[Senate Hearing 109-312]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-312
 
                        POLICY OPTIONS FOR IRAQ

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

                                HEARINGS



                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                       ONE HUNDRED NINTH CONGRESS



                             FIRST SESSION



                               __________

                       JULY 18, 19, AND 20, 2005

                               __________



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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)

  
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                            C O N T E N T S

                              ----------                              

               IMPROVING SECURITY IN IRAQ--JULY 18, 2005

                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware...........     3
    Prepared statement...........................................     5
Cordesman, Dr. Anthony H., Arleigh A. Burke Fellow in Strategy, 
  Center for Strategic and International Studies, Washington, DC.    27
    Prepared statement...........................................    30
Hagel, Hon. Chuck Hagel, U.S. Senator from Nebraska..............    65
Lugar, Hon. Richard G., U.S. Senator from Indiana................     1
McCaffrey, GEN Barry R., USA (Ret.), president, BR McCaffrey 
  Associates, LLC, Arlington, VA.................................    21
    Prepared statement...........................................    23
Pollack, Dr. Kenneth M., director of research and senior fellow, 
  Saban Center for Middle East Policy, The Brookings Institution, 
  Washington, DC.................................................     7
    Prepared statement...........................................    10
                                 ------                                

          ADVANCING IRAQI POLITICAL DEVELOPMENT--JULY 19, 2005

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware...........   105
    Prepared statement...........................................   105
Feldman, Dr. Noah, professor of law, New York University, New 
  York, NY.......................................................    99
    Prepared statement...........................................   102
Lugar, Hon. Richard G., U.S. Senator from Indiana................    81
Marr, Dr. Phebe, senior fellow, U.S. Institute of Peace, 
  Washington, DC.................................................    83
    Prepared statement...........................................    85
Van Rest, Judy, executive vice president, International 
  Republican Institute, Washington, DC...........................    92
    Prepared statement...........................................    94
                                 ------                                

         ACCELERATING ECONOMIC PROGRESS IN IRAQ--JULY 20, 2005

Barton, Frederick D., senior advisor, International Security 
  Program, Center for Strategic and International Studies, 
  Washington, DC.................................................   159
    Prepared statement...........................................   161
Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware...........   172
    Prepared statement...........................................   172
Crane, Dr. Keith, senior economist, RAND Corporation, Arlington, 
  VA.............................................................   151
    Prepared statement...........................................   152
Dodd, Christopher J., U.S. Senator from Connecticut..............   149
Lugar, Hon. Richard G., U.S. Senator from Indiana................   147
Mohamedi, Fareed, senior director, Country Strategies Group, PFC 
  Energy, Washington, DC.........................................   164
    Prepared statement...........................................   165
Murkowski, Lisa, U.S. Senator from Alaska........................   150

                                 (iii)

  


                       IMPROVING SECURITY IN IRAQ

                              ----------                              


                         MONDAY, JULY 18, 2005

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m., in 
room SH-216, Hart Senate Office Building, Hon. Richard G. Lugar 
(chairman) presiding.
    Present: Senators Lugar, Hagel, Alexander, and Biden.

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

    The Chairman. The Foreign Relations Committee is called to 
order. Today the committee launches a series of four hearings 
on Iraq. Each of these hearings will focus on one aspect of 
Iraq policy. As the American people and policymakers debate our 
course in Iraq, I believe the Senate Foreign Relations 
Committee can contribute greatly by being a bipartisan forum 
for advancing ideas to improve the situation. Our intent in 
these hearings will be to go beyond describing conditions in 
Iraq or assessing what is working and what is not. Our goal 
will be to examine options for making things better.
    With the help of our experts, we will consider whether 
changes in military tactics, alliance strategy, resource 
allocations, or other factors should be adopted. I am hopeful 
that this process will inform our own policymaking role, as 
well as help stimulate constructive public debate on forward-
looking alternatives.
    Traditionally, Congress has looked to the executive branch 
for foreign policy guidance and expertise. We should always 
carefully consider the recommendations of the President of the 
United States and his team, who are charged with implementing 
foreign policy. But I believe that our oversight role involves 
more than critiquing the President. Congress should also 
examine ideas and express its own views on critical issues.
    At the end of this four-hearing series, the Foreign 
Relations Committee will have held 30 full committee hearings 
on Iraq in the last 30 months of time. In addition, we have 
held numerous other hearings that have partially touched on the 
subject of Iraq. We have maintained this focus because success 
in Iraq is critical to the United States national security. 
Permanent instability in Iraq could set back American interests 
in the Middle East for a generation, increasing anti-
Americanism, multiplying the threats from tyrants and 
terrorists, and reducing our credibility.
    We know that the planning for postwar Iraq was inadequate. 
We should not pretend, however, that a few adjustments to our 
reconstruction strategy or an extra month of planning could 
have prevented all the challenges we now face in Iraq. Even in 
the best circumstances, political and economic reconstruction 
of Iraq after the overthrow of an entrenched and brutal regime 
was going to stretch our capabilities, our resources, and our 
patience to the limit. We are engaged in a difficult mission in 
Iraq, and the President and the Congress must be clear with the 
American people about the stakes involved and the difficulties 
yet to come.
    Almost 1,800 heroic Americans have died in Iraq during the 
past 2 years. During the insurgency thousands of Iraqi Muslims 
have been killed by other Muslims, including, most recently, a 
group of small children deliberately targeted by a suicide 
bomber. Like the recent terrorist attacks in London, the 
continuing insurgent attacks in Iraq are tragic, senseless, and 
often indiscriminate. Each day the Iraqi people are living with 
the fear caused by similar irrational, barbaric acts, but they 
continue to show their resilience. The Iraqi people get back on 
the buses, and open their shops for business. They return to 
their jobs as police officers, teachers, and doctors. They 
continue to hope that life will become normal and that the 
violence will end.
    Today we take on the responsibility of examining options 
for improving security in Iraq. Tomorrow we will address 
options for advancing Iraqi political development. On Wednesday 
we will turn our attention to the Iraqi economy. Finally, on a 
date to be determined, we will assess the regional dynamics 
related to the situation in Iraq as we ask questions about the 
impact on Iraq of Turkey, Iran, Saudi Arabia, and Syria.
    We have determined that these hearings will follow a unique 
format. Discussion in each hearing will be organized around 
four policy options for improving the situation in Iraq. 
Accordingly, after Senator Biden and I have offered our opening 
comments, instead of hearing comprehensive statements from the 
witnesses, we will put the first policy option and associated 
questions before our expert panel.
    Just as a matter of housekeeping, I will read the question 
and recognize one of the witnesses to commence his or her 
answer to that question. Each witness in turn will provide his 
or her views on the option being presented. Then we will put 
the second option before them, then the third, then the fourth 
and so on.
    Recognizing that options exist beyond our published hearing 
plan, we will ask our witnesses if they would like to offer any 
additional ideas for improving security that have not been 
discussed previously.
    After this sequence, committee members will be recognized 
in turn to address questions on any of the policy options to 
any member of the panel. My hope is that through the expertise 
of the witnesses, and the questions of the members, we can 
achieve a systematic evaluation of the options presented for 
improving Iraqi security. After the hearings, the committee 
will publish a record of all the policy options we have 
discussed.
    This morning we will ask our experts whether the basic 
counterinsurgency strategy that we are pursuing is the right 
one. We will ask whether it is possible to prevent infiltration 
of Iraq by foreign insurgents and whether it is feasible for 
other nations to assume a greater share of our border security 
burdens. We will ask how we can improve the critical process of 
training Iraqi forces, so that greater numbers of Iraqis will 
be capable of assuming the full range of security duties. We 
will examine whether changes should be made to the current 
United States force structure in Iraq.
    In this endeavor, we are joined by three distinguished 
experts. First, we welcome Dr. Kenneth Pollack, Senior Fellow 
and Director of Research at the Saban Center for Middle East 
Policy at The Brookings Institution. Dr. Pollack has provided 
exceptional security analysis to this committee in the past, 
and we are pleased that he has returned today.
    We also welcome GEN Barry McCaffrey, President of BR 
McCaffrey Associates. General McCaffrey, who has recently 
returned from a trip to Iraq and Kuwait, served as a professor 
at West Point after his distinguished military career, which 
included experience across the Middle East.
    Finally, we are pleased to welcome back Dr. Anthony 
Cordesman, the Arleigh A. Burke Chair for Strategy at the 
Center for Strategic and International Studies. Dr. Cordesman 
also has recently returned from a research visit to Iraq.
    We thank our witnesses for joining us and we look forward 
to their insights.
    I would like to recognize now the distinguished ranking 
chairman of our committee, Senator Biden.

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

    Senator Biden. Thank you very much, Mr. Chairman, and thank 
you for holding these hearings. We have indeed had a number of 
hearings examining ideas and new ideas and alternative ideas, 
and we have jointly and separately drawn from those ideas and 
made our own recommendations to the administration.
    Quite frankly, not many have been listened to. One of my 
frustrations I expressed to you--and I am sure you must feel 
it, although I speak only for myself--as we began this hearing 
is that there are no administration witnesses on the schedule 
for this series of four hearings. I think that is important for 
one significant reason. We all know no foreign policy can be 
sustained, especially General McCaffrey, being in the field and 
being wounded in Vietnam and leading troops in Vietnam, no 
foreign policy can be sustained, no matter how well informed, 
without the informed consent of the American people.
    The American people--it is not a judgment on my part about 
the policy. It is a judgment by the American people. The 
American people clearly have begun to lose faith that we have a 
sense of how to proceed in Iraq, that we have a strategy for 
winning. I do not believe that it is the body counts, as tragic 
as it is, that is causing the diminution of support for our 
effort, but I think it is a failure to understand or believe we 
have a winning strategy.
    I compliment the President for having made his speech a 
couple weeks ago now. But I think it is important the President 
and the administration witnesses come before us in our 
oversight capacity, not just to seek new ideas, but to 
literally oversee the administration's policy and let us know 
what their benchmarks are, what their objectives are, and how 
they are proceeding, because I otherwise think we are going to 
continue to lose the support of the American people unless 
something dramatically changes on the ground, which could be, I 
am hoping. I am always hopeful. Because I think we not only 
want the President to succeed in Iraq; his success is America's 
success and his failure means America has a problem.
    I still--I am one who still believes, as I think we all do 
up here, that we can succeed in Iraq. By ``success,'' I want to 
redefine it here, or define it again, I should say. I am not 
looking for Jeffersonian democracy. I never have been. I am 
looking for a country that is secure within its own borders, 
that is not a breeding ground or a haven for terror, that is 
not a threat to its neighbors, where everybody thinks they have 
a piece of the action. We will begin the process, which will be 
long and arduous.
    It has now been 6 weeks since I have returned from Iraq. 
There are some good things that are happening. But the security 
situation is still very, very much in doubt. With General 
Petraeus' efforts, some very positive things are happening, but 
I believe General Abizaid, in his recent assessment, is correct 
that the insurgency's strength is about the same as it was 6 
months ago, not in its last throes.
    Iraqi forces are gradually improving. I wish we would stop 
talking about 172,000 trained Iraqi forces. They are in 
uniform, but all of the folks I spoke to on the ground were a 
long, long way. What it does in my view is undermine the 
administration's credibility with the American people. If we 
have 172,000 trained Iraqi troops and 130,000 American, 140,000 
American troops, they ask me in my district why, with over 
300,000 troops, are we not doing better? You know, it is a 
problem. They know we ain't telling the truth.
    Since a month ago, we have been in contact with General 
Petraeus. Things are even improving beyond what it was 5 weeks 
ago.
    There has been some progress with the Sunnis. It seems to 
me that we have turned a political corner of sorts and that 
they have realized they have to get in the game. But that is a 
long way from being able to actually have a political strategy 
that is likely to work.
    The thing that I have found--and I am anxious to hear our 
witnesses--I found when I spoke to our military folks for the 
first time they were talking about, not the probability, but 
the possibility of a civil war. They were talking about things 
breaking down, not getting better. Now again, I do not want to 
exaggerate it. It is just that it is my fifth trip--I went a 
couple times with my colleagues on my left--and this is the 
first time I started hearing about that.
    I came back--and I will end with this, Mr. Chairman--and 
spent a lot of time with a lot of people, including one of the 
witnesses. I have tried to, like you do, we all do on this 
committee--one of the great, great benefits and privileges of 
this committee is the best minds in the country will come and 
talk to you and sit down with you and visit with you. I went 
visiting on a regular basis with half a dozen--it's a rotating 
group, but essentially the same half a dozen of three- and 
four-stars who have in the past, like General McCaffrey, had 
significant responsibilities, including CENTCOM as well as 
NATO.
    Everybody I spoke to in the field, and spoke to back here, 
talks about something that is different than I think we are 
going to hear today, that is encouraging--we may hear something 
different--about what constitutes a counterinsurgency, that, 
really, it is hard to figure out what our counterinsurgency 
plan is. Again, these guys--they happen to be all men in this 
case. I told General McCaffrey this. Folks are talking about 
you cannot deal with a counterinsurgency unless you can occupy, 
at least for a while, the territory and you can not do a whole 
lot if the border is totally porous, and I understand we are 
going to hear today that maybe there is not a reasonable 
prospect of being able to do anything about the border.
    At any rate, I am anxious to hear what the witnesses have 
to say. I have an inordinately high regard for all three of the 
witnesses and I think the way you are proceeding is a really 
very good format for us to use, targeting what, at least, is on 
our mind. It may be that the witnesses will conclude not all of 
it is relevant, what we are asking. But at least they will tell 
us.
    I would ask unanimous consent that my statement be placed, 
the remainder of my statement be placed in the record as if 
read, Mr. Chairman.
    [The prepared statement of Senator Biden follows:]

  Prepared Statement of Hon. Joseph R. Biden, Jr., U.S. Senator From 
                                Delaware

    Mr. Chairman, thank you. I, too, welcome our witnesses. This is a 
superb panel. And I applaud the other hearings you've held to explore 
policy options in Iraq.
    I am frustrated, though, that none of the witnesses before us 
today, or scheduled in the days ahead, work for the administration.
    I have said from the outset and repeat today: No foreign policy can 
be sustained without the informed consent of the American people.
    The American people have not been informed about the reality on the 
ground and the very difficult challenges that lie ahead. They do not 
believe we have a coherent, realistic plan for success. And the gap 
between the administration's rhetoric and the reality on the ground has 
created a credibility chasm that is endangering public support for our 
efforts in Iraq.
    I give the President credit for starting to level with the American 
people in his recent speech. But to fully regain their trust and 
support, I believe it is very important for the administration to set 
clear benchmarks for progress and to report on them to us, in public, 
on a regular basis.
    I want the President to succeed in Iraq. His success is America's 
success; his failure means America has a problem.
    I believe we can still succeed in Iraq. I define success as leaving 
Iraq better than we found it. Not a Jeffersonian democracy, but a 
country with a representative government in which all the major 
communities have a stake; a country that is not a breeding ground or a 
haven for terrorists; and a country that is not a threat to us or its 
neighbors. Full stop.
    Based on my recent trip to Iraq--my fifth trip there--I believe we 
need to change course, not simply stay the course, if we are to 
succeed.
    There are some positive developments. But the security environment 
in Iraq remains precarious. I found considerable evidence to support 
General Abizaid's recent assessment that the insurgency's strength is 
about the same as it was 6 months ago.
    The Iraqi security forces are very gradually improving thanks to 
the leadership of General Petreaus.
    But let's not kid ourselves when we hear reports of 172,000 
``trained and equipped'' Iraqis. When my constituents in Delaware hear 
numbers like that, they ask why we still have 139,000 American troops 
in Iraq. The answer is because very few of those forces are trained to 
the only standard that counts--the ability to operate independently, 
without our support.
    A month ago, just a handful of the more than 100 Army battalions 
met that standard, while many more could operate alongside the 
coalition or with strong backup.
    The January elections were a remarkable achievement, but the 
goverment in Baghdad has very limited capacity and reach beyond the 
green zone. This has created a power vacuum that is being filled by 
Sunni insurgents, foreign fighters, local militias, mafia gangs, and 
agents of neighbors like Syria and Iran.
    Ethnic tension is rising to the point where civil war, though not 
yet a probability, is a real possibility.
    In the absence of security and governing capacity, reconstruction 
cannot go forward. Iraqis will not put their faith in the government, 
and we will not be able to withdraw responsibly.
    I look forward to hearing our witnesses' ideas on meeting the 
security challenge. Here is what I believe we must do:
    First, we must take advantage of foreign offers to train Iraqi 
forces outside Iraq. Iraqi recruits could then focus their energy on 
learning instead of simply staying alive.
    Second, we should accelerate the training of an Iraqi officer 
corps. That is one of the keys to standing up an Iraqi military that 
won't melt when it comes under fire. We should train large numbers of 
midranking Iraqi officers here in the United States and encourage NATO 
allies to do more of the same in their countries.
    Third, we should press our NATO allies to come up with a small 
force of some 3-5,000 to help guard Iraq's borders. NATO has the plans 
for such a mission; the President needs to lead to give the alliance 
the political will to implement those plans.
    Fourth, we need a serious field mentoring program for newly trained 
Iraqi police recruits. It is wrong to throw freshly minted and ill-
equipped police officers against suicidal insurgents and desperate 
criminals. They must be partnered with experienced officers--initially 
international police professionals and ultimately Iraqis.
    Fifth, we must refocus the Iraqi Government on a plan to eventually 
integrate militias in Iraq. Integration won't be easy. But without it, 
you cannot build a unitary, functioning state.
    Mr. Chairman, security is about much more than having competent 
security forces. Real security depends on a political process in which 
all the major communities believe they have a stake. It requires a 
reconstruction program that increases electricity, clean water, sewage 
treatment, and jobs in a country where unemployment is estimated at 
more than 40 to 50 percent. We will hear more about that in the days 
ahead.
    I look forward to the testimony.

    The Chairman. Your statement will be placed in the record 
in full. I thank the distinguished ranking member.
    Senator Biden. I welcome the witnesses and thank them for 
being here.
    The Chairman. We will proceed now with the witnesses. Let 
me state the first option for comment by our witnesses. In this 
case I will ask Dr. Pollack to comment first, then General 
McCaffrey and Dr. Cordesman. Option one is: Should the 
coalition revise its current counterinsurgency strategy in 
Iraq? To follow up to that: Should the coalition and Iraq 
security forces create safe zones and put more emphasis on 
fighting street crime and organized crime, deemphasizing the 
hunt for insurgents, so that Iraqi economic and political life 
can take root? Should the coalition attempt to take advantage 
of divisions within the insurgents, for example Sunni 
nationalists versus foreign jihadists? Can a political solution 
be reached with Sunni insurgents and could this lead to Sunni 
cooperation in isolating, capturing, or killing the 
international insurgents?
    Would you proceed with your thoughts on this area, Dr. 
Pollack?

   STATEMENT OF KENNETH M. POLLACK, DIRECTOR OF RESEARCH AND 
    SENIOR FELLOW, SABAN CENTER FOR MIDDLE EAST POLICY, THE 
             BROOKINGS INSTITUTION, WASHINGTON, DC

    Dr. Pollack. Thank you, Senator Lugar. Thank you, Senator 
Biden, other assembled Senators. Thank you for giving me this 
opportunity to come before you to speak on this critical topic.
    As you have all repeatedly pointed out and I think very 
correctly, security undergirds the entire reconstruction of 
Iraq. Our problems with security are hampering, if not 
crippling, both the political, economic, and social development 
of the country. I increasingly believe that we have the wrong 
strategy in Iraq.
    Ultimately, with security there are two overarching and 
interlocking problems that we face in Iraq. The first is a 
diverse insurgency, but one rooted on the Sunni tribal 
community with an admixture of other elements. The second is 
the state of semilawlessness that exists elsewhere and 
throughout the country as a result of the security vacuum that 
we have left throughout much of the country.
    Our current strategy is one that I would describe as being 
one of postconflict stabilization, and its principal goal is to 
try to enforce security simultaneously across the entire 
country, largely by concentrating the available coalition 
forces, and primarily American forces, on those areas of 
greatest insurgent activity to try to quell them quickly and 
prevent them from spreading.
    This approach has several problems because of these two 
interlocking and overarching problems that we face. First of 
all, it plays into the classic failure of counterinsurgency 
operations, when in particular you do not use a true 
counterinsurgency strategy. The government forces, in this case 
the coalition forces, move into an area, they take down an 
insurgent stronghold, but, of course, the insurgents do not 
stay to fight. It is not in their nature to do so. It is not 
their objective to do so. They flee. They melt back into the 
population and, as a result, the major conventional assault has 
little impact on the actual strength of the insurgents.
    The insurgents then move on into other areas, and when our 
own forces, when the coalition forces, then shift on to follow 
them to their new strongholds, we often leave too few forces 
behind to secure the area that we have just taken down. The 
result is that we continuously chase insurgents across the 
country, we have little impact on their actual strength or even 
their ability to operate, and we continuously allow the 
insurgents to creep back into areas that we have already had to 
pacify.
    The second problem is that by pulling our troops out of the 
populated areas, by focusing them, I would say inordinately, on 
hunting down the insurgents in their strongholds and in their 
lairs, we have left far too few troops in the rest of the 
country to secure the vast bulk of the Iraqi population, 
particularly the Shi'a and the urban Sunnis, who desperately 
want reconstruction to succeed, but are increasingly distraught 
by our failure to provide them with basic security both against 
the insurgents and against typical crime, organized and 
unorganized, and to provide them with the basic services, like 
electricity and clean water and sanitation and gasoline and 
jobs, all of which are crippled by these first two security 
problems, by the problems of the insurgency and by the general 
lawlessness in the society.
    In addition, even where our troops are trying to guard the 
population, oftentimes our methods are counterproductive. We 
have placed a tremendous emphasis on force protection, on the 
protection of our own forces. While obviously force protection 
has got to be a major concern of United States and coalition 
forces, we have at times put that priority at the expense of 
the Iraqis' own security.
    Our troops stay in heavily defended cantonments. When they 
get out, they typically get out in motorized columns that move 
very quickly through Iraqi areas. There is very little 
presence. There is very little patrolling. There is very little 
sense of real security provided by our troops for the Iraqi 
people themselves.
    As a result, Iraqis are increasingly frustrated because 2 
years on they do not see any real benefits from our continued 
occupation of the country, and they have come to resent our 
occupation, not because they want us to leave, not because they 
do not want us there, but because they do not see us as 
providing them with the first benefits of reconstruction, basic 
security, and basic services.
    What I argue that the United States ought to adopt and what 
I increasingly hear from field-grade officers, American field-
grade officers in Iraq and back here in the United States, is a 
true counterinsurgency strategy. Very briefly, very broadly, 
what would a counterinsurgency strategy look like for Iraq? It 
would be based on the classic model of a counterinsurgency 
strategy, which is typically referred to as a spreading inkspot 
or a spreading oil stain.
    The idea would be to start with a smaller area, do not try 
to secure the entire country simultaneously, because frankly we 
do not have the forces in place to do so. Instead, we would 
start by securing a smaller portion of the country, one where 
the population would be already supportive of reconstruction. 
Of course, there are huge swaths of Iraq where the vast bulk of 
the population is enormously supportive of reconstruction and 
their anger at us is not because we are there, but because we 
are not there and not providing them with the security and the 
services they so desperately desire.
    We would concentrate our forces principally in that area or 
in those areas to make them safe for the Iraqis, to make them 
safe for Iraqi life to revive, for the Iraqi economy to revive, 
for Iraqi political affairs to revive at the local level. We 
would use foot patrols, a general presence, and an emphasis on 
law and order in these safe zones.
    We would then pour in economic resources into these safe 
zones to give the Iraqis tangible material benefits from our 
presence. We would help them to help their economy to revive. 
We would help them to rebuild their political processes at the 
local level and they would do so in an environment made safe by 
the coalition presence there.
    This process of pouring in resources, combined with the 
general greater safety, would create much greater popular 
support for our presence and would ultimately--and historically 
this has been the only solution to the problem--would solve the 
intelligence problem that we face in Iraq. The problem is you 
can never find all the intelligence you need if what you are 
doing is simply chasing insurgents. As the British learned in 
Northern Ireland and again in Malaya, as we learned in Bosnia 
and Kosovo, the only way that you get the intelligence that you 
need is by convincing the people that they are safe and that 
they are benefiting from your presence. Under those 
circumstances, the people come forward with all of the 
intelligence that you need and it becomes extraordinarily 
difficult for the insurgents to operate.
    We would also use these safe areas, these secure zones, to 
train indigenous Iraqi forces, both formal training, the kind 
of training that we have been doing in Iraq, but also informal 
training, the training that takes place after a unit has 
finished its basic training, its basic training cycle, but 
still needs to have unit cohesion, command relationships, and a 
sense of connection with the community all gel, all of which 
can only happen in actual operations in safe areas where there 
is a permissive environment in which these units can cut their 
teeth and not be stressed by high-intensity operations.
    The success of the secured areas should make other Iraqis, 
those outside the secured areas, more desirous of having us 
expand our presence, and as the number of indigenous forces 
that we train came on line and actually developed capability 
grew we would then use that expanded security presence to 
spread into other areas of Iraq as well. This is why this 
strategy is typically called, traditionally called, a spreading 
inkspot strategy.
    In so doing, the goal of this would be to deprive 
insurgents of a popular base and, in so doing, cause them to 
wither. This again is the classic model of counterinsurgent 
operations. It is how insurgencies have been typically defeated 
in the past and it is typically only when a government force 
has failed to employ this kind of strategy that they have 
failed, that is, failed to defeat the insurgency.
    It has a proven track record and, what is more, we have 
seen instances in Iraq where this strategy has been made to 
work. Wherever we have taken the time to put our people on the 
street, establish presence, mix with the Iraqis, establish 
mixed forces where the Iraqis are working with Americans, so 
that the Iraqis see both an American face and an Iraqi face to 
the presence, it has worked.
    Before the January elections we did this in cities like 
Mosul. We sent out foot patrols, and the Iraqis were stunned, 
and during that period of time security greatly increased in 
those cities where we did it.
    Fallujah is, in some ways, another good example. Fallujah, 
I would say, is an example of both the good and the bad. We 
took down Fallujah, we chased out the insurgents. 
Unfortunately, they moved to other areas and, as we have seen, 
there has been no actual diminution of the lethality or the 
extent of the insurgency.
    We did leave some forces behind in Fallujah. We left the 
Marines behind, who actually have a very good record in 
counterinsurgency operations, and to some extent Fallujah is 
better than it was before we took it down because we did leave 
a residual presence, and we have tried to put some economic 
resources in to take advantage of that somewhat better security 
environment.
    But we failed to put in enough troops and we have failed to 
make good on all of the economic commitments to Fallujah, and 
as a result the insurgents are creeping back, and I know that 
General McCaffrey will tell you more about the fact that 
Fallujah is, as yet, nothing to write home about.
    Mr. Chairman, I think that there is a strategy that can 
work in Iraq. It is the strategy that I have just outlined and 
which I have gone into much greater detail in my written 
testimony. But I think that we need to recognize that it is not 
a strategy without a price. Politically, it will be very 
difficult. It will take a long time, at least the decade-plus 
that Secretary Rumsfeld outlined, and it is one that will 
require us to admit to having made some mistakes and to force 
us to actually shift, very significantly, our approach to 
reconstruction in Iraq--very painful political choices.
    I think if we are willing to do that, I think there is a 
way out of this. I think that success is entirely possible in 
Iraq, because so much of the population wants reconstruction to 
succeed. But I think it is incumbent upon us to adopt a true 
counterinsurgency strategy to deal with the twin problems of a 
full-blown insurgency and the state of semilawlessness that we 
have continued to allow the country to wallow in.
    Thank you.
    [The prepared statement of Dr. Pollack follows:]

Prepared Statement of Dr. Kenneth M. Pollack, Director of Research and 
   Senior Fellow, Saban Center for Middle East Policy, The Brookings 
                      Institution, Washington, DC

    Mr. Chairman and Senator Biden, thank you for allowing me to come 
before you to discuss the future of Iraq, and particularly our efforts 
to secure that country to make reconstruction possible. As you have 
both repeatedly reminded us, the reconstruction of Iraq is a vital 
interest of the United States, just as it is vital to the people of 
Iraq. As we all know, and have repeatedly had reinforced to us, 
security is absolutely critical to the broader reconstruction effort. 
Without security, reconstruction will fail. And until we have dealt 
with the pressing problems of security, it will be impossible for us to 
perceive, let alone solve, many of the other matters troubling Iraq. If 
we get security right, everything is possible, although nothing is 
guaranteed.
    I have confined my remarks to the four options you have outlined. I 
will begin with your first option, and address each in turn.

    Option 1: Should the coalition revise its current counterinsurgency 
strategy in Iraq?

    Mr. Chairman, I believe that after 2 years of trying to secure Iraq 
with our current strategy, it is becoming increasingly clear that we 
have the wrong strategy for the job. Our current approach probably was 
the appropriate strategy in the immediate aftermath of the fall of 
Baghdad, but the inadequate number of troops we brought to Iraq and a 
series of other mistakes rendered this approach largely infeasible. 
Today, our problems have metastasized, and I believe that we must 
fundamentally change our strategy to cope with the new challenges we 
face.
    Our effort to secure Iraq faces two overarching and interlocking 
problems: A full-blown insurgency and a continuing state of semi-
lawlessness. Both are equally important. Reconstruction will likely 
fail if either is unaddressed. I believe that current U.S. strategy in 
Iraq is misguided because it is not properly tailored to defeat the 
first problem and largely ignores the second.
    Today, and since the fall of Baghdad, the United States has 
employed what I would call a ``post-conflict stabilization'' model of 
security operations. The key element of this strategy is providing 
simultaneous security for the entire country by concentrating coalition 
forces on those areas of greatest unrest to try to quell the violence 
quickly and keep it from spreading. Had the United States brought 
sufficient ground forces to blanket the country immediately after the 
fall of Saddam's regime--as many warned--and had we not made a series 
of other mistakes, like failing to provide our troops with orders to 
maintain law and order, to impose martial law and prevent looting, I 
think this strategy might very well have succeeded.
    However, our continued reliance on this approach is failing. To 
borrow a military term usually employed in a different realm of 
operations, today we are reinforcing failure. By continuing to 
concentrate our overstretched forces on the areas of greatest insurgent 
activity we are depriving most of Iraq's populated areas of desperately 
needed security forces, and by emphasizing offensive search-and-sweep 
missions, we are making ever more enemies among Iraq's Sunni tribal 
population. In other words, we are failing to protect those Iraqis who 
most want reconstruction to succeed and we are further antagonizing the 
community that is most antipathetic to our goals.
    This approach runs directly contrary to the principal lessons of 
counterinsurgent warfare.
    In 1986, Dr. Andrew F. Krepinevich, then a major in the Army, 
published what is widely regarded as the seminal work on American 
military performance in Vietnam, titled ``The Army and Vietnam.'' In 
this book, Krepinevich demonstrated that the Army high command--for 
reasons entirely of its own choosing--largely refused to employ a 
traditional counterinsurgency strategy against the Viet Cong and North 
Vietnamese Army Forces. The Military Assistance Command-Vietnam (MACV) 
repeatedly shut down other efforts, by the Marines and by Army Special 
Forces, to employ a traditional counterinsurgency (COIN) strategy. 
Krepinevich further demonstrated that these stillborn COIN campaigns 
had all proven far more successful before they were terminated than 
MACV's cherished offensive operations.
    Mr. Chairman, I do not know why it is that the United States has 
not yet adopted a traditional counterinsurgency strategy in Iraq. I 
suspect that it is for reasons far more mundane and far better 
intentioned than MACV's rationale was in that earlier war, because I 
know General Abizaid to be a superb soldier and a wise commander. 
However, whatever the rationale, it is clear that the United States has 
so far failed to employ a traditional counterinsurgency strategy in 
Iraq, just as we did in Vietnam, and as a result we are failing in Iraq 
just as we failed in Vietnam.
    Mr. Chairman, if you were to pick up a copy of Dr. Krepinevich's 
book, you would find, I think, a great many chilling passages. Passages 
where Krepinevich explains how history has demonstrated that a 
guerrilla campaign can be defeated, and how the United States failed to 
employ such a strategy in Vietnam. These passages are unsettling 
precisely because they so closely echo our problems and mistakes in 
Iraq today. We are once again failing to use a true COIN strategy in 
Iraq, and committing too many of the very same errors we made in 
Vietnam.
    The crux of a traditional counterinsurgency strategy is never to 
reinforce failure, but always to reinforce success. As Mao Zedong once 
wrote, the guerrilla is like a fish who swims in the sea of the 
people--thus, if you can deprive the guerrilla of support from the 
people, he will be as helpless as a fish out of water.
    The goal of a true-COIN campaign is to deprive the guerrilla of 
that access. The COIN force begins by securing a base of operations by 
denying one portion of the country to the insurgency. This portion can 
be as big or as small as the COIN force can handle--the bigger the COIN 
force available, the larger the area. Within this area, the COIN force 
provides the people with security, in all senses of the word. In Iraq, 
this would mean security from insurgent attack as well as from ordinary 
(and organized) crime. In so doing, the COIN force creates a secure 
space in which political and economic life can flourish once again. 
Ideally, the COIN force would pour resources into this area to make it 
economically dynamic and take advantage of the security the COIN 
campaign has provided, both to cement popular support for the COIN 
campaign and to make it attractive to people living outside the secure 
area so that they will support the COIN campaign when it shifts to 
their region.
    The increasing attractiveness of these safe areas also solve the 
intelligence problem that COIN forces inevitably face. Ultimately, 
there is no way that a COIN force can gather enough intelligence on 
insurgent forces through traditional means to exterminate them. 
Instead, as the British learned in Northern Ireland, the only way to 
gather adequate information on the insurgents is to convince the local 
populace to volunteer such information, which they will do only if they 
are enthusiastic supporters of the COIN campaign and feel largely safe 
from retaliation by the insurgents. When these conditions are met, the 
counterinsurgents enjoy a massive advantage in intelligence making the 
further eradication of the insurgents easy, and almost an afterthought.
    In addition, the COIN forces use these ``safe zones'' to train 
indigenous forces who can assist them in subsequent security 
operations. Once this base of operations is truly secure and can be 
maintained by local indigenous forces, the COIN forces then spread 
their control to additional parts of the country, performing the same 
set of steps as they did in the original area.
    Dr. Krepinevich describes this set of interlocking features as 
follows:

          After the army has driven off or killed the main guerrilla 
        forces, its units must remain in the area while local 
        paramilitary forces are created and the influence of the police 
        force is reestablished. The paramilitary forces should be drawn 
        from among the inhabitants of the area and trained in 
        counterinsurgency operations such as small-unit patrolling, 
        night operations, and the ambush. Resurrection of the local 
        police force is equally important. Properly trained, the police 
        can make an invaluable contribution to the defeat of the 
        insurgents by weeding out the political infrastructure, thus 
        preventing the reemergence of the insurgent movement once the 
        army departs.
          Thus, if the paramilitary forces can perform the local 
        security mission, and if the police can extinguish the embers 
        of the insurgent movement through suppression of its 
        infrastructure, the people will begin to feel secure enough to 
        provide these forces with information on the movements of local 
        guerrilla forces and on the individuals who make up the cells 
        of the insurgent movement. But before any of this can occur, it 
        is necessary for the government's main-force army units to 
        demonstrate that they will remain in the newly cleared area 
        until such time as the people are capable of assuming the bulk 
        of the responsibility for their own defense. Should the army 
        depart the area before the paramilitary units and the police 
        force are capable of effective operation, it will have 
        accomplished nothing. The insurgent infrastructure will quickly 
        reemerge from hiding, and the guerrillas will return to 
        reassert their control. The temporary control reestablished by 
        the government must be followed by the implementation of 
        measures designed to achieve permanent control. Thus, the 
        counterinsurgent must direct his efforts, not toward seeking 
        combat with the insurgent's guerrilla forces, but at the 
        insurgent political infrastructure, which is the foundation of 
        successful insurgency warfare. Keep the guerrilla bands at 
        arm's length from the people and destroy their eyes and ears--
        the infrastructure--and you can win.\1\
---------------------------------------------------------------------------
    \1\ Andrew F. Krepinevich, Jr., ``The Army and Vietnam'' 
(Baltimore, MD, Johns Hopkins University Press, 1986), pp. 13-14.

    This approach is typically referred to either as a ``spreading ink 
spot'' or a ``spreading oil stain'' because the COIN forces slowly 
spread their control over the country, depriving the guerrillas of 
support piece by piece until, in Krepinevich's words, ``Once the 
security of the population and its attendant resources is accomplished, 
the initiative in the war will pass from the insurgent to the 
government. The insurgent will either have to fight to maintain control 
of the people or see his capabilities diminish. If the insurgents 
decide to fight, they will present themselves as targets for the 
government mobile reaction forces.'' \2\
---------------------------------------------------------------------------
    \2\ Ibid, p. 15.
---------------------------------------------------------------------------
    The key, as Krepinevich and every other expert on counterinsurgency 
operations observes, is to start by securing the population and 
providing them with material incentives, in the form of real security 
and a thriving economy, that will cause them to reject the insurgency 
and support the COIN campaign. This is why a COIN strategy is best 
understood as a strategy of reinforcing success, because the 
counterinsurgents concentrate their forces where their support is 
strongest, and where they therefore can do the most good.
    Instead, the approach we are employing in Iraq--concentrating our 
forces in Iraq's western provinces where the insurgents are thickest 
and support for reconstruction weakest--means reinforcing failure. Such 
an approach has repeatedly resulted in failures in guerrilla warfare 
throughout history. Our efforts to ``take the fight to the enemy'' and 
mount offensive sweep operations designed to kill insurgents and 
eliminate their strongholds have failed to even dent the insurgency so 
far, and likely will continue to do so, as was the case in Vietnam and 
other lost guerrilla wars. Here is Dr. Krepinevich on the false promise 
of hunting guerrillas:

          Should government forces attempt to defeat the insurgency 
        through the destruction of guerrilla forces in quasi-
        conventional battles, they will play into the hands of the 
        insurgent forces. Insurgent casualties suffered under these 
        circumstances will rarely be debilitating for the insurgents. 
        First, the insurgents have no need to engage the government 
        forces--they are not fighting to hold territory. Second, as 
        long as the government forces are out seeking battle with the 
        guerrilla units, the insurgents are not forced to maintain 
        access to the people. Therefore, the initiative remains with 
        the guerrillas--they can ``set'' their own level of casualties 
        (probably just enough to keep the government forces out seeking 
        the elusive big battles), thus rendering ineffective all 
        efforts by the counterinsurgent to win a traditional military 
        victory.
          As a result of these circumstances, the conventional forces 
        of the government's army must be reoriented away from 
        destroying enemy forces toward asserting government control 
        over the population and winning its support. Government forces 
        should be organized primarily around light infantry units, 
        particularly in phases 1 and 2 of the insurgency. These forces 
        must be ground-mobile in order to patrol intensively in and 
        around populated areas, keeping guerrilla bands off guard and 
        away from the people. The counterinsurgent must eliminate the 
        tendency fostered by conventional doctrine, to cluster his 
        forces in large units. Only when the insurgency moves into 
        phase 3 will the need for substantial numbers of main-force 
        conventional units arise.
          Winning the hearts and minds of the people is as desirable 
        for the government as it is for the insurgent. This objective 
        can only be realized, however, after control of the population 
        is effected and their security provided for. Developing popular 
        support often involves political participation--at least on the 
        local level; public works--irrigation ditches, dams, wells; and 
        social reform--land reform, religious toleration, access to 
        schools. These actions are designed to preempt the insurgent's 
        cause, as, for example, land reform in the Philippines during 
        the Huk rebellion . . . Nevertheless, even though the attempts 
        to co-opt the insurgents may prove successful in winning the 
        hearts of the people, they will be for naught unless the 
        government provides the security necessary to free the people 
        from the fear of insurgent retribution should they openly 
        support the government.\3\
---------------------------------------------------------------------------
    \3\ Ibid, pp. 11-12. [Emphasis in original].

    Against a full-blown insurgency, such as we are facing in Iraq, 
offensive operations cannot succeed and are ultimately 
counterproductive. The guerrilla does not need to stand and fight but 
can run or melt back into the population and so avoid crippling losses. 
If the COIN forces do not remain and pacify the area for the long term, 
the guerrillas will be back within weeks, months, or maybe years, but 
they will be back nonetheless. Meanwhile, the concentration of forces 
on these sweep operations means a major diversion of effort away from 
securing the population. In Iraq, this has left the vast bulk of the 
population largely unprotected both against insurgent attacks and 
normal crime--organized and unorganized.
    Moreover, the tactics of our offensive operations have contributed 
to the alienation of the Sunni tribal community, driving many otherwise 
agnostic Iraqis into the arms of the insurgents. Many American units 
continue to see the targets of their raids as enemies and treat them as 
such--invariably turning them and their neighbors into enemies 
regardless of their feelings beforehand. Often, the priority American 
formations place on force protection comes at the expense of the larger 
mission--the safety, psychological disposition, and dignity of Iraqis. 
Busting down doors, ordering families down on the floor, holding them 
down with the sole of a boot, searching women in the presence of men, 
waiving around weapons, ransacking rooms or whole houses, and 
confiscating weapons all come with a price. Because too much of the 
intelligence that the United States is relying on is poor, it is not a 
rare occurrence that houses raided turn out to be innocuous. In some 
cases, the wanted personnel may have been there at some point and fled, 
but in others no one in the house was guilty at all. Indeed, too often, 
U.S. Forces are directed to raid a house or arrest a person by someone 
else who simply has a grudge against them and turns them in to the 
Americans as an insurgent to settle a personal score.
    An example of both the potential of true counterinsurgency 
operations and the danger of refusing to employ them can be found in 
the experience of the Iraqi town of Fallujah. Until the fall of 2004, 
Fallujah was a major insurgent stronghold. The town was then taken by 
U.S. Forces in a full-scale conventional assault in which, American 
commanders touted as major victories both the number of insurgents 
killed and the psychological gains of taking this stronghold from the 
enemy. However, within just a few months, the insurgents had reemerged 
with no noticeable impact on their operations or lethality. On the 
other hand, unlike many other towns in the Sunni triangle, a fair 
number of American and Iraqi Forces remained in Fallujah after the 
assault, providing it with greater security than in most neighboring 
towns, but not as much as was the case immediately after the assault 
when large numbers of American ground troops were present. Likewise, 
the United States and the Iraqis did begin to pump resources into the 
city, and reached out to local shaykhs to try to form a new political 
process, and to give local residents an incentive to participate in the 
national political process. As a result, Fallujah has been a modest 
success story. However, because promised funds have not been 
forthcoming, because the Marines in Fallujah are spread thinly and the 
Iraqi Forces are not indigenous--and are often Shi'a--the insurgency 
has begun to make a come back in Fallujah.
    Thus Fallujah demonstrates what a successful approach might look 
like, but only if it is handled properly. And unfortunately, Fallujah 
is more the exception than the rule. Elsewhere in Iraq, U.S. Forces 
clear the areas without staying in force, without leaving behind 
indigenous security forces willing and able to secure the area, and so 
without leaving the kind of security environment that would make it 
possible to try to revive either the local economy or the local 
political process.
    Southern Iraq and the persistent popularity of Muqtada as-Sadr--and 
other, similar figures--is another example of the problems created by 
our current security strategy. The predominantly Shi'i southeast of 
Iraq is overwhelmingly supportive of reconstruction, yet we find 
growing frustration with reconstruction, the United States, and the 
transitional Iraqi Government throughout that community. Why? Because 
the people are still plagued by organized and random crime, which makes 
their economic life difficult, keeps unemployment high and incomes low, 
contributes to frequent power outages and gasoline shortages, and 
prevents the restoration of clean water and sanitation, among other 
problems. This frustration, allowed to fester over time, is driving 
Iraqis into the arms of the Muqtada as-Sadr's of Iraq, whose message is 
a simple one: The Americans are either unwilling or unable to provide 
you with the basic necessities of life, but we can. They employ the 
model that Hizballah and Hamas have used to such success, providing 
tangible, material benefits in return for support. This is exactly what 
Muqtada as-Sadr provides the residents of Sadr City and what other 
shaykhs, alims, and other would-be potentates provide other Iraqis in 
different parts of the country.
    This is a disastrous course that could push Iraq into fragmentation 
and civil war. It is already convincing any number of groups--and not 
just the Kurds--that they should pursue autonomy from the central 
government, which is increasingly seen as out of touch, corrupt, and 
wholly focused on its own (irrelevant) squabbles over power.
    Mr. Chairman, this analysis leads me to the conclusion that the 
United States must dramatically reorient our strategy for securing 
Iraq. We must adopt a true counterinsurgency strategy, of the 
traditional ``spreading oil stain'' variety. We must simultaneously 
recognize that even if we do so, securing Iraq is going to take a very 
long time. In this respect, I was heartened to hear Secretary of 
Defense Rumsfeld acknowledge that success in Iraq would likely require 
over a decade. He is surely right, but he is only likely to be right if 
the United States adopts the right strategy to do so.
    Painted in broad brush strokes, a true counterinsurgency strategy 
for Iraq would focus on securing enclaves--Kurdistan, much of 
southeastern Iraq, Baghdad, and a number of other major urban centers, 
along with the oilfields and some other vital economic facilities--
while, initially, leaving much of the countryside to the insurgents. 
The coalition would consolidate its security forces within those 
enclaves, thereby greatly improving the ratio of security personnel to 
civilians, and allowing a major effort to secure these enclaves to 
allow local economic and political development at a microlevel. The 
coalition would likewise redirect its political efforts and economic 
resources solely into the secured enclaves--both to ensure that they 
prosper and because those would be the only areas where it would be 
worth investing in the short run. Such a strategy might, therefore, 
mean foregoing such things as national elections or rebuilding the 
entire power grid, because they might be impossible in a situation 
where the coalition forces had abdicated control over large areas of 
the country.
    The concentrated security focus should allow local economic and 
political developments to make meaningful progress, which in turn 
should turn around public opinion within the enclaves--making the 
Iraqis living in the enclaves more willing to support the 
reconstruction effort and, hopefully, making those Iraqis outside the 
enclaves more desirous of experiencing the same benefits.
    Once these enclaves were secured, and as additional Iraqi security 
forces were trained or foreign forces brought in, they would be slowly 
expanded to include additional communities--hence the metaphor of the 
spreading oil stain. In every case, the coalition would focus the same 
security, political, and economic resources on each new community 
brought into the pacified zone. If implemented properly, a true 
counterinsurgency approach can succeed in winning back the entire 
country. However, it means ceding control over swathes of it at first 
and taking some time before Iraq will be seen as a stable, unified, 
pluralist state. Nevertheless, it may be the only option open to us if, 
as is the case at present, the U.S.-led coalition cannot control large 
parts of the country and cannot keep the peace in those areas where it 
does operate.
    At a more tactical level, a true COIN campaign in Iraq would make 
securing the Iraqi people its highest priority. American Forces in 
Iraq, unfortunately remain preoccupied with force protection and with 
tracking down the insurgents who are attacking them, and as a result 
they are providing little security to the Iraqi people. U.S. Forces 
generally remain penned up in formidable cantonments. They are cut off 
from the populace and have little interaction with them. In the field, 
they come out to attend to logistical needs and to conduct raids 
against suspected insurgents. In the cities, they generally come out 
only to make infrequent patrols--which are virtually always conducted 
mounted in Bradley fighting vehicles or HMMWVs--the ubiquitous 
``Humvees'' or ``Hummers''--at speeds of 30-50 kms per hour. Indeed, 
prior to the January elections, American Forces did--temporarily--
engage in foot patrols in cities like Mosul and the result was an 
immediate, but equally temporary, increase in morale and support for 
the U.S. presence.
    It is a constant--and fully justified--complaint of Iraqis that the 
Americans have no presence and make no effort to stop street crime or 
the attacks on them by the insurgents. Many British officers, and some 
Americans, too, argue that the United States should instead be 
employing the kind of foot patrols backed by helicopters and/or 
vehicles that the British Army learned to use in Northern Ireland, and 
that all NATO Forces eventually employed in the Balkans. This is the 
only way that American Forces can get out, reassure the Iraqi 
civilians, find out from them where the troublemakers are, and respond 
to their problems.
    Adopting a true counterinsurgency strategy, coupled with its 
attendant tactics such as guarding population centers and key 
infrastructure, foot patrols, presence, and the eradication of crime 
and attacks on Iraqis would doubtless expose U.S. personnel to greater 
risks. However, they are absolutely necessary if reconstruction is to 
succeed in Iraq. There is no question that force protection must always 
be an issue of concern to any American commander, but it cannot be the 
determining principle of U.S. operations. American military forces are 
in Iraq because the reconstruction of that country is critical to the 
stability of the Persian Gulf and a vital interest of the United 
States. In their current mode of operations, our troops are neither 
safe nor are they accomplishing their most important mission. 
Consequently, executing that mission must become the highest concern of 
U.S. military commanders, and their current strategy--focusing on force 
protection and offensive operations against the insurgents--is 
misguided. If it does not change, the reconstruction may fail outright 
and all of the sacrifices of the American people and our service men 
and women will have been for nothing.

Option 2: Could the United States successfully press its allies to 
increase aid and provide manpower to protect Iraq's borders and prevent 
foreign infiltration?

    Mr. Chairman, at some level the answer to this second question is 
undoubtedly, ``yes,'' but I do not see it as an ``option'' that would 
solve our problems in Iraq. At best, it might help ameliorate our 
current problems, but no more.
    Given how little Iraq's neighbors seem to be doing to arrest the 
steady flow of Salafi jihadists, Sunni tribesmen, and others into the 
country, it is unexceptionable to suggest that they could not be doing 
more than they currently are.
    Syria is the country that we have focused our attention on, 
although it is hardly the case that they are the only problem, or 
probably even the major source of the problem. Many U.S. and foreign 
intelligence analysts believe that far more foreign fighters are 
infiltrating into Iraq through Saudi Arabia. I have little faith in 
technical fixes to the problem of infiltration across the long Syrian 
border, simply because it is so long and long borders are notoriously 
difficult to seal--our own problems with Mexico being an obvious case 
in point. Many Sunni tribes span the Iraq-Syria border and there is 
considerable trade.
    Certainly, a political solution might persuade the Syrians to do 
more to police the border, but our expectations should remain modest 
here as well. Should we wish to try, I see only a policy of real 
carrots and real sticks as having any real likelihood of success. The 
Syrians need to have positive incentives to cooperate and see real 
threats if they do not. However, we must keep our hopes for such a 
policy in check. Syria's handling of its border is part of the larger 
issue of Syrian relations with the United States that remains very much 
undecided in Syria right now. Indeed, it may be necessary to craft a 
much broader set of carrots and sticks with Syria designed to get at 
the whole range of United States-Syrian differences if we are to have 
any real prospect of success. The Syrian regime is deeply divided over 
its course, particularly with regard to its relations with the United 
States. Until Damascus decides what kind of country it wants to rule, 
and what its relationship to the region and the world should be, it is 
unlikely to make major changes on any piece of its foreign policy, 
especially as one as tightly bound to that broader set of issues as its 
relationship with Iraq.
    Consequently, tackling infiltration across the Syrian border may 
require a new American policy to Syria, and the Syrians revamping their 
own broad foreign policy goals. Neither seems likely in the short term.
    With regard to infiltration across the Iranian border, the news is 
both worse and better. Worse because all of the problems related to 
Syria--a long border, intermingled populations spanning it, a 
government divided over its relations with Iraq and the United States, 
and an inability to isolate its Iraq policy from the overarching 
question of what kind of country it wants to be--all go double for 
Iran. The situation is better, however, because Iran is not the problem 
when it comes to the Iraqi insurgency. The insurgency is overwhelmingly 
Sunni and while not everything that Iran is doing in Iraq is helpful to 
us, they are not providing any significant degree of assistance to the 
Salafi Jihadists, Sunni tribesmen, former regime officials, and various 
other groups who comprise the bulk of the insurgency.
    Jordan, Saudi Arabia, Kuwait, and Turkey are all staunch United 
States allies and it is likely that more could be accomplished with 
them, but also not without a price. All four of these countries is wary 
of American intentions in Iraq, and fearful that whatever our 
intentions may be, we are not making the kind of effort that will 
result in a stable Iraq. All four are Sunni Muslim nations with 
differing degrees of skittishness about the emergence of a Shi'i-led 
Iraq. On top of this, the Turks have their own longstanding concerns 
about Kurdish separatism. All four--but particularly the Saudis--have 
been ambivalent at best about slowing the flow of goods and supplies 
across their border to Iraq. And it is complicated by the fact that 
there is a portion of Saudi society that actively favors the Sunni 
``jihad'' against the United States and the Shi'a in Iraq.
    The governments of all of these countries have not been bashful 
about their own concerns in Iraq, and their price for greater 
cooperation is likely to be a straightforward one: A greater say in the 
reconstruction of Iraq. This is a tricky proposition, but not an 
unworkable one. Indeed, the solution is probably overdue.
    The United States and the new Iraqi transitional government should 
convene a contact group consisting of all of Iraq's neighbors--
including Iran and Syria. This group would meet frequently and 
regularly to receive information about reconstruction issues important 
to them, and to provide advice both to the Iraqis and to the United 
States regarding developments inside Iraq. The function of the contact 
group should be purely advisory--neither we nor the Iraqis should be 
bound by its recommendations but that advice should not be ignored 
lightly either. In a great many cases, simply tempering a policy to 
make it more palatable to Iraq's neighbors, or merely acknowledging 
their concerns and providing a full explanation of why their 
recommendation will not be the one adopted, can make a considerable 
difference. In return for their expanded role, all of the neighbors 
should be presented with detailed, and concrete plans for stemming 
illegal traffic across their borders and theft membership in the 
contact group can be made conditional upon their meeting these 
criterion.
    Unfortunately, Mr. Chairman, none of these measures is likely to 
have more than an indirect impact on the success or failure of 
reconstruction in Iraq. As noted in my response to Option 1, the 
insurgency is only one of our problems in Iraq, and the insurgency is 
not principally driven by external factors.
    Our intelligence regarding Iraq has consistently established that 
foreign fighters comprise only a small percentage of the insurgents in 
Iraq. What's more, anecdotal reporting suggests that foreign-born 
jihadists are playing a less important role in the insurgency. Early on 
in the conflict, the foreigners brought with them critical know-how in 
terrorist and guerrilla operations that the Iraqis largely lacked. 
However, today, more than 2 years after the fall of Baghdad, the Iraqis 
have learned what they need to know and so are much less reliant on the 
foreigners for training. Likewise, while it was once the case that 
suicide bombings in Iraq seemed to be the exclusive purview of the 
foreign-born jihadists who came to Iraq to martyr themselves, this is 
no longer the case. The evidence is sparse, but it does seem to be the 
case that a growing percentage of suicide attacks are being carried out 
by Iraqis themselves.
    Thus, even if you could somehow hermetically seal Iraq's borders, 
doing so would be unlikely to extinguish the insurgency, nor would the 
elimination of the insurgency solve all of Iraq's problems. The best 
intelligence indicates that the bulk of the insurgency is drawn from 
Iraq's Sunni tribal population, a great many of whom were recruited for 
Saddam's Republican Guard and Special Republican Guard, the Fidayin, 
and other key security forces. They have lost their prestige and their 
paychecks; they have been dispossessed by a society they once ruled; 
and they are fearful that we intend to put the Shi'a and the Kurds into 
the same position of authority their community once occupied--and that 
they will be oppressed in the same manner that they once oppressed the 
Shi'a and the Kurds. Thus there are plenty of Iraqis fighting us out of 
fear and a lack of anything else to do.
    As I have argued elsewhere, there are much better ways to make 
major dents in the insurgency. One method would be to allow the Iraqi 
economy to revive in a manner that it so far has not. Many of Iraq's 
angry young men would probably be quite a bit less angry if they had 
jobs, steady sources of income, and all of the benefits that come with 
it.
    Another approach would be to effectively buy off the Sunni shaykhs. 
Although our intelligence remains sketchy, it is clear that an 
important element of our problems with the insurgency comes from the 
active participation or passive acceptance by a huge range of Sunni 
shaykhs. In some cases, they appear to be ordering the young men under 
their authority to take up arms against the United States and the new 
regime because they feel politically and economically excluded from it, 
and they are well aware of the corruption of the new government, and 
probably exaggerate it to themselves, because they do fear a Shi'ite 
dictatorship, and because no one is paying them not to. In other cases, 
they simply make no effort to stop their tribesmen and followers from 
participating because they have no incentive to do so.
    However, for centuries, if not millennia, the central government in 
Baghdad successfully paid these shaykhs to cooperate with the regime 
rather than fighting against it. This seems unpalatable to American 
ears, but it is part of Iraq's societal traditions. The tribes of the 
west and south were never fully under central government control and 
would often fight against it or simply ignore its efforts at law and 
order unless they were paid not to do so. But in return for such 
payments--which could come in the form of government contracts, 
infrastructure development, and other forms of aid, not just cash--the 
shaykhs generally were quite content to avoid attacks on the goverment 
and even to keep order in those areas effectively beyond Baghdad's 
control.
    In the 20th century, the shaykhs were often paid not to attack and 
even to police the roads, bridges, power lines, and pipelines the 
insurgency currently targets. At times when relations between the 
shaykhs and Baghdad soured, attacks on this infrastructure invariably 
increased.
    Moreover, the shaykhs have shown a willingness to ``do business'' 
with a wide range of governments in Baghdad: The Ottomans, the British-
backed monarchy, various Iraqi military dictators, and Saddam's 
Stalinist regime. Of course, all of these regimes were all Sunni-
dominated, at least for their facade, and it does remain to be seen 
whether they would give such fealty to a Shi'a-led government, but 
there is every reason to expect that, coupled with an effort to 
increase Sunni tribal representation in the new government, the Sunni 
shaykhs would be willing to decrease or even end their support for the 
insurgency. To a great extent, it would mean giving this key segment of 
the Sunni community a real stake in the success of the new Iraqi 
Government--just as we have talked about doing right from the start--
and doing so in a very tangible way.
    Indeed, anecdotal reporting indicates that whenever American 
military and political personnel have reached out to local Sunni 
shaykhs, and provided them with material incentives to cooperate, they 
have been willing to do so, at least on a selective basis. This, too, 
provides evidence that it should be possible to co-opt many, perhaps 
most, of the Sunni tribal shaykhs and get them to stop fighting us and 
instead help us.
    Even if we were to successfully find ways to buy off the Sunni 
tribal shaykhs, we should not expect this to end the insurgency 
altogether. The Sunni shaykhs probably could convince a significant 
number of their followers to desist, either by their authority, or by 
the patronage they would in turn buy among their people with the 
resources we would be paying them. However, because the insurgency is 
so diverse, others would likely fight on: The foreign fighters, of 
course; homegrown Salafi jihadists, of whom there is also a significant 
number; true regime ``dead-enders'' who have so much blood on their 
hands that they could never expect anything but a hangman's noose from 
a new, democratic Iraqi Government; and a number of others of diverse 
motives. But it is clear that this would be a greatly diminished cohort 
from present numbers.
    Thus, if you are looking to weaken the insurgency, shutting down 
Iraq's borders can't hurt, but doing so will be much harder and less 
likely to have real impact than convincing Iraq's tribal shaykhs to 
withdraw their support from the insurgency. The first approach assumes 
that the insurgency is principally a foreign-driven phenomenon, which 
it unquestionably is not, the latter relies on traditional Iraqi 
techniques to get at what is largely a homegrown problem.

Option 3: Should the United States reprioritize the training schedule 
of Iraqi Forces and support more training in other countries?

    With regard to the specifics of the actual training of various 
Iraqi security personnel, my understanding is rudimentary at best, but 
I know of nothing particularly amiss. Instead, let me offer some 
comments regarding the duration, goals, and location of training.
    Without question, longer training schedules are better than shorter 
ones. Iraq's security forces need to be taught a range of military 
skills. However, of equal or greater importance, they need to be given 
the psychological tools to handle their very difficult 
responsibilities. They need to be integrated into multiethnic 
formations. They need to be convinced that reconstruction is the best 
course for Iraq and that their own sacrifices are crucial to the 
success of reconstruction. They need to believe that what they are 
doing is of immediate benefit to their country, their people, their 
sect, their town, and their family. They need to be able to trust their 
comrades, their American and coalition allies, and themselves. All of 
that takes a great deal of time.
    In addition, even after their formal training is completed, Iraqi 
units need time to further gel. Unit cohesion needs to be formed in 
training, but it is inevitably tested by the first operations that a 
formation undertakes. So, too, with the confidence of Iraqi recruits. 
So, too, with the leadership skills of their officers. What's more, the 
process of vetting--weeding out those unsuited for the tasks at hand, 
or those working for the enemy--is a lengthy one, and it is not 
infrequent for soldiers and officers to do well in training but fail 
once placed in actual combat situations, especially if the initial test 
is an extremely challenging one.
    For all of these reasons, it is critical that Iraqi units begin 
their operational tours under the most permissive conditions. They need 
to crawl before they can walk. This has not always been the case, 
although Iraqi and American friends tell me that it is increasingly so. 
If so, this is a very positive development. However, it once again 
emphasizes the length of the training process and the need to do it 
right and do it slowly. Nothing will undermine morale across Iraq's 
security forces--and undermine Iraqi confidence in reconstruction--so 
much as large-scale disintegration of their formations in combat, as 
was the case when units were rushed into combat in the spring of 2004.
    As far as the goals of training are concerned, while we do need 
some highly capable Iraqi units capable of conducting special forces 
type missions to help assault insurgent strongholds, of far greater 
utility will be large numbers of competent and trustworthy Iraqi 
formations capable of conducting basic protection missions--patrolling, 
searches, ambushes, point defense, infrastructure defense, and the 
like. Again, these are the tasks that are critical to victory in 
counterinsurgent warfare, as our experiences in Vietnam and elsewhere 
have repeatedly demonstrated.
    As far as the location of training is concerned, I don't think 
beggars should be choosers. Training forces out of country has positive 
and negative elements. Obvious positives include greater access to 
higher caliber trainers and reduced likelihood of attack by insurgents. 
Another less obvious benefit of such training is that taking a group 
out of their accustomed environment might change their perspective and 
encourage the formation of bonds of loyally to one another. Negatives 
include the distancing of the group from mainstream society and the 
possibility that the training will be less realistic--or simply less 
tailored to the circumstances they will face. In addition, there is the 
possibility that the population at large will be suspicious of them and 
may even treat them as foreign ``agents.''
    On the whole, I see these various plusses and minuses as 
effectively canceling one another out. As a result, I see the key issue 
as our need to train as many Iraqis as we can, and be able to provide 
them with the luxury of time and proper training--not to mention the 
related issue of proper equipment--so that they are someday able to 
shoulder the burden we need them to. If there are countries willing and 
able to provide such training abroad--and if not sending Iraqi units or 
personnel abroad would limit that training--then so be it. Our need for 
properly trained Iraqi security forces, in all senses of the words 
``properly trained,'' should be decisive given the rough equivalence in 
the liabilities and incurred compared to the benefits to be derived.

Option 4: Should the President change the force structure of the United 
States presence in Iraq?

    Mr. Chairman, I believe that it would be of tremendous benefit for 
the United States to significantly increase the number of high-caliber 
foreign troops in Iraq. Ironically, this is vital if the United States 
sticks with its current approach to security, which I have already 
described as a ``post-conflict stabilization'' model; but is only 
desirable, not necessary, if the United States shifts to a true 
counterinsurgency strategy.
    We simply do not have the troops on hand--American, allied, or 
fully capable Iraqi--to handle the number and extent of the tasks at 
hand. We do not have the forces available both to provide security in 
Iraq's populated areas and to suppress the insurgency in western and 
southern Iraq. In truth, we do not have sufficient troops for either 
one of those missions independently. As a result, with our current 
force structure, we can reduce towns in the Sunni triangle, but we 
cannot secure them long term. Inevitably, the forces needed to take 
down an insurgent stronghold must move on to the next one, allowing the 
last to quickly slip back into guerrilla control. This is a classic 
mistake of counterguerrilla warfare and it is tragic that we are 
repeating it. Moreover, our focus on trying to come to grips with the 
insurgents and clear out their strongholds has largely denuded southern 
and central Iraq's cities of sizable coalition forces, leaving them 
prey not only to insurgent attacks, but to crime and lawlessness more 
generally.
    If we stick with our current strategy, I see no alternative to a 
major increase in coalition forces over the next 2-3 years, probably on 
the order of 100,000 or more troops, if it is to have any chance of 
success. At some point, if our training program is allowed to mature, 
we will have several hundred thousand capable Iraqi security personnel 
able to take over responsibility for most, if not all, of the security 
mission. However, we are still several years away from that day, and in 
the interim, someone will have to make up for that deficit. Given the 
reluctance of our allies to provide significant numbers of ground 
troops, only the United States can do so, although providing so many 
more ground troops for several years to come may necessitate a thorough 
restructuring of U.S. ground forces more generally.
    At the risk of being redundant, let me repeat this point for the 
sake of clarity: We do not presently have adequate numbers of troops in 
country to execute the strategy that we have set out for ourselves--
setting aside the question of whether this strategy can succeed at all. 
As a result, we have provided too little basic security for the bulk of 
Iraq's population, and have inadequate forces even to suppress the 
insurgency in western and southern Iraq. Only a massive increase in 
troop strength--which the Iraqis will be unable to provide for several 
years--is likely to remedy that problem.
    Could we simply muddle through with the inadequate forces we have 
on hand. Perhaps. However, this would be a huge gamble for the United 
States, Iraq, the region, and perhaps the world. As I noted earlier, 
there are powerful centripetal forces in Iraq that are gaining 
influence because of our failure to deal with the various problems of 
the insurgency and basic insecurity. We may be able to keep them at bay 
until several years down the road when sufficient Iraqi Forces become 
available to address these missions. But doing so strikes me as 
reckless and irresponsible.
    Moreover, any objective analyst would have to recognize that the 
chances of this bet paying off look poor at this time. The Iraqi people 
are frustrated and growing more so. And it is this frustration that is 
our greatest threat. Because it is out of frustration with the 
inability, or unwillingness, of the United States and the transitional 
Iraqi Government to deliver on basic security--and the basic services 
like electricity, gasoline, clean water, and jobs for which basic 
security is the prerequisite--that Iraqis are beginning to turn to 
local shaykhs, alims, and other would-be warlords to provide them what 
the reconstruction authorities cannot. Thus it seems, at least, equally 
likely that the current trend will produce a slide toward fragmentation 
and civil war, as it is that it will allow for muddling through until 
the Iraqis can handle the security situation by themselves.
    Another advantage of adopting a true counterinsurgency strategy, 
however, is that while it would certainly benefit from the addition of 
more troops, it is not required. COIN strategies work by building 
popular support and using that popular support to deny support to the 
insurgency, as well as to generate indigenous forces capable both of 
fighting the insurgency and providing protection to ever greater 
portions of the population. When employed correctly, it is a self-
generating and self-sustaining strategy, which it is why it is able to 
defeat the converse strategy that lies at the heart of any insurgency. 
The size of the initial commitment of resources principally influences 
only the length of time that the COIN strategy takes to work. Thus, in 
theory, one could begin with nothing but a platoon, although starting 
with such a tiny force pool means that it would take an extraordinarily 
long time for the COIN strategy to succeed.
    In Iraq, we are fortunate to have a very large segment of the 
population that is at least passively supportive of the goals of 
reconstruction, as well as a force base of over 150,000 American, 
Iraqi, and coalition troops. That is a pretty good starting point for a 
true COIN strategy. It looks even better when one considers that the 
Kurdish population is fully supportive of reconstruction--at least in 
the sense of desiring an end both to the insurgency and to the state of 
semilawlessness in much of the rest of the country--and already has the 
security forces to effectively police their own territory,
    With these forces alone and employing a true COIN strategy, the 
coalition could probably secure much, perhaps all, of southern Iraq 
with its strongly pro-reconstruction Shi'a and urban Sunni populations. 
Along with Iraqi Kurdistan, this is a very good start, and suggests a 
reasonably rapid window of success, perhaps as little as 8-10 years, 
although probably more like 10-15, because it is the nature of COIN 
strategies to work slowly. It would be difficult, with only the forces 
on hand to also secure central Iraq, possibly including Baghdad and 
some of the key infrastructure of that area like the Bayji oil 
refinery, as well as roads, power lines, and oil pipelines connecting 
the north and the south.
    An alternative initial pacification effort could include Baghdad, 
and given its importance to Iraq, there is a compelling logic to do so, 
but in this case, the forces on hand probably could then only secure a 
more limited number of the Shi'i cities of the south, leaving large 
chunks of an otherwise supportive population outside of the initial 
``secure'' zone, and possibly driving them into the arms of the 
opponents of reconstruction. In other words, a true COIN campaign would 
have difficulty including both Baghdad and all of southeastern Iraq in 
its initial security zone with only the forces currently on hand.
    It is for that reason that even a COIN strategy would greatly 
benefit from more fully trained forces right from the start. The 
addition of another 30-50,000 troops might prove sufficient to make it 
possible to begin the COIN campaign by securing both Baghdad and key 
sites in central Iraq and nearly all of southeastern Iraq--in addition 
to Kurdistan. This is a very preliminary assessment that would require 
considerable additional planning and analysis, but it does seem likely 
at first blush.
    This would obviously be a far more desirable starting point, since 
it would mean including both the large Shi'a population of southeastern 
Iraq as well as the vital capital within the initial ``oil stain'' of 
the COIN campaign. Under these circumstances, it might be possible to 
achieve success within as little as 5-8 years, although 8-10 years 
still seems more realistic.
    Thus, under any circumstances, more first-rate forces in Iraq would 
be highly desirable, although if we persist with our current strategy, 
then they are indispensable.
    There is one last element of this option that needs to be 
addressed, and this is the question of whether more U.S. troops will 
help or hurt the cause of reconstruction. I am wholly of the opinion 
that, on balance, they will greatly help the cause of reconstruction.
    First, it is wrong-headed and perverse to suggest that more 
American troops in Iraq will simply stimulate more terrorist attacks, 
either because they will provide more targets or because they will 
generate more animosity. As for the insurgents, they have repeatedly 
demonstrated that they oppose not just the United States presence, but 
the entire project of reconstruction and--for the Sunnis who comprise 
the vast bulk of the insurgency--the ascendance of the Shi'ite 
majority. The insurgents have committed far more acts of violence 
against other Iraqis than they have against American Forces. What's 
more, they have made clear that they believe they are already waging a 
civil war against the Shi'a, whom the Salafi jihadists regard as 
apostates and for whom they reserve far greater venom than for infidel 
Americans.
    All of the evidence we have indicates that were U.S. Forces to 
leave Iraq, the insurgents would be even less restrained and would 
greatly increase their attacks on the new Iraqi Government, on the 
Shi'a, on the Kurds, and on anyone else they don't like. If you don't 
believe me, ask any Iraqi Shi'ite, any Iraqi Kurd, or any Sunni Iraqi 
who simply wants to lead a normal life; they are terrified of the hard 
core of the insurgency for this very reason.
    Second, it is wrong to simply postulate that Iraqis want the 
Americans out, and that their resentment of the American presence is a 
major source of the violence there. Iraqi views about the American 
presence are very complicated and, at times, contradictory.
    As best I can glean, both from public opinion polling and my own 
contact with Iraqis from across the ethnic and religious spectrum, most 
Iraqis dislike the U.S. occupation, but they regard it as more than a 
necessary evil. Because of the fears I have just described, and because 
they are realistic about the state of their country, the vast majority 
of Iraqis know that it is vital for American Forces to remain in Iraq 
for the foreseeable future because the alternative is chaos and civil 
war. However, Iraqis are deeply frustrated by the course of 
reconstruction. They are frustrated that 2 years after the fall of 
Baghdad they still face electricity and gasoline shortages, that much 
of the country still lacks clean water and sanitation, that 
unemployment remains so high, and that they still do not feel safe in 
their own country. This frustration is compounded by their sense that 
American soldiers go to great lengths to protect themselves and do 
little to protect them. Indeed, many Iraqis say that our obsession with 
force protection for our own troops comes at their expense; not only do 
our force protection measures greatly inconvenience them, but they will 
argue that these measures actually decrease their own security. For 
instance, the long lines to get through security check points around 
American bases become prime targeting grounds for insurgents and 
criminals.
    Often times, this frustration gets expressed--especially in badly 
constructed public opinion polls--by the sentiment that the United 
States ``should just leave Iraq.'' However, a bit more digging usually 
reveals the more subtle and, I have found, far more common, opinion 
among Iraqis that they want us to stay, but they just wish that we were 
doing more to help them with what really matters to them.
    I think it's probably likely that increasing the number of U.S. 
Forces in Iraq and redeploying them to Iraq's populated areas, and to 
guard key infrastructure, would probably be resented by some Iraqis. I 
think a great many others, however, would feel that it was a move long 
overdue. Especially if additional American Forces were deployed to 
provide security for the bulk of Iraq's population, were deployed in 
mixed formations with Iraqi units, were deployed on regular foot 
patrols and encouraged to get to know the residents of the 
neighborhoods in which they were stationed, all of the evidence 
suggests that Iraqi attitudes would range from grudging acceptance to 
positive relief.

    The Chairman. Thank you very much, Dr. Pollack. Let me 
mention that all of your testimony, prepared testimony, as well 
as that which you have delivered, will be made a part of the 
record. That will be true for each of our witnesses. We 
appreciate the careful preparation you have given to the 
hearing and your remarkable opening statement.
    General McCaffrey, would you offer us your thoughts?

STATEMENT OF GEN BARRY R. McCAFFREY, USA (RET.), PRESIDENT, BR 
            McCAFFREY ASSOCIATES, LLC, ARLINGTON, VA

    General McCaffrey. Well, Senator, let me thank you and 
Senator Biden and the other members of your committee for the 
chance to come down here and share some of these ideas. I very 
much appreciate the very determined and active leadership that 
all of you have shown on this issue.
    I just had a terrific session with Congressman Duncan 
Hunter over on the House Armed Services Committee and was able 
to remind them that Article I of the Constitution, the lead on 
shaping and forming our Armed Forces, in particular, lies in 
the Congress, not in the administration. So I think the 
resurgence of attention to these issues in Iraq, Afghanistan, 
and the war on terror is timely and warranted.
    Let me also say I am appreciative of the opportunity to 
appear with Ken Pollack and Tony Cordesman, both of whom have 
works that I use in my own classes at West Point and I have 
great respect for their work and their insights.
    I have just returned from another periodic visit in support 
of our joint military commanders, GEN John Abizaid, GEN George 
Casey, our tactical commander on the ground, LTG John Vines, 
and a brilliant young officer, LTG Dave Petraeus who, as we 
have mentioned, has been charged with forming the Iraqi 
security forces. I do not know of a more talented and 
determined person we could have put in charge of that effort.
    Going directly to the first question at hand, the nature of 
the counterinsurgency and how well are we doing at it, let me, 
if I may come into this from a slightly different perspective. 
It seems to me we finally have a strategy. We went in there 
with no notion at all except to knock down a million-man active 
and reserve army. We had no phase two. It was astonishing to me 
the egregious misjudgments of Secretary Rumsfeld and some of 
the civilian leadership in the Pentagon. I think they were 
warned very categorically, and very directly, by many of us 
prior to that war that we would end up with 26 million people 
and we had not confronted the coercive security forces of the 
Saddam regime.
    That is, obviously, water under the bridge. I think this 
brilliant man John Negroponte and John Abizaid, the two of them 
have crafted a policy, a strategy, which to my astonishment, 
just having gone in and having compared it to the Jerry Bremer, 
LTG Rick Sanchez efforts, appears to be gathering momentum.
    That strategy, number one, says create a legitimate Iraqi 
State. Get a constitution, get a referendum, get an election, 
get the Sunnis back in the political process. I think, 
collectively, the Sunnis, to my surprise, have decided that 
they want to get back in control of Iraq, but this time they 
are going to get back in the political process. I think there 
is a very high likelihood of political integration of the 
Sunnis between now and December, although clearly this is high 
risk and nonlinear political development.
    I think the second part of our strategy is build the Iraqi 
security forces. I think Senator Biden has pointed accurately 
to some terrific overstatements in the past couple years in 
which we have kluged together numbers that included oil derrick 
security guards as being the equivalent of trained military 
forces.
    Having said that, I think this fellow Dave Petraeus, backed 
up by John Abizaid, our Arabic-speaking, extremely experienced 
joint commander, I think we have finally got this thing moving 
in the right direction. I do not know what the right number is; 
170,000 on paper--my gut instinct was there is probably 60,000 
or more of them out there right now that actually are armed and 
determined to create a new Iraqi State. Some parts of Iraq, 
some parts of Baghdad, they are actually the lead elements. I 
think the majority of operations now in country have at a 
minimum Iraqi participation, if not Iraqi lead.
    So build the ISF; that is the effort. I hope we focus on 
that, though, because I consider it grossly underresourced. If 
we are spending $5 billion a month fighting an active coalition 
campaign and then you look at the level of effort on creating a 
250,000-man force of border patrol, customs agents, police, we 
are not in the ball game yet in providing the resources we 
need. We can talk about it more, but I wrote a Wall Street 
Journal op-ed: We ought to be talking about 120 Blackhawk 
helicopters, about 2,000 up-armored Humvees, about a couple of 
thousand M-113 up-armored vehicles.
    We are not even close to that. We have got these Iraqi kids 
out there with AKs, badly engineered light trucks, no 
maintenance system, no logistics system, no command and 
control. We've got to get serious about it.
    The one parallel besides the domestic politics that strikes 
me as eerily similar to Vietnam is the failure to focus on 
creating the Iraqi security forces as the dominant aspect of 
our strategy. Petraeus is saying it, Abizaid is saying it, but 
are we actually giving them the tools they need to do their 
job?
    Then third, we are doing economic reconstruction. Somebody 
ought to bring before this hearing, there is a brilliant young 
engineer, BG Tom Bostic. We are about to give him his second 
star. The last time I was there the economic reconstruction was 
a zero. This time around I saw a couple of thousand projects 
that are painfully under way, corruption being the single 
biggest threat to the economic reconstruction of Iraq.
    Then finally, we are doing counterinsurgency. I would take 
a slightly different viewpoint than Dr. Pollack. I think the 
counterinsurgency is the least important aspect of what we are 
doing. Every Iraqi police battalion, commando battalion, is 
worth 15 U.S. Army or Marine battalions in downtown Baghdad, 
Talifar, Ramadi. They can spot somebody who is Syrian. They 
know things are out of order.
    So I think our primary contribution--the Marines are doing 
a brilliant job out in Anbar Province doing spoiling attacks 
and trying to reestablish the border. But I do not think the 
counterinsurgency piece is actually central to what is going on 
in Iraq.
    I think, essentially, we are so dangerous to screw around 
with, meaning ``we'' the United States Armed Forces, the 
jihadists, a tiny element of that struggle, are now targeting 
Iraqi police and innocent civilians as opposed to going after a 
Third Infantry Division platoon in Baghdad.
    I would also argue that the massive slaughter of the 
innocents that these foreign jihadists are carrying out is the 
least relevant part of the problem. They will not bring down 
the Iraqi Government. They will not prevent the consolidation 
of a new political system and they darn sure are not a major 
threat to the U.S. Armed Forces.
    What we have to worry about, it seems to me, is preventing 
this civil war that is going on now--that is what we are 
looking at, is a low-grade civil war--from spinning out of 
control, either by lack of wisdom or premature withdrawal. By 
next summer, in my judgment--we have got 17 combat brigades 
there right now--we will be forced into a drawdown and have 10 
brigades or less on the ground by next summer. The Army and 
Marines are starting to come apart under this overly aggressive 
foreign policy in terms of the resources we have in national 
security.
    So I thank you for allowing me to offer those initial 
ideas.
    [The prepared statement of General McCaffrey follows:]

Prepared Statement of GEN Barry R. McCaffrey, USA (Ret.), President, BR 
                McCaffrey Associates, LLC, Arlington, VA

                  10 observations from iraq: june 2005
    1. Superb Status of Armed Forces Unchanged (courage, discipline, 
leadership).
    2. Effectiveness of MNF-I Command and Control and Interagency 
Process is impressive.
    3. Growing effectiveness of the Iraqi Armed Forces and Police: 
169,000 troops fielding 100(+) battalions. (60,000(+) armed and 
effective.)
    4. Sunni Political Participation--they will vote in December.
    5. Ineffectiveness of U.S. Public Diplomacy--media and military 
failure.
    6. Sustaining the War--Inadequate Base of Army and Marines.
    7. Engineering work in Fallujah--an angry city in ruins.
    8. Add Helicopter mobility to ISF: 120(+) Blackhawks.
    9. Add armor to ISF: 2,000(+) M113A3s Up-armor plus Transparent 
Turret; 2,000(+) Up-armor Humvees; 500(+) ASUs.
    10. General Officer turnover and Impact on Region. (General 
Abizaid/General Casey/Lieutenant General Petreaus/Lieutenant General 
Vines--a collective national treasure.)
                                 ______
                                 
Memorandum for: Senate Foreign Relations Committee
Subject: Trip Report--Kuwait and Iraq; Saturday, 4 June, through 
        Saturday, 11 June 2005
1. Purpose
    This memo provides feedback reference visit 4-11 June 2005 by GEN 
Barry R. McCaffrey, USA (Ret.), to Kuwait and Iraq.
2. Sources
    a. GEN George Casey, Commander, MNF-I--one-on-one discussions and 
staff briefings.
    b. LTG JR Vines, Commander MNC-I--one-on-one discussions and staff 
briefings.
    c. LTG Dave Petreaus, Commander, Multinational Security Transition 
Command--one-on-one discussions/briefings.
    d. LTG Robin Brims (U.K. Army), Deputy Commanding General of MNF-
I--one-on-one discussions.
    e. Charge d'Affairs James Jeffrey--office call one-on-one with U.S. 
Embassy Iraq.
    f. MG Tim Donovan (USMC), Chief of Staff, MNF-I--one-on-one 
discussions.
    g. MG Steve Johnson (USMC), Acting Commanding General, II MEF--one-
on-one discussion and staff briefing.
    h. BG Peter Palmer and BG John Defreitas--MNF-I Operations and 
Intel briefings.
    i. MG Rusty Findley (USAF) and Colonel Bill Hix--MNF-I Campaign 
Action Plan Brief.
    j. BG Tom Bostick--Army Corps Engineers. Gulf Region Division 
Brief.
    k. MG William Webster, Commanding General, Multi-National Division 
Baghdad--General Officer Briefing and 3rd ID Battle Staff briefing.
    l. 2nd Brigade 3rd ID Commander and Staff Briefing. Bagdad security 
operations.
    m. Ambassador Ahraf Oazi and U.N. Iraq Delegation--Lunch Meeting 
with Special Representative to the Secretary General of the U.N. in 
Iraq.
    n. MG Robert Heine, Acting Director IRMO (U.S. Embassy 
Reconstruction Program Officer)--one-on-one discussion/briefings.
    o. MG Hank Stratman--Political-Military-Economic Brief, U.S. 
Embassy.
    p. MG Eldon Bargewell, Joint Contracting--one-on-one discussions.
    q. Field Visit. U.S. Marine Infantry Battalion. Fallujah.
    r. Field Visit. U.S. Army Mechanized Infantry Battalion. Vicinity 
Tikrit.
    s. Briefing Iraqi Army Brigade Commander. Fallujah.
    t. Briefing by U.S. Army Embedded Training Team. Fallujah ISF Army 
Brigade.
    u. Briefing USMC Embedded Trainer. Fallujah Police.
    v. Briefing U.S. Army Captain. Embedded Training Team. ISF Army 
Infantry Battalion--Vicinity Tikrit.
    w. Briefing Iraqi Army Colonel. ISF Training Center. Vicinity 
Tikrit.
    x. Lunch discussions. Iraqi Army Battalion XO, S3, SGM. Vicinity 
Tikrit.
    y. Live Fire Demo/Briefing. Iraqi Army Commando Battalion.
    z. Demo/Briefing Iraqi Police ERU (Emergency Response Unit). 
Baghdad.
    aa. Field Sensing Session. U.S. Army Combat Division. Fifteen U.S. 
Army Company Grade Officers.
    bb. Field Sensing Session. U.S. Army Combat Battalion. Junior 
Enlisted Soldiers.
    cc. Field Sensing Sessions. U.S. Army/Navy/Air Force/Marine Senior 
NCOs.
    dd. Discussion Sessions. Two U.S. Contractor Teams (Logistics and 
Security)--Senior Leadership.
3. The Bottom Line--Observations from Operation Iraqi Freedom: June 
        2005
    1st--U.S. Military Forces in Iraq are superb. Our Army-Marine 
ground combat units with supporting Air and Naval Power are 
characterized by quality military leadership, solid discipline, high 
morale, and enormous individual and unit courage. Unit effectiveness is 
as good as we can get. This is the most competent and battle-wise force 
in our Nation's history. They are also beautifully cared for by the 
chain-of-command--and they know it. (Food, A/C sleeping areas, medical 
care, mental health care, home leave, phone/e-mail contact with 
families, personal equipment, individual and unit training, targeted 
economic incentives in the battle area, visibility of tactical 
leadership, home station care for their families, access to news 
information, etc.)
    2nd--The point of the U.S. war effort is to create legitimate and 
competent Iraqi national, provincial, and municipal governance. We are 
at a turning point in the coming 6 months. The momentum is now clearly 
with the Iraqi Government and the coalition security forces. The Sunnis 
are coming into the political process. They will vote in December. 
Unlike the Balkans--the Iraqis want this to succeed. Foreign fighters 
are an enormously lethal threat to the Iraqi civilian population, the 
ISF, and coalition forces in that order. However, they will be an 
increasing political disaster for the insurgency. Over time they are 
actually adding to the credibility of the emerging Iraqi Government. We 
should expect to see a dwindling number of competent, suicide capable 
jihadist. Those who come to Iraq--will be rapidly killed in Iraq. The 
picture by next summer will be unfavorable to recruiting foreigners to 
die in Iraq while attacking fellow Arabs.

   The initial U.S./U.K. OIF intervention took down a criminal 
        regime and left a nation without an operational state.
   The transitional Bremer-appointed Iraqi Government created a 
        weak state of waning factions.
   The January 2005 Iraqi elections created the beginnings of 
        legitimacy and have fostered a supportive political base to 
        create the new Iraqi Security Forces.
   The August Iraqi Constitutional Referendum and the December-
        January election and formation of a new government will build 
        the prototype for the evolution of an effective, law-based 
        Iraqi State with a reliable security force.
   January thru September 2006 will be the peak period of the 
        insurgency--and the bottom rung of the new Iraq. The positive 
        trend lines following the January 2006 elections, if they 
        continue, will likely permit the withdrawal of substantial U.S. 
        combat forces by late summer of 2006. With 250,000 Iraqi 
        security forces successfully operating in support of a 
        government which includes substantial Sunni participation--the 
        energy will start rapidly draining out of the insurgency.

    3rd--The Iraqi security forces are now a real and hugely 
significant factor. LTG Dave Petreaus has done a brilliant job with his 
supporting trainers.

   169,000 Army and police exist in various stages of 
        readiness. They have uniforms, automatic weapons, body armor, 
        some radios, some armor, light trucks, and battalion-level 
        organization. At least 60,000 are courageous Patriots who are 
        actively fighting. By next summer--250,000 Iraqi troops and 10 
        division HQS will be the dominant security factor in Iraq.
   However, much remains to be done. There is no maintenance or 
        logistics system. There is no national command and control. 
        Corruption is a threat factor of greater long-range danger than 
        the armed insurgency. The insurgents have widely infiltrated 
        the ISF. The ISF desperately needs more effective, long-term 
        NCO and Officer training.
   Finally, the ISF absolutely must have enough helicopter air 
        mobility--120+ Black Hawk UH 60s--and a substantial number of 
        armored vehicles to lower casualties and give them a 
        competitive edge over the insurgents they will fight. (2,000 
        up-armor Humvee's, 500 ASVs, and 2,000 M113A3s with add-on 
        armor package.)
4. Top CENTCOM Vulnerabilities
    1st--Premature drawdown of U.S. ground forces driven by dwindling 
U.S. domestic political support and the progressive deterioration of 
Army and Marine manpower. (In particular, the expected meltdown of the 
Army National Guard and Army Reserve in the coming 36 months.)
    2nd--Alienation of the U.S. Congress or the American people caused 
by Iraqi public ingratitude and corruption.
    3rd--Political ineptitude of Shi'a civil leadership that freezes 
out the Sunnis and creates a civil war during our drawdown.
    4th--``The other shoe''--a war with North Korea, Venezuela, Syria, 
Iran, or Cuba that draws away U.S. military forces and political 
energy.
    5th--The loss or constraint of our logistics support bases in 
Kuwait. Clearly we need constant diplomatic attention and care to this 
vital ally. If Kuwait became unstable or severely alienated to U.S. 
military objectives in the region, then our posture in Iraq would be 
placed in immediate fatal peril.
    6th--Open intervention by Iranian intelligence or military forces 
to support rogue Shi'a Iraqi insurgency. (Assassination of Sustani--
armed rebellion by Sadr.)
    7th--Continued undermanning and too rapid turnover in State 
Department interagency representation in Iraq.
    8th--Lack of continuity in CENTCOM strategic and operational senior 
leadership. The CENTCOM military leadership we now have is a collective 
national treasure.

   General Abizaid's value to the war effort based on his 
        credibility to U.S. Military Forces--and ability to communicate 
        and relate to the Iraqi emergent leadership--cannot be 
        overstated.
   The combination of a three-star tactical Headquarters (LTG 
        John Vines is the most experienced and effective operational 
        battle leader we have produced in a generation)--and an in-
        country four-star strategic commander (GEN George Casey) has 
        improved the situation from the overwhelmed, underresourced 
        Bremer-Sanchez ad-hoc arrangement.
   LTG Dave Petreaus has done a superb job building the ISF. 
        Relationships are everything in this campaign. We need to lock 
        in our senior team for the coming 24 months.
   Suggest that the three key U.S./coalition military HQS of 
        Casey-Petreaus-Vines need to stop unit rotation and go to 
        individual replacement rotation.
   The very senior U.S. military leadership needs their 
        families based in a Kuwait compound with periodic visits 
        authorized. (We did this with General Abrams and his senior 
        leaders during the final phase of Vietnam.)
5. The Enemy Threat
    1st--The Iraqi insurgency threat is enormously more complex than 
Vietnam.
   There we faced a single opposing ideology; known enemy 
        leaders; a template enemy organizational structure; an external 
        sanctuary which was vital to the insurgency to bring in 
        fighters, ammunition, resources; and relative security in urban 
        areas under Allied/Vietnamese government control.
   Iraq is much tougher. The enemy forces in this struggle are 
        principally Sunni irredentists--but there is also a substantial 
        criminal class determined to murder, rob, kidnap, and create 
        chaos.
   We also face a small but violent foreign jihadist terrorist 
        element. These terrorists do not depend on foreign sanctuary. 
        They can arm themselves with the incredible mass of munitions 
        and weapons scattered from one end of Iraq to the other.
   Finally, Iraq is encircled by six bordering nations--all of 
        whom harbor ill-will for the struggling democratic Iraqi State.

    2nd--On the positive side of the ledger:

   High Sunni voting turnout and political participation in 
        December will likely set the conditions for the downhill slide 
        of the insurgency.
   The insurgency can no longer mass against coalition forces 
        with units greater than squad level--they all get killed in 
        short order by very aggressive U.S./U.K. combat forces. The 
        insurgents have been forced to principally target the weak 
        links--the Iraqi police and innocent civilians. This will be a 
        counterproductive strategy in the mid-term. It has been forced 
        on them by the effective counterinsurgency operations and 
        information operations of coalition forces.
   Insurgents now have a reduced capability to attack coalition 
        forces by direct fire: 80 percent (+) of the attacks are 
        carried out with standoff weapons or suicide bombings (mortars, 
        rockets, IEDs).
   Suicide IED attack is enormously effective. However, it will 
        soon likely become a fragile tool. The jihadists will begin to 
        run short of human bombs. Most are killed or die while carrying 
        out missions which are marginally effective. This must be a 
        prime enemy vulnerability for coalition information warfare 
        operations.
   We must continue to level with the American people. We still 
        have a 5-year fight facing us in Iraq.

    3rd--The Fallujah Situation:

   The city has huge symbolic importance throughout Mideast.
   Unrealistic expectations were raised on how rapidly the 
        coalition could rebuild.
   The city appears to be an angry disaster. Money doesn't 
        rebuild infrastructure--bulldozers and workers and cement do. 
        The coalition needs an Iraqi/coalition effort principally 
        executed by military engineers--and thousands of Iraqi 
        workers--to rebuild the city. We need a ``Pierre L'Enfant'' of 
        Fallujah.
   Police stations are planned but barely started. The train 
        station is mined and the trains do not function. Roads must be 
        paved. We need to eliminate major signs of U.S.-caused war 
        damage, etc.
6. Coalition Public Diplomacy Policy is a Disaster
    1st--The U.S. media is putting the second team in Iraq with some 
exceptions. Unfortunately, the situation is extremely dangerous for 
journalists. The working conditions for a reporter are terrible. They 
cannot travel independently of U.S. military forces without risking 
abduction or death. In some cases, the press has degraded to reporting 
based on secondary sources, press briefings which they do not believe, 
and alarmist video of the aftermath of suicide bombings obtained from 
Iraqi employees of unknown reliability.
    2nd--Our unbelievably competent, articulate, objective, and 
courageous Battalion, Brigade, and Division Commanders are not on TV. 
These commanders represent an Army-Marine Corps which is rated as the 
most trusted institution in America by every poll.
    3rd--We are not aggressively providing support (transportation, 
security, food, return of film to an upload site, etc.) to reporters to 
allow them to follow the course of the war.
    4th--Military leaders on the ground are talking to people they 
trust instead of talking to all reporters who command the attention of 
the American people. (We need to educate and support AP, Reuters, 
Gannet, Hearst, the Washington Post, the New York Times, etc.)
7. Summary
   This is the darkness before dawn in the efforts to construct 
        a viable Iraqi State. The enterprise was badly launched--but we 
        are now well organized and beginning to develop successful 
        momentum. The future outcomes are largely a function of the 
        degree to which Iraqi men and women will overcome fear and step 
        forward to seize the leadership opportunity to create a new 
        future.
   We face some very difficult days in the coming 2-5 years. In 
        my judgment, if we retain the support of the American people--
        we can achieve our objectives of creating a law-based Iraqi 
        State which will be an influencing example on the entire 
        region.
   A successful outcome would potentially usher in a very 
        dramatically changed environment throughout the Middle East and 
        signal in this region the end of an era of incompetent and 
        corrupt government which fosters frustration and violence on 
        the part of much of the population.
   It was an honor and a very encouraging experience to visit 
        CENTCOM Forces in Iraq and Kuwait and see the progress achieved 
        by the bravery and dedication of our military forces.

    The Chairman. Thank you, General.
    Dr. Cordesman.

STATEMENT OF DR. ANTHONY H. CORDESMAN, ARLEIGH A. BURKE FELLOW 
 IN STRATEGY, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, 
                         WASHINGTON, DC

    Dr. Cordesman. Senator, let me express my thanks as well to 
the committee for the opportunity to appear here. Let me also 
begin with a caution. Some 30 years ago at the collapse of the 
forces in Vietnam, the ARVN, I was the Director of Intelligence 
Assessment and I was asked to do an analysis of our 
intelligence on both the Viet Cong and North Vietnamese and the 
ARVN.
    As part of that assessment, we prepared two chronologies. 
One was a chronology of all the brilliant ideas we had 
implemented to try to defeat the North Vietnamese and Vietcong. 
The other was a chronology of all the brilliant ideas we had to 
try to train and fix the ARVN forces.
    I do not believe there is any classic approach to 
counterinsurgency. I think people write very interesting 
classic books about the issue, and it is very easy to put 
forward suggestions when you are 7,000 miles away--as long as 
you do not have to figure out how much time is involved, the 
disruptive effect on current plans, how many men are involved, 
what the cost is, whether the end result will be interoperable 
or standardized, what the political and internal costs are.
    In short, I think you need to be very careful about these 
options, because as long as they are a strategic generalization 
it can always sound very convincing. The problem is we have a 
long history of going from generalization to failed practice.
    Let me be more specific about the three elements of the 
option, that is option one. It is not an option; it is two or 
three very different suggestions. I do not believe that there 
is any practical chance of creating safe zones. Watching what 
has happened in Baghdad, in Mosul, and elsewhere, the truth is 
that to create security simply takes too many men, even in the 
areas which are relatively stable provinces. As you look at the 
history of bombings, attacks, and sabotage, the fact is we are 
talking a vast amount of effort.
    I do not believe that we are unpopular because we have 
failed to secure Iraq. In the Oxford Analytica polls, the early 
polls of our presence in Iraq, some 67 percent of the Arab 
Sunnis polled saw the invasion as illegitimate. The figure was 
roughly 37 percent of Shiites. Well over a third, even then, of 
Arab Sunnis supported attacks on coalition forces. Then it was 
11 percent of the Shiites.
    If we are going to deal with these problems, it is going to 
have to be by pursuing the strategy that General McCaffrey has 
summarized. It is by creating Iraqi forces, Iraqi politics, and 
Iraqi governments that can establish security. It is going to 
have to be a combination of denying the insurgents sanctuaries 
and areas to operate in and expanding operations in the areas 
that are threatened. From what I have seen, we also need to 
recognize that these differ sharply by city and by governorate. 
This is not something that can be dealt with in terms of 
generalizations.
    I somewhat disagree with the point that Senator Biden has 
raised. He is perfectly correct in saying that when we talk 
about 172,000 trained and equipped troops many of these are not 
combat capable to act on their own. But as we saw during the 
election, even forces that are not particularly capable in 
terms of standing on their own can perform useful functions. 
Out of those, out of the 172,000 today, 63 to 64,000 are 
regular police, another 30,000 are special security forces, 
which provide area security in the so-called safe zones. Those 
units are just becoming ready, and in my written testimony I 
outline the pattern of readiness.
    They will take probably a year at a minimum to reach 
critical mass and readiness. Yet, they are moving toward that. 
As they expand and develop capability, they will provide the 
kind of security in the areas that we can use these forces in 
while the army units and other units can begin to move into the 
west.
    But I would absolutely agree with General McCaffrey, none 
of this is going to happen unless there is an inclusive 
political structure that brings a large number of Sunnis into 
it, as well as the kind of sticks which make it clear to the 
Sunni insurgents, who can be persuaded to change their mind, 
they cannot continue to operate safely and easily and have 
sanctuaries.
    I also would have to say that Fallujah, Ramadi, and the 
rest, even parts of Baghdad, or for that matter Basra and 
Mosul, demonstrate that it is not enough to have politics. You 
also need to have governance. One of the basic problems we have 
is it is not just the United States which cannot occupy space. 
Today if Iraqi troops go in, far too often no governance 
follows them up, or provides a structure of functioning 
government to supplement the presence of forces. That is 
critical, because for all of the skills and talent we bring, 
Americans rote at 6-month, 3-month, 9-month, and 1-year 
intervals. There is a major shortage of civilians to supplement 
the U.S. military in civil-military and political areas that I 
do not believe is correctable. The truth of the matter is not 
only are we seen as occupiers and crusaders in far too many 
areas, we simply lack continuity and area expertise. We simply 
are not there long enough to achieve the kind of effectiveness 
that only Iraqis can achieve.
    Now let me answer two other questions that the committee 
has asked. Should the coalition attempt to take advantage of 
divisions within the insurgents, e.g, the Sunni nationalists 
versus the foreign jihadists? I think this begins with a wrong 
assumption. Politically it is all very well to blame the most 
extreme bombings on foreign insurgents. People have said there 
are no such Iraqi bombings. When I was there people talked 
about 10 percent as being Iraq. When I then asked how many of 
these bombings could you really quantify as to what country 
they came from and who the bombers really were, the fact is we 
had no basis for making these judgments.
    Now, the committee may be able to get more detail in 
executive session, but we are making, as we have in the past, 
far too many generalizations about the nature of the 
insurgency. There is the same filtering process going from the 
field to the center through to Washington and then into the 
political structure, that I saw in Vietnam, in Somalia, or for 
that matter Lebanon.
    There has to be much better transmission of the hard data 
and intelligence and far fewer sweeping generalizations. Having 
said that, it is not the United States that can take the lead 
in negotiating between Sunni and Shiite and Kurd. General 
McCaffrey pointed out--and I think this is the key--if Iraq is 
to work in any form, there must be an Iraqi political structure 
which is inclusive. We need to give as much effort as we can to 
helping the Iraqis become inclusive, and then use as much 
influence as we can to keep them inclusive.
    I saw leaders in Iraq committed to inclusiveness, but I saw 
people under them, Sunnis fearing being purged, Shiites wanting 
to purge, Kurds wishing to basically separate themselves from 
the government.
    Senator Biden raised the risk of civil war. It is very 
real. This is a very fragile political structure. I do not 
believe that the constitution will perform miracles, even if it 
is passed in a referendum, and I think the political process is 
going to take as long as making Iraqi forces effective, and it 
is going to take United States focus on that.
    Similarly, when we talk about, can a political solution be 
reached with the Sunni insurgents and could this lead to Sunni 
cooperation; yes. But here again, let me say that political 
inclusiveness is something the Iraqis have to do, and from what 
I have seen a lot of the reason that Sunnis want to be in the 
political process. First, they see that the election has put 
Kurds and Shiites in control of the oil money and the power, 
and second, they see themselves in an area where, as the less 
extreme Sunni groups, they are not winning. There is ever more 
turmoil and uncertainty and instability and they are not secure 
from United States and Iraqi forces.
    Thank you.
    [The prepared statement of Dr. Cordesman follows:]

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

                              introduction
    One key issue in answering questions is whether they are the right 
questions to ask. Let me begin my testimony by stating that the 
``options'' and questions the committee has asked us to address are not 
necessarily the right options and questions. There are five major 
reasons why this is the case.

   First, the questions as presented in the form of the four 
        ``options'' do not really describe options, and include mixes 
        of different issues and questions. As a result, the answers to 
        each option have to mix positive and negative responses that 
        are not directly connected. In my responses, I have chosen to 
        address each question separately.
   Second, from a purely military perspective, the committee 
        does not address what may be the most important option, or set 
        of issues, affecting the current U.S. effort in Iraq: Whether 
        the mix of Iraqi military, regular police (those on the street 
        or in stations, in traffic or on highways, and at the borders), 
        and police units (Emergency Response Unit and Special Police; 
        the latter include Special Police Commandos, Public Order 
        Brigades, and the Mechanized Police Brigade) that is gradually 
        coming online in combat-ready form will be effective in 
        replacing coalition forces, how soon this is likely, and what 
        kind of, and when, reductions in U.S. and allied forces will be 
        possible.
          The coalition may have made serious mistakes in developing 
        Iraqi forces in the past, but a recent trip to Iraq indicates 
        that it is now beginning to have far more success. If current 
        plans are successfully implemented, the total number of Iraqi 
        military, regular police, and police units that can honestly be 
        described as ``trained and equipped'' should rise from 96,000 
        in September 2004, and 172,000 today, to 230,000 forces by the 
        end of December 2005, and 270,000 by mid-2006. The December 
        total could be a bit lower due to the extension of the police 
        basic course from 8 to 10 weeks, one of several initiatives to 
        raise the quality of the police and military forces.
          There will be a good balance of military, regular police, and 
        police units. Plans call for about 85,000 military in the MOD 
        by December, and 145,000 special police and police in the MOI. 
        The 85,000 in the military will include about 83,000 in the 
        army (including the ``national'' forces originally envisioned, 
        along with the former National Guard; also including combat 
        support, service support and training units). The remaining 
        manpower will include the Special Operations Forces and the Air 
        Force and Navy. About 100,000 of the personnel in the MOI will 
        be station/traffic/patrol police; in addition, nearly 20,000 
        more will be in the Special Police and the Emergency Response 
        Unit. The remainder covers the Border Forces, the Highway 
        Patrol, and Dignitary Protection. By June 2006, the total 
        number in the Iraqi Security Forces (military, regular police, 
        and police units) will go to approximately 270K, The MOD will 
        have about 90,000, and the MOI will have about 180,000--
        provided that there is no change in the currently planned level 
        of regular police.
          Included in the numbers of individuals trained and equipped 
        will be significant numbers of combat battalions. In July 2004, 
        just after the Iraqi resumption of sovereignty, neither the 
        Iraqi military nor the Iraqi police had any battalions that 
        could be deployed nationally. Under current plans, the numbers 
        of combat battalions in the MOD will total around 106 by 
        December of this year. On top of this, Iraq will have 35 
        brigade and 10 division headquarters providing command and 
        control of MOD forces. Of these headquarters elements, some 
        will be relatively mature, but at least a small number of each 
        will still be relatively ``young'' or inexperienced.
          In fact, much of the force generation effort will have 
        shifted to giving Iraqi combat forces the combat support and 
        combat service support units they need. By December, Iraq will 
        have fielded four Motorized Transportation Regiments (working 
        on the goal of one per division). Iraq will also have generated 
        six bomb disposal companies (with the goal of one per 
        division). In addition, nearly 70 Headquarters and Service 
        Companies will have been generated (although some equipment 
        shortages will remain). The goal for these Headquarters and 
        Service Companies is one per battalion. There will be slightly 
        under 30 combat battalions in the police units of the MOI.
          By June 2006, the numbers of MOD battalions is planned to 
        reach 114. The number of the MOI battalions will remain 
        unchanged, although their training will have been improved 
        through recently initiated advanced programs.
          Iraqi planning for Strategic Infrastructure Battalions (to 
        protect oil infrastructure initially and possibly other 
        infrastructure later) is not mature enough yet to give a solid 
        estimate of how many of those forces will be available on any 
        given timeline. The MNF is, however, working with the MOD to 
        help ``professionalize'' the first four or five of these units.
   Third, the committee has chosen to separate its military 
        options and questions from the need for an overall strategy to 
        deal with Iraq. In practice, the most important options for 
        military success may not involve changes in military forces and 
        tactics. This is a political struggle. No purely military 
        options can substitute for success in creating an effective 
        political structure that is both inclusive and protects the 
        rights of minorities, representing each major ethnic and 
        sectarian faction. No military option can substitute for the 
        creation of effective patterns of governance at the national, 
        regional, and local level--including the presence of both 
        police and civil authorities, especially a fair judicial system 
        and humanitarian detention facilities. No option based on force 
        can substitute for economic security; dollars are as important 
        as bullets. No American use of force can be decoupled from 
        public diplomacy that convinces Iraqis that the United States 
        and its allies will phase out their presence as Iraqi forces 
        become effective. (Note.--Careful with this one. Seems to 
        suggest some one-for-one tradeoff as Iraqi forces become 
        effective, coalition forces can go home, but only if the 
        security success has been accompanied by political and economic 
        success.)
   Fourth, for the same reasons, the committee ignores the most 
        critical weakness in U.S. policy and programs in Iraq that 
        currently affects the prospects for military success. The 
        United States seems to have succeeded in restructuring its 
        effort to create effective Iraqi forces. Senior U.S. officials 
        have pressed the Iraqis hard to create an inclusive political 
        system and there are clear signs of limited success, 
        particularly in the Sunni representation on the Constitution 
        Drafting Committee. Although without any specific timeline, 
        President Bush has said that the United States will eventually 
        withdraw all of its military forces from Iraq, and this, at 
        least, seems to reassure Iraqis that the United States has no 
        intention of permanently occupying Iraq or maintaining military 
        bases.
          In contrast, much of the U.S. economic aid effort is an 
        incompetent and ineffective nightmare. While the reprogramming 
        of aid to meet short-term security needs has served a vital 
        purpose in substituting dollars for bullets, and some projects 
        have been successful, far too much money has been spent and is 
        being spent on U.S.-conceived efforts that pour money into U.S. 
        and foreign contracts, spend that money outside Iraq or on 
        overhead and security, and do not lead Iraq toward effective 
        economic development. This spending has failed to create jobs 
        and investment activity that has a meaningful macroeconomic 
        scale or that will act to meet the needs of key sectors and 
        governorates. The USAID and Department of Defense aid planning 
        and contracting effort is a self-inflicted wound that needs to 
        be replaced by Iraqi planning and management as soon as 
        possible.
   Finally, the committee's ``options'' do not address the 
        military problem of shaping Iraqi forces that can affordably 
        deal with both the risk of prolonged low-level terrorism and 
        insurgency, and the need to defend Iraq's borders. This need, 
        for continued coalition aid that goes beyond counterterrorism 
        and counterinsurgency capability cannot be ignored while the 
        present ``war'' is being won. It is a critical issue with long 
        lead times that must be addressed as soon as possible in terms 
        of shaping mid- and long-term Iraqi force development. 
        Decisions need to be taken about the level of Iraqi forces that 
        the Iraqi budget can actually afford, and U.S. aid and advisory 
        plans to support this effort. These issues were not critical 
        while Iraqi forces were small and light; they are critical as 
        they become large and seek to acquire armor, artillery, 
        aircraft, and ships.
Option 1--Should the coalition revise its current counterinsurgency 
        strategy in Iraq?
    At this point in time, the key issues affecting strategy are not 
military, but politics, governance, aid, and economics. The United 
States and the Iraqi Government have largely ``cast the die'' in 
military terms, and the issue is not one of strategy as much as finding 
ways to ensure that the development of Iraqi forces will actually 
succeed.
    The committee's questions under this option do, however, raise 
important individual issues:

   Should the coalition and Iraqi security forces create safe 
        zones, and put more emphasis on fighting street crime and 
        organized crime, deemphasizing the hunt for insurgents, so 
        Iraqi economic and political life can take root? Such an 
        approach ignores the fact that Iraqi forces are already being 
        developed into three major components: Military, regular 
        police, and police units. It is true that the fact that 
        insurgents and terrorists can attack almost anywhere in Iraq, 
        even when the coalition and/or Iraqi forces are conducting 
        operations in the border area or in so-called secure areas. 
        Such coalition and Iraqi military and security efforts simply 
        make it harder for them to do so.
          However, this situation would be much worse if major ongoing 
        efforts were not being made to defeat them directly in the 
        areas where they have the most strength and to deny them 
        sanctuaries. Furthermore, reductions in present 
        counterinsurgency operations outside ``safe areas'' will tend 
        to cede control to the most extreme and violent groups and make 
        it even harder to include Sunnis in such areas in Iraq's 
        political process and economic development.
   Should the coalition attempt to take advantage of divisions 
        within the insurgents--e.g. Sunni nationalists vs. foreign 
        jihadists? The answer is ``Yes''; but only as a secondary and 
        supportive endeavor to the efforts made by the Iraqi 
        Government, and with great care to avoid being seen as somehow 
        dictating government actions or still acting as an occupier. 
        This question puts the lead role in the wrong place. The United 
        States should--and does--encourage the Iraqi Government to be 
        as inclusive as possible and to bring as many Sunnis into the 
        political process as possible; this should not be a U.S.-led or 
        coalition-led strategy. The coalition may need to make some 
        tactical accommodations with insurgents, but any major 
        negotiations must be led by the Iraqis.
   Can a political solution be reached with Sunni insurgents, 
        and could this lead to Sunni cooperation in isolating, 
        capturing, or killing the international insurgents? The basic 
        assumption in this question is wrong. Tying Islamic extremist 
        groups in Iraq to foreigners, and to al-Qaeda and Zarqawi, 
        addresses only one part of the threat and ignores the large 
        part--perhaps the true nature--of the threat. The most 
        dangerous ``international insurgents'' can operate in Iraq 
        because they are part of Islamist extremist groups with large 
        Iraqi membership. The key will be to split the more moderate 
        and pragmatic Iraqi Sunni groups from such extremist groups, 
        and give them an incentive to support government operations 
        against such extremist groups or take action on their own.
Option 2--Could the United States successfully press its allies to 
        increase aid and provide manpower to protect Iraq's borders and 
        prevent foreign infiltration?
    The main goal should be to increase the presence of Iraqi forces in 
securing the border and in providing security to governance in troubled 
areas. The MNC-I, MNSTC-I, and MOD are already working to help Iraq 
regain control of its borders in the tough spots (primarily the border 
with Syria) as soon as possible. This will take time and is already in 
its early stages. But reconstruction of the border forts in those 
areas, generation of additional border guards, generation of additional 
Iraqi Army units, and support for the Ports of Entry (where Department 
of Homeland Security Border Support Teams are helpful) are all 
underway.
    Border Transition Teams will begin linking up with Iraqi Border 
Guard units in the weeks ahead as well; they're already in Iraq and 
completing their final prep. This is a large and complex effort, but it 
is at least underway and will be very important to reduce the number of 
foreign suicide bombers and movement of funds/leaders. It will also 
have major impact on smuggling, which saps some of Iraq's economic 
power. It will also require additional equipment and technology, such 
as backscatter x-ray machines (already finding contraband at the Ports 
of Entry) and the PISCES system (which requires significant database 
development to be effective in the mid-term).
    In contrast, it is unrealistic to think that other coalition 
members or nations are going to help in the border areas that are 
really contested as the following answers to the committee's detailed 
questions indicate:

   Is there a reasonable prospect that allied or friendly 
        governments would agree to increase their military 
        participation for this purpose, which is perceived as less 
        dangerous than patrolling Iraqi hotspots? The answer is ``No.'' 
        It would take very large forces to make even the slightest 
        difference, and foreign countries are no more likely to deploy 
        troops to remote areas than elsewhere. Moreover, small, 
        isolated deployments would rapidly become targets, while 
        staying in large bases would be pointless. As various coalition 
        partners end their role in Iraq, some say they will be willing 
        to turn their forces from combat to training. This means that 
        it may be realistic to preserve some contributions that are now 
        planned to decline, but it is unrealistic to assume that any 
        such forces would go to ``hot'' areas on the border.
   What would the United States have to do to convince allies 
        to participate in this manner? Would this free up significant 
        numbers of U.S. troops for other duties, or would the gains be 
        insignificant? The United States would have to form a 
        ``Coalition of the Mercenary'' or the ``Compelled,'' and either 
        drag unwilling allies into the mission or pay them off. The 
        savings in U.S. manpower would be negligible at best. The 
        United States would have to provide secure logistic support and 
        rapid deployment capabilities to protect such units.
   Can foreign infiltration of Iraq be stopped by enhancing 
        border security? Some reductions may be possible, but most 
        infiltrators consist of men, not supplies. Border security and 
        customs posts will remain corrupt, infiltration can shift to 
        different border points, and better covers and documentation 
        will always allow infiltrators to enter the country. Attempts 
        to provide reasonable security at the borders should continue, 
        but the primary battle, in any case, will be inside Iraq and 
        not at the border.
   If foreign infiltration of Iraq could be stopped or slowed 
        significantly, how much impact would that have on the 
        insurgency? It would have an impact over time, particularly on 
        suicide bombings, but it could just as easily lead to a 
        widening of the attacks on targets outside Iraq. The question 
        may assume that Iraq has become the target of foreign Sunni 
        Islamist extremists. It has not. It is a target, along with 
        many other countries as the fighting in Afghanistan and the 
        rest of Central Asia, infiltration into countries like Saudi 
        Arabia, and the London and Madrid bombings clearly demonstrate.
Option 3--Should the United States reprioritize the training schedule 
        of Iraqi forces and support more training in other countries?
    A detailed analysis of the current MNF-I and MNSTC-I effort to 
train and equip Iraqi forces is attached, and it is requested that this 
be included in the record.\1\ It indicates that this effort has been 
comprehensively reorganized over the course of the last year, that it 
now includes far better readiness standards and significant allied 
contributions, and the two main issues to be addressed are providing 
the full range of civilian advisors needed to supplement the military 
in training the police forces, and how Iraqi forces should acquire 
armor and other heavier weaponry over time.
---------------------------------------------------------------------------
    \1\ Three detailed papers are available: ``Staying the Course? What 
Can be Done in Iraq,'' ``Iraq's Evolving Insurgency,'' ``Iraqi Force 
Development: Can Iraqi Forces Do the Job?'' All can be found in PDF 
format in the ``Iraq Briefing Book'' section of the CSIS Web site at 
www.csis.org/features/iraq.cfm.
---------------------------------------------------------------------------
    Progress in unit generation is necessarily much slower than 
progress in creating trained and equipped individuals. According to 
some press reports, the Iraqi Army had a total of 81 operating combat 
battalions by late May 2005, but a new evaluation matrix developed by 
MNF-I rated only three of those battalions at the top level of 
readiness and capability. (At the top level of readiness, a unit is 
capable of independent operations without coalition support). [Bradley 
Graham, ``A Report Card on Iraqi Troops,'' Washington Post, May 18, 
2005, p. A10.] Only one of 26 brigade headquarters had such a rating. 
However, many other combat battalions were still contributing to the 
fight, either with some support provided by coalition forces (the 
second level of readiness) or fighting alongside coalition forces (the 
third level).
    If one included all of the special police battalions, the press 
reported that the total force had risen from 81 battalions to 101, but 
the number of battalions rated in the top category of mission 
capability only rose from 3 to 5. Although the other operating combat 
battalions were contributing to the counterinsurgency to varying 
degrees, MNF-I concluded that it needed to make further major increases 
in the number of U.S. advisory or ``transition teams'' embedded in 
Iraqi units and was seeking to deploy rapidly 2,500 more soldiers by 
mid-June.
    Coalition leaders are concerned that detailed reports on the 
ranking of Iraqi forces will be used by insurgents to focus attacks on 
weaker units, but coalition experts summarized the status of Iraqi 
forces in mid-June as follows: No special police units and less than a 
handful of army units were rated ``fully capable'' of independent 
counterinsurgency operations. Some 40 percent of the special police 
units and 20 percent of army units were rated capable of leading 
operations with coalition support. Some 40 percent of the special 
police units and 45 percent of army units were rated capable of 
conducting counterinsurgency operations when ``fighting alongside'' 
coalition units. Less than 10 percent of the special police units and 
20 percent of army units were rated as ``forming'' or incapable of 
conducting counterinsurgency operations.
    Put differently, more than 60 Iraqi Army combat battalions could 
then perform a counterinsurgency role when operating with coalition 
forces; more than 20 combat battalions were capable of 
counterinsurgency operations, but needed some specific coalition 
support to do so. In the case of special police forces--which included 
the Public Order Brigades, the Mechanized Police Brigade, and the 
Special Police Commando Brigades, there were roughly 27 battalions 
authorized and 14 actually operational, all of them either fighting 
alongside or with coalition support. A long way from a perfect force, 
but a vast improvement over a single active battalion in July 2004.
    Looking toward the future, the focus of Iraqi and MNF efforts has 
clearly shifted from force formation to force effectiveness, and the 
MNSTC-I goal is to ``graduate'' most remaining units from basic/small 
unit training at Level 3 (``Fighting Alongside'' coalition forces). 
Their progression to Level 2 or Level 1 will follow on varying 
timelines. Some ``graduated'' units may still be assessed as Level 4 
(Forming), but they should be the exception.

   Are Iraqi troops being deployed before they are ready in an 
        attempt to demonstrate progress? This may have been the case 
        through the spring of 2004. It no longer seems to be an issue. 
        As is noted above, far better readiness and training standards 
        are being applied.
   Should there be a more gradual training schedule to allow 
        Iraqi units to develop greater cohesion and capabilities before 
        exposing them to hostilities? Iraqi forces are deployed into 
        more-demanding missions only on the basis of their actual 
        performance, as reflected by their transition readiness 
        assessment. The coalition transition teams that guide them 
        through their initial training and equipping remain with them 
        as they transition to operational status and as they are slowly 
        introduced to more-demanding missions over time. Keeping them 
        in training status would make things worse, not better. Their 
        involvement in appropriate operations will give them needed 
        experience and ensure that leaders and other ranks are 
        competent and active while they build practical cohesion and 
        capability.
   Should the number of Iraqi security forces be increased by 
        integrating the Badr brigade (an anti-Saddam Shi'a militia 
        group), the Peshmurga (Kurdish forces), or other local militias 
        into the Iraqi Army or National Guard? Would the political 
        ramifications of such integration outweigh the security 
        benefits? The problem lies in the word ``integration.'' If it 
        means properly vetted, fully trained, and dispersed as 
        individuals into a wide range of units to create truly national 
        forces, the answer is ``Yes.'' In the real world, Iraqi forces 
        have been recruiting militia members as individuals for almost 
        a year--as part of the Transition and Reintegration of Militias 
        program. Success in these endeavors has been mixed. Total 
        dissolution of militias will take time and serious negotiations 
        and will probably be successful only when the political parties 
        see the militias as no longer required because the central 
        government is providing adequate security.
          MNF-I and the Iraqi Government have avoided bringing militias 
        in as entire elements for very good reasons. The temptation of 
        using militias as an expedient short-term measure to establish 
        control somewhere in Iraq has a major long-range downside. The 
        biggest single challenge to the Iraqi leaders is to get all 
        ethnic groups, political parties, religious sects, etc., to 
        work together as part of the Iraqi State and political 
        processes. This means militias should not be legitimized and 
        that the government should retain the monopoly on the 
        legitimate use of power.
          There may be a need to find some mission for selected militia 
        units that will ensure they do not become involved in ethnic/
        sectarian struggles, but Iraq does not need low-grade ethnic 
        and sectarian forces. It needs effective national forces. 
        Furthermore, not every militia has the goal of remaining a 
        paramilitary force. For example, the Badr Corps (not Brigade) 
        is trying to be known as the Badr Organization and to shed its 
        militia image for a political role. This process may be simply 
        rhetorical, and has certainly not been completed, but offers 
        the possibility of another approach to the problem.
   Can we increase the number of troops trained in other 
        countries, such as France, Jordan, and Egypt? Or will these 
        countries provide training only if the cost is picked up by the 
        United States? Iraq now has at least 10 major training 
        facilities, the better part of a training brigade, special 
        skill training elements/schools, and countless ranges, shooting 
        houses, and other training facilities--and they prefer to train 
        their troops at home, as it's cheaper, done by Iraqis, and 
        avoids expensive/dangerous movements.
          There already are typically well over 3,200 Iraqis out of 
        country in training at any given time. Iraqis are taking 
        advantage of training offers that are fully funded and provide 
        the training they really want and can't do for themselves yet, 
        such as the German training of Iraqi engineer unit cadre and 
        trainers, which now train Iraqis at Tadji in the UAE. They have 
        other individuals all over the world in short and long courses. 
        But the movement of large elements is costly, difficult, and 
        time-consuming to the Iraqis.
          The United States can always push for additional increases, 
        and might have limited success (probably only token). The end 
        result in terms of problems in interoperability and men simply 
        seeking good foreign assignments might, however, outweigh any 
        benefits. Any apparent cost savings would probably be mythical 
        in the case of Egypt or Jordan; they would end up being paid 
        for by other aspects of U.S. foreign aid.
   Will we be diverting training assets in Egypt and Jordan 
        that would be better devoted to training Palestinian security 
        forces? The Jordanian training facilities are operating now at 
        essentially full capacity. Egyptian capabilities require on-
        the-scene study.
   Should we put more emphasis on training Iraqi military 
        officers in the United States in an effort to create 
        professional military leadership? The MNF-I and MNSTC-I are 
        pushing hard to create lasting institutions in Iraq. These 
        programs are having considerable success acquiring Iraqi 
        instructors, and being tailored to local combat conditions. It 
        is always valuable to train cadres in the United States to 
        ensure that foreign military officers understand U.S. concepts 
        and values, but this seems a doubtful way of having much impact 
        on Iraq's near-term force capabilities. Some limited amounts of 
        training are being accomplished in various elements of the U.S. 
        professional military education and training system, but the 
        effects of such training may not be felt for years.

Option 4--Should the President change the force structure of the U.S. 
        presence in Iraq?
    If the President has the magic wand necessary to create new forces, 
and is willing to ignore the impact on our All-Volunteer Force 
structure of increasing deployments, he should make three immediate 
changes in the U.S. force posture in Iraq. First, he should deploy far 
more military specialists in civil-military and counterinsurgency 
operations with suitable language and area skills. Second, he should 
extend all tours for the duration so that U.S. troops acquire real 
operational expertise and establish stable and lasting personal 
relations with Iraqis. And third, he should supplement the U.S. 
military with large numbers of skilled and highly motivated civilian 
counterparts to handle the wide range of civil missions in the field 
that are now badly undermanned or handled by the U.S. military. U.S. 
commanders in Iraq have every reason to ask why other agencies do not 
provide the civilians need to support many types of operations, and 
``Where is the rest of the U.S. Government?''

   Do we have the right number and types of troops in Iraq? 
        Unless we can suddenly create far more forces of the kind we 
        need, the number seems adequate. The problem is more force 
        quality than force quantity. As is suggested above, we have 
        serious limitations because we started this war with a global 
        force structure oriented for conventional war. The need for 
        change has been recognized, at least in some quarters. Change, 
        however, takes time, and must be made with caution. The U.S. 
        Army is already reorganizing and serious efforts are underway 
        to create more deployable forces with the necessary training 
        and area and language skills. These, however, will probably 
        take several more years to have a major impact. (Note.--You 
        really don't answer the question about the number; you do well 
        with the types.)
   In the short run, should the United States increase the 
        number of troops in Iraq to provide greater security in support 
        of critical political milestones, such as the writing of the 
        Constitution, the October constitutional referendum, and the 
        December 2005 elections? The commander of MNF-I should have 
        this flexibility. There should, however, be a clearly apparent 
        need for such action and one that the Iraqi Government and 
        Iraqis clearly recognize and accept. Significant additional 
        mission-capable Iraqi forces should be available by this fall 
        and winter. Wherever possible, Iraqi forces are what Iraqis 
        should see protecting them.
   Would an increase in U.S. troops have a discernable impact 
        on security? The problem with this question is that it ignores 
        the quality, expertise, and motivation of the U.S. troops 
        involved. Having more highly motivated and expert U.S. troops 
        deployed in areas with limited political visibility and impact 
        would always be desirable. The United States can always surge 
        troops for specific needs by altering rotation rates or using 
        the theater reserve. Short of a magic wand, however, it is not 
        clear where the United States could get enough of the right 
        kind of troops to make a major increase on a long-term basis 
        that would provide major new mission capabilities, or how it 
        could deploy large numbers in time to be effective without 
        seriously affecting the length of deployments and future 
        integrity of an All-Volunteer Force.
   Would it upset Iraqi public opinion? Or should we begin 
        drawing down some forces based on the presumption that the U.S. 
        troop presence fuels the insurgents and undergirds their 
        propaganda? We need to emphasize Iraqi forces, not U.S. Forces, 
        but we also need to understand that it is the visibility and 
        actions of U.S. Forces, not just numbers, that affect Iraqi 
        resentments. No coalition presence will ever be acceptable to 
        true hardliners, whether they are Sunnis or 
        Shi'ites like Sadr.

                        PERSONAL RECOMMENDATIONS

    My personal priorities and recommendations have already been 
addressed above, but there are several points that may be worth 
stressing. If Iraqi military, security, and police forces are to be 
created at anything like the levels of strength and competence that are 
required, the United States needs to take--or reinforce--the following 
steps:
 United States and Coalition Policy Priorities
   Accept the fact that success in Iraq is dependent on the 
        ability to create effective counterinsurgency forces in the 
        Iraqi police and military forces as soon as possible, and that 
        this is a top priority mission. U.S. and other coalition forces 
        can win every clash and encounter and still decisively lose the 
        war after the war.
   Make it fully clear to the Iraqi people and the world that 
        the United States and its allies recognize that Iraqis must 
        replace U.S. and coalition forces in ``visibility'' and 
        eventually take over almost all missions.
   Keep reiterating that the United States and its key allies 
        will set no deadlines for withdrawal--or fixed limits on its 
        military effort--and will support Iraq until it is ready to 
        take over the mission and the insurgents are largely defeated.
   Fully implement plans to strengthen Iraqi forces with large 
        numbers of U.S. transition teams as soon as possible, but 
        clearly plan to phase out the teams and eliminate Iraqi 
        dependence on them as soon as is practicable.
   Keep constant pressure on the Iraqi Government to improve 
        its effectiveness at the central, regional, and local level in 
        supporting Iraqi forces and in providing aid and governance 
        efforts that match the deployment and mission priorities of the 
        security and police forces. (This is an area where the rest of 
        the U.S. Government truly needs to help, particularly with 
        developing the ministerial capabilities needed to complement 
        our successes with the military and police.) Push the Iraqi 
        Government toward unified and timely action toward promoting 
        competence and removing incompetent personnel.
   Make the supporting economic aid effort as relevant to the 
        counterinsurgency campaign as possible, and link it to the 
        development of Iraqi Goverment and security activity effort in 
        the field. The aid effort must become vastly more effective in 
        insurgent and high threat areas. One of the most senior 
        officers pointed out as early as mid-2003 that, ``Dollars are 
        more effective than bullets. Physical security is only a 
        prelude to economic security.''
   Take a much harder look at the problems in Iraqi governance 
        at the central, regional, and local level. Force the issue in 
        ensuring suitable Iraqi Government coordination, 
        responsiveness, and action. Tie aid carefully to the reality of 
        Iraqi Government civil efforts to put government in the field 
        and follow up military action with effective governance.
   Make it clear that the United States and Britain will not 
        maintain post-insurgency bases in Iraq, and that they will stay 
        only as long as the Iraqi Government requests and needs their 
        support.
   Accept the need for a true partnership with the Iraqis and 
        give them the lead and ability to take command decisions at the 
        national, regional, and local levels as soon as they are ready. 
        Make nation building real. Some work already being done with 
        this with the Provincial Support Teams and the Provincial 
        Reconstruction and Development Councils.
   Accept the reality that the United States cannot find 
        proxies to do its work for it. NATO may provide helpful aid in 
        training, but will not provide major aid or training on the 
        required scale. Other countries may provide politically useful 
        contingents, but United States, British, and Iraqi forces must 
        take all major action. Continue efforts to build coalition 
        support, but don't provoke needless confrontations with allies 
        or other countries over levels of troops and training aid that 
        the United States simply will not get. Concentrate on the 
        mission at hand. [For a discussion of the futility of placing 
        too much emphasis on NATO, see ``NATO Fails to Agree on Iraq 
        Training Mission,'' Washington Post, July 29, 2004, p. A18.]
Priorities for Iraqi Force Development
   Continue pressure on the government to be as inclusive as 
        possible in every activity, to find some inclusive and federal 
        approach to draft the new Constitution, to keep the Iraqi 
        forces and civil service ``national'' and avoid purges of any 
        kind, and do everything possible to avoid the risk of 
        escalating to civil war.
   Prepare and execute a transition plan to help the new Iraqi 
        Government that emerged out of the January 30, 2005, elections 
        understand the true security priorities in the country, and 
        ensure it acts as effectively as possible in developing 
        effective governance and efforts to create Iraqi forces. Create 
        an effective transition plan for the December 2005 elections.
   Resist U.S. and Iraqi Government efforts to rush force 
        development in ways that emphasize quantity over quality, and 
        continue the focus on leadership, creating effective units, and 
        ensuring that training and equipment are adequate to the task.
   Continue efforts to ensure that the ethnic and religious 
        makeup of all facets of the Iraqi military and security forces 
        are ethnically and religiously diverse to prevent any one group 
        or religion from feeling persecuted by the rest.
   Continue the development of Iraqi military and police forces 
        that can stand on their own and largely or fully replace 
        coalition forces as independent units. In particular, continue 
        development of the combat support and combat service support 
        forces that will enable Iraqi operations following the 
        departure of coalition forces, including transportation, 
        supply, military intelligence, military police, etc. Give Iraqi 
        military and police forces the equipment and facilities they 
        need to take on insurgents without U.S. or other support and 
        reinforcement.
   Ensure that the ``defeat'' of criminal elements receives 
        high priority. Make creating an effective police and security 
        presence in Iraqi populated areas a critical part of the effort 
        to develop effective governance.
   Pay careful attention to the integration of the former Iraqi 
        National Guard into the Iraqi Army. Careless integration risks 
        creating a force that is larger, but not effective. This cannot 
        be dealt with by treating the merger simply as a name change.
   Focus on the importance of political security. Security for 
        both Iraqi governance and Iraqi elections must come as soon and 
        as much as possible from Iraqi forces. Iraqi forces will not be 
        ready to undertake such missions throughout the country through 
        mid-2005 and probably well into 2006, but they are able now to 
        have local and regional impact. Wherever they are operating, 
        they must be given the highest possible visibility in the roles 
        where they are most needed. Careful planning will let them 
        contribute significantly to the success of the constitutional 
        referendum in October and to the full national election at the 
        end of 2005.
   Create command, communications, and intelligence systems 
        that can tie together the Iraqi, United States, and British 
        efforts, and that will give the new Iraqi Government and forces 
        the capability they need once the United States leaves.
   Carefully review U.S. military doctrine and guidance in the 
        field to ensure that Iraqi forces get full force protection 
        from U.S. commanders, and suitable support, and that U.S. 
        forces actively work with, and encourage, Iraqi units as they 
        develop and deploy.
   Further develop the Iraqis' ability to engage in public 
        affairs and strategic communications. Make sure that Iraqi 
        information is briefed by Iraqis, and not by coalition 
        spokesmen.
   Reexamine the present equipment and facilities program to 
        see if it will give all elements of Iraqi forces the level of 
        weapons, communications, protection, and armor necessary to 
        function effectively in a terrorist/insurgent environment. 
        Ensure a proper match between training, equipment, facilities, 
        and U.S. support in force protection.
   Encourage the Iraqi Government to provide reporting on Iraqi 
        casualties, and provide U.S. reporting on Iraqi casualties and 
        not simply U.S. and coalition forces. Fully report on the Iraqi 
        as well as the U.S. role in press reports and briefings. Treat 
        the Iraqis as true partners and give their sacrifices the 
        recognition they deserve.

    Finally, it is not enough to do the right things; the United States 
must also be seen to do the right things. This means the United States 
and its allies need to develop not only a comprehensive strategy for 
Iraq that ties together all of the efforts to improve Iraqi forces 
described above, but also a strategy that can publicly and convincingly 
show Iraq, the region, and the world that the United States is 
committed to the kind of political, economic, and security development 
that the Iraqi people want and need.
    U.S. public diplomacy tends to make broad ideological statements 
based on American values. It tends to deal in slogans, and be 
``ethnocentric'' to put it mildly. What Iraqis need is something very 
different. It is confidence that the United States now has plans to 
respond to what they want. They need to see that the United States is 
tangibly committed to achieving success in Iraq, and not an ``exit 
strategy'' or the kind of continuing presence that serves American and 
not Iraqi interests.
    This means issuing public U.S. plans for continued economic and 
security aid that clearly give the Iraqi Government decisionmaking 
authority, and administrative and execution authority wherever 
possible. It means a commitment to expanding the role of the United 
Nations and other countries where possible, and to working with key 
allies in some form of contact group. It also means providing 
benchmarks and reports on progress that show Iraqis a convincing and 
honest picture of what the United States had done and is doing; not the 
kind of shallow ``spin'' that dominates far too much of what the U.S. 
Goverment says in public.
    Another key to success is to have a public strategy that formally 
commits the United States in ways that, at least, defuse many of the 
conspiracy theories that still shape Iraqi public opinion, and the 
private views of many senior Iraqi officials and officers. The United 
States can scarcely address every conspiracy theory. Their number is 
legion and constantly growing. It can and must address the ones that 
really matter.
    There are three essential elements that U.S. and coalition public 
diplomacy must have to be convincing:

   Make it unambiguously clear that the United States fully 
        respects Iraqi sovereignty, and that it will leave if any 
        freely elected Iraqi Government asks it to leave, or alter its 
        role and presence in accordance with Iraqi views.
   Make it equally clear that the United States has no 
        intention to dominate or exploit any part of the Iraqi economy, 
        and will support Iraq in renovating and expanding its petroleum 
        industry in accordance with Iraqi plans and on the basis of 
        supporting Iraqi exports on a globally competitive basis that 
        maximizes revenues to Iraq.
   Finally, make it clear that the United States will phase 
        down troops as soon as the Iraqi Government finds this 
        desirable, and will sustain the kind of advisory and aid 
        mission necessary to rebuild Iraqi forces to the point where 
        they can independently defend Iraq, but will not seek permanent 
        military bases in Iraq.

    This latter point is not a casual issue. Nothing could be worse 
than trying to maintain bases in a country with Iraq's past and where 
the people do not want them. Virtually from the start of the U.S. 
invasion, Iraqis have been deeply concerned about ``permanent bases.'' 
Yet even some of the most senior Iraqi officials and officers have 
privately expressed the view that the United States was seeking to 
create some 4 to 18 such bases.

    The Chairman. Thank you very much, Dr. Cordesman.
    Let me raise a second area for our discussion, and in this 
case I am going to ask you, General McCaffrey, for the first 
comment, then Dr. Cordesman, and then Dr. Pollack. Could the 
United States successfully press its allies to increase aid and 
provide manpower to protect Iraq's borders and prevent foreign 
infiltration? Is there a reasonable prospect that allied or 
friendly governments would agree to increase their military 
participation for this purpose, which is perceived as less 
dangerous than patrolling Iraqi hot spots?
    What would the United States have to do to convince allies 
to participate in this manner, and would this free up 
significant numbers of U.S. troops for other duties or would 
the gains be insignificant? Can foreign infiltration of Iraq be 
stopped by enhancing border security, and if foreign 
infiltration of Iraq could be stopped or slowed significantly, 
how much impact would that have ultimately on the insurgency?
    General McCaffrey, would you comment on this area of 
consideration?
    General McCaffrey. Senator, it seems to me there is no 
question that having allies active, with robust rules of 
engagement, with strong political backing, who bring their own 
resources, would be a vital addition to this struggle, 
certainly to garb ourselves in legitimacy of a broader mandate, 
to have U.N. support. All of this would be to the good.
    I personally believe the misjudgments of the first year, 
actually, will prevent us ever getting significant support out 
of any of our major allies--the Japanese, Western Europe, Latin 
America. It is just not going to happen. No one in their right 
mind would step into this mess this late in the game.
    I think most of our coalition--and although I am grateful 
and respectful of their individual sacrifice, the soldiers on 
the ground--I think they bring little to bear on the problem, 
with the exception of these terrific British forces. The rest 
of them do not make much impact in the situation. Some of them 
are a positive drawback. I mean, these--and I am sympathetic to 
the Japanese Self-Defense Force problems, but they literally 
have to be guarded while they are in Iraq.
    It is not going to happen. We are just not going to get 
people to come in and establish security on the borders, or 
even to put significant training resources into Iraq. Now, I 
also think that the few hundred people crossing the border, 
many of them out of Syria, bunches of people coming in out of 
Iran, massive movement cross-border, intelligence operatives, 
political operatives, et cetera, and certainly the Saudi border 
is completely unguarded--we can attempt to establish an Iraqi 
border presence. The Marines are doing that right now, trying 
to put back in all the posts that were rolled up.
    But that is not going to stop small determined numbers of 
people from entering to become jihadists. I also think it's 
fairly transparent that we do not have, unlike Vietnam, an 
external enemy who has to move munitions and money and 
leadership and training bases and sanctuary. That is not what 
we are dealing with. Poor Iraq may have had 900,000 metric tons 
of munitions scattered from one end of this country to another. 
Every farmer now has a hundred 155 artillery shells buried in 
the back yard. They are all carrying automatic weapons.
    So I do not think our problem is external. Our problem is 
internal. I really endorse, fully endorse, the comments of Dr. 
Cordesman along those lines.
    Now, I would also suggest to you--and this is sort of a 
parallel observation--the foreign jihadists who come to Iraq 
get killed in Iraq and fairly rapidly. I think many of them 
find, to their horror, that they came to get war stories to go 
back to Kuwait or Algeria and find out they have been 
volunteered to be a human bomb.
    Those attacks in the short run are going to be a problem 
for the insurgency. It is going to, in my judgment, add 
legitimacy to a viewpoint by the Iraqi people that they need 
the police and the army to protect them.
    I think the other thing that struck me as a major 
shortcoming of our so-called allies, what we lack is political 
and economic significant support in the Arab world, and in 
particular, from Sunni Muslim governments. Where are the 
Egyptians, the Saudis, the Kuwaitis, to come in and tell this 
minority, 20 percent of Iraq, who are most of the violence we 
are facing, most of the political opposition, and for them to 
enter and say: It is okay, cooperate; we will back you up, but 
we want you to get into the government. Where are the public 
visits of the Saudi Foreign Minister and the chief of the armed 
forces and others that would come in and say: Look, we are 
going to try and help you. Never mind significant economic 
investment on the order of $5 billion a month from the 
surrounding oil powers.
    So again, I think one thing we have been remiss in the 
first 2 years of the intervention was some maladroit diplomatic 
support for some very brave U.S. military efforts. But I think 
the rhetoric of old Europe and the rhetoric really of saying 
that the military contributions are insignificant and, 
therefore, the political contributions follow, has led us to a 
situation in which it is unlikely that our allies are going to 
play a serious role in this. And if we put the attention 
anywhere, it ought to be among the Islamic world: Stand with 
us, create a new state.
    But those six surrounding nations, not a one of them has 
the best interests of a law-based democratic Iraq at heart.
    The Chairman. Dr. Cordesman.
    Dr. Cordesman. I think that General McCaffrey has raised 
the key issues here. I was stationed in Iran. I spent, I guess, 
20 or 30 visits to Iraq during the Iran-Iraq war and previous 
years. I have been along the Saudi border and the Syrian border 
in the past. Frankly, I think the idea that you can secure 
those borders against the level of infiltration that takes 
place today, which is largely simply young men coming in as 
volunteers, plus limited numbers of sniper rifles, and a few 
night-vision devices is unworkable. Nobody has ever been able 
to secure those borders against smuggling and the idea that 
U.S. or foreign troops are going to somehow stop everybody who 
is a foreign young man who comes in through the trade routes or 
the legitimate lines of communication, or stop gear from being 
smuggled in on any border, strikes me as unrealistic.
    Right now you have a reasonable number of border forts 
under construction. Looking at what it is going to take to 
train the border police for the Iraqis, my guess is that it is 
a minimum of a year, before enough will be ready. However, if 
it is not Iraqis working with Iraqis--and corruption will be a 
constant problem even then--having foreign troops wander 
through various Iraqi villages and lines of communication near 
the border is going to make people angry without really 
accomplishing a great deal.
    It also does not take many outsider volunteers to sustain 
the threat. I heard different figures when I was in Iraq. But 
out of the detainees, there seem to be about 600 to 700 
foreigners out of over 15,000 Iraqis. If that is the case, the 
problem is not really foreign terrorists. It is rather that we 
have a serious problem with Iraqi insurgency, although it is 
quite clear that foreign young men are being recruited and used 
basically as bomb detonation devices.
    The other caution I would give you is, if you do not have 
those foreign young men, is it all that much harder to place 
bombs that do not use a human being to commit suicide in the 
same areas in the same attacks, simply using remote detonators 
or other devices? The answer is probably not. It may not have 
the same political impact to Islamists, but it is not going to 
solve the problem.
    I think at this point the only way that we could get more 
troops to perform this kind of mission would be a coalition of 
the mercenary or a coalition of the pressured, and frankly, I 
think the mission is not the one that I believe we should put 
effort into. I think it is far more--if we are going to put 
pressure on our allies, what do we want? Well, we'd like to see 
more debt forgiveness. We would like to see a forgiveness of 
reparations. There are lots of economic and other concessions 
and forms of aid which would be more important than getting 
token border defense contributions.
    It would be more useful to have people training the Iraqi 
border force with the numbers we are likely to get than it 
would be to put a few people on a few border forts. External 
pressure to try to get more Syrian cooperation may or may not 
work. Certainly, working with the Saudis, who have a physical 
problem simply in securing the border, would be an issue. We 
cannot talk to Iran, but we might wish to have Britain or 
others talk to Iran and clarify a lot of the uncertainties 
about infiltration on that border.
    Without getting into detail that I do not think is 
appropriate this morning, the problems we have with Turkey 
along the Turkish border are such where we might wish to see if 
there is some way, at least, to establish a better relationship 
between them, the Kurds, the Iraqis, and ourselves than exists 
today. But those only illustrate the kind of problems that 
General McCaffrey raised. Each of the neighbors is an issue, 
not just the border.
    Thank you.
    The Chairman. Thank you, Dr. Cordesman.
    Dr. Pollack.
    Dr. Pollack. Thank you, Mr. Chairman.
    Let me begin by saying that I largely agree with both 
General McCaffrey and Dr. Cordesman on this issue as well. I 
think that the claims that shutting down the border with Syria 
or with other countries--most of the information that I have 
seen indicates that, in fact, infiltration from Saudi Arabia is 
at least as great, if not a greater, problem than infiltration 
from Syria, but that closing down those borders is a little bit 
like shutting the barn door after the bull has left the stable, 
the horse has left the stable.
    It assumes that Iraq's insurgency is largely a foreign-
inspired movement, which our intelligence has repeatedly shown 
it not to be. It is overwhelmingly homegrown. Anecdotal reports 
that I have heard from Iraqis indicate that that foreign 
element, even though we make a great deal of it, is actually 
less important now than it was 2 years ago. Two years ago the 
Iraqis did not know how to mount insurgent or terrorist 
operations and were heavily dependent on foreign jihadists to 
show them how to do things--how to make bombs, how to set up 
IEDs, how to set up operational plans and do everything else 
for themselves. Today they have internalized most of those 
lessons and they are increasingly less dependent on foreigners 
for the know-how.
    Likewise, we tend to blame foreigners for most of the 
suicide attacks, but there is increasing amounts of information 
to suggest that even those are increasingly being committed by 
Iraqis themselves.
    So shutting down the borders would obviously be nice. It 
certainly could not hurt, but I do not think it is going to 
solve the problems that we have in Iraq.
    If we would like to garner additional support on the 
borders, I certainly think that there are some things that we 
can do. But again, even these are going to be modest, and again 
we should keep in mind the overarching point which I think all 
three of us have made, which is that the borders are not the 
real problem in terms of security in Iraq.
    One solution, one idea that we might try, is a contact 
group involving Iraq's neighbors. One of the claims that we 
have repeatedly heard from our allies--from the Turks, the 
Jordanians, the Saudis, and the Kuwaitis--is that they do not 
feel that they have enough of a say in Iraqi reconstruction and 
in political and economic developments, let alone security 
developments, inside the country. We might create a constant 
contact group at which all of Iraq's neighbors would be 
participating, along with the Iraqis and ourselves, and we 
would, at least, give them the opportunity to receive regular 
briefings on developments inside Iraq and provide a regular 
forum at which they could express their views.
    They would have to understand that this would be a purely 
advisory function and we and the Iraqis would not be compelled 
to accept their advice. But nevertheless, it would give them a 
sounding board. My own experience in the U.S. Government, both 
at the CIA and at the White House, has demonstrated to me that 
oftentimes just allowing our allies a say in the matter can be 
very helpful in securing some additional support from them.
    I will also say that I tend to agree with General 
McCaffrey's opening statement that because of the way that we 
handled both the war and the immediate reconstruction projects, 
I think it very unlikely that we are going to get major 
contributions from our allies.
    That said, I certainly think that it is possible to get 
more and I think that we certainly ought to try to get more. 
For me, this comes back to the central question of security 
that we have been dealing with. I think it unlikely that we are 
going to get large foreign contingents of ground troops. I just 
do not see that in the cards. Many of our most enthusiastic 
allies do not have the forces to send and those that do seem to 
be most reluctant to actually commit them.
    What we could conceivably get, and what we have been 
notably lacking, are personnel with the know-how to deal with 
the political and economic circumstances of reconstruction. 
Before the war I had the opportunity to go and speak with the 
352nd and 354th Military Civil Affairs Battalions, located out 
here in Maryland, who are the ones who are the point of the 
spear in terms of heading up the civilian economic 
reconstruction efforts on the part of the military in Iraq. 
Before they went in I spent an afternoon with them to try to 
help them understand the problems that they were likely to face 
in Iraq.
    One thing I heard continually from their officers was: Are 
we going to have the United Nations with us? Because what they 
said was: When we were in Bosnia, we did not do development, we 
did not do reconstruction; we guarded the people who were 
actually doing the development and reconstruction. The people 
who were doing development and reconstruction were led by the 
UNDP, who could pull in enormous numbers of people with the 
requisite skills and experience from around the world who knew 
how to do these things.
    Those people are notably lacking in Iraq and in many 
circumstances our own forces and our own personnel are being 
forced to learn on the job, and in some cases they have done 
brilliantly, in other cases less so. But across the board there 
are simply too few of them.
    Now, those skills are out there. There are more personnel 
in the world who have those skills and could be very helpful in 
Iraq. But they will not come because of the security situation.
    I will very respectfully disagree entirely with my good 
friend Dr. Cordesman's comments earlier about the ability to 
create safe zones in Iraq. It is possible. We have done it in 
Iraq. We have done it elsewhere. Other nations have done so, as 
well. But it is about making the security of the Iraqi people 
and their populated areas the first priority, something that we 
have notably failed to do in Iraq. As a result the cities are 
not safe and we cannot get foreigners to come to Iraq and to 
participate in the process.
    As a final point, let me add that we have all been talking 
a great deal about the legitimacy of the Iraqi political 
process and I, absolutely, 100 percent, agree with both General 
McCaffrey and Dr. Cordesman. What I would suggest, though, is 
that when you talk to Iraqis their ideas about legitimacy are 
less rooted in what we look at. They are not really interested, 
to tell you the truth, in what that constitution has to say. 
For them the legitimacy of this government is all about its 
ability to deliver on basic security, electricity, clean water, 
sanitation, jobs, and the other necessities of life. That is 
what they have continuously looked both to us and to these new 
Iraqi governments which we have successively put in place to 
deliver. The legitimacy, which is absolutely critical for 
success, is all about security, because the only way that the 
Iraqis are going to get those things is if their urban areas 
and their infrastructure is secure, and it is entirely within 
our ability to provide security for, at least, parts of Iraq, 
in fact, major parts of Iraq.
    The Chairman. Thank you very much, doctor.
    We will have a third area of discussion. On this occasion I 
am going to ask Dr. Cordesman to make the first comment, to be 
followed by Dr. Pollack and then by General McCaffrey. Should 
the United States reprioritize the training schedule of Iraqi 
forces and support more training in other countries? Are Iraqi 
troops being deployed before they are ready in an attempt to 
demonstrate progress? Should there be more gradual training 
schedules to allow Iraqi units to develop greater cohesion and 
capabilities before exposing them to hostilities? Should the 
number of Iraqi security forces be increased by integrating the 
Badr Brigade, an anti-Saddam Shi'a militia group, the Pesh 
Merga, the Kurdish forces, or other local militias into the 
Iraqi Army or the National Guard? Would the political 
ramifications of such integration outweigh the security 
benefits?
    Can we increase the number of troops trained in other 
countries, such as France, Jordan, and Egypt, or will those 
countries provide training only if the cost is picked up by the 
United States? And would we be diverting training assets in 
Egypt and Jordan that would better be devoted to training 
Palestinian security forces? Should we put more emphasis on 
training Iraqi military officers perhaps in the United States, 
in an effort to create professional military leadership?
    Dr. Cordesman, would you begin our discussion on these 
issues of security training?
    Dr. Cordesman. Senator, if you had asked me this question a 
year ago I think I would have said that we had failed to ever 
begin. At that point in time we had actually more people being 
reported as being in the Iraqi police, military, and security 
forces than we have today but we only had one battalion worth 
of Iraqi forces actually in service in the army and no 
battalion equivalents being deployed.
    But, things have changed. A lot of reference has been made 
to General Petraeus. I think that you could give the same 
praise to the people under him at almost every level. I think 
it is important to give it to General Abizaid and to General 
Casey, and certainly to the missions that visited Iraqi under 
both General Ikenberry and under General Luck, because a lot 
has changed.
    When we look at Iraqi force strength as of May 2005, we had 
put a great deal of emphasis on getting battalion-level 
elements ready and in some form where they could perform 
missions. You now had, counting the National Guard, 81 
battalions, not one.
    Now, many of those were not fully ready. You only had 1 out 
of 26 brigades with an operating headquarters. There was not 
combat or service support. But to put forces in the field who 
could establish a presence and move toward some kind of 
security in urban and other areas was a tremendous change. And 
if you threw in the special police units, which to me are much 
more critical in urban security and in providing the kind of 
counterinsurgency efforts needed to establish security in 
stable areas than the Iraqi Army or United States or foreign 
troops, the number went up to 101 battalions.
    The problem--and here I have to say Senator Biden is 
correct in raising the issue--is those numbers are impressive, 
but their readiness is still so low that it is going to take 
between 1 year and 2 years to bring to the kind of levels we 
need and probably 6 months to a year to really get to the kind 
of levels where major coalition reductions would be possible.
    Out of those 101 battalions, the top level of readiness, 
which is the ability to operate on their own, only applied to 
5. If you look at the other units involved--and all of them 
could do something--only about 40 percent were capable of 
performing the kind of missions where they could provide rear 
area security, where they could provide the kind of stability, 
the political structures, economic structures, that were really 
needed.
    That is still, however, a tremendous improvement, and I 
have broken out the details in the testimony I have given. The 
systems involved are too new to make some clear projections, 
but my guess is that by the end of this year, if this works, 
then you will have enough troops in some of the urban areas so 
you can get security.
    Now, let me note that the ability to make this work is 
again political. For example, there are two councils and, 
effectively two mayors, operating in Baghdad. In Basra, even 
though you had a Shiite group that was the alliance dominate, 
the actual local government in Basra is essentially a Shiite 
Islamist government which is basically bypassing at this point 
much of the police force. In Mosul you have major security 
divisions along very clear lines and to move police in is only 
gradually beginning to happen.
    So this is a political issue, not just a military one. Let 
me be a little more specific about your questions. Are Iraqi 
forces being deployed before they are ready in an attempt to 
demonstrate progress? No. But they are being deployed before 
they are combat-ready. The system General Luck recommended was 
to put 10-man training teams into each battalion and each major 
combat and service support element to have those units help 
develop leaders, to work to develop each unit, so the leaders 
that stay are the leaders who can lead, and to take the 
reality, which is many of the people we recruit are not people 
who are going to stay, and build up the units with the people 
who will stay so they actually can come on line as effective 
forces.
    No amount of training in the rear, no amount of exercises, 
is going to create effective Iraqi forces. If you wait for 
everybody to have dotted all of the i's on some theoretical 
checklist, you are basically going to end up with no real 
capability and a tremendous waste of time.
    Should a more gradual training schedule to develop Iraqi 
units, to develop greater cohesion and capabilities, be 
adopted? No. Frankly, the schedule you have is about as 
effective as it is going to be. The truth is that the 
recruiting structure, even though it has been greatly improved, 
is always going to have a very high rate of attrition. So is 
the leadership structure. You are going to have to put these 
people gradually into different missions, raise them up to the 
point where they can operate on their own, from the less 
demanding to the more demanding missions. This is not something 
where people can sit around in a base and be trained.
    Should the number of Iraqi security forces be increased by 
integrating the Badr Brigade, the Pesh Merga, and other local 
militias? A lot of that, to the extent that it is going to 
happen, has happened. It is already a serious problem in terms 
of the Badr Corps, not the Badr Brigade. Fortunately, the Badr 
Corps seems to be more interested in politics now than any kind 
of military adventures. But it is already seen as a force which 
is operating against the Sunnis as a potential cause of civil 
war.
    Taking these units and putting them into the Iraqi police 
or army on any terms acceptable to them is simply not a 
feasible solution. In the case of the Pesh Merga, some units 
are already operating. Others under the TAL agreement, which I 
think many people in Iraq as Iraqis still endorse, were to 
become the border security force as a way of preserving some 
kind of Kurdish force elements without having them be divided 
or creating divisive units. I think that nothing could be worse 
than trying to use these militias to solve a military problem 
at the cost of making the political problem worse. And having 
watched some of them in operation, I think that the idea that 
they are going to perform anything other than ethnic or 
sectarian missions is a dangerous illusion.
    Can we increase the number of troops trained in foreign 
countries? Sure, you can always do that at the margin. The 
problem is scale. Much of this would be on the so-what 
category. Okay, you can get a few more people trained here and 
there, maybe even several hundred or several thousand. But 
given the numbers involved, what you also get is a lot of 
people rotating in and out to foreign countries. It should not 
come as a surprise to the committee that the people who 
desperately want to go overseas for training, or outside Iraq, 
are not always among the most highly motivated of the forces. 
Nor does bringing them back always produce the best results. 
They have, actually, often a very serious rate of desertion 
after they are required to return.
    You have already got about 3,200 Iraqis training outside 
Iraq. I think that you need to be very careful about the idea 
that we can get any kind of scale that matters.
    Diverting training assets in Egypt and Jordan that should 
better be devoted to the training of Palestinian forces? I 
think you have done as much in Jordan as you possibly can 
already. There is not any surplus capacity to take on 
Palestinian forces at this point. Egyptian capabilities I 
cannot generalize on, but I think you need to be very careful 
about exactly what you are training the Palestinians to do.
    Finally, more emphasis on training Iraqi military officers 
in the United States in an effort to create military 
professional leadership. Let me go back. What we need are 
people who will stay in their units, lead in their units, who 
have the kind of experience to deal with the missions that need 
to be developed. It is true over time we need people to go to 
academies, to staff schools, to the equivalent of a national 
war college or defense university, but those people are not 
what we need most at this point in time. The kind of 
reorganization that has taken place in the MNF training effort 
and in the MNSTCI training effort is a lot more practical than 
sending people overseas, something that needs to be done 
constantly over time, but is not a way to win a 
counterinsurgency battle.
    Thank you.
    The Chairman. Thank you, doctor.
    Dr. Pollack.
    Dr. Pollack. Mr. Chairman, let me start by saying that I 
completely agree with Dr. Cordesman's comments, and I know also 
that General McCaffrey is going to spend a good deal of time 
also talking on the training program that we have. So let me 
confine my remarks to making a somewhat broader point.
    I think all three of us would agree that we now have in 
place, in fact, a very good training program for Iraqis. Again, 
I am sure that General McCaffrey will talk more about that. He 
may want to tweak it. But I think, overall, it is a good 
training program.
    Let me also say that while we are praising U.S. military 
officers for doing a good job and I heartily agree with the 
praise that has already been lavished on Generals Abizaid, 
Casey, and Petraeus, there is one other person who is worth 
mentioning, and I think that this is, for me, the crux of the 
problem with regard to training, and that is General Eton, who 
occupied the job that General Petraeus has before General 
Petraeus. I think that General Eton and his team also came up 
with a very good program, an initial program.
    The problem with the initial program, devised by General 
Eton and his team and the American coalition forces who were 
brought in to try to start things up, was political pressure, 
quite frankly. The word from Washington was: Generate more 
Iraqi battalions, get them on line because we desperately need 
manpower. And it was the short-circuiting of that original 
training program which caused the problems that we have now.
    Now, again, we have a new training program in place. I 
think it is a very good one. I think the main issue out there 
is allowing it to take its course. I completely agree with Tony 
Cordesman's point that training is a process and it is a 
process that is both formal and informal. There is training 
that has to go on in the barracks, there is training that has 
to go on in classrooms, there is training that has to go on in 
exercise fields. But there is also training that needs to go on 
in actual operations. It is a long process and we need to allow 
that process to develop.
    I think that Tony, again, correctly pointed out the 
distinction between troops that have some degree of readiness 
and those that are fully combat capable. We need to allow all 
of the Iraqi units to come up to full combat capability.
    I think the key question that we are all asking ourselves, 
and that is inherent in the entire nature of these hearings, is 
the question of how we get from here to there. I think we all 
agree that the long-term solution to security in Iraq is a 
fully capable Iraqi force that is capable of simultaneously 
dealing with the insurgency and providing law and order 
throughout the country. But we are not there yet, and it is 
unclear how long it is going to take.
    As I wrote in the New York Times a couple weeks ago, before 
he left General Petraeus took the opportunity to pull me aside 
at an event that he and I were both at, to try to drill home to 
me his feeling that it would take 3 to 5 years to stand up the 
Iraqi security forces that he needed to do the job. I still 
think that number is exactly right, and 3 years may actually be 
optimistic, looking at developments right now.
    So the question before us is how we get from here to there. 
I think that the big question for us is whether we have the 
right strategy now to get us to that point, at some point in 
the future, or do we need to start making changes.
    The Chairman. General McCaffrey.
    General McCaffrey. I do endorse the comments of Dr. 
Cordesman. In fact, one of the things I think that is unique 
about his work has been to painstakingly go through and get 
numbers that I trust. I have gotten to be a real skeptic about 
much of what I read unless I saw it myself on the ground.
    A couple of thoughts. First of all, there is no question 
that we have a huge responsibility to train and equip and 
design the right kind of Iraqi security forces. I am not sure 
the distinction between police commando battalions and army 
units is all that important. They tend to be light infantry 
units, hopefully with good intelligence, that have a will to 
fight.
    I think we are off an order of magnitude on the resources 
we have provided that effort. When Negroponte got in there he 
and Abizaid and Casey and Petraeus finally got it organized. It 
is starting to happen. I think the last number I saw was 3 
billion dollars' worth of material is coming in country. So you 
do see AK-47s, light radios, light trucks, some body armor, 22 
SWAT teams that have the same stuff as the NYPD. It is starting 
to move, there is no question.
    More has to be done. Some of them are long lead-time items. 
I would be astonished if we do not have a minimum right now as 
an example of 1,500 aircraft in country. We cannot leave unless 
there is an Iraqi helicopter mobility force. It takes a year to 
get some kid to fly a Blackhawk. We have got to buy them, and 
the price tags on those things are going to look monumental 
unless you compare it to the costs of staying in Iraq for 10 
years at $5 billion a month.
    But I see no foresight yet to get us up to the level of 
effort we need to create an ISF that will allow us to withdraw, 
and I think we need to push in that direction.
    I also have argued we have got to lock our senior military 
and political, diplomatic leadership and CIA into that war for 
the next 24 to 36 months. I have argued to the chairman of the 
JCS and others: Go get a compound in Kuwait and keep people 
like Petraeus there for 24 months. We are on the line. The 
State Department people are rotating in and out, 90 days, 180 
days. The most important people in this effort are not rifle 
company commanders. They are political officers in the U.S. 
Embassy and USAID people.
    Now, let me also, though, back off this issue. Train and 
equip; yes. The Iraqi military were the Germans of the Middle 
East. These are some of the most brutal, courageous people in 
uniform within a thousand miles of that country. They fought 7 
years of war against the Iranians. They took ferocious 
casualties. They fought the Brits, the Americans, the Saudis. 
They have conducted brutal internal counterinsurgency.
    We should not kid ourselves that--we are fighting, by the 
way, an insurgent force that is out of this minority of the 
Sunni population. I say there is probably 20,000 of them 
actively involved in taking shots at us, maybe as many as 
80,000 active sympathizers. Our problem is not organizing the 
Iraqi Armed Forces. It is creating the political conditions 
upon which these people think it is worth fighting and dying 
for: Either the provincial leadership, the urban leadership, 
the national leadership, religious leadership, or someone. That 
is why police and army fight and that is what has been lacking, 
and I think is now beginning to appear because of the January 
elections and so the general notion--and Sistani's leadership 
and others--many of the Shi'a, many of the Kurds, are 
grudgingly seeing a reason to create a federal security force, 
and that is starting to happen.
    Again, if the constitution, regardless of its final shape, 
creates Sunni inclusion in the government, I think we will see 
more reaction.
    I would also suggest to you that--and I think I may be a 
lone voice on this one--when we said we are going to disarm the 
militias, the Pesh Merga need to go away, it struck me as the 
height of naivete. Why would anybody in their right mind in the 
Kurdish leadership agree to disarm and throw their future in 
the hands of a federal Iraqi State is beyond me. Why would the 
Shi'a, who got slaughtered by the hundreds of thousands--300,00 
Shi'a dead, maybe 180,000 Kurds, out of the Iraqi Sunni 
dictatorship. Why would either group disarm?
    So my own notion is we ought to recognize that there is a 
place for them, certainly in countercriminal operations, 
counterinsurgency in their own regions. Maybe they ought to be 
in the national uniform. But we should not expect that the 
Iraqis, at any level, will or should voluntarily disarm.
    Nor should we, in my view, expect that in the short run we 
are going to get a Sunni police battalion to go into Ramadi on 
its own and conduct active intelligent counterinsurgency 
operations. It will not happen until they think the Sunnis are 
in the political process.
    Finally on the training notion, in country, out of country. 
I watched this process in Afghanistan also with great interest. 
I think the single most effective thing is John Abizaid and 
George Casey and Petraeus have put these training teams inside 
Iraqi battalions. A lot of them are Marine and Army Reservists 
and National Guard. A Utah State Police, Marine major I talked 
to--it is not surprising to me they immediately fall in love 
with the people they are training. They are happy they are 
there. They have a huge sense of courage to stay out there and 
live out there with these unknown foreign units. They are 
starting to have an impact.
    I have had a lot of conversations in small groups with 
Iraqi officers--the leadership of an infantry battalion, two 
Republican Guard officers, a sergeant major with 14 years in 
the Hamurabi Division. The three of them told me: Hey, you gave 
us our chance, our lives are unimportant; we intend to seize on 
this and create a new Iraq. And I believe them. I might add 
when I say that, I started my Vietnam experience as an adviser 
with a Vietnamese airborne infantry battalion. I think it is 
actually taking hold.
    Now, the other thing Generals Abizaid and Casey have done 
is, they have put a U.S. Marine or Army battalion linked into 
each of these emerging army battalions. That is having a huge 
impact. I went up to the 1st of the 30th Infantry southeast of 
Tikrit. Their infantry battalion is collocated with them. They 
are actively out there, but the people kicking down the door--
and by the way, they are trying to teach them to knock on the 
door and ask for permission to enter. The entry forces are 
Iraqi, not United States Army. I think that is having an 
impact.
    Finally, I agree with Dr. Cordesman. We have got a limited 
number of fighters and people who are good leaders in that 
emerging Iraqi security force. The last thing we want to do is 
send them to Germany for the year course in how to be a police 
officer in Munich or to send them to West Point for 4 years to 
emerge with a balanced education.
    These people are in the same situation we were in 1941; 
250,000 troops to 16 million in the space of 36 months. The 
Iraqis have got to stay there and fight because I would argue 
by the end of next summer we are going to be halfway out of 
Iraq, and hopefully with a stabilizing backup force. But we are 
reaching end game.
    I went into Fallujah, an angry, ruined city, which I 
personally do not believe three-quarters of the population is 
back in there; 250,000 people? Come on. I saw 900 threatening 
looking males driving around the city. But when you get in 
there, the Iraqi police now are manning the checkpoints. The 
entry control points are Iraqis and the Marines are backing 
them up.
    Again, thank God for--and I think Dr. Cordesman is right. 
It is not just Petraeus. There is a lot of Army Reservists 
doing this also and Marine Reservists. They have got a huge 
sense of momentum going. But we need an infusion at a serious 
level of equipment and then we need to let the political 
process create legitimacy under which these Iraqi young people 
will fight.
    The Chairman. Thank you very much, General.
    Let me raise now a fourth area, and I will ask Dr. Pollack 
to initiate the dialog on that, and then General and Dr. 
Cordesman. Should the President of the United States change the 
force structure of the United States presence in Iraq? Do we 
have the right number and types of troops in Iraq now? In the 
short run, should the United States increase the number of 
troops in Iraq to provide greater security and support of 
critical political milestones, such as the writing of the 
constitution, the October constitutional referendum, the 
December 2005 elections?
    Would an increase in United States troops have a 
discernible impact on security? Would it upset Iraqi public 
opinion? Or should we begin drawing down some forces, based on 
the presumption that the United States troop presence fuels the 
insurgents and undergirds their propaganda?
    Dr. Pollack.
    Dr. Pollack. Thank you, Senator.
    Let me begin my response by starting with the end of your 
last question, because I think it is actually related as much 
to this one. This is the question of the militias in Iraq. I 
completely agree with Dr. Cordesman that the militias are not 
ready to go away, nor are they ready to be integrated into some 
larger force.
    This is part of the dilemma that we face in Iraq. The 
dilemma we face is that we have not created the circumstances 
in Iraq in which it is politically, economically, or militarily 
conceivable to do away with those militias. Frankly, those 
militias are very popular in many parts of Iraq because they 
are the only forces that are providing day-to-day security for 
the Iraqi people.
    In fact, what I have seen over the past year is the 
proliferation of militias throughout Iraq, and to a great 
extent you see all throughout Iraqi, local alims, local 
sheikhs, other figures who are gathering weaponry, gathering 
ammunition, and tapping personnel to say, if the balloon goes 
up, if civil war breaks out, will you be there to fight for the 
neighborhood, and putting together their own militias.
    This, I think, is a clear sign that the militias are not 
ready to go away because we have not yet solved the security 
problems of the country.
    Keeping simply the needs of Iraq in mind, moving from that 
to the bigger picture, would it be useful to have more troops 
in Iraq? Yes, it would be more useful to have more troops in 
Iraq. I think regardless of our strategy it would be more 
useful to have more troops in Iraq. I would argue that if we 
continue with the current strategy that we have been employing 
it is absolutely essential because, again, while it is the best 
solution to have Iraqis performing these missions for us, we 
are a long way from having the numbers of fully capable Iraqi 
forces who can do these things.
    The interim, the period between now and when we will have 
those forces available, is very important, because in that 
interim if things go awry the country could easily slide into 
the civil war that Senator Biden talked about in his opening 
statement. That civil war is on the minds of Iraqis. It is 
always in the back of their heads. It is something that they 
fear on a regular basis. It is one of the reasons why they 
continue to tolerate and, to some extent, are enthusiastic 
about our continuing presence, despite the fact that we 
continue to disappoint them in our inability to provide them 
with basic security and basic services.
    Strangely, I think that if we continue with our current 
strategy, it is absolutely essential to have more forces in 
Iraq and, in fact, it will require a massive infusion of 
troops, because, at present, we do not have the fully capable 
forces capable of both suppressing the insurgency, as we are 
attempting to do, and providing security for the Iraqi people, 
and only a massive increase in forces will allow us to do those 
two things simultaneously.
    The alternative which I have suggested, a true, a 
traditional counterinsurgency approach, a spreading inkspot, a 
spreading oil stain, would greatly benefit from more troops, 
but it is not essential. In point of fact, it is one of the 
reasons why I am increasingly drawn to this, because it is 
possible to begin this kind of a counterinsurgency strategy 
with a smaller contingent of forces. Certainly the contingent 
of forces that we have on hand, given the widespread support of 
reconstruction, is actually a very significant amount of forces 
and probably would allow us to start building an enclave, 
building safe zones, in a very significant chunk of the country 
already.
    But this is the whole point of a traditional 
counterinsurgency strategy. You start with only a portion of 
the country. You make it secure, you make people enthusiastic 
about it, and as you train additional indigenous forces that 
allows you to spread out and encompass ever-greater regions of 
the population.
    So it would certainly be useful to have more troops because 
the more troops that we have the larger the area that we could 
start off pacifying. But if we stick with our current strategy, 
as I said, I think it is absolutely critical that we do so.
    Now, let me come to the question that you raised at the end 
of your option, which is: Would it be counterproductive to 
increase American troop levels in Iraq? There I will say 
unequivocally ``No''; it would not. I think it is truly 
perverse to argue that the presence of American troops are 
actually causing the terrorist attacks and insurgency. This is 
simply false. The insurgents attack the Iraqis as much, if not 
more, than they attack American forces. As Dr. Cordesman 
pointed out, the insurgents believe that they are waging the 
beginning of a civil war.
    The removal of American forces would not eliminate the 
insurgency or the terrorist attacks. It would simply unleash 
that civil war.
    As for whether it would create greater animosity among 
Iraqis, here it is a little bit thornier. It is true that 
Iraqis resent, many Iraqis resent, our presence in the country. 
It is also true that some Iraqis simply have soured completely 
on our presence. I think that there truly are Iraqis who may 
have welcomed us in 2003 and today just want to see us go at 
all costs. But it has been my experience and reading the public 
opinions carefully--and I think you do have to read them very 
carefully because they are often very misleading--because 
oftentimes it is the only moment that Iraqis have to speak 
truth to power.
    But reading them carefully and listening to Iraqis on a 
regular basis, what I consistently hear from Iraqis is, if you 
start out asking them about the American presence they will say 
something along the lines of: Why do you not just leave? But if 
you push them hard, if you try to get beyond that initial 
point, what you typically hear from them is some version of: 
Actually, we do not want you to go at all; what we want is, we 
want you to actually do something for us; we want you to 
provide us with the security and the basic services that we 
have been clamoring for for 2 years and frankly what I think is 
perfectly reasonable for them to expect 2 years after the fall 
of Baghdad.
    I think that for the Iraqis an infusion of additional 
American or other coalition forces, if somehow we could find 
those troops, would grudgingly be accepted. In many quarters it 
would be welcomed. But it would only be welcomed if those 
forces were used to actually provide security for the Iraqi 
people themselves. If our forces continue to operate the way 
that they have and if we continue to have the priorities that 
we do, then I think that the Iraqis will look at it and say: 
Why are you bringing more forces into our country if you are 
not helping us? Under those circumstances it could breed 
greater animosity.
    But it gets to the point that Senator Biden made at the 
beginning. Just as I believe he is correct that the American 
people are not concerned so much at the rising body count, 
although that is obviously tragic for every family who has a 
member of that list, they are more concerned about the strategy 
and their sense that we do not yet know what we are doing in 
Iraq.
    So, too, I think is that the case for the Iraqis. They are 
less concerned with the number of American troops in our 
country than what it is we are doing in their country.
    That, of course, brings me to the last point, which is 
where do you find these troops? Frankly, Senator, I do not have 
a good answer for that question. As I said, the problem that we 
face is a short- to medium-term problem. It is the question of 
what we do between now and 5 years from now, when we probably 
will have large indigenous Iraqi forces that are capable of 
shouldering most if not all of the mission at hand.
    But there is a long road between then and now. And while I 
think it would be extremely beneficial to increase our troop 
presence in Iraq, I think it would be very difficult, given our 
current force structure, to do so over the long term. I do not 
dispute General McCaffrey's point about how we are hurting both 
the Army and the Marines by this protracted deployment and how 
we have handled it. It is one of the reasons why I think that 
it may be time to look at the general force structure of the 
U.S. military.
    We created a military in the wake of the cold war that was 
sized for certain missions. I think the Iraqi mission has 
demonstrated that that military is incapable of handling this 
mission, and this mission is critical, is vital to the national 
interests of the United States.
    In the short term, I think we probably can plus-up our 
forces. Alternatively, as I said, we can move to a true 
counterinsurgency strategy, which will be a very politically 
difficult choice to make because it probably will mean saying 
we are not going to provide security for parts of the country 
and we are going to focus our efforts on parts that we think we 
can secure and there are going to be parts of it that are going 
to wind up looking like the Wild West, and it is going to take 
us quite some time before we can get there. That is going to 
be, politically, very unpalatable.
    But I think that may be our only solution, at least in the 
immediate term. Over the longer term, again we will train Iraqi 
forces, but we probably should be thinking about how we can 
reexpand our own order of battle so that we can start 
committing greater forces to Iraq and be able to sustain them 
without breaking the Army and the Marines.
    Thank you.
    The Chairman. Thank you, Dr. Pollack.
    General McCaffrey.
    General McCaffrey. Well, I would clearly agree that we have 
a 5-year challenge facing us in Iraq. It will probably take 
that long to create a legitimate Iraqi State, get economic 
reconstruction under way, and create Iraqi security forces that 
are fully capable of, on their own, maintaining internal order 
and protecting the country.
    But I think the next 18 months are crucial. In my judgment 
we are running out of domestic political support rapidly. The 
U.S. National Guard, this huge professional, disciplined force, 
is in a stage of meltdown and within 24 months will be coming 
apart. The wheels are coming off the National Guard.
    The U.S. Army now using year combat tours. Most of our 
fighting forces are rolling into their third combat tour since 
9/11. The Marines are running 7 months, a little bit better way 
of operating it, a very different force structure requirement. 
They are starting into their fifth combat tours.
    The U.S. Army and Marine Corps are incapable of sustaining 
this campaign. The question of more United States military 
forces for Iraq at the start is a moot point. They are not 
there. They will not be there. We can surge one, two, three 
brigades for the election. We will probably do that. This game 
is coming to an end.
    By next summer the National Guard combat brigades will have 
been used up unless we fundamentally change the rules of the 
game. Right now it says mandatory 24-month callup once in 5 
years. If we change it, we will accelerate the self-destruction 
of the Guard. But they are expended as of this summer, so we 
are now back to Active-Duty Army and Marines. Who are rapidly 
trying to create a fourth brigade in each U.S. Army division 
using the same manpower, two-battalion brigades. To some extent 
it is a shell game that will work as long as we are only doing 
counterinsurgency in Iraq. So the bottom line is there will not 
be any more United States forces for Iraq.
    Now, the second point. Personally, I would argue the last 
thing we are in Iraq to do is to conduct counterinsurgency 
operations to pacify the country and to win their hearts and 
minds. That ideology, that language, belongs in a different 
environment. It seems to me we have done a tremendous gift to 
the Iraqi people and the region by destroying the Saddam regime 
and its coercive tools. Now what we are trying to do is create 
a new political government, create new Iraqi security forces, 
and get out of there.
    So I would hope by December 2006 you would see perhaps 
three U.S. Army and Marine divisions outside the urban areas, 
particularly near Baghdad, but not involved in 
counterinsurgency in any way, but only backing up the emergent 
security force.
    Finally, it seems to me that the larger issue, for your 
committee and the Armed Services Committee to face, is not 
Iraq. We are not going to--my guess is we have got about a .80 
chance of pulling this off by the end of next summer. I am 
reasonably optimistic this is--we are in a race against time, 
lack of political will on the part of the American people being 
the big factor. I would be surprised if we do not pull it off.
    But we have got the wheels coming off the U.S. Armed 
Forces. We are running our capital fleet into the ground. It is 
not being rebuilt. Some time in the next 5 years, Castro is 
going to die. We are going to have a million Cuba refugees at 
sea. We are going to have an incipient civil war on the island. 
We are going to have to think through Venezuela and our oil 
energy. We are going to have to deter aggression against 
Taiwan. We are going to have to add military legitimacy to the 
political dialog with North Korea.
    We are--and now the rhetoric coming out of the QDR is let 
us go to a one-war capability, meaning you cannot use even the 
force you have got because you have told the world when you 
commit it, it is gone, there is no backup. So I think we are 
underresourced and I believe in personal judgment--I join many 
others--I think Secretary Rumsfeld is in denial of the evidence 
in front of his eyes that this military structure is not 
achieving its purpose and that we have to transform.
    I would also probably take partial issue with Dr. Pollack, 
the military we had was a World War II military, a cold-war 
military, it is tanks and artillery, and these guys just do not 
get it. That military took down the Afghan situation in under 
100 days. That military went in and took down a million-man 
army. The only cohesive force in Iraq for the last 2 years have 
been U.S. Army and Marine company commanders and battalion 
commanders, not on counterinsurgency, but on economic 
reconstruction. That is who built city councils.
    We are not new to the counterinsurgency game, for God's 
sake. We have been doing this for 200 years, starting with 
fighting our own indigenous warrior, Native Americans. I think 
when you look at downtown Iraq, the Bradley Fighting Vehicle, 
the Stryker units up north, the combination of armor and 
special ops and intel and Army aviation, the force structure is 
pretty good.
    It is not to argue against transformation. We get some real 
problems out there to change SOCOM's credentials and resourcing 
in particular. But I do not think the U.S. Armed Forces are the 
key factor, the bottom line, in Iraq right now. They are so 
tough, so disciplined, so determined, that the insurgency is 
leaving them alone. The insurgents are not operating in units 
bigger than squad-sized units. They had 50 of them attack Abu 
Ghraib 60 days ago and we killed damn near all of them almost 
immediately.
    They have stopped using mortars in most cases against our 
troop cantonments and they are going to rockets because when 
they do we use counterbattery and nail the shooter, or overhead 
systems or Predator.
    So I think the military is doing a terrific job. What we 
need is this new Ambassador on the ground and a 36-month 
strategy to get us out of there and to leave a determined Iraqi 
Government with its own security forces.
    Thank you, sir.
    The Chairman. Dr. Cordesman.
    Dr. Cordesman. I think that both Dr. Pollack and General 
McCaffrey have raised an issue which is not related directly to 
your questions, but absolutely critical. It is somewhat 
striking that 6 years after we began talking about force 
transformation we have one practical example, which is General 
Schoomaker's reorganization of the Army, and no meaningful 
future year defense program, no meaningful cost containment of 
procurement, no plans to reorganize our force structure in 
terms of the Reserves, the Guard, or any of the other elements 
that address not only this contingency, but any other 
contingency that we face.
    I do not know if we are going to talk our way through 
another quadrennial defense review, but at this point all I can 
say is, who cares? I learned when I worked in the Office of the 
Secretary of Defense if you are not shaping the budget it is 
all nonsense. What we have had, frankly, is 6 years, to be 
polite about it, in which we have not shaped the budget. And if 
all of those studies were burned tomorrow, who would ever know?
    That, unfortunately, has set the groundwork that we now 
have to face. Whether or not I agree with Dr. Pollack--and I do 
not--on how I would use the troops, I would love to have more 
people with language skills, civil-military experience. I would 
love to have people who could actually stay long enough and 
provide the continuity that is the key, regardless of how you 
are using people.
    But we have not got them. We have already over-rotated the 
people who are really good and we really need. Putting more men 
and women in simply for the sake of more men and women is not 
going to serve a purpose. If we cannot answer the question of 
where skilled people are coming from, the question, as General 
McCaffrey has said, is moot.
    I have to say there is one area where we could potentially 
find more people and where it would serve a purpose of, I 
think, really helping in the areas which are relatively secure. 
I found it amazing how few foreign service officers, who are 
career officers, have actually volunteered, who are actually 
performing duties in the field. In many cases these are people 
who are taking extended tours. A small part of the foreign 
service is taking on far too much of the job, supplemented in 
many cases by young contract personnel.
    One real issue here is why do we not have the civilian 
counterparts for the military? That is one of the critical 
aspects of the police training effort. One problem has been the 
Department of Homeland Security, other elements of the civilian 
side of the government. These are skills the military do not 
have. They are also skills we have not really drawn on.
    If I was to look at a priority where there may be some 
leeway for action, that is one of the critical ones. A more 
general issue for this committee is do we need a foreign 
service trained to hide in the embassies and pursue its careers 
in Washington, and if not should we change retention, 
promotion, and recruiting fundamentally?
    In a world where we talk about wars on terrorism and 
constant risk, having a foreign service oriented toward its own 
security and having civilian agencies which cannot be the 
military counterpart is a warning that goes far beyond Iraq.
    Now let me address the more specific issues here. I do not 
believe that it is 3 to 5 years before we find out whether 
Iraqis can perform the security mission. I agree with General 
McCaffrey that in the next 6 to 18 months we either pull this 
thing together or we do not. We are going to pull it together 
by finding out whether Iraqi forces come on line, not in full 
strength, but enough strength to make a difference, in areas 
which are more secure. We are going to find out whether Iraqi 
governants can actually deploy outside Baghdad and handle the 
regional issues involved, and we are going to find out whether 
Iraqi politics are inclusive.
    We are going to find out whether we can hold together the 
relationship between the Kurds and the Arabs, something that is 
basically uncertain. We are going to find out whether the 
Shiite areas which are relatively secure can establish, not 
security in any classic sense, but governance, of which 
effective police forces and security forces are part. Basra is 
a warning. United States-British troops could not address a 
single problem that is a security problem in Basra today. All 
they could do is add to the tensions between Shiite groups. 
Over far too much of the south that is the case.
    Iraqi pulls it together with Iraqi security and police 
forces or General McCaffrey's 80-percent chance of success 
comes a lot closer to mine, which is 50 percent and dropping.
    Similarly, in the Sunni areas we either can put people into 
the field who can govern, who can be a police force, and at the 
same time pressure Sunnis while the inclusive structure works 
or we fail.
    That to me is the key set of priorities, and U.S. troops 
simply are not capable of handling it. We may have to surge 
them. There may be a need, even at the cost of even further 
future problems for our all-volunteer force structure, to pull 
in specialized units to meet specialized needs. But sheer 
numbers, 10,000 men and women, what on earth does that mean? 
Ten thousand men and women with what capability to do what?
    I was trained from the start in the Department of Defense 
that whenever you start quoting total manpower numbers you have 
become irrelevant. I think in general that is one of the 
problems here. If you cannot say who to do what, when, and 
where, this is the kind of strategic generalization that does 
more harm than good.
    But let me make a final point here, and that is, would it 
upset Iraqi public opinion, is there hostility? I here--I do 
very much disagree with Dr. Pollack. I think in much of the 
south people sincerely do not want any kind of foreign military 
presence. In most Sunni areas I do not think they want us to do 
security missions.
    I think this is a very sincere nationalism, antagonism. It 
goes beyond Islamists. It is something I watched in Iraqi from 
1971 onward and I do not believe it has changed on the basis of 
my recent visits to Iraq. That is why I think, one way or 
another, either the Iraqis do this or we fail, and we need to 
understand that and begin to accept the risk.
    Thank you.
    The Chairman. Thank you, Dr. Cordesman.
    In our invitation to the witnesses we indicated that at 
this point there would be an opportunity for each of you to 
make concluding points or to reinforce something that you have 
said in view of what others have said. You have all been 
interacting remarkably in any event, but let me at this point 
ask you, Dr. Pollack, if you would like to make a final 
comment.
    Dr. Pollack. Thank you, Mr. Chairman. I think I have said 
all that I need to say about my views about our military 
strategy and the need to adopt a traditional counterinsurgency 
approach. Let me make just a couple of additional points and I 
will make them very briefly.
    I do think that we need to adopt as well a new political 
approach. I think that this is critical and we have all been 
talking about the importance of both the political and economic 
environments in Iraq to solving the security situation. I have 
repeatedly come back to the security situation because in my 
conversations with Iraqis, in my conversations with Americans 
working out in the field with Iraqis, it is security that is 
the first problem. It is security that is hampering the 
political and economic reconstruction programs, and, therefore, 
if we do not tackle security and start to make changes there, I 
think it very difficult to deal with the political and economic 
solutions, which are critical elements in the reconstruction of 
Iraq and the solution to dealing with the insurgency and the 
broader problems of the country.
    But one of the problems that we have facing us--and it is a 
point that I made with regard to General McCaffrey's very apt 
point about the importance of a legitimate political process--
is that the Iraqis see this as a legitimate political process. 
It is all well and good for the United States to stand up and 
say this is a legitimate process, but if the Iraqis do not buy 
it it is meaningless, because, back to Dr. Cordesman's earlier 
point and his repeated point, that we need Iraqis who are 
willing to fight and die for this country.
    Unfortunately, what we have increasingly seen is that for 
many Iraqis a piece of paper that looks very nice to us does 
not necessarily do it for them. In particular, one thing that I 
am increasingly hearing from Iraqis and seeing in both press 
reports and in United States Government reports is increasing 
disconnect between the Government in Iraq, in Baghdad, in the 
green zone, and the rest of the country. I am very frightened 
when I hear Iraqi friends talking about ``those people in 
Baghdad,'' meaning the new transitional governments, whom they 
seem to believe are not really interested in their lives and 
are not making much of an effort to help them, largely because 
they do not see any sort of improvement in the basic material 
aspects of their lives--security, electricity, these other 
factors that I have mentioned repeatedly.
    This is a tremendous problem. Iraqis complain about the 
corruption that General McCaffrey mentioned. They complain 
about the corruption within the government itself. Here I want 
to be very careful. As best I can tell, most Iraqis very much 
like Prime Minister Ibrahim Jafari. They believe that he is not 
corrupt and that he is very well-intentioned. But other members 
of their government do not seem to get that same impression, or 
give that same impression to the rest of the country.
    There is enormous corruption in the country. As I wrote in 
the New York Times, the Iraqi oil ministry seems to be nothing 
but a sieve. I would urge this committee in particular to try 
to get to the bottom of where that money is going, because it 
is an awful lot of money that ought to be going to the Iraqi 
people and does not seem to be.
    But our focus has been on this political process in 
Baghdad, and that political process needs to succeed. Do not 
get me wrong, please. It is necessary. It is a necessary 
element of success. But it is not sufficient. For Iraqis to see 
this political process as being legitimate, they need a 
connection to their government which does not yet exist.
    Many of these political parties have not made an effort to 
put down roots in the community, to recognize what the 
complaints are of their constituents, and to try to bring them 
real material benefits. As a result, Iraqis often feel 
disconnected from what we claim is their political leadership 
in Baghdad, and increasingly they are looking to go their own 
way.
    It is why you increasingly hear calls for autonomy, not 
just from Kurdistan, but from the Shi'a areas of southeastern 
Iraq, and that is extremely troubling. Again, that is the road 
to civil war.
    As a final point, since we have been jousting all morning, 
let me make one final rejoinder to Dr. Cordesman, which is his 
statement that the Iraqis either do this or we fail. I am in 
mortal danger of that statement. I think that is an enormous 
gamble. What I have seen from the Iraqis in Iraq, studying them 
for 17 years--and I recognize that Tony's numbers are double 
mine--the Iraqis cannot do this for themselves.
    We need to help them get past the first hurdles, and these 
are big hurdles, because they cannot do it for themselves. They 
are not culturally, politically, or socially inclined.
    Just one point. Let us remember that this is a society that 
for 30 years Saddam reinforced to the notion that they should 
not do for themselves, that the state should do everything for 
them and that Baghdad should be the arbiter of all 
decisionmaking in the country. When you get out into the 
countryside of Iraq and you talk to American personnel, 
military and civilian talking to Iraqis, they will say this 
again and again and again: We cannot get the Iraqis to do it 
for themselves. They expect us, they expect Baghdad, to do 
everything for them.
    It is going to take time to get past that, and it is going 
to take time before we have an Iraqi military that is capable 
of dealing with the security system. Just saying that it is 
either sink or swim, the Iraqis are going to do it, or not, in 
6 or 18 months, frankly, I would say that the chances of 
success are a lot less than 80 or 50 percent.
    The Chairman. Thank you, Dr. Pollack.
    I just have to interject at this point that under my 
distinguished friend Joe Biden's chairmanship, we had a good 
number of hearings before the war commenced. And distinguished 
persons just like yourself sat in front of us. Many of them 
were what I have termed to be the ``dancing-in-the-street 
crowd.'' They claimed that we would be welcomed, there was no 
need to have a whole lot of troops out there; the Iraqis, once 
rid of Saddam, would take care of their situation.
    Obviously, these views were not well founded, but 
nevertheless that was then; this is now. And I appreciate your 
testimony this morning very much.
    Let me just indicate----
    Senator Biden. I think the record should note Dr. Pollack 
was not one of them.
    Dr. Pollack. Thank you, Senator Biden.
    The Chairman. Thank you, Senator Biden, for making that 
interjection.
    Senator Biden. Others were more inclined to think that.
    The Chairman. Well, we will not go there.
    The fact is that there is not an easy bifurcation between 
security, politics, and economics. On Wednesday, as a matter of 
fact, we hope to discover where the oil money is or how much 
there is, because, somehow, despite the fact that security must 
be provided, and likewise a constitution or a political 
framework, someone must pay for all of this. Revenues must be 
raised in Iraq. There must be a functioning economy. So we want 
to discover all of these things sort of ad seriatim in the 
early days of this week.
    General McCaffrey, do you have some final comments?
    General McCaffrey. Well, I provided an after-action report, 
Senator Lugar, to you and your members of the committee.
    The Chairman. Yes.
    General McCaffrey. I tried to bring together some of the 
insights, to include a listing of the vulnerabilities I thought 
we faced, because I think the situation--essentially, I came 
back this time saying, reminding myself how impressed I was by 
the courage, the dedication, and skill of the U.S. Armed 
Forces. We have never had more creative, brave young men and 
women in uniform in our history. They are doing a remarkable 
job.
    The second observation, I thought we are finally getting--
Negroponte and Abizaid and Casey put together a decent 
strategy. I told them the strategy should not be classified; it 
ought to be up on billboards outside all of their encampments. 
Essentially it says we are going to create an Iraqi State and 
Iraqi security forces and we are leaving in some measured way.
    Then finally, I think I saw some chance that the Sunnis 
would decide to participate politically instead of just 
fighting.
    Now, balancing that, a couple of other observations. I 
steadfastly, and certainly on TV or radio, never allowed myself 
to be drawn into a comparison of Vietnam and Iraq. To be blunt, 
there are no political or economic or national security 
comparisons, except possibly U.S. domestic politics. But one 
thing struck me this last time. I was able to move around the 
whole country because I had this terrific young group of kids, 
Texas National Guard, security, two Blackhawks, two Apaches, 
advance parties, et cetera.
    Baghdad is 10 times more complex and dangerous than Saigon 
ever was. I used to live in an air-conditioned BOQ and drive, 
normally with two beers under our belts, down to Vung Tao to 
the beach with two bodyguards. This whole situation in Iraq is 
a real demanding, dangerous enterprise, where we have huge 
national security interests at stake. I personally would 
underscore in my judgment we had better pull this off. If it 
requires further resources or sacrifice on the part of the 
American people, we will be making a terrible misjudgment if we 
do not stay the game.
    Finally, sort of a minor observation. About one of the few 
things I was critical of the U.S. Armed Forces leaving country 
was our public diplomacy, our press policy, our media policy. I 
think the media are starting to send the second team to Iraq. 
It is dangerous. They are using unknown Arabic stringers to do 
their reporting. They are focusing on the bomb blasts with 
borrowed video. They cannot get out of their hotels, and the 
U.S. Armed Forces had better support them.
    Conversely, the Pentagon--I, debriefing this trip, said, 
can you imagine in World War II; we would have had a guy like 
Petraeus, who was widely hammered around Washington for 
appearing on the front page of Time Magazine or something--can 
you imagine taking in World War II some brave-hearted battle 
leader with a doctorate from Princeton who is telegenic and 
likes creating Arabic forces and telling him to stay out of the 
eyesight of the American people?
    What are we doing? The most trusted institution in American 
society now are the U.S. Armed Forces, hands down. They are up 
in the 80th percentile or higher. Our battalion and brigade and 
division commanders ought to be responding to the American 
people on TV and to the print media, and they are not doing it. 
So I think there is room for a little energy to get that 
process going. A free press, there will be no argument in this 
hearing room, is essential to what we are trying to achieve 
there.
    I thank you, sir, to you and your committee for the 
opportunity to share these ideas with you.
    The Chairman. Well, I appreciate your comments very much. 
On the last one, in another forum, I am going to be testifying 
at a Wednesday hearing on the media shield law. It strikes me 
this is another media shield situation. We really need to have 
persons who are articulate and well-informed talking about 
Iraq.
    Senator Biden. That is uniforms and not suits at the 
Pentagon.
    The Chairman. Dr. Cordesman.
    Dr. Cordesman. Thank you.
    This is an enormous gamble and the stakes are 
extraordinarily high, and they go far beyond Iraq. They affect 
the gulf, our strategic energy interests, the overall problem 
that we are struggling with, which is Islamist extremist 
terror.
    I agree that it is going to take years. I have no idea how 
many, whether it is 5, 10, or 12. The point is not that we can 
set the calendar. The point is we cannot set the calendar and 
we need a prolonged commitment.
    But I think General McCaffrey made the point, perhaps we 
all have made it in different ways, we have got to get through 
the next 18 months to get to those other periods. When I talk 
about Iraqi forces, I do not mean they will be ready. We will 
need significant United States troops until Iraqi forces can 
take over, and I do not know when that is. What I am certain of 
is that if the current procedure for training and expanding the 
role of Iraqi forces fails, we do not have a backup with United 
States military presence or anyone else.
    We have a political calendar where we can make many 
slippages in time or content. Iraq already had a good 
constitution. It did not really help very much. Perhaps having 
a better one may help or it may not. I think in the real 
world--Ken touched on the issue--the constitution counts when 
it touches on three things: Money, mostly how the oil money 
gets allocated; power, who has the power in the center; and 
then federalism or regionalism, how do you protect the 
minorities. Everything else is a little too Jeffersonian to 
reach Iraqi hearts and minds.
    The election that is coming may, or may not, make things 
better. We may see a lot more selfish ethnic, sectarian, and 
service politics. But what we have to have is unity and avoid 
civil war. To me, the exit strategy that is inevitable is we 
cannot fix Iraq if Iraq attacks itself, and we have to bear 
that in mind and I hope you will bear it in mind in your 
hearings on the political and economic dimension.
    We have talked here about a number of issues on the 
military side. Let me conclude with a few points--you asked for 
recommendations--that really do not relate to the military 
side, but to the other aspects of U.S. policy that I think are 
critical.
    I believe we face three major enemies in Iraq. One is the 
mainstream of Sunni insurgents, the other is Islamist 
extremists, and the third is the management of the aid process 
here in Washington. We have now committed as of this week $19 
billion out of $20 billion in aid money. Ken noted the problems 
in figuring out where the oil money is going. I think time and 
again it does not matter whether we have completed most of 
these projects. If we drew a map, they will be in the wrong 
area, they did not affect real world service, and they are not 
sustainable.
    The reporting going to this committee and to the public is 
like the Russian reporting. It is a number of project starts 
with a member of project completions, nothing on meeting 
project needs, no mapping of who it influences. It also is 
putting U.S. contractors, U.S. security teams, foreign 
contractors, and foreign security teams everywhere that it is 
operating. Whatever the hostility may be toward U.S. troops, I 
suggest the committee might want to drive behind some of those 
personal security detachments for contractors some day and see 
how they behave and see the level of hostility that is there.
    When we talk about Iraqi corruption, let me say that Iraqi 
corruption is infinitely preferable to ours. At least most of 
the money will be spent in Iraq and stay there.
    I think you need to ask some very searching questions in 
your next hearing. I see that Ambassador Khalilzad has already 
talked about moving the management of aid to the Iraqis into 
the Embassy and to the team in Iraq, and I think anything you 
do to bypass USAID in Washington and the defense contracting 
effort in Washington will be as effective a counterinsurgency 
action as anything you can do militarily. They are part of the 
threat, not part of the solution.
    Let me say in terms of public diplomacy here, General 
McCaffrey and Ken also raised a critical issue. What bothers me 
is our inability to communicate in Iraqi terms clearly and 
unambiguously that we will not be guilty of the conspiracy 
theories that they see us as most potentially guilty of, and 
those essentially are permanent bases versus advisory efforts, 
taking the oil, taking the land.
    We do not seem to have the public diplomacy here to support 
the public diplomacy in the field, and the public diplomacy in 
the field is badly underfunded and badly underpersoned simply 
because it is not given the seriousness it needs. So that adds 
to the aid dimension another issue.
    I think we have not touched on international organization. 
I do not believe we can go for foreign troops. I do believe we 
badly need to go for foreign help, and Ken mentioned the idea 
of having some kind of contact groups, of expanding our role 
here. I think that is absolutely critical.
    Let me just make one final point about oil, and I think it 
sums up what the committee might want to focus on. I get a 
little surprised when I look at my watch and find it is 2005 
and I then read the status report from the Department of State 
as of 13 July 2005 and read: ``On July 10th, bilateral energy 
consultations were held between the Iraqi Oil and Electricity 
Ministries and the U.S. Departments of Energy and State 
covering issues such as developing a needs assessment into 
Iraq's natural gas utilization for power generation.''
    We have spent $19.1 billion out of $20.9 billion and we do 
not have a clear assessment of the needs for Iraq's major 
source of revenue? We face a situation next year where the 
Iraqi budget is in excess of $18 billion. That is virtually the 
total of its entire oil revenues. And you have not even started 
planning for your $30 billion supplemental in aid for Iraq for 
the coming fiscal year. There is something wrong here that goes 
far beyond the military dimension.
    The Chairman. Well, thank you very much, Dr. Cordesman.
    Let me just indicate, before we begin our questioning, how 
much we appreciate the preparation each of you have made and 
even more the testimony you have given this morning. I think 
each one of us has benefited tremendously from the intellectual 
stimulation and also, hopefully, more than that from the action 
steps that we would feel impelled to take listening to the 
three of you talk.
    But now we want to ask some questions of you. We will have 
a 10-minute round and maybe more as members may have additional 
questions. I would like to begin my portion by asking you, 
General McCaffrey, in your testimony, in your written 
testimony, you suggest the period between January to September 
2006, that is next year, would be the peak of the insurgency. 
Can you discuss a bit more this conclusion? In other words, all 
three of you have identified this period from July 2005 to the 
end of 2006 as roughly the 18 months of critical time.
    You have introduced, General McCaffrey, the suggestion that 
6 months from now, more or less, the insurgency may pick up and 
continue on in its strongest form for maybe that 8- or 9-month 
period. What is your thought about that?
    General McCaffrey. Well, it will be interesting to see what 
I say in January 2006.
    My sort of gut instinct was that the new Ambassador we are 
going to send in there to replace Negroponte is a national 
treasure. This fellow has a tremendous sense of dealing with 
these kind of issues. I think if we can lock Abizaid and some 
of the other senior military leadership in place, the current 
trend lines say if the Sunnis come into the government--and I 
actually--I have been sort of fascinated listening to my two 
colleagues here, in particular the notion that they used to 
have a decent constitution anyway, but it made no impact. So if 
we can get a constitution that is not viewed as malignant to 
the Sunnis and if there is a vote, and if there is a 
pluralistic government of some sort in January, and if the 
construction of the Iraqi security forces continues on its 
current lines, in which by December we are alleging we will 
have even more people on the ground, 60 to 100,000 that are 
determined to try and support this political process, then I 
think that would be the high point of the insurgency.
    I have said all along the foreign jihadists, the suicide 
bombers, the slaughter of the innocents, the nailing of the 
Iraqi police forces as they are lined up to take rollcall, will 
not materially affect the outcome of this conflict. What we are 
watching in Iraq is: Can you take three warring factions--the 
Kurds, the Shi'a, and the Sunni--cobble together some loose 
federal structure, and have some way of capitalizing on their 
oil income and creating law and order?
    I am betting that, the current trend lines, we will 
probably see January be the high point of the insurgency, and 
then by, hopefully, the end of next summer, as we are forced 
into large-scale drawdowns of our military forces, that the 
Iraqis will be there to pick up the energy.
    The Chairman. Each of you in a way talked about our 
problems, our military structure. The drawdown seems to be 
there in the vision. It seems to be with all three of you. But 
as you are pointing out, success, whether it is the 80 percent 
you suggested, General McCaffrey, or the 50 percent you 
suggested, Dr. Cordesman, is dependent upon these factors of 
the inclusion of all the parties in the government and their 
respect for this constitution. That means respect for a process 
that has allocated oil revenues, or for a sense of federalism 
or autonomy, as that might be a part of the constitutional 
structure. The Kurds have certainly called for this, others 
maybe, so that there will be some loyalty felt by all the 
parties toward the center and, therefore, some willingness to 
fight for it.
    When Prime Minister Jafari came to this country recently to 
visit with our President, he stressed against the skeptics that 
August 15 really is important to get the constitution done. You 
have barely got some of the Sunnis around the table. You just 
appointed a few the other day. What is being written? How in 
the world can you cobble together a constitution by the 15th?
    Some have even suggested a little fudging, that it might go 
on until September 15 even if the August 15 deadline was sort 
of kept there. But in any event, there is going to be a 
constitution and a referendum, apparently. But the referendum 
has some tough qualifications. As I recall, there must be a 
two-thirds majority in each of the 18 governmental provinces 
now, which means a lot of people will need to be on board to 
get those kinds of pluralities.
    But even then, Prime Minister Jafari was optimistic that 
this is going to happen. They proceed on to the elections, 
which will then lead to the legitimacy of this elected 
government that we are talking about, that will have the 
support of everybody. There will be some sense as you suggest, 
I think, Dr. Cordesman, that power is recognized there and is 
accepted, that the oil revenues situation has been worked out, 
and that even regionalism, the sense of the Kurds, some sense 
of autonomy there, has been worked out. They want to be Iraqis 
as opposed to Kurds and a greater Kurdistan. That is the reason 
Jafari was saying we have got to proceed right along with these 
deadlines; these are not to be debated, despite the practical 
considerations.
    What is your judgment, Dr. Pollack, on how likely it is 
that the August 15 deadline, or some reasonable deadline soon 
thereafter, will be met with a constitution? Will this 
referendum in 18 districts, a two-thirds vote, happen with good 
participation by Iraqis, with maybe more Sunnis coming out this 
time? Likewise, will the officers that are selected under this 
constitution in December or January or whenever that event 
occurs, be accepted? Are they going to be the kind of people 
who say, we are Iraqis now?
    Dr. Pollack. Thank you, Mr. Chairman.
    I think there is a reasonable expectation that August 15 
will happen with--will come to pass and there will be a 
constitution agreed upon. I do not think it is a certainty and 
I would not want to assign a probability. On the one hand, we 
have seen the members of this government squabble over almost 
everything imaginable and the delays that we saw in the 
formation of this government suggest that we could just as 
easily see them unable to come to an agreement.
    The TAL was very much a compromise document. It was 
something that very few Iraqis really liked. Repeatedly they 
have looked at the TAL, they have taken runs at the TAL, and 
they have basically decided to leave the TAL intact because 
they have not yet wanted to have the kind of all-out fight they 
seem to believe that opening up the TAL again will require.
    Now, that is not necessarily bad. As we know from our own 
experience, constitutions are compromise documents. No one gets 
everything that they want from a constitution. And I suspect 
that there were any number of people who walked away from our 
constitutional convention very unhappy, bitterly disappointed 
by the compromises that were reached there. But ultimately it 
was good enough to make it work.
    What, of course, is critical in all of this is whether the 
Iraqis see those compromises as good enough to respect it and 
to live with it.
    I think it is conceivable that we could get to August 15 
and have a constitution, and it is also conceivable to me that 
those compromises, which while unpalatable to a greater or 
lesser degree by a whole range of Iraqis, could ultimately be 
accepted.
    Let me say, Senator, that my greater concern is that this 
will all be seen as ultimately irrelevant to the great many 
Iraqis. I think that if we have a--if we do get a good 
constitution on August 15 you probably will see a lot of Iraqis 
come forward to vote and to approve it in the referendum. For 
me this is very much like the January 30 elections, which were 
as much expressions by Iraqis of a determination to make 
reconstruction work as it was actual approval of the candidates 
who were being elected.
    Now, the UIA, the United Iraqi, list was very popular--
sorry, the Inter-Iraqi Alliance--was very popular because Grand 
Ayatollah Sistani told people that this was the group that he 
wanted in place and because Jafari himself was popular and 
Hakim has a following, other members of the coalition were 
themselves somewhat popular.
    But I think it is very important to keep in mind that for a 
great many Iraqis they voted and they voted for the United 
Iraqi Alliance in expectation that this was going to be the 
group who finally did bring them security and basic services, 
and that same group is becoming increasingly frustrated with 
this government because they are not providing those security 
and basic services that they seek.
    My fear is we could have a constitution, we could have a 
referendum, we could have an election in December, and we may 
find ourselves in exactly the same spot a year from now because 
that new government is just as unable to provide the Iraqis 
with the basic necessities that they demand and are entitled to 
as this one and all of the past ones have.
    The Chairman. I thank you for that.
    Let me just conclude my portion by saying our focus today 
was on Iraqi security, but in the course of that you have all 
made comments that I think are important about United States 
armed force structure and our security, as we face a whole list 
of potential challenges throughout the world. We are trying to 
think conscientiously about how we can allocate the resources 
that are required in terms of manpower and money and what have 
you to Iraq, recognizing that there is a rest of the world out 
there.
    So this is, hopefully, a wakeup call for all of us about 
the ambitions of our foreign policy. Whether we have ambitions 
or not, the needs of our national defense as well, require that 
we take a look at vital security issues.
    Senator Hagel, please.

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

    Senator Hagel. Mr. Chairman, thank you.
    Gentlemen, thank you for your efforts and honest, realistic 
analysis of our current position in Iraq. I am grateful, as I 
believe all who have had the opportunity to listen to you for 
the last 2\1/2\ hours, for your wise counsel based on 
significant experience, and certainly that includes recent 
experience, recent, I would put it, within the timeframe of the 
last 3 years, because each of you has been involved in framing 
up the challenges even prior to our invasion of Iraq and have 
been very steadfast in your continued honest analysis of the 
realities of what we are up against.
    I would want to comment on a point that the chairman just 
made. General McCaffrey, you have alluded to it in your summary 
remarks, and that is the magnificent conduct of our troops in 
Iraq. I know you have just been there and have briefed some of 
us personally, as you have done here today, and I assume you 
have had an opportunity to brief senior members of the 
Pentagon.
    I do not believe it is a matter of whether our troops have 
performed as magnificently as they have or not. In fact they 
have. In fact, we have loaded on our military so much burden 
and so much responsibility that I think it is part of the 
reason, as each of you have alluded to, some more than others, 
that we are in danger of destroying our National Guard and our 
Reserves as well as our Active-Duty Force.
    General McCaffrey, you are one of those young officers that 
came out of Vietnam after a couple of tours, as well as Norm 
Schwartzkopf and Colin Powell and another dozen or two dozen, 
who stayed in the military and said we are going to rebuild it, 
we are going to make it the kind of military that is worthy of 
our country and our people, and you did.
    I, too, am very concerned about what is happening to our 
military and our force structure. You, General, have 
articulated that point rather well, as Dr. Cordesman has 
referred to it as well as Dr. Pollack. I think we have to be a 
little careful that we do not connect this magnificent conduct 
and the kind of responsibility we have loaded on our military 
and the job they are doing with the policy.
    As a matter of fact, the issue was in Vietnam and Korea, 
every time we have asked our young men and women to make the 
ultimate sacrifice and serve this country, in an unquestioned 
way--and I would even say--and General, you were there and I 
was there--I think our forces in Vietnam fought very valiantly. 
They were not near as well trained as the forces in Iraq, nor 
probably as well led, certainly not as well equipped.
    But what we must assure our military and their families is 
that we have a policy worthy of their service and their 
sacrifices. That is the issue here. The issue is not whether 
our troops have performed admirably, and they have. Also, 
whether we are loading so much on them that they cannot 
perform, in fact, can never be successful at what we are asking 
them to do.
    The three of you have made it very clear, and I happen to 
agree. This is an issue, this war, this area of conflict, that 
will be determined by a successful political outcome. It will 
not be as a result of the military. The military is a very 
significant piece of that, as you all three have noted--
security, stability, allowing Iraqis an opportunity to develop. 
But in the end, it will be the Iraqi people who will decide.
    I would say, in light of that, when the three of you make 
some clear points of corruption, endemic corruption, which I 
hear from all sources in and out of our government, in and out 
of the military side of our government, the civilian side--that 
is an issue that we are going to have to deal with and, as you 
have noted, Dr. Cordesman, in your summary comments, hopefully 
we will get into some of the specifics of that this week at our 
next set of hearings.
    But if there is so much rot so deep down in that 
institution over there, then we do a great disservice to our 
service men and women asking them to give their lives for 
something that is not quite as noble as we like to portray it, 
or as our leaders like to portray it to the American people.
    The honesty of this effort is key in my opinion, and that 
is why the three of you and others we will hear from this week, 
your input is so important.
    Let me ask just an aside. General McCaffrey, I suspect you 
have had an opportunity to brief senior members of the 
Pentagon, I do not know, National Security Council people, 
others. I do not know who you have briefed. Let me ask Doctors 
Pollack and Cordesman: Have you been called in by any senior 
members of the administration to get your take recently on 
Iraq? Dr. Cordesman.
    Dr. Cordesman. I have talked to some of the officials who 
are designated for Iraq, but I have not talked to people in the 
administration.
    Senator Hagel. Thank you.
    Dr. Pollack.
    Dr. Pollack. Certainly no one senior in the administration 
on the issue of Iraq, certainly lower level, working-level 
people have consulted with me on a regular basis.
    Senator Hagel. Well, I will talk to Mr. Hadley, the 
National Security Adviser, and I suggested to him, as well as 
others in the administration at the highest levels of this 
administration, to reach out to people like the three of you 
and listen to the three of you and others. We are bubbled up to 
a point I think where we are disconnected from some very basic 
and dangerous dynamics of reality over there.
    Anyone who has heard the three of you this morning, and 
discount half of what you have said, it is still damn 
disturbing. I am not surprised with what we heard. But the 
administration would do well to reach into another universe of 
thinking and experience like the three of you.
    Thank you very much.
    Now, question. I would like to get the three of your 
thoughts on the Iran-Iraq relationship. As we know, the Prime 
Minister of Iraq, a number of his Cabinet Ministers are in 
Iran, have just completed talks there. How deep, how wide is 
that relationship? Should it develop? What kind of challenges 
does it present? Is it helpful? Does this lead to a wider sense 
of a United States-Iranian opportunity for a relationship?
    Any way you would like to take this, the three of you, I 
would appreciate hearing from you, but specifically focus on 
Iraq's challenges over the next couple of years. Can Iran play 
a role there? Should they? How close should that relationship 
develop? Dr. Cordesman.
    Dr. Cordesman. Senator, it is inevitable that there will be 
a relationship, that it will be strategically critical to Iraq, 
as it will be to Iran, and that whether we like it or not it is 
going to be a relationship which Iraq has to focus on and focus 
on visibly. Just as the Saudis, with much less incentive, had 
to reach out to Iran and reach a modus vivendi with Iran, Iraq 
absolutely has to. It has to deal with the border issue. It has 
to convince in many ways Iran that there is as little incentive 
to interfere as possible.
    There is the problem of reparations. There is the problem 
of religious traffic across the border. You can go through a 
whole list of issues where they have to work things out. 
Fortunately, the issue of oil and transportation has somewhat 
been eased. The Shatt-
al-Arab is essentially obsolete. Basically, modern shipping and 
oil traffic will not be moving through there.
    But even in terms of border incidents and waterway issues, 
one of the things that Iraq is going to have to deal with 
sooner or later is expanding its shipments out through the 
gulf, and if you look at the hydrology of the gulf to get 
efficient oil shipments it is going to have to change its 
current mooring positions. These are just a few of the cases.
    I do not know how Iran will play this out. I think it could 
be very dangerous. If Iran sees anything approaching a civil 
war buildup in Iraq, it is going to obviously back the Shiite 
side. If anything approaching an American power vacuum exists 
in Iraq, Iran is going to attempt to deal with that. If Iran 
comes into confrontation with us, I am not sure it can resist 
trying to play the Iraqi card in a negative way.
    But my impression at this point in time is that Iraq knows 
where to stop. The current leadership is not going to take 
risks that have Iraq seriously involved in training or security 
or advisory presences that would somehow threaten Iraqi control 
of Iraq; that Iran sees the situation at least for this moment 
as to its own advantage. We are effectively fighting a set of 
threats in their interest.
    But if you ask me what this Iranian Government will be 2 
years from now or the moment it comes under pressure or the 
moment it sees the political structure in Iraq fail, then I 
think the current status could change very rapidly and very 
unpredictably and almost inevitably for the worse.
    Senator Hagel. General McCaffrey.
    General McCaffrey. I agree with Dr. Cordesman's comments. I 
think there are--I listed one of the vulnerabilities of CENTCOM 
of our current Iraqi policy being the possibility of Iranian 
intervention, most likely in a covert form, active intelligence 
agents, money, cross-border operations, but potentially if the 
thing started to spin out of control late next year, with 
active military support to protect the Shi'a from being 
slaughtered by the Sunnis again. I do not think they will 
tolerate it.
    There are two other background factors, one of which is 
widely known, but I would argue is underappreciated. It seems 
to me that our vital ally on the ground which is at great 
jeopardy is Saudi Arabia. Now, if you wanted to ask me who I am 
worried about, it is Pakistan and Saudi Arabia, Saudi Arabia 
and Kuwait, perhaps, the two of them kluged together. They have 
an enormous fear, as we all know, of a Shi'a domination of the 
oil-producing regions of the gulf. The Saudi eastern oil fields 
are largely Saudi Shi'a population. If you look at Iraq, the 
layout of their oil reserves, much of them, particularly if 
Kirkuk goes back to the Kurds, end up in non-Sunni hands.
    So I think there is a political animosity that will unite 
much of the Sunni leadership in the Middle East against 
Iranian-Iraqi cooperation.
    Finally, it is nuclear weapons. The Iranians are going 
nuclear. They are going to achieve, in the next 5 years, some 
modest capability, 10 to 20 weapons. It will change 
dramatically the military balance of power in the Persian Gulf. 
The U.S. Navy will no longer go into the gulf without 
understanding they are literally placing 10 to 15,000 sailors' 
lives at risk. I do not see us currently having either the 
military power or the political will to deal with the several 
completely unpalatable options to deal with that.
    So flash forward 3 to 5 years. Iran is a nuclear power and 
with a huge capability to influence events in Iraq; a situation 
from which we will be withdrawing.
    Senator Hagel. Thank you.
    Dr. Pollack.
    Dr. Pollack. Thank you, Senator. I also completely agree 
with Dr. Cordesman's comments. I think they are right on the 
money. Let me just amplify a couple of them because I think 
they are important.
    Iran-Iraq relations are going to--are deep and will 
continue to deepen. There is no way that we can stop them and 
it would be foolish of us to try to do so. One of my fears is 
that there are elements within this government who see the 
Iranian bug bear around every corner, believe that any Iranian 
influence is inherently evil, and are fighting that influence 
with everything they can, not recognizing that they are doing 
tremendous damage to our relations with the new Iraqi 
Government and to the new Iraqi Government's ability to 
function. Iran will have a major influence in Iraq. We need to 
recognize that and accept it.
    By the same token, we should not see that influence as 
necessarily pernicious. As Tony has pointed out, and I think he 
is absolutely right, the Iranians are most afraid of chaos in 
Iraq. They hear the same things that we do, they see the same 
information we do. They, too, know that civil war is a very 
real possibility in Iraq and that is their greatest concern.
    As a result, I think we need to recognize that we have had 
tremendous tacit cooperation from the Iranians over the last 2 
years. The Iranians have been telling their various allies 
inside of Iraq to participate in the process, the political 
process that we have established. They have been restraining 
various hotheads in Iraq who have wanted to act unilaterally, 
to fight other groups, to engage in assassinations and 
terrorist campaigns of their own, and that has been extremely 
helpful to us.
    The Iranians have not done it out of any goodwill for us. 
They have done it, as Tony pointed out, purely because it is in 
their interest to do so. My guess is that that will continue to 
be the case, again as Tony points out, until one of three 
things happens: We succeed; we fail and the place starts to 
come apart; or we decide to try to mount military operations 
against Iran. Under any of those circumstances, then I think 
you could see Iran's perspective on Iraq changing.
    If we succeed, you know what? That is a problem I would 
very much like to have. If we succeed in Iraq and our problem 
is what do we do about the Iranian competition over a 
successful Iraq. If we fail, I think Tony is absolutely right. 
The Iranians will get into Iraq as quickly as they can, and 
they have set up a massive intelligence network inside Iraq to 
be able to move--to allow them to move very quickly to arm 
proxies, to set up safe havens, to create buffer zones, and to 
go to war with various groups that are going to be allied 
against them.
    One point I would make, just a tweak to Tony's comments, is 
that I suspect that a civil war on Iraq may not see Shi'a 
versus Sunni; it may see fragmentation and different Shi'a 
groups against different Shi'a groups and against different 
Sunni groups. Under those circumstances, the Iranians will be 
looking, and I think they already are looking, to identify 
their allies and their adversaries in Iraq and move very 
quickly to help their allies and hurt their adversaries as best 
they can.
    Obviously, the big unknown out there is--actually there are 
two, and Tony alluded to at least one of them. One is what are 
the Iranians going to do. They do have a new President. It is 
unclear if that new President will have any impact whatsoever 
on Iranian foreign policy. Their foreign policy so far has 
been, in the last 5 years, pretty consistent and arguably quite 
pragmatic, if not terribly pro-American. That is fine. We can 
live with it.
    If they change their policy, then things could start to be 
different inside of Iraq. But by the same token, I think we 
need to recognize that American policy toward Iran is very much 
up for grabs, and some of the more aggressive policies we have 
heard outlined toward Iran could have very serious 
repercussions for us in Iraq.
    As I said, we have greatly benefited from Iran's tacit 
cooperation in Iraq. If we go to war with Iran, then we will 
have very little incentive to continue to maintain that 
cooperation over Iraq.
    Senator Hagel. Thank you.
    Mr. Chairman, thank you.
    The Chairman. Thank you, Senator Hagel.
    Senator Biden.
    Senator Biden. Thank you very much, gentlemen, for a really 
useful morning. I hope they had the television on in other 
buildings downtown.
    As usual, my friend from Nebraska asks the $64 question: Is 
our policy worthy of our military? The answer is a flat ``No; 
it is not.'' In my view we have no discernible regional policy. 
I have not been able to divine it.
    We talk about Iran--and I had not planned on mentioning 
this, but Iran has certain interests as well. They do not want 
any permanent U.S. bases. They want a quick exit but leaving 
stability behind.
    Everybody forgets--you guys do not because you are so used 
to it. But you know, Persians have a bare majority in Iran. The 
idea of the consequence of a civil war, a sectarian war, in 
Iraq goes a lot further than just what the consequences are on 
other countries in the region, what the consequences are 
internally in Iran.
    Our policy thus far has been a disaster. General, I think 
there is a reason why--I will not bore you with; I have bored 
you already privately with my views about my conversations over 
the last 3 years with foreign leaders who could have helped and 
offered to help, and I believe they offered to help, and the 
way we dealt with it.
    There is an old bad joke about George playing center field. 
You basically said it. George plays center field; in the first 
two innings he has five errors. The coach pulls George out and 
says: Tony, you are in, and he puts Cordesman into center 
field.
    The first pitch, a routine fly ball to Cordesman hits his 
glove; he drops it, error. The coach goes nuts, calls time out, 
and says: Tony, you are out of there. As Tony Cordesman is 
crossing the third base line the coach grabs him by the number 
and says: What is the matter with you, Cordesman? Cordesman 
looks at the coach and says: Coach, George screwed up center 
field so badly no one can play it.
    Well, the truth of the matter is that is part of our 
problem. We have screwed up center field so badly, 
economically, politically, and I would argue in terms of 
military strategy from the suits, not the uniforms, that 
anybody who tells me--if I go one more time and someone tells 
me that we have given the military everything they want--that 
is simply not true, not true, not true, not true.
    In five trips to Iraq, I find an ascending willingness on 
the part of flag officers to say out loud: Hey, I do not have 
what I need. Because they figured out they are going to wear 
the jacket, they are going to be the ones blamed, they are 
going to be the ones blamed for a bad policy.
    Well, enough of my talking about that. Let me point out, 
this notion of U.S. interests and intentions, we have a big 
problem. I asked the question of this administration why we 
will not say we do not want any more bases there, just flat 
out: We will not have a permanent base there. Guess what? They 
have not resolved that issue internally. That is one of the 
reasons why we do not have a good public diplomacy, General. 
They do not know what to say. They do not know what to say as 
to what our policy is.
    The reconstruction policy, to quote a great chairman of the 
Foreign Relations Committee, it is incompetent, incompetent, 
incompetent. The corruption, as you point out, it is not just 
Iraqi corruption. It really is incredible to me. It is 
incredible to me the way in which every time we have been 
there, from the first time the three of us showed up together 
to the last three times. It seems to me like--Webster seems to 
me like a guy who can shoot straight and knows what he is 
doing, head of the 3rd ID.
    He shows me, just like his predecessor Chiarelli did of the 
First Cav: Give me PCV pipe, let me run it from the back of the 
homes into the Tigris River so there is not 3 feet of water or 
2 feet of sewage sitting in the front yard and, guess what, my 
troops do not get shot at as much. And he showed me these big 
overlays only you guys can do, the Powerpoint deals. Take away 
the garbage, turn on the air conditioning a little bit, a 
couple more hours a day.
    Our commander of the Third ID calls it, he refers to ``the 
greening of Iraq.'' He does not mean it in a positive way. You 
can see from a helicopter, the one you flew in, the same ones I 
flew last time. We wonder why foreign policy guys do not sign 
up, foreign service guys. Guess what, they do not get the 
Blackhawk I get. They do not get to travel at 100 feet off the 
ground at 150 miles an hour so there is no problem if I were to 
be shot at, with four guards with me.
    That is the reason they are not volunteering. They do not 
get to go outside. They do not get the protection you got, 
General. They do not get the protection I got. Go to Fallujah? 
Give me a break, go to Fallujah. Get your rear end shot off 
going to Fallujah.
    So what I have a problem with is figuring out how do we do 
more of the same. This is a race against the clock. Let me 
understand what I glean from you guys, and with the 
disagreements there seems to be pretty much a consensus. One, 
you have got to train the Iraqis. Ultimately they have got to 
do the job. They cannot be trained sufficiently to be able to 
take over major responsibility, big chunks, in less than a 
year.
    Tony, you and I may argue about how well they are trained 
and I can go back and read your statement from February and 
read mine from the same. We really have no difference. You know 
the reason they worked in the election, our military shut down 
the country. No one was allowed to drive a car. No one was 
allowed to move. They were able then to man a checkpoint. That 
made sense.
    But if we did not shut down the country, lock it down, they 
could not do it. But we all agree that they are on their way. I 
think Petraeus is first-rate. I have been a fan of his since he 
was up in the north, and I hope to God they do not take him out 
of there. He is the single best thing we have got going on the 
ground, in my view, and he is making real progress.
    But number one, everyone agrees it is going to take some 
time, in the year-plus category, to train up these guys. To 
create the political conditions to win, we have to do two 
things. We have to have elections, participation. But we found 
out when Sunnis get shot at they do not show up. What makes 
anybody think the Sunnis in the second round are going to show 
up, even if they helped write the constitution, if, in fact, 
the circumstance in the triangle is physically no different for 
them? Maybe, maybe, maybe.
    Second, you know, every poll I have seen and every Iraqi I 
have spoken to says to me, in my five trips: I cannot walk out 
my front door. You name me a city in America that would support 
George Washington reincarnated as President if they could not 
walk out the front door, were afraid to walk down the street, 
to send their kids down to the local store to pick up a 
grocery.
    So every one of them rates crime in the street higher than 
anything else. So I do not know how we avoid your position, Dr. 
Pollack, about we have got to do something to change the 
condition on the ground. I guess the thing we do is we train 
more Iraqis, but we need more time to train more Iraqis.
    Now, we have 6 to 18 months and that will tell the story. 
Iraqi troops, what happens outside Baghdad, and whether or not 
people can move around. Yet we are going to be asking the 
American people in the meantime, who are leaving us in droves--
because one thing I think the five of us all agree on, we 
cannot afford to lose here.
    So I end up back to the position that I think Iraqi 
attitudes do relate in part to their safety. I do think that 
the strategy, if you talk to our folks on the ground, as you 
guys have, all of you, they say: Look, they're trying to figure 
out if you get the Sunnis in on the deal, then you can isolate 
the jihadists. And the Sunnis are still the biggest problem in 
the insurgency, but if you get them in on the deal--we need a 
political solution. It is not going to lend itself to a 
military solution.
    But the one thing I disagree with you, General, is I think 
that the jihadists play a larger role here.
    Now, what are the Sunnis outside doing? I sit--and I agree 
with all of you. The one thing every place I go, I spend a lot 
of time, after the first of the year 4\1/2\ hours alone with 
Mubarak at his request. I spent a lot of time with the King. I 
spent a lot of time in the region. All I hear from all these 
guys is one thing, Dr. Cordesman. We cannot have a Shi'a state, 
we cannot have a Shi'a state, we cannot have a Shi'a state.
    Everybody who is Sunni looks first to Shi'a. It is amazing 
to me. Then when we say--when they offer to train or do more, 
we say to them: We cannot have them train or doing more because 
they are Sunni, our folks are saying.
    As I look at the security--and I will end, Mr. Chairman. I 
look at the security my last trip--and you guys have all done 
the same thing--I met with the Prime Minister, the Defense 
Minister, the Speaker of the Parliament. We have got a Badr 
Brigade and we have a Pesh Merga. We all agree it would be 
ridiculous for either of them to agree to disband. We do not 
have enough American forces. Whether we should or should not 
have had them, they are not enough. And we do not have an Iraqi 
Army trained up yet.
    Every Sunni I spoke with said: Senator, do not send anybody 
into my neighborhood that ain't Sunni. The Sunnis are not 
joining that military. So send the Badr Brigade into the Sunni 
Triangle, send the Pesh Merga by any other name into the 
triangle, I think you really do have a civil war, you really do 
have a civil war.
    So what I keep coming back to is, as much as we say our 
presence is one that is rejected, every single person I spoke 
to this time, including the most reactionary Shi'a, who I will 
not name but I will tell you privately said: You got to stay, 
you got to stay.
    So it leads me to this conclusion and I will stop, and if 
you would want to comment I would appreciate it, but I fully 
understand if you do not because the hour is late. One, I do 
not know how we move further without following up on some of 
Dr. Cordesman's ideas, and I think they are good because I also 
have suggested similar things, so you might think I would think 
they are good.
    One is we need benchmarks here. How can we measure success 
or failure if the administration does not state what their 
intention is? The idea we are now sitting down and doing an 
assessment of oil? What are the benchmarks? What is the goal? 
What are we setting out? What is the thing we measure success 
or failure against, except sit back there and say, I am going 
to trust these guys for another 2 years, these same brilliant 
guys who brought us this strategy?
    The second thing I do not understand is--and I think our 
new Ambassador--I fully concur with you, General, he is first-
rate. I think you are going to see him do, I pray, that he is 
going to take all this stuff out of the hands of Brown and Root 
and the rest. And let us say they are all good guys, honest, 
wonderful people. As one person said to me--and I will not name 
his name, a flag officer: Do not build me a tertiary sewer 
treatment plant; give me the PCV pipe. Do not tell me you are 
going to change the whole water supply system; give me 
generators that I can use right here, right now.
    The only guys--the 2,000 projects you talked about are all 
military. They are the only guys who know how to do it. But 
that is not where most of the money is going; 90 percent of it 
is not. Now, they just made an adjustment and they are going to 
put a little bit more after--what are those funds called? 
Commander's Emergency Response Funds. We should give it all to 
them, figuratively speaking.
    The third thing is we need foreign help. We need more 
people in on the deal. Not only do we need a contact group that 
is, I would argue, broader, Dr. Pollack, broader than you 
suggested. I am just a plain old politician and let me point 
out to you that if in my State we had been invaded by--the 
southern part of the State had massacred the northern part of 
the State, we had to write a new Delaware Constitution, we are 
going to bring the State together, we want to keep it within 
its existing borders, and I am from the northern part of the 
State and I say, by the way, you know what we could do, we have 
got to include more of those southerners in this government--
walking into that constituency that just lost their brother, 
mother, sister, aunt, uncle, father, I would get my head ripped 
off.
    But if I walked in and said, you know what, everybody in 
the United States of America, the other 49 States, are giving 
us aid; they are insisting we have to include them. If we do 
not, we get no help. That is the reason why.
    These Sunni leaders know they have to get in on the deal 
and the Shi'a leaders know they have to let them in. But it is 
that second, third, and fourth strata. So I would suggest we 
kind of missed something without understanding the political 
dynamic of what it takes for a political leadership to stand 
before its constituency, and it is a constituency of sorts--it 
is tribal, but it is a constituency--and make these cases.
    So I really think we have to, and I hope you can weigh in 
with the administration. We need a contact group. We need some 
benchmarks. We need some means of measuring what we are about 
to do and not lay it all on Petraeus, who is doing a heck of a 
job.
    So those are my comments. Anybody that wants to respond to 
them, I would appreciate it. If you do not, I fully understand.
    General McCaffrey. Senator Lugar, I apologize. I must get 
on a plane to Los Angeles or I will be beaten by the supper 
group that is waiting for me. I thank you for the honor of 
being here. I have great respect for your leadership and thank 
you for allowing me to participate.
    The Chairman. Thank you very much, sir.
    Senator Biden. Again, there is no need to respond, but I 
would invite it if either one would like to.
    Dr. Cordesman. Senator, let me just make one very brief 
response. I think what bothers me a lot is the sheer complexity 
of this. You mentioned benchmarks. A lot of this is also very 
local and very regional now, and necessarily in our hearings we 
focus more on gross national trends. Whatever we do out there, 
we need to have a much better picture of what is going on in 
given cities, in given provinces. We need to make clear 
distinctions in tribal groupings and so on.
    What strikes me as strange, in addition to the lack of any 
meaningful articulated grand strategy, is the inability we have 
outside the military, where we do tend to map areas of risk, to 
truly say what is it we are doing, what we are trying to pull 
together, how we are supporting the Iraqis.
    I hope as you go through the hearings to follow you are 
going to ask people to deal with the complexity of these 
issues, to go beyond the sort of sweeping strategic 
generalizations which far too often are used in the politics or 
these strange nationwide measurements of where the aid goes 
without any indication of what is happening economically in 
those areas, how it interacts with the politics and how that 
interacts with the security situation, because frankly it seems 
that we have forgotten every lesson we learned in Vietnam about 
trying to figure out what is happening and what we are really 
doing and what the effects are, or we have managed to classify 
it to the point where none of the people involved seem to know.
    Senator Biden. That is exactly what I mean by benchmarks. I 
am not talking about one grand strategic plan. I want to know 
whether or not in each of the cities there is another 20 
minutes of electrical power going on. I want to know whether or 
not their intention is to provide in city A, B, C, or D 
additional generating capacity. I want to know whether or not 
they intended on having a county council or a city council 
elected and whether or not they got it elected. I want to know, 
but I have not been able to, except when I go to Iraq and sit 
down and almost always, notable exceptions, with a man or woman 
in uniform.
    Short of that, I do not know where to go to get it, and, 
therefore, the ability to measure this is almost impossible.
    Dr. Pollack. Sir, let me just add on. It is interesting, I 
think, that Tony and I fixed on the same point that you made in 
your remarks, which I think are so important. Your point about 
giving most or even all of the money directly over to the 
CERFs, to the Commanders Emergency Relief Funds, strikes me as 
being in the same vein. I think that there is a role for these 
kind of macrolevel questions that we have been discussing 
today, in part because I think we have some of the macrolevel 
approaches wrong. But as Tony is pointing out, we also really 
need to take a microlevel approach and that is because, in 
large part, if reconstruction is going to succeed in Iraq it is 
much more likely to succeed from the bottom up than the top 
down.
    We have mostly been taking over the last year and a half, 
maybe even 2 years, a mostly top-down approach, in part because 
we panicked because we did not have a plan to do it bottom up 
and it was easier to reach out to the top down, in part because 
I think the security situation is such that it is much easier 
to sit in a room with Ibrahim Jafari and 20 other Ministers 
than it is to send people out into the field, exactly as you 
have suggested. It is dangerous out there and our people get 
killed because it is dangerous out there.
    But I am very, very nervous about that approach. It has not 
worked well in the past in other places and it is not working 
terribly well in Iraq, and it is creating many of the different 
problems--political, economic, and military--that we have been 
talking about. So it is absolutely critical.
    I will make a broad generalization about making broad 
generalizations, which is that it is critical, as Tony 
suggested, to get down to the microlevel to find out what is 
going on in every city and every province and every 
neighborhood of Iraq, because that is where reconstruction is 
going to work. It is, of course, also where we have had a 
number of success stories. We have all heard any number of 
anecdotal reports about the local foreign service officer or 
the local military-civil affairs person or some other group who 
has been able to do something at the village level and have 
really been able to connect with the Iraqi people, and, of 
course, that is critically important.
    But, of course, we do not have enough people and we do not 
have enough resources to be doing that broadly across the 
country. We also have these macrolevel problems that are 
hindering these microlevel solutions and preventing these 
microlevel solutions from either being sustained or catching on 
and spreading or becoming part of a larger trend.
    Thank you.
    The Chairman. Just out of curiosity, either at CSIS or 
Brookings Institution do you have graphics of Iraq that show 
province by province, maybe as national news magazines in our 
country would have, coloring--some are red, some are orange, 
some are yellow, depending upon a scale of 10, security is 9-
plus here, 7.0 here, or thereabouts? Or maps that indicate per 
capita income, if that is an appropriate figure, or 
unemployment?
    I am curious because I share Senator Biden's thought about 
benchmarks. But I am just wondering who in the world anywhere 
has such a critical aid when we are trying to gauge success, 
not just success militarily. The American people look at all 
this in terms of political support and economic support and so 
forth for all this. This is a critical time in terms of our own 
internal country dialog.
    I am just curious what sort of resources there are out 
there that we may be missing.
    Dr. Cordesman. Well, Senator, I cannot speak for Brookings. 
The truth is an awful lot of the data that is being provided on 
Iraq is national. A lot of it will not survive engagement with 
any kind of investigation as to where it came from. Often the 
data come from an Iraqi ministry and some of the Iraqi 
ministries measure some things quite well. We do not do a 
particularly good job of reviewing that data or transmitting 
it. Often when we do it does not come in with the 
qualifications or the limitations involved.
    There has been some survey work done by the UNDP. It has 
some significant statistical problems with it, but it does get 
into some of these areas. It goes outside the ministries. But I 
think one answer to this is that we really do not take a 
significant account of what the Iraqi governments are saying. A 
lot of the time local governments or provincial governments 
also gather this data. We cannot go into the field and get it, 
and frankly it does not come forward. If it is being gathered 
in the Embassy, I do not know whether it is there. I think it 
is in some of our Embassy teams present.
    So it is not that the data are not there potentially. It is 
that they are not really being tied together. As for what the 
Pentagon has in its Situation Room, that is a mystery to me, 
but I think it is in some ways a more reassuring view of the 
data that is generated and provided in Baghdad, and it does not 
get into a lot of these issues.
    As Ken pointed out, we really do need to know, because, 
otherwise, to me the classic example is Basra. We have there a 
Shiite Islamist government which is not part of the mainstream 
alliance, running its own police force. Ken pointed out it has 
some of its own economic goals. And if it was not for press 
reporting, I do not think any of us, or listening to the 
British, any of us would be aware that there is a major problem 
in Basra from anything that is being said in reporting in the 
United States.
    Senator Biden. Can I interrupt on that one point? You know, 
there are surveys that have been done and we, the United States 
Government, presented to us as of July 6 an assessment of the 
goals on bridge and road construction, education, judicial, 
civil society, transportation, and how close we have come to 
meeting our targets.
    But we can do household surveys in each of these 
provinces--they are a sophisticated group of folks--to 
determine everything from whether or not the trash is being 
picked up to whether they have potable water to whether they 
have any health care. It is not absolute, but it is a better 
means by which--and to the best of my knowledge we are not 
doing that. We are not doing that on a detailed basis to get a 
read as to where the needs are.
    I just raise that as an example of what I mean by 
benchmarks. I am just trying to figure out how we begin to 
assess any of this. Your point, doctor, is correct. But for the 
fact--I mean, where would we read some of that stuff?
    Dr. Cordesman. Senator, let me just give you one example. 
The ministry dealing with municipalities did a water survey, 
indicated that something like 30 percent of the Iraqis now have 
a reliable source of potable water. They did break it down. 
Now, I suspect those results were not that accurate in the 
west. But it is not as if some of this is not being done.
    As for outside telephone surveys or the other kinds of 
surveys which are being used, let me say that most of us have 
forgotten more statistics than we ever knew and that seems to 
apply to many of those pollsters. The samples are simply 
ridiculous and the results are ridiculous and the lack of 
control questions are ridiculous. So I would much rather see if 
we cannot fix the Iraqi process of governance, which has got to 
work anyway, than rely on more surveys, many of which seem to 
have four or five pressworthy questions without controls.
    Senator Biden. I guess what I am saying, I would like to 
know what our administration's policy is as to how to fix the 
Iraqi Government. I would just like to know what it is.
    The Chairman. Let me just add another question that comes 
from things that both of you have written. Dr. Pollack, your 
book on Iraq was tremendously influential to many of us as we 
came up to that situation. Now your book on Iran is very 
helpful. Dr. Cordesman's work is legion. We all clip that and 
put it in our files.
    One of the background things that you touched upon, and 
that I really was struck by, at a recent Aspen Institute 
congressional event on Islam regarding borders. I deliberately 
brought that up in our questions. But a good many people in the 
region do not see the borders that were arbitrarily put in by 
Great Britain or France or what have you after World War I as 
especially relevant to their lives. They are still thinking in 
terms of the Saudi Peninsula or the Ottoman Empire or various 
other configurations of people, and as we have heard today, as 
Shiites or as Sunnis or as differentiations of these groups.
    This whole business of trying to get people to think about 
being Iraqis, of actually seeing a nation state that would have 
the cohesion we are talking about as being successful, is still 
viewed by some as a bridge too far. Now, others would say, 
well, 50 years have passed and there are a lot of people who 
have a sense of being Iraqi, including many Kurds, and so 
forth. And we all hope that that is so, so that a nation state 
is conceivable, as opposed to either civil war or a 
fractionalization, even without war, in which people simply go 
off on their own way with their militias and have their own 
situations.
    My hope is that, since you both are influential, you will 
continue to discuss the history of the situation and the 
expectations of people, so that all of us will have that kind 
of a background, of what a very large achievement that would be 
if, in fact, this group of people find themselves as Iraqis, if 
they are able to support a constitution for whom they have some 
allegiance, to share oil revenues, whether they be in Kirkuk or 
wherever ultimately.
    This is why it is important again for us all to understand 
how big the place is in terms of differentiation of localities 
and provinces. Otherwise we may be discovering, not separate 
nations and states, but strange alliances with other countries 
that are around. We are going to take that up as a part of our 
hearing. We will explore how people get together with the 
Iranians. We will focus not on the relationship of Iraq and 
Iran, but on specific parts of the countries that come together 
on some other basis than arbitrary borderlines that we may have 
had before.
    I just make this as an observation. You all talked about 
it, but I think it was simply important to add.
    Finally, let me just say that I appreciate the fact that, 
as Senator Biden said earlier, at least those of us who were 
sitting there at that point--the Senator, myself, and I am 
certain Senator Hagel would share that view, and all of you--we 
are discussing this today from the premise that we must 
succeed. That was the purpose of this hearing and of the full 
series of hearings. This is not to be a forum in which somehow 
we discuss why we fail and why inevitably we must go downhill 
from here.
    We understand the lay of the land, I think. We know, 
realistically, how daunting the challenges are. But the purpose 
of this is to try to illuminate the facts and ways of 
collecting data or arguments that are beyond this, and 
conveying this information to other policymakers. I would just 
say, for whatever reassurance it is, we intend to share broadly 
with members of the administration the papers that you have 
written, the record of the series of hearings. We are hopeful 
that they will find them as profitable as the members have 
today.
    I thank both of you very much, and General McCaffrey as 
well, for remarkable testimony and the contribution you have 
made. So saying, the hearing is adjourned.
    [Whereupon, at 12:50 p.m., the committee was adjourned.]


                 ADVANCING IRAQI POLITICAL DEVELOPMENT

                              ----------                              


                         TUESDAY, JULY 19, 2005

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:30 p.m., in 
room SH-216, Hart Senate Office Building, Hon. Richard Lugar 
(chairman) presiding.
    Present: Senators Lugar, Biden, and Dodd.

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

    The Chairman. This meeting of the Senate Foreign Relations 
Committee is called to order.
    Today the Committee on Foreign Relations again meets to 
discuss Iraq, specifically how our Government can help advance 
Iraqi political development.
    Last January we witnessed the strong desire of Iraqis to 
achieve a working democracy when 8 million Iraqi citizens 
risked their lives to exercise their new freedom to vote.
    The resulting Iraqi leadership is working under difficult 
circumstances to include Iraqis, Shi'as, Kurds, and Sunnis, 
something never before achieved in an Iraqi Government. The 
cooperation among Iraqi groups has occurred despite the efforts 
of the insurgents to provoke a civil war or undermine the 
fledgling government institutions by perpetuating deadly 
attacks.
    But the political situation is fragile, and success will 
require much compromise, as well as progress in the security 
and the economic spheres. Even as we discuss options for 
enhancing the development of Iraqi political institutions, we 
are mindful that relevant deadlines are fast approaching.
    The Iraqi Government must draft a constitution by August 
15, and organize a referendum on it that is planned for October 
15. National elections for a permanent government would follow 
by December 15, 2005.
    These political milestones have come to be seen as integral 
to the overall goals of solidifying Iraqi political stability, 
overcoming the insurgency, and, ultimately, withdrawing United 
States forces from Iraq.
    In the last several weeks Iraqis on the Constitution 
Drafting Commission have indicated that significant progress 
has been made on the constitution, and this is encouraging 
news. But polling data indicates that there is still a great 
deal of uncertainty among Iraqis about exactly what is ahead in 
this process.
    Recognizing the importance of the aggressive constitutional 
and electoral time lines to our own interests, we'll be asking 
our experts today whether the time line is achievable, and what 
ramifications might occur if deadlines are changed or missed. 
We'll examine whether the current timetable remains the best 
option for advancing political development. We will also focus 
on whether it's possible to change the political climate 
through a public education campaign, how we can forestall a 
Sunni-Shi'a conflict, and how we can help cultivate Iraqi 
leaders who will tolerate inclusive political interaction 
without resorting to violence or other exclusionary tactics.
    Yesterday the committee examined options for improving the 
security climate in Iraq. Today we will proceed with the same 
format that yielded an excellent discussion in Monday's 
hearing.
    Our discussion will be organized around four policy options 
for improving the political situation in Iraq. Accordingly, 
after Senator Biden and I offer opening comments--and Senator 
Biden will be recognized when he comes to the hearing--instead 
of hearing comprehensive statements from the witnesses, at that 
point we will put the first policy option and associated 
questions before our expert panel. Each witness in turn will 
provide his or her views on the option being presented.
    Then we will put the second option before them, and then 
the third and fourth.
    Finally, recognizing that options exist beyond our 
published hearing plan, we will ask our witnesses if they would 
like to offer any additional ideas for improving political 
development in Iraq that have not been discussed.
    After this sequence, committee members will be recognized 
in turn to address questions to any member of the panel. My 
hope is that through the expertise of the witnesses, and the 
questions of the members, we may achieve a systematic 
evaluation of the options present for improving the Iraqi 
political situation.
    We are very pleased to welcome a distinguished panel of 
experts to help us with this inquiry today. Dr. Phebe Marr is a 
senior fellow at the United States Institute of Peace. She has 
been a valuable advisor to our committee on matters pertaining 
to Iraq, and she has testified before us on many occasions.
    Ms. Judy Van Rest is the executive vice president for the 
International Republican Institute. From April 2003 to July 
2004, she served as senior advisor for Governance and director 
of Democratic Initiatives for the Coalition Provisional 
Authority.
    Dr. Noah Feldman has also testified before us previously. 
He is a professor of law at New York University, and in 
addition to his academic work, he has advised the Coalition 
Provisional Authority on constitutional law issues.
    These experts have spent a great deal of time analyzing the 
Iraqi political situation, and we're grateful that we can draw 
upon their experiences and insights today.
    As I mentioned at the outset, we'll commence our hearing 
with the first set of questions, and I will ask--after I've 
read this material--for Dr. Marr to respond, then Ms. Van Rest, 
and then Dr. Feldman, in that order. And we'll rotate. The 
first responder for the second question will be Ms. Van Rest. 
You'll have an opportunity to lead off then, and Dr. Feldman on 
the third, and then back to you, Dr. Marr, on the fourth.
    Option number one: Should the coalition encourage Iraqis to 
forgo writing a full constitution at this time; or should we 
encourage a strict adherence to the current deadlines for 
finishing a constitution?
    Does the current compressed timetable for drafting and 
approving the constitution aggravate the destablizing 
differences among the parties?
    Delay would involve setting aside thorny issues that could 
undermine national cohesion like regional autonomy, the status 
of Kirkuk, the role of Islam, and others.
    Instead, should we be encouraging Iraqis to promulgate a 
miniconstitution covering electoral law, and other items on 
which agreement can be reached? Would agreements on limited 
subjects build momentum toward cooperation on more difficult 
items; or should we stick to the current schedule by pressing 
for a completed constitution by the deadlines that have already 
been established?
    What pressures, if any, can or should the coalition exert 
on the Iraqi Government to adopt either of these courses?
    Dr. Marr, would you lead off? And we welcome you again to 
the committee today.

 STATEMENT OF DR. PHEBE MARR, SENIOR FELLOW, U.S. INSTITUTE OF 
                     PEACE, WASHINGTON, DC

    Dr. Marr. Thank you very much, and I'd like to thank the 
members of the Senate Foreign Relations Committee, especially 
yourself, Mr. Chairman, for addressing these issues and for the 
opportunity to testify.
    I must add that my views here are my own, and not 
necessarily those of the U.S. Institute of Peace, which does 
not advocate specific policy positions.
    In my view the coalition should take its lead from the 
Iraqis and should not be seen to be intervening directly in the 
constitutional process, although it can certainly offer help 
and encouragement behind the scenes.
    The Iraqis, as you say, are intensely engaged, at the 
moment, in negotiations on the constitution and have indicated 
that they think that they can complete most of the necessary 
compromises and the drafting process by the deadline.
    If that is actually the case, it would seem presumptuous of 
us to urge them to take more time. However, as seems more 
likely, particularly with the news yesterday and today that the 
drafting proves more difficult, or Iraqis, themselves, indicate 
that they need more time, we should be encouraging them to take 
it, not forcing a deadline. In short, pressure for the deadline 
should not be coming from us.
    Rather, our message should be the achievement by Iraqis of 
a better instrument, one that satisfies Iraqi needs rather than 
a symbolic achievement of meeting a deadline.
    There are several incentives behind the drive to meet the 
deadline. One is the United States agenda, the need to prove to 
the United States public that progress is being made in Iraq.
    A second is the Iraqi election schedule and the desire by 
the current government to prove itself by meeting the deadline 
and by moving to another more permanent election.
    Third is the oft cited need to keep people's feet to the 
fire. Without a deadline the process could drag on indefinitely 
postponing the hard work of compromise, rather than facing the 
issues.
    Lastly, there's the symbolic fallout of missing the 
deadline, which could be seized on by the insurgents for 
propaganda.
    But these arguments, especially the last, in my view, do 
not outweigh the argument for taking more time, if needed, to 
produce a better constitution. Additional time should be 
evaluated on the basis of what can be achieved with it.
    For example, in the short term, there could, perhaps, be 
better public education and outreach on the constitution; a 
second benefit might be a greater inclusion of the Sunni 
community.
    But it must be admitted that several issues will be just as 
difficult to resolve in 6 months as on August 15. One is the 
thorny issue of Iraqi identity. The constitution will be 
expected to lay down a few principles on this subject. What 
will it say about nationalities? And will that satisfy the 
Kurdish need for a distinct identity? What about Iraq as part 
of the Arab world? And if Iraq is declared an Islamic State 
will that formulation provide space for secularists, non-
Muslims, women?
    But the second issue is, perhaps, the most difficult; that 
is the issue of federalism and the distribution of power 
between the central government and various provincial and local 
units.
    This involves, as you know, defining the provincial and 
local units. This solution must deal with the Kurdish regional 
government, whether Kirkuk and other territories are included 
in it, and the powers of the local units, especially the KRG 
and the central government, particularly, with respect to 
collection and distribution of revenue.
    Connected with this is the issue of ownership and 
management of Iraq's resources, especially oil. Will this be 
vested in the central government, or Iraq citizens, or will 
some of these resources accrue to local and regional 
governments?
    There will have to be a compromise and an understanding on 
these issues before the broad outlines of a constitution and 
stability in Iraq can take shape. If compromise cannot be 
reached, or at least, some broad principles laid down by August 
15, then Iraqis should be allowed to extend the deadline as 
provided in the TAL.
    It's not clear that simply putting out a miniconstitution 
with agreement on what they can achieve in the short term and 
postponing these critical issues is a solution. Neither the 
identity issue, nor the federal issue, are likely to be solved 
with any finality in a few weeks or even a few months. But by 
putting them off indefinitely it may make them more difficult 
to solve later as special interests become entrenched.
    Rather, Iraqis should be encouraged to think of this 
constitution as the first of many steps in the process of 
knitting their society and their country together and in 
democratizing it.
    Whether by August 15 or January 15 they should be 
encouraged to achieve a flexible formula for sharing power 
among communities and achieving a balance of power between the 
center and the periphery. They will need to come out with a 
constitutional framework firm enough and broad enough to 
provide for a stable, effective, government with enough 
sovereignty and legitimacy to instill confidence in Iraq's 
future at home and abroad.
    This is particularly important for foreign investors who 
will not want to sink money into a country whose government 
does not appear to be stable. But this instrument must also be 
flexible, able to be modified by some acceptable public 
process, over time, to allow for growth and development on the 
ground.
    What can and should the coalition do to advance this aim?
    First, stop pressure and public policy statements on the 
need to meet the August 15 deadline. Let the Iraqis take the 
lead, but let them know privately and publicly that if they 
need more time they should take it.
    Second, make equally clear, however, that the time is not 
limitless, that the TAL provisions do need to be met and that 
the time extension for some reasonable draft should be met, 
certainly, by January 15, if not before.
    Thus the momentum, which is already underway on the 
constitution, will be maintained.
    Third, encourage all concerned to view the constitution as 
a framework, an initial step in Iraq's constitutional life 
which can be adjusted, over time, in a public process to 
accommodate change. The constitution itself, of course, should 
provide for such a process.
    And fourth, encourage a more realistic attitude, especially 
in the United States, over what to expect of the constitution. 
Too much weight has been placed on the constitution as a 
turning point, and a means of curtailing the insurgency.
    Like the election, the draft constitution will be a 
positive step, but, in itself, is not likely to have more than 
a marginal effect on the insurgency. Tying the two together is 
a political mistake.
    [The prepared statement of Dr. Marr follows:]

  Prepared Statement of Phebe Marr, Senior Fellow, U.S. Institute of 
                         Peace, Washington, DC

    I would like to thank the members of the Senate Foreign Relations 
Committee, particularly Chairman Lugar and Ranking Member Biden, for 
holding this hearing today, and for the opportunity, once again, to 
offer my views on the political situation in Iraq and to suggest some 
ideas for increasing the chances for success in Iraq. I want to add 
that the views expressed here are my own and not necessarily those of 
the U.S. Institute of Peace, which does not advocate specific policy 
positions.
    The committee has posed a number of penetrating questions and 
options and asked for our analysis and suggestions. They have not been 
easy to answer because they touch on issues which go to the heart of 
the difficulties confronting Iraqis and the coalition forces. But I 
will do my best to address them.

    1. Should the coalition encourage Iraqis to forgo writing a full 
constitution now, or encourage strict adherence to current deadlines 
for finishing the constitution?

    The coalition should take its lead from the Iraqis and should not 
be seen to be intervening in the constitutional process, although it 
can offer help and encouragement behind the scenes. The Iraqis are 
intensely engaged at the moment in negotiations on the constitution, 
and have indicated that they think they can complete most of the 
necessary compromises and the drafting process by the deadline. If that 
is actually the case, it would seem presumptuous of us to urge them to 
take more time. However, if, as seems likely, the drafting proves more 
difficult or Iraqis themselves indicate they need more time, we should 
be encouraging them to take it--not forcing a deadline. In short, 
pressure for a deadline should not be coming from us. Rather, our 
message should be the achievement by Iraqis of a ``better'' instrument, 
one that satisfies Iraqi needs, rather than the symbolic achievement of 
meeting a deadline.
    There are several incentives behind the drive to meet the deadline. 
One is the U.S. agenda--the need to prove to the U.S. public that 
Iraq's political process is moving ahead, that progress is being made, 
and that the U.S. commitment has some measurable achievements--sorely 
needed in the face of insurgent attacks. A second is the Iraqi election 
schedule and a desire by the current Iraqi Government to prove itself 
by meeting the deadline and consolidating power by moving to another, 
more permanent election, as soon as possible. Third is the oft-cited 
need to keep people's ``feet to the fire.'' Without a deadline, the 
process could drag on indefinitely, postponing the hard work of 
compromise, rather than facing the issues. Lastly, there is the 
symbolic fallout of missing the deadline which could be seized on by 
insurgents for propaganda value. But these arguments--especially the 
last--do not outweigh the arguments for taking more time, if needed, to 
produce a better constitution.
    Additional time should be evaluated on the basis of what can be 
achieved with it. Here one must make a distinction between what could 
be achieved if the deadline were advanced a few more months, and what 
may take years or decades to achieve. In the short term, one thing that 
could be better achieved would be public education on the constitution 
and feedback from the public in time for consideration in the draft. 
Some effort has been made in this direction; but not enough. If the 
drafting committee could indicate, at the end, that they had considered 
public opinion, it might make a difference in public acceptance and the 
feeling the public had a stake in the process. A second beneficial 
outcome might be greater inclusion of the Sunni community. Sunnis have 
been included in the drafting process but more time might allow greater 
consultation and mobilization of support. Third, perhaps most 
important, more time could help in crafting a new electoral law that 
was more inclusive, if the constitutional committee were so inclined. 
Many Iraqis are suggesting that the law put more emphasis on districts 
and provinces, but this would require a census and other measures, 
which are time consuming. Time should not dictate something as 
important as the electoral law.
    But several issues will be difficult to resolve on August 15--and 
probably just as difficult on January 15. One is the issue of Iraqi 
identity. Is there an Iraqi identity and if so what is its nature? The 
constitution will be expected to lay down a few principles on this 
subject that various communities inside--and outside--Iraq will be 
watching carefully as a pointer to Iraq's future. What will the 
constitution say about ``nationalities'' inside Iraq and will it 
satisfy the Kurdish need for a distinct identity? What about Iraq as 
part of the Arab world? A statement that satisfies Arab nationalists, 
especially among the Sunnis, may not sit well with Kurds and some 
Shi'a. And if Iraq is declared an Islamic State, will the formulation 
provide space for secularists and non-Muslims? Even the Iraqi flag, as 
a symbol of Iraqi identity, will be contentious.
    Second is the issue of federalism and the distribution of power 
between the central government and various provincial and local units. 
This is undoubtedly one of the most contentious issues. First, it 
involves defining provincial and local units and their territorial 
boundaries. This solution must deal with the Kurdish Regional 
Government (KRG) and whether Kirkuk and other territories are included 
in it. It could also involve creating larger regional units, for 
example, in the region around Basra. Will the current 18 provinces 
continue to exist? Will provinces be defined on a territorial basis or 
will there be an ethnic or sectarian component? And what will be the 
powers of the local units (especially the KRG) and the central 
government, especially with respect to the collection and distribution 
of revenue?
    Third is the issue of ownership and management of Iraq's resources, 
especially oil. Will this be vested in the central government, or in 
Iraq's citizens as a whole. Or will some or all of these resources 
accrue to local and regional governments? Lastly is the issue of 
national security, the formation of a national army and the role of the 
various militias with respect to the central government.
    There will have to be a compromise and an understanding on these 
issues before the broad outlines of a constitution--and stability in 
Iraq--can take shape. If they cannot be reached, or, at least, some 
broad principles laid down--by August 15, then the Iraqis should be 
allowed to extend the deadline as provided for in the TAL. It is not 
clear that simply putting out a miniconstitution, with agreement on 
what they can achieve in the short term and postponing these critical 
issues, is a solution. Neither the identity issue--which involves 
relationships among Iraq's ethnic and sectarian communities--nor the 
federalism issue, which involves power sharing among communities and 
territorial units, are likely to be solved with any finality in a few 
weeks or even months. But putting them off indefinitely may well make 
them more difficult to solve later as special interests become 
entrenched. Rather Iraqis should be encouraged to think of this 
constitution as the first of many steps in the process of knitting 
their society and their country together and in democratizing it.
    Whether by August 15 or January 15 they should be encouraged to 
achieve a flexible formula for sharing power among communities and for 
achieving a balance of power between the center and the periphery. They 
will need to come out with a constitutional framework firm enough and 
broad enough to provide for stable, effective government, with enough 
sovereignty and legitimacy to instill confidence in Iraq's future at 
home and abroad. This will be particularly important for foreign 
investors who will not want to sink money into a country whose 
government does not appear to be stable. But this instrument must also 
be flexible, able to be modified by some acceptable public process over 
time, to allow for growth and development on the ground. Iraq's new 
identity; the relationship between the center and the provinces; and 
between its various communities will take decades to grow. The 
instrument that is written now should provide a framework for that 
growth, including the possibility of future discussions and 
modification. Any thought that a product achieved on August 15--or 
January 15--will be ``final'' is folly. But simply putting off 
difficult questions indefinitely is not an acceptable solution either.
    What can/should the coalition do to advance this aim?

   Stop pressure and public policy statements on the need to 
        meet the August 15 deadline. Let the Iraqis take the lead, but 
        let them know, privately and publicly, that if they need more 
        time, they should take it.
   Make it equally clear, however, that the time is not 
        limitless; that the TAL provisions do need to be met, and that 
        the time extension for some reasonable draft should be met by 
        January 15. Thus the momentum already underway will be 
        maintained.
   Encourage all concerned to view the constitution as a 
        framework, an initial step in Iraq's constitutional life, which 
        can be adjusted, over time, in a public process to accommodate 
        changes. The constitution, itself, should provide for such a 
        process.
   Encourage a more realistic attitude, especially in the 
        United States, over what to expect of the constitution. Too 
        much weight has been placed on the constitution as a ``turning 
        point'' and a means of curtailing the insurgency. Like the 
        election, the draft constitution will be a positive step, but, 
        in itself, is not likely to have more than a marginal effect on 
        the insurgency. Tying the two together is a political mistake.

    2. Should the coalition conduct a public education campaign 
designed to stimulate interest in the constitution and discussion of 
the insurgency?

    This is much easier to answer. The Iraqi Government--not the 
coalition--should conduct a public education campaign on the 
constitution but this campaign should not include discussion of the 
insurgency. These are two separate--though related--issues, which 
should not be mixed. Doing so would tie the constitution and its 
content to the insurgency; divert attention from the main subject and 
fix the two together in the public mind. It could put the constitution 
at risk and provide a new target for insurgent attacks. Worse, it could 
make the constitution's success appear contingent on insurgent activity 
and tie the government's agenda to the insurgency. The agenda should be 
in the hands of the elected government. Discussion of the 
constitution--as the blue print for Iraq's future--should stand on its 
own. But the public discussion should make clear that the political 
process is open to all and is the appropriate vehicle to achieving 
political goals--not violence--in the new Iraq.
    Whether a ``massive'' campaign can be conducted under present 
conditions is questionable, but certainly considerable public activity 
can be undertaken on the constitution and its various provisions. 
Discussion of these issues is important to invest society in the 
political process and the government to follow. Certainly issues can be 
debated in the media--press, radio and TV; in university and school 
settings; and within limits, in townhall settings. These steps will 
have a number of virtues. This activity is mandated in the TAL and 
following TAL procedure will demonstrate adherence to the rule of law. 
Even more important, it will help build civil society. Various civic 
groups formed to educate the public will be the basis for future 
interest and ``watchdog'' groups. (Already a number of these have 
formed and are operating.) This will lay the basis for future political 
participation.
    Special effort should be made to persuade Sunnis to lead the 
process in Sunni areas and to encourage Sunni participation in the 
discussion. The opportunity to participate in and influence the 
constitutional process is essential to give Sunnis a feeling that they 
have a stake in the future.
    I have a problem with the timing of the process, however. A public 
education campaign needs to be undertaken both before and after the 
final draft is submitted, so that the public feels it has a say in its 
content. While some activity has been initiated in this area, the 
efforts have been little and late. As the deadline nears, it is 
unlikely that such efforts will bear much fruit; hence, Iraq may be 
missing a chance to help invest the public with a feeling that it has a 
stake in its outcome. This is another reason to extend the timeframe 
somewhat.
    There is still an opportunity for public education after the draft 
is submitted and before the referendum and this is essential, not only 
for the vote on the constitution, but for the political process to 
follow. It is assumed that the constitution will elaborate principles 
to be followed by legislation filling in specifics in many areas. The 
public campaign can educate various sectors of society on their rights 
and obligations as specified in the constitution and how it will affect 
them. The groups which undertake this campaign will be essential 
building blocks in furthering this legislation and bringing the public 
and its various sectors into the process.

    3. Should we take steps to forestall a Sunni-Shi'a conflict?

    In some ways the question may misdefine the issue. Rather than a 
Sunni-Shi'a conflict, the conflict is much broader, and involves all of 
Iraq's communities in a search for a new identity. In fact, there are 
two complex processes going on. The first is an increasing polarization 
of the Iraqi polity among both ethnic and sectarian communities--Kurds 
and Arabs as well as Shi'a and Sunnis--as Iraq searches for a new 
political identity and a new political center of gravity. As is well 
known, the elections in January of this year put into office a majority 
Shi'a ticket--the United Iraqi Alliance--which got 48 percent of the 
vote; 51 percent of the seats in the assembly; and a Kurdish ticket 
which polled 26 percent of the vote and got 27 percent of the seats. 
Parties, such as the Iraqi list, led by Ayad Allawi, and the Iraqiyyun, 
led by Ghazi al-Yawar, which ran on a more centrist, nonsectarian 
platform, together polled only a little more than 15 percent of the 
vote. Sunnis, many of whom boycotted the election or failed to vote for 
other reasons, gained only 17 seats in the assembly, 6 percent of the 
total. The elections reflected a reality that Iraqi politics now runs 
largely on the foundation of cultural identity, not on the basis of 
interests or party platforms. Helping to move Iraq away from this 
polarization and encouraging a sense of national identity. should be 
one of the coalition's long-term goals.
    But it is well to keep in mind that both the Shi'a and the Kurds 
have been disciplining their own communities and preventing retribution 
and retaliation--up to a point. This has been successful largely 
because these two groups have benefited by inheriting power in the new 
regime, although this discipline may be breaking down on the ground. A 
Shi'a rejectionist, Muqtafda al-Sadr has been temporarily silenced, in 
part by military action, but more importantly by being brought into the 
political process. While Sadr himself did not run for election, he 
allowed his supporters to do so. They did well in the southern 
provinces and, through their participation on the UIA ticket, got a 
substantial number of seats in the assembly, and even some in the 
Cabinet. The Kurdish leadership, which tends to be pragmatic, has 
skillfully managed a younger generation of more extreme nationalists, 
best represented in the referendum movement, again because Kurds have 
been included in power; indeed, a Kurd is President of the Republic.
    In the end, rather than a Shi'a-Sunni conflict what we see is that 
of rejectionists of a new government and a new political order. This is 
the second, more critical process, most virulently manifested in the 
insurgency. Most of the rejectionists are Sunnis; most of the 
government and those shaping the new order are Shi'a and Kurds. But the 
Sunni rejectionists need to be understood, not simply as a sectarian 
group but as a community whose leaders once occupied power, not as 
Sunnis but mainly as nationalists, and now find themselves to be an 
increasingly marginalized minority. They not only resent their loss of 
power and status, but fear discrimination and victimization by the new 
ruling groups. Many have also lost employment and economic benefits as 
well. Moreover, the Sunnis are fragmented and generally without a 
strong spokesman or spokesmen who can speak for a broad sector of the 
community, although some groups are coming forward.
    In general Sunni rejectionists can be divided into several 
different categories. Extremists, such as the Islamic salafists and 
jihadis, tied to al-Qaida, and former Saddam loyalists engaged in the 
general violent mayhem in Iraq, are generally beyond the pale and 
cannot, and should not, be propitiated. But a number of other Sunni 
oppositionists--army officers, former Ba'th Party members, nationalists 
opposed to ``occupation'' and unemployed youth riled by current 
conditions--can probably be brought into the fold of the new regime in 
time and with the proper incentives. Conversations with Sunni 
oppositionists indicate that their concerns are (a) occupation and the 
foreign presence; (b) loss of power and prestige; (c) lack of Sunni 
representation in the political process; (d) increased sectarianism; 
and (e) the lack of a rule of law and security, especially for their 
community.
    Attempts to alleviate this problem should focus on addressing these 
problems. Several suggestions can be made.
    First, encourage the government to bring Sunnis into the political 
process. Progress has already been made through Sunni representation on 
the constitutional committee. A media campaign to solicit opinions on 
the constitution would further this process. If more time is needed to 
provide security in Sunni areas and to make sure a level playing field 
emerges in preparation for elections--both the vote on the constitution 
and the next parliamentary election--encourage the government to 
provide it.
    Second, encourage a revision of the election law which moves from a 
single countrywide election list to a more district-based system, which 
assures Sunni areas seats in the assembly regardless of who votes, and 
allows local leaders to emerge in Sunni provinces.
    Third, encourage the current government to revisit the de-
Ba'thification program. Anecdotal evidence suggests that much of the 
educated middle class--especially academics and professionals like 
doctors and lawyers--who may have been party members but who have no 
criminal records, feel alienated and left out. This class is 
particularly turned off by increased sectarianism, and by de-
Ba'thification which discriminates against them. Many are leaving, thus 
depriving Iraq of much-needed expertise. A better vetting system, which 
focuses on individual behavior and records, rather than a blanket 
category such as party membership, would help. But it has to be borne 
in mind that this is still an extremely sensitive issue for the new 
Shi'a and Kurdish leaders, who will need encouragement to move in this 
direction.
    Fourth, many Sunnis complain of a lack of rule of law and security. 
Strengthening the court system, the prison system, and the police 
system would also help. While this is a long-term effort, it is 
particularly necessary in Sunni areas and in Baghdad. Much of the 
security threat is due to common crime, especially kidnappings. 
Focusing on developing local police in local areas, and getting 
international help for the effort, could allow coalition forces to pull 
out of difficult cities, alleviating some of the problems of the 
military presence in Sunni areas. Many Sunni professionals could also 
be employed in the legal justice system, if strict standards of 
meritocracy are employed.
    Lastly, outside mediation might have some benefit but it needs to 
be handled carefully, lest it be seen as interference, especially by 
the new Shi'a-dominated government. Many key members of the new 
government have long been in opposition to the Sunni-dominated Ba'th 
regime. They face persecution, imprisonment, killing of relatives and 
long exile at their hands and hence fear and often distrust them. This 
fear and distrust is reciprocated by Sunnis, particularly since many of 
the Sunnis who need to be brought into the process may, indeed, have 
had contact with those using violence against the regime or have been 
supporting it. Hence, involvement by key figures in neighboring Arab 
Sunni States may be regarded with suspicion. However, including some 
Arab leaders in an international delegation--particularly if the 
delegation also included Shi'a--might be a good idea.
    Any mediation effort involving neighboring states would need a 
clear definition of its mission and what it could do to influence and 
mitigate the ``Sunni'' problem. The current government would be 
interested in efforts to control the border; efforts to control 
finances flowing to insurgents; public support for the electoral 
process and the new constitution; and public rejection of violence. 
International and regional efforts along these lines, in return for 
Iraqi Government efforts to bring more recalcitrant Sunnis into 
government and local police forces, might be helpful.

    4. How can the coalition cultivate new leaders in Iraq and insure 
that they will interact politically, rather than using violence?

    I am currently involved, as a fellow at USIP, in a study of Iraq's 
emerging political leadership and their various visions for the future 
of Iraq. In conjunction with this project, I have made two trips to 
Iraq--one in December to northern Iraq to interview Kurdish leaders and 
one in May and June to Baghdad and Basra to talk to the newly elected 
members of the assembly and the government and others working at the 
provincial level. These interviews revealed a rich mix of political 
leaders emerging with considerable promise for the future, although 
that promise may take some time to mature.
    The problem of replacing Iraq's leadership once Saddam and the 
Ba'th had been removed has always been one of the most difficult facing 
Iraq and the coalition. After 35 years in power, Saddam loyalists and 
the Ba'th Party were deeply entrenched not only in the military and 
security services, but in the bureaucracy and the education 
establishment as well. If many had been left in power at lower levels, 
continuity might have been greater, but there would have been little 
change from the past and leaving them in would have alienated the 
opposition which was spearheading the change. Removing and disbanding 
the previous pillars of state--the option chosen by the coalition--has 
allowed for entirely new leadership to emerge, but it has deeply 
alienated the previous official class and created a large vacuum at the 
center of power. Filling this vacuum, has been difficult.
    New leadership can come essentially only from two or three sources. 
One is the reintroduction of elements of the previous regime, vetted 
for security purposes. The second is from exile opposition groups who 
have been operating outside of Iraq for decades; and the third is from 
the indigenous Iraqi population, most of whom have had little or no 
leadership experience. Essentially, the coalition opted for the second 
solution, disbanding the army and the party and essentially bringing in 
a large group of exile opposition leaders, mainly from the West. This 
group dominated the Iraq Governing Council (IGC) and its associated 
Cabinet formed in 2003.
    In this first attempt at government, the CPA attempted to balance 
all of Iraq's ethnic and sectarian groups and also brought in most 
political parties--other than the Ba'th--that had played a role in Iraq 
previously. But the dominant members of the IGC, at this stage, were 
Western-educated Iraqis with long residence in, and familiarity with, 
the West. Many, though not all, were relatively secular. The shift to 
an interim government in 2004 did not essentially change that pattern, 
but the election of January 2005 brought an expression of popular will 
and a shift to new leadership which probably better reflects future 
trends in Iraq, although it is too soon to make firm predictions on 
that score. Several points need to be made about this leadership to 
understand the leadership challenge facing Iraq.
    First, the current government, like its predecessors, is dominated, 
at its upper ranks, by exiles who have spent most of their formative 
years outside Iraq, or in the case of the Kurds, running their own 
government in the north. But there has been a change in these exiles. 
Whereas earlier regimes--the IGC and Interim government--were led 
mainly by Western-educated and Western-oriented oppositionists, the new 
government is not. Some of these earlier politicians are still present, 
but key positions are now in the hands of the Shi'a religio-political 
parties of the UIA and the Kurdish parties. The Shi'a members of the 
opposition have often spent time, not in the West, but in Iran, or Arab 
countries like Syria and Lebanon. They are Arab Iraqis but are 
interested in instilling more of an Islamic identity in Iraq. So in one 
sense, Iraq has exchanged one set of exiles for another. But for now, 
new political leadership from inside Iraq--though it is emerging--has 
still not made its way to the top leadership posts in any significant 
numbers.
    Second, turnover in posts at the top has been substantial, creating 
lots of opportunities for social mobility, but little to gain 
experience. The same phenomenon is true at local and provincial levels 
where discontinuity may be even greater. In the current government, 
over 60 percent of Cabinet Ministers are new to the job. And even those 
who are not new, have only held a post at that level for a year or so 
in a previous Cabinet. Even then, many have been shifted from one 
ministerial post to another, giving them little time to put down roots. 
While some of this change is to be expected in a situation of radical 
change, it means that most new leaders still have little experience in 
running a state. Even well-trained exiles, to say nothing of indigenous 
Iraqis, will need time and a learning process to acquire this 
experience.
    One exception to this rule is the Kurdish leadership occupying 
positions in the central government and in the KRG. They have acquired 
considerable experience and maturity, often through the school of hard 
knocks, from running government in the north; dealing with the failure 
of a civil war; holding (imperfect) elections; and in dealing in 
foreign affairs with neighbors and with Europe and the United States. 
It is not surprising that their area is quiet and gradually becoming 
more prosperous. The question with the Kurds, however, is how committed 
they are to building Iraqi institutions in the center, as opposed to 
those in the north and how to draw this experienced leadership further 
into the rebuilding of Iraq.
    Experience in government also exists among academics and former 
bureaucrats some of whom were ex-Ba'thists and affiliated with them. 
But are they flexible and open enough to deal with the new situation? 
Many are still alienated by the loss of their status and fearful of 
discrimination. The question here is how to bring them in and 
compensate for their loss of status and prestige. Distrust between new 
and old must be dispelled and ways found to get both groups working 
together. There is some progress here, but it needs to be excelerated.
    Lastly there is the problem of differing visions of the future Iraq 
and where the various leaders would like to take the country. Arab 
Sunnis, and certainly ex-Ba'thists, want a unified country, empty of 
foreign forces, with a strong central government and a rule of law and 
meritocracy--all of which would favor them. Kurds want a federation 
with a high degree of self-rule. They are largely secular and look for 
a separation of mosque and state; and they support the continued 
presence of U.S. troops for protection. The dominant Shi'a coalition 
wants to affirm the Islamic character of Iraq and strengthen the role 
of Islamic law; is wary of U.S. forces but needs them temporarily to 
assure continuation of its majority rule; and favors elections which it 
hopes will assure its continued political dominance. And indigenous 
leaders would like to ease out the exiles to make room for themselves. 
All of these differences will have to be reconciled and political space 
made for different groups to live, compete and thrive. This will take 
years, but the process is already underway with Iraq's first free 
election and the negotiations for a constitution. In fact, the ongoing 
political process is one of the bright spots in a sometimes bleak 
picture.
    How can this process be facilitated and how can the coalition help?
    First and foremost, every effort should be made to open Iraq to the 
outside world. While exiles have had some exposure to the outside, 
those inside have had little. Education at every level has deteriorated 
and Iraqis, especially professionals, are hungry for outside expertise 
and contact. Give it to them. Visitors programs, fellowships, and 
scholarships to study at United States and European universities and 
colleges, providing computers and library facilities to universities 
and centers, and similar programs need to be encouraged and funded. 
While these are already underway--and have been successful--much more 
needs to be done. The greater interpersonal contacts that ensue will 
establish networks that can be built on in the future. One of the most 
positive aspects of my trips was in finding young people, in their 
twenties and thirties, who wanted to come to the States to study 
political and social sciences--not engineering and computers science--
for the first time in decades. We should encourage that.
    Second, concentrate on the younger generation which is Iraq's 
future. While the vision of most of the 40- and 50-year-olds in 
leadership has already been formed--and often in divergent ways--those 
in their adolescence and early adulthood are still flexible. And we 
should avoid stereotypes. For example, among the most hopeful and 
promising experiences of my trip to Baghdad was in talking to this 
generation, including several young people from Sadr City, often 
thought of as a poverty ridden slum and a nest of radical Islamists 
following Muqtada-l-Sadr. One was a husband and wife team involved in 
local municipal government; both were graduates of universities and one 
was interested in pursuing a Ph.D. thesis on U.S. foreign policy, but 
he needs more training in English. He should get it. Another was a 
remarkable young woman in her early thirties, who had been encouraged 
by her family to get an education as a doctor. She had almost achieved 
her goal when Saddam was overthrown. She was appointed to her 
neighborhood council, and in a new enthusiasm for politics, she ran the 
gamut from neighborhood to district to city council member; then was 
appointed to the interim national council of 2004 and finally ran, as 
an independent, for the new National Assembly--and won, all in two 
short years. She has elected a political career and wants to come to 
the States to learn, first hand, how to engage in one. What better way 
to invest in future leadership than to provide her--and others like 
her--with this opportunity.
    Third, encourage and strengthen the many civil society groups that 
are already blossoming, despite dire security conditions. Help newly 
emerging think tanks with funding they may need to get started and 
support the interest groups that are emerging during the constitutional 
process. Encourage training and conferences that bring diverse groups 
together in an environment that allows hands-on discussion and 
potential resolution of conflicts. The institution, which is funding my 
research, USIP, is a good example, though not the only one, of the many 
ways in which these activities can be supported, through grants to 
local civic action groups; training exercises; support for the 
constitutional process, and the like. IRI and NDI are doing yeoman work 
as well. These activities often do not make the deadlines but they are 
critical for developing future leadership with the skills and attitudes 
necessary for compromise.
    Fourth, strengthen government capacity, both at the national and 
local levels. The political process is, justifiably, sucking up much of 
the time, energy, and resources of Iraq's elite. Meanwhile, the more 
mundane aspects of government--delivery of electricity, garbage 
collection, security--are neglected or given over to freelancers and 
contractors who may be corrupt or worse. Building government structures 
and an honest bureaucracy, which can carry this load and employ the 
population, especially at local levels, would greatly enhance Iraq's 
ability to carry on and to garner popular support, while it struggles 
to settle the difficult political problems at the national level. 
Encouraging a civil service administration based on meritocracy would 
be a good step in this direction.
    Lastly, economic development--by and for Iraqis--must take place, 
despite the security situation. All evidence suggests that this 
element--and the security that goes with it--is the number one priority 
of the population, not the political process. The constitutional 
process, while important, must be supplemented by growing prosperity 
and a strengthening of the middle class. Over time, nothing will better 
tamp down ethnic and sectarian tensions; help mitigate past feelings of 
victimization and fears of reprisal; and provide a new and better 
vision for Iraq's future and for its youth, than more economic growth. 
The public must be given new opportunities and alternative visions for 
Iraq's future which can only come from widening economic opportunities 
and real freedom of choice. A failure to couple economic development to 
the political progress being made may produce an Iraqi version of what 
has just occurred in Iran--the election of a religiously conservative 
President supported by the neglected working classes. The potential 
indigenous leadership in Iraq today is not hidden secularists and 
liberals, but the Sadrist movement, which gains support by its nativist 
claims (its leaders have not spent time outside of Iraq) and its 
championship of the poor, uneducated, and jobless. The best way to 
combat this combination is to make sure (a) that the political process 
continues to be open to these groups, and (b) that the younger 
generation of underprivileged, such as those Sadr City residents I met, 
are nurtured, encouraged, and given access to the outside world.
    The views above reflect the testimony at the hearing; they do not 
represent formal positions taken by the Institute, which does not 
advocate specific policies.

    The Chairman. Thank you very much.
    Ms. Van Rest.

     STATEMENT OF JUDY VAN REST, EXECUTIVE VICE PRESIDENT, 
       INTERNATIONAL REPUBLICAN INSTITUTE, WASHINGTON, DC

    Ms. Van Rest. Thank you very much for this opportunity to 
testify before this committee. I have lived in Washington and 
worked in the field for a long time, in the democracy field for 
almost 15 years, and this is my first opportunity to testify 
before the Senate. So I appreciate this chance, and hope that I 
do you proud.
    On this question of whether the coalition should encourage 
Iraqis to forgo writing a full constitution at this time, I 
believe that the coalition must continue to encourage adherence 
to the August 15 deadline for the Iraqi National Assembly's 
adoption of a complete constitution.
    The risks of a drawn-out process outweigh the potential 
benefits. This is an option that should be strongly resisted, 
and adopted only as absolute last resort. Several arguments 
support this view.
    First is that most Iraqis, according to a recent IRI 
National Opinion Poll, indicate that they do not favor an 
extension of the August 15 deadline for the Iraqi National 
Assembly to complete the writing of a draft constitution. And a 
majority of political leaders from across the ethnic and 
religious spectrum also remain committed to the August 15 and 
October 15 deadlines for adoption of the final constitutional 
text, and it's ratification, respectively.

    [Note.--The ``IRI National Opinion Poll'' mentioned 
throughout this hearing will not be printed due to length but 
will be retained in the permanent record of the hearing and can 
also be accessed on the IRI Web site: http://www.iri.org/pdfs/
NovemberSurvey Presentation.ppt.]

    Beginning with the June 28, 2004, hand over of power, and 
more recently, with the January 30, 2005, national elections, 
we have witnessed the Iraqi people's desire and determination 
to meet the objectives set out in the transitional 
administrative law for the full restoration of Iraq's national 
sovereignty, and the creation of constitutional democracy by 
the end of the year.
    We should support these intentions and the momentum they 
have generated.
    If the constitutional committee fails to present the 
assembly with a draft constitution for approval before August 
15, or if the assembly fails to meet the deadline for its final 
adoption of a draft, the coalition should seek to persuade 
Iraqi legislators to extend the deadline for approval of a 
complete constitution for a period of no longer than 30 days. A 
more extended prolongation of the process would allow political 
focus to shift away from this crucial task. It could also 
undermine what opinion research has consistently shown to be 
the public's stubborn and critically important phase in the 
country's forward momentum.
    Second, delinking the most contentious issues from the 
broader body of the constitutional text and dealing with them 
in a separate and less time-constrained negotiation could have 
serious negative consequences. The risk of further 
deterioration in relations between Iraq's three principal 
communities grows in proportion to the duration of the time it 
takes to resolve these issues. The longer these key issues 
remain unsolved the more likely it is that the positions of the 
major interested parties will harden. The continuing evolution 
of facts on the ground will increasingly threaten to overtake 
and complete negotiations. The longer the period of legal 
fluidity is allowed to exist the less likely it is that 
mutually satisfactory outcomes can be achieved with respect to 
these issues.
    We must also consider that absent inclusion of provisions 
on such key issues as federalism and the religious character of 
the state, how far Iraq's Government would be able to move 
ahead in building legal and institutional structures pursuant 
to elements of the constitution that do get adopted.
    For example, without the form and structure of Iraq's new 
federalism agreed upon and in place, efforts to establish a 
national budgeting process and develop and implement fiscal 
policy could be hampered or rendered impossible.
    Likewise, efforts to move ahead confidently with legal and 
judicial reforms will be retarded to the extent that issues 
pertaining to the relationship between religious and civil law, 
and the roles of civil and religious adjudicating institutions, 
are left unsolved.
    I believe we should continue to support the current 
deadlines for adoption and ratification of a complete 
constitution until such time as developments lead us to 
conclude, beyond a doubt, that one or both of these deadlines 
present an impossible target. If an extension of the August 15 
deadline, in particular, becomes absolutely necessary it should 
be measured in weeks and not months so as to avoid loss of 
momentum and political focus.
    And the constitution that the Iraqi public is finally asked 
to ratify should be a complete document that addresses all of 
the key issues. Opening the door to prolonged debate on these 
politically sensitive matters will only serve to more sharply 
contrast the differences between major ethnic and religious 
groups and contribute to further polarization.
    Thank you.
    [The prepared statement of Ms. Van Rest follows:]

    Prepared Statement of Judy Van Rest, Executive Vice President, 
           International Republican Institute, Washington, DC

    Option 1--Should the coalition encourage Iraqis to forego writing a 
full constitution at this time, or should we encourage a strict 
adherence to the current deadlines for finishing a constitution? Does 
the current compressed timetable for drafting and approving the 
constitution aggravate the destabilizing differences among the parties? 
Delay would involve setting aside thorny issues that could undermine 
national cohesion, like regional autonomy, the status of Kirkuk, the 
role of Islam, etc. Instead, should we be encouraging Iraqis to 
promulgate a miniconstitution covering electoral law and other items on 
which agreement can be reached? Would agreements on limited subjects 
build momentum toward cooperation on more difficult items? Or should we 
stick to the current schedule by pressing for a completed constitution 
by the deadlines that have already been established? What pressures, if 
any, can or should the coalition exert on the Iraqi Government to adopt 
either of these courses?

    Response. The coalition must continue to encourage adherence to the 
August 15 deadline for the Iraqi National Assembly's (INA) adoption of 
a complete constitution. The risks associated with a prolonged or 
multistage process, and with delinking the most contentious issues from 
the broader body of the document, would outweigh the potential 
benefits. This is an option that should be strongly resisted and 
adopted only as an absolute last resort. Several arguments, I believe, 
support this view.
    First, most Iraqis, according to a recent IRI national opinion 
poll, indicate that they do not favor an extension of the August 15 
deadline for the INA to complete the writing of a draft constitution. 
And a majority of political leaders from across the ethnic and 
religious spectrum also remain committed to the August 15 and October 
15 deadlines for adoption of a final constitutional text and its 
ratification, respectively. Beginning with the June 28, 2004, handover 
of power, and more recently with the January 30, 2005, national 
elections, we have witnessed the Iraqi people's desire and 
determination to meet the objectives set out in the Transitional 
Administrative Law for the full restoration of Iraq's national 
sovereignty and the creation of constitutional democracy by the end of 
this year. We should, unequivocally, support these intentions and the 
momentum they have generated.
    What should our position be if the INA's Constitutional Committee 
should fail to present the assembly with a draft constitution for 
approval before August 15, or if the assembly, having received the 
committee's draft, should fail to meet the deadline for its final 
adoption? The coalition should seek to persuade Iraqi legislators to 
extend the deadline for approval of a complete constitution for a 
period of no longer than 30 days. A more extended prolongation of the 
process would, in my view, allow political focus to shift away from 
this crucial task. It could also undermine what opinion research has 
consistently shown to be the public's stubborn and critically important 
faith in the country's forward momentum.
    Second, delinking the most contentious issues--including the nature 
of Iraq's new federalism, the status of Kirkuk, and the role of Islam 
in Iraqi law and State institutions--from the broader body of the 
constitutional text, and dealing with them in a separate and less time 
constrained negotiation, could have serious negative consequences.
    The risk of further deterioration in relations between Iraq's three 
principal communities grows, I believe, in proportion to the duration 
of the time it takes to resolve these issues. The longer these key 
issues remain unresolved, the more likely it is that the positions of 
the major interested parties will harden. The continuing evolution of 
``facts on the ground'' will increasingly threaten to overtake and 
complicate negotiations. We are already seeing evidence of this 
dynamic, for example, in Kurdish efforts to alter the demographic 
makeup of Kirkuk and strengthen the institutional legitimacy of Kurdish 
regional militias, and in the south of the country, where some 
religious groups are attempting to exert increasing influence within 
the university system. The longer the period of legal fluidity is 
allowed to exist, the less likely it is that mutually satisfactory 
outcomes can be achieved with respect to these issues.
    We must also consider, absent inclusion of provisions on such key 
issues as federalism and the religious character of the state, how far 
Iraq's Government would be able to move ahead in building legal and 
institutional structures pursuant to elements of the constitution that 
do get adopted. For example, without the form and structure of Iraq's 
new federalism agreed upon and in place, efforts to establish a 
national budgeting process, and develop and implement fiscal policy, 
could be hampered or rendered impossible. Likewise, efforts to move 
ahead confidently with legal and judicial reforms will be retarded to 
the extent that issues pertaining to the relationship between religious 
and civil law, and the roles of civil and religious adjudicating 
institutions, for example, are left unresolved.
    In sum, I believe that we should continue to support the current 
deadlines for adoption and ratification of a complete constitution 
until such time as developments lead us to conclude, beyond doubt, that 
one or both of these deadlines present an impossible target. If an 
extension of the August 15 deadline, in particular, becomes absolutely 
necessary, it should be measured in weeks and not months so as to avoid 
loss of momentum and political focus. And the constitution that the 
Iraqi public is finally asked to ratify should be a complete document 
that addresses all of the key issues. Opening the door to a prolonged 
debate on these politically sensitive matters will only serve to more 
sharply contrast the differences between major ethnic and religious 
groups and contribute to further polarization.

    Option 2--Should the coalition conduct a massive public education 
campaign designed to stimulate interest in the constitutional 
referendum and discussion of the insurgency? This would include holding 
townhall meetings carried on radio and television on the future of 
Iraq. Could such a campaign reach the Iraqi people and would Iraqis 
participate despite threats of retribution? Would unscripted townhall 
meetings enhance the credibility of the message, thereby building 
public disdain for the insurgency and support for Iraqi political 
development? Could security be provided to prevent terrorist attacks 
during the townhall events?

    Response. Let me start by saying that I believe we are now at a 
point in the process where the role of public education is most 
crucial.
    Unlike an election, where voters are asked to express a personal 
preference from among a list of options or candidates, the 
constitutional referendum will ask Iraqis to support the product of 
many compromises--some of them touching extremely sensitive cultural 
and political nerves. People will not have the option of choosing only 
that which suits them, as they can in an election. Iraqi voters will 
have to understand the compromises that went into writing the 
constitution and, despite the fact that there will be elements in it 
with which they personally disagree, conclude that it offers the best 
hope for moving the country forward and improving their lives. They 
will have to reach this conclusion, moreover, despite what will almost 
assuredly be opposition from more radical and hard-line elements within 
their respective communities.
    To succeed in encouraging and preparing voters to make this choice, 
a comprehensive, consistently visible and broad-based public education 
campaign is absolutely essential. We must, however, distinguish between 
a ``coalition campaign'' and an ``Iraqi campaign.'' What is crucial is 
to insure that Iraqis are provided with the support that they need to 
design, produce, and implement a campaign to educate the population 
about the process that is underway, the issues under discussion, the 
content of the constitution, and the importance of participation in the 
referendum scheduled for October 15.
    I am pleased to say that such a campaign has, in fact, been 
initiated and that it is gathering momentum with each day that passes. 
The International Republican Institute (IRI), whose programs in Iraq 
are being funded by American taxpayers through USAID and the National 
Endowment for Democracy (NED), has been a principal motivator and 
supporter of these programs. Other American organizations, first among 
them the National Democratic Institute (NDI), are also contributing to 
this effort through their own civic and political networks in regions 
across the country.
    Though not in the context of townhall meetings, as we know them in 
the United States, much is already being done at the grassroots level 
to inform Iraqis' about the constitution. IRI is supporting a broad 
array of civic groups that are involved in a coordinated nationwide 
voter education campaign to raise public awareness of constitutional 
democracy and the constitutional drafting and referendum process in 
Iraq. Led by Iraqi civic groups working under the banner of the Civic 
Coalition for Free Elections, the campaign, entitled ``A Constitution 
for Everyone,'' consists of direct voter contact through workshops 
based on an IRI-developed curriculum and printed materials. Using 
prepared flip charts and distributing some 600,000 copies of the 
``Constitution for Everyone'' pamphlet, 1,400 workshops are planned--
more than 100 have already taken place--and we hope to reach more than 
60,000 voters in all 18 of Iraq's governorates.
    It is also encouraging to note that the members and leadership of 
the INA's Constitution Committee are themselves becoming more active 
and engaged in public education efforts. IRI has been in close contact 
with the Constitutional Committee over the past several weeks to offer 
assistance to its outreach efforts. In addition to offering weekly 
focus group reports on questions important to the constitutional 
drafting, IRI has already produced four television interviews with 
Constitutional Committee leadership, in which they have discussed 
process and content issues and answered questions from the public about 
the constitution. One of the programs featured the committee's 
chairman, Sheik Hamudi. Another featured women members of the committee 
in an effort to focus discussion on issues of particular interest to 
women. These 30-minute programs, of which more are to follow, are each 
being aired several times on major Iraqi television networks and will 
reach an audience of millions.
    IRI is also producing the Constitution Committee's first public 
service announcements (PSAs) and helping it develop and eventually 
distribute printed material. Our public opinion and focus group 
research, I am pleased to say, is being actively utilized by the 
committee in the design and development of these products.
    Iraqi women, through organizations such as the Rafadine Women's 
Coalition and the Women's Leadership Institute, are also doing a great 
deal to advocate for women's rights in the constitution drafting 
process and to publicize key issues through outreach to women across 
the country. IRI's Constitutional Consulting Team, composed of six 
eminent legal and academic specialists, is providing counsel to the 
leadership of these and other organizations, and IRI is supporting the 
production of their public education materials and their television 
broadcasts. I am also very encouraged by the extent to which the 
Minister of Women's Affairs, Dr. Azhar Al Shakly, has taken a 
leadership role in the public education effort. Later this month, in 
fact, Minister Al Shakly will be hosting two national women's 
conferences in Baghdad on issues related to the constitution. These 
events will be highly visible and provide added focus and momentum to 
the public education effort on behalf of women's rights in the new 
constitution.

    Option 3--Should we take new steps to forestall a Sunni-Shi'a 
conflict? Is international and Arab intervention feasible? Could an 
international working group that includes participation by Sunni Arabs 
from outside Iraq--Jordanians, Egyptians, and others--help broker 
negotiations between the parties? Is there some other vehicle that 
could provide technical support and mediation services for Sunnis and 
Shi'as to come to a peaceful accommodation? Could credible Sunnis be 
enlisted to participate in this process? Should de-Ba'thification be 
revisited?

    Response. At every transition point on Iraq's path to democracy--
including the handover of sovereignty in June 2004 and the election of 
the Iraqi National Assembly in January 2005--some very bright people 
said it could not be done, the ethnic, sectarian, and geographic 
divides were too great, the risk of violence was too high, and that 
even civil war was imminent. Yet, time after time, Iraqis have proven 
them wrong.
    Now, the actions of determined insurgents have again raised fears 
that the situation is on the brink of collapsing into conflict because 
of Sunni-Shi'a divides. History has shown us that divisions between 
these two branches of Islam can lead to conflict. In Iraq, Saddam 
Hussein's 35 years of murderous rule, including widespread abuses 
against the Shi'a majority, only contributed to suspicions between the 
two sects.
    Yet, once again Iraqis have expressed confidence that the 
democratic institutions they are creating offer them the political 
framework for resolving these differences and moving toward greater 
cooperation and trust as they build a united Iraq together.
    No one should be surprised that Sunni-Shi'a issues are part of the 
debate surrounding the drafting of a new constitution and the new Iraq. 
Rather, the fact that this debate is taking place should be viewed as a 
major step forward. This view was expressed by one Iraqi leader during 
a meeting with IRI staff. While he and fellow Iraqis argued about what 
system of government should prevail, he paused to comment, ``Under 
Saddam I would not even debate such issues in my own head. Now we are 
free to debate them among ourselves.''
    This commitment to democratic debate and a confidence in the 
framework is found across Iraq and across various sectors of society. 
Notably, it is found among Sunnis. We have seen Sunni representatives 
brought into the constitution drafting process. We have heard Sunni 
leaders say they made a mistake by not participating in the January 
election, a mistake they are encouraging their followers not to make in 
the upcoming elections.
    The evidence is not only anecdotal. Support for, and confidence in, 
democratic solutions among Iraqis has been expressed time and again in 
the nationwide polling done by IRI (``Survey of Iraqi Public Opinion'' 
\1\) The latest survey revealed that nearly 73 percent of Iraqis 
believe that the new Iraqi transitional government is representative of 
the Iraqi people as a whole. Among self-identified Sunnis, the 
percentage is 67.4 percent. For Shi'a it is 78.3 percent.
---------------------------------------------------------------------------
    \1\ The survey can be accessed at: http://www.iri.org/pdfs/
NovemberSurveyPresentation.ppt.
---------------------------------------------------------------------------
    Equally revealing is the strong support for coming elections; 75.6 
percent of Iraqis say they are very likely to vote in the upcoming 
constitutional referendum. Again, support is strong among both Sunni 
and Shi'a, at 63 percent and 83 percent, respectively.
    It is also worth noting that polling data reveals that the Sunni-
Shi'a divide is not that wide in comparison to self identification as 
Iraqis. Twice as many Sunni most strongly identify with their country 
in relation to the number who identify with their ethnic group. For 
Shi'a, four times as many identify with their country. When comparing 
strongly identifying with country to identification with religion, the 
ratio for Sunnis is 3:1 and for Shi'a it is 2:1. National identity is a 
necessary component in creating a willingness to make the compromises 
necessary to bridge the gaps that might otherwise be created by more 
divisive elements.
    These numbers are being reflected by action on the ground. Across 
the country, courageous Iraqis are standing up to those who would use 
violence to undermine the move toward a peaceful and democratic Iraq.
    IRI is working with numerous Sunni and Shi'a organizations, 
including clerics associations to educate Iraqis about the constitution 
drafting process and support for elections as a way of creating a more 
peaceful and prosperous Iraq today and for future generations.
    It is in this context that the response to what steps should be 
taken to avoid Sunni-Shi'a conflict should be found. The answer is to 
support the Iraqis in finding their own solutions, including that of 
de-Ba'thification, within the democratic political framework to which 
they have committed themselves. The Sunnis and Shi'as are already 
engaged in accommodation through political channels. Leadership is not 
advocating such violence for civil war. Such elements, while tragically 
conspicuous, are marginal forces. The United States and its coalition 
partners would do well to encourage, even pressure, neighboring 
governments and those of other Islamic States in the region that 
benefit from stability in Iraq to be more outspoken in their 
condemnation of terrorist violence in the name of Islam.

    Option 4--How can the United States cultivate emerging leaders 
among the various political actions in Iraq and ensure that they will 
interact politically, rather than using violence or exclusionary 
political tactics? Is such involvement feasible, or would it be 
counterproductive? How divergent are the views among the various new 
leaders on such issues as democracy, the appropriate political 
structure, the role of religion, or future relations with the West and 
Iraq's neighbors, and can the United States influence these views?

    Response. As outlined above, Iraqis are finding their own voice and 
leaders in support of political interaction rather than violence or 
exclusionary tactics.
    IRI and NDI have taken an active role in supporting this effort. 
Drawing on 20 years experience of assisting countries emerge from 
authoritarian rule to democracies, with technical training, we are 
helping Iraqis to build the political parties, civil society, 
government institutions, and other components necessary to have 
representative government. Encouraging this process is an important 
part of helping the majority in their fight for freedom against those 
whose agenda is hatred and violence.
    We do so keeping in mind that democracy is not an off-the-rack 
concept. One size does not fit all. Rather, democracy works best when 
it is tailor made. Basic elements are universal, but style and fit 
vary. By concentrating on providing training and support for the basic 
elements, we are helping the Iraqis to fashion a new free and 
democratic Iraq.
    One of the primary ways of doing this is by drawing on the 
experience of other countries. Central and Eastern Europe provides 
particularly helpful examples for the Iraqis to study. For example, 
trainers from Romania are well received because Iraqis can relate to 
someone who was imprisoned or had a family member killed by an 
oppressive dictator but who is now part of a successful transition away 
from authoritarian rule.
    Successful transitions in the Slovak Republic, Lithuania, and the 
Czech Republic as well as other regions in countries such as Indonesia, 
have all proved useful in providing Iraqis case studies for what has 
worked, and what hasn't, in making the move to a free and democratic 
society.
    These lessons are not only learned from trainings or exchanges. 
IRI's staff in Iraq includes those who helped to lead such transitions 
in their own home countries of Serbia, Moldova, and Ukraine. Part of 
their motivation is to bring others the support they received when they 
were activists for freedom. It is a lesson that has not been lost on 
Iraqis.
    As for opinion on issues of democracy and related topics, I would 
again cite a few results from the most recent national poll conducted 
by IRI:

   I will now read to you a list of human rights that have been 
        recognized by the international community. On a scale of 1 to 
        5, how important do you think it is that they be part of Iraq's 
        new constitution? Those choosing very important:

     71.4%--select and change their government through peaceful, 
            fair elections
      70%--fair and public trials
     69.1%--no discrimination based on religion, race, sex or 
            ethnicity
     67.8%--no torture or degrading treatment/punishment
     65.9%--individual privacy, including the family, home and 
            correspondence
     65.7%--no arbitrary arrest or detention
     60%--freely practice religion
     55.8%--free speech and press
     51.9%--own and sell property
     41.8%--organize political, civic or labor organizations

   Which do you think would be the most appropriate system for 
        a future Iraqi government?

     33.36%--mixed parliamentary/presidential
     30.3%--parliamentary
     22%--religious

   Which of the three branches of government do you think 
        should exercise the most power or influence in Iraq's future 
        government?

     41%--executive
     27.9%--divided equally
     9.9%--legislative

   Were Iraq to have a presidential system, which of the 
        following methods would you prefer to select the president?

     72%--direct election by the Iraqi people
     12.9%--appointed by national assembly
     5%--appointed by clerics or religious leaders

   Which would be the best way to organize the structure of the 
        national and governorate levels of government?

     76.2%--maintain current system of 18 governorates
     12.1%--group governorates according to geographic regions
     5.1%--allow governorates to determine regional groupings

   Some people say that religion has a special role to play in 
        the government while others believe that religion and the 
        government should respect one another but remain separate. Do 
        you believe that:

     48.1%--religion has a special role to play in the government
     45.9%--religion and government should respect one another by 
            not impeding on the rights roles and responsibilities of 
            the other

   Which of the following statements most closely fits your 
        view of the role of Islam in the creation of laws and 
        legislation?

     39.8%--Islam should be the main source (among many) of 
            legislation and laws in Iraq
     34.7%--Islam should be the sole source of legislation and 
            laws in Iraq
     12.3%--Islam should be one source (among many) of legislation 
            and laws in Iraq

   To what extent do you agree or disagree that people or 
        groups who could not (or did not) participate in the January 30 
        elections have the right to contribute to writing the 
        constitution?

     35.7%--strongly agree
     35.2%--agree
     8%--disagree

   Do you think that the new TNA should keep the 25 percent 
        quota for women in the National Assembly in the new 
        constitution?

     51.6%--yes, it should remain the same
     25.5%--yes, but it should be higher
     10.1%--yes, but it should be lower
     3.1%--no

    The Chairman. Thank you very much Ms. Van Rest.
    Dr. Feldman.

   STATEMENT OF DR. NOAH FELDMAN, PROFESSOR OF LAW, NEW YORK 
                    UNIVERSITY, NEW YORK, NY

    Dr. Feldman. Mr. Chairman, and members of the committee, 
thank you so much for this opportunity.
    There are essentially three different factions on this 
constitutional committee, the elected Shi'a, the elected Kurds, 
and the unelected Sunnis. Each has a different perspective, I 
think, on the issue in front of us, and I think that should 
influence our policy decision.
    The Shi'a and the Kurds have a constituency because they 
were elected, and as a consequence of that they want to move 
forward relatively quickly because it's in their interests to 
satisfy a constituency that's very frustrated with what has, on 
the whole, been a relatively slow progress.
    That's understandable. They're also the two sides that have 
the most experience negotiating constitutional deals. They've 
been dealing with each other for the better part of 3 years 
now. Beginning before the war, they negotiated the transitional 
administrative law together. They're very well experienced in 
this kind of negotiating, and their positions are relatively 
clear, both to them and to many of their constituents, because 
they've done this deal once before.
    And the reason that there's been so much progress so far in 
drafting, on the part of this constitutional committee, is that 
the players are not operating on a blank slate. They understood 
the deal in the transitional law, they understood the deal that 
they cut privately before the selection of the Prime Minister 
and the President, and they've been in the process of putting 
that deal into place.
    The Kurds have a further interest, which is an interest in 
making things happen as quickly as possible because of their 
perception, accurate in my view, that they have greater 
influence the further we are from a big public political 
debate. The more influence we put on the process, the Kurds 
believe, the greater their influence. This is because they 
feel--and I'll return to this a bit later--that the ordinary 
Iraqi, the ordinary Arab Iraqi, will experience sticker shock 
on looking at the provisions of the federalism arrangements 
that are set out in the TAL.
    Now the Sunni members, the Sunni Arab members, of the 
constitutional committee are in a completely different position 
because they were not elected. And I think they're the ones 
whose view on whether we should go forward quickly or whether 
we should delay the process, or on whether we should come up 
with some sort of a compromise, which I'll mention, probably 
should weigh the most heavily with us. So let me say why they 
think this, and also why I think their view should weigh 
heavily for us.
    They are central, these Sunni Arabs are central to the 
process of bringing the Sunni community, which is--some of 
which, at least, is sympathetic to the insurgency, not all--
into the political process so as to marginalize the extremist 
jihadi wing of the insurgency, which will, of course, never 
compromise on its own.
    These relatively brave--and I'll say more about that in a 
moment, too--Sunni Arab members of the committee are putting 
themselves on the line and may need to be able to show their 
potential constituency, the people whom they want to represent 
when they run for office in the near future, that they actually 
got something done in these constitutional negotiations.
    If it looks to the Sunni population as though these Sunni 
members, 10 voting members and 15 nonvoting members, were named 
to the committee and then rubber stamped a deal that had 
already been privately done by the Shi'a and the Kurds, then 
they will be discredited with their own constituency. All of 
the work--the good work in my view--that the United States and 
other coalition partners have done to convince the Shi'a and 
the Kurds to bring Sunnis into the political process will be 
lost if it turns out that the Sunnis themselves, that is to say 
the ordinary Sunni Arab, sees the participation of his putative 
representatives as having been empty. That's a substantial 
danger.
    Now some of the members of this committee will probably 
want to move to elections relatively quickly because they want 
to get Sunnis into elected office, they understand the boycott 
was a huge mistake, and they want elections relatively quickly 
to begin the process of reversing that boycott.
    So they may want to move forward quickly, but they will be 
hampered by two things. One, the danger that they'll be seen as 
rubber stampers, which is bad for them; two, the distinct 
possibility that when their constituents get a look at the full 
degree of Kurdish autonomy that's envisioned by most of the 
people who are close to this process, that they will be 
unwilling to vote for the constitution because of what I 
described earlier as sticker shock. They may believe it over 
time, just as the Shi'a Arab community has come to accept a 
fair amount of autonomy for the Kurdish regions.
    Their constituents, too, might over time develop this view. 
That's how it happened among the Shi'a; it took some time. And 
if that is to be the case then they may judge that some delay 
is appropriate. I don't think they would want too much delay 
because of the realities of needing an election. If they wanted 
some delay on that, something short of the 6 months, I don't 
think that it would be the right policy to oppose their getting 
that delay because they would be doing it in the hopes of 
getting the Sunni constituency on board. If they think they 
won't get the constituency on board because of it, then they 
won't push for a delay, they'll just push for the elections 
relatively soon to get their jobs in office.
    Now the delicacy of the situation of these members of the 
committee is enormously significant here, and in written 
comments that I submitted last week, I said that their personal 
safety was in danger. And unfortunately, today, we saw a very 
tragic substantiation of just that, and I'm sure we all share 
the sorrow over the fact that one member of the committee, who 
was a voting member, and another member, who was a nonvoting 
member, were killed, and their driver was killed as well.
    This is the kind of thing that is preventable to the extent 
that we can provide security for them, and we ought to be doing 
that, at least if they're willing to accept it. It is the kind 
of thing that is terribly harmful and it's similar in kind to 
the attacks on the Ambassadors of non-Iraqi/Sunni Muslim 
countries who have been in the country recently.
    The reason that the jihadi wing of the insurgency is 
attacking these folks is, precisely, that they see them as the 
route to a negotiation between the government, as it stands, 
and the moderate wing of the insurgency, and I use the word 
``moderate'' in a very--in quotation marks if you will, because 
they are, of course, involved in a violent armed insurgency and 
so in that sense they're not moderate at all. What I mean by 
moderate is only those people who might be willing, 
pragmatically, to cut a deal with the government.
    Now the reason I bring this up is just to mention that the 
jihadi wing of the insurgency will do everything it can to 
discredit the constitutional process and discredit the people 
who are participating in it, and, obviously, to try to kill 
those people if they can't discredit them.
    We, therefore, need to encourage Shi'a and Kurdish 
politicians to make sure that the Sunni politicians involved in 
the constitutional process have something to show for the fact 
that they're risking their lives. We need that, not out of a 
pure sense of honor, although I suppose that might be part of 
the picture, we need it because we need the constitution not to 
make the insurgency worse. If what emerges is a constitution 
that's ratified by Shi'a and Kurds, and they could well ratify 
it, and is opposed by Sunnis, it will harden the divisions in 
the country.
    So while I agree with Dr. Marr that the constitution alone 
can't solve the insurgency--that would be asking too much of 
the constitution--it can make things worse if it's not seen as 
fully inclusive.
    So I believe that the U.S. policy, at this point in time, 
should be to follow the wishes of the members of the 
constitutional committee, and particularly the Sunni members, 
to make certain that they have something that they can deliver 
to their constituents, and can be seen to deliver to their 
constituents, that's also acceptable to the Shi'a and to the 
Kurds.
    A last word on deferral strategies. One thing these Sunni 
members of the committee might want, and this may be true of 
some of the Kurds and Shi'a on the committee as well, is that 
they may want a partial constitutional deal that reflects 
agreement where they can get it, and defers questions where 
they can't get it. Now this form of compromise is, as Ms. Van 
Rest says, risky. In the long run there's always--in fact, not 
just a possibility, there's almost a certainty that unresolved 
issues will come back and resurface as serious problems down 
the line.
    Nonetheless, deferral is a hallmark of successful 
constitution writing, because very often the only alternative 
to a deferral in a deal is no deal at all. Our constitutional 
history certainly reflects that, perhaps not in the most 
creditable way, because as we all know the true deal that had 
to be struck in Philadelphia in 1787 was the deal over slavery, 
and the Founding Fathers compromised on that question and we 
paid the price of the Civil War ultimately for it.
    But in the interim we did, in fact, have a functioning 
Republic, and I think it is relatively clear that we would not 
have had a Union and a ratified Constitution had that deal not 
been struck.
    Now, fortunately, the compromises that have to be made and 
the questions of deferral that will have to happen in Iraq are 
nowhere near as morally problematic as slavery was. They are 
questions of federalism and they are questions of religion to a 
lesser degree. But it basically amounts to leaving things like 
the Kirkuk question out of the equation at present, using just 
the most general principles.
    Similarly, perhaps even leaving the question of the 
allocation of resources by region, which will be a very 
contentious and difficult issue, out of the equation in any 
explicit way. So I'm not disagreeing with Ms. Van Rest when she 
says that these will be problems down the line, I'm sure she's 
right that there will be. I'm suggesting that the alternative 
might be having no constitution just now, or even in the next 6 
months. And so under those circumstances it may well be that 
deferral is a constitutional solution that we may not be very 
happy with, but it may be the best thing going, and I think 
probably the Iraqis on the committee are the ones best placed 
to determine that.
    [The prepared statement of Dr. Feldman follows:]

    Prepared Statement of Noah Feldman, Professor of Law, New York 
                        University, New York, NY

                       TIMING OF THE CONSTITUTION

    Because of the addition of Sunni Arab Iraqis who were not elected 
members of the national assembly, the final composition of the 
constitutional committee charged with drafting a permanent Iraqi 
Constitution was not determined until the early days of July, 2005. 
This leaves the members of the committee with three choices: (1) Moving 
rapidly to release the constitutional draft for debate in the national 
assembly and eventual submission to a referendum on ratification; (2) 
delaying the formulation of a draft so as to encourage participation by 
the newly appointed Sunni members of the committee; or (3) offering a 
compromise between these two positions, producing a draft of a partial 
constitution now, and deferring some major constitutional questions 
until later.
    It is likely that the key decision among these options will be 
driven by the newly appointed Sunni members of the committee. These 
committee members face an extremely difficult and delicate challenge. 
On one hand, they understand that the Sunni boycott of Iraq's first 
post-war election was disastrous for their constituency. The sooner a 
new constitution is ratified, the sooner they can run for office in the 
hopes of giving Sunnis an elected voice in the government. A delay in 
ratification of the constitution would mean a delay for new national 
elections. This gives the Sunni committee members an incentive to 
encourage the rapid release of a constitutional draft. Furthermore, 
these members have now received a certain degree of national 
recognition, and most or all of them could be expected to stand as 
candidates in the new elections.
    On the other hand, the Sunni members of the constitutional 
committee must demonstrate to their potential constituency that Sunni 
participation on the committee has had a material impact on the 
substance of the new draft constitution. If it looks to the Sunni 
public as though the constitutional committee members chosen to 
represent them have merely rubber stamped a previously existing 
constitutional draft negotiated before their appointments by Shi'a and 
Kurdish members of the committee, the Sunnis on the committee could 
well be discredited, and the new constitutional draft with them. It is 
extremely important for the Sunni committee members to have an impact 
in the drafting process, and what is more, to be seen to have such an 
impact.
    The Sunnis on the constitutional committee are crucial participants 
in the nascent movement to get Sunni Arab Iraqis involved in Iraq's new 
political process, with the eventual goal of ending the insurgency by 
weakening support for it in predominantly Sunni areas. The outcome of 
this political process is by no means certain. The Sunnis on the 
constitutional committee need to be able to show results in order to 
advance the process. Violence is likely to continue while 
constitutional process proceeds, certainly perpetrated by the jihadi 
wing of the insurgency, but also by other insurgents when they think it 
will advance the Sunni cause.
    The more visible gains accomplished by Sunni leaders, the more 
ordinary Sunnis will come to see politics as preferable to violence as 
a means to accomplish their ends. In particular, the goal of those 
pursuing the political process must be to discredit the violent jihadi 
wing of the insurgency, which rejects political compromise altogether. 
It is no coincidence that the jihadi wing of the insurgency has been 
kidnapping and killing diplomats from Sunni Muslim countries in Iraq. 
Those diplomats have the potential to forge connections between a 
pragmatic Sunni leadership and the new Iraqi Government. The jihadis 
understand such connections as a major threat to their goal of keeping 
violent insurgency alive and resisting political compromise of the kind 
that more pragmatic insurgents--as well as much of the undecided Sunni 
Arab community--find potentially appealing. Killing these diplomats is 
aimed at the specific strategic goal of blocking political progress 
designed to bring the Sunni community into a pragmatic and nonviolent 
relationship with new Iraqi Government. The Sunni members of the 
constitutional committee are, therefore, also themselves at risk, both 
politically and in terms of their personal safety.
    Meanwhile, the Shi'a and Kurdish members of the constitutional 
committee would like to see a rapid move to the release of a 
constitutional draft. As elected officials, they share desire to end 
street progress to an increasingly frustrated public. On the Kurdish 
side, there is a lingering (and warranted) concern that an extended 
constitutional process might lead to the loss of some of the gains that 
Kurds have made in convincing, at least, the Shi'a political leadership 
to accept substantial de facto Kurdish regional autonomy under the 
rubric of federalism.
    The best posture for U.S. policy at this juncture is to express the 
view that, if the Sunnis appointed to the constitutional committee 
prefer some circumspection so as to consider the draft constitution and 
promote the interests of their constituents, the other members of the 
committee should show substantial concern for this desire. Having 
labored to bring these Sunni members to the committee, with the goal of 
developing Sunni politics and eventually marginalizing violent 
insurgents, the United States would not be well served by an approach 
that ran roughshod over Sunni interests in a way that rendered Sunni 
political participation useless.
    It may well be that the Sunni members of the constitutional 
committee would themselves prefer some sort of compromise option, with 
the deferral of many of the difficult constitutional decisions that are 
ahead. If so, such a compromise should be perfectly acceptable from the 
U.S. standpoint. Deferral is a standard strategy for constitution 
drafting under difficult circumstances. It does not work indefinitely, 
as the American Civil War demonstrates. But it can accomplish the 
short-term goal of shifting, at least, some underlying tension into the 
political realm and away from the use of force.

                        THE RATIFICATION PROCESS

    It is crucial that, unlike the Transitional Administrative Law, 
which by necessity was drafted privately and was not subject to 
national ratification, the final Iraqi Constitution be ratified through 
a process that involves substantial public involvement and discussion. 
Only such a public process can save the constitution from the 
inevitable criticism, which will be heard in Sunni areas of Iraq as 
well as elsewhere in the Muslim world, that it is the product of 
political elites sequestered in the green zone, who may have been 
elected, but who govern at the sufferance of the coalition.
    This said, the United States should be extremely cautious about 
designing or directing a public campaign, either to promote or discuss 
the constitution. Instead, the coalition should stand prepared to fund 
efforts in this direction designed by members of the national assembly 
and the constitutional committee. The Transitional Administrative Law 
provides for a popular referendum on the constitution, thus affording a 
formal measure of democratic legitimacy. Beyond this formal structure, 
the new Iraqi Government needs to develop its own, distinctively Iraqi 
process for discussing and analyzing the constitution. United States 
officials are poorly placed to determine the right format or forum for 
such debates.
    The town meeting is a particular form of political expression 
developed in a particular time and place and today not widely used even 
in the United States. The Framers of the U.S. Constitution designed a 
republican, representative form of government, not a direct democracy, 
and even the ratification conventions that took place in the 13 U.S. 
States were not open meetings, but involved representatives selected by 
localities and State legislatures. The ``town meeting'' as such does 
not have its roots in Iraqi political culture. Instead, Iraqis will 
probably develop some sort of model of consultative discussion more 
closely linked to the traditional Arab institution of the majlis.
    It is to be emphasized that when a new constitutional draft is made 
public, many ordinary Iraqis will experience a kind of ``sticker 
shock'' with respect to some of its more innovative aspects, especially 
those concerning federalism. An immediate, open, public discussion will 
generate some angry rejection of the degree of independence to be 
enjoyed by the Kurdish region. By the same token, religious radicals 
intent on destabilizing the constitutional process could well criticize 
the draft as insufficiently Islamic--a process which would be perfectly 
natural in public speeches or on television, but which would be 
potentially destabilizing if it were to take place in town meetings 
designed to debate the new constitution.
    The members of the constitutional committee have now had experience 
considering political realities and compromising on the basis of them. 
They must have the opportunity to explain the draft they have developed 
to their constituents in their own way. We must be vigilant about 
unwittingly undermining their efforts through a well-intentioned but 
ill-executed policy of encouraging town meetings.

                     AVOIDING SHI'A-SUNNI VIOLENCE

    The jihadi wing of the insurgency has continued to make great 
efforts to provoke all-out civil war between the Sunni and Shi'a 
communities in Iraq. In particular, attacks on Shi'a civilians, holy 
places, and prominent clerics are specifically aimed at causing Shi'as 
to break their restraint, Were it not for the steadying hand of 
Ayatollah Ali al-Sistani, it is entirely likely that violent 
retaliation would already have occurred on a significant scale. The 
great risk continues to be an attempt on the life of Sistani himself, 
which, if successful, would both provide enormous cause for retaliatory 
anger and remove the primaries barrier to its expression. It would be 
astonishing if such an attempt were not being planned at present. Many 
of the jihadis consider Shi'a Muslims to be heretics, and there is no 
reason to expect that they would show any respect at all for the person 
of Sistani.
    To avoid the outbreak of serious interdenominational violence, it 
is necessary to develop a network of contacts who can speak credibly on 
behalf of the Sunni community, and even, indirectly, on behalf of the 
pragmatic, largely ex-Ba'thist or ex-military wings of the insurgency. 
The Sunnis appointed to the constitutional committee may be considered 
the vanguard of such a group. Some Sunni clerics may also be useful for 
this purpose, especially if they would be willing to meet with Shi'a 
clerics on terms of equality. Diplomats from Sunni countries can play 
some constructive role in this process by identifying potential Sunni 
spokesmen. But ultimately, there is no substitute for elected Sunni 
officials serving in the same government bodies as their Shi'a 
counterparts. Developing a formalized mechanism outside of political 
institutions for communicating to Sunnis is likely to marginalize those 
political institutions, with serious long-term consequences.

                   THE EMERGING POLITICAL LEADERSHIP

    The highly fluid political situation in Iraq is generating a new 
group of political leaders who are acting as entrepreneurs filling a 
gap in the market. More such leaders will emerge in the coming years, 
both from within existing political parties and from without. The only 
generalization that is appropriate is that these leaders are quick to 
learn and shape the rules of the emerging political sphere. They have 
general ideological goals, but are typically willing to work with 
anybody to achieve them, and those goals are themselves open to rapid 
change and development.
    Muqtada al-Sadr is the model of these new political players. From 
challenging democracy as un-Islamic, he moved to participating in 
elections. From fighting the coalition through his militia, he moved to 
accepting coalition money for projects in neighborhoods he controls. He 
challenged Sistani directly, then acknowledged the latter's authority. 
None of these is a marker of any underlying moderation; each was a 
tactical decision taken in the light of circumstances.
    The chief failing of U.S. policy with regard to Sadr has been its 
uncertainty. The coalition needs to decide whether to co-opt and buy 
off potential militants or arrest and kill them. Fluctuations in policy 
are counterproductive given the general uncertainty and fluidity on the 
ground in Iraq.
    More broadly, given the U.S. force posture in Iraq, a policy of 
pragmatic accommodation with new political leaders is necessary. That 
means that even those who have in the past taken up arms against the 
coalition must be engaged where there is a chance of redirecting them 
to political, rather than military means. The key is to insist that any 
interlocutor must not simultaneously be involved in violence, and to 
demonstrate that giving up violence is rewarded with stature and money. 
This provides an incentive for mainstreaming that is crucial to 
encouraging politics in lieu of violence. Some contacts with violent 
insurgents will probably continue sub rosa, and that is not necessarily 
a bad thing if it encourages other insurgents to choose politics over 
violence on the ground of self-interest.
    Such interlocutors may be former Ba'thists, militia members, or 
others. (Two members of the constitutional committee are reported to 
have been members of the Ba'th Party.) If they will participate in 
peaceful politics, they should not be excluded on the basis of past 
membership alone. Of course criminals must be brought to justice--but 
in the short term, it is far more important to create political contact 
with all factions, especially those who presently threaten the future 
of the Iraqi political process.

    The Chairman. At this moment I'd like to recognize Senator 
Biden, the ranking member, for an opening comment.

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

    Senator Biden. Thank you very much. I apologize for being 
late and I got to read your statement, Dr. Marr, which I always 
do, before you testified, and while you were testifying.
    I think you've all summarized this pretty clearly, and I 
think that we all acknowledge that unless we get the Sunnis 
into the deal, whatever the deal is, constitution or otherwise, 
there is no resolution in Iraq, and so it's a difficult call.
    But I just want to thank you all for taking the time to be 
here, your testimony, and you're about to answer questions for 
us, is really genuinely helpful where I think there are very 
few absolutely clear-cut answers here.
    And so I will ask that my statement be placed in the 
record, Mr. Chairman----
    The Chairman. It will be placed in the record.
    Senator Biden [continuing]. And yield to you for gaining 
whatever--there is.
    [The prepared statement of Senator Biden follows:]

  Prepared Statement of Hon. Joseph R. Biden, Jr., U.S. Senator From 
                                Delaware

    I would like to second the chairman's welcome to our distinguished 
guests. The issues before us today are as important to our success in 
Iraq as they are complex.
    Our commanders on the ground have emphasized that military means 
alone are not sufficient to defeat the insurgency. Ultimately, true 
security and stability can only be achieved through a political 
accommodation among Iraq's major communities and factions.
    The constitutional debate in Iraq will play a significant role in 
determining whether there will be such an accommodation. I am hopeful 
the constitution can be drafted on time, though it will require 
consensus-building, compromise, and late nights.
    With less than 4 weeks to go, a number of contentious issues must 
be litigated, including: Federalism, the status of Kirkuk, the sharing 
of resources, and the role of Islam and women's rights, to name but a 
few.
    But even if all goes well, we shouldn't expect to see a perfect 
document on August 15. It's worth remembering that our own Constitution 
was 13 years in the making, and it remains a living document to this 
day.
    Assuming that the Iraqis succeed in putting together a draft 
constitution, there will remain several profound challenges.
    The first is getting the Sunni Arabs into the political process en 
masse, Iraq is scheduled to have two more elections this year--a 
constitutional referendum in October and another parliamentary election 
in December.
    Many Arab Sunnis boycotted January's parliamentary elections. I 
believe many others were kept away from polling stations by fear. It is 
absolutely essential to convince this silent Sunni majority to 
participate in the process and to claim a seat at the table in Iraq's 
first constitutionally elected government.
    Our second challenge is ensuring that the constitution is more than 
just words on a piece of paper. This requires accountability and 
transparency; security and judicial institutions that respect 
individual dignity, human rights, and the rule of law; and a government 
whose reach extends beyond the green zone.
    An equally profound challenge is sectarianism. On my first visit to 
Iraq 2 years ago, very few Iraqis would openly identify themselves as 
Sunni or Shi'a--it was considered inappropriate.
    Now, it is all too common--the result of a breakdown in Iraq's 
social and security order and the brutal agenda of a small group of 
religious extremists. We saw a horrific example of this agenda with 
last weekend's attack on a mosque south of Baghdad, which has claimed 
100 lives.
    Thus far, the Shi'a religious establishment has succeeded in 
keeping the desire for revenge after such attacks in check, but there 
is evidence of a growing number of reprisal killings against Sunnis.
    The tentative political progress in Iraq risks being washed away if 
this rising tide of sectarianism is not stemmed.
    I repeat what I said yesterday. I believe that we can still succeed 
in Iraq. By success, I mean leaving Iraq better than we found it--a 
country with a representative government in which all major communities 
believe they have a stake, and a country that is not a haven for terror 
nor a threat to us or its neighbors.
    I believe that there is an Iraqi nationalism that unites, at least, 
Iraqi Arabs. I believe that Iraq's Kurds, because they understand the 
realities of their neighborhood, recognize that autonomy in a federal 
Iraq is a much more realistic option than independence.
    I look forward to our witnesses' testimony.

    The Chairman. Thank you very much.
    We'll proceed then through the remaining three sets, and 
then have questions from members of the committee.
    Now the second set. I'll ask you, Ms. Van Rest, to make the 
first comment on this occasion.
    Should the coalition conduct a massive public education 
campaign designed to stimulate interest in the constitutional 
referendum and discussion of the insurgency? This would include 
townhall meetings carried on radio and television on the future 
of Iraq. Could such a campaign reach the Iraqi people, and 
would Iraqis participate despite threats of retribution?
    Would unscripted townhall meetings enhance the credibility 
of the message, thereby building public disdain for the 
insurgency, and support for Iraqi political development? Could 
security be provided to prevent terrorist attacks during the 
townhall events?
    Would you please proceed?
    Ms. Van Rest. We are clearly at the point in this process 
where the role of public education is quite crucial. The 
constitutional referendum is complicated for Iraqis. When they 
go to the voting booth it will not be simply a matter of voting 
for a particular coalition or name of a person, but there are 
some complicated issues that they may not agree with, and they 
need to understand how the process went along so that they 
understand the compromises made and have a full and complete 
understanding that while they may not agree with in the 
constitution, nevertheless, this may be the best way forward 
for Iraq.
    Public education campaigns by Iraqis are essential. They 
need to be done not by the coalition but by Iraqis themselves. 
What is crucial is to ensure that Iraqis are provided with 
support, that they need to design and produce and implement a 
campaign to educate the population about the process that is 
underway, issues under discussion, the content of the 
constitution, and the importance of their participation in the 
referendum scheduled for October 15.
    I am pleased to say that we are very much involved in 
supporting a campaign by a variety of Iraqi organizations 
across the country. This is something that we have been doing 
along with our colleagues at the National Democratic Institute 
to help get the word out about what the process is. We did this 
prior to the January 30 election, and what we discovered is 
that there are no end of Iraqi individuals and groups willing 
to risk their lives to conduct public education.
    Let me give you some idea of what is going on now. The 
workshops that are going on are not in the context of the 
townhall meetings as we know them, but they are more like small 
gatherings across the country. We're supporting an array of 
civic groups that are involved in a coordinated nationwide 
voter education campaign to raise public awareness of 
constitutional democracy and constitutional drafting and the 
referendum process. Led by Iraqi civic groups working under the 
banner of the Civic Coalition for Free Elections of which there 
are about 80 organizations.
    The campaign, which is entitled ``A Constitution for 
Everyone,'' consists of direct voter contact through workshops 
based on IRI developed curriculum and printed materials. There 
are scheduled around 1,400 of these workshops across the 
country. They have begun in a very intensive way, and there 
have been more than 100 workshops that have been conducted to 
date.
    In addition, we have been working with the constitutional 
committee to help them become more active and engaged in 
outreach to the public. We have weekly focus groups that 
provide them with information on the important questions of the 
constitutional drafting, we have already produced four 
television interviews with the constitutional committee 
leadership in which they have discussed process and content and 
answered questions from the public about the constitution. One 
of the programs features a chairman, Sheik Hamudi; another, 
featured women members of the committee in an effort to focus 
discussion on issues of particular interest to women.
    There are more of these 30-minute programs to follow; they 
are being aired on the major Iraqi television network and will 
reach an audience of millions.
    In addition, we are helping the constitutional committee 
produce public service announcements. We're in the process of 
doing that. And we're also helping them distribute--or print 
and distribute--various things such as posters and pamphlets 
around the country.
    Finally, Iraqi women are so very active in civic education. 
We work with several women's coalitions to get out the word 
about what is going on with the process and how they can have 
some sort of input into the drafting. And their efforts are 
ongoing constantly. Today, for example, a group called the 
Women's Leadership Institute held a public meeting and then 
they met with members of the constitutional drafting committee 
to share their views on what they believe should be in the 
constitution with regards to human rights and women's rights.
    We also have on hand a constitutional consulting team and 
they are legal and academic specialists who are helping out 
with conducting different workshops and sessions with various 
Iraqi groups.
    And, finally, we are giving support to the Minister of 
State for Women's Affairs in her efforts to hold national 
conferences to discuss issues of human rights and women's 
rights.
    The Chairman. Thank you very much.
    Dr. Feldman.
    Dr. Feldman. It is crucially important that the members of 
the constitutional drafting committee have the opportunity to 
argue to the general public in Iraq their case, to explain why 
they've drafted what they have drafted.
    That said, I think there are some significant concerns that 
we should be aware of with respect to the United States 
directing, and being seen to direct, a public education 
campaign, especially one that focuses on the town meeting. And 
I think those concerns are really three.
    The first is that the town meeting forum, as we think of 
it, an open town meeting where anyone can get up and speak his 
mind if he or she--if the person is willing to stand in line 
behind a microphone, it's not an indigenous political forum to 
Iraq. It's not an indigenous political forum even in much of 
the United States, although it is used in some places like my 
native New England.
    But the truth is that under such circumstances where anyone 
can get up and speak, the odds are very high, I would almost 
guarantee that in many cases some of the strongest and most 
vocal opponents of the constitutional process will be the ones 
who dominate these meetings. And I'll say a word in a moment 
about what it is that they're likely to say. But I think that's 
the first concern.
    In Iraq a model for public engagement developed by the 
members of the constitutional drafting committee itself is much 
more likely to be effective, and it will probably follow--
speaking in very general terms here--something like the 
consultative majlis model that is more commonly used in the 
Middle East, it will be discursive and dialogic if you will, 
but it would not be an open mike sort of situation. And may I 
add that the ratification conventions in the United States, 
when we ratified our own constitution, were not open 
microphone--well, there were no microphones, but they were not 
open-access affairs. People were selected, or elected, to 
participate in those constitutional conventions, and I don't 
think that undercuts the fundamentally democratic nature of the 
process, especially given that here there's going to be a 
democratic referendum on the constitution.
    The second concern is what I referred to earlier as sticker 
shock. There's been a process for Shi'a Iraqis in particular, 
Arab Iraqis that has not yet been undergone by Sunni Iraqis, 
when they are informed of just how much autonomy the Kurdish 
region has requested and is likely to get in the final 
constitutional draft. Many, many Iraqis remain uncomfortable 
with what is, let's be honest, de facto autonomy for the 
Kurdish region under many, many particular circumstances under 
the rubric of federalism. And a states' rights position, much 
stronger than states' rights, not only now in the United States 
but at any point in our history.
    It is likely that many people first introduced to this 
concept, especially in the Sunni areas, are going to react very 
negatively, and they're going to react negatively in public, 
and such meetings would be a natural forum for them to do so.
    Now some public expression of their shock is perfectly 
appropriate, and I expect we'll see it in newspapers and on 
television and probably in some public rallies. Having that 
happen in these meetings is likely to be very destablizing to 
the process of constitutional ratification, and I do not think 
it's an exaggeration to say that it would raise, at least, some 
possibility of a public groundswell against the constitution, 
which I think would be a very serious matter indeed.
    I would add to this the role of Islam as a factor that is 
likely to become much intensified in open meeting style 
debates. The Islamists, both on the Shi'a and the Sunni side--
we haven't heard so much from the Sunni Islamists, yet, in 
Iraq, but I promise you we're going to, in this ratification 
process--are excellent at essentially taking over public 
meetings and insisting on the insufficiently Islamic nature of 
any public governmental decision. They will not be concerned 
about the fact that behind closed doors a negotiation has 
already occurred in which Islam has been delicately balanced 
against democracy in a very, very precise formulation which 
will require a constitutional scholar to make any sense of it, 
and even then will probably make very little sense.
    We are opening the door potentially to an Islamist 
countermovement against the constitution, and among the Sunni 
Islamists, who, as I said, we have not heard from very much 
politically, but who are most closely connected to the jihadi 
wing of the insurgency. You're talking about a constituency 
that could do real harm to the constitutional process, and is 
guaranteed to try to do so. So I have some concern about that 
constituency and its participation as well.
    The last point is the desire for people who participate in 
meetings that are designed as part of the ratification process 
to be participating in meetings that actually matter. In other 
words, just as at our constitutional ratifying conventions in 
the States many people got up and said we don't like this 
constitution without a bill of rights, we demand that a bill of 
rights be added, and we vote to ratify only on the condition 
that a bill of rights be added, many people in Iraq 
participating in such meetings will want there to be changes to 
the document. The idea that they are being asked to debate 
something the text of which is fixed, and the text of which 
cannot be changed prior to the referendum, is likely to be an 
extremely unpleasant one for many people. And I say this partly 
based on personal experience in Iraq. I think there is a grave 
likelihood, at this point, that people who are already 
skeptical of the democratic process will say, why are we being 
asked to talk about this if a decision has already been made? 
If we can't do anything about it, why are we being asked to get 
up and express our views?
    That, too, is a potential source of frustration. So since 
there is no contemplated mechanism for returning back to the 
drafting committee after the point at which the debate has 
occurred, you are going to get frustration in the general 
public, in this case, just at the whole constitutional process, 
a sense of frustration and perhaps of having tried to 
participate politically but not having been able to do so, with 
the only protest mechanism available being a no vote.
    I would just close my comments by mentioning that many, 
many rational observers thought--before the recent 
constitutional referenda in Holland, in the Netherlands, and in 
France--that no reasonable voter in either of these countries 
could potentially vote against the constitution because the 
consequences were much too serious. Now admittedly they're not 
quite as dire in Europe as they would be in Iraq, but it is the 
case that many Iraqis would be prepared to vote against the 
constitution if they were sufficiently frustrated with the 
process. We must be very careful to avoid a situation in which 
we unwittingly, but in a well-intentioned way, facilitate a 
process that actually leads people to be dissatisfied with 
their constitution rather than happy with it.
    The Chairman. Dr. Marr.
    Dr. Marr. Well, I find myself in agreement on at least two 
points with my colleagues, and perhaps some caveats on the 
others.
    I found this question much easier to answer. Like others, I 
feel that it's the Iraqi Government, not the coalition, which 
should be conducting any public education campaign on the 
constitution. I also feel that this campaign should not include 
a discussion of the insurgency.
    I do want to elaborate a little on that because I feel that 
these are two separate, though related, issues which should not 
be mixed. Doing so is going to tie the constitution and its 
contents to the insurgency, divert attention from the main 
subject, and fix the two together in the public mind. Worse, it 
could make the constitution's success appear contingent on 
insurgent activity and tie the government's agenda to the 
insurgency.
    So the discussion of the constitution, as a blueprint for 
Iraq's future, should stand on its own, although, of course, 
the public discussion should make clear that the political 
process is open to all, and it's the appropriate vehicle to 
effect political goals, not violence.
    I believe that there should be a campaign conducted to set 
the constitution before the public. The way the question is 
phrased--whether it should be massive, whether it should be a 
townhall forum--I think is less important. I think, as Judy has 
said, there are certain ways in which this can be done in the 
Iraqi context which won't necessarily invite a lot of 
propagandistic speeches. Certainly, as she has said, campaign 
can be conducted through the media, through the press, perhaps 
in university and school settings, perhaps in the more 
traditional settings and so on.
    There are two virtues to doing this. One is that it helps 
build civil society which is very important. Various civic 
groups formed to educate the public will be the basis for 
future interest and watchdog groups, and, as has been 
indicated, a number of these have already been formed and are 
operating. And I want to add that special effort should be made 
to persuade the Sunnis in their area to lead this process, to 
encourage Sunni participation. It's very important that they 
get invested in the process, and develop a feeling that they 
have a stake in the future.
    Now, along with Dr. Feldman, I, too, have a problem with 
the timing of this process. I believe that a public education 
campaign needs to be undertaken, both before and after the 
draft is submitted, so that the public feels it has some say in 
the content. I agree that if you just spread the constitution 
before them and indicate they simply have an up or down vote, 
there's going to be frustration. And you might get a down 
rather than an up vote. This is one reason why I think a small 
extension in the time might be helpful.
    You can't write a constitution in a townhall, that's 
perfectly clear. But there are instances where the public, 
through interest groups such as those formed by women and 
others mentioned in the bill of rights, can have some input. 
They will feel that they're being listened to and taken account 
of. They will have a more vested interest in the outcome.
    So I would like to make sure that this public education 
process has some feedback into the constitution committee 
before the draft is finalized. Needless to say, I also feel 
that there needs to be some kind of opportunity for public 
education once the draft is completed, for several reasons. 
First, people do need to understand what their rights and 
obligations are under the constitution. Second, I think various 
interest groups and other civic societies involved in this 
process will be the building blocks for the legislation that 
will fill in the details on this constitution. Third, they will 
bring the public and its various sectors into the process; 
that's very important, too.
    The Chairman. Thank you very much for those responses.
    Now let us proceed to a third set of questions. Should we 
take new steps to forestall a Sunni-Shi'a conflict?
    Is international and Arab intervention feasible in that 
process?
    Could an international working group that includes 
participation by Sunni Arabs from outside Iraq, namely 
Jordanians, Egyptians, and others, help broker negotiations 
between the parties? Is there some other vehicle that could 
provide technical support and mediation and services for Sunnis 
and Shi'as to come to peaceful accommodation?
    Could credible Sunnis be enlisted to participate in this 
process?
    And finally, should de-Ba'thification be revisited?
    I call upon you, Dr. Feldman, to initiate the responses.
    Dr. Feldman. Thank you, Mr. Chairman.
    The jihadi wing of the insurgency is engaged in an all-out 
effort to create a true civil war in Iraq, and the reason we 
don't have a civil war is just that, although, there are 
massive killings of Shi'a civilians by some Sunnis there have 
not been substantial retaliations in killings of Sunni 
civilians by the Shi'a. There's really just one reason that 
that hasn't happened so far, and that reason is Ayatollah Ali 
al-Sistani, who has the kind of moral credibility in the 
country to call on his constituency to act with restraint.
    It is certain that an attempt on the life of Ayatollah 
Sistani is being planned. It would be unimaginable that no one 
was trying to kill him. An attempt will be made and one can 
only hope and pray that it will be unsuccessful.
    Nonetheless, we need to be well aware that that is not a 
far flung or unlikely scenario. Already several of his senior 
aides have been successfully assassinated, and again it's taken 
tremendous restraint on his part to be able to advise the Shi'a 
community, which is aided by a traditional political 
quiescence, but which will not hold on to that forever, that 
they ought to hold back and preserve the peace.
    So we definitely need some mechanisms that might be able to 
restrain, especially in a crisis situation like that one, and 
that would function under ordinary conditions as well.
    Now some participation of Sunni diplomats from outside of 
Iraq is certainly helpful, and we can deduce that it is 
potentially helpful from the fact that the jihadi wing of the 
insurgency thinks it might be helpful, which is why they're 
trying to assassinate those diplomats.
    It will now be much more difficult than it was the first 
time, and it was not easy the first time, to draw those other 
Sunni Arab countries into the process of negotiation by sending 
fresh diplomats. They, themselves, have security concerns, 
understandably, and it's a tremendous blow to their national 
prestige, and to their national interests, when they lose an 
ambassador. That's a serious business for obvious reasons that 
I don't need to explain to the committee.
    So I think we probably have, to some degree, exhausted, at 
least, the public version of that kind of diplomacy, and we may 
have to rely more on private versions of diplomacy of other 
Sunni-Arab countries going forward. It doesn't mean it can't be 
done privately in an effective way.
    There are essentially two groups of interlocutors that we 
could use in the Sunni-Arab community to try to make this 
happen. The first are Sunni clerics. These are very often not 
the people whom one would choose as interlocutors because to 
make them interlocutors is to empower them, and they're not 
people that have been elected, and they often have views and 
values deeply opposed to those of both the coalition and also 
held by the Iraqis.
    On the other hand, before elections happen, they are often 
the only people who are capable of speaking in an indirect way 
on behalf of those who were participating in the insurgency. 
They could be encouraged to meet on equal terms with Shi'a 
clerics, in cleric-cleric meetings that would be informal sorts 
of contacts, nongovernmental, but which might, in the long run, 
be a first step in the direction of having some line of 
communication that would be available in a crisis situation. 
It's not going to be an easy thing to do. Many of them lived 
happily alongside Shi'a for many years but if you push them, 
theologically, as the jihadis are doing, it's difficult for 
them to avoid the conclusion that, in fact, the Shi'a are, at 
best, heterodox and, at worst, heretics. That's a serious 
concern on their part. But some sort of clergy-clergy contacts, 
I think, should be encouraged and could be encouraged.
    The second group one could speak to on the Sunni-Arab side 
are essentially ex-Ba'thist or ex-military or both, members of 
the--what I described earlier again with apologies, is it a 
moderate or the pragmatic wing of the insurgency, that is 
people who don't see the end game as a permanent jihad but 
instead see the end game as some sort of a negotiated solution 
with the other side.
    We are already talking in some limited ways to those 
people. Some of them are participating in politics, and indeed, 
at least two of the members of this constitutional committee 
who are Sunnis are reputed to have been former Ba'thists at 
some stage of their careers. That's a good thing because this 
situation, although these are not people whom one would like to 
deal with, we have very little other choice if we want to stave 
off the possibility of more extensive violence.
    The background for all of this is just to keep in mind that 
the insurgency itself needs to be split, and that the jihadi 
wing is never going to negotiate, is never going to enter into 
reasonable deals, and that anyone who belongs to that line of 
the insurgency, or claims to belong to it, or is even openly 
allied with it, should be excluded from these sorts of 
contacts, but that there are others in the insurgency who do 
not feel this way and who can be won over--and to be blunt 
about it, bought out through this process. And I think we need 
to be open to dealing with those folks as we have already 
slowly begun to do.
    The Chairman. Thank you, Doctor.
    Dr. Phebe Marr.
    Dr. Marr. I think in some ways this question may misdefine 
the issue a little. Rather than simply a Shi'a-Sunni conflict, 
I think the conflict is broader, and as I said before, involves 
all of Iraq's communities as they search for new identity.
    In fact, I think there are two processes going on; one is 
an increased polarization of the Iraqi polity along both ethnic 
and sectarian lines--Kurds and Arabs as well as Shi'a and 
Sunnis as Iraq searches for this identify and a new political 
center of gravity. The elections in January revealed this 
polarity, putting into power an essentially Shi'a ticket with a 
majority and a very strong Kurdish ticket in the second place. 
Those with centrist or nonsectarian views either lost the 
election, or got very few votes.
    In any event, helping to move Iraq away from this 
polarization and encouraging a sense of national identity, 
particularly in speeches, messages and so on, should be one of 
the coalition's long-term goals. But I agree with Noah Feldman, 
it's well to keep in mind that both the Shi'a and the Kurds 
have been disciplining their own communities and preventing 
retribution and retaliation, up to a point, where they can. 
This has been largely successful because both of these groups 
have benefited by attaining power in the new regime.
    In the end, however, rather than a Shi'a-Sunni conflict, 
what I see is rejectionist resisting the new government and a 
new political order. This is most virulently manifested in the 
insurgency. Most of the rejection comes from Sunnis; most of 
those in the government and those shaping the new order are 
Shi'a and Kurds. But the Sunni rejectionists need to be 
understood, not simply as a sectarian group but as a community 
whose leaders once occupied power, not as Sunnis but mainly as 
nationalists. Now they find themselves to be an increasingly 
marginalized minority that not only resent their loss of power 
and status, but fear discrimination and victimization by the 
new ruling groups. And many have lost employment and economic 
benefits as well.
    As Dr. Feldman has said, they can be divided into several 
different categories. Like him, I would put the jihadists and 
the ``Salafists,'' who are extremist, beyond the pale. I would 
also put beyond the pale, Saddam loyalists engaged in violent 
mayhem. But I agree that a number of the other Sunni 
oppositionists--army officers, former Ba'th party members, 
nationalists opposed to occupation, and unemployed youth riled 
by current conditions--probably can be brought into the fold of 
the new regime in time, and with the proper incentives.
    Conversation with these oppositionists indicate they have 
roughly four or five concerns. They are, first, the issue of 
occupation and the foreign presence; second, the loss of power 
and prestige; third, the lack of Sunni representation in the 
political process; fourth, increased sectarianism; and fifth, 
the lack of a rule of law and security, especially for their 
community.
    Attempts to alleviate this problem should focus on 
addressing these problems. I would make several suggestions. 
First, as everyone has said, encourage the government to bring 
Sunnis into the political process.
    Progress has already been made on this--considerable 
progress--and if more time is needed on the constitutional 
process to do that, I would urge that we provide it.
    Second, encourage revision of the electoral law to move the 
process away from a single countrywide election list to a more 
district-based system, which I'm going to say more about later. 
This would ensure Sunni seats in the assembly regardless of how 
many voted and would certainly go down well in Sunni areas.
    Third, encourage the current government to revisit the de-
Ba'thification program. Anecdotal evidence suggests that much 
of the educated middle class, especially academics and 
professionals like doctors and lawyers, who may have been party 
members but have no criminal records, feel alienated and left 
out. Many are leaving Iraq. A better vetting system, which 
focuses on individual behavior and records rather than a 
blanket category such as party membership, would help. But it 
has to be borne in mind that this is an extremely sensitive 
issue for the new Shi'a and Kurdish leaders. This was brought 
out in many conversations I had with them in Baghdad.
    Fourth, Sunnis complain of a lack of rule of law and 
security. They're not alone in this, of course. Over the long 
term, strengthening the court system, the prison system, the 
police system, would help. I mention this because I think it's 
important to remember that not all of this violence is due to 
insurgency. A lot is due to common crime. If you could separate 
the police problem from the insurgency problem, strengthen the 
local police, especially Sunni police in Sunni areas, it would 
allow the coalition to take its forces out of cities and 
alleviate some of that problem.
    Lastly, outright mediation might have some benefit. But, 
frankly, I think it has to be handled carefully lest it be seen 
as interference, especially by the new Shi'a-dominated 
government. As for including key figures in neighboring Arab-
Sunni States we have to be careful here, too. That would be 
helpful, but many of them may be regarded with suspicion by 
this government. However, including some Arab leaders in some 
kind of an international delegation might be a good idea. But 
any mediation effort involving neighboring states would need a 
clear definition of its mission, what it would be expected to 
do to influence and mitigate the Sunni problem.
    The current government is interested in efforts to control 
the border, to control the finances flowing to insurgents, to 
get public support for the electoral process and the new 
constitution, and to encourage public rejection of violence. 
International and regional efforts along these lines, in return 
for Iraqi Government efforts to bring more recalcitrant Sunnis 
into the government and into local police forces, might be 
helpful.
    I would like to just add two points to what Dr. Feldman has 
said about who might mediate for the Sunni community. Religious 
leaders are one group, but let us not forget tribal leaders, 
who are often very pragmatic, who have local constituencies, 
and who certainly ought to be brought in, at least in the short 
term, as negotiating partners.
    The Chairman. Thank you very much, Dr. Marr.
    Ms. Van Rest.
    Ms. Van Rest. Thank you. To follow up on my colleagues 
remarks, what I want to describe is what we're seeing from our 
working in Iraq through these various groups. We are witnessing 
a determination among all the groups, Sunni, Shi'a, Kurds, even 
the smaller groups, to work together toward the goal of a 
united Iraq.
    One thing that we have been seeing is that there is no end 
of debate among the Sunni and the Shi'a about what type of 
government they should have, and indeed they are taking some 
joy in embracing the opportunity to have the debate because as 
we have heard from several of them, including one recently, 
that ``under Saddam I would not even debate such issues in my 
own head and now we are free to debate them among ourselves.''
    There is a commitment to democratic debate and confidence 
in the framework across Iraq and across various sectors of 
society. It is found among Sunnis. We have seen Sunni 
representatives brought into the constitutional drafting 
process, we have heard Sunni leaders say they made a mistake by 
not participating in the January elections, and a mistake that 
they are encouraging their followers not to make in upcoming 
elections.
    There is wide support for democratic solutions by Iraqis as 
shown in our polls. Support for, and confidence in, democratic 
solutions among Iraqis has been expressed time and time again 
in nationwide polling, which we have attached to the testimony 
in greater detail.
    The latest survey has revealed that nearly 73 percent of 
Iraqis believe that the new Iraqi transitional government is 
representative of the Iraqi people as a whole, among self-
identified Sunnis the percentage is 67.4 percent, and for the 
Shi'a it is 78.3.
    Equally revealing is the strong support for coming 
elections; 75.6 percent of Iraqis say they are very likely to 
vote in the upcoming constitutional referendum. Again, support 
is strong among both Sunni and Shi'a at 63 percent and 83 
percent, respectively.
    It is also worth noting that the polling data reveals that 
the Sunni-Shi'a divide is not that wide in comparison to self-
identification as Iraqis. Twice as many Sunni most strongly 
identify with their country in relation to the number who 
identify with their ethnic group; for Shi'a four times as many 
identify with their county. When comparing strongly identifying 
with country to identification with religion the ratio for 
Sunnis is three to one, and for Shi'a two to one.
    National identity is a necessary component in creating a 
willingness to make the compromises necessary to bridge the 
gaps that might otherwise be created by more divisive elements.
    These numbers are being reflected by action on the ground. 
Across the country courageous Iraqis are standing up to those 
who would use violence to undermine the move toward a peaceful 
and democratic Iraq. IRI is working with numerous Sunni and 
Shi'a organizations, and as my colleague Noah suggests, we're 
also including cleric organizations, and as Phebe mentioned, we 
have tribal organizations working to educate Iraqis about the 
constitutional drafting process and support for elections as a 
way of creating a more peaceful and prosperous Iraq.
    It is in this context that the response to what steps 
should be taken to avoid Sunni-Shi'a conflict should be found. 
The answer is to support the Iraqis in finding their own 
solutions, including that of de-Ba'thification within the 
democratic political framework to which they have committed 
themselves. Sunnis and Shi'as are already engaged in 
accommodations through political channels, leadership is not 
advocating violence for civil war, such elements while 
tragically conspicuous are marginal forces.
    The United States and its coalition partners would do well 
to encourage, even pressure, neighboring governments and those 
of other Islamic States in the region that benefit from 
stability in Iraq to be more outspoken in their condemnation of 
terrorist violence in the name if Islam.
    The Chairman. Thank you very much.
    We'll proceed now to the fourth option. We'll start with 
Dr. Marr in the response.
    How can the United States cultivate emerging leaders among 
the various political factions in Iraq, and ensure that they 
will interact politically rather than using violence or 
exclusionary political tactics? Is such involvement feasible, 
or would it be counterproductive? How divergent are the views 
among the various new leaders on such issues as democracy, the 
appropriate political structure, the role of religion, future 
relations with the West and Iraq's neighbors? Can the United 
States influence these views, or should we attempt to influence 
those views?
    Dr. Marr.
    Dr. Marr. Thank you. I'm currently involved, as a fellow at 
USIP, in a study of Iraq's emerging political leadership and 
their various visions for the future of Iraq. In conjunction 
with this I've made two trips to Iraq; one in December to talk 
to the Kurdish leadership and one in May and June to Basra and 
Baghdad to talk to the newly elected members of the government.
    These interviews reveal a rich mix of political leaders 
emerging with considerable promise for the future, but that 
promise is going to take time to mature. The problem of 
replacing Iraq's leadership, once Saddam and the Ba'th regime 
was removed, has, in my opinion, always been one of the most 
difficult problems facing Iraq and the coalition. Removing and 
disbanding the previous pillars of state has allowed for a new 
leadership to emerge, but has also created a large vacuum at 
the center of power. Filling this vacuum has been difficult.
    New leadership can come essentially from three sources. One 
is a reintroduction of elements of the previous regime vetted 
for security purposes; the second is from exile, opposition 
politicians who've been outside of Iraq for decades; and the 
third is from the indigenous Iraqi population, most of whom 
have had little or no leadership experience.
    Essentially the coalition opted for the second solution; 
bringing in a group of exile opposition leaders mainly from the 
West. This group dominated the early governments under the CPA 
and the interim government, but the election now has produced 
an essential change in that pattern and brought the expression 
of popular will and a shift to new leadership, which probably 
reflects future trends in Iraq.
    Several points need to be made to understand this 
leadership and the challenges it poses.
    First, the current government, like it's predecessors, is 
dominated in its upper ranks by exiles who have spent most of 
their formative years outside of Iraq, or in the case of the 
Kurds, running their own government in the north. Whereas 
earlier regimes were led mainly by Western-educated and 
Western-oriented oppositionists, the new government is not. Key 
positions are now in the hands of the Shi'a religio-political 
parties and the Kurdish parties. The members of this opposition 
have often spent time not in the West but in Iran or in 
neighboring Arab countries like Syria or Lebanon.
    The Shi'a are Arab-Iraqis but they are more interested in 
instilling an Islamic identity in Iraq. In one sense, Iraq has 
exchanged one set of exiles for another. The indigenous 
leadership from inside Iraq, though it's emerging, has still 
not made its way to the top of the leadership group.
    Second, turnover in posts at the top has been substantial, 
creating lots of opportunity for mobility but the need to gain 
experience. The same is true at local and provincial levels 
where discontinuity may be even greater. Something like 60 
percent of the current Cabinet Ministers are new to the job. 
Some of this change is to be expected in an era of radical 
change, but it means that the new leaders must gain more 
experience in running a state. This will take time.
    The one exception to this rule is the Kurdish leadership. 
They have acquired considerable experience and maturity, often 
through the school of hard knocks, in running a government in 
the north. And it's not surprising that their area is quiet and 
gradually becoming more prosperous. The question with the 
Kurds, however, is how committed they are to building Iraqi 
institutions in the center as opposed to those in the north, 
and how to draw this experienced leadership further into the 
rebuilding of Iraq.
    Lastly, there's the problem of differing visions of the 
future of Iraq and where the various leaders would like to take 
the country. In my initial interviews I have found a certain 
amount of overlap, but there are also differences. Arab-Sunnis, 
Kurds, and the dominant Shi'a coalition have different views 
that need to be reconciled. That process is being dealt with 
through the constitutional process and elections. Of course, 
it's going to take time, but in my view the ongoing political 
process is one of the bright spots in a sometimes bleak 
picture.
    How can this process of accommodation be facilitated? How 
can the coalition help?
    First and foremost, every effort must be made to open Iraq 
to the outside world. While exiles have had some exposure to 
the outside, those inside have had little. Education at every 
level has deteriorated and Iraqis, especially professionals, 
are hungry for outside expertise and contacts. Let's give it to 
them. Visitors programs, fellowships and scholarships to study 
in the United States, Europe, and elsewhere, computers and 
library facilities in universities and centers, need to be 
encouraged and funded. This is being done--I think these 
programs are successful--but I'd rather see more money 
appropriated for those things and less to some others.
    One of the most positive aspects of my trip was in 
discovering young people in their twenties and thirties who 
wanted to come to the States to study political and social 
sciences, not engineering and computer science, for the first 
time in decades. We should encourage that.
    Second, let's concentrate on the younger generation which 
is Iraq's future. While the vision of most of the 40- and 50-
year-olds has already been formed, often in divergent ways, 
those in their adolescence and early adulthood are still 
flexible. And we should avoid stereotypes.
    For example, among the most hopeful and promising 
experiences of my trip to Baghdad was in talking to this 
generation, including several young people from Sadr City. We 
often think of Sadr City as a poverty-ridden slum, a nest of 
Islamic radicals, but these young people dispelled some of that 
impression, as far as I was concerned. One was a husband and 
wife team involved in local municipal government. Both were 
advanced graduates of universities and one was interested in 
pursuing a Ph.D thesis on U.S. foreign policy, but he needs 
more training in English. He should get it.
    Another was a remarkable young woman in her early thirties 
who had been encouraged by her family to get an education as a 
doctor. She was just about to take her board exams when Saddam 
was overthrown. She was appointed to her neighborhood council, 
and then in the space of 2 years she went from the neighborhood 
council to the district council to the municipal council. She 
was appointed to the national interim council in 2004, she ran 
as an independent for the national assembly and she's just been 
elected. She wants to have a political career and to come to 
the States to learn firsthand how to engage in one.
    What better way to invest in the future than to provide her 
and others like her with this opportunity.
    Third, encourage and strengthen the many civil society 
groups that are already blossoming, despite dire security 
conditions. Help think tanks get funded, support interest 
groups that are emerging, encourage training and conferences 
that bring diverse groups together in an environment that 
allows hands-on discussions and potential resolution of 
conflicts.
    The institution, which is funding my research, USIP, is a 
good example of this activity, though not the only one. IRI and 
NDI are doing yeoman work as well. These activities do not make 
the headlines but they're critical to developing future 
leadership and the skills and attitudes necessary for 
compromise.
    Fourth, strengthen government capacity, both at national 
and local levels. The political process is justifiably sucking 
up much of the time, energy, and resources of Iraq's elite. 
Meanwhile, the more mundane aspects of government--delivery of 
electricity, garbage collection, security--are neglected or 
given over to free lancers and contractors who may be corrupt 
or worse. Building government structures and an honest 
bureaucracy would greatly enhance Iraq's ability to carry on 
and to garner popular support while it struggles to settle 
these difficult political problems at the national level.
    Encouraging a civil service administration based on 
meritocracy would be a good step in this direction.
    And lastly, economic development by, and for, Iraqis must 
take place despite the security situation. All evidence 
including the polls from IRI suggests that this element, along 
with security, is the number one priority of the population. 
The constitutional process must be supplemented by growing 
prosperity and the strengthening of the middle class. Over 
time, nothing will better tamp down ethnic and sectarian 
tensions, help mitigate past feelings of victimization and 
fears of reprisal, and provide a new and better vision for 
Iraq's future and its youth.
    A failure to complete economic development--to couple 
economic development to the political progress being made--may 
produce an Iraqi version of what has just occurred in Iran; the 
election of a conservative, religiously oriented, President 
supported by a neglected working class. The potential 
indigenous leadership in Iraq today is not hidden secularists 
and liberals, but the Sadrist movement, which is gaining 
support by its nativist claims. Its leaders have not spent time 
outside of Iraq, and it is championing the poor, uneducated, 
and jobless.
    The best way to combat this situation is to make sure, 
first, that the political process continues to be open to these 
groups, and second, that the younger generation of 
underprivileged, such as those Sadr City residents that I met, 
are nurtured, encouraged, and given access to the outside 
world.
    The Chairman. Thank you, Dr. Marr.
    Ms. Van Rest.
    Ms. Van Rest. I agree with Phebe on all the things she said 
about the importance of exchange programs bringing youth to the 
universities and the like. In addition to that, IRI and NDI, 
through various grants to indigenous organizations, have been 
doing work on the ground helping emerging leaders and emerging 
groups begin to learn the process of how to work in a 
democracy.
    As you all know the institutes have been doing this for a 
long time. We have more than 20 years experience in assisting 
countries to emerge from authoritarian rule to democracies, and 
with our technical training ongoing, we are helping Iraqis 
build political parties, civil societies, government 
institutions, and other components necessary to have 
representative government.
    We do this--keeping in mind that democracy is just not an 
off-the-rack concept, one size does not fit all, but what we do 
know from our experience is that there are basic elements that 
are universal in a democracy and as we have with many other 
countries around the world we are continuing to assist them in 
fashioning their own new and free democratic Iraq.
    I would also like to point out that it is a long-term 
process as well. We have in the most recent example--well, we 
have had several experiences, but Ukraine is an example that I 
like to point out, we have been working there for more than 10 
years and as we saw last fall that the Ukrainian people finally 
took the bull by the horns and decided that they, indeed, 
wanted to have their own democracy.
    In addition to helping Iraqis with training in their public 
education, civic organizations, we're also drawing on the 
experience of countries in Central and Eastern Europe. We have 
a good many on our staff who are from Serbia and Ukraine. We 
also have trainers--we've had trainers come in from Romania, 
for example, and these trainers are very well received because 
Iraqis can relate to someone who was imprisoned or had a family 
member killed by an oppressive dictator but who is now working 
in successful transition away from authoritarian rule.
    Successful transitions in the Slovak Republic, Lithuania, 
and the Czech Republic as well as other regions in countries 
such as Indonesia, have all proved useful in providing Iraqis 
with case studies. For example, we took a group of Iraqi 
election officials to observe elections in Indonesia and other 
countries prior to the January 30 election.
    IRI staff in Iraq are folks who have helped to lead 
transitions in their own countries and this is something that 
is very much appreciated by Iraqis we work with.
    With regard to the opinion on issues of democracy and 
related topics I would like to refer to our polls. We conduct 
them on a regular basis, we have a poll currently in the field. 
The most recent poll is attached and, as you can see, there is 
information that we hope will inform the committee and others. 
For example, one question is: ``Were Iraq to have a 
Presidential system which of the following methods would you 
prefer?'' and the majority of people want direct elections. 
That continues, no question about it. Yet, there are also 
differing opinions on what role religion should play.
    The Chairman. Thank you very much.
    Dr. Feldman.
    Dr. Feldman. Thank you, Mr. Chairman. I agree with much of 
what my colleagues say on this question. I would just emphasize 
that in the tremendously uncertain circumstances of present-day 
Iraq, the fluidity of the political situation is such as to 
encourage the emergence of a new generation of leaders, who are 
themselves extremely open to rapid changes both in their 
techniques and also in what appear to be their illogical 
commitments.
    Let me take as an example the most notorious, but also the 
most influential, young leader, that's Muqtada al-Sadr. Sadr 
began by challenging democracy as un-Islamic. One of his first 
big public speeches was a statement that Islam and democracy 
could not work together. He then moved on to participating in 
the elections. He began fighting the coalition violently 
through his Mahdi army, and indeed engaged in some very brutal 
fighting with U.S. forces, and yet he moved from that point to 
accepting coalition money for projects in neighborhoods that he 
and his political parties control.
    Sadr also challenged Ayatollah Sistani directly, in an 
extremely overt way, rather shocking to the Shi'a community, 
but he ended up acknowledging Sistani's authority when push 
came to shove.
    Now none of these is a marker of a moderate, this is not a 
moderate we're talking about. These are markers of someone who 
is learning as he goes, and who is ultimately willing to be 
extremely pragmatic, politically, in order to accomplish his 
goals. He still has general ideological preferences for 
something like an Iranian-style model of governance, but he's 
willing to work within the circumstances that he finds, which 
are circumstances that are rapidly changing. And one reason 
that he has survived thus far--there are two reasons he's 
survived. The first reason he survived is that the United 
States was not firm in its initial determination to get rid of 
him. If our decision had been to arrest him early on we could 
have done so at an early stage. That's the first reason he 
wasn't--he succeeded.
    The second reason, though, is precisely that he's been 
extremely flexible. I think the new generation of political 
leaders that are emerging in Iraq now share, not necessarily 
his particular ideological preferences, but they share this 
feature of tremendous flexibility, willingness to adapt to 
rapidly changing circumstances.
    Now what does that mean in a practical way for the United 
States? It certainly means that, at the grassroots level, we 
should be interested in educating people because if they are 
flexible, educating them in U.S. approaches and ideas can 
actually be effective.
    But it also means that we need to be realistic about what 
they will do when they go back to their country. It is not 
realistic to think that exposure to a Western-style education 
will make Western-style Democrats out of them. It's equally 
likely, or probably more likely, that such exposure will make 
them more sophisticated in dealing with us, a value to them----
    Senator Biden. It depends on their professor.
    Dr. Feldman. Everything does, as we'd like to believe in 
my, otherwise, largely irrelevant profession.
    So the truth is that we need to expect that we're going to 
be forced to deal with lots of extremely practically minded 
young politicians who will be willing, essentially, to say or 
do whatever is necessary for them to get ahead politically. And 
we have to be prepared to deal with them if we are adopting a 
strategy of dealing with them. What's problematic is if we 
adopt an equivocation strategy. What doesn't work is to say on 
day one, we're going to arrest you or kill you, and on day two, 
you are our ally in this democratizing process. Either one will 
work, often under lots of circumstances, but you've got to 
choose one and then stick with it, and I think that may be a 
general principle in life, but in this case it seems 
particularly true.
    The Chairman. Thank you.
    Now let me mention that at the beginning we said each of 
you would have an opportunity, at this stage, to add a final 
comment, something that has come to your mind, questions that 
have not been raised.
    Dr. Marr, have you had such inspirations at this point?
    Dr. Marr. Well, I've certainly been inspired by my 
colleagues here, but I did come with a suggestion that I think 
is worth looking at. Again, the lead has to be taken by the 
Iraqis, but after looking at polarization, looking at the 
election, and talking to many leaders, I'm seized with the idea 
that one of the things that would be most beneficial in Iraq in 
damping down this ethnic and sectarian polarization, would be a 
revision of the electoral law. The fact that it was a single-
list system seems to have contributed to the polarization. If, 
in fact, you could mix and match these provisions--it doesn't 
have to be all or nothing--but if a new electoral law could be 
drafted which shifts more in the direction of districts or 
provinces, a law that assures provincial representation in 
Parliament, this would shift the balance in the election to 
local and regional leaders who have constituencies. We can't be 
entirely sure--elections are always a question--but I think 
that would help. And there are many people in Iraq who 
suggested such a revision to me.
    For example, let's take many tribal leaders. I'm not a big 
fan of tribalism, but many of these leaders are educated, 
they're relatively sophisticated and they're practical and they 
have constituents. This would shift the system in the direction 
of constituents with interests and leaders with a need to 
``bring home the bacon'' rather than political parties with 
ideological frameworks. It would even help on the Kurdish 
issue.
    If we have any opportunity to suggest something, I propose 
this. We may not even need to suggest it because I think 
there's a contingent--quite a contingent--in the Iraqi 
political spectrum that would like that. Revising the election 
law may take more time, and may involve some kind of a census, 
but if this issue comes up we can give some good advice to 
Iraqis; that's my suggestion. That's worth taking a look at.
    The Chairman. Thank you.
    Ms. Van Rest.
    Ms. Van Rest. As I alluded to, in my last remarks, I think 
from our point of view, it's very important to understand how 
long it takes to help people in other countries realize their 
own democracy, and so, therefore, I'm just--and I know that 
there is a great understanding on this committee of this, is 
that we need to be in there with other groups, not only NED and 
IRI and NDI, but other organizations who can continue to help 
Iraqis as they develop in setting up their institutions, in 
learning how to operate within a democracy. It doesn't happen 
overnight, which I know is a very simplistic thing to say, but 
it is something that we know takes a very long period of time, 
and so that is what I would like to offer as something we need 
to keep our eye on with regards to democracy-building programs.
    The Chairman. Thank you.
    Dr. Feldman.
    Dr. Feldman. I would just very briefly emphasize that 
there's an intimate connection between the progress on 
security, or a lack of progress on security, and the 
constitutional progress. I sometimes think that Iraq is like 
watching a split screen. On one side of the screen is this 
constitutional process that all in all has gone pretty well. 
It's had steps backward and it's had steps forward, but it's 
made reasonable progress, and even though Sunnis did not 
participate in the election there are now Sunnis involved in 
the political process, and they will be involved to some degree 
in the final constitution.
    On the other side of the screen, meanwhile, is the 
continued violence that we do see, literally, on our television 
screens every day, which is deeply destablizing to the 
political process in that it makes it look like a show. It 
makes it look as though the political process is disconnected 
from reality, and that's deeply harmful not just to our 
interests in Iraq--because it makes it much more difficult to 
achieve a political balance there which would enable us to 
begin to drawdown forces--it's also terribly damaging to our 
broader efforts in the region to encourage political processes 
that look a bit more like democracy than those that presently 
exist. Because opponents of democratization in all of the 
countries in the region regularly say--now this is a new 
argument, they didn't have this argument before Iraq, but their 
new antidemocracy argument is, look how destablizing democracy 
is. Open up political processes and suddenly you'll have 
suicide bombers, you'll have people all over the streets, 
you'll be in a very, very risky situation. And that is, in the 
long run, just as harmful to our interests in the region as it 
is to our particular and very immediate problems in Iraq 
itself.
    So I would just emphasize that inasmuch as we care a lot 
about the political process, and today we've been emphasizing 
those aspects of the political process that are good, or that 
can be improved, but we recall that as you've had even other 
panels thinking about this issue to realize that there's a 
close and central link between these, and that we could very 
easily end up with the best constitution ever ratified in an 
Arab country--and, in fact, I'm relatively confident that we 
will end up with such a constitution, at least measured by that 
metric--and that it will possibly mean very little in practical 
terms if we don't have the security to enable it to actually 
operate in practice.
    The Chairman. Well, thank you very much. I appreciate, 
likewise, my colleagues' patience. Nevertheless, you have set 
the stage magnificently. We'll begin our questioning with 10-
minute rounds, and I'll start my 10 minutes by making comments.
    First of all, I compliment to you, Ms. Van Rest, for giving 
us this poll from the International Republican Institute. Now, 
the poll we have in front of us is April 11 through April 20, 
so this is 3 months ago. You're in the field now----
    Ms. Van Rest. Yes.
    The Chairman. You polled the whole country. People said 47 
percent most identified with their country, 18 percent with 
their religion, 16 percent with their ethnic group, 11 with 
tribe, and 4 with city and town.
    So this is almost half who identify with the country, that 
is, being Iraqi is the most important thing, as opposed to 
being a Shiite. On the other hand, if you break this down, as 
you have, by the major groups, Kurds don't see it quite that 
way. They would identify with their ethnic group. At least 37 
percent think that's the most important thing, as opposed to 
Arabs, of whom only 12 percent think that's the most important.
    But if you're talking about ``my country,'' Arabs, by 50 
percent, identify with the country, and 28 percent of Kurds are 
in this situation. So, as is often the case, in aggregating 
statistics, why, we have very different views in terms of prime 
loyalty. And then you get to perhaps the most important issue 
requiring a governmental solution--we heard this yesterday from 
our panel--security remains a distinct challenge. Not the 
insurgency sort, but walk out the door in the morning to go 
safely to school, things of this kind.
    In this poll, interesting enough, inadequate electricity 
was the winner, unemployment second. Well, that's 
understandable. National security came in third, and high 
prices, and far down the line came crime, terrorists, and 
health care, for example. Maybe these are situations for more 
affluent organized societies, when lights go on, for example. 
And there is some sense that you can make some money and have a 
job if there's 50 percent unemployment.
    We're going to discuss the economy tomorrow because we've 
all discovered--maybe aside from security concern walking out 
the door--after you walk out the door, you hopefully walk to a 
job, or some destination. And if there is not a society to 
enforce those opportunities--well, to say the least, this is 
destablizing to whatever is going on downtown in the 
constitution building.
    Having said all that, my thoughts come down to, first of 
all, this basic question that I raised with respect to the poll 
that the Republican Institute did. I'm still wrestling with 
what sense do Iraqis have of wanting to be Iraqis. I don't say 
this in a divisive way, but clearly one of the most horrible 
outcomes of all this will be civil war. Or even some degree of 
disintegration, that is, parts of the population, as we know 
it, affiliating with somebody else on the basis of tribe or 
religion. Dr. Marr, in guiding us in our studies of Iraq, 
didn't describe it as an artificial country, but some have told 
of people drawing a line around the land mass we today call 
Iraq, maybe the British, the French, others after World War I, 
encompassing some disporate people, putting a tyrant over them, 
Saddam being, maybe, the last iteration of this, but suddenly 
the tyrant is gone and now we have to face, well, there you 
are.
    In the midst of this, the Kurds, as we've discovered, given 
some protection by our aircraft and their location, did develop 
a certain degree of self-government. Not surprisingly, they are 
demanding a pretty high degree of autonomy in this, a federal 
principle. Furthermore, they have very strong bargaining 
positions. Kurd leaders, who have come to visit with members of 
our committee, individually or collectively, are saying that 
Kirkuk is extremely meaningful to us. And the oil that is 
involved in this is equally so.
    So we could say, well, now listen, Iraq has got to be Iraq, 
you're all Iraqis, and there needs to be a sharing of the oil 
wells, and, likewise, some recognition of whom Kurds might be 
pushing out of Kirkuk, or who's coming and going from this 
situation.
    And they said, well, that's all well and good, but, 
nevertheless, this is our bottom line. As we are negotiating 
here, it's not just simply how many members of the assembly we 
have, or whether it's a two-thirds majority, or so forth, it's 
more fundamental. Where do we stand in all this?
    And, of course, we'll get into our fourth hearing, during 
which some of the other countries around will be discussed, but 
the Turks have indicated very visibly and publicly that they 
want the Kurds to be thinking about being Iraqis, clearly 
incorporated in Iraq, not flirting with desires for greater 
Kurdistan again involving Syrians, Iranians, and Turks, because 
if so, then we have a whole set of new conflicts even as we're 
trying to settle one that is fundamental here.
    And I will conclude with this broad question. The thing 
about being Iraqi is, there is this problem that you've 
discussed. We have some very sophisticated people in that 
assembly dealing with this. As you said, Dr. Feldman, we have 
maybe one of the best constitutions we could have hoped to come 
from such a situation.
    But it appears the United States displaced Saddam Hussein. 
By and large we rejoiced, the Iraqi people rejoiced, and the 
world I think, by and large, even if they didn't want to 
participate in it, rejoiced that he's gone.
    And we made some assumptions then about democracy. We felt 
that this is the shining moment for democracy arising in this 
particular country, in this very difficult neighborhood. And 
now there are some who would say fair enough, but on a scale of 
10 it doesn't have to be a 9-plus. Maybe if we come out with a 
6-plus or something we may claim that headway was made.
    Well, maybe so, but as some of you have said, and others 
who are looking at this example around there may say, well, 
what's the tradeoff--stability versus a democracy rated as a 6-
plus on a scale of 10 that is somewhat unstable.
    If the Chinese statesman was comparing what we have today 
in Iraq with his own situation, he might say, ``We're getting 9 
percent real growth in China. We have an authoritarian regime, 
and as a control, it works for us. Let the business people make 
their money, but stay out of city hall. Our way ensures 
security and crime fighting, whereas you idealistic people who 
are all hankering about democracy are looking at an economy in 
Iraq where people are unemployed, there's not much real growth, 
there's insecurity and you don't know where the oil money is 
going.''--we'll talk about that tomorrow during our hearing on 
the economy--but you understand, what's the world to think as 
they look at all this?
    Fundamentally, is there going to be a way out of this, in 
your judgment? Will the sense of being Iraqi be sufficient? At 
the end of the day, will the basic elements finally compromise, 
however they get to that point, and, likewise, will they have 
enough pride in the situation that they actually cut 
corruption? Will they manage to get the outside investment that 
will be required to get the kind of employment levels or the 
economy that they want? Will they work with other countries so 
that their security remains sufficient, and they're not invaded 
by somebody else either surreptitiously or overtly while they 
are getting their fledgling democracy going? Is there enough 
stability here, enough sense that this is likely to work, 
leaving aside the timetables of how long we stay, anybody 
stays, and so forth? Is there something here that is 
sufficiently Iraqi to assure that?
    Dr. Marr, I think you've thought about this issue for a 
bit, and will you give your judgment?
    Dr. Marr. Yes, thank you very much.
    On balance it's going to be difficult but my answer to you 
is ``Yes.'' Over the long term, probably. Iraq could fail, it 
could break down into Lebanon. However, I don't think a civil 
war between the communities will ensue or the kind of war we 
see now--the rejectionists versus something new--will continue.
    I'm actually investigating this very issue of identity. I'm 
relying on IRI polls and others for the opinion of general 
population but I'm trying to determine through intensive 
interviews with leaders of various kinds--provincial and 
national, younger and older--how they view this issue. My 
conclusion, in general, is that the real difficulty lies with 
the Kurds and whether they feel ``Iraqi.'' This problem has 
grown tremendously in the last couple of decades.
    I do want to say something about your characterization of a 
new state and a dictator. Iraq had a lot of history before 
Saddam. Governance is a long-standing problem, but the British 
came in with much the same problem. Over a long period of time 
they did institute an imperfect parliamentary system, and we do 
have to remember that Kurds participated, to a great extent, in 
that. We had Kurdish Prime Ministers, Kurdish Ministers of 
Interior, Kurdish members of Parliament, and so on.
    Then the polity began to fragment and there was disruption 
especially after 1958. But the fact that the Kurds have been 
governing themselves for the last--what is it now--13, 14 
years, and that education has been in Kurdish for that time--
has created a younger generation for whom there has been no 
interaction with Iraq, and who don't know Arabic. The older 
generation is more pragmatic, they speak Arabic, they have a 
memory of having interacted with the rest of Iraq. But 
integration is going to be more difficult for the Kurds than 
others.
    There certainly is a sense of Iraqi identity among the Arab 
population, but in my view this has weakened over time--
certainly in Saddam's time, and recently. Why? Because many of 
the new leaders are not secular nationalists, they're people 
for whom religion and Islamic identity is increasingly 
important. This doesn't mean they're not Iraqi; they are Arab, 
and Iraqi, but the Islamic identity has become increasingly 
important.
    And we're now going to have some problems with the Sunnis 
who feel separate, which they didn't before. We have this issue 
in the constitution right now--whether Iraq is part of the Arab 
world. That's a rubric for whether identity is more Arab or 
Iraqi, but I think this is a less serious issue among the Shi'a 
and Sunni Arab population than it is with the Kurds.
    Just one more word about the Kurds. I believe that the 
Kurdish identity issue will improve in time, if things go 
better, we get some kind of constitution which the parties can 
agree on, and we get economic development. I keep emphasizing 
the economics because I think that's equally important to the 
political process.
    Economic opportunities are going to create different 
visions; something else to think about, something else to work 
for. The insurgency has succeeded in accomplishing two things 
in my view. It has succeeded in cutting Baghdad off from the 
rest of the country. I suspect all of you who have been to 
Baghdad know what I mean. If you're in the green zone in 
Baghdad you don't travel north, you don't travel south. And, of 
course, the insurgency has cut the country off from outsiders 
wishing to come inside. This is not helping integration. I 
believe integration will take place on the ground when people 
in the north come down to Baghdad to do business, when they go 
to Baghdad University, or Mosel University, when they have to 
interact on a personal level. That is going to knit people 
together and provide some lessening of this intense feeling of 
separation, among communities but for that we're going to have 
to get security.
    One last thing I keep mentioning to the Kurds; over time, 
they're going to have to make a decision on whether it's worth 
it to try to get independence. It is going to be terribly 
difficult to get recognized, by us, by the neighbors, and, of 
course, the cost of independence is going to be huge. They 
cannot protect their borders. They haven't been able to do so 
before, they can't do so now. If they don't get independence 
they'll be able to undertake some economic development, but 
they will not be able to develop those oil resources in the 
north and there will be constant limit on what they can 
achieve.
    One of the things I keep reminding them of, is that in 
their worst case scenario they could end up like northern 
Cyprus, part of a country which is not independent, but which 
has opted for ethnic separatism. They may be left behind as, 
hopefully, the rest of Iraq picks up and develops.
    So they have a problem as well, and it really is worth 
their effort to create a better Iraq, a neighborhood in which 
Kurds feel safer.
    The Chairman. I'll leave it at that. I'd like to ask the 
other panelists the same question, but we've run well over my 
time, and I want to recognize my colleague, Senator Biden.
    Senator Biden. Thank you very much. I've always been 
impressed by Dr. Marr, and had a chance to hear from her in my 
office here and I appreciate it. But I've been generally 
impressed by both of your testimony.
    I'd like to start with you, Ms. Van Rest. I must tell you 
this may not be fair but I think your outfit is doing something 
very, very important along with your Democratic counterpart, 
and I'm going to go to the floor and try to make sure you get 
another $28 million because I understand you're going to be 
ratcheted down. You're going to have to start to pull back, you 
and the whole NDI, and I think that would be a disaster, and we 
got an $18 billion bill for Iraq up there, and I'm going to try 
very hard to earmark $60 million for both operations.
    And second, Senator Dodd, I hope I'm not stealing his 
thunder, pointed out to me--this is pretty impressive, the 
methodology of this poll, face-to-face interviews of 2,705 when 
85 percent of our diplomatic corps never is able to walk 
outside the green zone, when there's very little intercourse at 
all out there. Impressive.
    And I have one very quick and may seem like an unrelated 
question, why Dahouk. Why was that excluded, was it security 
reasons up there?
    Ms. Van Rest. Yes, there are some security reasons up 
there.
    Senator Biden. Because you don't hear much--at least I 
don't hear much about that. You hear about Mosel and you hear 
about Ramadi, but I didn't realize that that was----
    Ms. Van Rest. There are some security issues there.
    Senator Biden. Let me--in the short time I have left I'd 
like to raise--I'm going to try to talk about it, and maybe if 
we get a chance to come back, Sunni participation, a little bit 
more about the Kurds, the insurgents, splitting the insurgency, 
the political process and how it's impacted by the issue of 
lack of security, and the timing of the constitution.
    But let me start off with Sunni participation, and if you 
can give me brief answers, understanding that we'll have to, 
maybe, expand on another round.
    Everybody acknowledges that the Sunnis have to be in on the 
deal, the Shi'a acknowledge it, the Kurds acknowledge it, they 
know the way that law that we know, but the law that the 
Americans know is the one guiding them now, says if any three 
provinces opt out it's out, so they know they got to get them 
in the deal.
    But Dr. Feldman, you talk about splitting the insurgency, 
and we all understand what you mean, they're not moderates, but 
in a relative sense it's moderate. It seems to me that the one 
way, the most likely way for that to occur is for us to get to 
the point where there's another election, not a referendum on 
the constitution, but an actual election for Sunni 
participation. And in my discussions with the Speaker of the 
Parliament, and with my discussions with the Secretary of 
Defense, they were emphatic about the need to--because they're 
all hanging out there. I mean very individually hanging out 
there, they're among the group you're talking about taking real 
courage to, you know, get in the deal here, that they need 
elections.
    I'm attracted by the prospect, and mainly because I 
suggested it, but you articulated it much better, Dr. Feldman, 
about the possibility of deferral. I agree that if we can have 
the election on time it's the best way to go. But that's 
problematic.
    I want to make sure I understand what you mean by deferral. 
The way I've been talking about it is the possibility that you 
actually defer the process of the written constitution that 
requires a referendum vote until there is a general election. 
Not preferable way, but I worry about you can't write the 
constitution, or you write it and it effectively excludes 
Sunnis even though they participate. It ends up the 
constitution fails under the existing criteria for acceptance, 
or it somehow gets jammed and you end up with the Sunnis 
fundamentally opposed to what's been agreed upon, highly 
unlikely one or the other would happen; maybe both.
    And so talk to me a little bit more about the notion of, as 
a fall-back position, the deferral idea.
    Dr. Feldman. Well, Senator Biden, I think there are two 
ways to think about the deferral question, and let me try to 
deal with each of them.
    Obviously, the reason we're in this situation is that 
Sunnis didn't participate in the elections the first time, they 
made a total miscalculation and now----
    Senator Biden. Or I would argue the miscalculation, which 
Dr. Marr said as well, we should have organized this not on a 
nationwide basis, we should have organized this on a provincial 
basis so that you get a certain number of delegates even if 
only two people vote.
    Dr. Feldman. I entirely agree.
    Senator Biden. In my view.
    Dr. Feldman. I think you're both absolutely right about 
that. In any case once we were in a situation where that wasn't 
the case, we faced a second problem of the fact that that way 
the transitional law is set up, we're expected to have the 
ratification vote prior to the election. Then the question is 
how could we change this?
    One option would be--and I think this is closer to the 
deferral that you were speaking of--literally, to say that we 
don't need to finish the constitution now, let's just hold the 
elections first to give the Sunnis a second try as it were, a 
second bite at the apple on the elections.
    Now if that were doable, and perhaps it is still doable, I 
would be strongly in favor of that. I think it would be a good 
solution. Some of the Shi'a and the Kurds would say, well, my 
goodness, this is unfair, they should have voted the last time, 
and the answer would have to be something like, you're right, 
and we know you're right, but better this than the alternative.
    In practical terms, though, I suspect that it will not be 
possible to convince either the Shi'a, the Kurds, or perhaps 
even the present administration to adopt that radical a change 
in the TAL framework.
    The leads to a second form of deferral which you might call 
soft deferral, and this begins with your idea, Senator, and 
then offers the following twist on it to meet circumstances.
    This view would, essentially, say that the present parties 
will sign something that they will call the constitution for 
purposes of the TAL.
    Senator Biden. Yeah, okay.
    Dr. Feldman. It will, however, be limited in its scope and 
many crucial issues will be deferred by its own terms until 
after there have been elections and we have Sunnis involved.
    That is imperfect from the standpoint of permanence, of 
course, but I think would be--it's a way of preserving the 
essence of your idea even if it turns out to be the case that 
we can't get people to agree to it informally.
    Senator Biden. Again, not my idea in the sense that it's 
preferable, but it was chilling to me the meetings I had with 
the present elected and appointed representative in the Iraqi 
Government over Memorial Day. Chilling the way in which they--
and I'm just going to speak generically--spoke of one another. 
It was chilling, it was anything but a coherent government, and 
they all had their own--understandably--axe to grind.
    For example, I was told by one Senator if you think the 
Peshmerga the Badr Brigade integrated or not into a Iraqi Army 
where Shi'as--Sunnis aren't joining is going to be able to be 
the vehicle to bring peace in the Sunni areas, give me a break. 
I mean, you know, we view them as more invaders than you, which 
leads me to my second question.
    How--and I'd ask any and all of you if there's time, and 
then I'll wait until the second round, there's a significant 
discussion among the military side of the equation here. You 
talk to the former generals, the security types who approach 
this from purely a security point of view, there's a debate 
about how much our presence is the cause of the insurgency, and 
how much our absence would impact on the insurgency. And you 
get both answers. You get one it is not the major reason for 
the insurgency, it's larger than that, and if we did leave it 
would get worse; and you get the other point of view which is, 
hey, it's a big deal if we got out of there at a smaller 
footprint then, in fact, things would get better.
    And so, as it relates to the Sunnis, again I did not--this 
time I didn't even get to Fallujah, Ramadyh, or anywhere else, 
I was just in Baghdad.
    And by the way, it was a lot worse than the first time I 
got there. I mean it gets worse and worse every time I've gone. 
And so I don't mean to suggest--in a sense I feel like when I 
go there I'm in a cocoon, that you know, my inability to get 
out--
    The chairman and I were able to walk around, literally, the 
first time we were there downtown. And it's just fundamentally 
changed.
    Anyway, having said that, my impression from the Sunnis 
with whom I got to meet inside the green zone, most of whom 
were related to the government, some were not, including 
military personnel, were that they would rather have us there 
now. The last thing they want to do is ask us to leave now, 
Sunnis. Sunnis. Yet there's an overwhelming sense that no, no, 
no--the Sunnis, if right now there is a secret ballot they'd 
all say get out of here, all go home. All coalition forces.
    What is the read? First of all, what is the public opinion 
beyond what it says here? Do you have a sense what that is? And 
both you doctors tell me what you think about the impact of 
U.S. presence as it relates to Sunni attitudes of 
participation, toward their participation in this outfit.
    Ms. Van Rest. I'll just try to address it from our 
viewpoint. We work--we don't have offices in the green zone, we 
work in the red zone. Because of security issues for staff, out 
of necessity, we really do rely on the Iraqi groups we work 
with, we spend a lot of time doing more training, ``training-
the-trainer'' kinds of programs so that they can branch out.
    It's one of those things where, while Iraqis, number one, 
are grateful for our assistance, they really want to be on 
their own. I'm not sure how they feel about, if our presence 
there militarily is the reason for the insurgency; on the other 
hand, they're very clear that they want us to leave, but not 
now.
    And they--I think it's just one of those things where we're 
constantly going to have to take stock of--continue to talk to 
them, it's a little bit of a, maybe, schizophrenic situation 
for them because they want their independence, they need our 
assistance, and so I think that that's what we're just going to 
have to continue to address.
    Senator Biden. My time is up, but a short answer from 
either one of your colleagues?
    Dr. Marr. I've looked at this and actually we've done some 
thinking about it among my colleagues at USIP. We gave 
something to the new Ambassador to think about.
    We all know you can't generalize about the Sunnis. We have 
to peel them back from insurgency like the onion.
    Those folks, the pale, we're all in agreement on, but there 
are different layers of opposition, and it's already breaking. 
The National Dialogue Council includes Sunnis. The IIP, the 
Iraqi Islamic Party has indicated its willingness to 
participate. The Council of Vlama has not yet done so. How 
about ex-Ba'th officers? There are a whole lot of people who 
fit in this category--academics, for example, who have shadowy 
parties. These people can be brought in to the process. I don't 
want to use the word co-opt, but they need to be constantly 
brought in, split off. This process is already taking place, 
and we ought to do everything we can to encourage that.
    I don't know about deferral, or having an election first, 
but this is a process which is happening. There are Sunni 
possibilities there. We have names. Frankly, these are the 
people whom we have to rely on. There are some tribal leaders, 
as well, who have to be identified province by province and 
area by area. They have constituencies. There's no sense in 
dealing with people who can't bring some other people in.
    Dr. Feldman. Very briefly. I think it's not schizophrenic 
for people both to deeply wish we would leave and recognize 
that the risks of that are enormous at the moment.
    I do think that in most of the Sunni areas the sense is, 
broadly, that we are on the side of the Shi'a and the Kurds, 
which to a certain extent is true. And as a consequence many 
people in those areas think that if we would leave that would 
strengthen their position. Some in the insurgency, actually, 
would want to retake the country. Others think that's 
unrealistic, but think they would be better off vis-a-vis the 
Shi'a and the Kurds if they were fighting on their own without 
us on the other side.
    And so there's probably a range of views about that. The 
people in the green zone that you met I would suspect, who are 
Sunnis, are in serious trouble if we leave, and I'm not 
surprised to hear that they would like us to stay put.
    Senator Biden. Thank you, and thank you, Mr. Chairman.
    The Chairman. And thank you, Senator Biden.
    Senator Dodd.
    Senator Dodd. Thank you, Mr. Chairman. And let me begin by 
apologizing to the chairman for not being present yesterday 
during the first round of these hearings. For weather reasons I 
couldn't get a plane out of Connecticut to get down here in 
time, so I want to apologize for missing yesterday.
    But thank you immensely for having these hearings, these 
are tremendously valuable and I know colleagues are busy with 
so many other things here, but it's so, and the way you've 
orchestrated it as well, Mr. Chairman, let me thank you for the 
way you've laid this out, and asking some basic questions and 
giving the panel an opportunity to go through all of that has 
been tremendously helpful.
    I gather my colleague from Delaware made note of the fact 
that he regretted, yesterday, the administration has not been 
present in all of this, and I know that's not the fault of the 
chairman at all, but I want to second his concerns about it. 
It's--the President started the dialog a week or two ago in 
talking about this issue. He needs to do more of it. Exactly 
the point that Senator Biden has made, and I think you've made 
as well, Mr. Chairman, that it's one thing to be concerned 
about public opinion in Iraq and how things are moving there, 
but I happen to subscribe to the notion that if the President 
continues to have eroding support here on this policy that the 
question will be answered even before the Iraqis may have 
answered the question.
    So his engagement and the administration's engagement, in 
this conversation, is extremely important, in my view, and I 
regret that they're not here to participate.
    A couple of questions, and I thank all three of you, it's 
been very, very interesting, and very, very helpful. I, too, 
was struck with this survey and rather impressed that 200 
interviewers can get out all across the country and conduct 
these interviews, and I want to raise a couple of questions, if 
I can.
    First of all, I want to get to the notion of how you 
communicate what's going on, and I thought about some of your 
points about holding town meetings are precarious. Even in New 
England I might point out they're precarious. I think the last 
one I had some years ago, when I finally decided I'd do student 
forums rather than open public forums, someone showed up 
dressed as Abraham Lincoln and he got into a fist fight with a 
world federalist, and that was the end of the town meeting, and 
they were the story the next day and I decided I wasn't going 
to provide a forum any longer for that kind of activity.
    Senator Biden. If the Senator would yield for a second----
    Senator Dodd. Yes.
    Senator Biden. I have a similar experience. I held 2 years 
ago, in a Boys Club in a place called Bear, Delaware, a town 
meeting, and 13 members of the Ku Klux Klan showed up.
    Senator Dodd. So to make your point, you know, who shows up 
at these town meetings, and how they use them for their own 
benefits, can be contrary to your stated goals of what you'd 
like to have occur at these things.
    But what I was thinking, as you were talking, you know, the 
founding of this Republic, it was a Federalist papers, that was 
the pamphleteer was the way of communicating, and the public 
was there making the argument as to why those provisions of the 
Constitution, and there's got to be some equivalent in this day 
of the Internet, and, of course, the ability with wireless 
communication skills to be able to allow the Iraqi people to be 
a witness to debate and discussion. I don't know if there's 
something comparable to a C-Span, but if there is I would hope 
that in the time that remains, we'd be looking at means by 
which the Iraqi people, through radio or television, could sort 
of listen in to this debate that's going on. And I presume it's 
a good heated debate between the various factions so that while 
they're not participating themselves in a real way they're 
conscious of the fact that their points of view are being 
articulated during those discussions.
    I think that has a lot to do with confidence building about 
whether or not my voice, my point of view, is being heard as 
they develop these points of view.
    So, again, I'm going to go through a couple of questions 
here and then give you a chance to respond to all of them. And 
maybe that's not realistic but it seems to me that's one sort 
of answer here.
    Second, I don't know if any of you--and I'm just curious--
this Sy Hersh article. I don't know if you had a chance to read 
it in the New Yorker and so forth, and wondered if you got a 
chance to make any conclusions about the correctness or 
incorrectness of his conclusions about--and to the extent then 
that this would have an adverse impact on the present process.
    The point being for those who may not have seen the article 
is that we were so deeply involved in influencing the outcome 
of that election in terms of even doctoring numbers and 
funneling money to preferred candidates, revealing the 
itinerary of election observers, voter intimidation, ballot 
stuffing, it's a pretty extreme set of conclusions, but Sy 
Hersh has not been wrong every time he's written an article, 
and, in fact, he's been right on a number of occasions.
    And I'm curious as to whether or not you have any 
observations about it?
    Then, I'd like to raise the issue, Mr. Feldman, that you 
talked about, and others did as well. But I was too struck with 
some of these numbers that the chairman raised in the survey 
done by IRI. And the conclusion on page nine of the survey, 
it's right direction/wrong direction. Ms. Van Rest, I'm 
interested in your survey done, why do you think Iraq is 
heading in the right or wrong direction? In the wrong direction 
column why is it going in the wrong direction? Security is the 
number one answer. The lack of it, I presume, almost 34 
percent. And yet when you go down the list terrorism shows up 
at 6 percent. And I'm just curious as to why there seems to be 
a disconnect between the lack of security and terrorism. What 
is going on in the minds of a respondent when there's so much 
of a difference where you've given the fact that--now granted 
this survey was done in April and we're in July, and there's 
been a spiked increase, so maybe in the April setting--I can't 
recall specific events, it may have been relatively flat, but, 
nonetheless, it's Iraqis who are dying. We're losing our 
soldiers, from time to time, in numbers none of us like at all, 
but compared to the Iraqis who are losing their lives on a 
daily basis I'm struck by the fact that they would not consider 
that. And maybe they are in the answer to the security 
question, but why they don't relate terrorism, or do they not 
see it as terrorism? Maybe that's part of the answer.
    And I'd like you to try to shed some light for me on that 
particular point as to why those numbers are different.
    And lastly, I wonder if you might--I've been very curious 
as to why we haven't taken advantage of our new found 
relationship with Libya. Khadafi has foresworn his accumulation 
of nuclear weapons, Senator Biden had a unique opportunity to 
actually address the Libyan legislature. The administration 
lists it as a major accomplishment, and I agree with them, I 
think this was a phenomenal result. Libya is a 97 percent Sunni 
country. I've been told that they are supportive of what we're 
doing, at least generally speaking, and curious if you might 
calibrate among those countries in the region who was in a 
better position to help us influence broader Sunni 
participation in the Iraqi process of the neighboring states.
    We all talk about Jordan and Egypt, but I never hear anyone 
mention Libya, and I'd be curious as to whether or not you 
think there's an opportunity there that we may not be taking an 
advantage of to the extent that there is a new found 
relationship here.
    Those are a lot of questions but I wonder if you might 
respond to them.
    Dr. Marr. I'd like to take on the terrorism question 
because I think I understand that.
    Terrorism broadly means what you and I read in our 
newspaper every day. The suicide bomber who undertakes massive 
killings in a marketplace or a mosque, something that people 
can't be sure of, that's uncertain. And targeting American 
forces which affects us, but not them.
    But I want to go back to something I mentioned in passing. 
Frankly, for the ordinary Iraqi, crime that we recognize as 
crime is a greater threat. For example, the kidnappings that 
are taking place in Baghdad, particularly among the middle and 
upper class people; assassinations of people who work for the 
government, of many university professors, doctors, and so on. 
Middle and upper class Iraqis--particularly people of substance 
are leaving Iraq because of this crime.
    That's one of the reasons why I think we should focus 
analytically and politically on that particular issue. This is 
more a policing issue. Getting more police would free up 
resources and forces to deal with the insurgents. These crimes 
are not always connected to the insurgency, but this is an 
issue that is devastating.
    Of course--we have to recognize that the insurgency is 
concentrated in a region, too--mostly Baghdad and the triangle 
rather than the north and the south.
    I also have some views on the neighbors and Libya. It often 
looks to us as though we should involve the neighbors, but 
inside Iraq, if you talk to Iraqis, particularly these in 
government--with the Kurds and with many of these new Shi'a 
leaders who are oriented in a different direction, it's pretty 
clear, involving the neighbors is not going to be helpful. Some 
of the remarks that I've heard from these people indicate that 
if you start to involve the Arab world, which is mainly Sunni, 
it's going to provide support for the Sunni population. There's 
suspicion of the Ba'thists; they're not in favor. So you've got 
to keep in mind that this is not a friendly environment for 
some of these regional partners. Libya would be a real stretch 
for the Iraqis. It's hard for me to see how the Libyans could 
mediate there.
    But even if we use Egyptians, Jordanians, and others among 
certain elements in Iraq, there's a great deal of suspicion of 
them. So we've got to be careful and sensitive.
    Ms. Van Rest. I'd like to comment on the question about 
direct assistance to political parties as discussed in the 
article.
    I know you all know this, but the National Endowment and 
the party institutes have been on record that we work with 
parties across the board. We don't pick any favorites, giving 
assistance to the parties in terms of training, communications 
training, and the like, and helping them to figure out how to 
develop messages, that kind of thing. And these are the 
techniques that have worked through the years in helping 
parties develop.
    So I think we've been on record with that before, but that 
characterizes our assistance.
    Senator Dodd. Let me just say, by the way, and I'm glad 
Senator Biden intends to offer some additional resource. We've 
had some--I remember some very close votes going back through 
the years, and I think by a margin of one vote, one year, we 
were able to sustain the National Endowment for Democracy. That 
was hotly opposed by many people who saw this as some great--
and I think the record of the NED and the respective two-party 
organizations have been terrific, it was long overdue that we 
weren't more directly involved in building parties--and by the 
way, let me focus on the party aspect of that too. I think one 
of the problems we've been involved in is we've tried to be 
neutral about this to such a degree that our support for civil 
society in a lot of places is very nice, but most of the people 
in civil society don't run for public office. And a great 
spokesman and so forth may show up but they never want to get 
out and knock on the screen door, and I wish we did more with 
the parties. I love civil society in these countries but we 
need to pay more attention to people who are actually willing 
to put their name on a ballot and go out and run for public 
office, and too often we ignore them, fearful we're going to be 
seen as being partisan in some way, and pay attention, the 
civil society groups which are wonderful but rarely want to 
engage in the kind of day-to-day politics you need to do if 
you're going to succeed.
    I didn't mean to digress, but I think it's a point that 
needs to be made.
    Dr. Feldman. A couple of quick points. First, with respect 
to where the debate is going to happen, Senator. Those of us 
who had some--who were involved in the transitional 
administrative law process--have been a bit surprised by the 
way the constitutional committee has operated, because the 
transitional administrative law contemplates that the elected 
national assembly will actually debate the constitution, and 
that would be--and was imagined to be--the natural forum for a 
public televised debate to be visible on Iraqi television and, 
indeed, on regional television where it would also have a 
substantial effect. And that debate would also be open to the 
possibility of changing the constitutional drafted text after 
the process of the debate, because the thing would not have, as 
it were, the text would not have gone out for ratification yet.
    I think it's still not too late to do that. I think that's 
contemplated by the transitional law. It doesn't require any 
changes, and I think it would be plausible to interpret the 
transitional law in the following way: To say that by August 15 
the committee is charged to produce a text, and it can do so. 
And then at that point the national assembly would have an 
opportunity to debate that, and there is, at least, until 
October 15 for ratification referendum. And that date could 
perhaps be extended, perhaps a little bit, at least, insofar as 
this is the Middle East and deadlines are never understood by 
anybody to be absolutely hard and fast.
    So I think there is a possibility for that, and I think it 
would be an ideal context for the debate to occur. It would be 
an opportunity for Iraqis to see the people whom they elected 
actually involved in the constitutional process.
    With respect to the Seymour Hersh article, I did see it. In 
fact, I spoke to Mr. Hersh several times in the process of 
preparing the article, and I think he even quoted a couple of 
things that I said to him there. And I think what is most 
striking to me about the article is that I urged, and I think 
others urged him, to try to see if he could find some sort of 
statistical proof of this suggestion about ballot stuffing, or 
substantial changes in outcomes.
    The one statistic that he pointed to there, which is at 
least worthy of closer attention--I don't think it proves 
anything, but it's worth looking at, is the statistic that says 
that then-Prime Minister Ayad Allawi received a much larger 
number of votes at the national level for his party than the 
same party received at the local level.
    In other words, that there was substantial ticket 
splitting. Now it's entirely possible that there was simply 
ticket splitting, that people were choosing--and this point was 
addressed in the article--that local people were voting for 
parties where they knew the local players, but they wanted a 
strong hand at the national level. That's a perfectly plausible 
explanation, nothing in the article that I've seen disproves 
that.
    It's certainly a statistic worth looking at more closely 
because the truth is that any allegations on this front are 
highly risky. We know this from the situation in Afghanistan 
where a single and ultimately unsubstantiated rumor led to some 
significant violence. Here, too, there could be a real 
process--perhaps not of direct violence, but, at least, of the 
discrediting of some of the people who are, after all, most 
positively inclined toward us. So it may have ended up 
backfiring.
    A last thought on this, and this is something that is much 
closer to the expertise of the members of the committee than to 
mine, but the article at least implied that there may have been 
some disrespect for the legislative input of Members of the 
Houses of Congress in the process of whatever decision was 
made. I, of course, have no way of knowing if any of that is 
accurate or not, but it seems to be of the greatest concern.
    Senator Dodd. And about Libya, do you have any----
    Dr. Feldman. I do. Two thoughts on Libya. I basically agree 
with Dr. Marr.
    The first is that Libya is noted for its--you mentioned 
that they're Sunni, which is true, but the President--or 
President is the wrong word--but Colonel Khadafi is noted for a 
very heterodox form of Sunni Islam, let's just say, going 
alongside his other personal idiosyncracies. I think we can 
probably say that without giving any offense. And I think that 
he would--this is known throughout the region, and I think that 
would make him, to some degree, disqualified from the 
perspective of many local Sunnis.
    The other is simply, and Senator Biden can speak to this 
since he was just there, it may be too soon to place any 
particular trust or extra credibility in someone who's track 
record--I totally agree with the substantial accomplishments 
that have brought him to where he's been brought, but his track 
record is, obviously, not one that inspired confidence, and I 
think there are other stories out there about him that are, 
even if unsubstantiated, the fact that such stories are 
circulating strongly suggests that he might not be the kind of 
person we'd want to strengthen in this way.
    Senator Dodd. Thank you very much. And thank you, Mr. 
Chairman.
    The Chairman. Well, thank you, Senator Dodd. I appreciate 
very much Senator Biden addressing the appropriation bill 
that's on the floor now, and the need for moneys for the NED 
and the party institutes, and Senator Dodd's strong endorsement 
of that. I would just add a third voice.
    During the 9 years that I was a member of the NED Board, I 
was tasked to get the money every year, and this was sometimes, 
as Senator Dodd knows, a precarious prospect, but I had----
    Senator Biden. You had to overcome some Democratic 
opposition as I recall.
    The Chairman. So I was relieved that when I left the board, 
the place was still there. They've been doing much better since 
I left the board, I might add.
    Senator Dodd. No correlation whatsoever.
    The Chairman. There has been recognition of its value. 
There is an important thing that is occurring on the ground in 
Iraq that is largely unrecognized. Let me compliment those of 
you who have been involved at any level with this.
    And second, I just want to note Dr. Feldman's comments 
about the TAL. How might this evolution of the constitution 
occur? In various of your comments today, you've mentioned when 
we got into this that you wonder how the people of Iraq will 
discover what is in the constitution, or evaluate it, and if 
they do so, is it a document that they can change?
    One of the truths that I perceive with this set of hearings 
is that it really is not too late for things on the ground to 
be influenced by the conversations that we're having here. They 
are a public forum, and we mentioned yesterday that we will 
make all this fully available to our administration and to 
others who are involved in our administration in Iraq for 
whatever value it may be.
    But it seemed to us at the time that we needed some 
stimulation of some ideas as to how we proceed. This may be a 
useful one, because we discussed today the question of do we 
delay, or do we semidelay, or do we have a finished product, or 
semifinished one? These are critical questions.
    I think this is a technical issue and maybe some of you can 
offer some thoughts. I think the TAL calls for a two-thirds 
majority in each of the 18 jurisdictional provinces of Iraq. A 
two-thirds majority is a daunting task in many situations, but 
to get that in all 18--and am I right, or does anybody know the 
rules of the game here, because this is the impression that 
I've obtained while listening to others who know much more 
about it than I do.
    Dr. Feldman. Mr. Chairman, I don't have the TAL in front of 
me, but as I understand it, the constitution would be ratified 
by a simple majority vote unless it were the case that two-
thirds of the voters in, at least, three provinces expressly 
rejected the constitution. So that's where the two-thirds came 
in.
    The Chairman. So it's a negative influence that--but two-
thirds in three situations?
    Dr. Marr. That would take care of the Kurds, but it would 
also take care of the Sunnis. The Shi'a, of course----
    The Chairman. Because in one of those two groups you could 
produce the three negative----
    Dr. Marr. They can veto.
    Dr. Feldman. And the other point, just to mention on that 
front, Senator, is in a pinch many on the Shi'a side never 
formally accepted that aspect of the transitional law. And I 
think they did so in part because they objected to what they 
saw as the counter majoritarian feature of the possibility of a 
veto.
    In practice, I think, though it's well understood by 
everybody that if that many people disagree with the 
constitution, there will be a serious problem in considering it 
to be ratified.
    But there might be, it's not inconceivable that it would be 
held ratified by some people even if it didn't satisfy that 
requirement.
    The Chairman. Well, given the real world outside with the 
French and the Dutch rejection of the European constitution, 
almost everybody in the world now knows these things might 
happen.
    Now, over in the European Union, which is a pretty well-
organized political operation, it's not exactly clear what they 
plan to do about this. So Luxembourg went on and had a 
referendum and passed it, and others may--they were all ready 
for one anyway, and didn't want to deny their voters. But, at 
the same time, the thought was originally that if the French 
did this, why you might finally return to France again, and 
say, now look, everybody else has ratified the constitution, 
why don't you have another look at it. So then, maybe, the 
French have another vote and they vote to ratify it. But now it 
appears that that's not exactly going to work.
    So, let's say that for some reason, and maybe it's close, 
but you get rejection in the Kurd area or the Sunni area, so 
that, as a result, we finally got through the deadlines of the 
constitution, we have gone through the referendum, there was a 
vote, the country was not shot up in the process, people got 
out in good numbers, but you don't have a satisfactory outcome. 
Now what is the process then? Or is there a process?
    Dr. Feldman. The TAL does contemplate that potentially 
happening. It suggests national elections would follow, and 
then the constitution--the National Assembly would be 
reconstituted.
    The Chairman. So you have the national elections anyway?
    Dr. Feldman. So there's a second bite at the apple 
available.
    The Chairman. The December 15 elections happen, so life 
goes on from August 15 to October 15 to December 15, but having 
then had these national elections, you've returned then to the 
constitutional business?
    Dr. Feldman. And you give it a second try, and the 
transitional administrative law remains--by its own account 
remains law throughout this period.
    The Chairman. Now, does the transitional law account for 
who would be elected in the December 15 event? In other words, 
sometimes, maybe some of us have erroneously said, well, you 
adopt the constitution and it provides for the officers of the 
country that are going to be elected. But if the constitution 
hasn't been adopted, who is it that gets elected on December 15 
that doubles back then to write the constitution?
    Dr. Feldman. Well, unless the present electoral law were 
changed in the way that Dr. Marr was suggesting we'd have the 
same--the same electoral law would be in place and we'd have 
the same nationalist proportional representation election. It 
is possible, though, that the National Assembly sitting after 
failure to ratify the constitution could itself pass a new 
electoral law.
    The Chairman. I see.
    Dr. Feldman. The only difficulty would be the ordinary 
political one of getting a group of elected officials to pass a 
law that would change the way that they were elected.
    The Chairman. But in any event I appreciate that, because 
we really have not had too much clarification in most news 
accounts of what is going to happen. Usually the story is, is 
it conceivable that there will be a constitution by ``x'' date, 
quite apart from will there ever be an election, and does 
anybody believe they're going to get to the third round in this 
calendar year.
    And most people will say, probably not, given the fact that 
the Sunnis just got to the table, or various other things were 
occurring.
    But all of you seem to be reasonably confident from your 
statements that these things are going to happen. Now there may 
be some variation as to what occurs, with the failure of the 
constitution along the way, maybe even an interim suggestion of 
who gets elected. But there may be flexibility in this group 
that is doing this to be able to talk about these things. They 
come to station even in the midst of insurgency and the lights 
going out and the other problems that we're talking about. That 
in itself is remarkable and commendable and to be supported. 
But it's a very different sort of story from either total 
collapse or some sort of remarkable victory in which everything 
is tidied up, we leave, and life goes on.
    This is outside the scope of what we're talking about 
today, but the Republican Institute poll does put a heavy 
premium on electricity as a very very important item, with 
unemployment coming fairly shortly thereafter. I'm curious how 
in the poll could there be such support on a matter that would 
normally be in one of our own domestic polls, the right-track/
wrong-track question. If you asked in the United States right 
now, do you think our economy is on the right track or the 
wrong track; a good number of people would come up with the 
wrong track. And this is the United States of America, with 5 
percent unemployment and so forth. Here, out in Iraq, according 
to this poll, 66 percent or so, if I read correctly, thought 
the country was on the right track.
    So I'm just extremely curious, given these grave problems 
of security, or electricity, or unemployment, or so forth, 
where is this residual optimism coming from? Is this a valid 
reading or was it April and maybe they are feeling differently 
in July?
    Do you have a thought?
    Dr. Marr. Can I just say--I know Judy is going to answer 
this--I think we have to recognize how regional this insecurity 
is. People in the Kurdish north are not affected as much by the 
security, and much of the south, while it has some turbulence, 
is also not affected. That's probably a healthy majority--at 
least a majority. But we're really focusing on Baghdad and the 
Sunni areas in talking about insurgency.
    The Chairman. I see.
    Ms. Van Rest. That was part of it. The other thing is, is 
you're absolutely correct. I mean polls are a snapshot at that 
particular time that seemed to be on the forefront of the 
people who--the electricity problem was on the forefront of 
those folks minds, you know, it was beginning probably to get 
quite hot having--I just remembered that surprisingly how hot 
it gets early on.
    The Chairman. Well over a 100 degrees.
    Ms. Van Rest. Yes, I think today was 120, one of our staff 
said, so I think it will be interesting to see how this next 
poll turns out, and, of course, we will make that readily 
available to everyone.
    The Chairman. We'll appreciate that.
    Ms. Van Rest. On the subject of optimism just, you know, on 
a personal note, having lived there a year and having the 
actually honor of being tasked with outreach to Iraqi women, 
initially, and then more into just civil society in general, 
which also included political parties, but civic organizations 
and youth groups, et cetera. I just can't emphasize enough the 
optimism that Iraqis have about their future. It really--I 
don't know how they keep it up frankly. I do keep in very good 
contact with Iraqi colleagues. I was there last December, 
probably will take another trip this fall, and so I feel like I 
have a little bit--even though I've been home for a year--a 
little bit of an understanding of the pulse of Iraqis in 
general, and it is about their future.
    It's really tough right now, no question, but really 
compared to other countries it's pretty impressive.
    The Chairman. Well, I thank you for that personal 
testimony. I would just reiterate again, that I'm sure all of 
our Senate group feels a debt to all three of you for the 
extraordinary experiences you've had and your ability to 
articulate these in trying to think ahead with us on public 
policy.
    Senator Biden.
    Senator Biden. Thank you very much. I echo that view. I 
mean, this is really very helpful.
    One of the things, the generic point that the chairman was 
making about one of the reasons why these hearings are held, is 
to generate ideas, to try to be sort of a cauldron for ideas 
and debate that hopefully percolate through this town and 
through the administration, through the Congress, and maybe 
beyond.
    And I think it's important to note if you observed that 
those of us on both sides of the aisle who have made it a 
vocation of ours to try to understand Iraq, to try to 
understand the region, and have spent hundreds of hours trying 
to learn from you all, and from our own experiences. If you 
notice we don't disagree. If you notice there's not a Democrat/
Republican--not just here in this committee, but those who if 
you ask if the press said name the 10 or 12 or 15 or 20 
senators most involved with American foreign policy, and who 
make it their business, there's virtually no fundamental 
disagreement among any of us. And I think that's an important 
point to make.
    All we're trying to do, and I know you know it but 
sometimes, you know, assumption is the mother of all screw ups, 
well sometimes assumptions aren't grounded in reality. The 
truth of the matter is, we all desperately want to see this 
succeed as you do, which leads me to this point, one of the 
reasons I'm still optimistic, notwithstanding the incredible--
in my view, speaking for myself--screw ups, and failures that 
were warned about in advance, and were overwhelmingly clear, 
and the failure to change course on some tactical matters since 
the statute came, and notwithstanding that, the reason I'm 
still optimistic is your point, Ms. Van Rest, about the Iraqis.
    My mother has an expression, she says honey, if you're hung 
by your thumbs long enough you get used to it. And the irony 
here is that there's some truth to that, that the Iraqis--it 
doesn't surprise me at all they'd say electricity is the 
biggest problem and I'm optimistic. In a strange sense no more 
than it did years ago by saying we want arms control and a 
bigger defense budget in the United States, they seem to be 
totally consistent.
    But having said that leads me to this--I'd like to posit a 
potential scenario and get you all to respond to it. I think, 
Dr. Feldman, and I've really been impressed by your testimony, 
I think that one of the reasons why we're surprised that in the 
initial iteration and discussion relating to the TAL it was 
kind of envisioned, at least by me which you all did, it was a 
good job, was that we really would have this process of 
constitution writing, there really would be a debate, 
essentially, from August to October, in this assembly that had 
been elected before the constitution was written. That would 
have the impact of informing the Iraqi people of, at least 
generically, what was at stake here, the big issues, and then 
there would be a referendum, and then there would be a vote.
    But I think what changed it, and this is a question as well 
as a statement, what changed it was, in my view, understandably 
and predicable, at the time the election took place, the slow 
turnout of Sunnis, and significant turnout of the rest of the 
country so that everybody started scrambling saying the Sunnis 
will not view, as legitimate, a debate in this assembly where 
they're not elected.
    And so the Iraqis came up with a way to go out and 
significantly increase the participation of the Sunnis in an 
unelected capacity, voting and nonvoting, in the constitution 
writing, which, essentially, sort of renders counterproductive 
in the minds of many that I spoke to in Iraq, having this 
debate in this assembly where there aren't Sunnis.
    Which leads me to this point, my guess is, this is the 
plain old politician in me, this is not any sort of foreign 
policy insight, this is just plain old politician in me, if I 
had to bet--and I don't want to bet, but if I had to bet my 
daughter's graduate school tuition, which is almost equal to my 
salary it seems, on this I would say what's likely to happen is 
that a constitution is written in time, there is a referendum, 
three provinces or governance turn it down by a two-thirds 
vote, there is a general election again, the Sunnis participate 
in this process this time, then the process is underway again.
    If I'm sitting there and I am in one of the Sunni provinces 
and I conclude that I am one of the moderate, quote, 
insurgents, and I regret having participated in the first 
place. I mean it's kind of interesting what we found when I 
went with one of our colleagues here to be, quote, the official 
observer for the Palestinian elections. Hamas came out and said 
don't vote, don't vote, don't vote, don't vote, and then they 
realized the night before that folks were going to vote and 
they said, well, vote for Charlie, vote for Charlie, vote for 
Charlie, vote for the guy who's going to screw things up, 
because they figured out, at the very end, their boycott wasn't 
going to work.
    It's kind of after the fact, it seems to me, that a 
significant number of Sunnis who aren't the jihadists or 
jihadist sympathizers, have reached that conclusion.
    But if there were any organizational capacity within the 
Sunni triangle areas and the three governorships that used to 
be, I'd be urging two-thirds no-vote in order to get me in the 
game so that I was actually part of the process. Ironically, 
that does not depress me. That does not make me think that all 
is lost.
    Now a lot can happen between the cup and the lip on that 
one. It may be there's so much chaos that flows from that 
quickly that you can't predict. But I wonder whether you'd--not 
whether or not I'm right, and I'm not sure--I mean on my bet, 
what do you think happens, and this is really a tough question 
and if you don't want to respond you don't have to, what do you 
think happens if, in fact, there is a rejection, and the way it 
reads is the referendum--it says the constitution will be 
approved if ratified by a majority of Iraqi voters and if two-
thirds of the voters in three or more of Iraqi's 18 governances 
do not reject.
    Then it goes on to say, your point, Doctor, the TNA will be 
dissolved--this is if a referendum rejects, the TNA will be 
dissolved, election for a new national assembly will be held no 
later than December 15. The new national assembly and a new 
Iraqi transitional government will then assume office no later 
than the 31st and will continue to operate under the TAL. This 
new national assembly will be entrusted with writing another 
draft permanent constitution, drafting deadlines would be 
adjusted so that this process can conclude within a period not 
to exceed 1 year.
    Is the center, Doctor, strong enough to hold, not spinning 
out of control here, if in fact, the anticipated possibility 
becomes a reality? And that is, there's a rejection and a 
general election.
    I know no one knows, but can you give me your best judgment 
if the scenario envisioned as a possibility actually occurs, 
what do you think happens. And you get to say I don't know, and 
you know, not respond if you don't want to because I realize--
I'm not being a smart guy, you're all extremely well regarded 
and having you go way out on the limb on this stuff is, you 
know, maybe not fair to ask you to do.
    Dr. Feldman. I would just make one preliminary comment and 
then try to take a crack at it. The preliminary thought is that 
I agree that many Sunni politicians might prefer the scenario 
you described. The only catch is that if you were one of the 
Sunnis who is serving on the constitution committee, for 
example, then the rejection of the constitution, unless you 
come out of the committee and oppose it, undercuts you for the 
purposes of the election.
    Senator Biden. Oh, I agree with that.
    Dr. Feldman. So the other Sunni politicians, I agree, might 
well be in a situation where they would prefer this outcome 
because it's a way of redoing the election and getting a second 
bite at the apple.
    I think that the center could hold, for the following 
reason, those who would probably be reelected from the Kurdish 
areas and the Shi'a areas in the second-round election would 
probably be close to the same people that are there today. I 
mean there would be some changes as a result of people's 
frustration with the lack of success of the constitutional 
process, but I think we would probably see much of those same 
set of people, and then there would be elections in the Sunni 
areas and we would probably see greater participation.
    I do think it would be negative with respect to the 
security situation though, in part because it might embolden 
insurgents who believe that a rejection of the constitution 
suggests that the Sunni population is in support of the 
insurgency. And here's where as much as we would like to delink 
the constitution from the insurgency, and I agree with Dr. Marr 
that we would like to delink it, I don't think it's 
realistically doable. The opposition to a constitutional 
ratification process in the Sunni areas will present itself as 
connected to support for the insurgent movement. And so I 
think, although the center might hold in the sense that Shi'a 
and Kurds would get back in office, the cost in terms of 
strengthening the insurgents through a public democratic 
representation would be a very, very great cost indeed.
    I would just add one last thought, it's possible that even 
in the Sunni areas they might not be able to manage two-thirds 
rejection----
    Senator Biden. I agree.
    Dr. Feldman [continuing]. And I think that one high-risk 
scenario is that you get something short of two-thirds in three 
provinces, say two provinces go two-thirds and one province 
only goes 61 percent against, then you've got the equivalent of 
a broad popular Sunni rejection of the constitution, but under 
the provisions of the TAL the constitution is ratified. So you 
have people saying we've got a constitution and others saying, 
but it doesn't mean anything to us.
    Senator Biden. One of the things that I think is really 
important here is when I was speaking to--and by the way as I 
mentioned, I don't want to mention individual names but there 
were Sunnis who we met outside the green zone in the red zone, 
who made the private argument to us that we thought you are our 
biggest problem, but you're not; our bigger problem is the 
Peshmerga or the Badr Brigade, our biggest problem is somebody 
other than you, we want you the heck out of here but not now.
    But it seems to me one of the really important elements, 
the extent that anyone, any official from any non-Iraqi source 
is being sought for advice from this committee that's doing the 
writing. If you said to me, I got to write one provision into 
this constitution, no one knows I wrote it, it would be viewed 
as spontaneously an Iraqi idea. I would write into this 
constitution an amending process that was readily available and 
not as difficult as ours. Not as difficult as ours. And my 
impression is there are both Shi'a and Kurds who understand 
that, Kurds less willing to take that chance than Shi'a because 
the Kurds have more to lose in an amending process.
    It's interesting to me when Senator Hagel and I went to 
Irbil in December 2002, before the war. We got smuggled in and 
we were asked to address the Kurdish Parliament in Kurdistan. I 
came away with two distinct feelings; one, there was an 
overwhelming assessment, Doctor, even among the younger leaders 
that independence was not an option in their lifetime. As much 
as things have changed and they've become more independent, 
they've also become more realistic about Iran and Turkey.
    But the second thing that came clear to me was they already 
had a constitution drafted. They already had their--I mean they 
asked us to endorse it. I mean they actually had a written 
document, which we didn't do.
    So I acknowledge that the Kurds are--my view is, that the 
Kurds would like nothing better than independence, but it seems 
to me they are more realistic than they were 15 years ago about 
that prospect. And they also, though, put a higher premium on 
actual autonomy, I mean republic, but autonomous republic.
    But I have digressed, and I apologize. The point is, do you 
think that they're seized with the notion that there's a need 
for an amending process that is not inflexible in order to pull 
this country together in light of the failure of Sunni 
participation in the electoral process in the first round?
    Dr. Marr. I put some of this in my testimony. I don't know 
whether they are or not, because any constitution, of course, 
has to have some amending process. But I agree with you. I 
would put a lot of emphasis on this. There has to be a balance 
between permanence and change. People need to feel they've come 
to some kind of general consensus which could persist for some 
reasonable period of time, but the constitution also has to be 
flexible enough for them to grow into. If we have any influence 
we should be encouraging them not to feel this constitution is 
grounded in cement, that it can't be changed tomorrow or the 
next year.
    I would also like to address your initial scenario. First 
of all, if we get a rejection and a continuation of the TAL and 
Iraqis have to take a second crack at the constitution, the 
Sunnis have another problem we haven't talked about. They're 
split and fragmented. The old Ba'th crowd is out. They are 
required to reject Ba'thism and there is no new Ba'th party or 
a substitute for it. They're fragmented in a number of ways. 
That's why I keep coming back to the electoral law. The way the 
electoral law is structured now, it favors people who can get 
an alliance together. That's what we saw in this election--a 
Shi'a alliance, a Kurdish alliance, and so on. I don't think 
the Sunnis are going to be able to do well enough, under the 
current law, to compete successfully.
    So I'm not so keen about a second shot under the same 
electoral law which, in fact, doesn't bring them into 
government.
    I'm not so sure we need town meetings, but we certainly 
need a process whereby Sunni leaders who control 
constituencies--whether tribal, religious, or professional--do 
educate their population to a certain extent so that they don't 
get up the day after the vote and suffer sticker shock.
    Senator Biden. Do the Sunni participants in the writing of 
the constitution, and I don't know them individually enough to 
know how much swack they have, but do they have enough--I mean 
I can envision if the people participating that would have been 
brought in, if they had real constituencies among the Sunnis 
they would essentially do what we did in a different form in 
the process of writing our Constitution, the Federalist papers, 
they would go back to their key constituents and try to sell 
them on that process, just for their own well being. I mean I 
can't imagine whoever the Sunnis are, and I don't know them 
well enough to know, I admit I don't know who the dozen or so 
key people are, Sunnis, in writing the constitution. If I were 
them, for my own safety's sake as they say, I would be 
backtalking to the tribal leader who's a Sunni saying, look, 
Dick, the reason why we're doing this is this, and I really 
think we can--is there any evidence that that process is--I 
don't know how we would know that, but is there any evidence of 
that sort of germination taking--because that's the place--I 
mean if you think about it I realize it's totally different in 
terms of electronic media access, microphones, et cetera, but 
who did--our leaders in writing that Constitution I might add, 
in 100-degree weather they went to the second floor in 
Philadelphia so no one could hear what they were doing, okay? I 
mean they didn't want any part of anybody knowing what was 
going on. They literally went to the second floor in 
Philadelphia, and it's hot. It was designed not to let people 
know what was going on.
    And, then, when we finally came to sell it, it was an elite 
to elites, it was the equivalent of how many people in America 
read the editorial page. It was the Federalist papers where 
documents were essentially editorials among and in the only 
major newspapers in America for the express purpose affecting 
elites. It didn't affect the guy farming in Dover, Delaware, 
and if he read it, it would be difficult to digest.
    And so the process and the way it worked here even if there 
had been media it would not have been to the vox populi, it 
would have been to the elites.
    And so what I--I guess what I'm grappling with here and I'm 
sorry to take this time, Dick, but what I'm grappling with here 
is, it seems to me, the key is less a town-meeting forum than 
communication to the elites, and as you point out, Doctor, and 
all of you have mentioned, there are identifiably, in each of 
these provinces, 2, 5, 10, 20, 30, 50 people. They are the 
professors, they are the doctors, they are the lawyers, they 
are the tribal leaders, they are the former officeholders that 
are still around. And so that seems to me there's got to be 
some way--and again I'm just thinking in terms of pure 
political organization here, of being able to get to the 
elites. And so that's a long, long trailer to a very short 
question, these Sunnis who are in the deal now, in writing the 
constitution, do any of them or collectively do they have 
sufficient standing among the elites in the Sunni communities 
to be able to at least make a case to the elites in the Sunni 
community?
    Dr. Marr. They have some standing, but I wouldn't say it is 
overwhelming. They include the Iraqi Islamic Party, the 
National Dialogue Council, which has reached out to others, and 
so on. We won't know their success until it happens. To be very 
brief, that's one of the reasons why I think a little extension 
in time would help. It would allow some of this process to take 
place before they get sticker shock--not through the town 
meetings but----
    Senator Biden. That's an interesting point.
    Dr. Feldman. Just to add one word to that, they don't know 
if they have that clout yet or not. They will try, but they're 
not automatically guaranteed a hearing, and they're certainly 
not guaranteed people listening to them, but I think they will 
try.
    Senator Biden. But you get a sense that they realize their 
futures depend on it, right?
    Dr. Feldman. Yes.
    Senator Biden. Thank you.
    The Chairman. Well, we thank you again for your devotion of 
3 hours to our edification and hopefully the edification of a 
broader group of people who have been witnessing the hearing, 
and who will read the record. We thank you for the statements 
that you have written, all of which will be made a part of the 
record, in addition to the polling data which we have all 
acknowledged is very important.
    I thank members of the committee, and the hearing is 
adjourned. We look forward to continuing on Iraq tomorrow 
morning.
    [Whereupon, the hearing was adjourned.]


                     ACCELERATING ECONOMIC PROGRESS
                                IN IRAQ

                              ----------                              


                        WEDNESDAY, JULY 20, 2005

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:15 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Richard G. 
Lugar (chairman) presiding.
    Present: Senators Lugar, Hagel, Murkowski, Biden, Dodd, and 
Obama.

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

    The Chairman. This meeting of the Senate Foreign Relations 
is called to order. The Committee on Foreign Relations meets 
for the third of our series of hearings on Iraq.
    Today we will examine ways that we might accelerate 
economic development of that country. During the last 2 days, 
our committee has had excellent discussions of how to improve 
security and advance political development in Iraq. The 
witnesses in both of those hearings emphasized that 
demonstrable economic progress is truly one of the keys to 
defeating the insurgency and to establishing a stable Iraqi 
Government.
    As Dr. Ken Pollack observed, in our hearing on Monday, the 
legitimacy of the Iraqi Government among Iraqis may be more 
dependent on the government's ability to deliver the 
necessities of life than on their support for a constitution, 
or even their political identification with Iraqi leaders. If 
Iraqis perceive that their daily lives are improving, they are 
more likely to take risks to oppose insurgents and to restrain 
factional groups that seek to fragment the country.
    The Foreign Relations Committee has frequently reviewed the 
progress of reconstruction spending and other economic 
development efforts by the coalition. At various intervals, 
since the invasion of Iraq, we have expressed the urgency of 
moving forward more quickly with reconstruction projects and of 
improving the percentage of aid that actually benefits Iraqis. 
Thousands of reconstruction projects have been completed so 
far. Schools, hospitals, and roads have been built. Tens of 
thousands of police and security forces are being trained, and 
more than 150,000 Iraqis are at work in United States-funded 
jobs.
    But many parts of Iraq still lack a reliable 
infrastructure, particularly with regard to electricity and 
clean water. This is a source of great frustration to the Iraqi 
people.
    The Iraqi economy has many scars from the last quarter 
century, which was dominated by war, sanctions, and the command 
kleptocracy of Saddam Hussein. Since 1980, Iraq's GNP has 
remained flat. An economy that produced 3.7 million barrels of 
oil per day in 1979, today struggles to produce half that 
amount. Sabotage is costing Iraq an estimated $600 million per 
month in lost oil export revenues and even more in repair 
costs.
    Corruption has been reported, most prevalently in the 
Ministry of Oil, but it also exists in other Ministries and 
sectors. Some suggest as much as one-third of imported refined 
oil products are being illegally diverted.
    Despite these difficulties, the Iraqi economy has great 
potential in the post-Saddam era. A full restoration of the oil 
sector would increase employment and improve government 
revenues. Underscoring the potential economic impact of greater 
personal freedoms, Iraq has seen as many as 3 million new phone 
subscribers and more than 100,000 new Internet subscribers 
since the fall of Saddam. Salaries, especially for government 
workers, have risen markedly, up 10 or 20 times their prewar 
levels, according to official government wage charts.
    Iraq also has substantial agricultural capacity. In the 
late 1970s, 30 percent of the Iraqi labor force was employed in 
agriculture, producing wheat, barley, rice, vegetables, dates, 
cotton, and livestock. Today, agriculture remains the third 
largest value sector and the largest employer. I am hopeful 
that significant USAID and coalition efforts will enable Iraqis 
to begin to fill their own grocery shelves and to decrease 
reliance on costly government-provided food baskets that most 
Iraqis continue to receive.
    Today, we will ask our witnesses to comment on a number of 
subjects. We are particularly interested in how the oil sector 
can be revived and protected from corruption and sabotage. We 
also will discuss whether our economic development strategy 
should be more decentralized and whether it should emphasize 
creating jobs and demonstrating tangible improvements in the 
everyday lives of Iraqis.
    In addition, we will explore what type of statistical 
indicators could be produced to provide a clear and credible 
picture of economic progress in Iraq. Such indicators would be 
designed both to inform policy decisions and to give the Iraqi 
people a better notion of what is happening in their country.
    We will proceed with the same format that yielded excellent 
discussions in our hearings on Monday and Tuesday. Our hearing 
will be organized around four policy options or sets of 
questions for accelerating economic progress in Iraq. 
Accordingly, after Senator Biden and I have offered our opening 
comments--and I will recognize the distinguished minority 
leader when he comes in--we will put the first policy option 
and associated questions before our expert panel. Each witness, 
in turn, will provide his views on the questions being 
presented.
    Then we will present the second option and then the third 
and the fourth. Finally, recognizing that ideas exist well 
beyond our published hearing plan, we will ask our witnesses if 
they would like to offer additional thoughts on improving the 
Iraqi economy that have not been thus far discussed.
    After this sequence, committee members will be recognized, 
in turn, to address questions to any members of the panel. My 
hope is that through the expertise of our witnesses and the 
questions of our members we can achieve a systematic evaluation 
of the options presented for accelerating economic progress in 
Iraq.
    We are especially pleased to welcome a very distinguished 
panel of experts to help us with our inquiry. Dr. Keith Crane 
is a senior economist at the RAND Corporation. He served on the 
Coalition Provisional Authority staff during 2003. I would also 
like to observe that Dr. Crane did his doctoral work at Indiana 
University, which gives special credentials to his testimony 
today.
    Mr. Frederick Barton is senior advisor in the International 
Security Program at the Center for Strategic and International 
Studies and has taken several research trips to Iraq since the 
end of the war.
    Mr. Fareed Mohamedi is the senior director of the Country 
Strategies Group at PFC Energy, has been studying the economies 
of oil-producing nations in the Middle East for many years.
    These experts have spent a great deal of time analyzing the 
Iraqi economic situation. They have presented remarkable 
papers. Let me just say at the outset that they will be made a 
part of the record in full. We are grateful we can draw upon 
their experience and their insights.
    Let me ask my colleagues, Senator Dodd or Senator 
Murkowski, if they have any opening greeting or comment.
    Senator Dodd.

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

    Senator Dodd. Mr. Chairman, once again--I said this 
yesterday--I regret I missed Monday's hearing. I was delighted 
to participate in almost all of yesterday's hearing and I am 
going to try and be here as much, today, as I can. This is 
tremendously valuable.
    I want to thank our three witnesses in anticipation of your 
comments. If the quality of your testimony even comes close to 
what we have heard over the last 2 days, it is tremendously 
valuable for those of us here. I regret that more of our 
colleagues are not here to take advantage of this, but with the 
news last night at 9 p.m.--in fact, Senator Lugar and I just 
left, testified together before the Senate Judiciary Committee. 
As all three of you are aware, a lot is going on up here.
    But this is tremendously helpful. I believe that C-SPAN is 
covering this, so I am sure our colleagues on this committee, 
in their offices, can listen in to what is being said, as well 
as it being transmitted to the public. This is exactly what we 
ought to be doing more of: Educating people in this country and 
elsewhere about what is actually happening on critical areas 
that are ultimately going to determine the success or failure 
of our efforts here in Iraq.
    So I am very grateful to the chairman. I think he has set 
up a wonderful way of doing this, of giving you the opportunity 
to lay out in four or five critical question areas that all of 
us appreciate are right on target as to what we ought to be 
addressing, and to give us some ideas about how we, then, can 
offer constructive ideas to the administration and others to 
implement these policies.
    Again, I will express my regret that it saddens me that the 
administration has not been before this committee to talk about 
this subject matter. It is a pleasure to have you here and we 
should listen to you, but it would be also helpful to have the 
administration come forward and share its ideas.
    The chairman has said this. Senator Biden has said this. It 
deserves being repeated. Just as it is important to build 
public support within Iraq for the efforts being made to 
provide them with a stable and free government in the future, 
the support here at home is critical to that success. And being 
candid and open with the American public about the successes, 
as well as the shortcomings, of policies helps sustain public 
support for a very complicated and difficult mission. When an 
administration is reluctant, for whatever reason, to share its 
observations here, then you undermine that public support and 
you have a deteriorating support for this effort.
    I hope that will change in time because this is of 
strategic importance, the outcome of this issue. So I am very 
grateful to the chairman and very interested in hearing what 
our witnesses have to say about--as the chairman said, this is 
maybe the critical issue. If we can get this right and our 
security issues work well to provide space and if the Iraqi 
people see that the quality of their daily lives improves; that 
there is a job, that their health care, their sanitation, their 
transportation systems will work and provide them with a decent 
living--and I do not mean ``living'' in economic terms, 
specifically, but a decent living set of circumstances--then I 
think all the other things can flow.
    In the absence of that, if you do not get this right, I do 
not care how many troops you put on the ground in Iraq, I do 
not care how big the police force is, you will not ultimately 
build the kind of support you need to have in Iraq.
    So I think this may be the critical piece to our discussion 
over these 3 or 4 days, and I thank the chair.
    The Chairman. Thank you, Senator Dodd.
    Senator Murkowski, do you have an opening thought today?

   STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM ALASKA

    Senator Murkowski. Mr. Chairman, I, too, would like to 
commend you for your initiative in moving forward with this 
particular panel in the series that you have done. I regret 
that I have not been able to attend the two prior ones. In 
looking at the schedule, though, I looked at this one and said 
this is one that I cannot miss.
    As the good Senator has just pointed out, the success in 
Iraq really does depend upon the economic health, the well-
being of the individuals that are there. If we can get this 
piece right, I agree with you that it all does begin to fall 
into place. But it is a precarious initiative when you try to 
do the rebuilding and you are faced with sabotage, you are 
faced with corruption, you are faced with just the downfall of 
everything that we try to put up.
    So we need to know. We need to be able to measure how are 
we doing, and the Iraqi people need to be able to measure as 
well and to know that progress is being made.
    So again, Mr. Chairman, thank you for what you are doing. I 
appreciate the testimony that we will hear from those who have 
gathered today, and I do hope that the entire Congress is 
looking to this particular panel that you have put together as 
we move forward in looking at what is happening in Iraq.
    Thank you.
    The Chairman. Thank you very much, Senator Murkowski.
    Now I want to offer the first block of considerations. Let 
me say that I will ask Dr. Crane to comment first, to be 
followed then by Mr. Barton and Mr. Mohamedi. Then we will 
rotate the batting order. During the second block, we will ask 
Mr. Barton to start and then Mr. Mohamedi and then, finally, 
back to Dr. Crane for the fourth group; and then, as we 
indicated, your final comments.
    Should the coalition do more to shift additional economic 
development resources and emphasis from Baghdad to the 
provinces? What have been the challenges in achieving this aim? 
Will strengthening regional and local authorities outside 
Baghdad speed delivery of services and broaden the tangible 
benefits of aid, and are the currently formed provincial 
reconstruction councils up and running and having the desired 
impact?
    Dr. Crane, would you begin our discussion.

     STATEMENT OF DR. KEITH CRANE, SENIOR ECONOMIST, RAND 
                   CORPORATION, ARLINGTON, VA

    Dr. Crane. Mr. Chairman, Senators, I appreciate the 
opportunity to be here today as part of this important set of 
hearings on policy options for Iraq. As an economist, I guess I 
respectfully disagree about the importance of economics. I 
should not denigrate my own profession, but security is really 
important. There is a great deal of lawlessness in Iraq, not 
just with the insurgency, and until people and businesspeople 
feel comfortable on the streets, are not afraid of kidnapping 
or robbery or extortion, the economy is going to have a great 
deal of problems getting on its feet and going. So I would 
really like to underline the importance of efforts on security, 
especially in terms of our assistance programs.
    Returning to the question. Despite the frustrations many of 
us have had with dealing with the Iraqi central government, 
there really is no way to do an end run around the central 
government. I think a number of people have found 
municipalities, the local levels, a little more responsive, but 
the key focus of our assistance really needs to be on getting 
the central government working better.
    This can be done through mentoring, improving tendering, 
improving contracting. Also we need to have a focus on getting 
financial management information systems up and operating 
outside of the Ministry of Finance. But the problem, currently, 
is Iraq has a very, very centralized government, a centralized 
state, and the municipalities and provincial governments really 
do not have the power or the decisionmaking authority to make 
these, to make decisions in terms of assistance.
    Finally, turning to the question of the provincial 
reconstruction councils. In some ways, I think this perpetuates 
some of the mistakes we have made in the past. Much of our 
assistance effort has been focused on having the United States 
do it. I know in the United States we have a very can-do 
attitude, but in the end the Iraqis are going to have to 
reconstruct their government. The focus really should be on 
trying to channel as much of our assistance through the Iraqi 
Government, make sure that we have effective contracting and 
auditing and accounting systems in place so we can actually 
help them rid themselves of the corruption and the problems 
that they have had in their own operations.
    But, unfortunately, when we kind of charge ahead and try to 
do things outside, around the government, in many ways we 
weaken the legitimacy of the government. Also, we are going to 
be out of there some time in the near future. What we really 
want to have in place is a government that effectively works.
    To the extent that we do focus on the regional and 
municipal governments, I think the municipal governments are 
the best place to go. They need some assistance in budgeting, 
contracting, recordkeeping, and needs assessment and those 
types of initiatives can be quite useful. But unfortunately, 
they are very dependent on the central government and we need 
to get our focus in terms of trying to coordinate between the 
regional bodies and the central government by focusing our 
efforts there.
    [The prepared statement of Dr. Crane follows:]

Prepared Statement of Keith Crane, Senior Economist, RAND Corporation, 
                            Arlington, VA\1\

    Mr. Chairman, I appreciate the opportunity to be here today as part 
of this important set of hearings on policy options for Iraq.
---------------------------------------------------------------------------
    \1\ The opinions and conclusions expressed in this testimony are 
the author's alone and should not be interpreted as representing those 
of RAND or any of the sponsors of its research. This product is part of 
the RAND Corporation testimony series. RAND testimonies record 
testimony presented by RAND associates to Federal, State, or local 
legislative committees; government-appointed commissions and panels; 
and private review and oversight bodies. The RAND Corporation is a 
nonprofit research organization providing objective analysis and 
effective solutions that address the challenges facing the public and 
private sectors around the world. RAND's publications do not 
necessarily reflect the opinions of its research clients and sponsors.

    Option 1--Should the coalition do more to shift additional economic 
---------------------------------------------------------------------------
development resources and emphasis from Baghdad to the provinces?

    What have been the challenges in achieving this aim? Will 
strengthening regional and local authorities outside Baghdad speed 
delivery of services and broaden the tangible benefits of aid? Are the 
recently formed Provincial Reconstruction Councils up and running and 
having the desired impact?
    Because the Iraqi Government remains highly centralized and because 
there is still no constitutional basis for devolving authority, 
technical assistance needs to be concentrated on making the core 
Ministries of the central government function more efficiently, not on 
channeling assistance through provincial and municipal government 
institutions that lack the constitutional authority to make and control 
expenditure decisions. Major efforts to strengthen regional and local 
authorities should wait until the new constitution defines their 
authority. The Provincial Reconstruction Councils are up and running. 
It is too soon to determine whether they are having the desired impact. 
They do suffer because they are a U.S. Government initiative as opposed 
to an Iraqi Government institution.
    Unless they become part of the Iraqi Government's operations, they 
are unlikely to survive the eventual U.S. drawdown.
    Helping local governments to better manage their affairs is a 
laudable goal. But until the legislative and executive authority of 
these institutions is constitutionally defined, governorate and 
municipal governments will remain weak. Currently, governorates and 
municipalities rely on the central government for virtually all their 
revenues. They have little independent expenditure authority. As long 
as the Ministries remain the de jure and de facto centers of power, 
assistance should be targeted on helping the core Ministries to better 
manage their affairs, despite the attractions of focusing on provincial 
or municipal authorities with whom it is often easier to work. This 
said, the Iraqi Government will be more effective, if more government 
functions are decentralized, A modest effort to help improve the 
abilities of local governments to operate would be useful.
    Building the capacity of Iraqi central government institutions to 
run its own affairs, especially to provide security to its citizens, is 
the most critical task for U.S. assistance programs. The most important 
Ministries on which to focus are: Interior, Defense, Justice, the 
Judiciary, Finance, Oil, Electricity, Health, Education, and 
Municipalities and Public Works. One of the most important lessons of 
the last 2\1/2\ years, a lesson well known by development experts, is 
that building electric power generating or water purification plants is 
a waste of resources if the host government is unprepared to operate 
and manage the facilities or the systems of which they form a part. 
This has been the case in Iraq. Within 18 months, IRRF II funds are 
likely to be completely spent. Assisting Iraqi Ministries to better 
manage their own affairs before assistance funds run out is key to 
ensuring that the provision of government services will improve even as 
U.S. assistance declines.

    Option 2--Should the coalition, in conjunction with the Iraqi 
Government, increase resources and emphasis on creating jobs and 
demonstrating tangible progress on the ground?

    It has been suggested that WPA-type programs for trash cleanup, 
local repairs, and the like would let Iraqis see visible progress and 
make their daily lives more bearable while putting money into the 
pockets of the unemployed. Would this strategy work? Could the 
coalition help the prospects for a functioning economy by encouraging 
shops and small businesses through microcredit, small grants, loans, 
and other programs?
    The real problem in Iraq is poverty, not unemployment, as shown by 
a recent in-depth study of living conditions in Iraq.\2\ Make-work 
schemes are a stopgap measure and are of questionable utility at this 
point of time in Iraq. At this juncture, assistance needs to be focused 
on improving the environment for economic development. First and 
foremost, this means the coalition and the Iraqi Government need to 
give first priority to improving security. No economy with the levels 
of violence and crime that currently exist in Iraq can sustain rapid 
growth. Second, assistance needs to be targeted on improving the 
capacity of the Iraqi Government to function effectively.
---------------------------------------------------------------------------
    \2\ Ministry of Planning and Development Cooperation, Iraq Living 
Conditions Survey 2004, Volume 1, Baghdad, 2005, at www.undp.org.
---------------------------------------------------------------------------
                           MAKE-WORK SCHEMES

    In a long series of opinion polls, high percentages of Iraq's 
citizens have consistently stated that their number one concern is 
security. Surprisingly, the same polls have consistently shown that 
most Iraqis have an optimistic view of their economic future. However, 
unless security improves, Iraq will not enjoy sustained growth; with 
security and sensible economic policies, Iraqis should enjoy sustained 
increases in living standards.
    Employment, or the lack thereof, has been a contentious issue in 
Iraq. Difficulties in finding work and dissatisfaction with job 
opportunities ranks as a chief concern in opinion polls of Iraqis. 
Young men looking for work have reportedly been a major source of 
insurgents. The ``National Development Strategy 2005-2007'' states that 
unemployment is as high as 50 percent.\3\ Other sources cite figures 
ranging to 40 percent.\4\
---------------------------------------------------------------------------
    \3\ The Iraqi Strategic Review Board, Ministry of Planning and 
Development Cooperation, ``National Development Strategy 2005-2007,'' 
Interministerial Committee on the National Development Strategy, 
Baghdad, May 2005, p. 5.
    \4\ Michael E. O'Hanlon, The Iraq Index, The Brookings Institution, 
Washington, DC, May 9, 2005, p. 24, www.brookings.edu.
---------------------------------------------------------------------------
    These estimates of unemployment rates are seriously flawed. The 
only two credible estimates based on nationwide surveys have been 
conducted by Central Organization for Statistics and Information 
Technology of Iraq (COSIT), the Iraqi equivalent of a combination of 
the Bureau of Labor Statistics and the Bureau of Economic Analysis.
    One set of estimates based on COSIT definitions estimates that 
unemployment rose from 16.7 percent in 1997 to 28.1 percent in October 
2003, dropping to 26.8 percent in 2004.\5\ The other survey, conducted 
using the International Labor Organization (ILO) definition of 
unemployment, finds that 10.1 percent of the labor force is 
unemployed.\6\ The ILO definition, accepted internationally, best 
captures actual economic activity of households. It defines 
unemployment on the basis of whether one has worked in the week prior 
to the survey; other surveys often ask the interviewee whether they 
consider themselves unemployed, not whether they have worked. Because 
individuals employed outside their chosen profession frequently respond 
that they are unemployed, even though they work in some other capacity, 
unemployment rates are often exaggerated in surveys that do not focus 
on whether the respondent worked recently.
---------------------------------------------------------------------------
    \5\ Central Organization for Statistics and Information Technology, 
``Report of the Employment and Unemployment Survey Results 2003 Year,'' 
January 2004, p. 15; The Iraqi Strategic Review Board, Ministry of 
Planning and Development Cooperation, May 2005, p. 27.
    \6\ Ministry of Planning and Development Cooperation, Iraq Living 
Conditions Survey 2004, Volume 1, Baghdad, 2005, p. 104, at 
www.undp.org.
---------------------------------------------------------------------------
    Other data support this view of an economically active, albeit poor 
male citizenry. Labor force participation ratios, the share of the 
population in the workforce, are similar in Iraq to other countries in 
Arab countries in the Middle East and North Africa. Ratios for men 
between the ages of 15 and 65 run 69 percent; those for women are much 
lower, at 13 percent. The private sector is the largest employer. Most 
people who work in the private sector are self-employed. They either 
operate their own businesses or work as day laborers. Detailed studies 
by anthropologists of street vendors, subsistence farmers, and day 
laborers, common occupations in Iraq, find that these individuals spend 
considerable time working each day. They do not receive a monthly 
paycheck from an employer; their incomes depend on demand for their 
services. This state of affairs is not unusual in other countries. In 
the United States, a large number of people run small businesses, 
farms, drive trucks, or work in construction. Their incomes depend on 
the profitability of their businesses or what jobs they have lined up. 
However, in Iraq, productivity and hence incomes are low. In contrast, 
U.S. citizens work in an economy in which they are highly productive, 
generating much greater incomes.
    The Iraqi Government is also a major employer (Figure 1). In poorly 
monitored Ministries, some workers treat their government salary as a 
stipend and spend most of their energy pursuing private activities 
after, or during, work or using their positions to seek bribes. In many 
cases, Iraqi Government workers supplement their incomes by working in 
the private sector as well. For example, many Iraqi doctors work in the 
public health care system, but also take private patients.



    I make these distinctions not to minimize Iraqi complaints or 
perceptions of unemployment, but so as to focus on the real problem, 
which is poverty, not the absence of economic activity. Because self-
employment is often poorly paid in Iraq, when alternative, better-paid 
employment is available, self-employed individuals quickly take them. 
This is why participation in make-work schemes has been high.
    In some instances, make-work schemes can ease social pressures by 
taking demobilized soldiers off the streets. However, in general the 
creation of short-term jobs in an attempt to placate the local 
population, partly in response to the perceptions of high unemployment, 
can be a problematic use of assistance. Make-work schemes, if done 
poorly, can and often do result in a reduction in average real incomes, 
in other words by wasting tax revenues on work that does not add value 
to the society, the schemes make the country and its citizens poorer, 
not wealthier. Poorly run programs can teach bad work habits, as well 
as good. Make-work jobs may teach people that advancement results from 
connections or putting in time, not hard work, and can discourage 
initiative. Furthermore, if the jobs are truly short-term, the programs 
can breed more ill will than gratitude, as recent hires find themselves 
laid off once the program expires. There is substantial anecdotal 
evidence to show that make-work programs employ insurgents without much 
effect on political views. In some instances, insurgents have 
participated in make-work schemes during the day, then fought the 
coalition at night.
    Some short-term projects can contribute to private business 
development. Road rehabilitation programs can generate economic rates 
of return averaging 20 to 30 percent by reducing transport costs. They 
can be undertaken by local businesses and involve local resources 
(gravel, bitumen, labor). Issuing contracts for small private companies 
is a good use of funds and teaches good habits. The contractor, if 
subject to adequate oversight, learns to bid, to manage his business, 
and to keep his workers happy and working. The contractor's emphasis on 
making the contract profitable results in appropriate motivations for 
his workers. Moreover, entry into these businesses is usually easy. The 
more entrepreneurial workers learn from their employers and then start 
their own businesses, using their current employer as an example of 
what can be done.

                    TARGETED LENDING AND MICROLOANS

    The key economic policy task in Iraq is to create an economic 
environment conducive to private sector activity. Successful 
development needs a favorable economic environment (low inflation, a 
sound financial system, a legal and commercial framework conducive to 
business, etc.); the use of markets to allocate goods, services, labor, 
and capital; security for persons and property; low transactions costs 
(the ability to travel, communicate, and transport goods easily and 
cheaply); and the human and physical capital to take advantage of these 
conditions.
    Improving the operation of Iraq's financial system would be an 
important contribution to financial stability and growth. The current 
system is underdeveloped: Financial assets as a share of GDP are 
minuscule; financial services contributed only 1.0 percent to GDP in 
2000 and no more in 2003. Banks have a very weak capital base. Bank 
employees, state and private, lack training in assessing credit risk. 
In other transition and developing countries, banking systems like 
Iraq's, characterized by a few large state-owned banks and a smattering 
of small, private banks, have become timebombs. Because of political 
pressures to lend and the inability to properly evaluate credit risk, 
the banking system tends to make bad lending decisions at this point in 
the recovery. When these loans go bad 3 to 4 years down the road, the 
banking system implodes; the government has to bail out the system at 
great cost while the economy goes into recession.
    CPA rightly focused on improving the banking system through 
training, restructuring, and encouraging foreign investment in the 
industry. All three initiatives, especially foreign investment, have 
been highly successful in other developing and transition economies. 
Building trust in financial transactions is a key part of this process: 
Central Bank of Iraq oversight of the banking system will contribute 
heavily in this regard. Creating a proper regulatory environment and 
facilitating the development of banking services should result in 
improvements in the speed and reductions in the costs of financial 
transactions, increasing financial intermediation as a share of GDP and 
improving capital allocation. These changes could add 3 to 4 percent to 
long-term GDP as the share of financial services in GDP moves to levels 
more typical of medium-income developing countries.
    Other financial sector policy initiatives need to be pursued with 
care. In a number of countries, small-scale microcredit programs have 
been successful in giving poor households an economic start, but 
programs rarely cover costs because making and collecting payments on 
small loans is so expensive. These programs are difficult to expand 
quickly. Successful microcredit programs entail a great deal of hands-
on work within communities. Quality, not quantity, is key to the 
success of microlending programs as it is with many other assistance 
programs.
    Directed lending to small- and medium-sized businesses has had a 
mixed track record in developing countries. Default rates, especially 
early in the transition, are often high and bad loans have contributed 
to banking collapses and recessions. As shown by the high degree of 
liquidity in Iraqi banks, small businesses are currently financing 
investment through retained earnings. Later in the recovery, banks will 
begin to provide loans to small business as their ability to judge 
creditworthiness and evaluate projects improves. However, with growth 
in GDP of an estimated 51.7 percent in 2004 and a projected 16.7 
percent in 2005, there are no signs that the small business sector is 
severely constrained by the lack of credit at this point in time.
    No transition economy has successfully developed mortgage lending 
in the early years because of high rates of inflation, the high level 
of economic uncertainty, the absence of information on personal 
creditworthiness, the large numbers of people without steady incomes, 
and the lack of objective assessments of the value of buildings. 
Assistance in setting up titling offices and systems, collecting 
information on property sales, removing regulatory and tax 
disincentives to property sales, and preparing legal changes to make 
foreclosure easier would prepare the groundwork for the development of 
a national mortgage industry; but in my view subsidized mortgages has 
been a poor use of assistance elsewhere. Housing is relatively 
expensive everywhere in the world; as a consequence, to reach a 
substantial number of people, mortgage subsidies are very expensive. If 
programs are kept small, they reach modest numbers of people.

                               CERP FUNDS

    A substantial amount of assistance in Iraq has consisted of smaller 
grants provided to local communities from Commander's Emergency 
Response Program (CERP) funds. This program has been very popular with 
commanders, as it is perceived as providing quick results that are 
readily apparent to local populations. Despite their popularity and the 
very substantial sums of money recently provided to commanders through 
CERP, it is not clear how useful these expenditures are in terms of 
fostering sustained growth, permanent employment, or even in 
counterinsurgency efforts.
    A number of analysts have argued that in the aftermath of a 
conflict, highly visible, quick impact projects are important to sway 
popular support for the new regime. If this was the case in Iraq, the 
opportunity has been lost. Coalition forces have been in the country 
for nigh on 2\1/2\ years. In many parts of the country, popular 
opinions about the coalition have coalesced around one view or another. 
For example, it is not clear whether a highly visible U.S. program of 
rebuilding Fallujah would have a significant impact on perceptions of 
the United States in that city.
    There is a case for the use of grants for small short-term targeted 
projects as part of an effective counterinsurgency effort. In the case 
of Iraq, the use of short-term targeted expenditures on neighborhood or 
town projects coordinated with other counterinsurgency efforts have 
received high marks in Baghdad and the north. On the other hand, 
commanders have sometimes focused on construction projects that, once 
completed, have not been effectively utilized by the community or have 
been targeted for destruction by insurgents because of their U.S. 
origin. Commanders have been confronted with pressure to give 
construction contracts to politically powerful individuals rather than 
the lowest bidder; a practice that would help perpetuate a culture of 
corruption in Iraq. In short, with CERP funds less may be more in a 
number of instances.

    Option 3--Should the coatition put more emphasis on overcoming the 
twin curses of the oil sector: Corruption and sabotage?

    Can the coalition work with the Iraqi Ministries to develop and 
fund a full scope program to enhance security of the oil production and 
distribution infrastructure and combat corruption in the Iraqi oil 
industry? Should the coalition and the Iraqis develop emergency 
pipeline repair teams, work with local tribes to protect pipelines, and 
offer incentives or rewards for those who turn in corrupt oil industry 
personnel? Within the oil sector, where is the corruption problem 
greatest? Would oil resources be more productively used for the benefit 
of the Iraqi people if they were managed regionally, instead of by the 
central government?
    Corruption in Iraq is primarily a problem of opportunity. If the 
opportunities disappear, corruption will decline. Thus policies need to 
be focused on reducing or eliminating opportunities for graft and 
corruption. The largest source of corruption in Iraq is the theft and 
diversion of gasoline and diesel fuel by government officials. Although 
the scale of this activity is impossible to measure accurately, one 
contractor reportedly stated that a third of imports of gasoline and 
diesel fuel ``disappear.'' These will run on the order of $2 billion in 
2005, roughly a tenth of Iraqi GDP. Eliminating this opportunity by 
liberalizing gasoline and diesel prices is the single most important 
economic policy change needed in Iraq today. The second most severe 
source of corruption by value is government contracting. Working with 
the Iraqi Government to create transparent, simple accounting and 
competitive contracting systems, is a very important economic policy 
measure for reducing corruption. Transparent, simple accounting 
systems, coupled with ``whistle-blower'' protections and severe 
sanctions, are important for combating the third most important source 
of corruption by value: Garnishing wages by more senior civil servants.
    It is impossible to overemphasize the importance of liberalizing 
gasoline and diesel fuel prices for the health of the Iraqi polity and 
economy. Currently, gasoline and diesel fuel are sold at about a nickel 
a gallon; smuggled into neighboring Turkey, they can be resold for more 
than $5 a gallon. Confronted with these nonsensical differences in 
prices, no society is immune from corruption. It is pervasive in the 
downstream activities of the Ministry of Oil. The severity of 
corruption is revealed in the lengths to which those involved are 
willing to go in order to preserve their access to state resources. The 
last two executives in charge of refining and product distribution were 
reportedly shot by organizations involved in stealing fuel, not 
insurgents. The first executive was wounded; the second was killed. 
These people were not victims of the insurgency, but of corruption.
    The economic costs of fuel subsidies form the single greatest 
economic problem facing the Iraqi economy. Controlled fuel prices are a 
particularly pernicious form of subsidization. In the case of Iraq, the 
IMF estimates that fuel price subsidies cost the country $7 billion in 
2004, a third of GDP.\7\ Of this, $2 billion was in hard cold cash used 
to import gasoline and diesel fuel from its neighbors (some of which 
was immediately resold to them at knockdown prices). The rest is the 
loss to the Iraqi Ministry of Finance from foregone revenues. With a 
budget deficit equal to 43 percent of GDP in 2004 and an estimated 28 
percent of GDP in 2005, the Iraqi Government cannot afford to squander 
its resources this way; at a minimum, U.S. policies should not support 
this waste.
---------------------------------------------------------------------------
    \7\ International Monetary Fund, Iraq: Use of Fund Resources--
Request for Immediate Post-Conflict Assistance, Washington, DC, 
September 24, 2004, pp. 15.
---------------------------------------------------------------------------
    These subsidies do little to alleviate poverty. Economists at the 
Coalition Provisional Authority estimated that less than one-fifth of 
the subsidy goes toward liquid petroleum gas and kerosene, the two 
fuels of most important to poor households. The rest subsidizes 
truckers, many of them foreign, or car owners, few of whom fall into 
the bottom of the income distribution.
    Subsidized fuel has created a host of economic and security 
problems. Because fuel is cheap, consumption is far higher than if 
Iraqis paid the true value of the fuel. The Iraqi Government is unable 
to satisfy this excess demand, so motorists find gasoline and diesel 
fuel in short supply and queue. Queuing wastes the time of drivers and 
truckers and creates hordes of irate motorists; witness Basra and 
Phoenix in the summer of 2003.
    Unless refined oil product prices are liberalized, Iraq will always 
be beset by corruption. Although not a politically popular move, the 
alternative is worse. In the case of Iraq, one would be hard pressed to 
prove that the security situation would be worse following price 
increases than it has been over the past several months. Which is more 
of a threat to Iraqi security today: Day in and day out, three-mile 
lines of irate motorists waiting 24 hours in 120 degree weather to fill 
their tanks? Or complaints by foreign truckers and potential blockades 
by taxi drivers from protests in the immediate aftermath of a price 
increase? Price increases are not politically popular, but neither are 
shortages and lines. Moreover, price liberalization provides a solution 
to lack of supplies by unleashing market forces. Price controls 
exacerbate the problems.
    There are better and worse ways of raising prices. Despite their 
unpopularity, controlled prices have been raised hundreds of times 
around the world. Governments that lay out a strategy for increases, 
discuss impending increases well in advance, explain where the 
additional revenues will flow, and then provide concrete evidence of 
how the price increases have improved supply or made additional public 
expenditures feasible generally have emerged unshaken, although less 
popular. Weak, politically unpopular governments that make surprise 
increases in prices in periods of economic decline after promising not 
to raise prices are prone to face riots.
    Sabotage in the oil industry stems from a variety of sources and 
motives. Iraqis tap product pipelines (gasoline and diesel fuel) to 
steal fuel for resale. Some tribes sabotage crude pipelines so as to 
blackmail the government into paying them not to damage the 
infrastructure, and insurgents attack the pipelines to reduce 
government revenues.
    The provision of security for the oil industry is the 
responsibility of the Ministry of Oil and the security Ministries. 
Because of the distorted pricing system and highly centralized way in 
which oil revenues are channeled in Iraq, the national oil company, 
which is overseen by the Ministry of Oil, has few financial incentives 
to guard the oil infrastructure effectively. Because all export 
revenues go directly to the Ministry of Finance, the oil company relies 
on budget support for its operations. Managers do not suffer from 
pipeline breakdowns nor benefit greatly from preventing sabotage. This 
state of affairs calls for change. The most successful state-owned oil 
companies around the world are operated as independent, profit-
maximizing companies. Management, supervised by an independent board of 
directors appointed by the state, is rewarded for pursuing profits and 
penalized for losses. Products are priced by markets. In this 
environment the state-owned company has financial and governmental 
incentives to combat sabotage and theft and takes measures accordingly.

    Option 4--Should the coatition and the Iraqi Government create a 
reliable set of indicators of when and where economic progress has been 
made?

    If the coalition or the Iraqi Government published regular updates 
on such figures as hours of electricity generated per day, gallons of 
fresh water supplied, number of beds in working hospitals, children in 
school, economic activity, oil production, unemployment, incidents of 
violence and the like for various regions and cities, could this 
successfully demonstrate progress to the Iraqis and the Americans and 
also point to areas where more effort is needed? Which would be most 
useful? Could such statistics be created free from political influence 
and would they be seen as credible?
    The Iraqi Government should focus on improving the timeliness and 
accuracy of those statistics currently collected and ensure that they 
are disseminated as broadly and quickly as possible. The coalition may 
contribute to this effort with technical assistance to the Central 
Organization of Statistics and Information Technology under the 
Ministry of Planning and Development Cooperation. However, it is 
generally counterproductive for the coalition to collect and 
disseminate its own statistics outside of Iraqi institutions. The 
coalition needs to help Iraq set up systems to collect and disseminate 
information after the coalition has left the country, not to create an 
autonomous system of statistical collection of dubious validity for 
current operations.
    The collection and dissemination of timely, accurate statistics is 
a government function throughout the world. Iraq is no exception. The 
Iraqi Government and Iraqi citizens and businessmen need reliable 
statistics to run their affairs efficiently and make considered 
decisions, The Iraqi Government has a large statistical office, COSIT, 
headed by individuals with graduate training in statistics from 
reputable foreign universities. Under Saddam, the office regularly 
published statistics on inflation within 10 days of the end of the 
month, a very credible record. More recently, the office undertook a 
massive, methodologically rigorous survey of living conditions in Iraq 
with funding from the Kingdom of Norway and with the assistance of UNDP 
and the Fafo Institute of Applied International Studies.\8\ The work 
provides the only credible recent information on living conditions in 
Iraq.
---------------------------------------------------------------------------
    \8\ Ministry of Planning and Development Cooperation, Iraq Living 
Conditions Survey 2004, Volume 1, Baghdad, 2005, at www.undp.org.
---------------------------------------------------------------------------
    Although COSIT has shown it can generate accurate, reliable 
information in a timely manner, the organization currently faces 
incentives to hoard or delay the release of information. The provision 
of bonuses and financial penalties coupled with performance audits 
would likely serve to greatly improve the quantity, quality, and 
timeliness of statistics collected by COSIT. These national statistics 
would entail collecting many of the regional and municipal statistics 
cited above, which could also be disseminated to help assess changes in 
conditions by governorate or municipality.
    In most instances, COSIT, in conjunction with other Iraqi 
Ministries, should be able to collect standard statistical information 
on its own. However, in two instances, numbers of violent Iraqi deaths 
(including insurgents, security forces, and noncombatants) and numbers 
of attacks, the coalition could assist the statistical agency in its 
work. These two indicators, deaths and attacks, are the most important 
for tracking trends in security in the country. They are probably the 
two most important pieces of information for the Iraqi public to make 
judgments on how security in the country is evolving.
    In my view, a number of the economic indicators on which the U.S. 
Government has focused would not sway public opinion and have not been 
useful for evaluating economic or political progress in Iraq. In some 
instances, these indicators have had counterproductive effects. For 
example, the focus on spending assistance quickly has contributed to 
waste without any noticeable effect on Iraqi public opinion. To focus 
on jobs created by infrastructure projects does not make sense in the 
context of a strategy of trying to improve public services through 
capital-intensive investments, The mixture of inputs, outputs, and 
outcomes in current reporting at times serves to obfuscate more than 
clarify.
    Congress should think carefully about its own demands for 
statistics and evaluation. In many instances, the perfect becomes the 
enemy of the good. A number of colleagues who work in the government 
have been requested to provide evidence of program effectiveness that 
is not possible under any conditions, let alone in a war-torn economy 
like Iraq's. It is impossible in any society to definitively link 
refurbishment of schools to academic progress. Instead of requesting, 
for example, numbers of jobs generated by construction programs, 
Congress would be better served if it requested detailed strategies of 
how particular assistance programs are to help the Iraqi Government 
improve its abilities to create a basis for sustained economic growth 
in the country.
    Opinion polling suggests that, unsurprisingly, Iraqis feel they 
have a pretty good handle on their own economic situation. They have 
much more difficulty in assessing the security situation. They also 
have suspicions about U.S. strategies and exaggerated expectations of 
what U.S. assistance will do. More important than providing a steady 
stream of data on electric power output, number of projects, or dollars 
spent, the U.S. Government needs to repeatedly send the following 
messages: The U.S. Government is in Iraq to help the Iraqi Government 
get on its feet and will then leave. It does not seek to remain in Iraq 
permanently. Two, the reconstruction of Iraq is the responsibility of 
the Iraqi people. The United States has attempted to provide a leg up, 
but Iraq, not the United States, will operate and pay for electric 
power, water, and other utilities. The sooner Iraq moves to restructure 
the Ministries and companies involved and to bill and collect payment 
for services rendered, the quicker Iraqis will have reliable water and 
electric power.

    The Chairman. Thank you very much, Dr. Crane.
    Mr. Barton.

STATEMENT OF FREDERICK D. BARTON, SENIOR ADVISOR, INTERNATIONAL 
   SECURITY PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL 
                    STUDIES, WASHINGTON, DC

    Mr. Barton. Good morning. Senator Lugar, thank you for the 
invitation. Senator Dodd, Senator Murkowski, it is good to be 
here with you.
    As you might remember, we first appeared before you in the 
summer of 2003 when we were back from the first independent 
review of the reconstruction that we conducted for Secretary 
Rumsfeld. At that time we spoke of a closing window of 
opportunity. Well, today, we have a tighter, tougher situation, 
with many fewer opportunities because of the choices made and 
the opportunities missed and the fear of many violent attacks.
    But what we must have is an economic strategy that is at 
its core an anti-insurgency strategy. Daily life will only 
improve if people believe that the entire enterprise is moving 
in the right direction. We cannot just hope for the best. We 
have to expand opportunities and hope that they will contribute 
to Iraq's safety.
    We must, I believe, present an alternative vision that 
reaches directly to the people, provides them with dramatic and 
positive changes in their lives, makes it clear that they are 
in charge of their futures, not the United States, not Baghdad, 
and certainly not the insurgents.
    This is not a time for creeping incrementalism or for 
tradition. Opportunities are few and the new direction must be 
clear and communicated, massively communicated. The core idea 
is to put the Iraqi people first. Every program and every 
approach, every expenditure, needs to ask: Are we maximizing 
the engagement and the ownership of individual Iraqis; are we 
giving them more opportunities to take charge of their futures?
    Few initiatives up to now have made this their central 
organizing principle. Today there is not only no choice, but 
this is also the wisest way to go. This does not mean throwing 
money at people. It does mean cutting out the middlemen, be 
they in Kuwait or in the central government or in large 
contracts. It does mean increasing the velocity of money 
movement, putting the people on the side of increased oil 
production, and staying focused on what matters.
    These ideas will be popular with Iraqis. Our earlier 
studies and measures of citizens in Iraq, including ``Progress 
or Peril,'' suggested that. These ideas are also consistent 
with the American political tradition of the right and the 
left, ``of the people, by the people, and for the people,'' and 
also of our pragmatism, because this is the wisest course at 
this time.
    These ideas are also counterinsurgent and counter-Iraq's 
past, where control, inside deals, intimidation, favoritism, 
and cronyism ran the show. This is an approach that 
acknowledges that the wisdom of the crowd, or people power, is 
preferable at a time of near-chaos, untested and unprepared 
political leadership with too full of an agenda, living with 
the overhang of a command economy in a difficult region.
    There will be resistance. Iraq's developing elites are 
waiting for their turn. Our government will hide behind 
``obligated funds,'' ``past practices,'' and the Iraqi 
sovereignty when it is convenient. Insurgents will see the 
radical challenge this presents. Former Ba'thists will 
recognize that life will not return to the status quo ante.
    Only Iraq's people will favor these notions. There is a 
greater advantage beyond capturing the public imagination. 
These ideas can be implemented. In the 25 post-conflict 
situations that I have been in, central governments without 
insurgencies cannot deliver services. The mere act of 
organizing takes almost all of their time. We have seen, 
through the global transfer of remittances, that money can move 
from an uneducated immigrant, across the world to a relative in 
the most rural part of Haiti or Afghanistan. We have also seen 
traditional State-owned enterprises, including in Senator 
Murkowski's State, offer--give stock to all the citizens of a 
State or a country. We have also seen commodity distributions 
replaced by buying power. The examples abound.
    So putting people first also has a further charm. It is the 
best available way to provide us with more options and moves 
just at the moment that the Iraq chessboard is looking more 
like a stalemate. As a guiding vision, putting people first 
provides us with the choices in every area--politics, security, 
as well as economics and social well-being.
    At the heart of the economic strategy is to get people more 
engaged, with greater ownership, and to expand the centers of 
activity. Swarm theory and distributed networks is now the best 
way to move ahead. The United States should make it clear we 
favor these approaches. We want Iraq's Government to set aside 
any recidivist intentions to return to state-centered control, 
and that we have confidence in the wisdom of Iraq's crowd: Its 
people.
    On option one, I would like to just focus on one example: 
Cut out the middlemen. The best foreign aid many of us have 
seen is when the United States is fighting a war in your 
neighbor's country. Things are going well right now in Kuwait 
and in Jordan. Probably it is their glory day, the best 
economic times in history. So we have to look and see how much 
of that action we can move into Iraq.
    I would offer one example that has been studied and shows 
promise--Basra. A few miles away, there is a ton of action in 
Kuwait and there is almost nothing going on in Basra. We have a 
rather modern airport. It will need some improvements and some 
are being worked on under a lot of U.S.-funded contracts and 
others. But capacity there is zero to 10 percent, less than 10 
percent. Some people told me zero percent, but let us say it is 
up to 10 percent. It is not being used. There is an airport 
that could take planes from all over the world. It sits in the 
middle of the desert. It can be secured. Things can be 
warehoused. A lot of action that is going on, and that then is 
going to be convoyed into the country, is not touching base in 
Iraq first.
    The same thing with the ports. Our questioning has 
suggested that maybe the ports are up to 50-percent capacity at 
this point. Use the Iraq ports versus using everybody else in 
the region. It is just a first obvious choice.
    The same thing with the rails. The rail network needs to be 
rebuilt, but it has that same kind of potential. Yes, they will 
need management help, but actually we have already done that 
fairly well. USAID funded a management contract at Khor az 
Zubayr which reportedly produced a $20 million profit after 1 
year. So fairly good management, not a concession deal, which 
is what the Danes did in Umm-Qasr, but nevertheless real 
potential.
    To more quickly answer your specific questions, I say 
``yes'' to the councils, ``yes'' to thousands of others. We 
really need many, many more outlets. We do not have the time to 
wait for a government to take shape and be efficient and honest 
and all the other things. It is going to have great difficulty 
finding, in the next 2 years, if it has not already failed in 
some of those areas.
    We have got to get Baghdad onto this program at the top, 
but not in the implementation. This will do more to cut 
corruption, speed economic activity, and engage the Iraqi 
people than most of what has been done up to now.
    Thank you.
    [The prepared statement of Mr. Barton follows:]

      Prepared Statement of Frederick D. Barton, Senior Advisor, 
International Security Program, Center for Strategic and International 
                        Studies, Washington, DC

    Thank you Senator Lugar, Senator Biden, your Senate colleagues and 
staff. It is a pleasure to be with you again.
    The task before us in Iraq has never been an easy one. Renewing 
Iraq's economy after decades of Saddam's totalitarian rule would have 
been a challenge even in the most peaceful of conditions. With the 
insurgency, it has proven near impossible.
    The security, political, and economic situations in Iraq today must 
be seen as part of an integrated whole. Improving Iraq's economy will 
not drive success by itself, but it is essential to making progress. 
Fewer choices remain today because of missed opportunities.
    Any successful strategy will reach well beyond Baghdad to empower 
local governing councils, independent authorities, and individuals. 
When you get to this stage of reconstruction, it is imperative to pick 
winners and to give them the means to succeed.

                     PUTTING THE IRAQI PEOPLE FIRST

    My belief is that the status quo, or even the status quo executed 
more efficiently, will not achieve the desired results this 
administration and its Iraqi partners are looking for.
    Iraq requires a dramatic shift in the way we do business. We need 
to put the Iraqi people first, and we need to operate in a more 
creative, entrepreneurial, and agile way. We cannot hunker down in the 
green zone and expect results. Nor can we expect that the Iraqi central 
goverment will be able to deliver.
    What does it mean to put the Iraqi people first, in terms of your 
four questions?

   Don't count on the central government to find the people.
   Get the money moving faster.
   Give Iraqis a direct stake in their oil flow.
   Create integrated benchmarks that matter.

    This shift will not be easy. We will worry about the loss of 
control, of oversight, of leverage. We will feel pressure to carry out 
our work in traditional ways. The reality is that success in post-
conflict reconstruction depends on more than stamping our name on a 
list of projects completed, goods delivered, or elections successfully 
run.
    Post-conflict reconstruction must not be ideological or utopian or 
build off the grandiose concept of ``nation-building.'' Rather, it must 
offer a pragmatic view that engages local people and encourages the 
expansion of their basic rights and freedoms.
    My belief is that employing such a strategy will be as important to 
defeating the insurgency as training the Iraqi Army.
Option 1: Don't count on the central government to find the people
    Development cannot stall in the central Ministries or stop at 
Baghdad's city limits. The key challenge in Iraq today is making sure 
reconstruction funds find the people. Some reports have it that 60 
percent of the $18 billion in reconstruction funds the United States 
pledged to disburse by the end of 2004 have not yet reached Iraqis.
    There is a constant tension in post-conflict reconstruction between 
meeting immediate interests and needs and building long-term capacity. 
We should work to strengthen and support the Iraqi Government, but we 
must recognize that not everyone in it will be able to escape static 
models of the past or eschew corruption. We must do an end-run around 
those who do not share our urgency and principles.
    The inefficiencies of the central Ministries are a big part of the 
problem in Iraq today. The CPA's overemphasis on the Ministries from 
the beginning was unrealistic and poorly executed. The current climate 
in Baghdad encourages large-scale corruption. Too little of this money 
ever finds its way outside of the capital.
    To ensure that reconstruction resources get outside the capital and 
into the hands of ordinary Iraqis, we need to pick winners rather than 
go through traditional channels, and we need to make sure resources are 
distributed in an open and transparent way. Less should be planned 
through central Ministries, and more should flow through reliable Iraqi 
partners in government and civil society.
    One available efficiency is to cut out middlemen and move business 
into Iraq. Basra, for instance, could serve as a hub for goods now 
moving through Kuwait. Its airport is working at under 10-percent 
capacity, and its two ports at less than 50 percent. Transforming Basra 
into a hub for Iraq will require a greater investment in both security 
and management, but it is possible, and should be tried.
    Baghdad's role should be to establish a national economic vision 
that captures the public's imagination. This has not happened yet. As I 
will detail later in my testimony, I believe this could be centered on 
a national wealth-sharing plan for oil revenues.
    The insurgency will make getting beyond Baghdad difficult, but the 
more that we can channel aid in a decentralized, grassroots fashion, 
the more diffused our presence will be throughout Iraqi society, the 
greater the number of Iraqis will be involved, and the smaller, more 
agile a target we will provide to those wishing to do us harm.
Option 2: Get the money moving, faster
    Creating jobs is an important element of post-conflict 
reconstruction. Jobs get potential insurgents off the streets and put 
money into the hands of Iraqi families. My belief, however, is that a 
WPA-style jobs program is unlikely to instill Iraqis with any real hope 
for the future or stake in the reconstruction effort. Such programs 
tend to pay low wages, employ people in menial tasks, and engage them 
for only short periods of time. Job creation may serve as a stopgap 
measure, but a more far-reaching strategy is needed.
    Microcredit, small grants, and loans disbursed on the local level 
are a far better option. What we need is to build a network of several 
thousand distributors who can help channel money into their communities 
where it is needed most. Local governing councils, civil society 
organizations, or women's groups that have a presence on the ground 
could help to implement these programs. It's been done successfully in 
equally tough places as Iraq. The Iraqi Government will not be able to 
move these funds fast enough into the communities.
    Our own funding methods must be faster and more flexible. Emergency 
response funds are a key component of such a strategy, but the U.S. 
military must not be the only outlet. Right now the U.S. military 
controls 70 percent of the $18 billion Iraq Relief and Reconstruction 
Fund. We should broaden the number of local actors who have access to 
emergency funds. Programs that can demonstrate an Iraqi contribution 
should be prioritized.
    One of the largest carryovers of the prewar period is the food 
basket that is provided to all Iraqis. It has been estimated to cost up 
to $18 billion per year, and is used for the centralized purchase of 
basic commodities, for distribution networks, and for other expenses. 
Iraqis would rather have the cash and make their own decisions on how 
to use it. Putting the money in their hands would generate more 
consumer power, accelerate money flows, and reduce the influence of the 
old state-centered model. The direct distribution of cash would also 
enhance the banking system and help develop local market competitors, 
much like we have seen with remittances.
Option 3: Give Iraqis a direct stake in their oil flow
    Iraq's biggest economic asset remains its oil wealth. From the 
perspective of the ordinary Iraqi, however, there is little tangible 
benefit from oil. Many Iraqis believe the U.S. Government still has 
designs on Iraqi oil. Corrupt Iraqi Government officials may also steal 
profits before they ever reach Iraqi people. Insurgents sabotage 
infrastructure in order to thwart reconstruction progress. Ordinary 
Iraqis do not have enough of a stake in the results.
    A plan must be designed in cooperation with the Iraqi Government to 
use oil revenue to build the long-term capacity of Iraq and to meet the 
immediate needs and interests of the Iraqi people. Here is a sketch of 
a two-part plan.
    The first part is to give Iraqis a direct stake in maximized 
production by instituting a wealth-sharing plan where each Iraqi family 
receives a certain amount of money in a personal account every year to 
spend on health, education, or livelihood. By depositing $500 per 
person into bank accounts, we will also capitalize a fledgling banking 
industry. The initial cost of such a program would be around $5 
billion.
    Such a plan could increase incentives for Iraqis to assist their 
government and coalition forces in protecting oil infrastructure. It 
will require bridge funding, however, since Iraq's oil production is 
unlikely to move from 2 million to 4 million barrels per day until 2010 
under the best-case scenario. The United States, should consider 
contributing to this bridge funding, as it will send a clear signal 
that we are seeking to use oil revenues to empower the Iraqi people 
rather than benefit from Iraq's wealth.
    The second part is to develop a board of overseers comprised of 
Iraqi officials, regional and international partners, and Iraqi civil 
society that could be charged with directing a portion of oil revenue 
to Iraqi public goods and tangible infrastructure projects. Such a 
board could solicit ideas from the Iraqi public and put the choice to 
referenda.
    The positive consequences that would flow from this plan could 
ripple across sectors, providing hope not only for Iraqi's economic 
well-being but for the security situation and our goals of democratic 
governance.
Option 4: Create integrated benchmarks that matter
    Our project at MS conducted a survey of Iraq's overall 
reconstruction progress in 2004. We offered measurable benchmarks for 
success on the basis of government, media, and polling reports, as well 
as interviews and focus groups we conducted on the ground. Our findings 
showed then, and the same is true now, that economic progress in Iraq 
is directly tied to progress on the security front.
    Knowing when Iraq has reached the tipping point--when Iraqis have a 
legitimate chance to sustain progress on their own--is not an easy 
task. Claims of success or failure are often perceived as merely 
political spin. But measuring allows decisionmakers to observe trends 
during ongoing interventions and to make mid-course corrections that 
advance the stabilization process, reduce political and financial 
costs, and save lives.
    Measuring progress is not merely an exercise to collect a random 
assortment of statistics on the numbers of children in school, numbers 
of beds in working hospitals, and the like. The danger in this is that 
we often count what is easily measurable rather than what matters most. 
Measuring must be part of an integrated framework of goals and 
indicators.
    Iraqis, themselves, must play a role in defining progress and 
measuring success. We can work with the Iraqi Government and civil 
society to help to articulate this plan and to gather measurements. The 
process must be open and transparent to the Iraqi people and the 
international community alike. The risk of insurgents targeting key 
benchmarks, if the plan is made public, is a red herring. Insurgents 
already know what is vital to success and what is not--sometimes better 
than we do.

                               CONCLUSION

    A new approach in Iraq should emphasize a decentralized approach 
and Iraqi ownership in the process, create long-term employment through 
microcredit and small loans, offer a viable plan for oil-wealth sharing 
and human capital investment, and a method to reliably measure 
progress. In short, trust more in the Iraqi people.
    Trusting the Iraqi people has been missing for too long. In January 
2005 I argued with two colleagues in the New York Times that we should 
let the Iraqis decide our tenure in a referendum that asks if we should 
stay or go. Doing so could affirm our commitment to empowering the 
Iraqis and steal the thunder from the insurgents. If the majority of 
Iraqis vote for us to stay, we have a mandate in Iraq we can use to win 
Iraqi hearts and minds. If Iraqis vote for us to go, we will leave 
based on the popular will of the Iraqi people--supporting our reason 
for being in Iraq in the first place.
    It is difficult to imagine broad economic progress in Iraq today 
without a greater sense of public safety. Many are pinning their hopes 
on processes to build the formal government, from constitution writing 
to elections. I believe it is more important to encourage an authentic 
Iraqi political voice to emerge, one that will make its people proud 
and reassure them that their leaders represent their best interests. 
This might be the only true hope to convince Iraqis to come together 
and stand up to the insurgency.

    The Chairman. Thank you very much, Mr. Barton.
    Mr. Mohamedi.

    STATEMENT OF FAREED MOHAMEDI, SENIOR DIRECTOR, COUNTRY 
          STRATEGIES GROUP, PFC ENERGY, WASHINGTON, DC

    Mr. Mohamedi. Thank you, Senator Lugar, for inviting me, 
and to the panel, Senators.
    I share with my friends here that security is, of course, 
of paramount importance, but I feel that the issue of 
decentralization is a very sensitive and potentially dangerous 
one if it is handled wrongly. Given the fragility of the 
central government of Iraq, its bureaucratic disarray, its 
financial shortages, and the lack of coercive means to assert 
authority around the country, and the centrifugal forces in the 
region, in the regions, an overt shift of emphasis and support 
by the coalition away from the center would have a very 
disruptive effect.
    I think this is particularly true in the sector that we 
know a little bit about and that is the oil sector. If the oil 
sector is allowed to fragment and be taken over by locals, then 
you will have local control over those revenues and that will 
essentially mean that they do not need to be part of a larger 
Iraq. Then you will have something, in our opinion, that took 
place in Russia, where the sector effectively fragmented and 
people grabbed the assets.
    But also, short of that and short of, in a sense, the 
political implications of that, on a very practical economic 
sense, you break down the operations and operational efficiency 
of the infrastructure when you fragment it. I mean, when the 
looting took place and the south was cut off from the north, in 
terms of power lines, you had a really hard time rebalancing 
the system and you lost quite a bit of power in terms of 
running that system. So you need to have a coordinated system 
from an operational point of view.
    But I do think that the coalition can play a very important 
role in Iraq in terms of strengthening local delivery and local 
institutions that deliver national goods. I think that 
coordination is very important. It was, as my colleagues here 
have previously said, a very centralized system. I think that 
in that sense to build up local capacity to enhance regional 
delivery of public goods is very important.
    That is all.
    [The prepared statement of Mr. Mohamedi follows:]

    Prepared Statement of Fareed Mohamedi, Senior Director, Country 
              Strategies Group, PFC Energy, Washington DC

                                option 1
Should the coalition do more to shift additional economic development 
resources and emphasis from Baghdad to the provinces?

    The issue of decentralization is a sensitive and potentially 
dangerous one. Given the fragility of the central government in Iraq--
bureaucratic disarray, financial shortages, and the lack of a coercive 
means to assert authority--and the centrifugal forces in the regions, 
an overt shift of emphasis and support by the coalition away from the 
center could have a disruptive effect at this point. This is 
particularly true in terms of the oil sector. Gaining control over 
local assets, which are part of a larger integrated whole, and attempts 
to then grab the revenue streams from crude oil, gas, and refined 
products sales and exports will become the objective of the regional 
governments or authorities. Once regional governments gain sufficient 
financial independence, a push for greater autonomy and eventually 
secession is quite possible.
    Short of this eventuality, an uncoordinated investment/development 
program, which gives regions priority over a national one, could lead 
to greater problems for the economy from an operational point of view. 
This, to a certain extent, already happened with the electricity sector 
when transmission lines leading from the south were cut off to ensure 
that the region had sufficient supplies. In order to rebalance the 
national electric power system, the coalition had to rebuild these 
lines at great expense. This is one example, but one could see the same 
problems in other infrastructure, transport, trade, and services areas. 
Without a national system, fragmentation and increased inequality will 
impair long-term growth and prevent recovery in the short term.

Will strengthening regional and local authorities outside Baghdad speed 
delivery of services and broaden the tangible benefits of aid? Are the 
recently formed Provincial Reconstruction Councils up and running and 
having a desired impact?

    Picking up on the point above, if the objective is long-term peace 
and stability in Iraq, then a national development program, which is 
produced by a democratic government at the center and administered by a 
national and regional bureaucracy, is essential. Beyond enhancing local 
security, an essential short-term and long-term goal for the coalition 
should be to build up the capacity of both the national and regional 
institutions in implementing economic development plans. Here the 
Provincial Reconstruction Councils could play a constructive role, 
especially if they enhance local capacity to carry out national plans, 
provide effective feedback and advise the center on local conditions. A 
dual role for national and local institutions in the development 
process will ensure national integration, economies of scale, be a 
check on local power monopolization and lessen the potential for 
corruption. It will also ensure the spread of best practices and reduce 
regional disparities.
    In this process of enhancing the capacity of both national and 
local institutions, the coalition and other aid donors should 
coordinate their efforts and play from the same score. An uncoordinated 
aid effort would have the same effect on Iraqi long-term development 
and short-term recovery as uncoordinated regional economic efforts.

                                OPTION 2

Should the coalition, in conjunction with the Iraqi Government, 
increase resources and emphasis on creating jobs and demonstrating 
tangible progress on the ground?

    A major increase in short-term funding for jobs programs, 
microcredit and small business development is highly advisable, 
particularly if it is done through national institutions (in 
coordination with regional/local institutions). Moreover, it must be 
done on an equitable basis across the country and targeted at the most 
needy groups. Emergency response funds distributed by the United States 
military have been effective in the absence of national and local 
institutions and should be continued and expanded. However, these must 
be portrayed for what they are: Short-term relief. Already the Iraqi 
State budget provides massive subsidies and income support to the Iraqi 
population, which is to some extent crowding out longer term 
investment. Short-term relief should not become long-term income 
support. That will lead to a sense of entitlement typical of most of 
the gulf countries surrounding Iraq.
    In the longer term, as a national development program takes off, 
contracting practices have to be improved to ensure a larger part of 
the reconstruction effort benefits local companies which employ Iraqis. 
Local content regulations also have to be implemented to achieve this 
objective. It is through local content requirements that the aid used 
to rebuild the infrastructure of the country will create backward 
linkages into the economy and enhance longer term employment, which the 
shorter term work programs and emergency funding get off the ground.

                                OPTION 3

Should the coalition put more emphasis on overcoming the twin curses of 
the oil sector: Corruption and sabotage?

    The twin curses of corruption and sabotage could result in further 
debilitating the only source of government revenue and, given the size 
of government expenditures in the national economy, it is virtually the 
largest source of private income as well. In the recent past, and in 
the short term, sabotage is the biggest problem the oil sector faces. 
It has prevented the use of the Ceyhan pipeline through Turkey and 
reduced exports by around 300,000-400,000 b/d from the northern oil 
fields. It is a constant threat to oil production and export facilities 
in the south. Through attacks on power infrastructure, feeder 
pipelines, and refineries themselves, sabotage has reduced the amount 
of refined products that can be supplied to the local market and 
imposed an additional burden on the treasury because of the need to 
import products from a tight regional and global oil/products market. 
Corruption has been a lesser problem but theft and misuse of resources 
have been contributors to supply disruption and the prevention of 
rebuilding the sector. Political interference in the sector, for 
reasons of financial gain or control over decisionmaking, has also been 
a big problem from time to time and has led to inappropriate personnel 
decisions and ultimately to hampering reconstruction efforts.
    In the long term, corruption could become a critical factor in the 
underdevelopment of the oil sector and the Iraqi Government. In fact, 
if oil sector corruption is not prevented, it will undermine the goal 
of building a democratic society in Iraqi. Iraq is the last huge oil 
frontier. This distinction is magnified by perceptions around the world 
that oil reserves are peaking, especially in those countries where 
private oil companies have easy access. Therefore, many private 
companies and consuming, country governments concerned about the 
scarcity of resources will be tempted to offer what ever it takes to 
secure resources in such a potentially prolific oil sector. The 
situation is equally desperate for the Iraqi political class. The need 
for resources, the ambiguity and uncertainty of power dynamics in the 
country and the need and temptation to use money to secure power to 
fill the vacuum created by the invasion has increased the receptivity 
of Iraqi officials to engage in corruption. The combination of factors 
makes it more likely than not that the development of the sector and 
the country will be distorted by this reality unless enormous efforts 
(some which we recommend below) are made to prevent it.
    Beyond these two sets of problems, another issue is emerging 
rapidly and could severely exacerbate problems in the oil sector and 
reduce revenues to the government. Due to sabotage, lack of funds, 
disorganization and physical aging of the oil fields, below-the-ground 
problems with lraq's oil fields are resulting in a stagnation of crude 
oil output and the potential for catastrophic declines in the near 
future. The Kirkuk oil field's production capacity has fallen to 
600,000 b/d from a prewar level of 700,000 b/d and could, under 
conservative estimates, collapse quite sharply to half the current 
capacity.
    In the south, 12 years of sanctions, combined with a lack of well 
workovers to maintain production post-invasion, have taken their toll. 
Foreign contractors report high water cuts, clogged well strings, and 
declining productivity per well. Iraqis are apparently using handmade 
shaped charges for reperforations, there is little, if any, functioning 
well instrumentation and there is no current seismic data or reservoir 
modeling work (although some foreign companies have attempted to begin 
work on the latter). Some wells have responded to recompletion work, 
but there is a real need for fracturing and acidizing techniques to be 
applied. The Oil Ministry has either been unable to organize such 
efforts or has pursued other priorities, and given security concerns in 
the relatively benign south, the cost and logistics of bringing in such 
large-scale operations may prove insurmountable. The result has been 
lower production, higher water cuts, and more lower quality Mishrif Pay 
output. According to reports, the quality of Basra light has declined 
from 32 API and 1.95 percent sulfur to 31.5 API and 2.7--2.8 percent 
sulfur.
    As production has declined at the workhorse Rumaila field, the 
Southern Oil Company, which is in charge of operations in the south, 
has sought to increase production at West Qurnah field to make up the 
difference. However, work delays there threaten production. Meanwhile, 
the water injection facilities (particularly Garmat Ali) that were 
meant to help restore production in Rumaila and elsewhere are running 
at only 55-60 percent of prewar capacity, causing further production 
and well losses. Bureaucratic impediments have also made it difficult 
to procure the chemicals and spare parts needed to operate revamped 
facilities.
    Even with the current high oil prices, the Iraqi Oil Ministry must 
find some way to efficiently spend its capital budget to sustain 
production capacity in the one area capable of more or less unhindered 
exports. The recent reshuffle of personnel by the Oil Minister Bahr al-
Uloum elevated less-experienced managers at the expense of seasoned 
technocrats. This has reduced the effectiveness of what little funds 
the government has. The result may be a greater reliance on foreign 
expertise. The Iraqi Drilling Company's recent announcement that it is 
seeking an international strategic partner should be seen in this 
light, and is likely to be a precedent followed by a number of other 
Oil Ministry companies.
    That said, relying on foreign expertise will necessitate improved 
security, even in the south. Security problems have slowed and undone 
some of the work already carried out by Western contractors and the 
U.S. Army Corps of Engineers after the invasion, and failing to improve 
the situation will hold back Western international oil companies with 
the necessary expertise and capital back going forward. However, 
coalition military forces are unlikely to protect the foreign oil 
workers and their sophisticated equipment, particularly in the south 
where U.K. forces are seeking an accelerated handover to Iraqi security 
forces. International oil companies, meanwhile, are likely to regard 
the cost of providing private security on the scale necessary as 
prohibitive, even if they were willing to take the risk with their 
personnel. Thus, the subsurface work necessary to prevent declining 
production will simply not get done fast enough in the medium term, if 
at all.
    The oil sector has four critical roles to play in the future 
development of the Iraqi economy.

   First, it will provide the revenues to support and later 
        revive what is now, essentially, a failed state. That will buy 
        Iraq time from a humanitarian and institutional point of view 
        to get its true economic development process going.
   Second, if done correctly with the appropriate local content 
        regulations, investment by the Iraqi National Oil Company 
        (INOC) to rebuild capacity to around 3-3.5 million b/d 
        (preinvasion capacity) and by international oil companies 
        (IOCs) to build new capacity beyond 3-3.5 million b/d in 
        conjunction with INOC could massively contribute to the local 
        economy. Creating strong ties between the oil and nonoil sector 
        is critical for employment generation, skills development and 
        in order to retain a greater part of the oil rents at home. Oil 
        and gas, as an industrial input, could also serve as an 
        important incentive to invest in Iraq, especially for energy-
        intensive industries such as petrochemicals, steel, aluminum, 
        and copper.
   Third, as Iraq seeks external investment to develop its huge 
        untapped oil reserves, foreign investors in the nonoil sector 
        will look at developments in the oil sector with great 
        interest. In the first case, they will view relations between 
        international oil companies and the government as an indicator 
        of how they will be treated and what investment conditions 
        could be like. Moreover, as foreign investment goes in, they 
        will view this as an expansion of the local market and be 
        interested in taking advantage of new economic opportunities.
   Fourth, the institutional development of the national oil 
        company into an efficient and dynamic business unit, could set 
        the pace for corporate development in the economy. Around the 
        world, national oil companies that have developed talent and 
        strategic prowess have become the domestic pacesetters and 
        transferred and spread these skills to other industries. As the 
        sector develops and matures, the national oil company could 
        also be the pacesetter in privatization programs. This is a 
        powerful signal to international capital markets that Iraq 
        would be open for business.

    Putting Iraq on this virtuous cycle of development--oil sector 
restoration leads to revenue increases which leads to infrastructure 
development and ultimately to the spawning of a self-generating private 
sector--will require effective political and institutional 
arrangements, security, and international initiatives to reduce 
corruption.
    For an effective institutional setup, two issues are critical.

   First, a political deal has to be struck between the 
        principal political parties so that an effective oil sector 
        development model can be chosen. An effective oil sector 
        development model includes several key ingredients including 
        high-level political and economic strategy coordination (in 
        order to answer the question ``what does Iraq want from its 
        oil/gas sector over time?''), operational autonomy for the NOC 
        (choosing best practices), transparency in contracting, access 
        to the best skills from the private sector and democratic 
        control over oil/gas receipts.
   Second, since the oil and gas assets are national assets, 
        are spread throughout the country and needed for national 
        development, national government control is essential for 
        optimal development of the sector. This will ensure national 
        unity (see above), seamless integration, rational sectoral 
        operations and enhance optimal long-term development potential. 
        Breaking the sector apart and managing it regionally will be 
        disastrous for Iraq as a political entity and lead to 
        increasing regional divergence, monopolization of revenues by 
        key groups for parochial purposes and ultimately lead to 
        greater instability.

    The design of the sector will determine the future viability of a 
democratic unified Iraq. If the sector is controlled by a few, it will 
serve the needs of a few. This was clearly apparent in the Saddam 
Hussain regime. Ensuring democratic control should not be mistaken for 
operational autonomy. National policies can be set by the central 
government in coordination with the regions and then the sector can 
follow these policies in the most effective manner. Breaking the 
operations up regionally would fracture the sector and possibly lead to 
local control which, in turn, would lead to political problems. 
Similarly, revenues should not be divided by region. This is the 
situation in Nigeria and has led to countless problems of regional 
competition for resources. But, as in Nigeria during the 1960s, oil 
producing regions should not be neglected to point where the region is 
compelled to violently gain control over, its part of the sector. 
Today, in Nigeria local groups extort money from private companies 
working in their regions. This is also a possibility in Iraq in the 
future. So a balance between meeting central and regional needs with 
effective democratic controls is essential for the optimal development 
of the sector and the political economy of Iraq.
    Security is the single biggest impediment to smooth operations of 
the Iraqi oil and gas sector and a huge blockage to further 
development. For the most part, the national oil company, the Oil 
Ministry, and local and national security forces have struggled to keep 
the sector operational with mixed success. More effective security in 
protecting pipelines, refineries and ports will require more, not less, 
support from the coalition forces and a larger presence of the Iraqi 
security personnel. A wider political resolution to the internal 
conflict will also be critical. At present the expectation in the 
sector is that there will be less coalition involvement in security of 
infrastructure and that the Iraqi forces will take some time to become 
fully effective. Moreover, there are fears that the violence against 
the oil and gas sector is moving south so there could be more 
disruptions in the larger of the oil producing regions of Iraq. Over 
the longer term, no foreign company will be willing to invest in Iraq 
without effective security. In fact, the fear is that the presence of 
foreign personnel will exacerbate the security situation if a long term 
political solution has not been struck.
    Preventing corruption is essential for the future development of 
the sector and for ensuring the Iraqi people gain the most from their 
national patrimony. One effective means of preventing the misuse of the 
sector for private or political gain would be to set up effective 
constitutional constraints and systems. The coalition could guide the 
various Iraqi political parties to ensure the constitutional provisions 
meet this requirement. Another effective means of preventing corruption 
would be to enlist the help of international companies, multilateral 
institutions and governments to come together to set up conventions to 
stanch it from the outside. There are a number of international 
transparency initiatives which could be subscribed to. However, a 
specific initiative, with Iraq in mind, could reduce the competitive 
pressures to indulge in corruption and greatly enhance the development 
process.

                                OPTION 4

Should the coalition and the Iraqi Government create a reliable set of 
indicators of when and where economic progress has been made?

    Improving public information is essential to improve the trust of 
the Iraqi people in the new government. However, the most important set 
of metrics that the Iraqi people are looking for are reduction in 
actual crime and political violence, improvement of physical deliveries 
of public services and jobs/income growth. An improvement in all three 
of these variables will have a marked improvement on public perceptions 
of the new government and its ability to deliver progress.

    The Chairman. Thank you very much, Mr. Mohamedi.
    Let us proceed to the second options, and I will ask you to 
give the first response after I have restated the options, Mr. 
Barton. Should the coalition, in conjunction with the Iraqi 
Government, increase resources and emphasis on creating jobs 
and demonstrating tangible progress on the ground? It has been 
suggested, for example, that a WPA-type program for trash 
cleanup, local repairs, and the like would let Iraqis see 
visible progress and make their daily lives more bearable, 
while putting money into the pockets of the unemployed.
    Would this strategy work? Could the coalition help the 
prospects for a functioning economy by encouraging shops and 
small businesses through microcredits, small grants, loans, and 
other programs? Should we increase the amount of emergency 
response funds distributed by U.S. military, especially in 
areas where the civilian economic and infrastructure is not yet 
in place?
    Mr. Barton. Senator Lugar, we are doing quite a lot in this 
area right now. Some of the estimates we have seen are up to 
200,000 people who are receiving some kind of daily job help.
    I have real reservations about this as having much promise. 
Generally, these jobs are very short term. They last up to 6 
weeks, maybe a little longer. They oftentimes are in repetitive 
functions that do not really build the capacity there in the 
country. They are centrally run, which means that they are slow 
to get going. So they have significant disadvantages.
    That does not mean that they could not work, but I think 
they have to address those inherent weaknesses that are 
usually--that usually come with the international model and the 
international assistance. So if we make them longer, if we make 
them tied to something that has a longer term value, then I 
think there is some promise there. But I do not think it is 
really anywhere near as attractive an alternative as finding 
existing enterprises and helping them grow.
    One of the problems in these post-conflict places is that 
the currents are very strong. So swimming against the tide is a 
difficult task and we are much better off if we can find 
anything that is going on and build upon it. As you mentioned 
in your comments, the telephone industry has had a fairly good 
period. Obviously, the television and the communications 
industry in general has been one of investment during this 
period of time.
    The markets tend to have quite a lot in them. There is a 
consumer expansion. The economy, as a whole, is growing by most 
estimates, so there are things going on. Finding those things 
that are going on and giving them the juice to grow more is a 
better way for us to spend our money and I think it will be 
faster as well.
    So, generally, what we are looking for as we look at the 
economy of these places is what is practical. To set up new 
structures and new programs when it is hard to get anything 
done and you cannot get a public official from one place to 
another just does not make a lot of sense.
    So that would be the last part of the argument, which is 
that we really need to widen the circle of trusted partners. We 
have done quite a good job, the new Iraqi Government and the 
international community, in identifying and building capacity 
in a lot of places. But we are going to have to have more 
confidence in their ability to deliver than we have up to now. 
Up to now it has been very much of a control model and 
generally in post-conflict places you are much better off if 
you are a shepherd, if you are just saying, we are going toward 
that wall, let us all try to go this way, as opposed to, come 
into my corral and I will take you over there. It is just not 
going to happen in Iraq right now, and for all the reasons that 
you know.
    Finally, the foreign responsibility here. I think our 
responsibility is to make sure that those funds are distributed 
fairly, that we watch for cronyism, we watch for regional 
favoritism, we watch for the things that will undermine the 
public confidence, which again there are abundant examples of, 
and in this kind of a rumor-filled environment they will travel 
much farther than they would necessarily in a place where you 
have some checks and where people feel that justice might be 
possible.
    The Chairman. Thank you very much, sir.
    Dr. Mohamedi.
    Mr. Mohamedi. I do believe that increasing the funding for 
jobs programs, microcredit, small business development, are a 
good idea. I think they would be done through national 
institutions. They should be done on an equitable basis. I 
think we should avoid this cronyism and giving the ability of 
certain local elites to create new patronage networks.
    However, I do not think that--these programs should be 
regarded as what they are, that is short-term relief, and not 
be left behind as a burden on the government budget. Already 
there is a huge subsidy component in the budget, a lot of 
relief. So I think that would leave a long-term legacy that we 
do not want really to do.
    I also think that nothing replaces good job creation and 
part of our aid program should start to really focus on 
contracting practices that enable local businesses, and 
particularly the issue of local content and local businesses 
providing to industries like the oil industry and gas industry, 
et cetera.
    From a longer point of view, a longer term point of view, I 
think one issue that should be brought up is the whole issue of 
foreign debt. I looked at the IMF figures the other day and, 
basically, the debt service for Iraq will be about $10 billion, 
which is the amount of the net financial requirements of the 
budget, basically, is $10 billion. So if you remove the debt 
payment they would not have to borrow.
    So it is, in a way, ironic that they will be borrowing $10 
billion every year just so their debt situation will stay the 
same. So I do not think that is a long-term sustainable 
situation.
    The Chairman. Thank you very much, sir.
    Dr. Crane.
    Dr. Crane. I concur with both my colleagues about the fact 
that make-work schemes are really a stopgap measure and often 
are of questionable utility, especially at this point in time. 
The real problem in Iraq is not unemployment; it is poverty. 
The only good survey of what is taking place in Iraq today, 
which was conducted through UNDP, found the unemployment rate 
at 10.1 percent by standard international levels. The problem 
in Iraq is that people are very--are very low productivity. It 
is a country very similar to those in the rest of the Middle 
East, where you have normal high male-labor-force 
participation, women in many ways excluded from the labor 
force, but most of these people work in the informal sector. 
They run small shops, they are day laborers. Their income 
depends on what they do, much like many other people in the 
United States who drive a truck or work construction.
    But, in the case of Iraq, the economic environment has been 
such that it is very difficult for people to prosper. So the 
big focus should not be on creating make-work jobs that, in 
many cases, destroy value and saddle the Iraqi Government with 
another very large government subsidy, but it is to really 
clear the way as much as possible to make it possible for these 
small businesses to prosper and grow.
    Looking at the question of targeted lending and microloans, 
microcredit has been successful in many parts of the world. It 
is expensive. There are no microcredit programs, to my 
knowledge, that really can fund completely the cost of 
collection and making loans. They are often supported by 
international financial institutions or donors. Nonetheless, 
they are a good way to transfer money.
    However, it is often a case of quality as opposed to 
quantity. Badly run programs which do not make borrowers adhere 
to repaying the debt, that kind of dole-out money without 
looking at the different projects, can actually lead to be 
counterproductive.
    This condition is even more important in terms of targeted 
lending to small- and medium-sized businesses. The Iraqi 
financial industry is in its infancy. It is very 
underdeveloped. What we have seen in other transition economies 
is that if there is a big push to make loans without regard to 
creditworthiness, to push money through the system at this 
point in time, 3 to 4 years down the road Iraq will have a 
banking crisis as these loans are not repaid and the economy 
will go into recession.
    At this point in time, the growth in Iraq is really driven 
by these small businesses, sole proprietorships, and they fund 
their own development out of their own credit.
    Finally, I would like to say a few things about CERP 
programs. This is going to be a politically unpopular 
statement. They have been very popular with commanders. I think 
in small doses they have been quite effective. As I understand 
it, currently $3 billion have been allocated to CERP programs. 
I could be wrong, but it is a very large sum of money.
    Our commanders are busy fighting a war in Iraq. They are 
not development specialists. They are not individuals who are 
really trained or have the time to look at investments in terms 
of water, electric power, sewage. Many commanders have done a 
wonderful job there, but this is--in this case, less is 
probably more. This is in my view too large of a sum of money 
and this money should be really targeted through our other 
assistance programs, like USAID or PCO, through the Iraqi 
Government. Commanders have other things to do with their time 
rather than run development programs.
    The Chairman. Well, thank you very much, Dr. Crane.
    These first two sets of issues, as you all perceived as 
witnesses with Senators listening to you, try to address 
comments coming to our committee in the past about 
centralization as opposed to decentralization. How do you move 
it out of Baghdad and should you do so in the first place? As 
Dr. Mohamedi has pointed out with regard to the oil wells, you 
have a big distribution problem, given the fact that we are 
trying to get people to think as Iraqis.
    These are issues that keep swirling about. I appreciate 
what you have brought to the discussion. Likewise the WPA idea. 
We had a crisis in our country back in the thirties. Many 
people point out that one way of getting at it is to get some 
visible results, to have people out there with money. Yet, at 
the same time, as you have pointed out, some of the 
consequences of this, including the $10 billion of debt service 
of the past, would be a lot of debt service for the future.
    So that the visible results, real jobs, real 
sustainability, and in the midst of it, the security problems. 
So it's all well and good for us to be talking about 
decentralization as if this was a normal affair, when all of 
you have been on the ground and know that it is not. But I 
appreciate that discussion.
    Now, let me break before we address the third issue, which 
will address the oil business, to recognize the distinguished 
ranking member, Senator Biden, for his opening comments.

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

    Senator Biden. Mr. Chairman, I would ask unanimous consent 
that my comments be placed in the record as if read.
    The Chairman. They will be placed in full.
    Senator Biden. And by way of explanation, I was down in the 
Judiciary Committee guarding the bill I have cosponsored, that 
you and Senator Dodd have introduced, the shield law for the 
press, and that is why I was not here on time. I am not sure 
how good a job I did. The best part was I did not speak at all, 
so maybe there is a chance. [Laughter.]
    [The prepared statement of Senator Biden follows:]

 Prepared Statement of Joseph R. Biden, Jr., U.S. Senator from Delaware

    Thank you, Mr. Chairman.
    I think that it is fair to say that the reconstruction program in 
Iraq has been a disaster.
    Of the $18.4 billion that Congress appropriated at the urgent 
request of the President in the fall of 2003, just $7 billion has been 
spent.
    And well over half of that has been spent either directly on 
building Iraqi security forces or on security-related costs for 
reconstruction projects.
    We have repeatedly missed deadlines for increasing power and oil 
production. As temperatures approach 120 degrees, Iraqis still have 
only about 8 hours of electricity a day. Almost half don't have regular 
access to clean water. And most estimates place unemployment at about 
40 to 50 percent.
    General Webster, the commander of the Third Infantry Division, 
talks about the need to clean up what he calls the ``Green lawns and 
Green streets'' of Baghdad. Green is the color of raw sewage as seen 
from the air.
    For anyone who doesn't think there is a direct correlation between 
the living conditions and job prospects for ordinary Iraqis and their 
support for the insurgency, spend 5 minutes with any of our military 
commanders.
    They will tell you that long power outages, reconstruction delays, 
factories standing idle, and jobless young men all contribute to the 
steady supply of recruits to fill the ranks of the insurgency.
    I look forward to hearing the ideas that our witnesses will 
present. I believe that we need to do four important things.
    First, we must establish realistic goals and make clear what we're 
doing to overcome the shortfalls.
    For example, the goal was to generate 6,000 megawatts of 
electricity in Iraq by last summer. Today, we're at just over 4,000 
megawatts. But demand is nearly twice that and we've scaled back our 
goal to 5,500 megawatts by December.
    The administration said oil would pay for Iraq's recovery. Yet Iraq 
is still falling some 750,000 barrels a day short of the target of 3 
million per day. At current prices, that's a shortfall of $10 billion a 
year.
    Second, we must have accurate measures of the delivery of essential 
services if we want to know what difference reconstruction is making.
    Third, we must focus resources on smaller projects that make an 
impact in the lives of ordinary Iraqis.
    Most Iraqis are simply looking for an improvement in their standard 
of living, not state-of-the-art infrastructure.
    A general in Iraq told me that instead of building a tertiary 
sewage treatment plant, we should be running PCV pipe from people's 
backdoors to the river so they don't walk out their front doors into 3 
feet of sewage.
    In parallel, we should increase the amount of reconstruction funds 
given directly to U.S. military commanders--one of the few success 
stories in reconstruction. I've seen for myself the difference these 
funds make in giving our commanders a weapon to make Iraqis happier and 
our troops safer.
    Fourth, we have to develop the capacity of Iraqi Ministries.
    This is the third Iraqi Government in less than 2 years, and there 
could be a fourth by the end of the year. We know the difficulty of 
transitions between administrations every 4 years. Imagine the 
challenge in Iraq when the management team of a barely functional 
government changes every few months.
    We have to help the government deal with rising corruption, which 
is badly eroding public confidence.
    And we must press our allies to help train Iraqi personnel. The 
British have proposed partnering individual countries with a cluster of 
Iraqi Ministries. We should follow up on this idea.
    There is a direct correlation between Iraqis supporting their 
government and children going to school, men and women going to jobs, 
sick people having a doctor, families getting the electricity they need 
to stay cool, and police protecting citizens from robberies and 
kidnapping.
    In short, if the economy and reconstruction don't succeed, it's 
difficult to imagine the insurgency being defeated.
    I look forward to the testimony.

    The Chairman. We appreciate your endorsement.
    Senator Dodd. Senator Lugar, Senator Murkowski, and Senator 
Hagel may make additional comments on that.
    The Chairman. That will come later in the hearing.
    All right, let us move on to the third set. Should the 
coalition put more emphasis on overcoming the twin curses of 
the oil sector, namely corruption and sabotage, right now? Can 
the coalition work with the Iraqi Ministries to develop and 
fund a full-scope program to enhance security of oil production 
and distribution infrastructure, and also at the same time 
combat corruption in the oil industry?
    Should the coalition and the Iraqis develop emergency 
pipeline repair teams, work with local tribes to protect 
pipelines, offer incentives or rewards for those who turn in 
corrupt industry personnel?
    Within the oil sector, where is the corruption problem 
greatest? Would oil resources be more productively used for the 
benefit of the Iraqi people if they were managed regionally 
instead of by the central government?
    I will ask you to start on this issue, to which you have 
given a great deal of thought and scholarship, Mr. Mohamedi.
    Mr. Mohamedi. Thank you.
    I think that the twin curses of corruption and sabotage are 
very much with us and are going to continue to play, at least 
in the short to medium term, unless we do something about the 
security issue. I mean, that is the primary problem right now; 
short-term problem. It has debilitated the pipeline, export 
pipeline to Turkey, which has reduced the amount that the 
northern fields can produce, and, in fact, cut production by 
something like 3 to 400,000 barrels a day.
    Attacks on power plants and feeder pipelines, refineries, 
all then lead to shortages of product, refined product, which 
then adds to the burden on the treasury because you have to 
import this product.
    The corruption issue has been, to a certain extent, a 
lesser but still a very important issue in terms of diversion 
of supplies and diversion of products, as you mentioned earlier 
on. But I think the corruption issue will be a very critical 
factor in the future as the sector is further developed, as 
foreign companies come in.
    We are at a very pivotal point right now when it comes to 
the Iraqi oil sector and in terms of the world oil industry. 
You have very few new places to go to for international oil 
companies and there is a sense out there, as China comes on the 
market, as India comes on the market, that there are going to 
be insufficient resources. At this particular critical point of 
peak oil and energy insecurity, you have this huge sector 
coming on line. So there is enormous potential for graft and 
bribery and corruption to take place.
    So there is an enormous demand from the outside, and then 
on the inside there is an enormous need for money. The two 
create the perfect conditions for some pretty rotten stuff.
    Beyond this, I would like to say a couple of things on the 
short run, that you have got a potential for catastrophic 
declines in the northern oil fields because of insufficient 
work that has been done by the Ministry and because of the lack 
of security the foreign contractors could not get in there and 
do some of the work. And you have got aging problems in the 
southern fields, which are starting to now push production down 
to something like 1.5, 1.8 million barrels a day in the south.
    The combination is we are seeing production stagnate at 
around under--around 2 million barrels a day or under. And if 
there is this catastrophic decline in the north, you could see 
production falling in the future, which will really hurt your 
revenue streams.
    Beyond this and back to the longer term in terms of 
structuring the sector, I think that if you do not get the 
sector, the sector of the structure right, in my opinion you 
will not get the future politics of Iraq right, because if you 
have someone capture the sector he will turn it into, he or she 
will turn it into a private preserve for themselves and then go 
back to the old system of patronage, the old political economy 
that was there.
    Oil has to be in a sense very much--both the sector and the 
revenues from it have to be very democratically controlled. 
Having said that, I think it is important not to miss out on 
the opportunity to give the sector a certain operational 
autonomy. So strategy is controlled by democratic forces, 
institutions, but the operations are done by the sector itself.
    One last point on the corruption issue. We have thought 
that the U.S. Government and others should embark on an 
initiative to bring international oil companies, multilateral 
institutions, governments together to sign onto an 
anticorruption initiative and to create transparency--means to 
create transparency, so that you do not have the use of 
corruption to access the sector.
    The Chairman. Thank you very much, sir.
    Dr. Crane.
    Dr. Crane. Corruption is primarily a problem of 
opportunity. In any society, if you do not have proper controls 
or proper incentives, unfortunately, corruption rears its head. 
In the case of Iraq, the major largest source of corruption has 
to do with controlled prices of gasoline and diesel fuel. 
Gasoline and diesel fuel go for a nickel in Iraq. You can walk 
across the border and sell it for five bucks a gallon. With 
these types of opportunities or incentives facing people, 
people obviously become corrupt.
    The second largest source of corruption in Iraq has to do 
with government contracting. Here again, the question here is 
in terms of opportunity. Whenever you have transparency, open 
competitive contracting systems, it becomes much more difficult 
to engage in corruption.
    Finally, a third source of corruption, not as large as the 
others, has to do with the employment of ghost workers or 
garnishing individuals' wages. When I was in Iraq we had a riot 
by police as their commanders attempted to take 25 to 30 
percent of their wages.
    It is really impossible to overemphasize the importance of 
liberalizing gasoline and diesel fuel prices for the health of 
the Iraqi polity and economy. It is a question not only of 
corruption; it is really of the ability of the economy to grow. 
I have followed 40, 50 economies in my life, especially when I 
was in the private sector. I have never seen a more distorted 
economy than Iraq's and this is fundamentally due to refined 
oil product prices.
    The cost of these subsidies is extraordinary. They run $7 
billion a year. Our entire aid program to Iraq, in the course 
of 3 years, is going to be less than is being currently wasted 
on subsidies.
    These subsidies do nothing, or very little, to alleviate 
poverty. Most of the subsidy goes to, in the case of diesel 
fuel, industrial manufacturers, people running generators, 
Turkish truckers, Kuwaiti truckers. In the case of gasoline, 
car ownership in Iraq is heavily concentrated in the upper 
income levels. Very few of the bottom income levels in Iraq 
could even afford, even think about affording a car. We did 
some work at CPA; 80 percent of the $7 billion goes into diesel 
and gasoline.
    The reluctance to liberalize prices has often been stated 
because they see it as a security concern. Although not 
politically popular, it is hard for me to see that the security 
concern--that security could be worse trying to guard lines of 
irate motorists, day in and day out, who wait 24 hours in order 
to fill up in 120-degree weather.
    We have had a number of instances where prices have been 
liberalized. Hundreds of times throughout the world, people, 
governments, have had to raise these prices. In fact, when I 
was in Baghdad we had a number of Finance Ministers from the 
former Soviet Republics in Central and Eastern Europe came in 
and said how they did it. It is important to discuss this with 
the population, prepare them well in advance, explain where the 
additional revenues will flow, and make sure that the public is 
well aware, and make sure that every motorist can get his last 
cheap tankful of gas before prices go up.
    But nonetheless, the government really needs to follow 
through with this. It is true that some very weak, very 
politically unpopular, dictatorial governments have confronted 
riots when they have raised prices. These are in very specific 
situations and usually result from surprise increases, in which 
case the population has not been forewarned or in which there 
had been no public discussion.
    Turning briefly to sabotage. Sabotage in the oil industry 
is not just a problem of insurgency. Many Iraqis tap product 
pipelines for gasoline and diesel to steal fuel for resale. A 
number of tribes actually sabotage crude oil pipelines so they 
can blackmail the government into paying them to guard the same 
pipelines that they have just damaged. And in many cases 
insurgents attack the pipelines.
    All of these are problems. However, the provision of 
security for the oil industry is really a responsibility of the 
Ministry of Oil and the security Ministries. Again, I have 
never seen such a distorted, inefficient arrangement in terms 
of--centralized arrangement in terms of running the oil 
industry, as I have in Iraq.
    I agree with my colleague, there needs to be a 
decentralization of control, incentives for managers in the 
national oil company to run their operations correctly. I will 
guarantee that, given the correct economic incentives and 
decentralization of control, the managers of the national oil 
company of Iraq will take a much, much more concerted and much 
more focused effort in order to guard their pipelines, guard 
their assets, than they currently do, if the government would 
try to create a modern, state-owned oil company.
    The Chairman. Thank you, Dr. Cramer.
    Mr. Barton.
    Mr. Barton. I would like to answer yes to your larger 
question: Yes, that we do need to put more emphasis on this, 
because this has to work. If the oil does not work in Iraq, it 
is really difficult to have much of a discussion about an 
economy in Iraq.
    But I do think that this is also another issue that needs a 
larger galvanizing idea. You have heard from my colleagues the 
number of things that have to be done right to get to a point 
where we are going to be better off, and to do all those things 
in the best of circumstances is extraordinarily unlikely.
    So my hope here is that we go for a larger, galvanizing 
idea. What I would suggest is that we, obviously, have to get 
people--get the people of Iraq on the side of greater 
production, so you do not have what was just being described as 
tribes holding the government hostage, but maybe the individual 
members of the tribe questioning whether that is a good idea.
    I do not believe that we should see the fragmenting of 
production. But the heart of this is wealth-sharing. That 
wealth-sharing argument is going to compound the difficulties 
of the constitutional process. It has not been resolved. It has 
not been addressed directly, and I would suggest that a good 
wealth-sharing model might be one that gives one-third of the 
revenues to the central government, one-third of the revenues 
to the governants, and one-third of the revenues to the people.
    I think it will have a political beauty to it as well as a 
practical value of getting most of the public on the side of 
increasing production, which is ultimately where our interests 
coincide. The United States interests and the interests of the 
Iraqi people have to be closely aligned if we are going to see 
the value.
    If that sounds too rich--and that is one of the arguments 
that people will make against this, that, oh, we cannot afford 
it, the Iraqi Government cannot afford it, it is impossible, 
they can barely make do with what they have right now--I would 
suggest that what we might do is we start with a focus, and the 
focus could be consistent with this counterinsurgency economic 
strategy that I am suggesting, and that is focus on the youth 
market, and perhaps just bite off a piece of the population at 
large, the 40 percent of people who are under 18, the 10 
million or so young people who have been undereducated over the 
last 20 years, and set up personal education accounts for them.
    It is not hard to do. An example would be $500 per Iraqi 
under 18 for education. That would capitalize--that would cost 
about $5 billion to set up and on a renewing basis it would be 
virtually nothing. That would be--that would also have the 
additional benefits--and this is one of the ideas that we 
really have to keep in mind, as we are looking at these post-
conflict countries is, whenever you do anything, you have to 
make sure that it has two or three benefits, because you do not 
have the time to just do one-offs.
    What we see in these post-conflict countries is 100 
successful projects and somehow one signal failure. That is 
exactly what is going on. If you read the reports on all the 
successful things that we are doing, the country is going south 
and yet all the projects are going north. How does that work?
    So, in this particular issue, the beauty of setting up 
these kinds of accounts is that you capitalize the banking 
system and the financial services, if you can call it that, in 
this country at the same time. You essentially provide money 
for other economic activities, such as local loans, which again 
is something you have to do because it is not going to come 
from the center. You are just not going to get--you do not have 
the infrastructure or the opportunity with the insurgency to 
get out there.
    Again, would the international community consider front-
loading such an idea if there is, in fact, a period where we 
need until 2010 to get the production, the oil production, up 
to the point where it will produce these kinds of assets? I 
suspect that would be necessary. I think that is not a big 
price to pay in light of what it is costing us per month to be 
there right now.
    I think it would also give us the opportunity for greater 
management oversight and greater transparency, which in the 
transition is a pretty good idea and a good place for us to 
spend our time.
    The Chairman. Thank you very much, Mr. Barton. I know that 
idea will form a part of our discussion as members ask 
questions.
    Let me proceed to our final set of thoughts: Should the 
coalition and the Iraqi Government create a reliable set of 
indicators of when and where economic progress has been made? 
If the coalition or the Iraqi Government publish regular 
updates on such figures as hours of electricity generated per 
day, gallons of fresh water supplied, numbers of beds in 
working hospitals, children in school, economic activity 
generally, oil production specifically, unemployment, incidents 
of violence for various cities and regions, could this 
successfully demonstrate progress to the Iraqis and, likewise, 
to Americans who are watching all these areas and wanting to 
know how much success is being obtained?
    Which figures would be the most useful, and could such 
statistics be created free from political influence and would 
they be seen as credible?
    Dr. Crane, would you have a go at that?
    Dr. Crane. Statistics are important, obviously, and, in 
fact, the collection and dissemination of timely, accurate 
statistics is a government function throughout the world. Iraq 
is no exception. However, I think, sometimes in the past 2 
years that we have neglected the fact that we have, again, 
attempted to do an end run around the proper collection of 
statistics.
    Iraq has a very large statistical office. It is called 
COSIT, or the Central Organization for Statistics and 
Information Technology. The directors have graduate degrees in 
statistics. Unfortunately, they have not had proper incentives 
over the past 2 years to really issue those statistics and 
collect statistics in a rapid, timely manner. They have, in 
some sense, seen it more in their interest to withhold 
information, to delay the release of information, than to 
provide it quickly and accurately.
    Consequently, our real focus there is not for us to go 
ahead and try to create our own statistical collection 
techniques outside of the Iraqi Government, because we are 
going to leave some day. What we need to do is, again, focus on 
creating incentives within the bureaucracy, through bonuses and 
financial penalties coupled with performance audits, to improve 
the quality, quantity, and timeliness of the statistics 
collected by COSIT.
    If any of your staff have an opportunity to look at this 
new study that came out by UNDP, it is really quite amazing 
what they have done, and COSIT did this study. They, of course, 
were paid by outsiders in order to do it, but it is the only 
good view of what the economic and living standards are in Iraq 
today.
    In my view, a number of the economic indicators, on which 
the United States Government has focused, would not sway public 
opinion and are really not very helpful for evaluating economic 
and political progress in Iraq. In some instances, I think the 
indicators have had counterproductive effects.
    I think, for example, the focus on spending assistance 
quickly has contributed to waste without any noticeable effect 
on Iraqi public opinion. I remember when the supplemental was 
passed I kind of hit my head and said the size of this 
supplemental is equal to the total GDP of Iraq. If you could 
imagine pumping $11 trillion into the U.S. economy in 1 year 
and then withdrawing that the next year, the economic 
dislocations are extraordinary. So many times slower is better.
    I also note the focus on the jobs created by infrastructure 
projects really does not make a lot of sense. The 
infrastructure projects are designed to create, to provide 
electricity, water. They are really not designed to make work 
for short-term job gains.
    I also think, sometimes, Congress should think carefully 
about its own demands for statistics and evaluations. Some of 
my colleagues in the government have been requested to attempt 
to link things like refurbishment of schools with decline in 
what is happening in the insurgency or increases in education. 
You cannot do that in any country. There just is not the type 
of linkages between having a painted wall and how children 
perform in school.
    I think what is important, what Congress could really do, 
is request much more detailed strategies of how particular 
assistance programs are going to help the Iraqi Government 
improve its abilities. This is one thing I still find sadly 
lacking in terms of our own assistance programs. What is it 
that we are trying to do? What is the strategy?
    Maybe, unsurprisingly, I think opinion polls find that the 
Iraqis have a pretty good handle on their own economic 
situation. In fact, it is the one area in which Iraqis are 
fairly optimistic.
    Where the message is not getting through is not in terms of 
how many megawatt hours of electricity are being generated each 
month or oil production or oil exports. The messages not 
getting through to Iraqis are twofold: One, that the United 
States Government is in Iraq to help the Iraqi Government get 
on its feet and will then leave. It is surprising the number of 
Iraqis think that we want to be there permanently. This is much 
more important than any of this economic information.
    Second, a message, that I think we have downplayed but 
really need to get through, is that the reconstruction of Iraq 
is the responsibility of the Iraqi people. It is not our 
country, it is their country. We are going to give them a leg 
up to get going, but the United States is not going to operate 
and pay for electric power, water, and utilities going forward. 
The Iraqis are going to have to pay for those services 
themselves, and I think the sooner that we make this clear in 
our own assistance programs I think the better off we will all 
be.
    The Chairman. Mr. Barton.
    Mr. Barton. Thank you. I certainly want to second much of 
what Keith said and will not repeat that.
    We spent quite a lot of time on measuring progress. We 
produced a report last year and a followup that was called 
``Progress or Peril'' and it tried to develop a more integrated 
model, because we realized that the way people live their lives 
is not based on one indicator or even a handful of indicators. 
It tends to be a series of indicators across security, economic 
and social well-being, justice and reconciliation, and 
participation, political participation.
    We found that we could also do some of the work that Keith 
was describing by hiring local Iraqis and we did, in fact, do 
our survey by hiring seven Iraqis to travel around the country, 
because we knew we could not. We could not even get the 
Canadian diplomat, who we had engaged to train the Iraqis, into 
the country for several weeks and finally had to do it up in 
the north.
    But when they did get out and spoke to several hundred of 
their fellow countrymen, they found that there was a surprising 
level of optimism, based on Iraqis knowing that they had some 
wealth and the fact that they were looking ahead. I doubt that 
if we went there today, that we would see quite the same sort 
of feeling.
    But, nevertheless, measuring progress we believe is 
absolutely critical. It is not done in most of these post-
conflict settings. If we went in today to Haiti, for example, 
people would wonder where on the track we are. We always seem 
to be running around in circles and people say, have we not 
done this before? And there is an awful lot about Iraq that is 
taking that form and shape as well, right now.
    So the advantage of measuring progress is, at the very 
least, you have a baseline. So if you know where you started 
and you are going in the right direction, then you can see 
whether you are making progress. Right now what we have is a 
series of measurements that say how much we have spent, how 
many projects we have completed, and those are basically inputs 
and outputs and they have very little to say about impact or 
whether people--the outcome of this spending or these efforts 
really matter. So we would emphasize those particular elements 
of any measure of progress.
    On the second part of this, which is sort of what to do 
with the information, we found in Iraq that the people are very 
hungry for information. They are starved for information. They 
have come out of a period where virtually nothing was 
trustworthy. What could you believe? So, consequently, seeing 
tends to be believing.
    But it is also a marketplace where they are hungry 
consumers and so we have to increase the kinds of information, 
the channels of information. It gets back to something we spoke 
about here 2 years ago, which is how could we go into a 
communications situation like this and set up one television 
network, when we should have said, how about 27 television 
networks? Why would we only have one $50 million contract to 
one operator that had never done it before, when there is a 
huge country and a huge need and for $500 million we could have 
been the tidal wave of Iraqi information?
    We missed that option. Still have to do that. There is 
still that need to explain everything we are doing. We can help 
the government, as Keith suggested. I think it makes sense for 
the government to have the capacity to do some of these 
measures and what-not. But obviously the people need this 
information to make wise choices. They need knowledge about 
where we think there may be instability that particular day. 
They need to know how much electricity they are going to have.
    How could you possibly plan your life under the 
circumstances that you have right now? How hard is that to do? 
We have a traffic report every single day as we drive into 
this, or if there is a train-line problem or whatever. All of 
that information is available to us readily.
    Senator Biden. Why are you looking at me when you say 
``train''? [Laughter.]
    Mr. Barton. We have that kind of option. But I do not see 
that being part of our thinking.
    Again, we are working with a group of people, political 
leaders, who have essentially one model that they know. It is a 
state-centered model and they are not in this exploding 
consumer marketplace that has to be addressed. So it is again 
putting the people first and figuring out what they need. 
Information is at the heart of making wise choices. We cannot 
possibly deliver the wise choices for people on an individual 
basis. This is the only way to do it as far as I am concerned.
    So finally, the last thing I would like to say is that if 
we do kind of trust the marketplace more--however you want to 
categorize it, because you can say this from the left or the 
right; it is essentially the same idea--we have to be 
prepared--and this is really, I think, your responsibility--to 
not punish the results of this, because the results are going 
to be like they are everywhere else. It is going to look a lot 
like a bell curve and 20 percent of it is going to be 
successful and 20 percent of it is going to be abject failures, 
and in the middle, what we are trying to do in Iraq, as we are 
trying in every post-conflict place, is to get the middle to 
lean toward the success quite a bit more. Right now the middle 
is leaning toward the failing side.
    But those 20 percent of failures, which we are going to 
have, we cannot spend all of our time worrying about the fact 
that there is some lost money, some misdirected programming, 
that somebody ran off to London or whatever it happened to be, 
because from my way of thinking in these cases it is not as if 
every bomb that we drop is a smart bomb. They may be called 
that, but they do not always hit the right targets, as we well 
know. It is the same in these kinds of cases. There is an awful 
lot of loss and inefficiency. But what we are trying to do is 
to juice up this marketplace and get it going, and I believe 
that getting this kind of information, these sorts of measures, 
and a much-expanded communications will help with that.
    The Chairman. I would just observe, Mr. Barton, this is 
almost like a keynote address for our hearing. The need for 
information in Iraq and in this country is just enormous. As 
pointed out, you testified and others did a year ago, 2 years 
ago, and we are still working at this. But this is one reason 
for having these sets of hearings, because I think maybe my 
staff is hiding these reports from me so I do not know what is 
going on in Iraq and, therefore, have an irrational urge to ask 
all of you to penetrate the gloom and work through the details.
    But I suppose there is, in fact, more information. You have 
mentioned, Dr. Crane, that Iraqis themselves are turning out 
some statistics, and that is sort of a new idea for me today. 
Others may understand all that goes on in Iraq now, these 
people collecting this information. But at the same time, what 
meaning it has to anybody, or your reports from your 
foundation, is an extremely important question. How do you 
ensure distribution?
    So I would just encourage each of you, as you have new 
reports, please just send one directly to me and to Senator 
Biden, because we would like to know, and my guess is, so would 
the other members of our committee.
    With that anecdotal reflection, Mr. Mohamedi, would you 
observe your thoughts on this?
    Mr. Mohamedi. I really do not have much to add to my 
colleagues here, who have done an outstanding job of answering 
this question. I think, basically, to reiterate, the metrics 
that the Iraqi people are interested in are reduction in actual 
crime and political violence, improvement in physical 
deliveries of public services, and jobs and income growth. I 
think that is what they are really looking for.
    I think our role also should be in a sense, to communicate 
sort of in a sense, a meaning of life issue and not concentrate 
so much on leaky faucets, in the sense that we are there to 
provide fairness and reconciliation and ultimately the right 
conditions for a better future. I think that we missed in 
providing that message right after the occupation because of 
the mishandling in general of the occupation.
    The Chairman. Thank you very much.
    We will proceed, now, to questions of committee members. We 
will have a 10-minute round and, perhaps, an additional one as 
members may require that in questions to be asked of any member 
of the panel.
    I will begin my 10 minutes. After the constitution and the 
election of the officials, a government exists. There is a 
budget for this government now. It is not well-known to any of 
us, although I suppose, once again, if we did greater research 
we could try to find out what the anticipated revenues and 
expenditures are. One of the thoughts generally, around the 
world, is that the oil revenue will be a large component of 
governmental revenue, whether it be at the central government 
or the provincial governments; and furthermore, that that is a 
pretty good thing as far as the Iraqis are concerned, given the 
price of oil increasing.
    Without getting into a market forecast, there are many who 
would say that there are many governments around the world 
right now that may very well profit from $60 a barrel or $70 or 
$80 as the case may be. Certainly the Iraqis could, if, in 
fact, they have the oil to sell, the sabotage does not occur, 
the maintenance occurs, and, in fact, there is a fairly good 
transparency, with the checks and balances of democracy, as 
some of you have pointed out, so that somehow revenues aid all 
of the people.
    I would just ask, parenthetically, what other sources of 
revenue are likely to be useful? Are the concepts of 
corporation taxes, income taxes, and sales taxes part of the 
ethos of the country? Granted they are going to be passing 
their tax bills, with whatever advice we might give as to what 
system it might be. But I am just trying to think, how does 
this government pay for itself, and then deal with the $10 
billion debt service that you mentioned overhangs all of this 
from the past?
    We have raised, from time to time around the country, the 
question of how debt reduction is going, debt forgiveness? Have 
we forgotten all about that? Have people given up compassion at 
this stage, and are they sort of stuck with that, so that as we 
pass on and they have to run it themselves, they are left with 
this situation?
    Finally, I would just ask for any of you to comment, if you 
have not had a chance to, on the suggestion that Mr. Barton 
made, this extraordinary idea of wealth-sharing of the oil 
revenue. Other countries have thought about this. Norway, for 
example, has had a far-sighted program, understanding the oil 
may not be there forever and it is a national heritage. Mention 
has been made of our own State of Alaska. Senator Murkowski 
touched upon this.
    You suggested, Mr. Barton, the perhaps extraordinary idea 
of personal accounts for those 18 years and younger, who are 40 
percent of the population. It is an intriguing idea. It may not 
be a part of the Iraqi ethos, as they take a look at the 
situation. It may be a bridge too far, even if it might be good 
advice from ourselves.
    But discuss, all of you, how is the country going to pay 
for itself down the trail and retire whatever debt is left over 
that we have not thought about? Will oil do it in one form or 
another, or what else is going to be required?
    Would you start with this, Dr. Crane? Would you have a go 
at it?
    Dr. Crane. There has been an Iraqi budget for 2004 and a 
2005 budget. They are actually working on a 2006 budget. 
Unfortunately, last year the budget deficit was 46 percent of 
GDP.
    The Chairman. 46 percent?
    Dr. Crane. 46 percent. We think ours is large.
    The Chairman. Yes.
    Dr. Crane. And this year it is upward in the 20 percent. 
This has been financed, of course, by programs that we have 
provided and was also financed by some of the Oil-for-Food 
moneys that were available through New York.
    The budget, 90 percent and upward of budget revenues come 
from oil exports.
    The Chairman. 90 percent?
    Dr. Crane. 90 percent. And it is moving upward to 98 
percent.
    In addition to that, there is a 5-percent tariff that has 
been imposed and there are some few other little taxes that go. 
But it is primarily oil that provides, covers the budget costs.
    This gets into, I guess, two questions. There has been some 
pushes--there is an income tax that hits some people and a 
corporate income tax as well, which is not collected. It is 
just for joint stock companies and, as we said before, most 
people work for themselves.
    One of the problems of trying to impose or create a modern 
tax system on a country like Iraq is, it creates enormous 
opportunities for corruption. In the former Soviet Republics, 
where I have worked quite a bit, customs agents are thieves, 
and people who go into the business are in it for the bribes.
    So, at least for the next 3 or 4 years, it makes a lot more 
sense to keep the fiscal side based on oil revenues just to 
prevent the creation of a typical Middle Eastern bureaucracy, 
which is out there to destroy business, to hold people up, to 
subvert the process of commerce. In fact, even today if you go 
up to Dohuk--when I was there we had trucks lined up 4 days on 
the border. They would go through seven individuals, drinking 
tea, who were waiting for bribes to let them through. As 
anybody who knows anything about trucking knows, to have your 
truck driver sitting there for 4 days on the border is 
extraordinarily expensive.
    So part of the problem I have with using oil funds or 
having an allocation to the Iraqi people is that that money is 
already bespoken for. In fact, there is not enough there, and 
the Iraqi Government has pretty optimistic views of what the 
donor community is going to be doing in 2006, 2007, 2008, to 
cover planned budget deficits.
    In addition, this year, in terms of the budget, we have 
seen a dramatic bumping up in terms of the number of 
individuals who are employed by the government and at the same 
time less expenditures on the capital side. So despite the high 
oil prices, also a great deal of this oil revenue has gone 
missing.
    Turning to your question about debt forgiveness, Iraq just 
has not been servicing its debt. So, although, maybe they owe 
$10 billion, they have not been paying it. In the IMF agreement 
of last year, the Paris Club group has forgiven much of the 
debt contingent on the Iraqis adhering to that agreement. They 
have not so far. They are already out of compliance, and again 
this goes back to these very, very large, $7 billion, an 
extraordinary amount of money, which is wasted on refined oil 
product subsidies.
    The Chairman. Well, let me just say just in capsule now, a 
46-percent deficit and that is essentially being paid for by 
our money plus a little bit of other international. So, at the 
time we withdraw militarily--and we may be withdrawing 
monetarily--now, you are saying they sort of understand that 
down the trail in a way. But still this is a big chunk of the 
deficit being paid for by us as a part of our work on the 
military-diplomatic side.
    Now, sort of secondly, since 96 percent or so of the money 
comes from oil to begin with, really you are advocating, maybe 
wisely, do not start an internal revenue service there because 
you will just simply set up another bureaucracy of corruption 
and complexity. It would be much more straightforward, if you 
get right the oil thing and it is transparent, to collect the 
money the old-fashioned way for the central government, but not 
enough even if you collect all of it, and if the prices of oil 
go up, so that ultimately something else has to happen in terms 
of economic gain in the country.
    Finally, you have suggested, at one point, $7 billion being 
spent in subsidies now, so that they can have nickel gasoline 
that you can sell for $5 across the border, and whether, 
politically, you can ever remove all this, but still it may be 
easier than some other situations, that if you finally get that 
right likewise, with the world economy and oil, you pay for it 
domestically what the cost is, too.
    The Chairman. Those are interesting.
    Mr. Barton.
    Mr. Barton. I would like to pick up on a number of things 
you said. I think one of your last comments, that we cannot 
prepare to withdraw monetarily necessarily as early as we can 
if we ever get to the military question, is something that we 
have to consider, because, generally, our military presence 
does drive our financial contributions, and we may not have 
exactly that luxury if we want to see a favorable outcome here.
    On the first issue of sort of money, the money that is 
going to come into Iraq basically is oil money and 
international assistance and, in a hierarchy, remittances from 
outside of Iraq. Customs is really, even though exactly what 
Keith said is true, it is still one of those things you can get 
right. There are places that customs works around the world and 
it tends to be a pretty reliable source of revenue, and there 
is a lot of action right now to look to.
    Then, I think you have to look at taxes that will hold in 
the context, which will be luxury taxes, probably at hotels and 
what-not--there are a lot of those that are being collected 
informally in some of these places--the communications that you 
mentioned earlier. Look to areas where there is some success 
and where there are some transactions taking place, where you 
can actually see how many transactions are taking place and you 
could make those taxable. And then fees are probably the 
simplest way of doing it.
    I do think that this is--cutting subsidies, as you just 
suggested, is another good idea. How much, as Keith suggested, 
is a delicate matter. But I do not think we have--there has not 
been a really good discussion of this. It has been seen as sort 
of an ideological debate: Do it, or it is stupid, as opposed to 
maybe we could do something and it might help a bit.
    I do think that this is another place on the tax issue 
where wealth-sharing needs to be considered, because you do not 
want everything going back to the center. One of the reasons 
that I like decentralization in these places is because you are 
going to have such uneven performance, and one big Minister or 
Ministry performing unevenly is a multibillion dollar problem, 
whereas 17 governors misperforming, basically, hardly ever adds 
up to a billion. So you do in a way bring the problem down to 
scale, which you have to do, because in a place like Iraq and 
in most post-conflict places, the problems are larger than we 
can imagine. So you are taking the impossible and making it 
addressable, as opposed to taking a problem and logically just 
making it work.
    The second thing on the debt service, we did the original 
paper on this issue back in 2003, in the beginning of 2003, and 
we created this $300 billion number, which we then footnoted 
like crazy to suggest, do not take it to the bank but it is the 
best number we could come up with. I think that the issue has, 
as Keith suggested, has been set aside, but it has not been put 
to rest.
    So the United States has actually been a very constructive 
player and I think our Treasury and former Secretary Baker 
really took the lead on this issue; took it to the world 
community, and they have gotten everybody to agree to sort of 
an 80-percent buyoff number, 80-percent forgiveness number.
    I believe that Saddam's overhang needs probably the full 
bankruptcy treatment. If you do not go over 95 percent, you are 
going to have a legacy problem which is going to sink Iraq's 
Government when it gets to the point that people start 
expecting it, something of it.
    What we have done is we have bought time. We have 
essentially told all of our allies and everybody else: Let us 
settle on this number, everybody is going to get something, go 
away for a few years until this thing gets cleaned up. That is 
not exactly a solution. So I think that is the operative model 
that we have used so far.
    We have let other things continue. The reparations from the 
Kuwait war are probably something that should have been shut 
down. We happen to be the champions of it. It was a good idea 
at the time. It is not a good idea now. How much farther do we 
let these things go on? So that the U.N. Compensation 
Commission, which we are a big part of, is now near the end of 
its life. But it has got multibillions of dollars of payments 
that are still owed to people as a result of settlements that 
came out of that process. That is real money that is going to 
slow down the recovery or that we are going to have to replace 
with our own contributions.
    So I think that the debt issue has a counterinsurgency 
economic quality to it as well, which is to let the people of 
Iraq know that they are finally free of Saddam and that we, in 
fact, are on their side on this issue. So it does fit within 
that same kind of thematic idea that we have been trying to 
develop.
    Finally, on the wealth-sharing, there are a lot of people 
who say you cannot afford it. That may be the case, but if that 
is the case then fronting $5 billion when essentially we are 
spending that kind of money on a rather, almost a weekly basis, 
is not a bad notion if we believe that it has the potential to 
capture the imagination of the Iraqi people. There is a 
political cost. How can the people of the world be expected to 
give money to a country that has oil? But what we are trying to 
do is to figure out a way to have this thing end 
satisfactorily, and that is why I think it is worth doing.
    I think that Keith's concern that it is not affordable 
diminishes if, in fact, we could stabilize the oil issue and 
get to 2010 with probably $50 oil. Most experts are not 
suggesting it is going to drop dramatically in the near future. 
And we are probably looking at 4 million barrels a day by 2010. 
That is more than twice the present production. So there might 
be some liquidity in there. If there is an objection to 
fronting the money, maybe we create the loan fund that does it 
and then we expect some sort of payback over 5 or 10 years.
    That is not impossible in this case. I think it would be a 
very good investment and I think it is possible to do it. Right 
now, as we take it, there is about $30 billion of net, is what 
oil produces after its own domestic consumption in the country. 
So it is not a bad pool to look at.
    Those are just some points to your questions.
    The Chairman. Well, that is really tremendous testimony. I 
think we are faced with the practical thought that, at some 
point, we might be successful in stopping the insurgency, the 
Iraqis may adopt a constitution, they may elect people, may 
have some degree of confidence in what they are doing, and 
suddenly they will have 46 percent of their budget that is not 
there, and all the debt. As you say, we made these agreements, 
but the issue has not quite been put to rest. If we leave 
before it is put to rest and we move on to some other topic, 
and here these folks are left, and we have congratulated them 
on democracy and on a remarkable turnaround, but they are 
bankrupt year after year, there might be no possibility of this 
thing making it.
    This is why it seems to me this hearing or these questions 
are tremendously important for anybody interested in the future 
of the country, because they will not go away. Somebody has to 
be paid. The legacy of Saddam, as you say, has to be addressed 
and even the legacy of these payments to Kuwait, which are a 
delicate matter, but very important to bring up.
    Yet life goes on for the Iraqis and everybody else who is 
involved, without much discussion. So I hope we can encapsulate 
each of the ideas that you are bringing to the fore in some 
report from our committee that we can share with others, who I 
think really need to be thinking about this agenda even as we 
have been privileged to this morning.
    With the indulgence of my colleague, I will ask Mr. 
Mohamedi for his thoughts and then I will turn to my colleague.
    Mr. Mohamedi. I think that building nonoil revenues is 
essential for the long-term economic development of Iraq. I 
have seen so many Middle Eastern oil-producing, and Asian oil-
producing, and Latin American oil-producing, countries that got 
hooked into the oil trap. We know all the issues around that. 
So I think it is very important we have an opportunity right 
now to develop nonoil, a system to capture nonoil revenues.
    I will get into that in a little bit. But I just want to 
get back to oil revenues. I disagree with this issue of 
fracturing oil revenues or partitioning it off between federal 
or central, provincial, and people. I think that will lead--
especially if you divide it in an automatic formula between 
central and provincial, you will get a Nigeria situation. In 
Nigeria the politics has organized itself, the subregional 
politics, to capture national rents. So you have got this 
constant fracturing that is going on and constant strife 
looking for that.
    I think that the issue of dividing that oil revenue should 
be done on the central level through a political--democratic 
political process.
    On the issue of sending some part of that revenue stream to 
the people directly, I think in a sense, it is an attractive 
idea. I do agree with the issue that there is not enough money 
right now. But there could be revenue streams coming in, in the 
future, from future oil production growth and future royalties 
and taxes that foreign companies could be paying in. And I 
think that would be an idea, that if some of it goes off to 
individuals or families in Iraq that could help with national 
buy-in. It would help with the idea of foreign direct 
investment. And if you then attach an income tax to that, you 
could possibly create the basis of rolls--of tax rolls--because 
people would be getting something and then they will be 
deducting it. So that could be the future of an income tax 
system, which in a sense, I think, would be good for the future 
of the country.
    Finally, the foreign investment that will come in from the 
oil sector has two components to it. One, it will be, we think, 
and if this is done correctly and without corruption, that 
there will be things like signature bonuses, which can be put 
into a major development fund which can fund development 
projects in the nonoil sector. Hopefully they will not end up 
in the pockets of leaders or Ministers or whatever and 
transferred to Switzerland.
    The other part will be taxes and royalties that will be 
coming in and that will enhance government oil revenues in the 
future. There is quite a bit of money there if you think that 
in say 20 years this country could be producing 6 million 
barrels a day. I think it is a bit premature to expect that we 
will be producing--Iraq will be producing--4 million by 2010. I 
think that we just do not have the time to do that on a 
political level and just the pure physical level of investment.
    Finally, I think that if Iraq is to integrate back into the 
international capital markets, which will be an important 
source of long-term development finance, as you said, we really 
have to resolve this, the debt issue. I think the quicker it is 
resolved, Iraq could come back and be a responsible borrower on 
the international markets.
    Thank you.
    The Chairman. Thank you very much, sir.
    Senator Biden.
    Senator Biden. Gentlemen, thank you very much for your 
testimony. This all has sort of an Alice in Wonderland quality 
to it to me. It sounds like I am being facetious. I am not. 
Senator Lugar used the phrase in another context ``a bridge too 
far.'' With the significant number of mistakes we have made the 
last 2 years and the failure in my view to learn from them, 
this is getting to be a bridge pretty far.
    When you were here, Mr. Barton, you were here with Mr. 
Hamre and the Hamre report. You talked about the window closing 
and the window would close by that fall, a year ago. I still 
think we can salvage success. But boy, it is getting harder.
    We are talking about long-term financial and budgetary 
opportunities and constraints for a functioning government in 
Iraq down the road. We are talking 2010. Pray God that is our 
problem in 2010.
    I have difficulty, especially every time I come back from 
Iraq, avoiding the mistake--and sometimes it is a mistake--of 
connecting directly our economic input and impact with 
political and security outcomes.
    Now, Mr. Crane, you have been very articulate. You take a 
long view and a pessimistic view, which is--I mean, I am not 
criticizing either. I am just observing, at least, how it comes 
across to me. And you make the case, as well as Mr. Barton. We 
have to--and I have made the same speech a year ago--we have to 
have a better benchmark to determine what constitutes impact.
    We say we are going to build or help open x number of 
schools, or we are going to pump y barrels of oil, or 
whatever--not we; they. And whether or not we do that does not 
tell us much about whether or not the impact is what we hope 
and intend. What is the impact we are trying to have? The 
impact we are trying to have is to impact on the possibility of 
developing a stable government where everybody feels, every 
major constituency feels, they have a stake in the outcome, if 
not a democracy, that has the capacity to function.
    That is as good as it gets for me. I know we talk about 
democracy. Hopefully, I am wrong, but probably not in my 
lifetime anything we consider, I consider a liberal democracy.
    So I find myself coming back and being seized, Dr. Crane, 
with the notion that, which you have said would not be a 
popular notion--it may or may not be--but CERP funds, because I 
sit there with a commanding general who flips up on a screen a 
Powerpoint presentation that shows--and I take him at his 
word--shows that we had x number of attacks on his forces in 
the following, in a certain grid here; when he took the 
literally, not figuratively, foot and a half of sewage off the 
front streets and literally piles of garbage 12 to 14 feet high 
and cleared them, subsequently the following 4 months he had no 
attacks on his forces in that spot; and where you actually had 
the street cleaned--and this happened to be in this one 
instance I am telling you in Sadr City--when you had the street 
cleaned, when people were able to walk out to the equivalent of 
the corner grocery store, they had informants telling them: By 
the way, around the corner there are some jihadists; around the 
corner there are some insurgents. And it has changed the safety 
and security of not only the people on the ground who live 
there, but our forces.
    Now, I have a tendency to extrapolate from that, and I 
acknowledge in a model you may flip up it does not follow, that 
it is the only place I have seen--and again, I have only been 
there five times--it is the only place I have seen a 
correlation between an investment and an outcome.
    When Senator Lugar and I were there early on, one of the 
things that became very apparent to us--I speak for myself; I 
think he agrees, but I do not want to put words in his mouth--
is that any nation that could take down Saddam Hussein as 
swiftly and as surely as we did, obviously can get the electric 
running 24 hours a day immediately, obviously can provide 
potable water for everybody, obviously ought to be able to make 
the streets safe.
    So I acknowledge we suffer from an expectation game here, 
that the expectations appear to me to be unrealistically high 
for what we had the capacity to do, no matter how well we did 
it. But the failure to come close to meeting expectations I 
think has--this is the plain old politician--a dramatic impact 
on the willingness of people to essentially place their bet on 
the government as it is emerging and place their bet on us 
being a positive force.
    Which is a long way of leading me to what I keep coming 
back to, Mr. Barton, what I think is a central problem today 
and a significant mistake we made, but I think is correctable 
still, and I want to address that. That is what you have all 
said in one way or another, access to information by Iraqis, by 
the people.
    To this day, to the best of my knowledge we have not 
broadcast widely that we do not expect to remain permanently in 
Iraq, have permanent bases. Now, I may be wrong about that. 
Maybe we have stated that as a policy. But I do not think 
anybody in the region thinks it or knows it.
    I do not think, from my observation--the first time we were 
there and we were flipping, there's channels like VH-1 on 
television. Who would listen to it except somebody who's watch 
a test pattern on a TV tube? It was so absolutely boring, 
uninformative, sporadic.
    So my question is this. Is it possible--excuse me. Why is 
it not still possible for us to move from the single model that 
is a failure, in my view, to the model of--facetiously you said 
100--to 20, to 50? Is that beyond our reach? Is there no 
ability to go back and sort of repair that, to change or 
produce or encourage or whatever more outlets for information 
in the country?
    That is my first question: Is it too late? Yes, you, Mr. 
Barton.
    Mr. Barton. Who knows if it is too late, but I think it is 
still worth doing, because as long as you are spending 
multibillion dollars a month in the place you are obviously 
making a serious effort at trying to change the environment the 
way you want to.
    I happen to believe it is absolutely central to our moving 
ahead. Now, I would say that if you were to put a billion 
dollars on the table and say, we would entertain anything from 
new television networks to cable systems to bloggers to 
Internet stations, and we would just like to see what the 
universe of responses might look like, you would be 
overwhelmed. You would have more than you have the resumes, 
when you put a job on the market in your office, I can assure 
you of that.
    So there would be a wide series of plays, and it should go 
everywhere from Disney down to 12 teenagers who have a good 
idea on how to reach these folks. So I would say that 
opportunity is there still. I think--but again, you have got to 
encourage the entrepreneurial side. You have got to make sure 
that it has the Iraqi play in it, which I think you will get a 
huge Iraqi play. It is a very young market.
    What was the first thing we heard? Everybody got satellite 
dishes. What is the second thing we heard? Everybody has gotten 
cell phones, even though we were trying to control that market. 
So the market has taken off without us and we are still trying 
to do this corraling effect: Let us control it, let us set the 
rules for how you put on a station.
    When we had our very first conversations with the people 
who were running this TV station in Baghdad, the operation that 
we were setting up, you know what their concern was at that 
time? They are getting too independent; those newscasters that 
we set up are actually saying things that may be news. Their 
first notion was: Shut them down.
    We said: What, are you nuts? Start five more stations or 
five more news operations. Do not even think about shutting 
them down. That is so anti-American in its core concept. Why 
would you want to be associated with that idea?
    So I firmly believe that there is still an opportunity. 
There is clearly an opportunity in the region. There is clearly 
an opportunity. One of the suggestions we made to Jerry Bremer 
was: Hire a thousand unemployed Iraqi students--not hard to 
find. Give them cameras, send them out to record what is going 
on in their country every day, and then all you have got to do 
is have a little editing shop that runs fresh cuts of what is 
happening, good news, bad news, all day long. People are 
interested. It will be like C-SPAN. There is going to be an 
audience for it.
    So there are lots of ideas there. Every one of these ideas 
is in place, somewhere in the world, a thousand times by now. 
It is not just America, it is not just in South Bend. People 
have started their own little communications systems 
everywhere, and we could definitely make that thrive.
    Again, I believe it would be hugely counterinsurgent. There 
will be the fear that maybe the insurgents will use it. Guess 
what, they are figuring out how to do everything already much 
faster than we are doing it. So we have got to--we are not 
going to control their marketplace. We have to overwhelm their 
marketplace, and that is why I like the tidal wave concept 
here.
    Senator Biden. Well, I happen to agree with you. By the 
way, those satellite dishes pick up Al-Jazeera and pick up 
everything else. It is not like they are picking up pro-Western 
or progovernment or prodemocratic forces and voices. It is not 
like there is a plethora of those out there. I think you are 
right, I think we take our chances.
    I realize my time is up, Mr. Chairman, but if I may, with 
your permission, ask one more question.
    I am at a loss as to why, to use maybe an unfair slang 
expression, why we cannot walk and chew gum at the same time. I 
am at a loss as to why we cannot, Dr. Crane, focus on the 
significant longer term necessary institutional changes that 
are required, including projects that are required, whether 
they are a tertiary sewage treatment plant for Baghdad or 
whether it is a long-term plan to be able to invest in the oil 
wells so their maximum production capacity is able to be met 
down the road.
    At the same time, it seems to me the incredible amounts of 
money we are expending, why we do not adopt the notion--and I 
think most of us on this committee have adopted it--as Mr. 
Barton says, 20 percent of the money we are going to invest 
there is going to be an absolute total abject waste.
    You know, there used to be a professor at the Wharton 
School--I did not go to the Wharton School, but I am told by my 
friend, Ted Coughlin, who went there. He said his professor 
used to quote John Wanamaker, the retailer. He said: You know, 
I know that 50 percent of my advertising is a waste of time; my 
problem is I do not know which 50 percent.
    If we do not approach this investment policy and 
reconstruction policy in Iraq with a similar frame of mind, I 
do not know how we get anywhere. We cannot manage our own 
economy all that well, let alone something that we are taking 
from 30 years of shambles in the middle of an ongoing war. So I 
guess what I am driving at here is, I do not know why we 
cannot, for example, rhetorical question: Why did we not take 
advantage of the British suggestion of the European Union 
providing experts to essentially adopt an agency, to actually 
bring in people like you, Dr. Crane, from Europe who knew what 
they were talking about, who were able to have a concrete input 
and working with the Iraqis in each of the Ministries, and 
actually try to use a civilian input to help them get them up 
and running?
    Maybe it is because it takes too much organizational skill 
to do it but we decided it was not worth doing. I do not know, 
but it confuses me why we did not.
    So I will end with this, and I am not asking you to respond 
now, but for the record if you are willing, or even give me a 
call and sit with me in my office, what are the practical, 
small-bore things that we can be doing now in a society, sir, 
that I think is still significantly tribal in structure?
    I mean, I do not get why we do not walk into some of the 
medium-sized cities and towns in the country and say to the 
local, in effect--and I realize it is misleading to use this 
kind of terminology because people have a different image--the 
local leader and say: Here, build this dirt road from point A 
to point B.
    We sat in a--it was a moment I had some hope, and I promise 
I will end with this. A moment I had some hope. Senator Lugar 
and I and as well as our friend, Senator Hagel--and this is how 
much things have changed in terms of security as well--got in a 
car, drove out to a mosque that had been partially bombed out, 
in a neighborhood that--on the fringe of two neighborhoods, one 
of which I am guessing had the equivalent of 2,000 homes in the 
neighborhood identified and another neighborhood of almost 
equal size, and it, to my recollection, seemed to be 
essentially on the border, ``the border'' meaning the line, the 
street line, all within Baghdad.
    I witnessed a remarkable thing. You had a very bright young 
lieutenant, American, in uniform, standing at the bottom of the 
stage with two people setting up, two tables at angles up on 
what looked like a high school gymnasium stage, and somewhere 
between, my recollection is, 20, 30, 40 community leaders, 
whether they were leaders in the sense that they were the best-
known guy on their block or not.
    They were talking about--I remember the one example. We 
were running a water line and the question was they were 
debating as to whether or not there was enough PCV pipe that 
was going to be available when it hit the road that separated 
the neighborhoods, whether they could get the water into the 
next neighborhood.
    They were actually having a town meeting about it. And I 
thought, wow. And this young lieutenant was so impressive. He 
was sitting there saying: Now look, you got to do this and you 
guys do this; we will get you this. And they were making their 
decisions.
    But it was about simple things: Can you turn the spigot and 
water come out? So I cannot figure out how we get those small-
bore projects. If it is 117 degrees, if, in fact, there is 
sewage in my front yard, if, in fact, there is no prospect for 
the air-conditioning to be able to be on more than 6 to 8 hours 
a day, and my two sons do not have a job and I do not have one, 
you got a problem.
    So a famous Senator who served on this committee once said: 
Maybe we need a bunch of mayors over there with a little bit of 
walking-around money, in the best sense of that word, some of 
which will be wasted.
    So, I guess what I am trying to say is: Why can we not do 
what are those things that are going to have the kind of 
immediate impact that politicians need to be able to generate 
consensus, to be able to govern, that they need?
    I am finished and if you want to comment, fine. But you do 
not need to. We have held you very long already.
    Dr. Crane. I do not disagree with all that you have said, 
but I think one of the mistakes we have made, we have tried to 
do too many end runs in Iraq. And it is not our purpose to have 
the Iraqis like us. It is our purpose to have the Iraqis look 
at their government as legitimate. I think all too often what 
we have ended up doing is we have been focused on making 
ourselves look good rather than trying to figure out how to 
make the government at all levels----
    Senator Biden. Now I see what you are saying. I did not 
understand. That was part of your point before. I do not 
disagree with that.
    Dr. Crane. I think Major General Chiarelli's program in 
Sadr City was excellent, but it was not all CERP funds. He, 
himself, says it was Office of Transition Initiatives, and it 
was linked together. One of the things when I talked to him was 
that, about garbage pickup, he did not hire people for 6 weeks 
and lay them off after the garbage was done. He actually 
contracted it out to local businesses, and that became a 
service that they were held accountable for that was turned 
over to the municipality.
    It is precisely these things that get us out of the 
picture. We do not want us to be the contractors. We want the 
Iraqi Government to get those skills.
    Senator Biden. Can I pursue that with you just a second?
    Dr. Crane. Sure.
    Senator Biden. Chiarelli, when I spoke to him--you are 
exactly right and you know more about it than I do. But when I 
spoke to him he raised the specter, had he not had the ability 
to have that startup money and had he sat there, there would be 
no initiative, either from the CPA at the time or from the 
local governance entity. But what he was able to do is what 
Webster is trying to do now with the 2nd I.D., is trying to 
build on that.
    So we are saying the same thing. I misunderstood you. The 
idea of going out and sinking a well, which may be needed, and 
then walking away without figuring out who controls the well, 
how there is access to the well, the local governance entity 
being able to have some impact on that--one of my problems here 
is that we seem--it is my problem with the contracting 
generally on a larger scale. The contracting generally on a 
larger scale seems to take the Iraqis out of the equation in 
terms of--look, there are some really competent Iraqi 
contractors. There are competent Iraqi businessmen.
    Now, granted I do not know enough to know, because we had 
the de-Ba'thification problem, how many of the competent people 
were the people who were on the take or part of the deal and 
were the bad guys. Do you follow me? But it seems to me one of 
the reasons I am anxious for our new Ambassador to get up and 
running, I think he gets what you are saying. I think he gets 
it.
    You just clarified something for me. I misunderstood, 
doctor, about what you were saying. I agree, there has got to 
be a mechanism for handoff to make this thing permanent.
    Dr. Crane. One last point here. It is not how much, it is 
how. I think I am a little bit disturbed with people who just 
say, go out, spread the money around. One of the real 
disappointments for me in Iraq was, as I was saying, that what 
you want to do is you want to go out there and make sure every 
single contract is competitively bid, so these Iraqi companies, 
they know that finally life has changed. It is no longer who 
you know, it is no longer that life is rigged against you.
    Some of the concerns I have had in terms of spending--and 
this goes to CERP funds. I think CERP funds have been great. I 
think $3 billion is probably too much of a good thing. But I 
have also seen this in terms of shortcuts in contracting. It is 
extraordinarily important to have everybody know this is as 
clean a bid as it can be, and then people have confidence that 
life is different, and then you see a startup of contractors, 
entrepreneurs.
    Senator Biden. Do you think we could do that in a timely 
way?
    Dr. Crane. Yes.
    Senator Biden. In other words, I happen to agree with you 
again. I think we could. I do not think it necessarily slows 
the process so the sewage sits in the front street a year 
longer. It may sit on the front lawn another 2 days or 3 weeks. 
But the idea that we cannot competitively bid this in country I 
think is--I do not think that is accurate.
    Dr. Crane. It speeds it up. It will speed it up.
    Senator Biden. I am sorry to go so long.
    Mr. Barton. Just a couple quick responses. This period now, 
because it is so fragile, tends to be--the microeconomics tend 
to be more important than the macroeconomics. You have got to 
get through the microperiod to get to the macro. It does not 
mean that you are not walking and chewing gum at the same time, 
but do not expect that your macroactivities are really going to 
produce anything that is going to be felt in this most 
immediate moment.
    So I think that I also want to just reinforce what Keith 
said, that the process is really the product. What we are 
talking about here is change. The status quo ante does not work 
in a place like Iraq. If we go back to the way things were, I 
do not think many people will think that that was a significant 
success.
    So change is really the central concept here. So you have 
to have, when you go to these local initiatives--and I do 
believe that we have lots of agents. I think that if you did 
have a thousand flowers blooming strategy in Iraq you would 
have lots of people that are out there ready to go, but they 
have not had liquidity.
    The liquidity has been more--the little liquidity that we 
have had has been in our control and we have not trusted these 
people to have really some money to actually fix a pothole 
yourself. So I think that side is still a huge opportunity that 
exists, whether it is a women's center or a local governing 
council or whatever, as we spoke about earlier.
    But then you are going to have to get to critical mass, and 
that is sort of how do you connect this thing so it is not just 
a thousand points of light that are all flickering, but it 
actually comes together and means something. I think one way 
you do it is you get enough of it going on, which is 
essentially what you were saying regarding sort of the Great 
Society or the post-riot period or whatever, the implementation 
of some of those programs.
    I think liquidity here is terribly important, terribly 
important. If you look at the U.S. Government, the CERP funds, 
OTI, and AID, there are not a lot of places that you have 
liquidity where somebody can actually go in and put the money 
to the problem and to the potential, as opposed to: I have got 
AIDS money, I have got child vaccination money, I have got 
education money.
    Let people be--the beauty of walking-around money is that 
it can solve the problem rather than your bringing your 
prescription to what exists in the place.
    Senator Biden. One of the reasons for my observation, and 
it may be unfair--I am not making this judgment; I am just 
making this observation. One of the reasons I think that CERP 
funds have become so attractive is there is such a, rightly or 
wrongly, dissatisfaction with our contracting, no-bid 
contracting methods here, and the billions of dollars we are 
spending with American companies in the lead. I am not making a 
political--I am not doing this demagoguing stuff that big 
companies--I am not saying that.
    But that is the perception. That is the perception that I 
think is fairly widely held. So part of this frustration, 
doctor, part of this frustration for guys like me saying, well, 
I would rather Chiarelli have the money than I would be 
focusing it in on the programs where we are finding out we are 
spending 40 to 45 percent of it on security and they are hiring 
private security guards.
    Anyway, I thank you guys very, very much.
    Thank you, Mr. Chairman, and I appreciate your testimony.
    The Chairman. Do you have a comment, Mr. Mohamedi?
    Mr. Mohamedi. One quick comment, and that is that you 
talked about tribes and using tribal leaders to do local work. 
I think if you need to get a little job done I think that is 
not a bad idea. But I do not think that Iraqis are 
multidimensional. The tribal affiliation is one aspect of their 
identity. It is a much more complex situation.
    The other thing is that if you create those type of 
linkages and demote the national government and bureaucracy and 
effective bureaucracy, I think you are contributing to 
fracturing and creating local elites and all of that.
    Senator Biden. I think that is a legitimate point. Thank 
you.
    The Chairman. Thank you, Senator Biden.
    We thank you, gentlemen, for a very, very thoughtful 
contribution, which we have cherished and which we are hopeful 
will be spread among those who will read the hearing reports 
and other summaries we may make of it. But we thank you for 
working with us. We may, in fact, have more hearings in due 
course, so please stay closely in touch.
    Saying this, why, the hearing is adjourned.
    [Whereupon, at 12:19 p.m., the committee was adjourned.]

                                  
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