
Another $383.8 million was approved for a somewhat similar time-urgent 
program called the Accelerated Iraq Reconstruction Program (AIRP) in 
April 2004.\13\
    What is less clear is how good the partnership is between the U.S. 
military and the U.S. aid effort in governance and economic programs, 
and whether the U.S. Embassy and U.S. command have been able to 
establish the necessary level of civil-military jointness in making it 
possible to carry out such programs. The poor civil-military relations 
between the CPA and previous military command left what at best was a 
poisoned chalice.
    As will be discussed shortly, one of the keys to success in 
economic aid and stability, will be to terminate the U.S. contractor 
effort as immediately and fully as possible, and to shift aid planning 
and execution to the Iraqi government and Iraqi contractors. Such an 
effort, however, requires careful U.S. review in the field and often 
hands-on advice and support by U.S. officials and direct, accountable 
employees of the U.S. government. It also requires removing non-Iraqi 
security personnel as quickly as possible. This will make civil-
military jointness even more critical than in the past.
    It also raises an issue that may be too late to address in Iraq, 
but that may be critical in the future. The separation of U.S. civilian 
authority and operational military commands makes good practical sense 
during conventional warfighting. It is far less clear that it should 
happen in stability, peacemaking, and nation building operations.
    Many of the pointless civil-military tensions, and much of the lack 
of effective civil-military coordination, during ORHA and the time of 
the CPA were the result of a divided presence coupled to divided 
responsibility. The need for truly integrated civil-military operations 
(including integrated effort in developing local military, security, 
and police forces) is simply too great to permit this to happen in the 
future, and such integration should occur in Iraq as quickly as 
possible.

                       ECONOMIC AID AND STABILITY

    The U.S. economic aid program in Iraq has had many individual 
success and accomplishment, and U.S. AID and contractor personnel have 
accomplished a great deal in individual areas in spite of immense 
difficulties and the dangers in the field. As an overall effort, 
however, U.S. economic aid has lagged far behind the need for urgent 
action; has wasted vast resources on an impractical contracting effort; 
and reflects U.S. views and priorities. As a result, it is decoupled 
from the needs of Iraq, the political and military realities and 
pressures in the country, and the need to transition responsibility and 
action to the Iraqi government as soon as possible.
    The situation is made worse by an almost completely dysfunctional 
reporting system within the U.S. government that does not tie plans and 
accomplishments to realistic requirements, and that reports different 
kinds of aid in separate reports using different categories. It has 
been compounded by the CPA's inability to put its ideas about economic 
reform into action while sustaining economic distortions like the 
massive subsidies provided under Saddam Hussein. It was further 
compounded by a focus on longer-term plans and expenditures in a 
country where the U.S. faced serious security problems and needed to 
act decisively and to begin achieving far more visible results over a 
year ago.
    The U.S. has had problems in every aspect of its efforts in Iraq 
that threaten its ability to ``play the course.'' Its efforts at 
economic aid, however, are a uniquely mismanaged mess.
Effective Plans and Action, Not Resources, Are the Problem
    Any estimate of either Iraq's near-term or overall needs for aid 
can only be a crude guesstimate. Figures like $50-$100 billion have 
been quoted for ``medium term relief and reconstruction,'' but they are 
not based on either reliable input data or credible models. The present 
problem, however, is not one of resources. There are enough funds to 
``play the course.''
    As of early November, the U.S. had only disbursed $3,255 million of 
$18,060 in FY2004 IRRF aid. Disbursements were also running at well 
under $50 million a week. It is disturbing that a total of $14,891 
million of this total is said to be committed, and $10,437 is said to 
be obligated. This kind of ``progress'' may well be wasted on delayed 
and unneeded efforts, or vast amounts of overhead and security 
expenditures. At the same time, the Inspector General for the CPA has 
reported that a total of some $55.1 billion had been provided or 
pledged for Iraqi relief and reconstruction. As of September 30, 2004 
this included: \14\

   $24.1 billion in U.S. appropriated funds, used primarily for 
        reconstruction. These funds come from three public laws: (a) 
        PL108-287 provides a total of $300 million in CERP funds under 
        PL108-287 ($100 million allocated to Iraq). PL108-11 (April 
        2003) provides $2,475 million in IRRF funds, $802 million in 
        NRRRF, $684 million in CERP, $51 million for the new Iraqi 
        Army, $413 million to USAID, and $66 million to the Department 
        of State. PL108-106 (November 2003) provides $18,439 million in 
        IRRF, $877 million in CPA OPS/IG, $106 million in IRMO, and 
        $140 million in CERP.
   $28.2 billion in Iraqi funds, used primarily for ongoing 
        operating expenditures, but also for reconstruction and relief: 
        $1,724 million in vested funds from frozen funds; $927 million 
        in seized funds and confiscated cash and property, and $25,782 
        million in the Development fund for Iraq, financed by oil 
        revenues, repatriated funds, and money in the oil for food 
        account.
   Some $2.8 billion in donor funds: $849 million in 
        humanitarian relief, $435 million in IMF EPCA funds, and $1,355 
        billion in actual deposits for the $13,589 million pledged at 
        the Madrid International Donors Conference for Iraq 
        Reconstruction.

    Iraq will almost certainly need more aid over the next few years, 
as well as debt relief and forgiveness of reparations from the Gulf 
War. The immediate task, however, is to put an aid program in place as 
soon as possible that helps establish security, meets the urgent needs 
of the people, and moves money to Iraqi projects run by Iraqis.
Restructuring the Near Term Approach to Economic Aid and Stabilization
    The U.S. Embassy has already successfully sought reprogramming of 
$3,460.1 million aid funds to meet urgent security needs. President 
Bush approved this transfer on September 30, 2004. It cut $1,074.6 
million out of electricity projects and $1,935.6 million in water 
projects that could not be executed in a timely way and which faced 
many security problems. It added $1,809.6 million to security and law 
enforcement, $460.5 million to justice and public safety, $660 million 
to private sector employment development, and $80.00 million to 
governance. The U.S. has stepped up emergency aid expenditures to deal 
with contingencies like Fallujah. There also is a base of valid aid 
projects underway that should be successfully pursued.
    Nevertheless, there seems ample reason for the U.S. to act 
immediately to ``zero base'' the current economic aid effort to achieve 
the following objectives:

   Ensure adequate financing for short term CERP/AIRP projects 
        to allow intensive U.S. operations in CY2005 and CY2006, and 
        make military and political stability efforts the key priority. 
        The priority is to make things work in Iraq in the middle of 
        drastic political change, insurgency, and economic crisis. Mid- 
        and long-term efforts will have priority when--and if--there is 
        a longer term.
   Focus on unemployment and immediate social needs. The latest 
        weekly report on aid related jobs shows a loss from 68,000 jobs 
        to 61,000. This trend, however, is irrelevant. The Iraqi labor 
        force totals at least 7.8 million. More than 11 million Iraqis 
        are young dependents between 0 and 14 years of age (more than 
        40% of the population). The U.S. Census Bureau estimates that 
        there are 4.2 million Iraqis in the critical employment age 
        between 20 and 24, and more than 2.2 million are male. There 
        are no accurate employment statistics, but real and disguised 
        unemployment is probably around 30-40%, and may be 40-60% among 
        young males. Stability at the local level is the issue. Classic 
        infrastructure and institutional development must wait.
   Put the Iraqis in charge of planning, project development, 
        and project management for mid- and long-term projects. The 
        U.S. has not shown any special competence in formulating and 
        executing such projects. If anything, trying to do things the 
        U.S. way, with a heavy emphasis on large, long-term 
        infrastructure projects and construction efforts has helped 
        convince a large part of the Iraqi people that the U.S. is not 
        even trying to help them. There will be a continuing need for 
        the U.S. to review projects, take steps to limit corruption, 
        and ensure proper completion. The Iraqi government, however, 
        must be given as much authority as soon as possible, and the 
        Iraqi people must see that it is in charge.
   Encourage short-term and mid-term solutions with clear local 
        benefits in troubled and high risk areas. The need to do this 
        should be obvious but the current aid plan still tends to 
        emphasize mid- to long-term construction. Over $8 billion out 
        of the $18.4 billion in FY2004 IRRF funds, and puts $5.248 
        billion into water and electricity projects that are time 
        consuming and vulnerable.\15\ These efforts may well be needed 
        in time; but local needs should be met right now and even if 
        this means patchwork efforts that are not cost-effective.
   Minimize the role of USAID in Washington. Iraq is not a 
        traditional ``client'' for aid, and the USAID contracting 
        process is a slow moving nightmare oriented towards U.S. 
        formulated and executed projects. USAID personnel have often 
        done well in the field, but direction should come out of the 
        U.S. Embassy and aid flows should be programmed to go directly 
        to the Iraqi government and contractors.
   Minimize or eliminate the use of U.S. or non-Iraqi 
        contractors. Reliance on large U.S. contractors may have made 
        some kind of sense at the start. At this point, their overheads 
        and security costs, and the non-performance of many foreign 
        subcontractors, is a major problem. It compounds the Iraqi 
        impression that the U.S. aid effort is not serious and does not 
        help Iraqis. It adds major delays and creates far more security 
        risks than letting Iraqis do the job. This effort is not about 
        ``buy American'' and meeting accounting and contracting 
        standards. It is about nation building and achieving a 
        strategic result.
   Multilateralize the aid process to minimize direct U.S. 
        responsibility and allow the U.S. to use joint pressure on the 
        Iraqis to perform. The U.S. should seek to create international 
        groups to handle key aspects of the aid effort. This is 
        necessary both to make it clear that the U.S. is not attempting 
        to dictate and that it is no longer responsible for Iraqi 
        actions. It is also a key way to seek further aid from other 
        countries.
   Make the aid and economic development process transparent. 
        No one can talk to Iraqis and not be aware of the fact that 
        their expectations are grossly exaggerated and they are badly 
        informed about both what must be done and what is being done. 
        Part of the problem is that they simply do not know the scale 
        of the challenges involved. Part is the contrast between the 
        constant lists of ``accomplishments'' being claimed by the U.S. 
        and the realities they live with. The U.S. needs to provide far 
        more honest reporting on the scale of the problems Iraq has 
        inherited from Saddam's regime, how much must be done to 
        correct them, the realities of what the U.S. aid program is 
        actually accomplishing, and how such accomplishments relate to 
        real world needs and goals.
   Make a major point of multilateralizing development aid for 
        the petroleum sector. It is still far from clear how much 
        Iraq's oil fields have suffered from mismanagement and the 
        years of underfunding that began early in the Iran-Iraq War. 
        The present oil ministry goal of 2.5 MMBD may or may not be 
        suitable given current reservoir problems. The recent weekly 
        average of 2.39 MMBD certainly does not meet this goal, or 
        compare with estimates of 2.8-3.0 MMBD in prewar capacity.\16\
          Average oil exports have been ranging from 1.1 to 1.8 MMBD in 
        2004, generally on the lower side. High oil prices and export 
        revenues per barrel have allowed Iraq to earn $14.6 billion in 
        oil revenues in 2004, as of November 2004, but it seems 
        unlikely that Iraq will earn the $18 billion it earned in 2002, 
        much less the $22 billion in near term annual earnings the U.S. 
        projected at the time the war began. Moreover, as of November 
        2004, the U.S. had actually dispersed only $56 million of 
        $1,701 million in IRRF aid for oil infrastructure.\17\
          There is no single area more critical to the Iraqi economy, 
        to giving the Iraqi government the resources it needs, and to 
        refuting charges that the U.S. and Britain are seeking to grab 
        Iraqi oil than helping the Oil Ministry create an effective 
        plan to repair and develop Iraq's oil resources in a way that 
        is multilateral and transparent enough to make it clear to 
        Iraqis and the world that the U.S. truly wants to help and not 
        to profiteer.
   Push debt and reparations forgiveness to the limit: The last 
        thing Iraq needs is a burden similar to one place on the Weimar 
        Republic. A stable and secure Iraq cannot emerge with massive 
        foreign obligations and debts. Nations in general find it 
        easier to foreign such obligations than to provide real aid 
        money, and a major U.S. effort to open pressure all of Iraqi 
        debtors and reparations holders is a good way to externalize 
        the aid effort and counter nations that are willing to be 
        critics, but not to help.
        The Paris Club agreement on November 21st to reduce some $31 
        billion of $38.9 billion in Iraq's debt in three stages is an 
        80% reduction that does not meet the goal of a 95% reduction 
        set by the U.S., but is an important step forward, particularly 
        if it can be extended to all debtors and remain linked to 
        pressure on Iraq for effective economic reform.\18\ It does, 
        however, leave Iraq with combination of reparations and 
        remaining debt that may exceed $120 billion. This is one of the 
        few political weapons the U.S. has in dealing with outside 
        powers and it should use it to the maximum extent possible.\19\

Restructuring the Mid- and Long-Term Approach to Economic Aid
    In addition to these immediate priorities, the U.S. needs to take a 
similar approach to encouraging the Iraqi government to carry out 
multilateral and study plans that will allow it to act when (and if) 
security and stability are established, and Iraq's longer term needs 
can really be established.

   Infrastructure planning: Roads, electricity, water, and 
        sewers: The U.S. has placed far too heavy an emphasis on 
        infrastructure recovery without having clear Iraqi plans and 
        priorities, and Iraqi decisions designed to correct the massive 
        imbalances and inadequacies Saddam's regime created in the 
        services and facilities provided to given groups. This is an 
        area where Iraq needs to make hard decisions and choose its own 
        path, not have the path chosen for it.
   The financial sector: The U.S. made some good beginnings in 
        this area, but Iraqis now see many of its efforts to open up 
        the financial sector in conspiracy theory terms. The U.S. needs 
        to shift as much of the burden in this sector to the World Bank 
        and IMF as possible, and ideally, to work with Iraq to find 
        some European or Asian nation to take the lead.
   State industries: Iraq's state industries are a major 
        economic millstone around the neck of its development efforts. 
        They are also a political nightmare. The U.S. should encourage 
        reform, but distance itself from direct involvement. Let 
        Iraqis, the IMF/World Bank, and other nations take the lead.
   Subsidies: As above. The U.S. has already done enough damage 
        by failing to come to grips with the problem immediately after 
        the war, when something might have be done with far more ease.
   The agricultural sector: Some progress has already been made 
        here. Creating an efficient and competitive sector, however, 
        again involves political issues that the U.S. should be careful 
        to give the Iraqi government the lead in. Aid efforts should be 
        as multilateral as possible.
   Education: The issue is not facilities; it is quality and 
        relevance in term of job creation. Unlike some countries in the 
        region, Iraqis see this on their own. The U.S. role should be 
        to encourage them to plan and act, and provide aid. It can be 
        largely passive.
   Austerity and Financial Discipline: Iraq needs job creation, 
        sustainment, and stability first. The U.S. should help it 
        resist any types of rapid economic reform that will be 
        internally destabilizing. Landings need to be as soft as 
        possible.

    Plans for U.S. withdrawal and phasing down the U.S. aid effort 
should not mean abandoning Iraq. They should instead mean mid- and 
long-term aid plans that can actually be implemented on terms the 
Iraqis want, can execute, and can sustain. The U.S. also needs to be 
careful to multilateralize such efforts as much as possible to give 
them international legitimacy, avoid taking responsibilities that 
belong with the Iraq government, and demonstrate the legitimacy of its 
actions.
  ``know when to fold and know when to run:'' when and how to get out
    While any form of conspicuous U.S. failure in Iraq will be serious 
defeat, such a defeat is still all too thinkable and all too possible. 
This is why every section of this analysis has not only addressed what 
can be done to create some acceptable form of ``victory,'' but the need 
to transfer responsibility to Iraqis, and to create the kinds of 
transparency that will minimize the political backlash and blame the 
U.S. will face if it must withdraw.
    As has been stated in the introduction, the key to any feasible 
form of ``victory'' is to plan to ``fold'' just as rapidly as the Iraqi 
government can take over the political and security burdens, and has 
some basis for dealing with the economic crisis. The only way to win 
the game in Iraq is to stop playing it as soon as the Iraqis are ready 
to take over. Ideally, this should occur no later than the end of 2006, 
and take place earlier if Iraqi governance, legitimacy, and security 
can be established during 2005.
    At the same time, the U.S. does not need the kind of exit strategy 
that means deliberately planning for failure. It also does not need to 
set deadlines for withdrawal that may well make failure a self-
fulfilling prophecy. The odds may not be good, but they are scarcely 
unacceptable and it may well be possible to improve them substantially 
during 2005--if the U.S. acts promptly and decisively.
    It cannot be emphasized too strongly that the U.S. should not set 
deadlines for a U.S. troop presence, or ceilings on U.S. aid. These are 
a dangerous signal to the insurgents, who will see such deadlines as a 
reason to keep fighting and as a key sign of American weakness and lack 
of resolve. They will make it even more difficult to attract and keep 
coalition and international support. They also are far more likely to 
make Iraqis think about protecting themselves, and make them avoid the 
risks of supporting the interim government and nation building process. 
Morality and ethic also play a role, not just expediency. This is a war 
the U.S. started, and a peace process that it initially bungled. Quite 
aside from power politics and strategy, it has a moral and ethical 
responsibility to the Iraqi people.
    Yet, the U.S. and its allies do need to think and plan for the 
``unthinkable.'' They need contingency plans to deal with different 
kinds of failure, and they must plan for the possibility that Iraqis 
may either demand an exit or the situation may become untenable in 
spite of U.S. and allied efforts. No one can guarantee success in Iraq; 
or that Iraq will not descend into civil war, come under a strongman, 
or split along ethnic or confessional lines. The U.S. must be ready if 
the Iraqis fail to move forward and reach a necessary political 
consensus, divide or move towards civil war, or ask the U.S. and its 
coalition allies to leave.
    It is silly and dangerous to deny the possibility this can happen, 
or to claim the U.S. can never withdraw. If anything, this encourages 
precisely the kind of Iraqi government dependence on the U.S. that will 
make things worse for both Iraq and America. The U.S. should make it 
clear the length and nature of its effort in Iraq is conditional. It 
should make it clear that the Iraqi government has goals it must meet, 
that it must take the creation of Iraqi military and security forces 
seriously, and must focus on economic, power sharing, and other key 
realities and succeed.
    Iraqis should know that the U.S. does have credible plans to leave 
if an elected government asks it to leave, and to reduce its role and 
presence in response to any such legitimate request. It should make it 
equally clear that it has a presence to phase out its military role, 
and reduce the size of its Embassy, as Iraqi capabilities expand and 
the Iraqi political process and capability to govern reaches the point 
where an Iraqi government feels it is ready.
    Rather than setting deadlines, the U.S. should make it clear that 
it is committed to an ``exit strategy'' tied to the Iraqi political 
process, and to the ``legitimacy'' of its own position in Iraq. Iraqis 
and the world should know the U.S. plans to leave under two conditions: 
Whenever this is demanded by a legitimate Iraqi government, or in 
phases as Iraqis take over given missions. The U.S. must recognize that 
its ability to stay and perform meaning roles over the next few years 
is directly linked to a firm and open commitment to leave in the 
future.
    The U.S. should, however, also make it clear to Iraqis that it will 
not stay if the situation deteriorates beyond certain limits. It should 
set clear metrics for Iraqi success and continuously pressure Iraqi 
leaders and the government to meet them. It should not go beyond aid in 
counterinsurgency; it should leave if the political process fails and 
the civil war breaks out. It should leave if the Iraqi government and 
security forces fail to develop over the next two years, and it should 
not attempt to stay if the Iraqi government cannot manage the budget, 
economy, or its foreign aid. Any of these contingencies are a clear 
message that the U.S. should begin to ``run,'' and should quietly 
prepare plans for such action.
    Regardless of how the U.S. departs, it should still try to do as 
much in withdrawing to ensure that the future situation in Iraq will be 
as favorable as possible. It should not take key assets with it, and 
should continue with valid aid programs if this is possible. However, 
it is one thing to play the game and quite another to try to deal with 
defeat by reinforcing failure or ``doubling the bet.'' If it is clear 
by 2006 that the U.S. cannot win with its current level of effort, and/
or the situation seriously deteriorates to the point where it is clear 
there is no new Iraqi government and security force to aid, the game is 
over. There no longer is time to fold; it is time to run.

   THE BROADER REGIONAL CONTEXT: HAVING SOMEPLACE ELSE TO ``RUN'' TO

    The U.S. must also recognize that the game in Iraq is only one 
arrow part of the strategy it must develop in the Middle East. Win, 
lose, or draw in Iraq, the U.S. needs to pursue major initiatives that 
will improve its overall position in the region, reassure it allies, 
and allow it to stay in an area with some 63% of the world's proven oil 
reserves and some 37% of its natural gas.
    In the worst case of force withdrawal, the U.S. must also be ready 
with major efforts to reassure the friendly Gulf states and other Arab 
allies, demonstrate that the U.S. will maintain a major presence in the 
Gulf, contain any risk that civil conflict in Iraq will spill over into 
other countries, contain any Iranian actions, and deal with the 
inevitable Islamist claims of ``victory.''
    The U.S. must make every effort to strengthen its position in other 
parts of the Gulf and the Middle East. Virtually the same strategy is 
needed whether the U.S. succeeds or fails in Iraq. Even ``victory'' in 
Iraq will be highly relative, and defeat will force the U.S. to 
reinforce its position in the entire region. The specific steps the 
U.S. needs to take are:

   Give the settlement of the Arab-Israel conflict the highest 
        possible priority in the most visible form possible.
   Rebuild U.S. ties to friendly Gulf states like Saudi Arabia 
        and strengthen ties to all of the GCC states, emphasizing 
        cooperation in dealing with terrorism and Islamic extremism.
   Adopt a more flexible policy in dealing with Iran.
   Prepare for the potential impact of problems in Iraq in 
        dealing with the fighting in Afghanistan.
   Recast U.S. energy policy to deal with the reality that the 
        U.S. will have growing strategic dependence on Gulf and Middle 
        Eastern oil exports for the next 20 years, and their security 
        will become steadily more important.
   Adopt a realistic approach to political reform in the region 
        that will improve U.S. relations with both moderate regimes and 
        with the peoples of the area.
   Give the political dimension of counterterrorism a new 
        priority, addressing the many aspects of the way in which the 
        U.S. now fights the war of terrorism that needlessly hurt 
        relations with the Islamic and Arab world, and restrict the 
        educational, business, and other relations necessary to create 
        a common effort to deal with terrorism and extremism.

Giving Solving the Arab-Israeli Conflict the Highest and Most Visible 
        Priority
    Arafat's death has created an opportunity that the U.S. must act 
upon as immediately as possible. There is nothing to be gained from 
waiting for two inadequate governments to try to bludgeon each other 
into peace. A common solution cannot be imposed by force, and the U.S. 
and Arab world will never agree on all the details of a final 
settlement. The time has come, however, for an open and continuing 
effort by both the Quartet and Arab world to define a final settlement, 
and to build on the lessons of Camp David and Taba.
    The time has come for the U.S. to both act on its own and put 
pressure on the rest of the Quartet and moderate Arab states to take 
every possible measure to persuade the Palestinians to reject terrorism 
and on the Israelis to both evacuate the Gaza, and roll back the 
settlements the West Bank that extend beyond ``Greater Jerusalem'' and 
security adjustments to the 1967 boundaries.
    This means the kind of compromise that President Clinton proposed 
at Camp David and that was discussed at Taba. Adjustments involving 
some 3% of the area of the West Bank, not the 10-20% included in some 
maps of the Israeli security barrier or the 30-40% some times proposed 
by hard-line settlers. At the same time, 35 years of facts on the 
ground are facts on the ground. The worlds of 1949 and 1967 are gone 
forever, and peace must be based upon this reality.
    The challenge is to persuade Israel to make as many compromises as 
possible, and to find ways to compensate the Palestinians. The time has 
come to look beyond the narrow terms of a settlement and see what a 
massive aid program could do to guarantee a future Palestinian state's 
economic and political success, and give the Palestinians living 
standards that could underpin a peace. More ambitiously, it is to look 
at how Jordan, Israel, and a Palestinian state could cooperate to live 
in peace.
    Boundaries are the past. With the exception of the holy places, the 
focus should be economics, demographics, living standards, and security 
in the broadest sense. This may well require a Western and Arab 
economic aid program totaling billions of dollars over a period of 
years. It will certainly require a continuing U.S. aid program to 
Israel as well.
    Moreover, it requires Palestinians and Arab governments to look 
honestly at the demographics of Gaza and the West Bank, and to 
understand that it is going to be an incredible challenge to deal with 
the inherent population growth in both areas.
    Gaza only had less than 245,000 people in 1949, and around 330,000 
in 1967. The CIA estimates it now has more than 1.3 million, a growth 
rate of more than 3.8%, and 49% of its population is 14 years of age or 
younger. The U.S. Census Bureau estimates that it will grow to 1.7 
million by 2010, and 4.2 million by 2050.
    The West Bank had 775,000 people in 1949, and around 680,000 at the 
end of the 1967 war. The CIA estimates it now has more than 2.3 
million, a population growth rate of more than 3.2%, and 44% of its 
population is 14 years of age or younger. The U.S. Census Bureau 
estimates that it will grow to 2.8 million by 2010, and 5.6 million by 
2050.
    Far too many generations of young Palestinians have already been 
wasted in conflict. If the generation that now exists and the 
generations to come are to have hope, then the Palestinian refugees 
outside Gaza and West Bank--nearly 90% of whom have never seen what 
will be ``Palestine,'' must be made full citizens of the countries 
where they now reside as refugees.

Rebuild U.S. ties to friendly Gulf States like Saudi Arabia and 
        Strengthen ties to all of the GCC states, Emphasizing 
        Cooperation in Dealing with Terrorism and Islamic Extremism
    The U.S. needs to take broad steps to encourage evolutionary 
political, economic, and demographic reform in the region, and to 
recast its approach to counterterrorism to take more consideration of 
its political impact. Both steps are discussed later in this report. In 
the short term, however, the U.S. needs to prepare now to strengthen 
its security ties to every friendly state in the Gulf, and to key 
neighboring states like Egypt and Jordan.
    The security posture of Saudi Arabia and every other Gulf 
Cooperation Council (GCC) state is undergoing major changes. They no 
longer face a major near to mid-term threat from Iraqi military forces, 
but must deal with instability in Iraq and the growing risk that Iran 
will become a nuclear power. This confronts Saudi Arabia and its 
neighbors with hard strategic choices as to whether to ignore Iran's 
efforts to proliferate, seek U.S. military assistance in deterring Iran 
and possibly in some form of missile defense, or to acquire more modern 
missiles and its own weapons of mass destruction.
    The most urgent security threats to the Southern Gulf states, 
however, no longer consist of hostile military forces. They have become 
the threat of Islamic extremism and terrorism. Since May 2003, Saudi 
Arabia has faced an active internal and external threat from Islamic 
extremists, many affiliated with Al Qaida or exile groups, and it must 
pay far more attention to internal security than in the past. At the 
same time, the Saudi government must deal with the fact that this 
threat not only is internal, but also is regional and extends 
throughout the Islamic world. Saudi Arabia's religious legitimacy is 
being challenged, and its neighbors and allies face threats of their 
own.
    Bahrain, Kuwait, and Oman faces Islamist security threats at a 
lower level, but must also mix reform with improved internal security. 
The UAE has some Islamist elements, and Qatar has essentially chosen to 
buy time by mixing U.S. basing and reform with the tolerance of 
Islamist extremists as long as they do not act within Qatar.
    Saudi Arabia, in particular, must make major adjustments in its 
alliances. The events of ``9/11,'' the backlash from the Israeli-
Palestinian conflict, differences over how to deal with terrorism, and 
differences over the Iraq War have all combined to complicate Saudi 
Arabia's security relations with the U.S., and to force it to distance 
itself from the U.S. in some ways. At the same time, the Al Qaida 
terrorist attacks on Saudi Arabia in May 2003 made it brutally clear 
that Saudi Arabia was a full participant in the war on Islamic 
terrorism and had even stronger incentives to cooperate with the U.S. 
in anti-terrorism. Similarly, Saudi Arabia has not found any substitute 
for U.S. power projection capabilities in dealing with Iran, 
instability in Iraq, or Yemen, and needs U.S. technical assistance to 
deal with massive and continuing deliveries of U.S. military equipment.
    The other Gulf states face somewhat similar problems, and the past 
failure to create an effective regional security structure has made 
their problems worse. The Gulf Cooperation Council has made some 
advances in military cooperation and internal security, but remains 
largely a hollow shell. There is no true integration of security 
efforts and only symbolic progress towards collective security. 
Interoperability remains poor at every level, and there is little 
progress towards effective power projection and sustainability.
    There is little meaningful progress towards the creation of the 
kinds of information technology, C41 (Command, Control, Communications, 
Computers, and Intelligence), IS&R (Intelligence, Surveillance, and 
Reconnaissance, and net-centric systems) that could tie together the 
forces of the GCC, as well as make Saudi cooperation with U.S. forces 
far more effective. At the same time, petty rivalries continue to 
divide the Southern Gulf states, and Saudi Arabia face serious problems 
in dealing with Yemen and in obtaining Yemeni cooperation in blocking 
the infiltration of terrorists and the smuggling of arms and narcotics.
    All of these factors interact with a longer-term set of threats to 
the stability of every Gulf State that are largely economic and 
demographic, but which may ultimately be more important than outside 
military threats and the threat of Islamic extremism and terrorism. 
Recasting military plans and improved internal security efforts must be 
coupled to political, economic, and demographic reform.
    Saudi Arabia, for example has embarked on a process of political, 
economic, and social reforms that reflect a growing understanding by 
the governing members of the royal family, Saudi technocrats, and Saudi 
businessmen that Saudi ``oil wealth'' is steadily declining in relative 
terms, and that Saudi Arabia must reform and diversify its economy to 
create vast numbers of new jobs for its young and growing population. 
These efforts so far are still faltering and have failed to gather the 
necessary momentum, but their success is at least as essential as any 
change in Saudi Arabia's security structure.
    Every Gulf state must find ways to combine economic reform with 
political and social reform to remain stable in the face of change, and 
every state must be far more careful about the ways in which it uses 
the revenues from its oil exports and its other revenues. This means 
hard decisions about future arms imports and investments in military 
and security forces. Massive changes are needed in military planning, 
and especially in military procurement and arms imports, to create 
balanced and effective forces at far lower cost.
    As yet, Gulf states have only begun to react to these changes. 
Their military and internal security forces are only beginning to adapt 
to the fact the Iraqi threat has largely disappeared, that Iran's 
threat is a mix of proliferation and capabilities for asymmetric 
warfare and not the build-up of conventional forces, and that they are 
engaged in a generational struggle against domestic and foreign Islamic 
extremism. They have only begun the process of deeper political, 
economic, and social reform; their plans are still half formed, and no 
aspect of reform as yet has the momentum necessary to succeed.
    Even if the U.S. succeeds in Iraq, it needs to work with every Gulf 
state to help them make the necessary changes in their respective 
security structures. It also needs to move decisively and openly away 
from an emphasis on arms sales and U.S. basing and deployments to 
encouraging effective security cooperation, strengthening the right 
kind of internal security efforts, creating more cost-effective 
military forces, and slowing down arms imports to fund higher priority 
needs. The U.S. also needs to emphasize that its presence in the Gulf 
will be tailored to meet local and not just U.S. security needs, that 
the size of its forward posture will be tailored to the threat, and 
that it is seeking military partnership and interoperability. The U.S. 
also needs to lay the groundwork now for reshaping its military posture 
in the Gulf when it withdraws its forces from Iraq and leaves all of 
its bases in that country.
    If the U.S. fails in Iraq, this will create an even stronger 
incentive to have the strongest possible ties to the Southern Gulf 
States. Saudi Arabia remains the key to any coordinated effort--just as 
it remains the key to including Iraq in some broader regional security 
concept. This does not mean seeking a return to the direct basing of 
the pre-Iraq War era, or trying to create some form of U.S. pillar. It 
does mean rebuilding ties with Saudi Arabia focused in counterterrorism 
and energy interdependence. At the same time, the U.S. needs to 
strengthen its ties to Bahrain, Kuwait, Oman, and the UAE, as well as 
work as closely as possible with Yemen.
    The U.S. should quietly develop a clear strategy and action plan 
for discussing such future cooperation with each country that will lay 
the groundwork for action if the U.S. is forced to withdraw from Iraq, 
and prepare aid efforts and incentives for cooperation in adjusting to 
this contingency. The same is true in preparing for the impact of any 
U.S. withdrawal on Jordan and Egypt.
    As a side issue, the U.S. needs to be far more careful about 
talking about NATO initiatives in the region. To date, far too many of 
the discussions of this issue have focused on what NATO wants without 
any discussion of how this is going to benefit the Gulf states in terms 
of security, interoperability, and better arms sales policies. There is 
no evidence that NATO or European countries will actually provide more 
military capability, or seriously ease the burden on U.S. force 
deployments. There is a very real risk that another ``talk shop'' will 
be layered over the existing problems in Gulf security structures. U.S. 
efforts focused on getting NATO forces for Iraq that the U.S. clearly 
is not going to get now seem more likely to end in counterproductive 
tokenism than anything else.

Adopt a More Flexible Policy in Dealing with Iran
    The U.S., the West, and Gulf states cannot afford to ignore either 
the military realities in Iran, or the risk it will pose to Iraq 
whether the U.S. fails or succeeds. At one level, there is a clear case 
for the U.S. to encourage its Gulf and other allies to try to halt or 
limit Iranian proliferation and for the U.S. to work with Gulf states 
to create an effective level of military containment, deterrence, and 
defense. At another level, the U.S. will need to work with Iran to make 
it clear that there are good options for negotiation and improving 
relations, and options for cooperation in dealing with Iraq that will 
be to the advantage of Iran, Iraq, and the U.S.
    Iran is the only military power that poses a direct threat in terms 
of conventional military forces and proliferation. The disclosures made 
by the IAEA over the last year indicate that it is nearly certain that 
Iran will continue to covertly seek nuclear weapons, regardless of what 
it claims to agree to. It is developing long-range missiles, it has 
never properly declared its holdings of chemical weapons, and the 
status of its biological weapons programs is unknown.
    Moreover, the disclosures that have come out of Libya's decision to 
end its nuclear program indicate that Iran may well have one Chinese 
fission weapons design, with a 1,000-pound payload, and all of the 
technology necessary to make high capacity P2 centrifuges. This would 
eliminate the need for many aspects of nuclear weapons testing, as well 
as make it far easier to create small, dispersed trains of covert 
centrifuge facilities.
    Iran is still a significant conventional power. It has some 520,000 
men under arms, and over 300,000 reserves. These include 125,000 
Iranian Revolutionary Guards trained for land and naval asymmetric 
warfare. Iran's military also includes holdings of some 1,600 main 
battle tanks, 1,500 other armored fighting vehicles, 3,200 artillery 
weapons, 300 combat aircraft, 50 attack helicopters, 3 submarines, 59 
surface combatants, and 9 amphibious ships.
    Iran is a potential threat to Gulf shipping as well as to shipping 
in the Gulf of Oman. It occupies islands near the main shipping 
channels in the Gulf and has close contacts with outside terrorist 
movements. At the same time, virtually all of Iran's military equipment 
is aging or second rate and much of it is worn. It has not been able to 
modernize its air forces, ground based air defenses, or develop major 
amphibious warfare capabilities. Iran lost some 50-60% of its land 
order of battle in the climatic battles of the Iran-Iraq War, and has 
not imported a cutting edge weapon system since that time, or created 
advanced new C41 systems.
    According to U.S. intelligence estimates, Iran imported $2.0 
billion worth of arms during 1996-1999, and $600 million from 2000-
2003. Iran only signed $1,700 million worth of new arms agreements 
during 1996-1999, and only $500 million in new arms agreements during 
2000-2003.\20\ This is roughly 30% to 35% of the level necessary to 
recapitalize and modernize its forces. Though Iran may be able to 
compensate in part through its domestic military production, its 
current weapons developments are scarcely advanced enough to solve its 
problems. As a result, it must either succeed in proliferation or rely 
heavily on asymmetric warfare.\20\
    Iran has declared it has the capacity to make chemical weapons. The 
details of its biological warfare efforts are unknown but it continues 
to import suspect biotechnology. It is also moving forward in the 
nuclear dimension. The IAEA has discovered a number of disturbing 
details about its uranium enrichment program that are very similar to 
Libya's nuclear weapons program, including the ability to produce P-2 
centrifuges. Iran has conducted experiments with Uranium Hexafluoride 
that could fuel a weapons-oriented enrichment program, and has worked 
on a heavy water plant that could be used in a reactor design that 
would produce fissile material far more efficiently than its Russian 
supplied light water reactor. While it is not yet confirmed, Iran may 
well have received the same older Chinese design data for a 1,000-2,000 
pound nuclear weapon that Libya acquired through Pakistani sources.
    The report by the Director General of the IAEA, dated September 1, 
2004, states that Iran continues its nuclear development program, has a 
design for P-2 centrifuge, and that there has been low and highly 
enriched uranium contamination in Iranian nuclear sites.\22\ The Board 
of Governors met on September 13, 2004, they are divided over what to 
do with Iran, and they are likely to postpone their decision until 
their November meeting.
    There is also evidence that Pakistan might have helped Iran in its 
enrichment program. The Agency argues that Pakistan has helped Iran 
since 1995, and that the Pakistanis delivered the P-2 design to the 
Iranians. IAEA goes on to claim that Iran is intending to ``turn 37 
tons of nearly raw uranium called yellowcake, into uranium 
hexafluoride.'' Experts contend that this could be enough to create 5-6 
atomic weapons.\23\
    It is doubtful that Iran will really fully comply with the NNPT, 
and it seems more likely that it is only a matter of time before Iran 
acquires nuclear weapons. It's, however, very unclear what kind of a 
nuclear power Iran will be. No plans have ever surfaced as to the 
number and type of weapons it is seeking to produce or the nature of 
its delivery forces. Nothing meaningful is known about Iranian nuclear 
doctrine and targeting, or plans to limit the vulnerability of its 
weapons and facilities--and whether these could include a launch-on-
warning or launch-under-attack capability.
    Iran might be content to simply develop its technology to the point 
it could rapidly build a nuclear weapon. It might choose to create an 
undeclared deterrent, limit its weapons numbers and avoid a nuclear 
test. It might test and create a stockpile, but not openly deploy 
nuclear-armed missiles or aircraft. It also, however, might create an 
overt nuclear force. Each option would lead to a different Saudi 
response, as well as provoke different responses from Israel and the 
U.S., creating different kinds of arms races, patterns of deterrence, 
and risks in the process.
    Delivery systems are also a problem. Iran is reaching final 
development of its Shahab-3 missile, and working on a longer-range 
version of the missile as well as the Shahab-4, and Shahab-5. These 
missiles will be able to reach most Gulf cities and area targets, but 
are far too inaccurate and lacking in total payload to be effective 
conventional weapons. They are useful militarily only if they have 
warheads carrying weapons of mass destruction. Moreover, Gulf states 
face the risk of some form of covert attack or the possibility of the 
transfer of weapons to some anti-Saudi extremist group or proxy. These 
currently do not seem to be probable scenarios, but they are possible.
    Much will depend on whether Iran feels it faces a threat of attack 
or preemption if it openly deploys nuclear forces, and on its 
perception of the level of cooperation between the U.S. and the 
Southern Gulf states in creating effective defenses and deterrence. 
Iran will never be a regional ``superpower,'' but it may well become 
dangerous if any power vacuum or lack of resolve emerges in the region. 
It will certainly exploit any gap between U.S. policies and efforts and 
those of other Gulf states, as well as any opportunities offered by 
states outside the region.
    Much will also depend on how Iran perceives its options in dealing 
with the U.S. over both its overall security position and Iraq. The 
U.S. needs to offer carrots as well as sticks. It needs to make it 
clear to Iran that the U.S. will not stay in Iraq or uses its position 
there against Iran. It needs to stop talking about an ``axis of evil,'' 
and act from a stance of ``more in sorrow than in anger,'' calling for 
cooperation and putting the onus on Iran's hardliners. It needs to 
adopt a clear posture of being willing to engage in unrestricted 
official dialog, and show it will engage Iran in any area where quiet 
talks and mutual cooperation can help both nations. Afghanistan is an 
example, and should have been a prelude to such cooperation over Iraq.
    Above all, the U.S. needs to stop talking vaguely about Iran at the 
``official spokesman'' level and making charges it does not 
substantiate in detail. The U.S. needs to makes its concerns clear and 
specific, and back them up. It needs to advance proposals, not just 
problems. It needs to recognize Iranian concerns and show how 
cooperation over Iraq and other issues could benefit Iran more than 
confrontation. It also needs to think long and hard about how to 
approach Iran in the case of either success or failure in Iraq. A 
stable Iraq means a Shi'ite majority; a failed Iraq means a power 
vacuum. Iran should be quietly told what U.S. policy is, and what its 
options are, in both cases.

Prepare for the Potential Impact of Problems in Iraq in Dealing with 
        the Fighting in Afghanistan
    It is time to need to think long and hard about the future of 
Afghanistan, and what can actually be done about it--particularly if 
the U.S. is forced to withdraw from Iraq. There already is a serious 
risk that the legacy of the defeat of the Taliban is making Afghanistan 
the ``poster child'' of politically correct and unobtainable goals. 
This situation is difficult now, and could become explosive if the U.S. 
is seen as being defeated in Iraq.
    What is need is realism, and not good intentions. As is the case in 
Iraq, it is plans that can be actually implemented. This requires 
several existential questions to be dealt with that the U.S. (and 
Europe) often seem determined to ignore:

   What constitutes achievable success in nation building in 
        Afghanistan, and is it that much different from what the West 
        normally regards as failure?
   How long and intensive should the fight to deal with the 
        remnants of the Taliban and Al Qaida go on? What kind of fight 
        is actually worthwhile? When do the problems in terms of 
        domestic hostility to Western intervention, for Pakistan, etc. 
        exceed the benefits?
   Is a true central government really practical or necessary?
   Is any kind of economy other than a drug economy actually 
        possible, and what does economic reform and development in 
        Afghanistan actually mean?
   What can NATO really accomplish? As the Economist points out 
        (June 19, 2004), NATO and Western international efforts to date 
        are not a success story: Many pledges in aid and in providing 
        police and security forces have not been kept.
   NATO only now has 6,500 men in the ISAF, and most have such 
        light equipment they are undergunned compared to some warlords. 
        They currently only function in Kabul and have a limited 
        presence in Kunduz. Adding some 3,500 men more, as a result of 
        the NATO summit of June 2004, will fall far short of the 5,000 
        President Karzai requested as a minimum. Only 1,500 of the 
        personnel will evidently actually be deployed to Afghanistan, 
        including one battalion of 700 men. (2,000 more of the 3,500 
        will be a ready reserve, including two more battalions). Those 
        deployed will provide token Europe support for the PRTs planned 
        for Faizabad, Maimana, Baghian, and Mazar-I-Sharif, but not 
        deal with the Pushtun issue.\24\
   What can be done to make aid more real and more effective? 
        What can be done to convert non-U.S. pledges into actual aid 
        deliveries (only about $386 million of a total of only $1,24 
        billion in such pledges had actually been provided as of June 
        2004, versus $1.4 billion out of U.S. pledges of $3.3 billion)? 
        Moreover, is actual aid needed and not loans? Do NGOs need new 
        fiscal monitoring and controls to examine how much money they 
        actually spend in country, as distinguished from overhead and 
        salaries?

    Afghanistan does not have to be ``mission impossible,'' but the 
U.S. and Europe must focus on ``mission practical'' to make real 
progress. They also need to look far beyond democracy and politics, and 
come to grips with governance, economic, demographics, and the hard 
realities on the ground.
    The U.S. also needs clear contingency plans for having to leave 
Iraq under any conditions that the region will perceive as defeat. This 
may well mean moving some elements of U.S. forces eastward, rather than 
to the Gulf, or bring them home. The U.S. will need to take tangible 
action in Afghanistan to show that a local reversal is not a regional 
defeat, and that the U.S. will act to strengthen both Afghanistan and 
Pakistan.
    This does not, however, mean expanding its role in Central Asia. 
That role is already conspicuously tied to dictators and failed 
regional leaders, and the U.S. needs to be far more careful about the 
extent to which it becomes coupled to such regimes in local eyes. ``The 
enemy of my enemy is my friend'' is a proverb that requires far more 
judgment and restraint.
Recast U.S. Energy Policy to Deal with the Reality that the U.S. Will 
        Have Growing Strategic Dependence on Gulf and Middle Eastern 
        Oil Exports for the Next 20 years, and Their Security will 
        Become Steadily More Important
    The election campaign is over and it is time for both parties, and 
the Administration and the Congress, to be honest about energy. The 
U.S. can and must find substitutes for petroleum, but this will take 
decades. In the interim, the U.S. and the global economy will actually 
become steadily more dependent on energy imports, and particularly on 
energy imports from the Gulf. The Department of Energy estimates that 
oil will account for some 39% of the world's energy consumption through 
2015, and that the U.S. and its major trading partners in developing 
Asia will account for 60% of the increase in world demand through this 
period.\25\
    The MENA region has some 63% of all of the world's proven oil 
resources, and some 37% of its gas. In 2001, the Gulf alone had over 
28% of all of the world's oil production capacity, and the entire MENA 
region had 34%.\26\ These reserves, and low incremental production 
costs, ensure the region will dominate increases in oil production 
through at least 2015. The EIA estimates that Saudi Arabia alone will 
account for 4.2 MMBD of the total increase, Iraq for 1.6 MMBD. Kuwait 
for 1.3 MMBD, and the UAE for 1.2 MMBD. These four countries account 
for 8.3 MMBD out of a worldwide total of 17.9 (46%). To put these 
figures in perspective, Russia will account for an increase of only 1.3 
MMBD.\27\
    The International Energy Agency estimates cover a longer period 
than the EIA estimates. They predict that total conventional and non-
conventional oil production will increase from 77 MMBD in 2002 to 121.3 
MMBD in 2030. This is a total increase of 44.3 MMBD worldwide. The 
Middle East will account for 30.7 MMBD, or 69% of this total. The IEA 
also estimates that the rate of dependence on the Middle East will 
increase steadily after 2010 as other fields are depleted in areas 
where new resources cannot be brought on line. It estimates that 29 
MMBD, or 94% of the total 31 MMBD increase in OPEC production between 
2010 and 2030 will come from Middle Eastern members of OPEC.\28\
    This dependence will be easier to secure with a friendly and stable 
Iraq, but the U.S. has no choice. The U.S. Energy Information Agency 
(EIA) summarizes the trends in Gulf oil exports as follows in its 
International Energy Outlook for 2004, and it should be noted that its 
estimates are based on favorable assumptions about increases in other 
fuels like gas, coal, nuclear and renewables, and favorable assumptions 
about increases in conversion and energy efficiency: \29\

          In 2001, industrialized countries imported 16.1 million 
        barrels of oil per day from OPEC producers . . . Of that total, 
        9.7 million barrels per day came from the Persian Gulf region. 
        Oil movements to industrialized countries represented almost 65 
        percent of the total petroleum exported by OPEC member nations 
        and almost 58 percent of all Persian Gulf exports.\30\
          By the end of the forecast period (2025), OPEC exports to 
        industrialized countries are estimated to be about 11.5 million 
        barrels per day higher than their 2001 level, and more than 
        half the increase is expected to come from the Persian Gulf 
        region.\31\
          Despite such a substantial increase, the share of total 
        petroleum exports that goes to the industrialized nations in 
        2025 is projected to be almost 9 percent below their 2001 
        share, and the share of Persian Gulf exports going to the 
        industrialized nations is projected to fall by about 13 
        percent. The significant shift expected in the balance of OPEC 
        export shares between the industrialized and developing nations 
        is a direct result of the economic growth anticipated for the 
        developing nations of the world, especially those of Asia.
          OPEC petroleum exports to developing countries are expected 
        to increase by more than 18.0 million barrels per day over the 
        forecast period, with three-fourths of the increase going to 
        the developing countries of Asia. China, alone, is likely to 
        import about 6.6 million barrels per day from OPEC by 2025, 
        virtually all of which is expected to come from Persian Gulf 
        producers.
          North America's petroleum imports from the Persian Gulf are 
        expected to double over the forecast period. At the same time, 
        more than one-half of total North American imports in 2025 are 
        expected to be from Atlantic Basin producers and refiners, with 
        significant increases expected in crude oil imports anticipated 
        from Latin American producers, including Venezuela, Brazil, 
        Colombia, and Mexico. West African producers, including Nigeria 
        and Angola, are also expected to increase their export volumes 
        to North America. Caribbean Basin refiners are expected to 
        account for most of the increase in North American imports of 
        refined products. With a moderate decline in North Sea 
        production, Western Europe is expected to import increasing 
        amounts from Persian Gulf producers and from OPEC member 
        nations in both northern and western Africa. Substantial 
        imports from the Caspian Basin are also expected.
          Industrialized Asian nations are expected to increase their 
        already heavy dependence on Persian Gulf oil. The developing 
        countries of the Pacific Rim are expected to almost double 
        their total petroleum imports between 2001 and 2025.

    While quantified estimates of export dependence are uncertain, its 
clear that it would take a massive breakthrough(s) in technology or 
discoveries of reserves outside the Middle East and North Africa (MENA) 
to change these trends.
    Moreover, both the military security of the MENA region, and its 
ability to achieve the necessary investment in new energy production 
are critical U.S. strategic interests. For example, some 40% of all 
world oil exports now pass daily through the Strait of Hormuz and both 
EIA and IEA projections indicate this total will increase to around 60% 
by 2025-2030.\32\
    The IEA projections, for example, indicate that Middle Eastern 
Exports will total some 46 MMBD by 2030, and represent more that two-
thirds of the world total. This means that the daily traffic in oil 
tankers will increase from 15 MMBD and 44% of global interregional 
trade in 2002, to 43 MMBD and 66% of global interregional trade in 
2030. This means that the daily traffic in LNG carriers will increase 
from 28 BCM and 18% of global interregional trade in 2002, to 230 
carriers and 34% of global interregional trade in 2030.\33\ The IEA 
does, however, estimate that these increases would be some 11% lower if 
oil prices remained consistently high in constant dollars.
    The International Energy Agency also estimates that imports will 
rise from 63% of total OECD demand for oil in 2002 to 85% in 2030 some 
$3 trillion dollars must be invested in the oil sector from 2003 to 
2030 to meet world demand for oil, and something approaching half of 
this total must be invested in the Middle East. Some $234 billion will 
be required for tankers and oil pipelines, and again, a substantial 
amount must go to the MENA area.\34\
    Under most conditions, the normal day-to-day destination of MENA 
oil exports is strategically irrelevant. Oil is a global commodity, 
which is distributed to meet the needs of a global market based on 
process bid by importers acting in global competition. With the 
exception of differences in price because of crude type and 
transportation costs, all buyers compete equally for the global supply 
of available exports, and the direction and flow of exports changes 
according to marginal price relative to demand. As a result, the 
percentage of oil that flows from the MENA region to the United States 
under normal market conditions has little strategic or economic 
importance. If a crisis occurs, or drastic changes take place in 
prices, and the U.S. will have to pay the same globally determined 
price as any other nation, and the source of U.S. imports will change 
accordingly. Moreover, the U.S. is required to share all imports with 
other OECD countries in a crisis under the monitoring of the 
International Energy Agency.
    The size of direct imports of petroleum is also only a partial 
measure of strategic dependence. The U.S. economy is dependent on 
energy-intensive imports from Asia and other regions, and what comes 
around must literally go around. While the EIA and IEA do not make 
estimates of indirect imports of Middle Eastern oil in terms of the 
energy required to produce the finished goods, the U.S. imports them 
from countries that are dependent on Middle Eastern exports, analysts 
guess that they would add at least 1 MMBD to total U.S. oil imports. To 
put this figure in perspective, direct U.S. oil imports increased from 
an annual average of 7.9 MMBD in 1992 to 11.3 MMBD in 2002, and 2.6 
MMBD worth of U.S. petroleum imports came directly from the Middle East 
in 2002.\35\ If indirect U.S. imports, in the form of manufactured 
goods dependent on imports of Middle Eastern oil were included, the 
resulting figure might well be 30-40% higher than the figure for direct 
imports.
    Moreover, the U.S. and other industrialized states are increasingly 
dependent on the health of the global economy. With the exception of 
Latin America, Mexico, and Canada, all of America's major trading 
partners are critically dependent on Middle Eastern oil exports. In 
2002, the Middle East and North Africa supplied 5.0 MMBD of 11.9 MMBD 
of European imports (42%). MENA exporters supplied 4.0 MMBD of Japanese 
imports of 5.1 MMBD (79%). While MENA countries supplied 0.8 MMBD out 
of China's imports of 2.0 MMBD (39% and growing steadily in recent 
years), 0.2 MMBD of Australia's imports of 0.6 MMBD (33%), and 6.5 MMBD 
of some 8.6 MMBD in imports by other Asian and Pacific states 
(76%).\36\
    The EIA and IEA project that the global economy will also grow far 
more dependent on the Middle East and North Africa in the future. The 
EIA's International Energy Outlook 2004 projects that North American 
imports of MENA oil will increase from 3.3 MMBD in 2001 to 6.3 MMBD in 
2025--an increase of 91%, almost all of which will go to the U.S. The 
increase in exports to Western Europe will be from 4.7 MMBD to 7.6 
MMBD, an increase of 62%. This assumes major increases in oil exports 
from the FSU and conservation will limit the scale of European imports 
from the Middle East. Industrialized Asia--driven by Japan--will 
increase its imports from 4.1 MMBD to 6.0 MMBD, or nearly 50%. China 
will increase its imports from 0.9 MMBD to 6.0 MMBD, or by nearly 570%; 
and Pacific Rim states will increase imports from 5.0 MMBD to 10.2 
MMBD, or by 104%.
    U.S. oil imports are only a subset of U.S. strategic dependence on 
Middle East oil exports. It is important to note, however, that neither 
the Bush energy policy, nor any recent Congressional energy bills, are 
projected to have any meaningful strategic impact on U.S. import 
dependence if they are ever passed into law and transformed into 
action. It takes massive shifts in U.S. energy consumption and supply 
over extended periods of time to accomplish this and there are good 
reasons that the Bush Administration, Kerry energy policy, and 
Congressional advocates of different policies have either failed to 
make meaningful analysis of the impact of their proposals on U.S. 
import dependence or have provided ``blue sky'' estimates that are 
little more than political posturing.
    If one turns to the EIA estimates made since the Bush 
Administration came to office, it is clear that realistic models of 
U.S. energy needs will lead to steady increases in U.S. energy imports. 
The EIA's 2003 Annual Energy Forecast reports that net imports of 
petroleum accounted for 55 percent of domestic petroleum consumption in 
2001. U.S. dependence on petroleum imports is projected to reach 68% in 
2025 in the reference case. This is a rise in U.S. net imports from 
10.9 MMBD in 2021 to 19.8 MMBD in the reference case (+82%). In the low 
oil price case, net imports would rise to 21.1 MMBD. They would be 18.2 
MMBD in the high oil price case, 17.8 MMBD in the low economic growth 
case, and 22.3 MMBD in the high economic growth case.\37\
    The EIA's annual U.S. energy forecast for 2004 predicts that 
imports will be even higher. It reports that net imports of petroleum 
accounted 53 percent of domestic petroleum consumption in 2002. U.S. 
dependence on petroleum imports is estimated to reach 70 percent in 
2025 in the reference case, versus 68 percent in the 2003 forecast. 
Imports are expected to be 65 percent of total consumption. In the low 
oil price case this number is estimated to be 75 percent.\38\ (The 
AEO2003 report indicated that estimated imports as a share of total oil 
consumption would be 65 percent in high price case in 2025, and 70 
percent in the low price case.)
    The specific figures will vary according to oil price s and the 
growth of the U.S. economy, and the EIA contingency forecasts are 
summarized below in millions of barrels per day: \39\

------------------------------------------------------------------------
                                                                  Net
     Year and projection       Product      Net     Net crude   product
                               supplied   imports    imports    imports
------------------------------------------------------------------------
2002........................       19.8       10.5        9.1        1.4
2025:
    Reference...............       28.3       19.7       15.7        3.9
    Low oil price...........       31.1       23.3       18.2        5.1
    High oil price..........       25.6       16.6       14.3        2.2
    Low Growth..............       25.9       17.6       15.0        2.6
    High Growth.............       30.6       21.8       16.4        5.4
------------------------------------------------------------------------

    In 2002, net U.S. imports of petroleum accounted for 53 percent of 
domestic petroleum consumption. Increasing dependence on petroleum 
imports is projected, reaching 70 percent in 2025 in the reference 
case. The corresponding import shares of total consumption in 2025 are 
expected to be 65 percent in the high oil price case and 75 percent in 
the low oil price case.
    In short, the practical problem for the foreseeable future is how 
to ensure that the MENA states can obtain the more than $1 trillion the 
International Energy Agency estimates they will need to expand energy 
production capacity and exports, and to protect growing U.S. and global 
dependence on MENA energy exports, particularly from the Gulf. There 
are no meaningful near and mid-term options that will allow the U.S. to 
reduce dependence in any meaningful strategic sense at anything like 
today's market prices for energy. The U.S. must shape its security 
policies accordingly, regardless of what happens in Iraq. It must also 
shape them in light of U.S. dependence on a global economy--not simply 
direct U.S. dependence on oil imports.

Encourage Evolutionary Political, Economic, Demographic, and Social 
        Reform
    The U.S. cannot secure its narrow strategic interests in the Middle 
East unless it also seeks far broader strategic goals that will meet 
the needs of its peoples as well as those of the United States. The 
battle for hearts and minds extends far beyond Iraq, and the West and 
the Middle East, particularly the U.S. and Arab world, need to take a 
more honest approach to reform.
    So far, governments have reacted largely by treating the symptoms 
and not the disease. Counterterrorism is essential to deal with the 
most obvious and damaging symptoms, but it cannot deal with the 
underlying causes. Military force is sometimes necessary. However, it 
is now all too clear in Iraq that it can create as many--or more--
problems than it solves.
    The practical results are all too clear from an August 2004 survey 
by the Pew Research Center, and one that clearly shows how the 
divisions between the West and Middle East affect moderate and 
traditionally friendly states. The Pew group reported, ``In the 
predominantly Muslim countries surveyed, anger toward the United States 
remains pervasive . . . Osama bin Laden is viewed favorably by large 
percentages in Pakistan (65%), Jordan (55%) and Morocco (45%). Even in 
Turkey, where bin Laden is highly unpopular, as many as 31% say that 
suicide attacks against Americans and other Westerners are justifiable.
    There are many other surveys that deliver the same message, just as 
there are many surveys of U.S. and Western opinion that reflect anger 
against terrorism, and hostility towards Islam and the Arab world. The 
events of 9/11, the rise of Islamic extremism and the faltering Western 
reaction, the broad regional backlash to the Arab-Israeli conflict, the 
Iraq War, and the growing clash between religions and cultures, have 
all led to a crisis in relations that governments cannot address in 
such conventional terms.
    U.S. and Arab relations are where they are today for many reasons, 
but one of them is that the Western and Islamic worlds have previously 
defined ``tolerance'' in terms of mutual ignorance, and in terms of 
governmental indifference at the ideological, political, and cultural 
level.
    Empty U.S. calls for instant, region-wide democracy and political 
reform are producing a dangerous counterreaction in much of the Arab 
world. A Western focus on counterterrorism--without a balancing focus 
on creating bridges between the West and Middle East--is often breeding 
extremism rather than defeating it.
    At the same time, token pledges and efforts at reform within the 
Arab world fall far short of the needs of Arab peoples, and are weak 
and ineffective counters to extremism. Neither Middle Eastern 
governments nor Middle Eastern intellectuals have yet shown they can 
honestly address the scale of the region's problems or act decisively 
at the speed and depth required.
    These efforts cannot deal with problems that are ``generational'' 
in nature. They are not the product of one temporary series of 
conflicts and tensions, or of the threat posed by today's groups of 
terrorists and extremists. Weak regimes, population growth, 
demographic, hyperurbanization, and a failure to develop and diversify 
regional economies all act to create pressures on the Middle East that 
will outlive Bin Laden and Al Qaida by decades.
    Most of the nations of the Arab and Islamic world now face 
pressures and changes that they can only deal with if they come firmly 
to grips with the need for reform:

   Failed secular regimes and political parties have pushed the 
        peoples of the region back towards Islam and made them seek to 
        redefine the role of religion in their lives.
   Massive population increases: The Middle East and North 
        Africa had a population of 112 million in 1950. The population 
        is well over 415 million today, and approaching a fourfold 
        increase. It will more than double again, to at least 833 
        million, by 2050.
   A ``youth explosion,'' where ages 20-24--the key age group 
        entering the job market and political society--has grown 
        steadily from 10 million in 1950 to 36 million today, and will 
        grow steadily to at least 56 million by 2050.
   Some 36% of the total MENA population is under 15 years of 
        age versus 21% in the U.S. and 16% in the EU. The ratio of 
        dependents to each working age man and woman is three times 
        that in a developed region like the EU.
   A failure to achieve global competitiveness, diversify 
        economies, and create jobs that is only partially disguised by 
        the present boom in oil revenues. Direct and disguised 
        unemployment range from 12-20% in many countries, and the World 
        Bank projects the labor force as growing by at least 3% per 
        year for the next decade.
   A region-wide average per capita income of around $2,200 
        versus $26,000 in the high-income countries in the West.
   A steady decline in non-petroleum exports as a percentage of 
        world trade over a period of nearly half a century, and an 
        equal pattern of decline in regional GDP as a share of global 
        GDP.
   Hyperurbanization and a half-century decline in agricultural 
        and traditional trades impose high levels of stress on 
        traditional social safety nets and extended families. The urban 
        population seems to have been under 15 million in 1950. It has 
        since more than doubled from 84 million in 1980 to 173 million 
        today, and some 25% of the population will soon live in cities 
        of one million or more.
   Broad problems in integrating women effectively and 
        productively into the work force. Female employment in the MENA 
        region has grown from 24% of the labor in 1980 to 28% today, 
        but that total is 15% lower than in a high growth area like 
        East Asia.
   Growing pressures on young men and women in the Middle East 
        and North Africa to immigrate to Europe and the U.S. to find 
        jobs and economic opportunities that inevitably create new 
        tensions and adjustment problems.
   Almost all nations in the region have nations outside the 
        region as their major trading partners, and increased 
        intraregional trade offers little or no comparative advantage.
   Much of the region cannot afford to provide more water for 
        agriculture at market prices, and in the face of human demand; 
        much has become a ``permanent'' food importer. Regional 
        manufacturers and light industry have grown steadily in volume, 
        but not in global competitiveness.
   Global and regional satellite communications, the Internet, 
        and other media, have shattered censorship and extremists 
        readily exploit these tools.
   A failed or inadequate growth in every aspect of 
        infrastructure, and in key areas like housing and education.
   Growing internal security problems that often are far more 
        serious than the external threat that terrorism and extremism 
        pose to the West.
   A failure to modernize conventional military forces and to 
        recapitalize them. This failure is forcing regional states to 
        radically reshape their security structures, and is pushing 
        some toward proliferation.
   Strong pressures for young men and women to immigrate to 
        Europe and the U.S. to find jobs and economic opportunities 
        that inevitably create new tensions and adjustment problems.

    Unlike today's crises and conflicts, these forces are so great that 
they will play out over decades. They cannot be dealt with simply by 
attacking today's terrorists and extremists; they cannot be dealt with 
by pretending religion is not an issue, and that tolerance can be based 
on indifference or ignorance.
    Today, both sides take a dysfunctional approach to reform. The Arab 
world tends to live in a state of denial about both the scale of its 
need for reform, and the ineffectiveness of most of its present 
efforts. Arab governments and Arab intellectuals have generally failed 
their peoples. They promise, plan, and talk but falter in taking 
meaningful action. The end result is that the failure of evolution 
breeds revolution, and the failure of moderates breeds extremists.
    Far too many of these failures also transcend culture and religion. 
A failed state sector is a failed state sector. Policies that block 
economic growth block economic growth. Bad education is bad education, 
and rote learning is rote learning. A development plan that is never 
really implemented cannot lead to development. Slow progress in the 
rule of law and basic human rights is simply too slow to be acceptable. 
A virtual conspiracy of silence on the subject of population growth and 
demographics amounts to intellectual cowardice.
    There is no question that much in the U.S. and the West also 
deserves criticism. The answer, however, is not to stifle criticism, 
but rather to encourage mutual criticism and common pressure for reform 
and change. Moreover, the problems involved are relative; the Arab 
world and Middle East simply are moving too slowly, making far too many 
excuses, and exporting a great deal of the problems that can only be 
solved through action at home.
    Blaming the West, ``globalism,'' the U.S., and a colonial heritage, 
are all further forms of moral and intellectual cowardice. At least 90% 
of the problems of Arab states and Middle Eastern governments are self-
inflicted wounds. They will only be solved when individual Arab 
countries have the courage and will to solve them on their own.
    The other side of this coin, however, is that U.S. calls for 
instant progress towards region-wide ``democracy'' and ``elections''--
the kind of vague generalities that called for the initial drafts of 
the U.S. ``Greater Middle East Initiative''--only make things worse. 
They treat all countries as the same, ignore the need for political 
parties, experience with elections, and moderate opposition movements. 
They also ignore the human rights, rule of law, economic, demographic, 
educational, and social reforms that often have a higher priority and 
are the precursors to meaningful pluralism. Far too often, the U.S. has 
adopted a ``one man, one vote, one time'' approach to change in the 
Middle East; and has ignored the need for evolution by its friends in 
the search for a revolution that would bring extremists and its enemies 
to power.
    The vague generalities of the G8 communique that took the place of 
the ``Greater Middle East Initiative'' were far less damaging, but also 
provide no basis for real progress. They do not offer incentives in 
terms of economic aid, accession to the WTO, better trade, or foreign 
investment. They talk in meaningless terms about regional solutions and 
intraregional cooperation.
    A broad debate, indeed dialectic, is needed on reform in the Arab 
world and Middle East. The primary force for this debate must come from 
within, but it must be provoked, challenged, and aided from without. At 
the same time, the U.S., EU, and all of the members of the G8 need to 
move beyond both political mirror imaging and vacuous good intentions.
    Calls for reform need to be evaluated, planned, and prioritized on 
a country-by-country basis. They need to build on what countries, and 
their reformers, are doing wherever possible. They need to find out the 
best evolutionary path to human rights, rule of law, economic, 
demographic, educational, and social reforms in a given country; and 
provide real incentives not just criticism. They need to understand 
that democracy without stability, and the proper checks and balances, 
is simply a different form of extremism.

Give the Political Dimension of Counterterrorism a New Priority
    The same pressure for reform are both an underlying cause of 
terrorism and a reason why the U.S. must give the political dimension 
of counterterrorism a new priority. The U.S., the West, and every 
moderate state and movement in the Islamic world now face a common 
threat in forms of Islamic extremism that cannot tolerate other 
interpretations of Islam, much less Judaism and Christianity.
    This threat is inevitably coupled to the threat posed by forms of 
Christianity that see all non-Christians as damned, and Jews simply as 
a convenient mechanism to trigger the second coming. It is coupled to 
Israeli extremist statements that effectively dehumanize Palestinians 
and reject the legitimacy of Islam, and statements in the Arab world 
that go from anger against Israel to attacks on all Jews and Judaism.
    The result to date has been a flood of mutually hostile press 
reports, television coverage filled with conscious and unconscious 
bias, and in movie villains that exploit, rather than counter, 
prejudice. We see it in a series of public opinion polls that reflect a 
growing polarization between broad sectors of the public, and again, 
particularly in the U.S. and Arab world.
    Most tangibly and dangerously, the practical result is terrorism 
and violence; endless conspiracy theories, vicious stereotypes; 
detentions; and growing barriers to travel and immigration. It is 
reflected it in the breakdown of long-standing alliances, in the 
growing bitterness and underlying hatred in the Arab-Israeli conflict; 
in Afghanistan and Iraq in the form of religiously inspired insurgency 
and asymmetric war; and in threats to acquire and use weapons of mass 
destruction against those with different cultures and religions.
    So far, the U.S. has responded by focusing on counterterrorism. In 
the process, it has created growing barriers between it in the Arab 
world, undermined past alliances, and focused on short-term expedience. 
Many Arab regimes have acted in terms of denial, taken half measures, 
and failed to address extremism. The end result of both approaches is 
that the problem is growing, not diminishing. The problem is also that 
extremist movements are developing new linkages and finding new ways to 
exploit popular anger, emotion, and religious prejudice.
    The U.S. needs to work with Arab and other Islamic regimes to take 
a new approach to public policy that goes beyond the traditional 
approach to strategy, and one that must have the active support of both 
Western and Islamic governments. Governments--and particularly the U.S. 
government and the moderate governments of the Arab world--need to make 
a concerted effort to make religious and cultural tolerance a matter of 
public policy. They need to support this effort in the ways they 
structure education, diplomacy, law enforcement, immigration, and all 
of the other tools available to the state.
    What are some of the practical actions that the U.S., other 
Western, and Arab and Islamic governments need to employ to bring 
balance and depth to their actions, and to implement such a grand 
strategy? The answers must be empirical, and many must be found on a 
nation-by-nation and case-by-case basis. The best approach should be 
the subject of an intense debate in both the West and at appropriate 
points along the continuum of the Arab countries, the Middle East, and 
the Islamic world. It is clear, however, what some of the answers must 
be:

   Western and Islamic governments must make enduring efforts 
        to bridge the gap between cultures and religions, and create a 
        common effort to move towards development and reform.
   Governments need to fund dialogue and mutual exchanges at 
        the levels only governments can mount, and do so through a mix 
        of grants, public information campaigns, and governmental use 
        of all the tools available to influence domestic and foreign 
        public opinion.
   The leaders of governments need to encourage the highest-
        ranking religious leaders of the West and Islamic world to deal 
        as firmly with the divisions between Judaism, Christianity, and 
        Islam as the Vatican finally dealt with the divisions between 
        Judaism and Christianity.
   Comprehensive educational reform is needed in both the 
        Middle East and the West to teach tolerance based on 
        understanding at every level from the earliest levels of 
        education through graduate education, and a systematic purging 
        of education material with prejudice, hate, or stereotypes.
   Use should be made of all the legitimate tools of law to put 
        an end to extremist and hate-oriented literature and use of the 
        media.
   Governments need to carry out a comprehensive review of visa 
        policies based on the understanding that encouraging legitimate 
        study abroad, media presence and visits, academic exchanges, 
        visits for dialogue and cultural familiarization, and 
        international business are as much a critical element in the 
        war on terrorism as defeating or interdicting terrorists.
   An equally comprehensive review is needed of 
        counterterrorism policies that looks beyond a narrow focus on 
        defeating terrorists and seeks to ensure that necessary action 
        to defeat terrorism does not create unnecessary anger and 
        hostility, detain or arrest the innocent, or fail to compensate 
        those who are unfairly arrested.
   Western policies towards immigration must emphasize 
        tolerance and equality for Arab and Islamic immigrants, not 
        just economic need and security.
   Governments need to act to set common ground rules for 
        handling deportations and detainments that fully consider the 
        human rights and political aspects of such actions, and their 
        ``backlash''.
   A common effort to develop efficient means for reviewing 
        charitable and other fund transfers and activities so that 
        legitimate activity is not blocked by the effort to reduce the 
        funding of extremism and terrorism.
   Creation of new mechanisms for security dialog between 
        groups like NATO and the GCC, and on a national basis, to ease 
        the pressure for arms sales, strengthen mutual security efforts 
        to deal with threats like proliferation and asymmetric warfare, 
        and create true security and arms control partnerships in 
        regions like the Gulf.

    There is one other critical step the U.S. needs to take to deal 
with terrorism and every other issue in the region. The U.S. needs 
strong, well-funded, and proactive U.S. Embassy teams that can deal 
with the needs and perceptions of each country in the region. It needs 
to adequately fund public diplomacy at the national level, and tie 
together its efforts at encouraging reform, building effective security 
structures, and counterterrorism.
    Effective national policies are not enough. The U.S. needs coherent 
efforts tailored to the need of given countries, and to give the term 
``country team'' real meaning. It needs to put an end to the 
underfunding of U.S. efforts in the field, and break out of the 
increasing tendency to see Embassies as fortresses that need to be 
defended, rather than as the first line of action.

Shaping the Post-Iraq Environment
    Wars are usually a bad time to try to shape regional policy. It 
should be clear, however, that even the best outcome in Iraq is not 
going to transform any other nation in the region in the near to mid-
term if ever. Any U.S. defeat in Iraq is going to immediately affect 
the U.S. in every other area of U.S. policy in the region.
    The U.S. cannot afford to defer any of these other issues and 
concentrate on Iraq--whether it adopts a ``play the course'' strategy 
in Iraq or any other approach. It needs a comprehensive strategy and 
action plan for dealing with the Middle East--win, lose, or draw.

                               __________
NOTES
    \1\ There are many poll results that make this point. Perhaps the 
best in terms of detail was one sponsored by ABC and conducted in 
February 2004. It showed that the Iraqi people as a whole still had 
real hope for the future. At the same time, the polls made it clear 
that there already were deep divisions within Iraqi society that could 
block nation building, or even lead to civil war. The results of the 
poll were mixed. Some reflected the deep ethnic and religious 
differences in Iraq. Other results were more optimistic. Even if one 
looks at results for the least confident group--the Sunnis--it is 
obvious that most Iraqis saw life as getting better, understood that 
Iraq was in transition, and had hope for the future.
    The ABC News poll found the following attitudes:

------------------------------------------------------------------------
                                  Percent responding to survey question
                               -----------------------------------------
                                                 Shi'ite
                                 Sunni Arabs      Arabs         Kurds
------------------------------------------------------------------------
Life these days:
    Good......................           66            67            85
    Bad.......................           33            33            13
Life compared to one year ago:
    Better....................           50            60            69
    Worse.....................           25            16            13
Expectations:
    Better....................           61            72            83
    Worse.....................           12             4             2
------------------------------------------------------------------------

    The attitudes reflected in the ABC poll scarcely provided any 
guarantee of success, victory, and peace. Minorities generally shape 
violence and civil war, not majorities. It was clear from the broader 
range of results discussed throughout this analysis that there were 
Iraqis that remained extremely hostile to the Coalition. This was 
particularly true in Iraq's western province of Anbar and the most 
hostile cities in the Sunni triangle, but it was also true of some 
Shi'ites as well.
    The evolving mix of insurgents that the U.S. and Coalition had 
begun to fight in the late spring of 2003 also had significant popular 
support in their ethic area. Anbar is the single most Sunni Arab-
dominated province in Iraq, the area with violently hostile cities like 
Fallujah, and anger over the U.S.-led invasion spikes in that group, 
which was favored under Saddam Hussein's regime. ABC estimates that 
Anbar has some 5% of Iraq's population and is 92% Sunni and 91% Sunni 
Arab. It also accounts for 17% of all Sunni Arabs.
    In a February ABC News poll of Iraq, 71 percent of respondents in 
Anbar viewed attacks on coalition forces as ``acceptable'' political 
action. Among all Iraqis, just 17 percent held that view. Similarly, 56 
percent in Anbar said attacks on foreigners working alongside the CPA 
are acceptable, compared with 10 percent of all Iraqis. The ABC 
analysis found that Anbar residents are no worse off economically than 
most Iraqis. But they are less apt to say their lives are going well 
(52 percent in Anbar, compared with 70 percent in all Iraq); their 
expectations for the future are less positive; and above all, they are 
far more deeply aggrieved over the invasion and occupation.

   Eighty-two percent in Anbar say the invasion was ``wrong,'' 
        compared with 39 percent of all Iraqis. (Sixty-seven percent in 
        Anbar say it was ``absolutely'' wrong, compared with 26 percent 
        nationally.)
   Residents of Anbar are twice as likely as all Iraqis to say 
        the invasion humiliated rather than liberated Iraq.
   Sixty-five percent in Anbar say coalition forces should 
        leave now, compared with 15 percent of all Iraqis.
   More residents in Anbar prefer ``a strong leader for life'' 
        than either a democracy or an Islamic state. In all Iraq, more 
        prefer democracy.
Attitudes in Hostile Areas: The Sunni Triangle
    The ABC poll figures for the attitudes in the entire Sunni triangle 
(Ramadi, Fallujah, Tikrit, Samara, Baquba, and Baaji) are only 
marginally more reassuring. This area is estimated to have some 12% of 
Iraq's population and is 81% Sunni and 79% Sunni Arab. It has 34% of 
all the Sunni Arabs in Iraq.

   Seventy-one percent in the Sunni Triangle say the invasion 
        was ``wrong,'' compared with 39 percent of all Iraqis. (Fifty-
        six percent in Sunni Triangle say it was ``absolutely'' wrong, 
        compared with 26 percent nationally.)
   Residents of Sunni Triangle are nearly twice as likely as 
        all Iraqis to say the invasion humiliated rather than liberated 
        Iraq.
   Thirty-eight percent in Sunni Triangle say coalition forces 
        should leave now, compared with 15 percent of all Iraqis.
   More residents in Sunni Triangle prefer ``a strong leader 
        for life'' than either a democracy or an Islamic state. In all 
        Iraq, more prefer democracy. The ABC Poll found the following 
        results and they seem likely to be equally true of the rest of 
        the ``Sunni triangle.''

                                                 [In percentage]
----------------------------------------------------------------------------------------------------------------
                                                                                  Entire Sunni
                                                                                    Triangle
                                                                                    (Ramadi,
                                                                    Anbar          Fallujah,        All Iraqis
                                                                                Tikrit, Samara,
                                                                                 Baquba, Baaji)
----------------------------------------------------------------------------------------------------------------
Attacks ``acceptable'' on:
    Coalition forces.........................................              71               44               17
    Foreigners working with CPA..............................              56               33               10
Presence of coalition forces:
    Support..................................................              85               80               51
    Oppose...................................................               9                9               39
    ``Strongly'' oppose......................................              76               63               31
Say coalition forces should leave now........................              65               38               15
Invasion was:
    Right....................................................               9               16               48
    Wrong....................................................              82               71               39
Invasion was ``absolutely'' wrong............................              67               56               26
Invasion:
    Liberated Iraq...........................................               9               14               42
    Humiliated Iraq..........................................              83               75               41
Confident in CPA.............................................              12               14               28
Confident in occupation forces...............................               9               17               25
Preferred political system:
    Single leader for life...................................              45               41               28
    Islamic state............................................              18               19               21
    Democracy................................................              18               26               49
    No opinion...............................................              19               14                4
    Sunni....................................................              92               81               40
----------------------------------------------------------------------------------------------------------------

The Risk of Shi'ite Hostility
    This mix of ethnic, regional, and national results does not imply 
that Iraq as a whole cannot reach agreement on a new government. The 
ABC poll data show a lack of interest in retribution with regard to the 
Ba'athists, and the desire (even in Kurdistan) to keep Iraq as a single 
nation in spite of extreme political fragmentation and wariness.
    The polling does, however, reflect a host of problems that have 
been apparent on the ground ever since the fall of Saddam Hussein. 
These include high and unrealistic expectations for the future. They 
reflect ongoing public concerns and demands--nationally and locally--
for such essentials of life as security, jobs and electricity. It also 
shows that U.S. and Coalition success is critically dependent on 
Shi'ite goodwill. Or, to be more objective, success is dependent on 
Shi'ite tolerance and intelligent self-interest.
    The first year of occupation showed that the Coalition could hope 
to win a fight against part of Iraq's Sunnis--if it could eventually 
persuade the majority to support the nation building process and accept 
peaceful solutions. It showed the Coalition could largely count upon 
Kurds--who had nowhere else to go--if they remained unified and were 
willing to accept a realistic form of autonomy while respecting the 
rights of Arabs and other minorities. Sheer demographics made it clear, 
however, that the Coalition effort had no hope of dealing with a true 
popular uprising or rejection by the majority of Iraq's Shi'ites, or 
with the result of a serious civil war either between Sunni and Shi'ite 
or mass popular Shi'ite factions.
    It is important to note in this regard that 37% of the Shi'ites 
felt humiliated by Iraq's defeat. 35% felt the invasion was wrong, 12% 
felt the Coalition should leave immediately, and 12% felt that attacks 
on Coalition personnel were acceptable. While only 7% of the Shi'ites 
polled preferred a religious leader, 32% preferred a strong leader 
versus 39% for democracy.
    This is a significant and potentially violent Shi'ite minority, 
although the ABC poll also shows that Shias in the South--a region 
heavily repressed under Saddam's regime--are more likely than those 
elsewhere to say it was right for the coalition to invade, and to say 
the invasion liberated rather than humiliated their country.

                             [In percentage]
------------------------------------------------------------------------
                                                Southern     Shia Arabs
                                               Shia Arabs     elsewhere
------------------------------------------------------------------------
U.S.-led invasion was:
    Right...................................           56            44
    Wrong...................................           28            47
Invasion:
    Liberated Iraq..........................           49            34
    Humiliated Iraq.........................           27            53
What Iraq needs at this time: A gov't mainly           79            52
 of religious leaders.......................
Preferred system:
    Democracy...............................           39            41
    Islamic state...........................           31            16
    Single strong leader....................           18            33
Confident in religious leaders..............           57            44
------------------------------------------------------------------------

    \2\ Based on the analysis by my colleagues Rick Barton and Sheba 
Crocker in ``Progress or Peril? Measuring Iraq's Reconstruction,'' CSIS 
Post-Conflict Reconstruction Project, CSIS, 2004.

    Oxford: How much confidence do you have in the [U.S. and UK 
occupation forces]?

                                                 [In percentage]
----------------------------------------------------------------------------------------------------------------
                                                               Oct.-Nov.                 Mar.-Apr.
                                                                  '03        Feb. '04       '04        Jun. '04
----------------------------------------------------------------------------------------------------------------
Great Deal..................................................         7.60         8.70         7.00            6
Quite a Lot.................................................        13.60        19.00        18.40           14
Not Very Much...............................................        22.20        25.60        22.30           30
None at All.................................................        56.60        46.80        52.30           51
----------------------------------------------------------------------------------------------------------------
Oxford Research International ``National Survey of Iraq.''

    IIACSS: How much confidence do you have in [Coalition forces] to 
improve the situation in Iraq?

                             [In percentage]
------------------------------------------------------------------------
                                                  Apr.-May
                                     Jan. '04       '04        May '04
------------------------------------------------------------------------
Great Deal.......................        11.60         2.60         1.50
Fair Amount......................        16.70         4.40         8.20
Not Very Much....................        13.70         4.70         6.10
None at All......................        53.30        83.50        80.60
------------------------------------------------------------------------
IIACSS, Department of State, CPA, ``National Poll of Iraq.''

    \3\ E-mail dated 22-11-2004 from Curt Tarnoff, Specialist in 
Foreign Affairs, Congressional Research Service, 202-707-7656, 
[email protected].
    \4\ Once again, the data are uncertain. The original (FY04) request 
in education/refugees, etc. was $300 million, in January 2004, it 
became $280 million, in April 2004, $259 million, and $379 million 
under the re-allocation plan. E-mail dated 22-11-2004 from Curt 
Tarnoff, Specialist in Foreign Affairs, Congressional Research Service, 
202-707-7656, [email protected].
    \5\ Based on the analysis by my colleagues Rick Barton and Sheba 
Crocker, ``Progress or Peril? Measuring Iraq's Reconstruction.'' CSIS 
Post-Conflict Reconstruction Project, CSIS, 2004.
Attitudes towards Iraqi Police Forces
    IIACSS: How much confidence do you have in the [new Iraqi police] 
to improve the situation in Iraq?

                             [In percentage]
------------------------------------------------------------------------
                                                  Apr.-May
                                     Jan. '04       '04        May '04
------------------------------------------------------------------------
Great Deal.......................        44.80        47.90        47.30
Fair Amount......................        35.00        29.60        28.70
Not Very Much....................         6.70         8.60         5.70
None at All......................        11.00        11.20        15.80
------------------------------------------------------------------------
IIACSS, Department of State, CPA, ``National Poll of Iraq.''
Iraqi Perception. Also see Saban Center for Middle East Policy,
  Brookings Institution, ``Iraq Index: Tracking Reconstruction and
  Security in Post-Saddam Iraq,'' and ``Progress or Peril? Measuring
  Iraq's Reconstruction,'' CSIS Post-Conflict Reconstruction Project.

    Oxford: How much confidence do you have in the [new Iraqi police]?

                                                 [In percentage]
----------------------------------------------------------------------------------------------------------------
                                                               Oct.-Nov.                 Mar.-Apr.
                                                                  '03        Feb. '04       '04        Jun. '04
----------------------------------------------------------------------------------------------------------------
Great Deal..................................................        19.70         7.60        33.00           35
Quite a Lot.................................................        30.60        43.30        39.20           39
Not Very Much...............................................        33.40        20.60        17.60           20
None at All.................................................        16.30         8.50        10.20            7
----------------------------------------------------------------------------------------------------------------
Oxford Research International, ``National Survey of Iraq.''

Attitudes Toward Iraqi Army Forces
    IIACSS: How much confidence do you have in the [new Iraqi army) to 
improve the situation in Iraq?

                             [In percentage]
------------------------------------------------------------------------
                                                  Apr.-May
                                     Jan. '04       '04        May '04
------------------------------------------------------------------------
Great Deal.......................        34.70        36.50        32.90
Fair Amount......................        28.40        25.00        28.50
Not Very Much....................         9.70         9.90         8.60
None at All......................        17.20        17.80        20.10
------------------------------------------------------------------------
IIACSS, Department of State, CPA, ``National Poll of Iraq.''

    Oxford: How much confidence do you have in the [new Iraqi army]?

                                                 [In percentage]
----------------------------------------------------------------------------------------------------------------
                                                               Oct.-Nov.                 Mar.-Apr.
                                                                  '03        Feb. '04       '04        Jun. '04
----------------------------------------------------------------------------------------------------------------
Great Deal..................................................        16.00        19.70        24.40           24
Quite a Lot.................................................        30.10        42.20        46.70           50
Not Very Much...............................................        34.30        27.50        17.10           20
None at All.................................................        19.50        10.70        11.80            6
----------------------------------------------------------------------------------------------------------------
Oxford Research International, ``National Survey of Iraq.''

    \6\ For a discussion of some of the problems involved, see 
``Rebuilding Iraq: Resources, Security, Governance, Essential Services, 
and Oversight Issues,'' Washington, GAO-04-902R, June 2004.
    \7\ The money allocated to total obligations had only put $2,325 
million into the start of the pipeline. Office of the Inspector 
General, Coalition Provisional Authority, ``Report to Congress,'' 
October 30, 2004. p. 59.
    \8\ The Deputy DoD OIG for Inspections and Policy is about to begin 
a joint project with the DoS OIG to cover all phases of the training 
effort for the Iraqi police forces. This should be extended to cover 
Iraqi military and security forces.
    \9\ Department of Defense, ``Iraq Weekly Status Report,'' September 
22, 2004.
    \10\ Department of Defense, ``Iraq Weekly Status Report,'' November 
3, 2004 and information provided from MNSTC-I.
    \11\ http://www.mnstci.iraq.centcom.mil/facts_troops.htm, accessed 
November 11, 2004.
    \12\ State Department Report, November 19: NATO's Iraq Training 
Plans, press release on 23-1-04 as of 9:32 AM.
    \13\ Office of the Inspector General, Coalition Provisional 
Authority, ``Report to Congress,'' October 30, 2004, p. 69.
    \14\ Office of the Inspector General, Coalition Provisional 
Authority, ``Report to Congress.'' October 30, 2004.
    \15\ Department of Defense, ``Iraq Weekly Status Report,'' November 
3, 2004.
    \16\ Iraq's oil situation is considerably more complicated than 
some estimated indicate. An in depth analysis by DOE/EIA in its Country 
Analysis Brief of November 2004 raised the following issues:
    In early August 2003, the CPA put the cost of rehabilitating Iraq's 
oil sector to its pre-war state at $ 1.144 billion, and the time frame 
to do so at nine months. Much of this work is being performed by KBR 
under the supervision of the USACE and the ``Restoration of Iraqi Oil'' 
(RIO) program. In late January 2004, USACE awarded two major upstream 
contracts, worth $1.9 billion, under RIO 2. Contracts went to KBR (for 
$1.2 billion) in the south; Parsons and Australia's Worley (for $800 
million) in the north.
    According to the Oil and Gas Journal, Iraq contains 115 billion 
barrels of proven oil reserves, the third largest in the world (behind 
Saudi Arabia and Canada). Estimates of Iraq's oil reserves and 
resources vary widely, however, given that only 10% or so of the 
country has been explored. Some analysts (the Baker Institute, Center 
for Global Energy Studies, the Federation of American Scientists, etc.) 
believe, for instance, that deep oil-bearing formations located mainly 
in the vast Western Desert region, for instance, could yield large 
additional oil resources (possibly another 100 billion barrels or 
more), but have not been explored. Other analysts, such as the U.S. 
Geological Survey, are not as optimistic, with median estimates for 
additional oil reserves closer to 45 billion barrels.
    . . . Iraq generally has not had access to the latest, state-of-
the-art oil industry technology (i.e., 3D seismic, directional or deep 
drilling, gas injection), sufficient spare parts, and investment in 
general throughout most of the 1990s. Instead, Iraq reportedly utilized 
sub-standard engineering techniques (i.e., overpumping, water 
injection/``flooding''), obsolete technology, and systems in various 
states of decay (i.e., corroded well casings) in order to sustain 
production. In the long run, reversal of all these practices and 
utilization of the most modern techniques, combined with development of 
both discovered fields as well as new ones, could result in Iraq's oil 
output increasing by several million barrels per day. In February 2004, 
former Iraqi Oil Minister Issam al-Chalabi stated that recent efforts 
to boost Iraqi production might be harming the country's oil reserves.
    According to the U.N. Joint Logistics Centre (JLC), in August 2003 
``about 40% of [northern Iraqi] production [was being] transferred to 
the Baiji refinery, with the balance into the fields, ostensibly to 
maintain pressure. This is a most unusual practice but extraction of 
the surplus crude is necessary to produce much needed LPG. It means, 
however that crude oil production is overstated by the volume 
reinjected (it not being available for refining or export, but counted 
as production). The reinjected crude may be lost forever.'' Meanwhile, 
the USACE has stated that its mission was to focus on war-damaged, 
above-ground oil facilities, not ``redeveloping the oil fields,'' with 
Iraqi engineers reportedly estimating that expected recovery rates at 
Kirkuk have fallen as low as 9%, far below industry norms.
    On August 13, 2003, Iraq's main oil export pipeline from its main 
northern oilfield of Kirkuk to the Turkish port of Ceyhan reopened (see 
below for more details), but the line was shut down once again shortly 
thereafter due to sabotage on August 15 and 17. The pipeline reopened 
once again in early March 2004. Iraq currently is aiming to increase 
its exports to around 2.0 MMBD by the end of March 2004, but this goal 
depends in large part on security being maintained. Between April 2003 
and the end of the year, there were an estimated 86 attacks on Iraqi 
oil infrastructure, including the country's 4,350-mile-long pipeline 
system and 11,000-mile-long power grid. In response, the U.S. military 
set up a 9,700-person force, called Task Force Shield, to guard Iraq's 
oil infrastructure, particularly the Kirkuk-Ceyhan line. Under Saddam 
Hussein, Iraqi pipelines were guarded in part by local tribes, and in 
part by two army divisions dedicated to the task.
    . . . As of early March 2004, Iraqi production (on a net basis) had 
reached perhaps 2.2 MMBD, with ``gross'' production (including 
reinjection) of around 2.4 million bbl/d. Although Iraq is a member of 
OPEC, its oil output has not been constrained by OPEC quotas since it 
resumed oil exports in December 1996.
    Prior to the latest war, oil industry experts generally assessed 
Iraq's sustainable production capacity at no higher than about 2.8-3.0 
MMBD, with net export potential of around 2.3-2.5 million bbl/d 
(including smuggled oil).
    Among other challenges in maintaining, let alone increasing, oil 
production capacity, were Iraq's battle with ``water cut'' (damaging 
intrusion of water into oil reservoirs) especially in the south. In 
2000, Saybolt International had reported that NOC and SOC were able to 
increase their oil production through use of short-term techniques not 
generally considered acceptable in the oil industry (i.e., ``water 
flooding,'' injection of refined oil products into crude reservoirs). 
The Saybolt report now appears to have been largely accurate. In 
addition, a U.N. report in June 2001 said that Iraqi oil production 
capacity would fall sharply unless technical and infrastructure 
problems were addressed.
    Oil market consultants PFC Energy have stated that ``unless water 
injection used to maintain pressure in the southern fields is 
restarted, there is a strong possibility that [they] will go into more 
rapid decline and suffer permanent reservoir damage.'' PFC added that 
``this means the rehabilitation work at the Garmat Ali water processing 
plant is crucial.'' U.N. oil experts reportedly have estimated that 
some reservoirs in southern Iraq have been so badly managed that their 
ultimate recovery rates might be only 15%-25%, well below the 35%-60% 
usually seen in the oil industry.
    Iraq's southern oil industry was decimated in the 1990/1991 Gulf 
War, with production capacity falling to 75,000 bbl/d in mid-1991. That 
war resulted in destruction of gathering centers and compression/
degassing stations at Rumaila, storage facilities, the l.6-MMBD 
(nameplate capacity) Mina al-Bakr/Basra export terminal, and pumping 
stations along the l.4-MMBD (pre-war capacity) Iraqi Strategic (North-
South) Pipeline. Seven other sizable fields remain damaged or partially 
mothballed. These include Zubair, Luhais, Suba, Buzurgan, Abu Ghirab, 
and Fauqi. Generally speaking, oilfield development plans were put on 
hold following Iraq's invasion of Kuwait, with Iraqi efforts focused on 
maintaining production at existing fields.
    . . . In December 2002, the Council on Foreign Relations and the 
Baker Institute released a report on Iraq's oil sector. Among other 
things, the report concluded that: (1) Iraq's oil sector infrastructure 
is in bad shape at the moment, being held together by ``band-aids,'' 
and with a production decline rate of 100,000 bbl/d per year; (2) 
increasing Iraqi oil production will require ``massive repairs and 
reconstruction . . . costing several billions of dollars and taking 
months if not years''; (3) costs of repairing existing oil export 
installations alone would be around $5 billion, while restoring Iraqi 
oil production to pre-1990 levels would cost an additional $5 billion, 
plus $3 billion per year in annual operating costs; (4) outside funds 
and large-scale investment by international oil companies will be 
needed; (5) existing oil contracts will need to be clarified and 
resolved in order to rebuild Iraq's oil industry, with any ``prolonged 
legal conflicts over contracts'' possibly ``delay[ing] the development 
of important fields in Iraq''; (6) any ``sudden or prolonged shut-
down'' of Iraq's oil industry could result in long-term reservoir 
damage; (7) Iraq's oil facilities could easily be damaged during any 
domestic unrest or military operations (in early February 2003, the 
Patriotic Union of Kurdistan claimed that Iraqi soldiers were mining 
oil wells in the north of the country in anticipation of war); and (8) 
given all this, a ``bonanza'' of oil is not expected in the near 
future.
    According to the Middle East Economic Survey (MEES), problems at 
Iraqi oil fields include: years of poor oil reservoir management; 
corrosion problems at various oil facilities; deterioration of water 
injection facilities; lack of spare parts, materials, equipment, etc.; 
damage to oil storage and pumping facilities; and more. MEES estimates 
that Iraq could reach production capacity of 4.2 MMBD within three 
years at a cost of $3.5 billion. The International Energy Agency, in 
contrast, estimates a $5 billion cost to raise Iraqi output capacity to 
3.7 MMBD by 2010, and a $42 billion cost to raise capacity to 8 MMBD by 
2030.
    \17\ Department of Defense, ``Iraq Weekly Status Report,'' November 
3, 2004.
    \18\ Office the Press Secretary, Press Release, November 21, 2004, 
508 PM.
    \19\ An EIA report dated 11-04 notes that, ``the country's economy, 
infrastructure, environment, health care system, and other social 
indicators all deteriorated sharply. Iraq also assumed a heavy debt 
burden, possibly as high as $116 billion if debts to Gulf states and 
Russia are counted, and even more if $250 billion in reparations 
payment claims stemming from Iraq's 1990 invasion of Kuwait are 
included. It is possible, however, that much of Iraq's debt will be 
written off in the end, and that reparations will be capped at a 
certain level, possibly around $40 billion. In December 2003, former 
U.S. Secretary of State James Baker was sent as an envoy to several of 
Iraq's major creditor nations, attempting to secure pledges to write 
off some of Iraq's debt. Russia stated that it would be willing to 
write off part or all of the $8 billion it is owed in exchange for 
favorable consideration for Russian companies on Iraqi oil and 
reconstruction projects. In January 2004, Kuwaiti Prime Minister al-
Sabah announced that his country would be willing to waive some of the 
$16 billion owed by Iraq, and would help reduce Iraq's overall foreign 
debts as well. Under U.N. Security Council Resolution 1483, Iraq's oil 
export earnings are immune from legal proceedings, such as debt 
collection, until the end of 2007.''
    \20\ Richard F. Grimmett, ``Conventional Arms Transfer to 
Developing Nations, 1996-2000,'' Washington, Congressional Research 
Service, CRS RL32547, August 26, 2004, pp. 50 and 61.
    \21\ Richard F. Grimmett, ``Conventional Arms Transfer to 
Developing Nations, 1996-2000,'' Washington, Congressional Research 
Service, CRS RL32547, August 26, 2004, pp. 50 and 61.
    \22\ IAEA GOV/2004/60, ``Implementation of the NPT Safeguards 
Agreement in the Islamic Republic of Iran,'' Report by the Director 
General, 1 September 2004.
    \23\ Sanger, David, ``Pakistan Found to Aid Iran Nuclear Efforts,'' 
The New York Times, September 2, 2004.
    \24\ Michael Evans and David Charter, ``NATO will send More Troops 
to Afghanistan,'' London Times, June 29, 2004; Defense News.com, June 
30, 2004.
    \25\ See http://www.eia.doe.gov/emeu/cabs/pgulf.html, DOE/EIA 
estimated in September 2004 that the Persian Gulf contains 715 billion 
barrels of proven oil reserves, representing over half (57%) of the 
world's oil reserves, and 2,462 Tcf of natural gas reserves (45% of the 
world total). Also, at the end of 2003, Persian Gulf countries 
maintained about 22.9 MMBD of oil production capacity, or 32% of the 
world total. Perhaps even more significantly, the Persian Gulf 
countries normally maintain almost all of the world's excess oil 
production capacity. As of early September 2004, excess world oil 
production capacity was only about 0.5-1.0 MMBD, all of which was 
located in Saudi Arabia.
    According to the Energy Information Administration's International 
Energy Outlook 2004, Persian Gulf oil production increased from 18.7 
MMBD in 1990 to 22.4 MMBD in 2001. It is expected to reach about 27.9 
MMBD by 2010, and 38 MMBD by 2020, and 45.0 MMBD in 2025. This would 
increase Persian Gulf oil production capacity to over 33% of the world 
total by 2020, up from 28% in 2000.
    The estimate does, however, change significantly in the high oil 
price case: It is expected to reach about 21.4 MMBD by 2010, and 27.3 
MMBD by 2020, and 32.9 MMBD in 2025.
    \26\ Estimates differ according to source. The last comprehensive 
USGS analysis was performed in 2000, and was seriously limited by the 
fact many countries were affected by war or internal turmoil and 
declared reserves without explaining them or provided data by field. 
Standard estimates of reserves by non-USG sources like those in the Oil 
and Gas Journal and World Oil do not adjust reported data according to 
a standardized methodology or adjust for the large number of countries 
that never alter their estimates of reserves for actual production.
    For example, six of the ten nations with the largest proven 
reserves are in the MENA region. An IEA analysis shows a range of 259-
263 billion barrels for Saudi Arabia, 105-133 billion for Iran, 66-98 
billion for the UAE, and 31-29 billion for Libya. The figure of 115 
billion for Iraq is consistent only because it is a figure announced in 
the past by the Iraqi government and there are no accurate, verified 
estimates. To put these figures in perspective, the range for Russia is 
60-69 billion, 25-35 billion for Nigeria, 23-21 billion for the U.S., 
and 52-78 billion for Venezuela. (International Energy Agency, ``Oil 
Market Outlook,'' World Energy Outlook, 2004, OECD/IEA, Paris, October 
2004, Table 3.2.)
    Estimates alter radically if an unconventional oil reserve like 
Canadian tar sands are included. The Middle East has only about 1% of 
the world's known reserves of oil shales, extra heavy oil, tar sands, 
and bitumen. Canada has 36%, the U.S. has 32%, and Venezuela has 19%. 
The rest of the world has only 12%. The cost-effectiveness of producing 
most of these reserves, and the environmental impact, is highly 
uncertain, however, even at high oil prices. (International Energy 
Agency, ``Oil Market Outlook,'' World Energy Outlook. 2004, OECD/IEA, 
Paris, October 2004, Figure 3.13.)
    Reserve estimates also change radically if ultimately recoverable 
reserves are included, and not simply proven reserves. Some estimates 
put the total for such reserves at around 2.5 times the figure for 
proven reserves. For example, the IEA estimate for the Middle East 
drops from around 60% to 23%. Such estimates are speculative however, 
in terms of both their existence and recovery price, and do not have 
significant impact on estimates of production capacity through 2025-
2030. They also ignore gas and gas liquids. The Middle Eastern share of 
undiscovered oil and gas resources rises to 27% based on existing data.
    Such estimates are also heavily biased by the fact that so little 
experimental drilling searching for new fields occurred in the Middle 
East between 1992 and 2002. The IEA estimates that only 3% of some 
28,000 wildcat explorations for new fields worldwide took place in the 
Middle East. Recent exploration in key countries like Iran, Iraq, and 
Libya has been minimal. Some 50 Saudi fields, with 70% of the reserves 
that are proven, still await development. (International Energy Agency, 
``Oil Market Outlook,'' World Energy Outlook, 2004, OECD/IEA, Paris, 
October 2004, Figure 3.15.)
    \27\ Guy Caruso, ``U.S. Oil Markets and the Middle East, DOE/EIA,'' 
October 20, 2004.
    \28\ IEA estimate in the World Energy Outlook for 2004, Table 3.5, 
and analyzed in Chapter 3.
    \29\ The DOE/EIA, ``International Energy Outlook for 2004,'' can be 
found at http://www.eia.doe.gov/oiaf/ieo/download.html.
    \30\ See http://www.eia.doe.gov/emeu/cabs/pgulf.html. In 2003, 
Persian Gulf countries had estimated net oil exports of 17.2 MMBD of 
oil (see pie chart). Saudi Arabia exported the most oil of any Persian 
Gulf country in 2003, with an estimated 8.40 MMBD (49% of the total). 
Also, Iran had estimated net exports of about 2.6 MMBD (15%), followed 
by the United Arab Emirates (2.4 MMBD--14%), Kuwait (2.0 MMBD--12%), 
Iraq (0.9 MMBD--9%), Qatar (0.9 MMBD--5%), and Bahrain (0.01 MMBD--
0.1%).
    U.S. gross oil imports from the Persian Gulf rose during 2003 to 
2.5 MMBD (almost all of which was crude), from 2.3 MMBD in 2002. The 
vast majority of Persian Gulf oil imported by the United States came 
from Saudi Arabia (71%), with significant amounts also coming from Iraq 
(19%), Kuwait (9%), and small amounts (less than 1% total) from Qatar 
and the United Arab Emirates. Iraqi oil exports to the United States 
rose slightly in 2003, to 481,000 bbl/d, compared to 442,000 bbl/d in 
2002. Saudi exports rose from 1.55 MMBD in 2002 to 1.77 MMBD in 2003. 
Overall, the Persian Gulf accounted for about 22% of U.S. net oil 
imports, and 12% of U.S. oil demand, in 2003.
    Western Europe (defined as European countries belonging to the 
Organization for Economic Cooperation and Development--OECD) averaged 
2.6 MMBD of oil imports from the Persian Gulf during 2003, an increase 
of about 0.2 MMBD from the same period in 2002. The largest share of 
Persian Gulf oil exports to Western Europe came from Saudi Arabia 
(52%), with significant amounts also coming from Iran (33%), Iraq (7%), 
and Kuwait (6%).
    Japan averaged 4.2 MMBD of net oil imports from Persian Gulf during 
2003. Japan's dependence on the Persian Gulf for its oil supplies 
increased sharply since the low point of 57% in 1988 to a high of 78% 
in 2003. About 30% of Japan's Persian Gulf imports in 2003 came from 
Saudi Arabia, 29% from the United Arab Emirates, 17% from Iran, 12% 
from Kuwait, 11% from Qatar, and around 1% from Bahrain and Iraq 
combined. Japan's oil imports from the Persian Gulf as a percentage of 
demand continued to rise to new highs, reaching 78% in 2003.
    \31\ Estimates by country and necessarily uncertain. The 
``International Energy Outlook for 2004'' estimate of production 
capacity in MMBD for MENA countries is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                2010               2020               2025
                                                        --------------------------------------------------------
                    Country                       2001               High               High               High
                                                         Reference   price  Reference   price  Reference   price
----------------------------------------------------------------------------------------------------------------
Iran...........................................     3.7        4.0     3.5        4.7     3.8        4.9     4.3
Iraq...........................................     2.8        3.7     2.9        5.3     3.7        6.6     4.6
Kuwait.........................................     2.3        3.7     2.3        4.4     2.9        5.0     3.4
Qatar..........................................     0.6        0.6     0.6        0.8     0.7        0.8     0.7
Saudi Arabia...................................    10.2       13.2     9.4       18.2    12.9       22.5    16.0
UAE............................................     2.7        3.3     2.7        4.6     3.3        5.2     3.9
                                                ----------------------------------------------------------------
      Total Gulf...............................    22.4       27.9    21.4       38.0    27.3       45.0    32.9
                                                ================================================================
Algeria........................................     1.6        2.0     1.6        2.4     2.0        2.7     2.2
Libya..........................................     1.7        2.0     1.7        2.6     2.1        2.9     2.4
Other Middle East..............................     2.0        2.2     2.4        2.6     2.9        2.8     3.1
                                                ----------------------------------------------------------------
      Total Other..............................     4.3        6.2     5.7        7.6     7.0        8.4     7.7
                                                ================================================================
      Total MENA...............................    26.7       34.1    26.1       45.6    34.3       53.4    40.6
Total World....................................    79.3       95.1    90.0      114.9   107.2      126.1   117.3
(US)...........................................     9.0        9.5     9.9        8.9     9.6        8.6     9.0
----------------------------------------------------------------------------------------------------------------

    OPEC data are labeled confidential but are very similar. The IEA 
does not provide country-by-country estimates, but uses very similar 
models with similar results. It estimates total world production was 77 
MMBD in 2002, and will increase to 121 MMBD in 2030. If one looks at 
the data for the Middle East, the latest IEA estimates are as follows:
    The IEA estimate in the ``World Energy Outlook for 2004,'' Table 
3.5, is:

----------------------------------------------------------------------------------------------------------------
                                                                                                          Ave.
                                                                                                         annual
                                                                     2002     2010     2020     2030     growth
                                                                                                       (percent)
----------------------------------------------------------------------------------------------------------------
OPEC Middle East.................................................     19.0     22.5     37.4     51.8        3.6
Other Middle East................................................      2.1      1.8      1.4      1.0       -2.7
                                                                  ----------------------------------------------
      Total......................................................     21.1     24.3     38.8     52.8  .........
Non-Conventional Oil (Worldwide).................................      1.6      3.8      6.1     10.1        6.7
World............................................................     77.0     90.4    106.7    121.3        1.6
----------------------------------------------------------------------------------------------------------------

    \32\ See http://www.eia.doe.gov/emeu/security/choke.html#HORMUZ. 
The Strait is the narrow passage between Iran and Oman that connects 
the Persian Gulf with the Gulf of Oman and the Arabian Sea. It consists 
of 2-mile-wide channels for inbound and outbound tanker traffic, as 
well as a 2-mile-wide buffer zone. The EIA estimates that some 13 MMBD 
flowed through the Strait in 2002. The IEA puts the figure at 15 MMBD 
in 2003. Both agencies indicate that the amount of oil moving by tanker 
will increase steadily as Asian demand consumes a larger and larger 
share of total exports.
    Closure of the Strait of Hormuz would require use of longer 
alternate routes (if available) at increased transportation costs. Such 
routes include the 5 million-
bbl/d capacity Petroline (East-West Pipeline) and the 290,000-bbl/d 
Abqaiq-Yanbu natural gas liquids line across Saudi Arabia to the Red 
Sea. Theoretically, the l.65-MMBD Iraqi Pipeline across Saudi Arabia 
(IPSA) also could be utilized, more oil could be pumped north to Ceyhan 
(Turkey), and the 0.5 million-bbl/d Tapline to Lebanon could be 
reactivated.
    \33\ International Energy Agency, ``Oil Market Outlook,'' World 
Energy Outlook, 2004, OECD/IEA, Paris, October 2004, Table 3.7 and 3.8.
    \34\ International Energy Agency, Oil Market Outlook, World Energy 
Outlook, 2004, OECD/IEA, Paris, October 2004, Chapter 3.
    \35\ BP/Amoco, ``BP Statistical Review of World Energy,'' London, 
BP, 2003, p. 17.
    \36\ BP/Amoco, ``BP Statistical Review of World Energy,'' London, 
BP, 2003, p. 17.
    \37\ EIA ``Annual Energy Outlook, 2003,'' pp. 80-84.
    \38\ Energy Information Administration, ``Annual Energy Outlook 
2004,'' p. 95.
    \39\ EIA, ``Annual Energy Outlook, 2004,'' Table 26.

    The Chairman. Well, thank you very much, Dr. Cordesman, for 
a very comprehensive, very important paper. As you saw, some 
members were nodding at various points. A good number of these 
issues are ones in which we find accord. You have phrased the 
issue in an articulate way. Now, there are others that we may 
want to question, and we will be doing that in a moment. This 
is why we have called General Newbold and Mr. Khalil for 
immediate commentary on your paper.
    Let me mention, if I can engage in a colloquy with the 
distinguished ranking member for a moment, that the 
distinguished ranking member requests that after the comments 
by General Newbold and Mr. Khalil, he be recognized for his 
opening statement. That seems to be a reasonable thing to do.
    Senator Biden. I do not want to interrupt the flow here.
    The Chairman. The other reasonable thing to do, if we can. 
We have nine members present. We are approaching a quorum. We 
could obviate the need to meet in a business meeting at 2:30, 
given the fact that there appears to be unanimous consent, as 
far as I can tell, on the effective busywork that we need to 
do, namely the adoption of our rules, budget resolution, 
subcommittee organization and membership.
    Senator Biden. That is correct. There is no disagreement on 
our side.
    The Chairman. So, not to disconcert the witnesses, but at 
the proper moment, I might call for order and dispense with 
that business if possible. If not, I would ask all members to 
be prepared to meet at 2:30 this afternoon in S-116 to do that 
business.
    I call now on General Newbold.

   STATEMENT OF GREGORY S. NEWBOLD, LIEUTENANT GENERAL, U.S. 
      MARINE CORPS (RET.), MANAGING DIRECTOR, GLOBESECNINE

    General Newbold. Thank you, Mr. Chairman. I am honored to 
be here, obviously, on the subject before this committee.
    The first thing I would like to offer is that I am 
comforted that the debate, the discussion, the dialogue, is 
taking place before this committee. Too often this is viewed as 
a solely military issue with military solutions and the fact is 
that it is not. It takes all elements of our national power to 
address this issue, and most fundamentally this committee is 
the appropriate one.
    Sir, I have prepared a written testimony that I would like 
to offer for the record.
    The Chairman. It will be made a part of the record in full.
    General Newbold. Thank you, sir.
    I will make comments that highlight what are in the written 
testimony. I know that your first priority is that I comment on 
Dr. Cordesman's paper and I will do that and then offer some of 
my own views.
    I have read a lot of Dr. Cordesman's writings and we have 
discussed these issues at length. I have a great deal of regard 
for him and for his paper. I find very little not only to 
disagree with, but virtually everything to support. I have also 
read his written testimony and, frankly, I find that even 
better. I think it is more focused and pointed. It is critical, 
but where it is critical it makes a great deal of sense, and it 
matches my personal experience.
    I will not regurgitate the points he has made, but I would 
like to highlight and reinforce some of my own that complement 
what Dr. Cordesman has said. In particular and in no particular 
order, I think our public diplomacy, information operations 
campaign, not only in Iraq but elsewhere, have been abysmal. It 
is almost a cultural weakness of ours, but very costly when we 
are this inefficient and this ineffective.
    Our regional policies, as Dr. Cordesman pointed out, are 
viewed as one-sided and they have implications and effects that 
reach far beyond Iraq. In fact, when I am asked about an 
appropriate Iraq strategy my first answer is that there is no 
independent Iraq strategy; it has to be a regional strategy. 
When our policies are viewed as so totally one-sided, the 
complications are evident.
    We had an extremely poor plan prior to the invasion for 
what would take place after the invasion. There was some 
planning done on the military level. It was done in spite of 
the process, not because of it. We have inherited the seeds 
that we have sown and the vacuum that we created, and that is 
very unfortunate. More unfortunate is that if we do not correct 
this process that resulted in such flawed and even arrogant 
planning, we are doomed to repeat it.
    I would like to point out that I think the United States 
military in Iraq has performed magnificently at the operational 
and at the tactical level. I have a number of friends that have 
been involved in the fight and, frankly, I spend part of every 
single day trying to take care of the wounded sailors and 
marines who are at Bethesda, Walter Reed, and elsewhere. I have 
enormous respect for what they have accomplished, but I believe 
that much of it is in spite of our policies and our strategy 
and not because of it. They deserve all the credit and all the 
support we can give them.
    But the truth is we have overly focused on military 
solutions. We focused on military strategy for Iraq and in the 
postwar phase we have been very energetic on the military 
front, but that should not be the centerpiece for our policies, 
as I will point out.
    At the national level, we have been deluding ourselves on 
some key points, probably most importantly on the nature of the 
insurgency in Iraq, but also on the nature of what it will 
take, more broadly than Iraq, to counter radical Islam and 
terrorism and to develop the policies and procedures that will 
accommodate that.
    The state of training of Iraqi forces were described by Dr. 
Cordesman and in my own opinion we are either deluding 
ourselves or it is being misrepresented. I will talk a little 
bit more about the Iraqi national guard and the Iraqi army 
later on. But if the centerpiece for our withdrawal is the 
state of training, then we first must be honest about it.
    We also have not had truly an international coalition to 
the degree that has been described and we will begin to lose 
additional members of the coalition.
    The fundamental reality of what exists in Iraq right now is 
that we have an intractable insurgency of great vehemence that 
has cost us over 10,000 casualties and over 1,000 Americans. It 
has no immediate end in sight and we ought to know by now what 
our strategy is. I do not think we do.
    No matter what strategy we adopt, I think we ought to have 
a clear goal to be out of Iraq within 2 years. That may not be 
achievable, but it ought to be our goal. If we set it as our 
goal, perhaps we will assign the assets, the resources, and the 
mental energy to achieve it. If we are content to stay in Iraq 
for 5 years, if we are content to sustain the casualties at the 
rate we have to date, then it will be our future.
    A fundamental weakness of what we have been doing in Iraq 
in my view is that we have viewed the Iraq situation 
overwhelmingly from an American perspective. This is not unique 
to this administration. It is something I have witnessed in 
administrations for as long as I have been involved in the 
process. But it is the problem we have right now, and examples 
of what I am talking about, the ethnocentric view of this 
situation, include on the political front expectations that I 
believe are exaggerated of what are immediately achievable in 
Iraq.
    Our goals ought to be noble and they ought to be very 
challenging. But we cannot set them as the minimum standard for 
what we will accept in Iraq. It is not Iowa. It has a rich 
history of clan-tribal accommodations and government that will 
take generations to overcome.
    The second problem I see on our American perspective of the 
issue is that we see the insurgency as a military problem. As I 
will point out later, we have failed to grasp what has caused 
the insurgency and what has sustained it. If we view it only in 
military terms, then we will have only military solutions. We 
have done a wonderful job on the tactical level. We have killed 
literally thousands of insurgents. We have inflicted punishing 
defeats on the insurgents in Najaf, in Samarrah, and in 
Fallujah. But during the same timeframe we have had such great 
victories on the tactical level, the insurgent strength has 
grown from 5,000 to 20,000. We cannot kill the insurgents as 
fast as they can recruit them, so we have to look for a 
different strategy.
    Most troubling of all the American perspective problems I 
have described is that we have yet to articulate why we believe 
that ordinary Iraqis, Shiites and Sunnis, men and women, old 
and young, Baathist and the downtrodden, have joined the 
insurgency. Until we describe its root causes, we will not come 
up with the solutions that address them. The most basic primer 
at any war college will tell you that you begin to fight an 
insurgency by understanding why there is an insurgency. In all 
my contacts and all my reading and all the expressions I have 
heard, I have yet to see the government address that.
    I would like to point out that among the solutions I would 
recommend, none of them involve an immediate withdrawal. I 
think that would be a catastrophic mistake----
    Senator Biden. Say that again, General, because I did not 
hear it. I did not hear what you just said.
    General Newbold. Sir, I think it would be a catastrophic 
mistake to have a strategy that would call for an immediate 
withdrawal.
    Senator Biden. Thank you.
    General Newbold. I think the implications of that would be 
catastrophic because, not only in the Iraqi sense, but for the 
signal it sends to the world and the encouragement it would 
give to those who have confronted us. I am not asking for that, 
not recommending that at all.
    However, we have to understand that the fundamental reason 
for the insurgency, the thing that ties all of the various 
groups together, is that in their view we are an occupying 
power. It does not matter how noble our reasons and our 
rationale. It does matter what they believe the reasons are. 
They see us as a western power in their country, in their 
region, for oil, and we have to do something that addresses 
that.
    I have close friends and people I respect that have 
countered the milestones and timelines argument by saying that 
the insurgents will hunker down and wait for our withdrawal and 
then go on the offensive. I think they make a fundamental and 
sad mistake. If they would address first why so many people, 
why 20,000, are in the insurgents and why so many more are 
supporting the insurgency, they will examine that and find that 
if we withdrew then the insurgency would unravel. Now, there 
are conditions we must establish for a withdrawal and I will 
address them.
    We have to have a new strategy, a recrafted one. It has to 
be bolder, more flexible, and more imaginative than we have had 
to date. It has to be based on military actions that strike the 
insurgency and dissipate its strength. But even more important, 
it must tie ordinary citizens of Iraq to the future that we 
have described and the new elected government will describe. 
They have to have more stake in the future that we postulate 
than the one the insurgents do and they must believe that we 
can achieve what we said.
    Dr. Cordesman has talked about the woeful steps that have 
been taken to provide the ordinary comforts of life to the 
Iraqi citizens, ordinary comforts that are not ordinary in 
Iraq. Six hours of electricity a day in Baghdad is one 
testimony to that.
    Our troops have performed with distinction, but they cannot 
do it all. We have a golden opportunity with the election. It 
is a wonderful manifestation of what is possible. But we will 
lose the momentum quickly if we do not sustain the effort on a 
broader array of fronts.
    More specifically, in the security realm there has been an 
enormous amount of progress and innovativeness in the last 
month. With General Casey and General Luck's visit and most 
especially with General Abizaid's plan to greatly augment the 
forces that will train the Iraqi army, I see a good amount of 
hope. The Iraqi national guard effort was a huge mistake. It 
was not only ineffective, it was counterproductive. It consumed 
an enormous amount of equipment and money and, at least in the 
Sunni areas, it was a totally ineffective force.
    The Iraq army, on the other hand, much more competent. In 
places where it has had to fight it has fought well. It will 
take some time, but it will take time according to the surge 
efforts we make. I am encouraged by what has happened in the 
last month.
    Dr. Cordesman has talked about the pitiful efforts we have 
made to equip. After a year and a half, we are now approaching 
the 50-percent level in most of the items that are desperately 
needed, and we have to do better than that. We have to call on 
our allies, not only to make promises to help train, but to 
deliver on those promises. And in my view, if it takes 
additional forces in the short term to control the rest of 
areas like Mosul and others that percolate, then we ought to do 
that, rather than sustain this level of effort for 5 more years 
of bleeding.
    In the political realm, if it had matched the efforts on 
the military side we would not be having the problems we are 
today. The fact is most of the political effort was expended in 
Baghdad and the insurgency will be won or lost in the interior. 
After a year of trying, there has been almost no success in 
getting political training teams out into the interior to help 
with the provinces, and that is unsatisfactory.
    My recommendation is that we regionalize our effort in 
Iraq, that we create a graduated or an exaggerated system of 
carrots and sticks, incentives and disincentives, by which 
stable areas of Iraq can receive benefits that make them a 
clear model for the others to emulate. The areas unstable will 
be told that they will receive the benefits, the gratuities, 
the independence, independence of judgment, etcetera, only when 
they become stable. As it stands right now, all of the regions 
are created equally, treated equally, and that is unfortunate. 
Unless there are incentives we cannot condition human behavior 
to adjust.
    In the economic realm, Dr. Cordesman has talked at length 
about that. Suffice it to say that the meager expenditure of 
our resources has had an outcome that has undermined our 
effort. Quality of life for Iraqis must improve. We must 
provide jobs to give people an alternative to the insurgency, 
and we frankly have to overhaul what has been done there, as 
Dr. Cordesman said.
    Finally, in the war of public opinion, I have already 
described how poorly we have done. In that regard, I go out on 
a limb independent of many of the people whose opinion I 
respect. I truly believe that one of the reasons for the 
vehemence of the insurgency is that they view us as an 
occupying power. While I do not recommend timelines, I do 
recommend that we break away from a blind obedience to the code 
of conditions only and offer some hope to the Iraqis 
conditioned on a roadmap. We ought to provide an example that 
will indicate that if conditions in Iraq or in the provinces--
one at a time, become more stable, that they will see the 
coalition forces are withdrawing.
    There is a way to do that. We can do it with illustrative 
examples that shift the responsibility directly to the 
insurgents for the length of the stay of the U.S. forces. I 
believe that we have to do that. The ordinary Iraqi has to know 
that United States and coalition forces are there because the 
insurgents have made that a requirement. Together with the 
newly elected government of Iraq, we ought to indicate that 
forces can begin withdrawing when the insurgent activity 
declines, as soon as the end of the year. If conditions were 
such that the Iraqi army was fully capable of handling an 
inconsequential insurgency, then it is possible that our forces 
could largely be withdrawn by the end of 2006.
    If conditions do not allow that because the insurgents 
refuse to comply, then it is their responsibility for an 
extended stay. We ought to use this in an information campaign 
broadcast by the President and articulated on a daily basis to 
ensure that the message is loud and clear, not only in Iraq, 
but throughout the region.
    I think the elections gave us a wonderful opportunity, but 
the momentum will soon slip. We need to be more open-minded 
about possible alternatives to our strategy in Iraq. We need to 
listen to different voices. We need to be flexible and adaptive 
and we need to re-invigorate the three elements of national 
power that have been so weak so far.
    Mr. Chairman, thanks for the time to appear before the 
committee.
    [The prepared statement of General Newbold follows:]

  Prepared Statement of Gregory S. Newbold, Lieutenant General, U.S. 
  Marine Corps (Ret.), Managing Director, GlobeSecNine, Arlington, VA

    First, I am honored to have been invited before this Committee, 
composed of these members, on a subject of such vital importance to our 
country.
    Second, I am comforted that the forum for this discussion is the 
Senate Foreign Relations Committee because too often we view these 
issues as military in their origins, processes, and solutions. They are 
not. These issues don't start, and their answers don't lie, strictly in 
the military realm. To address the issue at hand appropriately, our 
nation and this committee must take into account both all elements of 
our national power and the character of this insurgency more fully than 
we have in the past.
    In this paper and during my oral testimony, I will provide my views 
about the most productive course for our strategy in Iraq, but will 
first comply with the Committee Chairman's letter of invitation, in 
which I was asked to provide commentary on Dr. Cordesman's paper, 
``Playing the Course: A Strategy for Reshaping U.S. Policy in Iraq and 
the Middle East.''
    Dr. Cordesman's Paper. As you know, Dr. Cordesman is an astute and 
prolific analyst of issues that affect our national security. ``Playing 
the Course,'' and a host of other of his papers, perform a great 
service by their dissection of key issues in both a detailed and frank 
way. Perhaps more importantly, Dr. Cordesman's prescriptions are 
generally ahead of government thinking.
    In my view, Dr. Cordesman's analysis hinges on his five main 
recommendations and four central observations. The recommendations are 
essentially these:

   Craft a dramatically improved statement of U.S. intent for 
        Iraq and the region and implement it in an overhauled 
        communication effort.
   Develop more effective Iraqi governance at the local, 
        provincial, and national level.
   Increase the effort to adequately train and equip the Iraqi 
        security forces.
   Improve the political and informational effects of U.S. 
        military strategy and operations.
   Recast the economic focus of effort to increase near term 
        stability and transition to Iraqi management of this effort as 
        soon as possible.

    Dr. Cordesman's four central observations--as extracted by me--that 
I will use as the basis for my comments are these:

   The odds of a successful outcome in Iraq are about even.
   The U.S. has to seize upon the opportunity to declare 
        victory and withdraw as soon as possible--probably by the end 
        of 2006.
   The U.S. must see the conflict in broader terms than we are 
        now. The U.S. must implement regional policies that bring due 
        credit to us, and we must see the conflict in ways that can 
        address the root causes of terrorism and the clash of cultures.
   The U.S. must free itself from hindrances to its strategic 
        freedom of action imposed by dependence on Middle Eastern oil.

    First, I agree with Dr. Cordesman's recommendations and 
observations without caveat or criticism. They are correct. To be 
useful to this committee, though, I will reinforce specific points that 
I think are crucial to a meaningful analysis, and offer some additional 
specificity in recommendations that I think should be fundamental 
elements in a re-crafted U.S. strategy.
    My reinforcement of Dr. Cordesman's recommendations is based on my 
own thoughts:

   Our public diplomacy/information operations have been poor 
        throughout the last several decades and are distinctly not up 
        to the task today.
   Our regional policies are almost universally viewed as one-
        sided, and our credibility on almost every other issue is 
        undermined by this fact.
   We had a poor to non-existent plan for the post-invasion 
        phase, and are now reaping what we sowed. In fact, failing to 
        correct the conditions that resulted in poor planning may doom 
        us to repeat them.
   The U.S. military has performed magnificently and 
        heroically--not because of the strategy, but in spite of it.
   We have focused overly on the military as a tool to contain 
        the insurgency, and have been woeful in providing the other 
        elements of national power that are needed in at least equal 
        measure.
   At the national level, we are deluding ourselves in many key 
        ways--examples are the public assessments of the state of 
        training of the Iraqi forces and police, the underlying nature 
        of and prospects for the insurgency, the degree to which we 
        truly have an international coalition in support, and in the 
        strategy for adequately addressing the root causes of 
        terrorism, radical Islam, and instability in the region.

    First, as I see the fundamental reality--we are facing a tough, 
resilient insurgency that has no end in close sight. We've had over 
10,000 casualties and over 1,000 deaths, and by now we should know 
whether our strategy has a realistic chance of creating appropriate 
conditions in Iraq and bringing our troops home. In my view, five years 
of this is unsustainable in what it will cost us materially (our most 
patriotic young citizens), economically, diplomatically, and 
politically. We should not accept five years of what we are 
experiencing now. No matter whose strategy is adopted, it ought to set 
at its goal a termination within two years. Better to surge now--with 
whatever that costs us--than to bleed for five years.
    A fundamental weakness in my view, and one we must correct, is that 
we continue to view Iraq overwhelmingly from an American perspective. 
(This is not a phenomenon unique to this Administration, and was 
equally a characteristic of the previous one.) Two examples in the 
current crisis are illustrative of our myopia. The first is that we 
define a satisfactory political outcome--federalism and democracy--in 
ways that are more realistic for Iowa than for Iraq. The dream is 
correct and noble; the standards for near term attainment are 
unrealistic. The second is that we view the insurgency as a military 
problem that can be defeated principally by killing more insurgents. In 
the past six months we've killed thousands of insurgents and inflicted 
significant defeats on them at Fallujah, Samarra, and Najaf--and by our 
own estimation the insurgent ranks have grown from 5,000 to 20,000. 
What is most troubling is that I have yet to see or hear of a 
government assessment that adequately describes what motivates 
thousands of young and old, male and female, Sunni, Shia, and Kurdish 
Iraqis to attack us with suicidal fervor. The basic primer in all of 
the service war colleges instructs you that you cannot formulate an 
effective strategy for an insurgency, if you have not adequately 
assessed its root causes. As it stands now, we think of the problem and 
the target as the insurgents; rather than what creates the insurgents. 
We attack the insurgents, rather than what produces them.
    Iraq is now fractionalized; some discord and factional fighting are 
part of its future. If we departed peremptorily, the cost to Iraq, the 
region, our credibility, and probably to our national security, would 
be severe. Pared to its core, though, our central problem is that our 
attempts to stabilize the country are being undermined by the 
insurgency--and the fundamental reason for the insurgency is that we 
are occupying Iraq. It does not matter how nobly we view our presence; 
what matters is that the absolutely overwhelming view of Iraqis (and of 
others in the region) is that we are occupiers. Worse, in their view, 
we are Western infidels there only to control oil. Their recruiters are 
having a good deal easier time than ours.
    The irony of our occupation is simple, but profound--there is no 
stability without us, but our presence inflames the insurgency that 
causes instability. The trick, then, is to craft a strategy that 
neutralizes the rationale for the insurgency--the chief complaints that 
drives the active insurgents and their supporters to violence--while 
strengthening the stake of the ordinary Iraqi in a future tied to the 
legitimate government.
    A re-crafted strategy must be far bolder and broader than has been 
initiated thus far. Thus far, we have attempted a military defeat of 
the insurgents, augmented by weak efforts to improve the material 
condition of the Iraqis. As Dr. Cordesman points out, only a small 
portion of funding for infrastructure, security, and quality of life 
improvements have been spent. The ordinary things that most symbolize a 
life with hope--jobs, electricity, clean water, security, and sewage 
and trash removal are not ordinary enough. Coalition military training 
teams operated throughout the provinces, while training teams to assist 
in governance, economics, and information dissemination are scarce 
outside of the capital. Our troops have performed with distinction, but 
they can't do it all.
    We have an opportunity to seize important initiative with the 
significant success of the election, but the momentum we gained can be 
transitory if not reinforced. The theme to a reinvigorated strategy 
should address root causes, and be no more complicated than 
dramatically enhanced incentives and disincentives (``carrots and 
sticks'') that make clear that the dreams and aspirations of ordinary 
Iraqis lie with the new Iraqi government, and the insurgents are the 
enemy of their hopes.
    Where we need to sustain and augment the effort:
    In the Security Realm. While we strike insurgent forces and keep 
them off balance, we must give full weight to Gen. John Abizaid's call 
for a dramatically enhanced force to train the Iraqi Army. The National 
Guard proved to be largely useless in the Sunni areas, and our main 
efforts have to focus on the more promising Iraqi Army. We also need 
our European allies immediately to fulfill their promise to help train 
Iraqi security forces. We must ruthlessly overcome the inertia that has 
taken over a year and a half to provide only half of what is needed to 
fully equip the Iraqis security forces. Soon, we are going to lose a 
portion of our allies on the ground, and we need to replace them as the 
need arises. Finally, if we don't want the insurgency to drag on for 
five years, we need to be ready to surge adequate forces to dominate 
restive areas like Mosul and Ramadi. We have operational momentum, and 
we ought to exploit it.
    Where we need to overhaul our effort:
    In The Political Realm. Our diplomatic and political efforts pale 
in comparison to our military ones. Our political assistance is almost 
completely restricted to Baghdad, while the insurgency will be won or 
lost in the outlying areas. We should implement a regionalization 
strategy that empowers the more stable provinces and motivates the 
restive areas to change, consistent with a carrot and stick approach. 
To the stable areas, we should offer increased financial assistance, 
less Coalition presence, and greater autonomy in disbursing aid. This 
strategy won't work, however, unless the benefits are exaggerated 
enough to encourage emulation by those who don't have them. 
Alternatively, the restive areas would receive restricted amounts of 
aid, less autonomy, and more Coalition force presence because they 
would be augmented by those who are released from duty in the stable 
areas. Those in the unstable areas need daily reinforcement that a 
better life ensues when the area is stable. When the people believe 
this, the insurgents lose their protective cloak and their support 
network.
    In The Economic Realm. As Dr. Cordesman points out, our inability 
to dispense appropriated funds where they are needed is nothing short 
of astounding. To a significant degree, the inability to improve the 
daily lives of the Iraqi citizen is our biggest failure, and one of the 
biggest sources of dissatisfaction. We need to create or restore basic 
human services, and we need to establish jobs. If we don't dramatically 
alter the speed at which we are dispensing aid, all other efforts may 
be moot. The CETA funds, by which military commanders have been able to 
fund projects that improve the quality of life for Iraqis in their 
area, ought to be an immediate and active model for other agencies.
    In The War of Public Opinion. By any poll, scientific or otherwise, 
we have performed dismally in attempting to win hearts and minds. [This 
almost seems to be an American cultural deficiency, because this trait 
has been symptomatic for generations of administrations.] But beyond 
our inability to grasp and articulate the themes that resonate most 
heartily with the various groups in Iraq, we have little to advertise. 
If root causes are important, then we need to find the ways to 
neutralize them. When the reasons are material--quality of life 
issues--then we need to work to address them, and advertise our 
success. Solutions here were previously discussed. The more difficult 
situation, though, occurs when the root cause of violent opposition to 
our forces, is our forces. To legions of Iraqis driven by what we would 
call nationalism, the cause is simple--they are an occupied country.
    Since the issue most fueling the insurgency is our presence, we 
need to shift responsibility/blame for our current presence to the 
insurgents. Simply communicated, we would probably have withdrawn by 
now, if not for the actions by the insurgents. And, we could make a 
fairly speedy withdrawal now, if not for insurgent actions. The key to 
success in the war for public opinion is that we need to be able to 
discuss what would happen with success. This approach must be a unified 
front with the newly elected Iraqi leadership. In my view, closed 
mindedness about discussing anything except that our withdrawal is 
wholly ``condition based,'' fuels the perception that we have no 
intention of withdrawing. To be sure, we don't need or want precise 
timelines, but we ought to be imaginative enough to provide examples of 
what could happen if the insurgency was measurably suppressed and the 
Iraqi Army was stronger. We must be utterly convincing that the length 
of our stay can be short or long--and it is entirely dependent on the 
violence currently tolerated by the silent majority of Iraqis.
    An Example. Our goal is to leave Iraq a stable country, able to 
administer to its own needs and security. This is not now possible. 
Should the insurgency wane significantly, however, you might expect to 
see reduction in U.S. and Coalition forces by the end of the year. If, 
on the other hand, the insurgents refuse to respect the will of the 
Iraqi people and its government, we would be compelled to remain until 
conditions permitted a beginning to our withdrawal. We would prefer to 
begin a withdrawal, but apparently the insurgents are not willing to 
see either our departure or the government of the Iraqi people succeed. 
Continuing the example, if the insurgency were to be assessed as 
``controlled and of minor consequence'' by the end of 2006, there would 
be no reason for continued U.S. presence in Iraq--other than those 
minor forces requested by the Iraqi government to assist in training 
the new Iraqi Army. Such a withdrawal, though, is entirely dependent on 
the ability of the Iraqi Army to provide reasonable security. If the 
insurgents continue to disrupt the daily lives of Iraqis and their 
attempt at democratic government, and the government requests our 
continued operations, then we would have no choice but to stay.
    We have a chance to build on the success of Sunday's elections, and 
future demonstrations of democracy in Iraq, by undermining the 
legitimacy of those who violently oppose us. To exploit this success, 
though, we need to demonstrate more honesty in self-appraisal, and 
greater flexibility and imagination in implementation, than we have to 
date. We cannot accept further delays in administering the political, 
economic, and public information aspects of our strategy, because the 
cost will ultimately be measured in young Americans. We should set 
goals for how long we want to sustain this effort, and take the actions 
that provide a real opportunity for making them achievable.
    This will take flexibility among our key decision-makers, and a 
willingness to exploit alternative views and options--neither have been 
the norm.

    The Chairman. Well, thank you very much, General Newbold, 
for your very comprehensive and thoughtful statements. Members 
will have questions for you as well as for Dr. Cordesman and 
Mr. Khalil in just a few moments.
    As the chair announced before General Newbold's testimony, 
we would like at this point to have a business meeting, which 
would obviate the need to meet this afternoon at 2:30. I have 
asked the distinguished ranking member for his permission, and 
he has told us to proceed.
    So let me just say, now, that more than 10 members are 
present. The hearing is now recessed, to reconvene shortly at 
the conclusion of the business meeting. For the interest of our 
audience, this should take just a moment.
    I now call the committee to order and convene the business 
meeting. I call members' attention to the business meeting 
agenda. The committee must approve subcommittee organization 
and membership, subcommittee jurisdiction, Foreign Relations 
Committee rules, and the committee budget resolution. These 
items are described in your committee memo and all have been 
agreed on in discussions between the chairman and the ranking 
member. Our responsibility today is to pass these 
organizational items so that the committee can become fully 
functional in this Congress.
    Do you have any further comments, Senator Biden?
    Senator Biden. Mr. Chairman, I would just like to survey 
again my colleagues.
    My understanding is from staff and each of your staffs that 
everyone has signed off on and we are all on the same page on 
this.
    [No response.]
    Senator Biden. That being the case, Mr. Chairman, we have 
no objection and suggest we adopt the changes, the agenda, as 
you have laid it out.
    The Chairman. Is there further debate?
    [No response.]
    The Chairman. If there is no debate, I move that the items 
on the agenda be approved en bloc by a voice vote. All in favor 
say aye.
    [A chorus of ayes.]
    The Chairman. All opposed say nay.
    [No response.]
    The Chairman. The ayes have it and the agenda is passed.
    Please record the members who are present. If other members 
come in they would have the opportunity to vote. I appreciate 
very much the cooperation of the membership.
    Senator Biden. Mr. Chairman, a minor little point. Since we 
had called the meeting for this afternoon, can we leave the 
record open the entirety of the day for those members who may 
not make it to this hearing but would like to be recorded?
    The Chairman. By unanimous consent, the record will be kept 
open for the rest of the day for members' comments or votes or 
both.
    Senator Biden. Thank you.
    The Chairman. I thank Senator Biden.
    This concludes the business meeting. I now call to order 
the hearing and the Chair recognizes Mr. Khalil. Thank you for 
your patience.

 STATEMENT OF PETER KHALIL, VISITING FELLOW, SABAN CENTER FOR 
       THE MIDDLE EAST POLICY, THE BROOKINGS INSTITUTION

    Mr. Khalil. Thank you, Mr. Chairman and Senators. I would 
also like to thank you and the committee for the honor to 
testify today for the first time, and I hope not for the last 
time. I am going to start, Mr. Chairman--I have a prepared 
written statement also I hope to place in the record.
    The Chairman. It will be placed in the record in full.
    Mr. Khalil. Thank you, sir.
    I am going to keep my remarks brief and to the point. I 
have studied Dr. Cordesman's paper and noted his comments today 
and General Newbold's comments and agree with the broad thrust 
of their arguments. I hope to make apparent any points of 
difference as I deliver my comments.
    By way of quick introduction and to set the context for my 
remarks, I was sent to Iraq as an independent civil servant of 
the Australian Government, not a political appointee and I hope 
not one of the ideologues that Dr. Cordesman referred to 
earlier. I was working in my time there very closely with the 
Iraqi political leadership and also the tribal leaders and the 
clerics and academics across the country on the issue of 
rebuilding the Iraqi security forces and national security 
institutions, such as creating the newly civilian-led Iraqi 
ministry of defense. I was also involved for some time in 
conducting negotiations with Iraqi political militia leadership 
in transitioning their forces into the state security services.
    It was, if I may say, a great honor to serve my country and 
to serve within the U.S.-led coalition. I am honored to be part 
of that long tradition of United States-Australian alliance and 
real friendship, which I think actually springs not just from 
our shared strategic interests but also our shared values.
    Even though today I will be focusing on security aspects, I 
do agree with Dr. Cordesman that any Iraq strategy must, both 
at the operational and strategic level, push progress in a 
combination of political transition, security and economic 
reconstruction for it to be successful. A successful Iraq 
strategy not only defeats the insurgency but makes possible two 
very important goals which I do not think are mutually 
exclusive. They are: First, a speedy return of United States 
troops in the next few years; and second, the longer term 
strategic goal of a free and democratic Iraq, able to defend 
herself from external threats and no longer a threat to her 
neighbors, nor a haven for terrorists. These are goals which I 
assume all the Senators on the committee share, although there 
may be some disagreement on how to get there.
    There are three key areas I want to touch on this morning, 
all of which I believe are critical to the successful Iraq 
strategy and which can make the achievement of these goals 
possible. First, the policy direction of training of Iraqi 
security forces, their capabilities, and my firm belief that it 
is actually the quality, not the quantity, of these forces 
which is critical in ensuring a realistic transfer of security 
responsibilities from United States forces to Iraqi forces, and 
basically how we should proceed on this front. Second, the 
second key area is the critical importance of reform and 
rebuilding of the Iraqi security institutions and ministries 
and the capacity-building efforts in those structures. Third, 
very quickly, where the two tracks of security reforms and 
political transition meet and the need, I believe, for the 
United States to ensure that there is a commitment to the 
underlying principles and democratic practices, which I think 
are crucial to a genuine Iraqi democratic state.
    The first key area, security and training policy. We are, 
at present, in a situation which is essentially United States 
and coalition forces leading the counterinsurgency effort with 
Iraqi forces only in a very supporting role. General Casey said 
in the past that what the Iraqis want to do in the next year is 
reverse that. I think that is possible, and I also think that 
the exit strategy as outlined by the administration is, at 
least at the strategic level, fundamentally sound: Train Iraqi 
security forces and have them take over responsibility for 
directly dealing with the insurgency so that United States 
forces can gradually withdraw. The devil is in the detail, 
however. It is the quality, not the quantity, of the forces, as 
I have said, which is critical to a realistic transfer.
    At present, as Dr. Cordesman has pointed out, the vast 
majority of the Iraqi security forces, 127,000 I think is the 
number, have not actually been given the required 
counterinsurgency or counterterrorism training and therefore do 
not have the required capabilities to conduct offensive or even 
at times, as we have seen in Mosul and other places, defensive 
operations against the insurgents.
    Now, I do not imply that there should not be this large 
number of Iraqi forces in existence. It is just that they each 
have a role and function, as in any society, and not all of 
them can actually be thrown out into the front line against the 
insurgency.
    The assumption of the Pentagon in the early postwar phase 
was that there would not be such an intense and deadly 
insurgency. So consequently a lot of the plans to train Iraqi 
security forces were broad and based on large numbers of 
recruits doing very basic training in local policing and also 
conventional military operations. Dr. Cordesman is also correct 
in saying that the emphasis has clearly shifted to training the 
right type of Iraqi security forces with the capabilities to 
take over offensive operations from the United States with 
minimal support.
    I have more detail in my written testimony about the 
problems with both the Iraqi police and the Iraqi national 
guard training and there is a detailed discussion in that of 
the specific training policy for each of the Iraqi forces. The 
main point I wish to make here is that, even with the 
improvements in the vetting and training process having become 
centralized, firstly under General Eaton and now currently 
under General Patraeus, the bulk of these forces--that is, the 
national guard and the police--will not necessarily have the 
capabilities to take on the insurgents even with the training 
they get now.
    While I was in Baghdad, I have seen as late as May 2004 
national guard and police forces, local police forces, 
providing perimeter security, even in the Green Zone, outer 
perimeter security, and they also performed with distinction in 
securing polling centers in the recent election. But that is 
what they are trained to do, basic fixed-point security. They 
do not have the capabilities to take on the insurgents 
offensively. Only the specialized units, police units and army 
special forces, which are currently very limited in number, as 
Dr. Cordesman has pointed out, have the required capabilities 
to take on the insurgents offensively.
    I would also like to note that the bulk of Iraqi army 
training and capabilities are geared toward conventional 
military operations--defending Iraq from external aggression. I 
believe that, given the past history of the Iraqi army and its 
use as a tool of repression, the United States must be very 
careful not to overemphasize the use of the army in internal 
security operations.
    It was in early 2004 that the Iraqi interim political 
leadership and the CPA put in place the policy to raise and 
train high-end internal security forces, commonly known as the 
Iraqi Civil Intervention Force, an umbrella grouping which 
includes several types of specialized police units with this 
specialized training, SWAT teams and special police commando 
units. I think these are the critical forces, with the 
capabilities to take on the insurgents.
    They are particularly important, not just because of the 
specialized training and skill sets, but the ability to combine 
intelligence, law enforcement, and light infantry capabilities. 
They are also important in my view in the sense that we can 
limit a heavy emphasis on army internal security operations.
    So, I think the key to a realistic transfer of security 
responsibility, that is Iraqi security forces that can 
successfully conduct offensive and defensive counterinsurgency 
operations with minimal United States support, rests not only 
with building up the Iraqi army special forces, but more 
importantly these high-end internal police forces under the 
ministry of interior.
    As far as I understand, these forces are growing in number. 
There are, I think, plans for something like 33 battalions of 
these forces to come out of the training pipeline over the next 
24 months. But I actually believe a concerted and concentrated 
effort must be made in the next 12 months to intensify and 
increase the training of these specialized units, particularly 
in counterinsurgency and counterterrorism, to ensure a 
realistic handover in the next 24 months.
    I think it is short of a plan, but specifically an increase 
and-or a shift in the allocation of U.S. and coalition training 
resources and manpower to the specific co-in and 
counterterrorism training of these forces, I think this will 
lead to a realistic handover and the consequent withdrawal of 
U.S. troops.
    The second key area is building the capacity of Iraqi 
security institutions and ministries. There is obviously more 
to Iraqi security strategy than training forces. A key area 
where progress has been made to date and the groundwork laid is 
the capacity-building efforts within the newly civilian-led 
Iraqi ministry of defense. A good example for the Senators is 
the time I spent there conducting interviews and selection of 
senior leadership for the ministry of defense, up from the 
ministry down through the deputy secretaries and the secretary 
and the senior leadership in the ministry. We had to discount 
around half of the hundreds of Iraqis that we interviewed for 
these positions because they either did not understand or would 
not accept the very simple concept of a civilian minister of 
defense.
    So I do really believe that the training, mentoring, and 
educational and technical assistance for this new civilian 
service in the ministry of defense and also for the more 
troubled ministry of interior is an area that the United States 
has made good ground in over the past 2 years, but really needs 
to remain committed to, likewise with other coalition partners 
such as the U.K. and Australia, which have committed assistance 
there.
    To the third and last point, the political transition 
process and the need for underlying democratic practices to be 
instilled in the Iraqi structures. Democracy is not just about 
elections, as Dr. Cordesman has pointed out. There are 
underlying principles and practices in the security sector 
specifically which make democracies work and must be encouraged 
in Iraq.
    The principles and democratic practices which are specific 
to ensuring Iraqi security institutions work in a democratic 
state include some of the following, and I want to emphasize 
the principle of civilian control over the military, but more 
specifically democratic civilian control over the military and, 
more broadly, the security forces, so a clear chain of command 
up through the operational military, Iraqi military and police 
commanders, to the civilian ministers of defense and interior 
and of course up to the prime minister and the security 
cabinet.
    An even distribution of power among the key security 
ministries, particularly important to Iraq, so that not one 
minister has dominant control over Iraqi forces.
    Transparency in both the executive and the national 
assembly and a clear separation of the two, particularly in the 
need to establish oversight committees in the new national 
assembly, something I am sure the Senators here would be very 
much behind.
    Checks and balances in the national assembly on the use of 
force and in the executive on this insofar as such decisions 
require cabinet consensus and the approval of the president 
always, I think, are critical and they must be adhered to to 
ensure the newly formed Iraqi security institutions work in a 
democratic state.
    The United States does have considerable ability to 
influence and encourage the new Iraqi political leadership, but 
these principles and practices, some of which have been 
established over the past 2 years, need to be respected and 
enshrined, and that there is no serious deviation from these 
important foundations, because I do believe that whatever 
progress is made with the elections that we have just seen, 
these will be in jeopardy without the ongoing presence of some 
of these democratic practices.
    I think the focus of United States policy and continued 
United States support in these areas will ensure longer term 
success in Iraq and mitigate the need to return to a possibly 
failed state in 20 years time. Put simply, during this 
political transition process over the next 12 months the 
administration really should focus its efforts in supporting 
the commitment to these underlying structural foundations and 
principles common to all democracies and really stay out of 
some of the meddling and internal Iraqi politics and political 
personalities.
    In conclusion, Mr. Chairman, I think three key points can 
be summarized here. One, increasing or shifting the allocation 
of resources to training counterinsurgency and counterterrorism 
training for Iraqi forces over the next 12 months. That may 
include army ranger battalion special training from the United 
States being committed to that effort.
    Second, continued United States focus on capacity-building 
for the Iraqi security institutions, such as the ministry of 
defense and the ministry of interior, which back up these 
forces and are very important.
    Third, United States influence of the political process 
should be focused on encouraging and enshrining these 
underlying democratic practices and principles I have outlined 
within the Iraqi security and political structures.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Khalil follows:]

 Prepared Statement of Peter Khalil, Visiting Fellow, Saban Center for 
     Middle East Policy, the Brookings Institution, Washington, DC

    Anthony Cordesman's paper ``Playing the Course: A Strategy for 
Reshaping U.S. Policy in Iraq and the Middle East'' presents sound 
strategic assessments which can aid U.S. policy towards Iraq. My 
agreements with his ideas and a few points of difference are made 
apparent in the following analysis and recommendations. Any Iraq 
strategy both at the operational and strategic level must push progress 
in a combination of political transition, security and economic 
reconstruction for it to be successful.
    A successful Iraq (exit or victory) strategy aims to achieve two 
goals: 1. the speedy return of U.S. troops in the next few years; and 
2. the establishment of a free democratic and pluralistic Iraq, secure 
and stabilized, able to defend herself from external threats, no longer 
a threat to her neighbors nor a haven for terrorists. These do not have 
to be mutually exclusive. A weakening and defeat of the insurgency 
through a combination of progress of Iraqi security reform, democratic 
political transition and economic reconstruction will lead to the 
achievement of both.
    There are three key areas of U.S. policy over the next 12 months 
which can ensure the achievement of these goals:
    1. The training of Iraqi security forces and the building up of 
their capabilities. The quality, not the quantity, of these forces is 
critical in ensuring a realistic transfer of security responsibilities 
from U.S. forces to Iraqi forces.
    2. The reform and rebuilding of Iraqi security institutions and 
ministries, capacity building in those structures and the practice of 
underlying principles and democratic practices within those structures 
that are crucial to a genuine Iraqi democratic state.
    3. The political transition process and the point at which the two 
tracks of security reforms and political transition form an important 
nexus which the U.S. must help to shape.

                        1. SECURITY AND TRAINING

    At present U.S. and coalition forces are leading the 
counterinsurgency effort with Iraqi forces in support. General Casey 
has said that ``What the Iraqis want to do in the next year is reverse 
that,'' and he has added that ``We're an outside force, and the Iraqis 
in some parts of the country see us as an occupation. We need to get 
the Iraqis in front.''
    The exit strategy concerned with security as outlined by the 
administration is, at least at the strategic level, fundamentally 
sound: to train Iraqi security forces and have them takeover 
responsibility for directly dealing with the insurgency so that U.S. 
forces can gradually withdraw. The devil is in the details, however. It 
is the quality, not the quantity, of the Iraqi security forces which is 
critical to a realistic transfer of security responsibility from U.S. 
forces to the Iraqi security forces. At present the vast majority of 
these forces (130,000 trained and in uniform) have not been given the 
required training and do not have the required capabilities to conduct 
offensive (or even defensive) operations against the insurgents.
    This is not to imply that there should not be the large numbers of 
Iraqi forces which exist. It is just that they each have a role and 
function, as in any society, and not all of them can or should be 
thrown on the front line of the insurgency.
    Problems with both the Iraqi Police and Iraqi National Guard (ING) 
can be traced back to the fact that initially, throughout 2003 and 
early 2004, much of the training and vetting of recruits for these 
services was decentralized. Local U.S. and coalition military 
commanders were given the responsibility to raise these units, leading 
to a lack of standardization in their training and in uneven vetting of 
these recruits across the country. The pressure on the United States 
and coalition military to get Iraqi boots on the ground led to many 
local police simply being ``reconstituted''--former police officers who 
were brought to work without having to go through the required police 
academy training. National guardsmen went through minimal levels of 
basic training and then were expected to be the bulk of Iraqi forces 
facing the insurgents.
    To a certain extent, these training and vetting problems have been 
rectified. The raising and equipping of Iraqi Police and ING have been 
centralized, first under Major General Eaton from spring 2004 until 
June 2004 and since then under his successor, Lt. Gen. David Petraus. 
Under General Petraus, ING training involves 3 weeks of basic training 
and 3-4 weeks of collective training. However, ING capabilities are 
still limited to basic tasks such as fixed-point security, route-convoy 
security and joint patrolling with coalition troops. The ING performed 
these tasks admirably during the January 30 elections, when they were 
charged with creating cordon and perimeter security around polling 
centers; yet they still require heavy U.S. logistical and combat 
support.
    Local Iraqi police forces currently complete 8 weeks of training 
(or a 3-week refresher course for former officers) in police academies 
around Iraq and in Jordan. Still, their capabilities are limited to 
local policing duties and ensuring basic law and order. Given their 
skill sets, they are unable to combat the insurgency effectively as a 
frontline force. It should be noted that even the best-trained Western 
police forces would have a great deal of difficulty dealing with such 
intense and continuous attacks with RPGs, small-arms fire, and suicide 
bombings on their officers and police stations.
    In contrast to the ING and the police, the Iraqi Army has had a 
centralized recruiting and vetting structure from its inception. As a 
result, the Army has attracted a higher quality of recruits who must 
undergo thorough and standardized vetting, and the training itself has 
been of a higher standard. The basic 8-week army boot camp is 
supplemented by additional training for recruits moving into special 
forces, such as the Iraqi Intervention Force (IIF).
    It should be noted that the bulk of Iraqi Army capabilities are 
attuned to conventional military operations, especially defending Iraq 
from external aggression. Given the past history of the Iraqi Army, 
including its use as a tool of repression against the Iraqi people, and 
the propensity for the military to dominate Iraqi politics, the United 
States must be very careful not to overemphasize the use of the Iraqi 
army in internal security operations. Necessity, however, has required 
the building up of the IIP (9 battalions by the end of January 2005) as 
the Army's key counterinsurgency wing. This force has proven to be 
extremely capable in operations in Samarra and Fallujah in late 2004. 
The Iraqi armed forces also has at its disposal two trained battalions: 
the 36th Commando Battalion--a special ING battalion put together to 
serve as an infantry-type strike force in late 2003, with fighters from 
many of the different Iraqi militias--and the Iraqi Counterterrorism 
Battalion, with fighters drawn from both the ING and Army units.
    The key to a realistic transfer of security responsibility to Iraqi 
forces rests not only with these Iraqi Army special forces (such as the 
IIF), but more importantly with the building of high-end internal 
security forces under the Ministry of Interior. These specialized 
national police units are particularly important because of their 
specialized training and skill sets and their ability to combine 
intelligence, law enforcement, and light infantry capabilities. They 
are also important in the sense that a heavy emphasis on Army internal 
security operations can be limited as much as possible.
    It has taken some time for the building of these internal security 
forces to get underway. The assumption of the Pentagon in early 2003 
and in the early postwar phase was that there would not be such an 
intense and deadly insurgency. Consequently, the initial plans to train 
the Iraqi security forces were broad, relying on large numbers of 
recruits with very basic training in policing and conventional military 
operations. Only in early 2004 did the Iraqi interim Governing Council 
and the Coalition Provision Authority put in place a policy to begin 
building specialized internal security forces to fight the insurgency. 
Since then, the emphasis has clearly shifted to training the right type 
of Iraqi security forces with the capabilities to take over offensive 
operations from U.S. forces with minimal support.
    These high-end internal security forces are commonly known as the 
Iraqi Civil Intervention Force, an umbrella grouping that includes 
several types of specialized police forces:

   The Iraqi Police Service Emergency Response Unit: an elite 
        270-man team trained to respond to national-level law 
        enforcement emergencies--essentially a SWAT capability.
   The 8th Mechanized Police Brigade (MPB): a paramilitary, 
        counterinsurgency Iraqi police unit. The MPB will comprise 
        three battalions.
   The Special Police Commando Battalions. The Special Police 
        Commando Battalions provide the Ministry of Interior with its 
        strike-force capability. The commandos--which will ultimately 
        comprise six full battalions--are highly vetted Iraqi officers 
        and rank-and-file servicemen largely made up of Special Forces 
        professionals with prior service. \1\
---------------------------------------------------------------------------
    \1\ http://www.mnstci.iraq.centcom.mil/facts_troops.htm.

    These internal security forces, which are specifically and 
intensively trained in counterinsurgency and counterterrorism, are the 
key to the transfer of security to Iraqi forces.

 2. BUILDING THE CAPACITY OF IRAQI SECURITY INSTITUTIONS AND MINISTRIES

    It should be made clear to U.S. policymakers that democracy is not 
just about elections, and there is more to the Iraqi security strategy 
than training forces. There are underlying principles and practices in 
the security sector which make democracies work and must be encouraged 
in Iraq. Thus, it is imperative that U.S. policy makers ensure that 
fundamental principles inherent in all democratic states are part of 
the security and political structures of the future Iraq. The focus of 
U.S. policy and continued U.S. support in these areas will ensure 
longer term success in Iraq and mitigate the need to return to a failed 
Iraq in 20 years' time.
    A key area where progress has been made to date and needs to be 
continued is capacity building within security institutions, such as 
the newly civilian-led Iraqi Ministry of Defense. A functioning and 
strengthened civilian-led Iraqi Ministry of Defense (IMoD) is critical 
given the past history of civil-military relations in Iraq. During the 
Baathist regime, the Baath Party emptied the military of independent 
professional officers and replaced them with Baathist ideologues in 
uniform who held the key security posts in the cabinet. In turn, this 
Baathified military dominated the ministry.
    The new IMoD, headed by a civilian Minister of Defense, was 
established in April 2004. The United States and its coalition 
partners, such as the United Kingdom and Australia, must remain 
committed to capacity building, training of civil servants, mentoring, 
and technical assistance for the new civilian service in the IMoD. This 
is critically important, as the ministry's civil service not only 
provides the logistical and administrative support for the new armed 
forces, but also articulates and develops the strategic defense policy 
for the country under the guidance of the civilian Minister of Defense 
and ultimately up to the security cabinet of ministers.
    An independent civil service with no political appointees has been 
established in the IMoD. The Iraqi Minister of Defense cannot bring 
``his people'' into the IMoD. Iraqi civil servants are professional and 
objective, dedicated to serving the national interests of Iraq without 
fear of losing their jobs with a change of minister. Unfortunately, 
Iraq has a predilection for nepotism and corruption, and the Interim 
Ministry of Interior was rife with examples of different ministers 
appointing cousins, uncles, and other personal favorites to senior 
leadership positions. This cannot afford to be replicated in the newly 
established IMoD.
    There are many critical principles that underlie a democratic 
state: the separation of powers, freedom of expression, and a host of 
civil and political rights. Principles and democratic practices 
specific to ensuring that Iraqi security institutions such as the new 
IMoD work in a democratic state include:

   The principle of civilian control over the military, but 
        more specifically democratic civilian control over the 
        military. This entails a clear chain of command up through the 
        operational Iraqi military commanders to the civilian Minister 
        of Defense, the Iraqi Prime Minister, and the security cabinet.
   Transparency in both the executive branch and the National 
        Assembly.
   An even distribution of power among the key security 
        ministries. This is particularly important to Iraq, in order to 
        assure that no one minister has dominant control over the Iraqi 
        security forces.
   Checks and balances in the National Assembly on the use of 
        force and in the executive, insofar as such decisions require 
        cabinet consensus and the approval of the President.
   The establishment of oversight committees in the National 
        Assembly.

    These are fundamental principles and practices which are critical 
to the long term goals as outlined. They must be adhered to ensure the 
newly formed Iraqi security institutions work in a democratic state. A 
genuinely free democratic Iraq requires democratic practices and 
democratic institutions. The U.S. ability to influence and encourage 
the Iraqi political leadership to enshrine these principles and 
structures (some which have already been put in place during the past 
two years) but also to ensure there is no serious deviation from some 
of these important foundations is critical to achieving long-term U.S. 
strategic goals in Iraq.
    Although these principles and practices may seem like intangibles 
in comparison to concrete needs such as training, they may be even more 
important. No matter how well the Iraqi security forces are trained and 
take over their security responsibilities, the real danger exists that 
U.S. policy makers will drop the ball on ensuring the maintenance of 
these democratic security structures and practices. The United States 
needs to keep its assistance up in ensuring that these institutions and 
these democratic practices continue through political transition 
process over the next 12 months.

  3. THE POLITICAL TRANSITION PROCESS AND THE NEXUS BETWEEN SECURITY 
                    REFORM AND POLITICAL TRANSITION

    Put simply, the political transition is one in which the 
Administration should focus on those underlying structural foundations 
and principles common to all democracies. The United States must ensure 
that in the political transition over the next 12 months, including the 
drafting of the constitution and the development of Iraqi security and 
political institutions, that they encourage the practice of these 
principles in governance in the security and political spheres while 
essentially foregoing interference in individuals and political 
personalities.
    The legitimacy of the newly elected National Assembly and the 
executive government that is formed will be key to accomplishing the 
long-term goal: a free democratic Iraq. Thus, the United States must 
resist the temptation to try to control the political process which 
will form the new Iraqi government. Certainly, in a general sense the 
United States should encourage a Shi'a leadership to include key Sunnis 
in the new cabinet. However, overall the United States needs to play 
the ball and not the man--in other words, focus on maintaining sound 
structural foundations and underlying principles and not supporting 
personalities who may be in or out of favor.
    A democratically elected Iraqi government in which Sunni, Shiite, 
Kurd, Turkoman, Christian, Yazidi, Communist, capitalist, secularist, 
and Islamist are all represented may not even be a government the 
United States particularly likes--particularly if Sunni ex-Baathists or 
radical clerics like Muqtada al-Sadr hold key cabinet posts. But such a 
government will be legitimate, with the support of an overwhelming 
Iraqi majority, and will serve to hold the country together to the 
detriment of the insurgents. As long as this future government does not 
attempt to erode the important principles which buttress a pluralistic 
democratic state, the United States should not attempt to fiddle with 
the internal Iraqi political process--even if it does not like who 
wins.

    The Chairman. Thank you very much, Mr. Khalil.
    I call now upon the distinguished ranking member, Senator 
Biden, for his opening statement.

   STATEMENT OF HON. JOSEPH R. BIDEN, JR., U.S. SENATOR FROM 
                            DELAWARE

    Senator Biden. Thank you very much, Mr. Chairman.
    Tony, I am sorry I missed the very beginning of your 
statement, but I can assure you quite literally there is not a 
thing you have written that I have not read in the last 2 
years, and that is not an exaggeration.
    As I listened to your statement, General, I think we should 
point out for the record, nothing either of you are saying is 
new today in terms of what you have been saying from the very 
beginning. It is kind of dumbfounding we are here at this point 
having to be--reiterating these points.
    Mr. Chairman, I want to thank you for having this hearing. 
As we have all seen, we obviously have an extremely 
distinguished panel. I have already relied a great deal on the 
advice of two of our witnesses over the last 2 years in 
formulating my own views thus far. So it will not be surprising 
for them to hear that I agree with virtually everything they 
have had to say.
    Sunday's elections were, to state the obvious, a 
significant positive tribute to the courage of the Iraqi people 
and to the courage of our soldiers and civilians in Iraq. The 
images of children dancing in the streets and elderly walking 
miles to polling stations despite the obvious danger were 
incredibly moving. Given the trauma of the past 2 years, to say 
nothing about the past 3 decades, it was encouraging to have 
some good news coming out of Iraq.
    But, as all of you have pointed out, one election does not 
make a democracy or even a stable government make. Whether the 
history books look back on Sunday as a transformational event 
in Iraq is going to depend on what the Iraqis do and what we do 
in the next several months. It seems to me that we have several 
very important challenges, some of which you all have 
mentioned.
    First, in my judgment we have to use our influence to work 
the Sunnis back into the constitutional writing process here, 
which will define minority rights and protections. Quite 
frankly, in my most recent trip to Iraq last month, I got the 
sense, from some of the Shias with whom we met that they 
understood that, that the Kurds understood that. Now, whether 
or not they can translate that understanding to reality remains 
to be seen. But it seems to me that is a critical step that has 
to be undertaken.
    Second, the Iraqi Government, to state the obvious, needs 
more capacity. When Senators Lugar and Hagel and I were there a 
year and a half ago, right after Saddam's statue went down, we 
kept talking about capacity, what we were going to do to 
provide the Iraqi people with any capacity.
    When the transfer of sovereignty occurred last summer, it 
was clear that we transferred sovereignty, but virtually no 
capacity. I want to ask you in the question and answer period 
more about why it has been we have failed to focus on that and 
instead have insisted on this arbitrary number of 127,000 
trained Iraqis as if it provided capacity for this government.
    Third--and I am summarizing here, Mr. Chairman--we need to 
show reconstruction results. I am going to be anecdotal. I was 
with my friend from Rhode Island on a recent trip. We met with 
a number of people, the same people we met with, I met with, 2 
months earlier, 3 months earlier, with Senator Hagel.
    General Chiarelli of the First Cav, he was very, very 
simple and straightforward. I think he has done a hell of a 
job. He said: Look--he showed us Sadr City and he said: This is 
my responsibility. Then he showed us HMMV's going down the 
streets with sewage up to the hubcaps and piles of garbage 
literally 10, 12 feet high in front of the front doors of 
homes, not much further away than this rail is from that door. 
He said: I talked to the CPA and I have talked to their 
successors about what we do about that, and they talk about 
$100 million, hundreds of millions of dollars, tertiary 
treatment plant.
    He said: Give me some PVC, let me run it with Iraqis from 
the homes to the Tigris River, drain the swamp. You know, we 
have all seen the Powerpoint presentations the military, that 
you guys, General, love so much; He then showed us where all 
the attacks on his forces had been, where the most 
environmentally degrading circumstances existed, where he had, 
I think it was--correct me, Chuck or staff, if I am wrong. I 
think he said he had 30 million bucks he was able to spend 
right away, where he used it.
    Then he put another graph right on top and said: Now look 
what has happened. CNN 3 or 4 days ago--some of you may have 
seen it; I was at Davos and I turned on CNN. They had Chiarelli 
walking down a street with Iraqis who were turning in 
insurgents because they now had a street built, the garbage 
taken away, the sewage diverted, and lights on.
    The idea that we have only spent $2.4 billion--not very 
well, I might add--out of the 8--as you said, Tony, the good 
news and the bad news. The good news is we have only wasted 
$2.4 billion. The bad news is we still have this vast bulk of 
this reconstruction money we have not used.
    So I would like to ask you some more specific questions 
about that, but the failure of us being able to use more than 
15 percent of the so-called Marshall Plan reconstruction has 
not been all because of insurgents. It is not all because it is 
too dangerous. It is the method we have chosen as to how to lay 
it out.
    In my judgment we have to move away from these massive 
projects that are costly, slow, susceptible to both the 
incompetence of American contractors and the difficulty they 
have in dealing with security, as well as not providing any 
immediate tangible results for folks in the street.
    Fourth, it seems to me we finally have to make Iraq the 
world's problem, not just ours. I had the opportunity, Mr. 
Chairman, to spend I do not know how much time, but a 
considerable amount of time with a few of my colleagues, with 
President Chirac. The President, our President, has a unique 
opportunity when he heads to Europe now. It is time the 
Europeans stop bleeding for the Iraqi people and ante up a 
little bit. It is time they get over George Bush. It is time 
they get over the election. It is time to get over it. They 
love beating up Bush and I believe it has been used as an 
excuse, in some cases from their perspective legitimate, to 
avoid their own responsibility.
    Talking with the French president, he was very specific--it 
is not appropriate to lay it out here--very specific about 
things he is willing to do relating to training on and off the 
scene, relating to involvement in civil society issues. We 
should ask, ask. We should give them a way out and into their 
responsibilities. I know some of you have mentioned that.
    Fifth, it seems to me we have to articulate much more 
forcefully what our plan is. We are going to come up and we are 
going to have to vote for $80 billion, I say to my colleagues 
here. I am prepared to vote for it, but this time I am not 
voting for it unless they tell me what they want to do. I am 
not looking for a withdrawal date. I am one who has been 
calling for more forces up until recently. I have been one who 
has been suggesting that we have to do more.
    But I want to tell you something. As that old song goes, 
what is the plan, Stan? I do not see any evidence, except on 
the training side and only in the last 4 to 6 weeks, that there 
is any coherent notion about how Iraq fits into our regional 
strategy and about how, in fact, we even define what the 
insurgency is.
    The Secretary of Defense started off calling them dead-
enders and jihadists. Give me a break. They are dead-enders, a 
bunch of dead-enders and jihadists. Well, what are they? I want 
the administration to tell me what they think they are, so I 
have any notion to whether or not there is any maturation in 
the thinking of this administration, because otherwise we are 
faced with a situation, Dr. Cordesman, in my view that you had 
said in your November article which you have updated for this 
presentation here, which is that we do not have much better 
than a 50-percent chance.
    You indicate if we do these things we have a much better 
than 50-percent chance. I think we do as well. But I want to 
tell you: If there is no change, no change in the thinking of 
this administration, significant change in the last 10 months, 
we do not have a shot in my view of prevailing. And I am not in 
on the game any more, because then I am faced, as we always are 
in the Senate, with Hobson's choices by presidents, two bad 
choices. The one is, do we continue to drain American blood for 
an approach that seems to be, I think, a loser, or has there 
been a change in the strategy. And if it is, what is the 
strategy? So I want to know what it is as just one Senator.
    I also believe, to state the obvious, we have to support 
our military, and that relates to their training, their 
mission, their rotation schedule, the equipment they are 
provided. We can go into that later and I do not want to take 
the committee's time since so many of our colleagues are here 
now.
    I think maybe most importantly, I say to my colleagues more 
than the witnesses, we need some straight talk to the American 
people here. We need to level with them. I know you are tired 
of hearing me saying this, but no foreign policy can be 
sustained very long without the informed consent of the 
American people, and there has not been informed consent. We 
still operate in this fiction that we do not have to put money 
for Iraq in the budget, in the regular budget.
    I do not know how you guys in good conscience can support 
that notion, that it is unknowable what we need. We still talk 
about this in terms of what great success we are having. I 
recommend any administration official who tells us what great 
success we are having to get back in a HMMV with the Senator 
from Rhode Island and me and go 50 to 60 miles an hour inside 
the Green Zone, with automobiles weaving in and out and while 
sitting there, although I did not hear them, six mortar attacks 
in broad daylight inside the Green Zone; flying in, making sure 
we cannot go anywhere at all except on a helicopter at high 
speeds about 100 feet off the ground. Tell me about how much 
more security we have. Why do they insist on this fiction that 
we have 125,000 trained Iraqis?
    So we better level with the American people. There are a 
number of questions that are going to have to be answered by 
the administration. They will get my continued support if they 
try to answer them, but I want to tell you something. We should 
use this opportunity, I will say parenthetically, Mr. 
President, of voting for money to get a real live strategy 
written, stated, articulated by the administration as to what 
their plan is, because if it is a repeat of the last 2 years we 
are doomed to fail in my humble opinion.
    I thank you for allowing me to make this statement, Mr. 
Chairman, and I will reserve my questions until after you 
question.
    The Chairman. Thank you very much, Senator Biden. Let me 
just say that, one characteristic of the hearing on both sides, 
both the witnesses and the Senators, is that there will be a 
lot of straight talk this morning. It is meant to have 
oversight, but likewise a constructive purpose. We appreciate 
your papers as well as your responses to the questions that we 
will ask to try to flesh out what you have said to us.
    We have many Senators here. The chair would suggest that we 
have a 7-minute question period for our first round, so that we 
try to get to as many Senators as possible. I know you, Dr. 
Cordesman, must leave us, I understand, at about 11:30; is that 
correct?
    Dr. Cordesman. I changed the plane until later, Senator, so 
I can extend it. Thank you.
    The Chairman. I am glad you will be able to stay longer. 
That is great.
    Now, let me just ask members to be thoughtful about the 7-
minute limit. As always, the chair will try to be liberal and 
make sure answers have been given and questions have been 
asked. But at the same time, as a courtesy to all of our 
members, it would be helpful if we can try to observe the time 
limit.
    Let me start by asking a question and then ask the three of 
you for comments. In the testimony that you have given today 
there is a question about definition of the insurgents. Who are 
they? To contain or defeat them, calls for careful definition 
of the enemy. Likewise, why do they appear to be growing in 
number even as a number are killed by our security forces or 
the Iraqi security forces.
    An assertion has been made that essentially the insurgency 
comes because we, that is the United States and our allies, are 
perceived as occupiers, and that the end of occupation would 
end a rationale for the insurgency. Let me just ask for more 
definition of this proposition. Some have suggested that the 
insurgency is primarily focused in four of the 18 provinces of 
the country. One of the characteristics of those provinces is a 
high number of Sunnis. Furthermore, some have suggested that a 
number of the insurgents have in mind not only the end of 
American occupation, but likewise the end of the Iraqi 
democracy experiment. In other words, they would simply like to 
take power again, and one way of doing that is, of course, the 
elimination of outsiders, ourselves included, but also of those 
who are involved in this fledgling experiment, including those 
who would be involved in the constitution-building, or at least 
the present leaders, to be replaced by those whom the 
insurgents would attempt to install by force.
    That may be a stretch for 20,000 people, but then no one 
knows whether just 20,000 are involved. So I am curious, how do 
we have this situation in which, on the one hand, we are 
pledged to try to defend the fledgling democracy, the 275 
people that will now assemble, the election procedure of a 
referendum on their constitutional development, and the 
December 15th election of the new officers of the country, 
while at the same time providing the training that we have all 
talked about today, including certainly much more training? The 
people you have identified need to have specific types of 
training to be more effective.
    How do we go about trying to determine, as Dr. Cordesman 
has suggested, the metrics of how well we are doing? Clearly, 
in our hearing with Dr. Rice, Senator Biden raised the point 
about the 120,000 that are suggested as trained and the 
estimates of 12, 14,000, maybe, who really seem to be effective 
against an insurgency, or capable of replacing U.S. forces. We 
raised the metrics question during that confirmation hearing.
    How would we know how that training is coming so that we 
can have this dialogue with the Iraqis or with the world as to 
our withdrawal, as to how this handover occurs, and thereby 
leave behind a group of people who are prepared to defeat 
insurgents who may be after them by then and no longer after 
us?
    Dr. Cordesman, would you begin with your comments on this 
broad question?
    Dr. Cordesman. Well, Senator, you have hit on, I think, one 
of the key questions. Let me say, all of these numbers when you 
talk to intelligence people who actually serve in the field 
have to be generated as guesstimates. They will tell you, if 
you keep asking us to provide an estimate we will provide you 
with an estimate. But we do not have a basis for counting. We 
do not have a methodology that we can defend. We have to make 
rough estimates.
    So General Newbold quoted 20,000. I am perfectly happy to 
support the figure. I have seen estimates as low as 14,000. 
Iraqi officials have talked about 200,000 sympathizers. The 
truth is that we do not have an intelligence structure that can 
give us precise numbers.
    We are talking, too, about a very diverse movement, and I 
will concentrate here on the Sunnis. Some 35 groups have 
claimed to exist. I think the latest estimate I heard was that 
we could confirm the existence of about 18. Some of these have 
outside leadership. There are no outside groups per se except 
for a relatively small but fairly lethal group that is 
responsible for a lot of the suicide bombings.
    The most recent estimate for General Casey was that only 
1,000 of the insurgents were foreign volunteers, and most of 
these foreign volunteers are not trained, experienced people. 
They are being recruited locally in Arab countries and funneled 
in through primarily Syria, but also to some extent Iran.
    When we talk about these movements, they are organized so 
there are core cadres of people who do planning and 
organization. There seem to be finance and infrastructure 
cadres who do not operate, but do provide services. Then you 
keep recruiting locally young men, most of them young Sunnis, 
in an area where unemployment is put at the 70-percent mark for 
this particular age group.
    Some of the groups are Islamic. They seem to be relatively 
small as pure Islamist extremist groups, but certainly there is 
a growing number of Sunni groups that are Islamists there. Some 
are Baathists, some are former regime loyalists, many are 
local.
    So we really need to understand. Why are they growing? 
Well, they are growing because many of them are hostile to the 
new government. They are hostile to the loss of Sunni power. 
They are hostile to the existence of a more democratic 
structure in an artificial country where the Sunnis led because 
Britain used divide and conquer tactics from the foundation of 
Iraq to the present.
    Now, when it comes to metrics, the metrics we had in 
Vietnam were better than the metrics we have now. We broke them 
down locally. We showed what areas could be secured. We showed 
what the number of incidents were. We broke the incidents down 
by type and we had pattern analysis of what the incidents were 
trying to do. We have suppressed that data, although we 
initially published it.
    Since time has run out, I will try to get back to metrics 
on how you can deal with measuring the improvements in the 
Iraqi forces later.
    The Chairman. Well, thank you, following an example that I 
hope we will set, we will not proceed with additional comments 
of others. You may want to make those comments as you respond 
to other Senators or in a second round.
    Senator Biden.
    Senator Biden. Thank you. I promise I will adhere to the 
same discipline.
    I would like to just focus in the 7 minutes on training, if 
I may. Dr. Cordesman, through my four trips into Iraq and 
regular e-mail contact between the trainers that are there and 
my staff, I share the view that has been expressed I think by 
all of you, that I think that there has been a bit of, as we 
Catholics say, an epiphany of the need for fundamental change 
in training. I think General Petraeus is first rate. I think he 
is making a genuine effort. I think they are changing the way 
in which this is going on. I think they are much more realistic 
about what the reality is there.
    Without getting us into numbers--and by the way, Dr. 
Cordesman, you said up to 16 or 17 thousand. I think that was 
the number. I have been using the figure, based on what I have 
been able to glean from the folks in the field, somewhere at 
the low end of around 5,000, at the high end, 18,000, depending 
on how you define their mission and what you define as 
capacity.
    We all agree that part of, quote, a ``success strategy'' is 
giving the capacity to the emerging elected government to not 
only govern itself with some legitimacy, but also to be able to 
maintain its position with a capacity to have a security force 
available to it. How long are we talking about, assuming the 
change has taken place as to how to train and what the goals 
are as we think it has? I am vastly oversimplifying in the 
interest of time. How long are we talking about, assuming 
everything went according to plan, we work like heck, we have a 
rational new policy?
    What are we talking about? Are we talking months? Are we 
talking more than a year, Dr. Cordesman? What are we talking 
about to be able to give an Iraqi government the capacity to 
maintain its own security?
    Dr. Cordesman. I think, briefly, Senator, we are talking 
some point in 2006. We had only one operational battalion of 
the Iraqi army in the spring of 2004. We have been able to 
increase that to something like 27 battalions at the end of 
this month. But that is training and equipment. Let me stress, 
that does not mean they are combat-ready.
    Senator Biden. I understand.
    Dr. Cordesman. You have to have leaders. You have to have 
unit integrity and you have to have experience. We can do that 
by putting in U.S. advisers. We can do it by selectively moving 
units into the field. But to actually get to combat-ready 
forces, that process, once you have trained and equipped, is 
going to take you a matter of at least 3 to 4 months.
    You also, in terms of equipment, have not equipped these 
forces with what they need to survive. What you have are a few 
old Soviet APC's, but you do not have a real mechanized 
battalion in the field yet. We will have a mechanized brigade 
by some time in the summer. But we are talking about three 
divisions eventually and that would be some point in 2006.
    Senator Biden. Thank you.
    General, do you want to add to that? You have done it.
    General Newbold. Sir, just a couple of quick comments. As 
is obvious to everybody here, we are not training them to 
western standards. The real standard is how good are they 
against the insurgents. So to some degree it depends on how 
quickly we and the Iraqis can destroy the power of the 
insurgents, not just military but political as well.
    I would argue that we ought to--in certain areas of Iraq--
use moderately trained Iraqis to control the situation, as we 
have seen both in the north and in the south of Iraq. We 
certainly cannot in western Iraq. But we can incrementally feed 
them into the more benign areas with the state of training that 
they have right now.
    I think it will take until the end of this year to be able 
to do that in many areas of Iraq. It will take through next 
year, if we overhaul our strategy, before the predominance of 
the security mission can be undertaken by the Iraqis. They will 
be at a self-generating point, dependent upon the activity of 
the insurgency, probably within a year. That does not mean 
that----
    Senator Biden. No, I understand. By the way, in 
communicating with some folks on the ground these last couple 
days, on the Iraqi performance. They did perform well in the 
election. But what everybody forgets is the United States 
secured the perimeter. The United States essentially 
established martial law. The United States on election day 
actually shut down the country in terms of vehicles, etcetera. 
Then within the second perimeter you had the Iraqi army 
performing well, and within the interior perimeter you had the 
national guard and police performing well.
    But absent that outer perimeter, being able to be locked 
down, figuratively speaking, by the United States military, no 
one should read into what happened on election day the idea 
that the Iraqi forces have the capacity. Let me put it another 
way. Absent the presence of American forces in Iraq on Sunday, 
I do not think the kind of situation that existed would have 
been possible.
    Well, I can see the light is about to go on. I am going to 
come back and ask you about the notion of building an 
integrated Iraqi force--I am talking about an army that can 
shoot straight, have the proper equipment, be under the control 
of a civilian Iraqi government, being in the range of 30 to 
40,000 over the next couple years. Is it likely to be 
integrated, that is Sunni, Shia, Kurd? What are the problems we 
face there?
    But I have many more questions, but I will abide by the 
yellow light and yield back the last few seconds I have.
    The Chairman. Thank you, Senator Biden.
    Senator Hagel.

   STATEMENT OF HON. CHUCK HAGEL, U.S. SENATOR FROM NEBRASKA

    Senator Hagel. Mr. Chairman, thank you.
    Gentlemen, thank you for coming before our committee this 
morning. You have each made a significant contribution and your 
careers attest to that as well.
    For the record, General Newbold, I think it would be 
helpful if you would tell this committee what you did at the 
Pentagon in your last job and how you were involved in the 
lead-up to our invasion of Iraq and when you left the Pentagon?
    General Newbold. Okay, sir. I became the Director of 
Operations for the Joint Chiefs of Staff in August of 2000. The 
Director of Operations, as you know, is responsible for 
oversight for the employment of our forces around the world and 
is the communicator between the Joint Staff and the equivalent 
operations that go on in the combatant commanders' realm. I 
left that job in November of 2002.
    Senator Hagel. 2002.
    General Newbold. Yes, sir.
    Senator Hagel. So you had a considerable amount of 
experience on the inside at the Pentagon as we were preparing 
to go into Iraq?
    General Newbold. Sir, I had virtual access to every bit of 
intelligence. Other than the Presidential daily briefings, I 
think I had 100 percent other than that. I participated in all 
the planning, all the conduct of operations for Afghanistan and 
all the planning for operations for Iraq.
    Senator Hagel. My point in asking you to put that on the 
record is so that we will all clearly understand that you are 
not a very distinguished lieutenant general retired who is 
before us today just commenting or speculating. In fact, you 
were there and had a very significant responsibility for our 
efforts. So thank you for your service.
    Let me ask each of you, and because of our time restraints 
I would appreciate a brief answer: The issue is Kurdistan. What 
in your opinion is the likelihood of the Kurds moving to 
establish an independent state? Dr. Cordesman, may I start with 
you.
    Dr. Cordesman. I think they will only do that, Senator, if 
they cannot find a way to protect what they already have in 
some form of not necessarily autonomy, but federalism. If there 
are compromises, if as it seems this new government remains 
inclusive, then I think the Kurds will be more than willing to 
stay and will not seek independence, particularly given the 
risks of seeking independence and the problems with the Turks.
    Senator Hagel. Thank you.
    Mr. Khalil.
    Mr. Khalil. Thank you, Senator. Having spent many hours and 
days with Massoud Barzani and Jalal Talabani, I think I can 
summarize their key concerns as: First, political instability--
they do not know what this future government will hold--and 
second, security, obviously terrorist attacks in their region 
and Irbil and Sulaimaniya and so forth. So until they find out 
what the political situation will be, they are committed and 
have been on the record to be committed to a federal structure 
so long as the autonomy that they have developed over the last 
10 years remains. That is a red line for both Barzani and 
Talabani. So they are committed to this stage.
    The other point I should make is we made great efforts to 
include the Kurds in the central governmental structures, in 
the security institutions and in the political structures. You 
see obviously Barham Salih is the deputy interim prime 
minister. The secretary general of the ministry of defense is a 
Kurd. One of the four-star generals is a Kurd. There are Kurds 
in the Iraqi army, in the security forces.
    They feel that they have a place within that central 
government. I think they will also have a place, given their 
turnout in the elections, a place in the new, newly elected 
government as well.
    Senator Hagel. Thank you.
    General Newbold.
    General Newbold. Sir, I think the Kurds have set the 
minimum conditions, politically, economically, and culturally, 
that they expect to be met. On the economic side, other than 
the political--on the economic side, they want access to oil; 
and on the cultural side they want to protect what elements 
there are of Kurdish culture. As long as those are met, I think 
you will hear proclamations and politics about independence, 
but I think they will be content to be part of a greater Iraq. 
If any of those three or all of those three are endangered, I 
think they will probably seek alternatives.
    Senator Hagel. Thank you.
    Both Dr. Cordesman and General Newbold mentioned in your 
testimony on more than one occasion the future of Iraq being 
very significantly attached to regional security, the regional 
dynamic, which I happen to agree with and I have spoken on that 
point over the last few years. Would you each develop that 
regional security, regional strategy dynamic, with some 
context? What are you referring to when you talk about a 
regional strategy? Dr. Cordesman, we will begin with you.
    Dr. Cordesman. First, Senator, as I said earlier, we need 
to have a strategy that will reassure moderates, people in the 
Arab world who want a peace settlement, that we are 
aggressively out seeking to create an Arab-Israeli peace 
settlement and a settlement between Israel and the 
Palestinians. It is not necessary that we compromise or give up 
on Israel's security. It is absolutely necessary we be 
constantly visible and pushing for the kind of conditions which 
were advanced by President Clinton and again at Taba.
    Second, we need to reassure people in the region that, 
regardless of what happens in Iraq, we will stay in the region, 
maintain a security presence, and that they can count on us 
being there to support them.
    Third, we need to get away from this constant emphasis on 
general rhetoric about democracy and have Embassy teams and 
practical policies that encourage reform on an evolutionary 
basis, working with governments when we can, and working with 
reformers in the countries, not working with people from the 
outside, who in general have no impact or influence.
    Senator Hagel. General Newbold.
    General Newbold. Sir, I think we have to understand not 
only our goals and have them be crafted realistically, but we 
have to understand what the people in the region consider their 
fundamental goals and objectives involving security, economic 
interests. Again, we view these overwhelmingly in American 
perspective through our eyes. The Iranians' role in this, the 
Gulf States, and the internal frictions they have among 
themselves, their forms of governance, and the 
interrelationship of all the Arab states just in their future 
is critically important that we understand, and I would submit 
that we do not very well.
    We need to match our goals and objectives to theirs more 
closely and to appreciate what they consider the fundamental 
requirement. Most importantly is, as Tony Cordesman has pointed 
out, our treatment of the Palestinian-Israeli issue is 
perceived to be a factor which undermines our credibility in 
all other issues. Unless we are perceived as more evenhanded, I 
think we will have trouble throughout the region convincing 
people that our goals are objective.
    Senator Hagel. Thank you very much.
    Mr. Chairman, thank you.
    The Chairman. Thank you, Senator Hagel.
    Senator Dodd.

   STATEMENT OF HON. CHRISTOPHER J. DODD, U.S. SENATOR FROM 
                          CONNECTICUT

    Senator Dodd. Thank you, Mr. Chairman. Mr. Chairman, thank 
you for holding this hearing. The timing was tremendously 
appropriate, to come immediately after the events on Sunday, 
and it is tremendously worthwhile to have such competent 
witnesses before us.
    Mr. Cordesman, let me tell you, your statement here today 
is--I hesitate to speak as glowingly about it for fear that 
others may not pay as much attention to it. But I want to tell 
you, this is about as clear and thoughtful a set of 
recommendations as I have seen and I commend you for them.
    Let me ask you, just without getting too open-ended, but 
obviously I would like to hear how you read the elections. What 
should we take from this? If you are being asked to give a 
brief analysis of what happened on Sunday and what should we as 
Americans read from that and how do we then take that decision 
and try and move it forward a bit? I wonder if you might 
comment on the elections themselves.
    Dr. Cordesman. Well, first, Senator, one of the problems we 
have is we do not know how many people turned out. We do not 
know who they voted for and we do not know what the people they 
voted for are going to decide. But whatever happened, it is 
quite clear that very large numbers of Kurds went out and 
voted, not simply for a national election, but for a Kurdish 
assembly and for local elections. A lot of the tensions and 
problems that people feared did not take place, particularly 
given the history of Kurdish rivalry.
    Sunni parties went out and voted in large numbers. We 
probably will never be able to know how many really voted 
because one problem is the registration lists are the Oil for 
Food list. They are not people who went out to register to vote 
and only about 60 percent of the polling places that were 
required could actually be put into the field and many did not 
open.
    But all that said, it is quite clear that the Sunnis not 
only went out and voted, they voted for different parties, they 
did not vote along some clear theological line, and the party 
that was most religious, it is the quietest party that is not 
seeking any kind of theocracy. It is seeking a government which 
again is based on coalitions. In those areas where Sunnis could 
vote, the vote was very, very mixed. But there are indications 
that in places like Mosul when people saw it was safe to go out 
to vote in Sunni areas they did begin to vote, not in the 
numbers required.
    The other thing to put this in context is we keep talking 
about the Sunnis, but they are at most 20 percent of the 
population. More recent estimates put them into the 12- to 15-
percent category. The areas where people could not vote, like 
Al-Anbar Province or Nineveh or elsewhere, probably had 
something on the order of 7 percent of the population of the 
country.
    So the election I think, given the conditions, is a much 
better tribute or a much better sign of hope than can be 
indicated simply by how many people out of the registration 
list went to the polls.
    Senator Dodd. Dr. Khalil.
    Mr. Khalil. Thank you, Senator. All of the Iraqis, whether 
they be Sunni, Shia, or Kurd, also voted for local provincial 
elections as well as the national assembly. The Kurds, as Dr. 
Cordesman pointed out, had the additional vote for the Kurdish 
assembly.
    He is right that the Sunnis make up around 20 percent of 
the population, but they do make up about 99 percent of the 
insurgency. The important point about this is that, even though 
there was much talk about boycott by the Iraqi Islamic Party, a 
more moderate Sunni party, and the Moslem Scholars Association, 
the leader of the Iraqi Islamic Party actually said before the 
elections that he would not prevent his candidates, who were 
still on the slate and still on the ballot, from taking their 
seats if they won. So there might still be some Sunni 
representation on the assembly.
    The other point which is important is as far as bringing 
more moderate Sunnis into the political process, I think it is 
important that they be made part of the constitutional drafting 
process, the Sunni jurists and clerics, and also that the new 
cabinet has some Sunni leaders appointed as ministers. Both 
Shia leaders have said that they will commit to this. Abdul 
Aziz al-Hakim and Jafri have said this. So there is the 
potential to bring the Sunnis into the political process and I 
think there are some positive signs.
    Senator Dodd. General, I want you to comment as well, but I 
want to ask you something as well. When I came in you were 
talking about the withdrawal or the exit strategy. I do not 
have your exact words here, but you said we could leave when 
the insurgents allow us to leave. What occurred to me, just for 
the sake of discussion, is there a realistic assessment here 
that there are certainly significant parts of the insurgency or 
elements of the insurgency that would like us to stay for their 
own broader political purposes, that having the United States 
in Iraq on a daily basis, the informational benefit to them 
throughout the Arab world and elsewhere, engaged in sort of a 
quagmire, may serve their longer term and deeper interests than 
having us leave Iraq?
    Is that a fair criticism of the assumption that we can go 
when they allow us to go?
    General Newbold. Yes, sir. Just on the election very 
quickly, I thought it was a wonderful, courageous display by 
ordinary Iraqis and it ought to give us hope and it gave them 
tremendous hope. There is the potential for it to have a 
contagious effect throughout the region. We should not overplay 
that, but we ought to try to take advantage of it.
    The momentum will slip quickly unless we are effective at 
pushing the things that made it possible. The Sunnis will be 
the key. They are a minority that believes they have majority 
rights and an almost cultural disposition to rule. If the new 
government provides them opportunities and gives comfort to 
quell their fears, then I think they'll participate and I think 
we have some opportunities there.
    As far as the exit strategy, my comment of course was to 
shift the responsibility to the insurgents so that we shift the 
blame if we stay there longer than we would desire, than they 
would desire. But I do believe there is a hard-core element, 
Islamists, radical Islamists most particularly, who take some 
comfort by our presence in Iraq to allow them to increase their 
vitriolic statements throughout the world and to attack us in 
the place where we are vulnerable.
    Senator Dodd. Thank you.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Dodd follows:]

           Prepared Statement of Senator Christopher J. Dodd

    Mr. Chairman, I would like to commend you for holding this 
important hearing just two days following elections in Iraq. I would 
also like to thank our distinguished panel of witnesses who are here 
today to share their thoughts on U.S. policy toward that country and 
the greater Middle East. There is no more important issue facing us 
than the future of that region, and I look forward to hearing the 
expert testimony of all our witnesses, and to engaging in a productive 
dialogue. Dr. Cordesman, I would especially like to thank you for the 
various items you have submitted for the record. You make some very 
important recommendations that I believe the Bush Administration would 
do well to heed.
    Obviously, it will be some days yet until we know the results of 
the Iraqi elections. But I think it is important to say that regardless 
of the many challenges we face and any disagreements we may have over 
the direction of U.S. foreign policy, the holding of elections in Iraq 
was a momentous event for the Iraqi people. But we shouldn't take that 
to mean something it doesn't.
    The elections are not the end of our task in that country--they are 
a beginning. First of all, we will not always have troops there. If the 
new Iraqi government requests that the U.S. withdraw its troops, we 
should abide by its request. And if it doesn't make this request, we 
should still do everything in our power to ensure that we adequately 
prepare Iraqis for handling the defense and stability of their country 
as quickly as possible.
    That means we will have to start being honest about the numbers of 
Iraqis currently up to the task of defending and stabilizing their 
country. Common sense dictates that if the number of those types of 
forces were even close to the figure that Secretary of State Rice 
quoted for trained forces generally in that country--120,000, including 
50,000 police--then U.S. troops would likely be able to start 
withdrawing as we speak. That is obviously not the case.
    Simply put, when it comes to the training of Iraqi forces, we have 
a long way to go. And we are in desperate need of an effective plan to 
get there.
    But paying lip service to withdrawal and having a realistic plan to 
do so are not one and the same. We can't approach withdrawal from Iraq 
in the same haphazard and shortsighted way that we approached the 
invasion of that country. We have to have a plan or we could turn a 
difficult situation into something much worse. I couldn't agree more 
with Dr. Cordesman on this point--that regardless of whether we 
withdraw gradually over the next couple of years or if the Iraqi 
government asks us to leave in the coming weeks--we must not abandon 
the people of that country.
    What does that mean? It means that there is more to nation 
building--and I think it is safe to call it that--than the use of 
military might. Regardless of when we exit, we should be generous with 
offers of aid and assistance to the new Iraqi government--even if that 
government sometimes takes stands on issues with which we disagree. 
We've refused to learn this lesson with respect to democratically 
elected governments in our hemisphere, such as Venezuela, and I hope 
that we don't make the same mistake with respect to Iraq.
    What is needed more than anything else when it comes to nation 
building is the partnership of the people in the nation you are trying 
to build. To loosely borrow a well-known phrase, the new Iraq needs to 
be a country built by Iraqis and for Iraqis. That means using U.S. aid 
increasingly to put Iraqis to work in the building of their country. 
According to statistics, at least 2 million Iraqis are currently 
unemployed. American aid could be used to put them to work in 
rebuilding their country's infrastructure. This is the right thing to 
do. But more importantly, it would give Iraqis a greater stake in the 
success of a democratic Iraq, which is in our mutual interests.
    Moreover, U.S. aid should be focused on short term projects, not 
long-term lofty ideas. Because the legitimacy of the new Iraqi 
government will be based in large part on whether it is able to provide 
the basic services that every citizen expects of their government.
    However, the subject of this hearing rightly extends beyond U.S. 
policy in Iraq and seeks to address the future of our policy throughout 
the greater Middle East. Iraq is not the only place where elections 
were recently held. In the Palestinian territories too, there is a new 
democratically-elected government in power led by Mahmoud Abbas. That 
government has not only paid lip service to the need to restart the 
Israeli-Palestinian peace process--it has also taken some steps toward 
that end. The Israeli government has responded in a positive way to 
these steps. But we're at a delicate juncture here. A door is open, and 
we do not know how long it will remain so.
    I commend Secretary Rice for using the beginning days of her 
service as Secretary of State to travel to Israel and the Palestinian 
territories and meet with both sides. I hope that her trip will mark 
the beginning of a high-level and personal involvement by the Bush 
administration to advance the cause of peace between Israelis and 
Palestinians.
    Another issue that cannot be ignored is that of Iran. It is 
obviously in our best interest, as well as in the interest of regional 
Middle East security, to prevent Iran from acquiring nuclear weapons. 
To that end, the U.S. must do two things.
    First, I believe we must work more closely with the Euro-3--
Britain, France, and Germany--to put together a comprehensive strategy 
for dealing with Iran's nuclear program that includes both credible 
carrots and credible sticks. And second, we must reassure our allies in 
the region that our twin commitments to development and security--
especially in the event that Iran achieves nuclear capability--extend 
beyond Iraq. Our allies will be more confident in the U.S. commitment 
to that region knowing that U.S. interest will not fade as we 
eventually disengage from Iraq.
    In short, we have our work cut out for us. But the future could 
hold great potential if we get our act together with respect to our 
policy in the Middle East. Thank you, Mr. Chairman.

    The Chairman. Thank you very much, Senator Dodd.
    Senator Coleman.

  STATEMENT OF HON. NORM COLEMAN, U.S. SENATOR FROM MINNESOTA

    Senator Coleman. Thank you, Mr. Chairman.
    I want to follow up on the questions about the election. I 
had a chance to be in Iraq about 3 weeks ago. We were in Iraq 
and Afghanistan, and then went to Brussels and met with the 
Secretary General of NATO, met with the new President of the 
European Union, President Barroso. Two observations and then a 
question.
    In Afghanistan, Hamid Karzai talked about--these are his 
words--``the paradigm-shifting impact of the election.'' He 
talked about the impact that had on the Taliban, that really it 
gutted any strength that they had by the fact that people 
showed up. He anecdotally told the story of one polling place 
in a tribal area where mortar shells were lobbed in. The women 
refused to leave the line. They were going to vote. The men 
scattered but came back. So he talked about the paradigm-
shifting impact of the election.
    On the last comment and then the question. I was struck in 
visiting with the NATO ambassadors with the level of pessimism 
amongst almost every one of them about what was going to happen 
on Sunday in Iraq. It was almost as if they could not conceive 
that, in fact, an election, a valid election, would take place. 
It just was not going to happen. It did.
    So my question is kind of looking to the future. What do 
you see? You have done a good job, Dr. Cordesman, of kind of 
explaining what happened. Look a little bit to the future. Is 
there this potential for this election to be a paradigm-
shifting event? Was it just because of great security that the 
insurgents were not able to come forth and do all that they 
did? If the insurgents, as Mr. Khalil talked about, are 90 
percent Baathists, it is internal then, they are not external 
folks, what does the statement that the Iraqis made about 
democracy, about voting, what does that do to the insurgency?
    Dr. Cordesman. We need to be very careful, Senator, because 
the latest estimate I have seen is there were over 100 
attempted or actual incidents in the Baghdad area and somewhere 
between 260 and 300 attempted incidents in the area outside 
Baghdad. It was not as if they were passive. So the insurgents 
are not going to go away quickly. As General Newbold and Mr. 
Khalil have pointed out, they are a serious issue and a lot of 
them are committed.
    But they certainly do remain a relative minority, both in 
terms of their religion and ethnicity, and that has to be kept 
in perspective. Now, where is this going to go? I do not think 
you can say that you have seen any turning point here until you 
see what the results of the election are. I do not mean the 
vote. If the Iraqi parties come together, if as has been 
suggested by my colleagues they are inclusive to the Sunnis in 
the ministers and in terms of the convention for the 
constitution, if they show they can cooperate, retaining the 
good ministers--and this is important, continuity--but sharing 
power among each other, then this step forward in governance, 
combined with the election, will over time, I think, become a 
turning point.
    But we should not expect that to occur simply because there 
is a vote. People have to show they can govern. They have to 
show they can make the right political decisions. They have to 
show they can be inclusive. If they meet these tests, that is a 
turning out.
    Senator Coleman. Mr. Khalil.
    Mr. Khalil. Thank you, Senator.
    I traveled to Ramadi and had a very interesting meeting 
with the governor of Al-Anbar Province, the tribal leaders, and 
also around a dozen or 15 insurgents, basically ex-military 
personnel. These are rational actors, and I am talking about 
the ex-Baathists--they are still Baathists--the Saddam 
loyalists, the ex-military personnel and the intelligence folk. 
They will come to the negotiating table.
    It is the extremists, the Islamic extremists, the foreign 
jihadists, which you cannot negotiate with. Obviously, with 
Zarqawi saying democracy is wicked, that is not a negotiating 
point. So if you look at Muqtada Sadr as a template, there is a 
potential to bring these guys into the political tent. He laid 
down his arms, or the Mahdi army's arms, and thought about 
coming into the political process rather than using force, and 
there you see reconstruction occurring in Sadr City.
    I think this can occur in the Sunni Triangle with some of 
these more moderate Sunni resisters, the ex-Saddam security 
personnel.
    Senator Coleman. General Newbold.
    General Newbold. I agree with the comments of my 
colleagues. I think it has the potential to be a seminal event. 
We need to quickly reinforce what was positive about it and 
give concrete evidence of what the Iraqis were looking for. We 
need to take some combination of the Sunnis--just a quick 
reminder: The Sunni areas in the west of Iraq are not naturally 
wealthy areas. There are little resources, little hope out 
there, independent of the central government who will sustain 
them. The central government needs to indicate that it will 
sustain them politically, economically, and culturally.
    Senator Coleman. I have a little time. Could you follow up? 
Can you give your assessment of the impact and the 
opportunities on the international community? I have talked 
about the pessimism I saw before the election amongst our 
allies. Talk a little bit about the impact of the election on 
our allies and how do we seize--if there are opportunities 
there, how can we seize them?
    Dr. Cordesman. Well, very briefly, Senator, it is already 
clear that there is much more positive Arab press and media 
coverage as a result of the output of the election. The 
coverage was more balanced in some ways than I expected, which 
is not to say that it was perfectly objective. A lot of people 
who had remarkably pessimistic statements up to the point where 
the election was held have begun to either back off or be more 
accepting.
    But again, I think General Newbold made the point. If we 
see a pattern of violence develop over the next week, if we see 
the coalitions do not work together, if we see any split from a 
major faction, then this temporary boost could be just that. So 
is it positive so far? Yes. Is it going to stay positive? 
Everything depends on what the actions are.
    Senator Coleman. General Newbold, I think we have got a 
couple of seconds left. Is there anything you want to add to 
that?
    General Newbold. Yes, sir. I am not surprised by the 
comments you heard at the NATO ministerial level and I think it 
was very grudging accord that al-Jazeerah and the other Middle 
Eastern outlets gave to the elections. I think that the bias is 
unfortunate; not helpful.
    Senator Coleman. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you very much, Senator Coleman.
    The chair wishes to announce that a full statement on the 
hearing from Senator Dodd will be made a part of the record. 
Likewise a full statement by Senator Voinovich, who had to 
leave to be involved in another hearing, should be a part of 
the record.
    [The prepared statement of Senator Voinovich follows:]

 Prepared Statement of Senator George Voinovich, U.S. Senator From Ohio

    Thank you, Mr. Chairman. I am glad to have the opportunity to be 
here with my colleagues on this Committee to continue discussion on 
U.S. policy toward Iraq and the greater Middle East. This conversation 
is appropriate on the heels of Sunday's historic elections, in which an 
estimated eight million Iraqis cast ballots to choose members of a 
national assembly, who will have the opportunity to write a new chapter 
in the history of a free and democratic Iraq.
    The significance of the elections the world witnessed just two days 
ago should not be understated. This event marks a major step in efforts 
to move toward a new era of peace, stability and democracy in Iraq, and 
the Iraqi people are to be commended for their commitment to the 
principles of democracy and their perseverance when faced with very 
real threats of violence from those who do not wish to see freedom 
prevail in Iraq.
    We must also recognize the role played by dedicated American men 
and women in uniform, who, working with coalition partners and Iraqi 
security forces, worked to provide a secure and stable environment so 
that the elections could in fact take place. Their service was not 
without cost or personal sacrifice.
    More than 1,400 American service members have lost their lives 
while serving in Iraq. Moreover, it is reported that in addition to an 
estimated 35 Iraqis who were tragically killed by suicide bombers who 
attacked polling stations on Sunday, a 22-year-old Army medic from 
Cincinnati, Ohio, Private First Class James H. Miller IV, lost his life 
while providing security for the elections. Last week, four United 
States Marines from the State of Ohio were killed when a helicopter 
crashed near Iraq's border with Jordan. These men and women have made 
the ultimate sacrifice not only in order to promote a free, democratic 
and prosperous future for the people of Iraq and the greater Middle 
East, but also to protect the national security interests of the United 
States.
    As our witnesses will discuss, it is essential that the U.S. policy 
makers constantly re-examine strategies to bring lasting peace to Iraq. 
We owe it to the Iraqi people and to our men and women in uniform to 
ensure that we move forward with a solid plan, doing all that we can to 
empower Iraqis so that they are able to provide for their own security 
and stability as soon as possible. This is not an easy task, which 
makes our discussion this morning even more important.
    I would like to join the Chairman and Ranking Member in welcoming 
our distinguished witnesses this morning: Dr. Anthony Cordesman of the 
Center for Strategic and International Studies (CSIS); Lieutenant 
General Gregory Newbold, USMC (Ret.) of the Potomac Institute for 
Policy Studies and GlobeSecNine; and Mr. Peter Khalil, who is a 
Visiting Fellow at the Brookings Institution.
    Thank you. I look forward to your testimony.

    The Chairman. Senator Feingold.

   STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR FROM 
                           WISCONSIN

    Senator Feingold. Thank you, Mr. Chairman. I thank you and 
Senator Biden for holding this hearing. Like many Americans and 
Iraqis and people around the world, I was deeply moved by the 
courage of the Iraqi men and women who went to the polls to 
participate in Sunday's election and to make their voices heard 
in determining the future of their country. Iraqi's election 
was unquestionably an inspiring event.
    I do have, of course, a series of very serious continuing 
concerns that I have outlined briefly in an opening statement 
that I would ask to be put in the record if I could.
    The Chairman. It will be put in the record in full.
    Senator Feingold. Given the limited time, Dr. Cordesman, I 
would like to go on to a point you mentioned in your testimony. 
You underscore the need for clear statements from the President 
and the Secretary of State that help refute the sort of key 
conspiracy theories that poison our relations and undercut the 
legitimacy of the Iraqi government.
    Among the statements you call for is one clearly stating 
that we will not exploit Iraqi oil wealth in any way and that 
we will shift our aid funds to Iraq control, insisting only on 
sound accountability measures. As I consider these 
recommendations, my thoughts turn to the report that the 
Special Inspector General for Iraqi Reconstruction issued on 
Sunday. This is an office that I fought hard to make sure would 
exist and now this report indicates that the Coalition 
Provisional Authority failed to impose adequate controls on 
nearly $9 billion that was distributed to various Iraqi 
ministries during the period prior to the transfer of 
sovereignty late last June.
    I find this extraordinarily disturbing. The $8.8 billion in 
question was Iraqi money, proceeds from oil sales and 
repatriated funds, that the United States as the occupying 
authority was responsible for administering. But today we 
simply cannot account for what happened to these funds. This 
kind of mismanagement is a gift to those forces who want the 
world, and particularly the Muslim world, to mistakenly believe 
that the United States is a corrupt and imperialistic power.
    In my view, this is not just an oversight failure. It is a 
policy failure, with the potential to help the very forces that 
wish to do us harm. How will Iraqis and others in the region 
understand this failure? In light of the inability of the CPA 
to account for what happened to this Iraqi money, how likely is 
it that the nascent Iraqi government could provide meaningful 
accountability for U.S. taxpayer dollars if they were given the 
kind of control over the reconstruction budget that you 
actually have advocated?
    Dr. Cordesman. Senator, the argument always in the field is 
we are too busy today doing things to account for all of these 
expenditures. The problem, as you pointed out, is tomorrow 
always comes and you are then judged by how well you accounted 
for them.
    I think that these figures are at least somewhat excusable, 
simply because of the pressures, the uncertainties, the 
reprogramming. But it should not have been that difficult to 
maintain a modern accounting system. This is not the kind of 
cash flow problem where you have to get down to individual 
dollars and cents. These are massive expenditures.
    What I find a lot more disturbing is when I read the 
reporting that comes out weekly as to what we are doing with 
the money now. We have reporting on electricity which is the 
amount of power generated, not the amount of power distributed. 
Often the reporting on the electricity generated is the 
theoretical capacity, not the amount actually delivered. We 
have reporting on the oil sector, which is a critical earning 
area, the oil sector indicates we not only are not coming close 
to meeting our goal, we do not have significant stocks to deal 
in the area with the winter.
    More than that, I look at the latest figures on expenditure 
on the oil program and you allocated $3.6 billion to help 
renovate the oil sector in this $18.4 billion tranche and they 
spent all of--let us see. Let me correct that. They spent all 
of $123 million of that money to date. You look down the list, 
there is 15 percent of the money disbursed on electricity, 
which does not mean completions. We spent 15 percent on trying 
to improve governance. We spent something like 5 percent of the 
money that was allocated on health care and 7 percent of the 
money on water. For those of us who do believe in the private 
sector, we spent about 9 percent on private sector development.
    When I look down the list of what people claim is done, it 
is just one list after another of a project started. Nobody 
says whether the project survived. Nobody says whether the 
project can ever be used. We have massive projects like water 
plants north of Basra that cannot feed the system, so even if 
they are not sabotaged it does not matter.
    What bothers me is not that there is an accounting problem. 
What bothers me is this incredibly powerful tool is not being 
used to support Iraq, is not being used to fight insurgency, is 
not being used to support the government. I think any soldier 
or commander in the field will tell you that dollars are as 
important as bullets, and we are getting plenty of bullets and 
we are not spending the dollars.
    Senator Feingold. Thank you, doctor. You note that United 
States success in Iraq is heavily dependent on two things, the 
emergence of a government that Iraqis see as legitimate and 
which can effectively govern and the ability to train Iraqi 
military and security forces that can largely replace United 
States forces.
    It seems to me that that will become increasingly difficult 
for Iraqis seeking to broaden their political power base. It is 
going to be hard for them to avoid publicly rejecting the U.S. 
presence in the country and publicly rejecting any kind of 
collaboration with the United States. So in a way their 
political imperatives would lead them in this direction even if 
these leaders recognize that Iraqi's security forces are ill-
prepared to provide security without international assistance.
    So I am concerned that one of your conditions might, of 
course, clash with the other, that Iraqis seeking political 
legitimacy may be unable to support a United States presence 
for long enough to train Iraqi forces. I would like your 
thoughts on that.
    Dr. Cordesman. Senator, there were several parties that 
went into this election initially talking about having a fairly 
rapid U.S. exit. Both of them changed their positions before 
the elections were held. We do not have a major party out there 
that participated in the election that is calling for any kind 
of rapid or precipitous U.S. withdrawal.
    What they are calling for is creating Iraqi forces as soon 
as possible which can replace us, which I think is exactly what 
we want. So certainly there will be plenty of people in the 
insurgency who do not like us there, but at least as yet none 
of the major lists that participated in the election do not see 
the need to keep us until their own forces are ready.
    Senator Feingold. Thank you, Mr. Chairman.
    [The prepared statement of Senator Feingold follows:]

              Prepared Statement of Senator Russ Feingold

    I thank Chairman Lugar and Senator Biden for holding this important 
hearing today, and I thank all of our witnesses for taking the time to 
be here to help the Committee think through the very serious challenges 
and the high stakes that confront our policy in Iraq and the broader 
Middle Eastern region today.
    Like many Americans, Iraqis, and people around the world, I was 
deeply moved by the courage of the Iraqi men and women who went to the 
polls to participate in Sunday's elections and to make their voices 
heard in determining the future of their country. Iraq's election was, 
unquestionably, an inspiring event.
    But while I commend the Iraqis, and the brave servicemen and women 
who helped to make the conditions for elections possible, common sense 
also tells me that Iraqi elections are not a silver bullet for 
resolving ongoing instability in Iraq, and celebrating these elections 
is no substitute for articulating and implementing a clear, efficient 
plan for handing off responsibility for Iraq's security to the Iraqis 
themselves and bringing American troops home.
    Our troops on the ground have been performing courageously--
sometimes even in the inexcusable absence of adequate equipment, 
support, and mission-appropriate training. They deserve better policy. 
American taxpayers have been asked to contribute hundreds of billions 
of dollars to this effort--and the Administration has failed to budget 
responsibly for these costs. The next generation of Americans is going 
to get stuck with the bill, and they deserve better policy. All 
Americans have a real, urgent stake in prevailing in the fight against 
terrorism, in denying terrorists new recruits and shoring up a global 
coalition to hunt down and eliminate terrorist networks. But Iraq has 
become the new premier training ground for terrorists, and our 
international standing has been dramatically weakened by our policies 
there. America's national security deserves better policy.
    We need a strategic plan, not lofty rhetoric. We need a clearly 
defined and realistic mission, not a sweeping set of abstract 
commitments. And we need a concrete timetable for achieving clear 
goals, not vague policies that wander from objective to objective with 
no end in sight. So I look forward to this hearing, and hope that soon 
we will hear from the Administration about how, precisely, they intend 
to proceed.

    The Chairman. Thank you, Senator Feingold.
    Senator Chafee.

   STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM RHODE 
                             ISLAND

    Senator Chafee. Thank you, Mr. Chairman.
    Welcome, gentlemen. Senator Biden mentioned Dr. Cordesman's 
November paper and I see that in that paper you talk about 
advocating a regional strategy, and I know Senator Hagel 
touched on that while I was gone. In particular you talked 
about being more flexible with Iran. Maybe you could add to 
that and illuminate on how we can be more flexible with Iran?
    Dr. Cordesman. It is odd, Senator, that ``containment'' was 
a word that became so unpopular and which in retrospect in the 
case of Iraq does not necessarily look all that bad. In the 
case of Iran, I think the challenges are much worse than they 
were in the case of Iraq. We are not talking about a simple 
dictator, nor are we talking about a broken military force. We 
are talking about a more cohesive country which has its own 
political turmoil.
    I think the key here is in many ways containment. It is to 
work with the Europeans. It is to put pressure on, but work 
with, the International Atomic Energy Agency to see if we can 
block proliferation. I cannot make you any promises, but I do 
not believe that any effort to rush into military threats or 
military options is the way that we can deal with the problem 
of proliferation in Iran.
    Similarly, I am afraid that Iran is moving toward a less 
democratic, more conservative, more isolationist, 
traditionalist political structure, and the coming presidential 
elections will cement the problems that occurred in the Majlis, 
when you essentially would not let the more moderate candidates 
even run, much less be elected. But it is still possible to 
have dialogue with Iranians. It is still possible to talk to 
people. It is possible to make it clear that our objectives are 
not ones which challenge Iran's basic national interests. These 
are ways we can, at least, hope that we can move toward a more 
open dialog and a better situation in the future.
    But I think it is absolutely clear that we cannot permit 
transfers of technology for proliferation if we can block them. 
We cannot allow Iran to operate in other countries in 
asymmetric or terrorist operations if we can put pressure on 
them to halt it. We must do all we can to block the transfer of 
arms.
    The one caution I would give is that American sanctions 
against Iran have been almost totally ineffective and as Iran 
has learned how to make better oil deals we are watching those 
sanctions essentially become almost purposeless. We need to 
take a very hard look at that aspect of our policy and see if 
there is not some way to work with countries rather than put 
out sanctions which no longer impede them.
    Senator Chafee. What would be a good venue for dialogue? 
How would we start that?
    Dr. Cordesman. Unfortunately, Senator, I think a lot of 
that--I have been in many second track dialogues with Iranians 
and it was always very interesting and I learned a great deal. 
The end reaction every time, however, is we have a long list of 
things we would like you to do, but if you did them our 
internal politics prevent us from actually moving forward. 
Those dialogues over time have shown that the people who 
advocate dialogue in Iran are progressively more cautious and 
more frightened of the consequences of being in them.
    We still have to try. We have to meet with them in second 
track meetings wherever we can. But I think one of the great 
tools we have here is to work with the Europeans, who have been 
allies here and cooperated with us in trying to block 
proliferation. It is to make use of countries which can talk to 
Iran and do not have the same history and communicate wherever 
we can a positive message, that if Iran will back away from the 
policies that divide us, none of which really serve its 
ultimate interests, we are ready to have an official dialogue, 
to deal with Iran in economic terms, to have the kind of 
relations we should have.
    Senator Chafee. Who of the Europeans have the best 
relations with the Iranians, the ruling government that exists 
in Iran now, which European or a number of them?
    Dr. Cordesman. I think often we are talking about some of 
the smaller countries, like Switzerland, who have more 
continuity, talk to the people in Iran. Germany certainly has 
worked hard at this issue. Britain has tried. Unfortunately, 
Britain has found, as have others, that when you go beyond 
dialogue to actually set policies you often provoke reactions 
among the Iranians which make it difficult.
    But one of the problems we have is these countries, 
Senator, are virtually all talking to the Khatemi faction. They 
are talking to the people who will not be there when this 
President leaves office. We do not even know if the more 
pragmatic traditionalists, like the Rafsanjani faction, will be 
represented in large numbers. If they are, then the Europeans 
will be able to talk to them. But it does seem to vary by 
country and on a given day the country that seems to favor Iran 
the most has the best relations. It is a very troubled, 
difficult situation.
    Senator Chafee. Would any of the other two guests like to 
add anything?
    General Newbold. Just very quickly, Senator. I think Iran 
is a schizophrenic society and has to be dealt with to some 
degree that way. That is, it reminds me of when I was Director 
of Operations, Joint Chiefs of Staff, our path toward Iraq was 
becoming obvious. I suggested that we look at Iraq and those 
things that would undermine Saddam Hussein and those things 
that would reinforce his power. A clear analysis there, a 
simple analysis, would show that many of the things we were 
doing, in fact, reinforced the power of Saddam Hussein.
    In a like way with Iran, if we are bellicose, if we are too 
threatening, we reinforce the radicals and we undermine the 
people that might be predisposed to align with us.
    Senator Chafee. Thank you.
    The Chairman. Thank you very much, Senator Chafee.
    Senator Boxer.

 STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. Thanks, Mr. Chairman.
    I want to thank the panel. You have just been so 
interesting, I think, for all of us. I really appreciate your 
being here and extending your time.
    Secretary of State Rice said after the election, she said 
the election signals a new day for Iraq. I agree with that, but 
I think it also should signal a new day for America and our 
policy toward Iraq. Of course, for me that is what I am 
grappling with, how do we take this good news and how do we put 
a light at the end of the exit tunnel. And I know ``exit'' has 
suddenly become a somehow charged word. I am not wedded to the 
word, but an end, an end of so much money, an end of so many 
troops, etcetera, an end of being a target to the insurgents, 
all of that.
    Friday I visited with the families of marines stationed at 
Camp Pendleton and this particular marine--First Marine 
Expeditionary Force has taken a huge hit. I want to report that 
their families are just extraordinary and I think we all know 
that. General, you know this. They are just extraordinary. They 
are willing to make even more sacrifices. If they are asked to 
by their Commander in Chief, they will absolutely do it.
    So I think it is up to us to show our appreciation to them, 
not only by doing what I am very excited to see is going to 
happen, I think, in the State of the Union, a great increase in 
some of the benefits, which members of both parties want to see 
happen along with the President, but also I do think we need a 
light. We need to light a candle here so we have some goal.
    General, you actually used the word ``goal,'' and I think 
in many ways for me you did light a candle to our exit, 
although you said we should set a goal of being completely out 
of Iraq in 2 years. Is that correct? That is what you said? 
Yes.
    I assume you believe that should be done gradually, is that 
correct?
    General Newbold. I am sorry, ma'am?
    Senator Boxer. I assume you believe that should be done 
gradually. Okay, so it seems to me if we were just to, just for 
the sake of discussion, adopt that goal, we then have to take 
your next statement, which is disheartening--that one was 
heartening--and that was that you said that you don't see an 
end in sight of this insurgency. Those were your words.
    So if we have this strategy, this goal to be out in 2 
years, doing it gradually, but yet there is no end in sight to 
this insurgency, clearly the training of Iraqi forces, which I 
have to say--Senator Biden has just been on this for so long, 
and Senator Lugar as well, in hearing after hearing after 
hearing. It looks like this goal that you set can only be met 
if we can transfer authority to the Iraqis themselves, because 
there is, quote, ``no end in sight of this insurgency.''
    So I guess it is frustrating for us because, first, we 
cannot seem to find out exactly how many troops are trained, 
and there are reasons for that. But Senator Biden asked 
Secretary Rice a number of questions. I am not going to go over 
the give and take, but at the end of the day Senator Biden 
said--and Joe, if I misstate this please tell me--that you felt 
if they were properly trained that they could replace our 
people one on one, if they were properly trained. To which she 
replied: I really do not think so; I do not think they can do 
all of that which American forces do.
    Then she said: But in some ways, she said, they will be 
better because--and I am liberally quoting her now; she said--
they really know the neighborhood. They know better than our 
people who are these insurgents.
    So with that, I want to ask a question. If Secretary Rice--
first, I want to know if you agree that we cannot make this one 
to one transfer, because if we could that would begin a 
drawdown and it could begin to gradually bring our forces home 
in direct relationship to the training of their forces. So I 
want to ask you about that.
    But I also, Dr. Cordesman, wanted to ask you: If Secretary 
Rice is correct and the Iraqis know the neighborhood better, 
why is it that we do not believe them when they are telling us, 
the Iraqi intelligence, that they may have 30,000 fighters and 
up to 200,000 supporters? You alluded to it, but you did not 
seem to give it too much credence.
    So those are those two questions I have.
    General Newbold. Senator, on the direct swap one for one, I 
do not believe that we can swap the units and the individuals 
one for one, but I am also not sure we need to. Again, my 
recommendation is that we regionalize our approach and we use 
the newly trained Iraqi forces, who are clearly not up to 
United States standards right now, but use them in the more 
benign areas, freeing up some of our forces--coalition forces, 
United States forces--to move to the more active and violent 
ones, and over time as the Iraqi forces become better trained 
and become stronger quantitatively, then they can replace us in 
those areas.
    So a one for one swap is not required in order to achieve 
what we want to to withdraw our forces.
    Dr. Cordesman. Senator, part of the problem I have with all 
of these numbers, as I said earlier, is intelligence, if it is 
not based on facts, is intelligence based on guesswork. We do 
not have a way of measuring the number of insurgents in any 
meaningful way. If you want to make a conservative guess, you 
push the number down. If you want to make a pessimistic guess, 
you push it up.
    I think that the Iraqi Minister of Defense and other Iraqi 
officials rounded the numbers off because they first wanted to 
make the point that we are dealing with considerable sympathy 
for the insurgency. That is where the 200,000 came from. Where 
the 30,000 came from and whether it is better than 14,000 gets 
back to whether you define core insurgents, people who are 
members of organized cells, fighters, part-time sympathizers.
    Now, we broke those out in Vietnam. What we have today in 
Iraq is virtually meaningless reports coming out by way of 
public data, and to the extent I understand it, one reason they 
are meaningless is we have not standardized the way we break 
out the assessment of insurgents in given areas, and our 
numbers are bad even when we pull together the intelligence 
estimates. But I have not seen the classified data, I cannot 
assure you of that.
    Senator Boxer. Well, Mr. Chairman, if I could just say, I 
have had meetings with the military, our military, trying to 
find out the size of this. It is frustrating since our coming 
home depends on the size of this insurgency.
    I just wondered if I could simply ask one quick question 
and that would be the end of me.
    The Chairman. Very well.
    Senator Boxer. That is, what do you think was the role of 
the Grand Ayatollah Sistani in the turnout?
    Dr. Cordesman. I think it was extremely positive. He has 
pushed for elections. He has pushed hard. But he has pushed for 
coalitions. He has been a quietist. He has not pushed for any 
kind of theocratic rule. It is clear that he sees a Shiite Iraq 
as an Iraq that has to have Sunnis and Kurds in it, rather than 
something that is a Shiite enclave. So I think his role was 
consistently positive.
    Senator Boxer. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Boxer.
    Senator Martinez.

   STATEMENT OF HON. MEL MARTINEZ, U.S. SENATOR FROM FLORIDA

    Senator Martinez. Mr. Chairman, thank you very much and 
thank you for holding this hearing. I think it is extremely 
timely. I too share in the delight of seeing these pictures on 
television of people voting, standing in line, daring the 
insurgents and daring the negative forces who do not believe in 
democracy. So I am, for one, extremely pleased with where we 
are today and I am delighted we have a chance to hear from 
these gentlemen, and thank you all for coming.
    Dr. Cordesman, I wanted to ask if you might lay out for me 
one of the things I heard in following up on the euphoric day 
of the election about not losing the momentum. I know we have 
talked in several ways about that issue, but I would like to 
know from each of you if you could detail out a perhaps one, 
two, three approach of how to maintain the momentum, but then 
again how to build on that momentum to achieve the goal that we 
seek, which is obviously to empower an Iraqi Government to 
handle their own affairs and yet allow us to have a timely 
withdrawal.
    Dr. Cordesman. The key to the momentum, Senator, I think is 
ultimately Iraqi. We need to encourage them--and here my 
colleagues have made the same points--to be inclusive, to bring 
in the Sunnis, to try to defuse the insurgency by showing those 
Sunnis who will be part of the country that they have a future 
in spite of the economic and other problems they face.
    We need to encourage the kind of settlement with the Kurds, 
the type of federalism that will stabilize the structure. We 
need to work with the new ministries and new parties and make 
it clear we will support them and that we accept their 
sovereignty. One of the visible signs we have to have is the 
fact that we are not proconsuls, but we are working with these 
new elected officials as truly sovereign officials.
    I have already suggested one key tool would be to move 
toward transferring control of the aid funds and the aid 
projects to them. I think that would give a lot of momentum. 
Another would be to announce a plan for training and equipping 
Iraqi forces that showed Iraqis that we will indeed give them 
the quality, the capability, to take over as many of the 
missions as possible, as soon as possible.
    I think, as I mentioned earlier, it would be equally 
valuable if we understood that a Presidential or a Secretary of 
State policy statement outlining our goals for Iraq and for 
this government, that dealt with each of the major conspiracy 
theories, which was actually set forward openly by the 
President--and General Newbold made a key point. It is 
incredible to me that American officials cannot understand you 
do not communicate policy in press conferences. Nothing you say 
in a press conference is a policy statement.
    If you have a policy toward Iraq, the President or the 
Secretary of State--and those are the only two officials--have 
to announce it openly, clearly, and in a specific speech. This 
to me is just one proof of what General Newbold said, that our 
public diplomacy is often as much an enemy as the insurgents.
    Senator Martinez. Mr. Khalil.
    Mr. Khalil. Thank you, Senator. On how to maintain 
momentum, I agree with Dr. Cordesman. The political process has 
to be inclusive of the Sunnis clearly, involve them in the 
drafting of the constitution and get them involved in the new 
cabinet.
    Second, economic reconstruction needs to be targeted in the 
Sunni Triangle towns and cities. I think, in reference to what 
Senator Biden said earlier, smaller projects, Iraqi companies, 
and contractors being involved in this is absolutely critical.
    Third, obviously a focus on training, counterinsurgency 
training, for the Iraqi forces to ensure a realistic handover.
    Just on the insurgency a quick point. They do not all see 
eye to eye in the insurgency. When we spoke to the Fallujan 
tribal leaders, for example, they referred to the foreign 
Islamists as ``the destroyers'' and they are happy to get rid 
of them. But they could not move against what they called the 
``sons of the tribe,'' who were Iraqi ex-military personnel. So 
there is some room for maneuver here.
    They have been coordinating their efforts because they have 
the same short-term goals of derailing the political process, 
but in the long term they certainly don't have the same agenda, 
and you can start to break up that insurgency by bringing some 
of the ex-Saddamists and ex-Baathists, the military personnel, 
into the political process.
    Senator Martinez. General.
    General Newbold. Senator, in order to ensure we do not lose 
the momentum I would do four things that match my colleagues' 
statements. First, we have to have a quick display, visible 
evidence that there is an increased transfer of power and 
authority to Iraqis in the political, economic, and military 
realms. It has to be that visible. It has to be articulated and 
displayed, so the Iraqis believe that the situation is 
changing.
    Number two, I have already spoken to the accommodation of 
the Sunnis in which they are made more comfortable that they 
will be taken care of politically and economically.
    Number three, I agree very strongly with the Presidential 
statement. I think it needs to be done, not just for Iraq but 
for the world.
    Finally, at the end of the day the Iraqis need to believe 
not just the elections, but the follow-on actions that 
constitute forming their democracy, bring them hope for the 
future. That in and of itself, that hope will sustain them 
until such time as they completely govern the country and we 
withdraw.
    Senator Martinez. Thank you.
    One other area I wanted to follow up on, Dr. Cordesman, 
your mention of transferring the management of the aid or the 
funds to the Iraqis, which I can certainly understand would be 
an important consideration. I notice your criticism of those 
funds that appear to not have been properly accounted for. As 
someone who had a little bit of experience in running a multi-
billion dollar department of government that often had a 
difficult time tracking funds that were transferred to others 
to spend, I wonder if the transferring to the Iraqis would not 
then also be accompanied by those kinds of problems in 
accountability.
    I am not suggesting by that we should not do it. But you 
know, we used to work an awful lot at HUD on what we called 
capacity-building and it seems like in order to be able to 
spend the dollars you almost have to invest dollars so the 
folks know how to spend them, and then the very complicated 
process of accounting for how you spend them. So in other 
words, there is a whole bureaucracy that has to be in place. 
There has to be, frankly, information technology, a lot of 
things have to happen in order for us to apply our standard to 
how they account for the funds that we might transfer.
    Would you delve into those? Maybe too much into the weeds, 
but I really wonder how we would do that.
    Dr. Cordesman. Senator, very briefly, I do not believe that 
you can transfer money to Iraq without seeing significant 
corruption. This is a society which has inherited a kleptocracy 
and people are desperate for money. But I think we need to be 
very careful about what our goals here are. It is not to create 
a very large cadre of Iraqi CPA's, and here I mean accountants. 
It is to get the money into Iraqi hands where, as my colleagues 
have said, it is going to buy stability, it is going to help 
deal with the Sunnis, it is going to compensate the Kurds, who, 
incidentally, have lost the money they have through smuggling 
and Oil for Food and there is a potential stability problem 
there.
    How do you measure success? It is not by accounting. It is 
by projects out in the field. It is by things accomplished. It 
is by having U.S. people observe and see that the projects 
actually get implemented. It is by giving people the equivalent 
of things like the CERP program so our commanders still retain 
the money that they can give again, so dollars can be used 
instead of bullets.
    If we lose 10 to 15 percent to corruption, so what? We are 
losing more than that now simply to buy mercenaries to protect 
projects that do not work. I think this is a fundamentally 
different issue. Our problem is not accounting; it is winning.
    Senator Martinez. I agree with you and I appreciate my time 
is up, but I do want to point out that I agree with that 
approach. I think we have to get the money out there. I was 
just hearing, on the other hand, Ambassador Bremer being blamed 
at times for perhaps putting out too much money early on that 
has not been as fully accounted as it should be. I do not think 
we can apply our accounting standards to what needs to be done 
on the field, and I appreciate your point of view on that. 
Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Martinez.
    I will just comment without asking you to reply further. 
The answer you gave, Dr. Cordesman, that the Kurds have lost 
money from the smuggling and the Oil for Food program, is an 
interesting footnote for the current investigation of Oil for 
Food. I make that point simply because, as we get into the 
weeds of that, our own policy, or lack of it, is likely to come 
to the fore.
    Senator Nelson.

    STATEMENT OF HON. BILL NELSON, U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    Speaking of Ambassador Bremer. I would like to ask you all 
about my colleague from Florida. He countermanded a Floridian, 
General Garner, who was put in charge of Iraq to begin with. 
General Garner wanted the Iraqi army to virtually stay intact. 
Bremer came in and said dismantle it. I would like your 
comments on that.
    Dr. Cordesman. Senator, I think that in reality--and I 
overflew quite a number of those concerns when I was in Iraq 
and I am sure that my colleague has seen a lot more of them--it 
was gone. There were elements of one corps left intact, not a 
particularly good one, up in the northeast. The army was a 
conscript-oriented force, the parts that we would probably have 
wanted to have retrained. It left, came back, looted, and left 
again.
    One of our basic problems in training the Iraqi army was 
just creating new barracks and facilities once we decided to do 
it. I think that the decision that was wrong, was having 
watched it disband, we had no plan to create a credible force 
to deal with security either in terms of the police, the 
security forces, or the military. We talked about a token force 
to be on the borders, policemen who would operate basically in 
a more secure environment than you can find a mile away from 
Capitol Hill, and security forces whose main purpose was not to 
be security forces.
    That was a decision which simply should not have been made. 
There should have been from the start the understanding of how 
difficult the problems would be. Moreover, in disbanding it 
took a long time to decide that it is not a good idea to have 
several hundred thousand young men wandering around with no 
income and no job and some of the best trained people in the 
country with no meaningful pension. And even then we could not 
get the money to them for a matter of months, and this is a 
cash economy. Most Iraqis cannot go to the bank or cash a 
check.
    So I think the problems here were not the fabled disbanding 
of the Iraqi army, which we did with some 18,000 precision-
guided munitions and quite a lot of tanks. It was the 
aftermath.
    Senator Nelson. General, in your statement you said, and I 
am quoting: ``We had a poor to nonexistent plan for the post-
invasion phase.'' Then you go on to say: ``At the national 
level we''--meaning the United States--``are deluding ourselves 
in many key ways. Examples are the public assessments of the 
state of training of the Iraqi forces and police, the 
underlying nature of, and prospects for, the insurgency, the 
degree to which we truly have an international coalition in 
support, and in the strategy for adequately addressing the root 
causes of terrorism, radicalism, and instability in the 
region.''
    I have felt, along with our colleagues here, our leaders in 
the committee, that the United States has not stepped out 
vigorously enough to get other nations of the world to help us 
in the plan for the occupation and in the training of Iraqis. 
So we have gotten all of these countries, in Europe and others, 
that have hardened their positions publicly, saying they will 
not come in and help us with the occupation.
    But is there not the indication that these countries have 
told us that they will help with the training of the Iraqi army 
and the Iraqi police? And, what are your observations about the 
United States unwillingness to step out and really implore 
these nations, including Arab nations in the region, to help us 
with training? And, if they would, how do you see that helping 
us to accelerate the training of the Iraqi forces?
    General Newbold. Senator, I think it is critical that we 
get our international partners to participate more fully. Two 
reasons: Quantitatively, and that is simply we could use more 
trainers; and also symbolically, to broaden this from a United 
States occupation to an international effort to rebuild Iraq. 
Senator Biden, I know, has worked closely to try to gain more 
from our traditional allies.
    There are two faults really there. Frankly, my experience 
in my dealings was that sometimes we dealt with them arrogantly 
and the reaction of some of our allies was predictable. On the 
other hand, some of our allies were the ones that would not 
support Secretary Powell's attempts at smart sanctions and the 
failure of smart sanctions led down a path toward what became 
the invasion of Iraq and the power of the people that wanted 
to, the power within our government, that wanted to do that.
    So on the part of the allies, they have been recalcitrant, 
reluctant, and halting, and that is unfortunate. Iraq is 
important not just for the United States, not just for the 
region, but for the world. As Senator Biden pointed out, I 
think we need to redouble our efforts, perhaps swallow a little 
bit of our pride. But we also need to expect some of our 
traditional allies to be more accommodating, and if they are 
not, it will stick with us for some time, I am afraid.
    Dr. Cordesman. Senator, could I make just one comment. You 
referenced ``Arab training.'' One thing we need to be very 
careful about: If we take the figures that are normally used, 
80 percent of this country is not Sunni Arab. The neighbor to 
the east is Iran. It is very difficult to bring in outside 
people for training, for training missions, beyond what we have 
already gotten from Jordan, and Jordan is conducting these 
training missions at the cost of potentially serious political 
instability.
    So I think if we are going to solve this problem it has to 
be through us, Europe, and outsiders, not through people in the 
region.
    Senator Nelson. Which outsiders?
    Dr. Cordesman. Hopefully Europeans. But I will tell you 
honestly, I do believe the administration and people in the 
field have made every effort to try to bring more trainers in 
from Europe. The truth is that European countries, that are not 
present, are not going to send training people in there. 
Remember, what we need is interoperability, leadership, and 
units that can have quality and function with unit integrity. 
So simply pushing people through a training facility, 
particularly if it has a different language and different 
customs and patterns, can almost be counterproductive, not a 
help.
    Senator Nelson. Well, is this to say then that we are 
doomed?
    Dr. Cordesman. No, sir. It is to say that I think General 
Luck's strategy of putting more United States and hopefully 
British forces into Iraqi units, concentrating on stiffening 
and training them while they are in service to supplement the 
programs General Petraeus has under way, is a good solution in 
the way of moving toward the quality we need. But if we wait 
for the Europeans, we are going to be in very serious trouble, 
and it is important to note that both in the Balkans and in 
Afghanistan the Europeans have only delivered about 30 percent 
of the police forces they pledged and those were problems where 
there was a great deal more support than we have in Iraq.
    Senator Nelson. So we are looking at a force of 120,000 
U.S. troops for at least a couple of years?
    Dr. Cordesman. No, sir. I think that what you are looking 
at is, if you move to the point where you go from two or three 
experienced battalions to the point where the 27 battalions in 
the army now in existence are actually in the field and 
experienced by the middle of the year, if you see the national 
guard phased out and the better manpower used in the army, as 
General Newbold has said, and I think my colleague as well, you 
can by late 2005 and through 2006 see a steady drawdown in 
United States forces and see competent Iraqi units replace 
ours.
    But to do that they not only need training, they need 
standardized equipment, they need standardized rules of 
engagement, they need to be fully interoperable, and they need 
to be units which can cooperate with each other in the field. 
It is nice to have NATO units, it is nice to have units trained 
outside, it is helpful as a sign of solidarity, but when we 
stress so much interoperability and standardization in NATO, we 
have to remember it is a lot more important in putting together 
a force like this in a country that faces an ongoing 
insurgency.
    Mr. Khalil. Mr. Chairman, could I add a quick comment to 
the Senator's question? Just on the issue of outside help, 
Senator, I did travel a fair bit to some of the Arab countries 
in the region to ask them for support and assistance in some of 
the training. I traveled with General Eaton and other CPA 
leadership. Many of them wanted to help because it was in their 
strategic interest to see a stabilized Iraq, but many did so 
very privately. They did not want it made public because of 
domestic pressures, and there is some assistance from some of 
these Arab states that is not out there as far as public 
information.
    On the issue of the Iraqi army, it was dissolved and many 
of the conscripts, around 400,000 of the conscripts, the 
largest share were not going to come back. I think the real 
problem was in the immediate postwar phase, knowing that there 
was going to be this security vacuum, that there was not an 
increase in U.S. and coalition troops to fill that vacuum and 
to provide basic law and order.
    There was a grace period where Iraqis did view the 
coalition forces as liberators, but that quickly eroded because 
of the lack of basic law and order and the looting that 
occurred.
    Senator Nelson. Thank you.
    The Chairman. Thank you very much, Senator Nelson.
    Let the record show that Senator Obama has been here from 
the beginning of the hearing. I appreciate your patience, 
Senator. We are delighted that you are here as our 11th 
questioner. We have very good participation today by the 
committee. Senator Obama.
    Senator Obama. Thank you very much, Mr. Chairman.
    I want to thank the guests. It has been very informative, 
so I very much appreciate their presence and patience with us. 
This weekend I think we saw an enormous glimmer of hope in what 
has been a very difficult situation, and I think that it is a 
testimony to the Iraqi people. It is also a testimony to our 
military, which, as you indicated, General, have performed 
oftentimes despite bad policies to provide the kinds of 
security that facilitated the election. So I am very proud of 
our troops.
    I have mentioned before, Illinois I think, would be the 
third or fourth largest coalition partner if it was a country. 
So I am just grateful that we reached the point that we did 
this weekend. We have a lot of work to do.
    A couple of questions I have. One, I am just going to pick 
up off the training issue that Senator Nelson and certainly 
Senator Biden have been pursuing vigorously. I was out of the 
room. I understood that I think someone asked, and my staff 
indicated that it might have been you, Dr. Cordesman or General 
Newbold, that you did not think that we needed a one-to-one 
replacement of American troops to Iraqi security forces. I was 
not sure whether you were able to elaborate on that, but do you 
have an estimate at this stage in terms of a reasonable minimum 
number of security personnel that are fully trained and 
equipped in the way that you have discussed to allow us then to 
phase out and let them take on the full responsibility of 
security in their country?
    Dr. Cordesman. No, Senator; I do not. I think the reasons 
are this. First, this is an ongoing battle. We do not know what 
the insurgency will be over time. As we have all said, a lot of 
this depends on the politics and to some extent the aid 
policies that are pursued. More inclusive policies could reduce 
the size of the Sunni threat. If you get the Islamists, the 
outsiders, the extreme units, more isolated, you need far less 
troops, both American and Iraqi.
    If you make mistakes, the reverse is going to be true. We 
do not have a core understanding at this point of what units in 
the Iraqi military structure we can build on. I am looking at a 
report dated 21st of January from the U.S. Embassy and it 
refers to special operations forces, a counterterrorist force, 
and a commando battalion as having conducted independent 
operations. That is a very limited number of men.
    But you have got 27 battalions in the field. If you build 
up to solid brigades and the insurgency goes down, then the 
Iraqi forces can replace us more quickly. If the insurgency 
goes up and the Iraqi forces remain weak, then one-to-one 
ratios become almost theoretical. It has been pointed out that 
police can operate in much of this country if the country is 
secure and the police are properly deployed, trained, and 
equipped.
    But the fact is that today, out of 55,000 supposedly 
trained Iraqi police forces, about half do not have real 
training and you have something on the order of 13 battalions 
out of that force--that is somewhere around 8,000 police--with 
the core capability to deal with significant threats.
    On January 6th they folded the national guard in--and I 
will leave that to General Newbold or to my other colleague--
into the army. That had 68 battalions in the national guard, 
which sounds incredibly impressive, except maybe two to three 
of them could actually function because this was the old 
Facilities Protection Service.
    What we desperately need is a clear plan to create a 
balanced, integrated approach to strengthening Iraqi forces, 
one that Iraqis can see, that you in the Congress can see, and 
that the world can see. But for us to sit here and say we can 
give you these numbers under these conditions, we simply do not 
have the kind of information. That is one of the reasons why 
our efforts are being given so little credibility in much of 
the region.
    Senator Obama. That is a good point, so let me follow that 
up, and any of you can respond to this. But where does that 
plan for security force development and training, where does 
that get articulated? Now that we have had these elections, 
although the job of the assembly is primarily to draft this 
constitution, is that still primarily our function in 
consultation with them? Who announces it? How do we track it?
    Part of my interest is figuring out how, on an ongoing 
basis, we are going to be able to evaluate the progress that is 
made.
    Dr. Cordesman. Well, in a practical way, Senator, first, we 
do not know if the Minister of Defense or the Minister of the 
Interior will stay. The last time we had considerable 
turbulence and lost 3 months simply because the Ministers 
changed. The Minister of Defense in the old government did not 
get along well with the Minister of the Interior and got along 
even less well with the Minister of Finance.
    I would suggest that in practice the best way to approach 
this would be to have the people actually in the field--General 
Petraeus, General Sanchez, General Casey--propose an integrated 
plan which would include the police and security forces with 
the military to the Iraqi government, so they would have a 
clear plan to work from rather than ask them to do something 
they will not be able to do for months, but give them the 
sovereign right to make the key decisions.
    I would make that plan clear and public so people could see 
what our intentions were and that we were really stepping up to 
the job with the mix of equipment, training, leadership, and 
advisory presence that is really needed.
    Senator Obama. General, Mr. Khalil, do you want to add 
anything to that?
    General Newbold. Real quickly, over the last 6 weeks the 
United States military in Iraq through Central Command has 
developed actually quite a good security plan. You could argue 
it is a bit later than the need, but----
    Senator Obama. It is a year late.
    General Newbold. But it is a pretty good plan. My most 
important point would be that that is a security plan and, 
unless articulated into a broader plan that shows much more 
energy and imagination in the economic, political, and 
informational realm, then we will become more efficient without 
becoming more effective in Iraq.
    Senator Obama. Mr. Khalil.
    Mr. Khalil. Thank you, Senator. Just very quickly also, I 
think the plan also has to emphasize shifting the focus of 
training and training resources on the counterinsurgency forces 
that can really take over responsibility, so increasing police 
trainers, increasing army ranger training personnel, even FBI 
trainers in some cases, and not just from the United States, 
from other coalition partners, I think is imperative, even to 
the point where you might want to think about not going ahead 
with the full 68 battalions of the National Guard. I think they 
are currently at around 40 battalions or 45 battalions, and 
shift those resources to training counterinsurgency forces. I 
think that is a critical element.
    Senator Obama. Mr. Chairman, I know I am out of time, but 
maybe if I could just have one last follow-up question and then 
I can turn it over to you and Senator Biden.
    Shifting gears a little bit, but it picks up on your last 
point there, General. That is, it is our task as the U.S. 
Government to articulate our policies. Dr. Cordesman, you, I 
think, laid out what I find a very persuasive suggestion, that 
we specifically, unequivocally, in a policy statement as 
opposed to in an ad hoc fashion debunk some of the conspiracies 
that may be--conspiracy theories that may be out there with 
respect to our presence.
    I thought all those are suggestions that I hope this 
administration pays attention to. I am wondering whether we 
should rightly expect a well-articulated exit strategy as part 
of that broader statement, because when Dr. Rice was here I 
recognized this administration's reluctance to put a firm 
timetable. On the other hand, it strikes me that, particularly 
given some of your comments, General, about the fact that our 
presence there may actually inhibit some of the political 
developments that we want to see happen, that this now may be 
the time post-election where we stake out a position, 
recognizing that there may be some flexibility involved, but 
that we say very clearly, here is what we anticipate doing on 
the security front, on the economic front, on the political 
front, and that it would actually enhance our ability to 
execute over the next year or two.
    So I wanted to see if what you talked about, doctor, was 
inclusive of a broader exit strategy or you were restricting 
your comments to those five or six points that you thought 
needed to be made.
    Dr. Cordesman. The problem I have with exit strategies 
become so confused with simply leaving as distinguished from 
strategy.
    Senator Obama. Let me interrupt then just to say, I have 
been very clear and I think the majority, the strong majority 
of this committee, has been clear that we want also a success 
strategy and not simply a cut-and-run strategy. So I asked the 
question in that context.
    Dr. Cordesman. I think it is exactly as General Newbold has 
said, I think frankly we have all said. It should not just be a 
military strategy. It should be an economic strategy. It should 
be a political strategy. It should be a clear statement of 
American objectives. And it should be quite clear to the Iraqis 
in the world that at the end of this, when Iraq is able to have 
a government that stands on its own, when it has military 
forces that, at most, require a United States advisory 
presence, that when its economy has taken the benefits of the 
aid that is needed, we will be out of Iraq except for whatever 
very limited remnant is needed and we will have no bases, we 
will make no effort to exploit the situation, our objectives 
will be to create the kind of Iraq which can stand on its own, 
deal with its own problems, and remain hopefully pluralistic 
and federalistic.
    The only caution I would give you, Senator, is I do not 
believe we should set some calendar. If a calendar is to be 
proposed it should be proposed by the Iraqis, first, because it 
is their choice to make and, second, because I become 
frightened that the minute you put a date down and for any 
reason you cannot make the economic program work, the military 
program takes more time, there is some kind of political 
division that is not a crisis but difficult, and you cannot 
meet that deadline, all of a sudden your credibility comes into 
question and, more than that, as you move toward the deadline 
the insurgents are going to try to find every fault line they 
can to make that deadline impractical and unworkable.
    Senator Obama. Could you argue that that was the same 
argument that was being made about the election? I guess what I 
am wondering is whether just creating some sense of urgency 
actually then accelerates activity and shapes and channels and 
focuses people's attentions in ways that are useful and makes 
it less likely that we would drift and continue failed policies 
when we know that we are going to have to make this thing work 
in a time certain.
    Dr. Cordesman. There is a difference between, I think, 
putting out a plan that shows the urgency we have in economic 
aid and in creating effective military forces and in setting 
deadlines for withdrawal. Do not forget, Senator, we have two 
more deadlines just this year, the constitutional election and 
then an election at the end of the year. We are going to be 
moving very, very rapidly there.
    I think the best thing to do is not to set deadlines for 
withdrawal, but to set very clear milestones for practical U.S. 
action. One obvious area is to make the aid program work. 
Another is to get effective Iraqi forces on line. Those give 
the kinds of urgency I think we need without potentially 
trapping us.
    The Chairman. Thank you very much, Senator Obama.
    We will have a second round of questioning now. We promise 
not to hold you indefinitely through your lunch hour, but we 
will allow 10 minutes for our second round.
    I will commence by raising a question just pragmatically. 
We on this committee and you today as witnesses have found a 
number of deficiencies in terms of our planning and execution 
of whatever we were doing in the past. But pragmatically, what 
is your assessment of how we are doing now? For example, 
Ambassador Negroponte went to Iraq at midyear to stand up a 
very large Embassy. We estimated, at least at the time of our 
hearings, that there would be maybe 700 employees in that 
Embassy, maybe more than that, for that matter, with a number 
of Iraqis employed in various capacities.
    Ambassador Negroponte has been in operation now for several 
months of service there. You have cited Generals Petraeus, 
Casey, and Sanchez who are now in our military leadership 
capacity there. I raise this question because frequently as we 
all talk about this we point out that these things happened and 
that they did not work out particularly well. But then, as 
opposed to simply condemning the whole efforts therefore, we 
are all in favor of making things work out well now, playing 
the ball where it lies and moving ahead.
    How well are we doing with the current leadership that we 
have in the country? Or should the question be broader? Does it 
include the President, the Secretaries of Defense and State? In 
other words, can you give some assessment of how we are doing?
    Dr. Cordesman. Senator, as I said in my testimony, I see 
significant improvements taking place in the area. I think that 
just talking to people, the relationships between the Embassy 
and the military, the inter-agency cooperation, is far better 
than it was a year ago.
    I think there is the feeling that Ambassador Negroponte has 
created an effective team on the civil side. You have several 
other Ambassadors, all of which have a very high reputation. 
You do have a problem. The Embassy, for reasons which we should 
have thought about harder, was put in the wrong place and the 
Green Zone is not the place to have an Embassy. You have people 
too concentrated in the Embassy. One of the complaints I hear 
from the military is they need civilians to assist them in a 
lot of the missions they have and those people are not going 
out into the field, I think often more because they are not 
allowed to than because of any reluctance, although there were 
recruiting problems in getting that Embassy staffed with many 
of the sort of people at the lower and mid-level.
    So I think you do see a more powerful team, and certainly 
in the field you have people, I think, that can implement a 
policy effectively. My greatest concern there would be twofold. 
One is continuity, because I am very much afraid we are going 
to rotate people yet again in a society where having people 
stay is absolutely critical. A 1-year tour is almost a recipe 
for difficulty, if not failure.
    The other is I do not know if we have a meaningful 
problem--a plan, rather, for dealing with this Embassy. I am 
afraid we have a very expensive building going up in the Green 
Zone, rather than one which is being moved out into areas at a 
reasonable size and cost to meet the future need and reduce the 
security profile. I would want to have a very clear picture of 
exactly why we are doing this, because I often get the 
impression we have people tripping over each other in that 
Embassy rather than being functional as we go down the level.
    But in general, when you ask how we are doing, we do not 
have a viable aid plan, we do not have a public broad plan for 
making the Iraqi forces ready and capable, we do not have a 
clearly articulated plan for supporting governance, and we do 
not have a series of public statements from the President or 
Secretary of State which deal with the issues which are of 
great concern, rightly or wrongly, conspiracy theories, to many 
Iraqis. Those are four areas that have got to be fixed as soon 
as possible.
    The Chairman. Let me then follow through this way. Before 
the military action occurred, this committee had hearings with 
regard to the planning that we felt would be required following 
military victory. One of the more discouraging hearings was one 
in which we asked for testimony from the Department of Defense 
and it was not forthcoming. So we were led to speculate as to 
what was occurring with the 150 persons reportedly back in the 
Pentagon interdepartmental, presumably thinking about what we 
were going to do. But it was never clearly articulated by 
anyone in the administration. We had some witnesses who 
likewise aided our speculation and a good number of people who 
offered suggestions of what probably should be in the plan, 
some of them specialists on Iraq from think tanks in this 
country and on some occasions actual Iraqis who had some 
experience with their own country.
    Now, I mention that because it is conceivable, as I have 
reflected back, that, audacious as it may seem, perhaps this 
committee, aided by some of our expert witnesses and others, 
might have drafted a plan or some plans. Not that we are 
supplanting the Commander in Chief or the Department of Defense 
or State or anyone else, but maybe for sake of argument there 
was, at least, some cohesive thought, as opposed to our 
commenting again and again that there was not much of a plan 
and that we were not hearing from anybody and therefore our 
oversight was somewhat frustrated.
    Maybe our responsibility was a little bit broader. This is 
one reason why we are having this hearing today, to try to 
think, building upon what has been, I believe, a very important 
moment with the election, however one wants to describe what 
that means and what it means in the future: What do we do now?
    You have suggested, all three of you, the need for a plan 
or plans. You have just outlined about four plans, Dr. 
Cordesman, that you felt were required. Maybe there are more. 
What if, just for sake of argument, this committee said, we 
really do not see the administration's plans and so as a result 
we are going to suggest some plans ourselves? Not to be 
provocative or overstepping our bounds, but nevertheless we 
just think somebody needs to be thinking about these things.
    Is it conceivable that this might stimulate those 
responsible at various levels in the administration, the 
military, Ambassador Negroponte, whoever, to say, okay, but you 
have got it wrong, this is really what we ought to do? Would 
this sort of tease out of the system the plans that might occur 
and that, absent our being this bold, might not happen for a 
while?
    Do any of you have any thoughts or guidance to our 
committee along those lines?
    Senator Biden. Our collective staff behind us are rolling 
their eyes.
    I think you are dead right, but anyway go on.
    The Chairman. Notwithstanding rolling of eyes.
    Dr. Cordesman. I am sure your loyal staff can have such a 
plan within the next 4 days.
    More seriously, I think we have to do something. This is 
the first day of February. It is an obvious statement, but we 
are now down to 11 months in 2005. We have a constitution which 
to be made work there has to be as much support to federalism 
as we can possibly give by way of tangible plans between now 
and the late spring. We need to be ready to have an election 
where people fully believe in the future by the end of this 
year.
    Those plans should exist in every area. They do not have to 
be my plan and I am sure each of the colleagues would agree. 
But it is very, very discouraging that what we have today is no 
plan in every important area, no plan that can convince the 
Iraqis, no plan that can convince the Congress, no plan that 
can win the support of the American people or the world.
    One way or another, that plan should exist. I do not care 
what it takes to force it to the surface. It should exist.
    The Chairman. Let me just comment quickly that this 
committee did believe that we ought to be engaged in some type 
of permanent organization for nation-building or 
reconstruction, as I think it is now called at the State 
Department. We proceeded to have a plan for this. Immediately 
the State Department and other people in the administration 
said: Well, we are already behind the scenes doing a lot of 
this and so we really do not want you to pass a bill mandating 
such; it has to happen administratively.
    So, in fairness, we heard Secretary Rice testifying the 
other day about quite a considerable effort going on in this 
area, which is a 180 change from the thought, say of 4 years 
ago, that we are just not engaged in nation-building, never 
intend to be. But clearly we are. The State Department actually 
has some people thinking about this and doing it.
    This is why I raise this suggestion, that from time to time 
people say, well, this is not your province. In fact, behind 
the scenes: You do not know what you are talking about; we are 
actually doing these things. But I hope that is the case, for 
the same reason that you have suggested, Dr. Cordesman, because 
the plans are not apparent and they are probably very necessary 
for all the reasons you have given.
    I would just conclude by saying specifically that you have 
raised a very important question that this committee probably 
should be seized with, and that is the Embassy building, the 
location and so forth. You are testifying that putting it in 
the Green Zone is not a very good idea. We are about to 
appropriate money, as I understand, as part of an $80 billion 
supplemental for Iraq and Afghanistan to build an Embassy.
    Some would say, well, of course it is there. That is the 
only conceivable place you could protect all these people. In 
other words, as Senator Biden has described his travels, 
currently in Iraq this is a pretty dangerous place for all of 
our folks to be going. So some would say, no wonder you do not 
have many volunteers, this is not exactly the best kind of 
duty. So you, at least, ought to hunker down, provide some 
security, build the Embassy there.
    Likewise, public diplomacy is a topic that we have explored 
to a fair degree. We held one hearing after another. But we 
always keep coming up with the fact that whatever we are doing 
simply misses the mark. Now, surely in this whole country there 
are some persons of sufficient intelligence who could formulate 
a plan that is better than what we have, as opposed to our 
holding hearings pointing out that whatever we have done is 
ineffective, as one person after another leaves the 
administration having had a go at it for 6 months or more.
    This is why I query the idea of somebody having a try. Our 
staffs are very good at it, but plagiarizing broadly from your 
papers and testimony today and from others who have testified 
before us, we may now have some good ideas.
    Senator Biden.
    Senator Biden. I would like to follow up on that, Mr. 
Chairman. I know this is a strange, a strange turn of events. I 
think that we are sitting here as loyal Americans trying very 
hard to support an administration that finds itself in a very 
difficult spot, and trying to, at least speaking for myself and 
based on the struggle you have just seen my colleague go 
through here, trying to not overstep our bounds, understanding 
the constitutional limitations on the role of the Senate and 
the Senate Foreign Relations Committee.
    But I now regret in retrospect not having taken the 
documents we produced here back, even in the bad old days when 
I was chairman straight through to the follow-on and 
amplification of the effort when my friend became chairman, 
before the war. In hearings going back to the summer of 2002, 
the nature of the problem we were going to face was laid out in 
exquisite and excruciating detail, as if--I have press 
occasionally approach me and say, well, all right, you say this 
now. I say: No, no, no, no, we are not saying this now. We said 
this a month ago, 3 months ago, 5 months ago, 7 months ago, a 
year ago, 2 years ago.
    What I am afraid I am doing again, in a public admission 
here, is, to use the phrase for the third time to this 
committee, engaging in what Samuel Johnson said people engage 
in who consider second marriages. That is the triumph of hope 
over experience. I am afraid I am engaging in that again.
    Let me get right to it here. The truth of the matter is 
this is still a divided administration. As much as we state 
just authoritatively that we have no intention of having a 
permanent military base here, that is not my understanding of 
what is still being debated within this administration. The 
reason why no one from this administration has said, in my 
view, we have no intention of having a permanent military base, 
is there are still powerful voices, not the President, powerful 
voices in this administration who want a permanent base.
    I recently got back from the World Economic Forum. Every 
major player in the region in what they call bilateral meetings 
came up to me and said: Are you trying to have a permanent 
military base there? You know, sometimes paranoia is justified. 
The reason why I would respectfully suggest many of the obvious 
questions and plans you lay out that should be on the table 
now, are not on the table is, there is still disagreement, not 
among our uniformed military in my observation, General, thus 
far, but with the civilians over there, the civilians over 
there.
    Now, maybe I am wrong, but why in the Lord's name would the 
Secretary-designee, now Secretary of State, sit before us and 
say without equivocation, followed on by every civilian leader 
in this administration, no, we have 125,000 folks trained, 
knowing full well what was meant by ``trained''? Why would they 
say that, except that I do not think they are on the same page 
yet.
    Now, I realize this is mildly heretical, but I do not get 
the sense they are on the same page regionally. Do any of you--
this is a rhetorical question. Do any of you think that the 
administration has a position on Iran, yet? If it does, I would 
like you to secretly tell me. I am not being a wise guy. I am 
not being a wise guy here. They have not resolved their 
positions.
    We sit here and say we need a regional plan. My lord. They 
are in disagreement in this administration on what to do about 
the Palestinian election, whether or not to move to the road 
map immediately, whether or not to sit back and twiddle our 
thumbs, whether or not to get engaged. We are divided on 
whether or not we are going to join the Europeans in an attempt 
to actually try to reach an accommodation, at least test the 
possibility of an accommodation with the Iranians, or whether 
we are going to sit back and stay out of the deal.
    So I do not know. I think we are all kind of engaging in 
this notion of a triumph of hope over experience. I have yet to 
see--and if it exists, I pray they come forward with it; maybe 
the beginning of the outlines will occur in the State of the 
Union. And I am not being political. I think when I said this 4 
years ago about how divided this administration was, everybody 
thought I was being political. This is the single most divided 
administration of the seven Presidents I have served with. 
Absolutely like a San Andreas Fault ran down the center of this 
administration, or ran down somewhere in this administration.
    I tell you what, I am not sure, notwithstanding Powell's 
exodus, notwithstanding some of the changes that have taken 
place, that there is a resolution of the fundamental underlying 
questions we all say has to be dealt with. A regional strategy; 
how can you have a regional strategy if you do not have a 
bilateral strategy, a strategy on a bilateral issue of Iran-
United States? How can you have a regional strategy if I have 
yet to hear an articulation of what our Mideast policy is now? 
I have yet to hear it privately, publicly.
    On the central issues that we are going to allay the 
concerns of the Iraqi people, I would like to have them allayed 
internally. I would like the President to say: We guarantee you 
there will be no permanent American base in Iraq, period. That 
is so easy to say. Why has he not said it? It is not that he is 
not a bright guy. It is not that he does not understand the 
consequences of that. I believe they have not made up their 
mind.
    So it leads me to the following question. I have been 
implying as I look back on it to my constituencies and to my 
colleagues and to my own caucus in a partisan sense that the 
administration has got it now, because I constantly am pointing 
out General Petraeus's efforts, General Luck, what he is about 
to recommend, and so on, and that is all progress. But I do not 
get any sense--Mr. Khalil, I quoted you in the hearing. The 
response I got was--they continue to talk about, when you hear 
the President speak, the jihadists. I am constantly saying I 
have not heard a single military person tell me that that makes 
up more than 10 percent of our problem in terms of the 
insurgency. Yet, when the President speaks he talks about if we 
do not fight them in Baghdad, we are going to fight them in 
Boston. Give me a break. The election is over.
    I hear talk about the inability to articulate our position 
on Iran, in the Middle East. So where is the regional plan? I 
hear the economic plan. I do not see any evidence--it may 
exist. I do not see any evidence, doctor, that this 
administration has made at the Presidential level a decision 
that we are fundamentally going to change our approach on the 
distribution of the remaining roughly $16 billion in 
reconstruction funds.
    Lastly, what concerns me almost as much as anything, I do 
not get the sense that at the Presidential level, the Secretary 
of State, President, Secretary of Defense, the Vice President's 
office, that there is a recognition that this is a tribal 
society and that the core constituencies are tribal and 
clerical. They are not the sort of generic Shia, Sunni, Kurd. 
May I remind everybody, which you guys already know in spades, 
what prompted a trip, occasionally on the floorboards of an 
automobile, in 2002 by Senator Hagel and me to Irbil was, guess 
what, we wanted to hear firsthand that Barzani was not going to 
kill Talabani and Talabani was not going to kill Barzani. That 
was only 2\1/2\ years ago.
    But I see nothing to indicate to me that at the policy 
level of this administration there is a recognition of any of 
these fundamental points relating to regional policy, relating 
to the distribution of reconstruction moneys. What do you hear 
when you ask the Secretary of Defense why there is not more 
reconstruction? I will say in advance, if the Secretary is 
listening, I am paraphrasing the best of my understanding of 
your position; Mr. Secretary: The reason why it is not going on 
is totally a consequence of the insurgency. That is the only 
reason nothing is being done; the insurgency. We have no 
progress on the economic front because of the insurgency.
    Obviously that is an impediment. But my observation, that 
is not the primary problem. It is a plan. When are we going to 
move from Brown and Root--and I am not beating up on Brown and 
Root. I am not pulling the Democratic stuff about that. When 
are we going to move from they are the solution to all our 
problems to the idea that you pointed out, Mr. Khalil, for some 
time: You got to get in the neighborhoods, you got to get down 
to specific things.
    So that is a reflection of my intense frustration, which 
leads me to my question: Do you think the administration 
realizes how fundamentally they need to change their policy of 
the past 2 years?
    Dr. Cordesman. I see a hint, Senator, but there are no 
secrets in Washington and there certainly is no such thing as a 
secret strategy that has to be implemented on the interagency 
basis. As Senator Lugar pointed out, that strategy is 
absolutely vital. It needs to be public, it needs to be 
understood here, in Iraq, and in the world, and it is not.
    If it exists, there is no conceivable reason not to make it 
public, to articulate it, and to provide it in detail. If it 
does not exist, we have, depending on whether you take us 
seriously, at most 23 months to make this work, and we do not 
have time not to force the issue.
    I would just say one remark in conclusion. I had as one of 
my assignments, a very long time ago writing for the Secretary 
of Defense, an assessment of why the collapse took place in 
Vietnam, why the ARVN could not defend itself, and why the Viet 
Cong dominated so quickly. That report vanished into the hands 
of the OSD historian and was never seen again, but it is not a 
report that I would like to write in the future about Iraq.
    Senator Biden. General.
    General Newbold. Senator, I have absolutely no reason to 
believe that this administration will change the process that 
resulted in this mess to begin with. I continue to have close 
friends in every building that is central to this and have long 
discussions with them, no disagreements. I do not believe the 
things that we propose in here, or the chairman has articulated 
about what we need for the future, are going to change.
    Senator Biden. Mr. Khalil.
    Mr. Khalil. Senator, the way it works--and I have viewed 
this firsthand as both a participant and an observer--is a 
bottom-up, trickle-up effect almost. The people in the field, 
the military, the officers, the enlisted, the civilian 
personnel, based on trial and error get things right and it 
sort of trickles up, higher up if you like. But there is not 
strategic guidance from the top down.
    I always found it very curious that there was no clear 
strategic plan or strategic objectives articulated at the top 
of the government, and I always thought it was the immense 
nature of the U.S. Government, all the agencies and departments 
and they could not get it together. But there certainly does 
need to be this clear strategic objective articulated so that 
the policy can be formed in all these key areas we have talked 
about today--political transition, economic reconstruction, and 
security--and have that flow downward rather than having it be 
a bottom-up.
    But clearly the administration--it eventually does make its 
way up because we hear talk about the importance of shifting to 
training security forces. This was in December that there was a 
real emphasis on this from the White House. So it sort of makes 
its way up very slowly.
    Senator Biden. With all due respect, I do not think that 
would have occurred had we not continued to beat them up and 
beat them up and beat them up and raise it and raise it and 
raise it and raise it and raise it. I could be wrong about 
that. But I tell you what, I would like to suggest, and I will 
conclude, Mr. Chairman, I would like to suggest that, with a 
requisite degree of humility--and there cannot be too large a 
dose of it--that this committee under your leadership, you and 
I, attempt to lay out, attempt to lay out, what we think the 
strategy should be or encompass, and where we cannot agree at 
least lay out the alternatives that are available, because 
quite frankly, Mr. President--Mr. Chairman--I do not know that 
it is likely to come in any form that is discernible from any 
other source, quite frankly.
    But if we do it--look, you are the guy who put together 
very quietly a group of the leading people in this country, 
military, State, retired, active--I mean, employed--left and 
right, to deal with this nation-building notion. I came along 
for the ride with you on that. It was your leadership. I am 
absolutely positively convinced that it would not have reached 
the point where there is action occurring now had you not done 
that.
    So again, I mean this with absolute--there is not a large 
enough dose of humility for me to suggest that we should try 
this. But somebody--it has got to be started somewhere. You 
guys do it. You guys do it from your think tanks, from your 
background, from your interest, from your great credibility. 
But it does not quite get there no matter how good you are.
    So I think it ends up having to--I think it will force the 
issue. I am going to be presumptuous: I think there will be a 
lot of grateful administration people if, in fact, we could 
somehow begin to force this issue. And maybe, if we begin, Mr. 
Chairman, midterm or right in the beginning, it will maybe 
prove to be unnecessary, and that will be a wonderful moment if 
that occurs. But I think until we politically help, quite 
frankly, in a bipartisan way, help make it clear that there is 
a general consensus on the kinds of things we have to know, I 
am not sure it is going to happen.
    I want to point out now for the record and for the press 
that remains here, there has been very little disagreement on 
post-Saddam Iraqi policy, suggestions, criticisms, constructive 
criticisms, between and among Democrats and Republicans in the 
Senate. Almost every one of us who have taken this on as our 
major responsibility, foreign policy and this, have been, if 
not in the same pew, clearly in the same church. So I do not 
see that much disagreement based on any partisan, partisan 
approach to this. So I hope we can, at least, take a crack at 
some version of that.
    I personally want to thank each of you. Your testimony and 
your advice for the last 2 years has been invaluable. Thank 
you.
    The Chairman. Well, I thank the distinguished ranking 
member for his comments, and I would concur that it is very 
important for our committee in a bipartisan way to view the 
situation and to offer constructive ideas. We have been 
attempting to do that, I think with some success. But I think 
that probably we need to do more. Stimulated by your guidance 
this morning, and the excellent testimony you have given, we 
will proceed to do that.
    Certainly it would be a better idea than simply having 
partisan arguments about the competence of the President, of 
the Secretary of State or Defense or whoever as individuals, 
personalizing the situations, or debating which administration 
does better. What we really need now are plans, as you pointed 
out, with a fairly narrow timeframe in which some things have 
to occur. If we are able to help stimulate that, this may be 
for the better.
    But in any event, we thank the three of you for your 
comprehensive testimony and for being so forthcoming in your 
responses. We are hopeful that we can call upon you again for 
testimony, but in the meanwhile, perhaps at least, for some 
expert advice.
    Thank you very much. The hearing is adjourned.
    [Whereupon, at 12:30 p.m., the committee was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


          Letter From Andrew S. Natsios, Administrator, USAID

                 U.S. Agency for International Development,
                                 Washington, DC, February 22, 2005.
Hon. Richard G. Lugar,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: I appreciate your continued support for the U.S. 
Agency for International Development (USAID) and your determination to 
ensure that our nation has the capability it needs to face our present 
engagements in Iraq and the Middle East. Your efforts to engage the 
Senate Foreign Relations Committee in a discussion of the strategies 
necessary for the success of the Iraq reconstruction effort is welcome.
    In that spirit, I would like to bring to your attention the 
erroneous criticism of USAID in testimony before your Committee on 
February 1, 2005. The subject of the hearing was ``Strategies for 
Reshaping U.S. Policy in Iraq and the Middle East.'' The assessment of 
USAID provided at the hearing was misinformed and displayed a 
significant misunderstanding of our activities and the roles of the 
different U.S. Government agencies involved in the decision-making 
process for Iraq reconstruction.
    The acknowledgement of the courageous efforts of USAID government 
and contract personnel in Iraq who are implementing programs under 
dangerous circumstances was much appreciated. Also noted, and we agree, 
was the U.S. Government's effort to adapt to the need for more short-
term, quick-impact projects that realize more immediate results for 
Iraqis. It was quite striking, however, that many of the policy 
prescriptions and adaptations called for in the hearing are precisely 
the activities that USAID has been implementing for some time.
    Mr. Chairman, the enclosed document covers several points 
concerning the successful performance of programs USAID has designed 
and is implementing in Iraq. USAID has held and retains a vital role in 
the U.S. Government effort to assist Iraqis in reconstruction and in 
the transition to a stable democracy. May I request that you make this 
letter and its enclosure a part of the record of your February 1, 2005, 
hearing?
    As always, I am available to provide you and your staff with any 
information needed regarding our activities in Iraq.
            Sincerely,
                                         Andrew S. Natsios,
                                                     Administrator.
    Enclosure.
                                 ______
                                 

                  USAID's Iraq Reconstruction Program

    USAID has and continues to measure progress in Iraq and has 
demonstrated a pattern of success in its reconstruction programs. USAID 
has maintained transparency in its reporting to Congress and the 
American public about how U.S. taxpayer dollars are being spent in 
Iraq.

   USAID continues to issue both daily updates (to date, nearly 
        500 have been issued) for internal government use and weekly 
        updates for public consumption (posted on our website) which 
        report on the progress of our different reconstruction projects 
        in Iraq.
   Each USAID reconstruction program is linked to appropriate 
        strategic objectives within the U.S. National Strategy for 
        Supporting Iraq.
   USAID cooperates with the Iraq Reconstruction Management 
        Office (IRMO) to ensure full support for U.S. Government 
        objectives and strategies, and integrates its reports on 
        progress with other U.S. Government efforts in Iraq, through 
        IRMO.
   All USAID programs are implemented using a well-established 
        USAID procedure for the supervision of programs. Work plans are 
        generated and approved for every implementing partner. They are 
        adjusted as necessary based on the evolving, and extremely 
        dynamic, situation in Iraq.
   To date, the USAID Inspector General (IG) has conducted 20 
        performance audits and 45 financial audits of USAID programs in 
        Iraq.
   Performance audits conducted by the USAID IG generally found 
        USAID programs in Iraq to be in compliance with Federal 
        Acquisition Regulations and made recommendations to the process 
        going forward. These audit reports are available at 
        www.usaid.gov/oig/.
   In addition, on performance of individual USAID contracts 
        for Iraq, the IG has generally found that the activities are 
        being carried out according to the contracts.
   For example, an IG performance audit of USAID's Community 
        Action Program found that based on a statistical sample of 89 
        selected projects (e.g., citizen participation, inter-community 
        and local government cooperation) 98 percent were achieving 
        intended results. (January 2005)
   An audit of USAID's reconstruction and rehabilitation 
        activities found that 64 of 72 of Bechtel's activities were 
        complete or on schedule. Remaining delays were due to changes 
        in scope, security and coordination issues with the Coalition 
        Provisional Authority or Iraqi ministries. (June 2004)
   Additionally, an audit of results data reported by USAID for 
        Iraq education activities found that for eight activities 
        reviewed (e.g., schools rehabilitated, student kits and 
        furniture delivered) six were under-reported, one was reported 
        accurately, and one activity was over-reported (1,500 schools 
        rehabilitated verses 1,356 actual due to a differing definition 
        of what constituted completion). (June 2004)
   The IG has completed 45 financial audits of USAID contracts 
        in Iraq. Twenty more are in process. These audits covered 
        various costs incurred under USAID/Iraq contracts totaling 
        approximately $591 million. Of those completed, questioned 
        costs have been minor (less than five percent of total amount 
        audited), and they have not been related to fraud. Moreover, 
        since these questioned costs are not related to fraud, much of 
        the questioned amount is subsequently allowed when additional 
        records are found to support the costs.
   The USAID IG also works with the Special Inspector General 
        for Iraq Reconstruction and the results of all USAID IG audits 
        are included in his quarterly reports to Congress.
   The IG is continuing to perform performance and financial 
        audits of the Iraq program. Our regional office in Iraq is 
        currently conducting three audits of USAID activities: Health 
        Care, Electrical Generation and Water and Sanitation 
        activities. These audits are examining whether intended outputs 
        are being achieved and whether sustainability in these programs 
        has been addressed by USAID.

    Initial reconstruction funding under what is referred to as the 
first Iraq Relief and Reconstruction Fund I (IRRF I), were appropriated 
by Congress directly to USAID; however, USAID did not make all program 
funding decisions.

   IRRF I reconstruction funds implemented by USAID in Iraq 
        were targeted to the immediate needs identified by the U.S. 
        Government Disaster Assistance Response Team (DART) and as 
        approved by the CPA.
   USAID made program funding decisions under IRRF I with the 
        approval of the CPA, and in many cases, received carefully 
        defined tasks to implement from the CPA.
   Under IRRF I, USAID was appropriated approximately $2.1 
        billion for Iraq reconstruction efforts. To date, all of those 
        funds have been obligated and $1.7 billion (77.8 percent) has 
        been spent.
   For example, of the $69,732,000 obligated by USAID for 
        healthcare programs in Iraq under IRRF I, $67,320,000 (96.6 
        percent) have been spent. These funds are being used to 
        directly benefit Iraqis--immunizing literally millions of Iraqi 
        children and hundreds of thousands of pregnant women, equipping 
        healthcare centers to improve primary care, and building 
        capacity at the Iraqi Ministry of Health.
   Additionally, of the $1.03 billion apportioned under a USAID 
        contract to Bechtel for infrastructure reconstruction under 
        IRRF I, 100 percent has been obligated, and $766.9 million 
        (77.4 percent) has been spent. Tasks under this contract 
        included: power plant rehabilitation; rehabilitation of water 
        treatment facilities; telecommunications rehabilitation; 
        rehabilitation of essential roads, bridges, and railways; 
        school reconstruction; health clinic construction and 
        rehabilitation; rehabilitation of the Baghdad and Basrah 
        International Airports; and rehabilitation and management of 
        the Port of Umm Qasr.

    Funding under IRRF II ($18.4 billion), as appropriated by Congress, 
was managed by the now-expired CPA, and is currently managed by the 
Iraq Reconstruction Management Office (IRMO) under the U.S. Department 
of State Embassy in Iraq.

   USAID does not maintain the responsibility for the overall 
        strategic programming and program funding decisions for IRRF II 
        funds.
   Strategic programming authority under IRRF II resided with 
        the CPA under Ambassador Bremer until it expired, and is now 
        with IRMO under the direction of Ambassador Negroponte.
   All IRRF II funds apportioned to USAID, under both the CPA 
        and IRMO, are programmed to fulfill specific U.S. government-
        wide reconstruction goals.
   USAID does not retain responsibility for programming the 
        entire $18.4 billion appropriated under IRRF II.
   As of January 26, 2005, USAID had been apportioned slightly 
        less than $3 billion of the IRRF II funds. Of that total, over 
        $2.5 billion (87 percent) has been obligated to existing 
        contracts and grants and over $480 million has been spent on 
        ongoing CPA/IRMO-approved projects in support of the Iraqi 
        people.
   The great bulk of the remainder of the $18.4 billion was 
        apportioned initially through the CPA to the Iraq Project 
        Management Office (PMO), and then to the Iraq Project and 
        Contracting Office (PCO), an organization of the U.S. 
        Department of Defense (post-CPA, the PMO was renamed as the 
        PCO).
   The role of the CPA/PMO, and the programming decisions that 
        it made prior to its expiration, is an essential component to 
        any discussion of reconstruction strategy and spending.
   Despite the relatively small share of reconstruction funds 
        apportioned to USAID, USAID has provided successful programs 
        which address short and medium-term needs while setting the 
        foundations for long-term stability.
   Under the IRRF II, for example, a total $786 million is 
        dedicated to healthcare. USAID has been apportioned only $75 
        million (9 percent) of that amount. Of this, $50 million is 
        obligated to the current construction of a children's hospital 
        in Basrah, and the remaining funds are currently being 
        programmed to build capacity at the Ministry of Health. All 
        other dedicated healthcare funds have been apportioned to PCO.
   Additionally, under IRRF II, USAID is implementing 
        successful programs in local governance, community development, 
        transition initiatives, health, education, private sector 
        development, economic governance, vocational education, 
        business skills training, agriculture, infrastructure 
        rehabilitation (power, water and sanitation, and 
        telecommunications), humanitarian assistance, and assistance to 
        the elections process.

    USAID has undertaken a comprehensive approach to democratic 
development in Iraq, not limited to elections as an event, but 
encompassing the deeper and more profound changes required to establish 
stable democratic institutions. Most importantly, USAID recognizes that 
the spirit of democracy is rooted not in the institutions of 
government, but in the people. Therefore, we have worked creatively and 
vigorously to ensure that the Iraqi people have an active voice in the 
creation of their own democracy.

   USAID recognized, before arriving in Iraq, the importance of 
        effective regional and local governance to Iraq's future, both 
        as a tool of governance, and as an incubator for a new 
        generation of democratic elite. Toward that end, USAID programs 
        have worked in a coordinated fashion to support Iraq's 
        political transition, informing Iraqis of the process, 
        assisting in the devolution of authority to provincial and city 
        governments, and constructing the mechanisms to foster a new 
        cadre of democratic leaders in Iraq.
   To promote diverse and representative citizen participation 
        in communities throughout Iraq, USAID designed the Iraq 
        Community Action Program (CAP). Under this program, USAID 
        awarded cooperative agreements now worth nearly $168 million to 
        five international non-governmental organizations (NGOs).
   These NGOs are working in different regions across Iraq to 
        foster stability and improve Iraqis' lives by ensuring that 
        citizens' basic needs are met within their respective 
        communities in a process that gives Iraqis a voice in those 
        decisions. Specifically, this program:

     Establishes community committees that are representative 
            of the gender, ethnic, and religious composition of the 
            community;
     Demonstrates rapid improvements in Iraqis' lives and the 
            positive outcome of citizens working together to identify 
            common priorities; and
     Draws upon local expertise to address identified priority 
            needs.

   To date, CAP has worked with over 700 community groups to 
        implement over 3,000 immediate impact local projects, chosen by 
        the communities themselves.
   The CAP process facilitates the development of community 
        leaders through the creation of the community groups. Over 
        12,000 Iraqis have stepped forward and been selected by their 
        communities to represent them in project selection and 
        implementation. This has provided a training ground for future 
        leaders, many of whom have gone on to fill leadership roles in 
        city, provincial, and national venues.
   USAID also committed more than $2.4 million to a nationwide 
        Civic Education Campaign, which educates Iraqis on democracy 
        and Iraq's political situation. To date, USAID partners have 
        facilitated over 29,000 civic dialogue meetings attended by 
        over 750,000 Iraqis, helping them understand the concepts of 
        democracy and participate in the shaping of their future.
   These meetings provided a forum for debate and the 
        development of democratic understanding. Never before in the 
        history of Iraq have so many Iraqis had the opportunity to 
        learn the fundamentals of democracy and prepare themselves to 
        actively participate in the development of their government.
   A solid local government system in Iraq is the foundation 
        upon which a democratic national government can be built. 
        Effective local governance encourages citizen participation, 
        builds experience in governance, fosters dialogue among 
        competing groups, and delivers essential services based on 
        community priorities.
   USAID is performing a thorough analysis of those candidates 
        elected to the Transitional National Assembly to determine how 
        many of those newly elected officials began their public 
        service at the local community and provincial levels with the 
        indirect support of USAID activities.
   A near total vacuum existed in Iraq in the ability of 
        government institutions at all levels to provide basic services 
        such as water, sewer, electricity, solid waste collection and 
        disposal. USAID, therefore, designed and is implementing, in 
        April 2003, a $236 million Local Governance Program (LGP). 
        Since its inception, the LGP has worked with Iraqis in all 18 
        governorates to promote diverse and representative citizen 
        participation in provincial, municipal, and local councils.
   During the first year of the program, USAID awarded $15.5 
        million in rapid response grants to strengthen the capacity of 
        municipal authorities to deliver core municipal services.
   The LGP facilitated the establishment and reconstitution of 
        16 governorate councils, 90 district councils, 194 city or sub-
        district councils, and 445 neighborhood councils.
   The LGP also works to strengthen the management skills of 
        city and governorate administrations, local interim 
        representative bodies, and civic institutions to improve the 
        delivery of essential municipal services such as water, sewer, 
        electricity, solid waste collection and disposal; and civil 
        society organizations and their participation in public life. 
        LGP staffs have trained thousands of Iraqi civil servants in 
        the details of effective governance.
   The LGP has fostered new Iraqi leaders whose leadership in 
        Iraq's govemorates, cities, and towns improves the quality of 
        life of Iraqi citizens. This new, non-Ba'athist cadre of civil 
        servants is playing an integral role in helping to secure 
        Iraq's evolving democratic future as they participate in 
        elections and the constitutional process.
   Since the announcement of the November 15 agreement in 2003, 
        USAID has planned, implemented, and managed a comprehensive 
        package of technical assistance and commodities supporting 
        Iraq's transitional election process. This technical and 
        operational assistance, along with broader democratization and 
        civil society programs like CAP and the LGP, has contributed 
        greatly to the positive election outcome.
   In support of the January elections, USAID's partners 
        implemented domestic election monitoring programs resulting in 
        the training of approximately 12,000 domestic observers and 
        15,000 of the accredited political party observers mobilized on 
        Election Day.
   Through our partners, USAID implemented a comprehensive, 
        country-wide voter education and get-out-the-vote campaign, 
        including special programming for Sunni areas.
   In the post-election period, USAID will continue to plan and 
        implement a variety of programs matching the needs of the 
        evolving Iraqi democracy, undertaken in full partnership with 
        Iraqi counterparts. In particular, USAID is undertaking 
        activities in four key areas--constitutional development, 
        institutional development, civic participation, and local 
        governance development--ensuring follow-up to elections success 
        with comprehensive support to the Iraqi democratic transition.

    USAID has adapted to the challenges of the insurgency and is 
providing short and medium-term deliverables through its programs--
directly and more visibly improving the lives of Iraqis.

   USAID's programs have been designed, from the outset, to 
        balance the need for short and medium-term deliverables with 
        the need for setting the foundation for longer-term stability 
        in Iraq.
   USAID's ongoing agriculture, civil society, education, 
        health, and local governance programs all institute grant 
        programs designed precisely for flexibility and short and 
        medium-term impact while linking these short-term impacts into 
        a coherent long-term strategy.
   USAID has formed a unique partnership with the U.S. Army's 
        1st Cavalry Division (1st Cav). Together, USAID and the lst Cav 
        are focusing their efforts on reducing tensions in Sadr City 
        and other poor neighborhoods throughout Baghdad that have 
        become dangerous.
   Since April 2004, USAID, in coordination with the 1st Cav, 
        has targeted immediate assistance, through its infrastructure 
        and transition initiative programs, to improve the provision of 
        essential services as well as to provide labor-intensive 
        projects such as trash pick-up and surface sewage removal in 
        restive Baghdad neighborhoods. In this joint effort, USAID has 
        approved more than 860 transition initiative grants, worth 
        nearly $100 million.
   This effort has generated both extensive short-term 
        employment for thousands of Iraqis and provides the foundations 
        for medium-term stability. Since June 2004, USAID grants have 
        created temporary (60-day plus) jobs for an average of 21,000 
        local residents per month in the Baghdad districts of Sadr 
        City, Tissa Nissan, Abu Ghraib, Karradah, Al Rasheed, Al 
        Mansour, Al Adahamiyah and Al Khark.
   Moving forward, these projects served as models for 
        collaboration between USAID and the U.S. military that was 
        replicated in other strategic cities, including Najaf, 
        Tal'Afar, and Samarra.

    USAID has taken a comprehensive approach to the particular 
challenges of market economic transitions.

   USAID has extensive, successful experience assisting in 
        command-to-market economic transitions. We are well aware of 
        the time and effort this transition requires and our programs 
        reflect the long-term view, but do not ignore short and medium-
        term deliverables.
   Drawing on our experience, from Poland to Mongolia, we 
        designed and are implementing a comprehensive program of 
        systematic and sustained assistance in Iraq.
   Individual programs in economic governance, private sector 
        development, vocational education, and agricultural reform 
        address both the immediate problems of Iraq's economy, and are 
        establishing the foundations for the long-term process of 
        economic transformation.

    USAID has deployed highly qualified personnel to Iraq and these 
staffs have maintained USAID's continuity on the ground.

   USAID personnel joined a multi-agency effort to plan for 
        humanitarian and reconstruction needs in Iraq in late 2002, and 
        USAID was prepared to mobilize its significant development 
        resources and technical expertise to support humanitarian 
        relief and reconstruction requirements in Iraq.
   Following the cessation of major conflict, the U.S. 
        Government deployed a multi-agency Disaster Assistance Response 
        Team (DART)--including USAID staff--to Iraq to assess and 
        respond to humanitarian needs and to help coordinate the 
        emergency relief effort.
   At the same time, USAID deployed technical staff to prepare 
        for the immediate reconstruction requirements. USAID 
        established offices in Arbil, Baghdad, Al Hillah, and Al Basrah 
        and USAID personnel were located in Kuwait, Doha, Amman, and 
        Cyprus to provide regional support. On July 27, 2003, the USAID 
        Mission Director officially announced the formation of USAID's 
        Mission to Iraq. The USAID Mission in Baghdad coordinates all 
        USAID programs.
   USAID has deployed numerous expert personnel, with post-
        conflict development experience in regions including Serbia, 
        Bosnia, Kosovo, Rwanda, West Bank/Gaza, and East Timor, to 
        Iraq.
   Regional experts with experience in programs throughout the 
        Arab world, from Jordan to Egypt to Morocco, are a core part of 
        USAID's staff, as well as of the staffs of our contractors.
   USAID experts include career foreign service officers with 
        decades of overseas experience; academics who have spent many 
        years doing research on topics as diverse and relevant as local 
        governance in the Arab world, peace-building, and strategic 
        planning for reconstruction and stabilization; economists and 
        lawyers specialized in command-to-market transitions who have 
        served from Poland to Mongolia; engineers with major project 
        experience in infrastructure development throughout the 
        developing world; and civil society experts who have run 
        programs in countries as diverse as Guatemala, Mali, Egypt, and 
        Romania.
   Our experts are not merely visiting Iraq. They are deployed 
        there for an extended period of time. In fact, there are still 
        USAID personnel on the ground that entered Iraq immediately 
        following the war in 2003. As a result of their exceptional 
        skill and dedication, the majority of USAID senior staff tours 
        in Iraq have averaged over one year from the beginning of our 
        service there. This pattern does not evidence a lack of 
        continuity.

    USAID has, and continues to work in close cooperation, indeed 
partnership, with both the appropriate government agencies in Iraq, as 
well as with the Iraqi people.

   All USAID programs have been developed, and are implemented 
        in the closest possible consultation with Iraqi government 
        leaders and organizations.

    USAID and all of its partners employ large numbers of Iraqi 
professional staff in a wide range of technical and expert roles in 
every program area.

   We continue to expend considerable effort to train Iraqi 
        contractors to function as productive sub-contractors on 
        various reconstruction projects using substantial numbers of 
        Iraqi labor.
   For example, Bechtel has used 120 different Iraqi 
        subcontractors on 160 subcontracts for a total value of $185 
        million under its first contract. Additionally, Bechtel 
        employed an average of 3-4,000 Iraqis per day in 2004 on 
        projects in Iraq.
   At present, USAID programs, contracts and grants alone are 
        employing 53,900 Iraqis.

                                 
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