[Weekly Compilation of Presidential Documents Volume 30, Number 27 (Monday, July 11, 1994)]
[Pages 1438-1446]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's News Conference in Naples

July 8, 1994

    The President. Good afternoon. During this trip we are addressing 
three concerns that will determine whether we have a peaceful and 
prosperous future.
    In Latvia and Poland and later in Germany, we are focusing on the 
aftermath of the breakup of the Soviet empire and the need to strengthen 
democracy and economic growth there, to work for a united Europe that 
can be a partner in trade and a partner for peace. Second, we are 
working against nuclear proliferation.
    In Geneva, the third round of talks between the United States and 
North Korea has just begun today. Here in Naples, at my first meeting 
with Japan's new Prime Min- 

[[Page 1439]]

ister, Mr. Murayama and I had a very good discussion about the North 
Korean situation, and the Prime Minister praised what he called the 
United States tenacious efforts and pledged his continuous support in 
our nonproliferation efforts.
    Finally, as the world's leading economic powers gather tonight for 
our annual summit, we will act on the third and in some ways the most 
important issue of this trip, economic growth. I'm here to keep our 
economic recovery going back home by promoting economic recovery 
throughout the world. More than ever, what happens in the world economy 
directly affects our ability to create jobs and raise living standards 
for our own people.
    For too long, our leaders ignored the economic realities. At home, 
our economy drifted; the deficit exploded; the middle class suffered. 
Now, with the strategy for renewal, we have taken action. We are putting 
our economic house in order, cutting our deficit in half, and reducing 
the Federal work force to its smallest level in 30 years. We're 
expanding exports by tearing down trade barriers and preparing our 
workers and our children through better education and job training for 
the jobs of the 21st century.
    The economy has responded. I'm pleased to report today that in the 
last year and a half our economy has created over 3.8 million jobs, 
380,000 in the last month alone, and the highest number of manufacturing 
jobs in the last 4 years. Ninety-two percent of those new jobs are in 
the private sector, and last year more new businesses were incorporated 
than in any single year since the end of World War II. Our economy is 
coming back on its soundest footing in decades, with more jobs and low 
inflation. In fact, we're leading the world.
    America has 40 percent of the G-7's gross domestic product but 
provided 75 percent of the growth and about 100 percent of the new jobs 
over the last year. Growing our economy and shrinking our budget deficit 
from the biggest among these nations to one of the smallest gives us the 
authority to speak and the credibility to be heard on the matters of 
discussion here.
    Our partners are making progress, too. The growth strategy we urged 
the world to adopt at the G-7 meeting in Tokyo last year is working. The 
economy is recovering worldwide. We produced a landmark GATT trade 
agreement, and Russia's economy is making progress as well, with lower 
inflation, a reduced deficit, and more and more people working in the 
private sector.
    Now in our meetings this year, on behalf of all the American people, 
I'm urging the G-7 leaders to keep the world recovery on track. This 
weekend we will take steps on four fronts: First and foremost, we will 
continue to work to spur growth and create jobs. One of the most 
important ways to do that is for all of us to actually enact the Uruguay 
round of the GATT agreement this year. Passing it this year, 
immediately, will provide a shot in the arm for the world economy. We 
must maintain this momentum toward a more open world economy. I'll urge 
my G-7 colleagues to review and analyze the remaining trade and 
investment barriers and to report back to us in Halifax next year. But 
these meetings will go beyond the traditional concerns of G-7 summits to 
the traditional concerns of working people and their families. We will 
address the education, the training, the job skills of our working 
people, building on the jobs conference in Detroit earlier this year. 
This will be an historic first for the G-7.
    Second, we'll begin to build the telecommunications infrastructure 
of the new information-based global economy, without which we can't take 
full advantage of our efforts to tear down trade barriers.
    Third, we'll focus on the explosive mix of overpopulation and 
environmental degradation that could overwhelm all of our own economic 
efforts.
    Finally, we'll continue to help the economies of Central and Eastern 
Europe through long-term reforms, trade, and investment. As a priority 
we plan to offer our support and advice to the Ukrainian Government on 
economic reform and on nuclear safety. And President Yeltsin will join 
in our political discussions for the first time this year as a full and 
equal participant.
    We know these issues will not be resolved overnight. But I have no 
doubt that for every American and for people all over the world,

[[Page 1440]]

we must work together to build these foundations of the future.
    Now, before I close and take questions, let me say a brief word 
about the people back home in America who are battling the fires and the 
floods. This a time of particular difficulty for many of them. We've 
lost many lives in the fire fighting in the West and Colorado, and we 
have problems in other States there. And of course, we've had the 
terrible floods in Georgia, the problems spreading to Alabama and 
Florida. My thoughts and prayers are with the people back home who are 
battling these fires and floods and especially with the families of 
those who have lost their lives in the disaster.
    I have spoken with the Governors of Colorado and Georgia, and I have 
instructed all the Federal Departments who can help to make their most 
aggressive efforts to do so. I am convinced that at this time we are 
doing everything we can, but the situation remains difficult on both 
fronts.

Haiti

    Q. Mr. President, more than 16,000 Haitians have fled in boats in 
recent weeks, giving rise to talk that it's going to require a military 
invasion to depose the military leaders of Haiti. Do you think that 
that's increasingly likely, and what is in the U.S. national interest of 
such a move?
    The President. Well, let's divide the two things if we can. First of 
all, as Amnesty International has recently reported, the human rights 
violations in Haiti are on the increase; the use of murder, rape, and 
kidnaping as a means of maintaining political control has intensified; 
we have seen the gripping pictures of more people lying dead in the 
streets.
    I think, overwhelmingly, the reason for the increased exodus, people 
looking for safety, is the violation of human rights by military 
dictators who overturned a legitimate election and who broke their own 
word to leave. And I don't think we should lose sight of that.
    In the face of these continuing human rights violations and their 
intensification, the United States determined that its policy of direct 
return should be changed. I did not believe that policy was sustainable, 
given what we knew about what was happening in the human rights area and 
the fact that the government had blocked all reasonable attempts by 
citizens to restore economic growth and political democracy.
    Now, we have interest in what happens in Haiti. There are a million 
Haitian-Americans. There are thousands of American citizens trying to 
survive and live and work in Haiti. We have an interest in promoting 
democracy in the area. Cuba and Haiti are the only two countries in the 
entire hemisphere now that are not ruled by democratic governments. We 
have an interest in seeing that the United Nations and its work is 
upheld, and there was an agreement--the Governors Island Agreement--
signed in the United States in which the rulers, the military leaders 
committed to leave. So we have very clear and significant interest in 
addition to the massive outflow of people seeking refugee status in our 
country, which is a significant problem.
    But I want to divide what is happening there with the refugees from 
the question of how best to deal with it. We are working on very tough 
enforcement of the sanctions, and we have not ruled other options out.

Decline of the Dollar

    Q. Mr. President, regarding all the progress that's been made over 
this past year on the economic front, many people are confused though 
because the dollar has dropped to almost a record low, especially in 
connection with the yen. How do you explain this tremendous loss of 
faith in the dollar when you point to these economic achievements over 
the past year?
    The President. Well, first of all, I think it's important that you 
pointed out that the dollar has dropped to an historic low against the 
yen only. It's also dropped some against the mark but well within 
historic variations. And that's partly because the economy is picking up 
in Europe as well, something that we really want to happen, and we hope 
that it will continue to pick up.
    I think that the main reason is a macroeconomic reason, the 
persistent existence of the trade debt surplus that Japan has with the 
United States and the fact that over the past year the Japanese economy 
has been flat except for a good first quarter, so that there's not been 
the capacity to reduce the trade

[[Page 1441]]

deficit through buying more American products. And Japan, as the Prime 
Minister said today, has had a number of changes of government so that 
there has not been the political capacity to reach any agreements which 
would permit the trade deficit to narrow. And as a result of that, the 
currency values have changed to try to reflect that reality.
    I still believe that the best thing we can do is to keep focusing on 
the fundamentals. If America is leading the world out of a global 
recession, we should be very concerned about the value of our dollar, 
and we should tell the world that we do not wish to have a low dollar so 
that we can have more American goods bought and so that we won't buy 
more foreign goods. We do not wish to seek prosperity through 
devaluation of our currency, but we do wish to continue our own growth 
and to promote growth in Europe and Japan. As Japan grows and engages us 
on the framework talks and continues to open its own economy, as those 
three things happen, you will see the value of the dollar rebound 
because the trade situation will right itself.
    We ought to follow the economic fundamentals in the real economy, 
and that's what I'm trying to do.

Haiti

    Q. Mr. President, in the past when Presidents have ticked off, as 
you did just moments ago, American interests in a place where there's 
trouble, it has often been the precursor of at least serious 
consideration of military action. Would it be fair to say, sir, that you 
at least are seriously considering that? And could you give us some of 
the up side and down side of a possible action of that kind?
    The President. It would be fair to say that my position has not 
changed since I first commented on that a few months ago. I do not 
believe that we should rule out any option. I believe we should continue 
to pursue the aggressive use of sanctions. I believe we should continue 
to call on the leaders of Haiti to leave now. They promised to leave. 
They continue to violate the international community's sense of decency 
and to violate human rights, and they're in there illegally, and they 
ought to go.

Bosnia

    Q. The contact group has presented a take-it-or-leave-it plan for 
the party, a plan that basically ratifies ethnic cleansing in several 
areas. Could you explain how your thinking shifted on this, how you came 
to believe that stopping the war was more important than taking the 
moral high ground on this issue?
    The President. First of all, the contact group has worked with all 
the parties there. We were successful, as you know, in helping to get 
the Croatians and the Bosnians back into a federation where they were 
working together. This contact group proposal would restore to that 
federation something over 20 percent of the land in Bosnia and would 
provide still for a loose federation involving all three major ethnic 
groups.
    It seems to me that that is a fair and reasonable way to proceed and 
that the people who have followed this most closely believe that this is 
the most just result that can be obtained while bringing an end to the 
conflict.
    The United States has spent about a billion dollars a year there, 
has done its best to contain the conflict: We have our troops in 
Macedonia; we have used our air power through NATO; we have supported 
the creation of the safe zones; and we have supported the contact 
group's efforts as a way of recognizing what can most nearly be done to 
reconcile these interests with the termination of the war.
    I think it's fair to say that the contact group believes that this 
is the fairest proposal that can be achieved to all the parties 
concerned and still bring a fairly rapid end to the bloodshed, which is 
something that's in the human rights interest to all the people 
involved.

Haiti and Ukraine

    Q. Can you tell the Congressional Black Caucus in good conscience 
that Haiti is a regional issue that doesn't have a role here, but yet 
Ukraine is a place which deserves possibly billions of dollars in 
international aid and will be one of the focuses here?
    The President. Well, first, let me say that both France and Canada, 
two other members of the G-7, have served as friends of Haiti. There are 
a lot of Haitians in Canada, and

[[Page 1442]]

France has historically had an interest in it. So I think we will be 
discussing it.
    Secondly, we have intensified our humanitarian assistance to 
Haitians, both to feed more Haitians and to provide more medical 
assistance there, so as to offset the impact of the embargo. So I do 
think it's an important thing.
    But the difference is that Ukraine is part of our historic mission 
to try to unify Europe around democracy and market reforms and a new 
sense of common respect for national borders and common commitment to 
mutual security. There are 60 million people who live there, and their 
fate and what happens to them is of immediate and pressing concern to 
the rest of Central and Eastern Europe as well as to Western Europe.
    I might say that when I was in both Latvia and Poland the first 
subject which came up after the interest of the countries that I was 
visiting, on their initiative, was the future of Ukraine. I think it is 
very important, and I don't think one should be used to denigrate the 
other.
    Andrea [Andrea Mitchell, NBC News].

Panama

    Q. We've spent our lives, American lives, and many dollars to 
restore democracy to Panama. Can you explain to the American people how 
an ally such as Panama could now be refusing to help us out of this 
crisis? And does the increasing flow of refugees, if it continues, make 
it more likely that you will have to resort to some military option 
because we have no place to put these unfortunate people?
    The President. I believe we will be able to develop a network to 
deal with them. The Panamanians will have to explain their own actions 
and their retraction of their former position. That is not for me to do. 
But I will say this: I appreciate what Granada, Antigua, Dominica have 
done in agreeing in principle to help us with this. And Mr. Gray is 
working hard with them and with others to develop a network which will 
permit us to deal with those who are seeking safety. And I think we'll 
be able to do that.
    Q. How do you feel about what Panama has done?
    The President. Well, I'm disappointed. But my concern right now is 
to build a network of friends in the hemisphere who agree that the 
Haitians are entitled to consideration here and who want to help us to 
do it. And I'm grateful for the three nations who do want to help us to 
do it.

The Economy

    Q. Mr. President, a strong unemployment report today in the States 
has given rise to concerns that the economy might actually be 
overheating. Do you think that the Fed should raise interest rates again 
to counteract that possibility?
    The President. I don't think I should depart from my past policy of 
not commenting on the Fed's actions. But let me say, the evidence, if 
you read it, is encouraging on the inflation front. While 380,000 new 
jobs came into the economy in the last month--and we're now up to 3.8 
million in the first 17 months of our administration--the wage levels 
did not go up a great deal, the working hours did not increase a great 
deal. It appears that, among other things, you've got a lot of young 
people coming in for summer jobs and more robustly than normal, and you 
also have some employers switching from using more overtime to actually 
hiring more workers as they have greater confidence that we're going to 
have a sustained recovery.
    I don't think we should do anything to undermine the recovery when 
we have still Americans who need jobs, we have still Americans who are 
working part-time who wish to work full-time, we have parts of America 
that have not felt the recovery, and we have no evidence of inflation.
    The real key is, is the economy generating real genuine 
substantiated fears of inflation? The answer to that is, no. If you look 
at the wage levels and the other indicators, we're having a growth with 
low inflation, really for the first time in 30 years an investment-led 
growth. We're leading our partners in the rate of investment, in the 
rate of productivity growth, in the rate of export increase. And I think 
we ought to keep it on that track. I don't think we should reverse 
course.

[[Page 1443]]

Russia

    Q. Mr. President, what are you going to tell President Yeltsin when 
you see him about the extent of the U.S. ability to help him when in 
Russia right now there is great concern that the U.S. has reached, 
essentially, the extent of its ability to help, and it isn't felt to be 
very much?
    The President. I think we've done quite a lot. But let me say, we 
just had a new energy deal signed there as a result of the work of the 
Gore-Chernomyrdin Commission, which is a multibillion-dollar energy 
deal. I think that Russia always felt that most of our help to them 
would come through private investment in their country, not through tax 
dollars.
    Given the commitment we have made to reduce the deficit in this 
country and the fact that I've presented a budget that eliminated over 
100 Government programs and cut 200 others, we've been, I think, quite 
generous in our governmental assistance to Russia. But what we really 
want to do is to help them to grow their economy through the private 
sector and to make Russia more attractive for private American business 
and individuals to invest and to help them grow in that way.
    And I think the work that we're doing with them on energy and on 
privatization and, frankly, on housing for the soldiers that are coming 
home, a lot of these things will help to generate more private sector 
development over the long run. And that is a long-term commitment of the 
United States that we're not going to weaken on.

Decline of the Dollar

    Q. You're putting economic growth at the top of your list of 
priorities. Does that account for the fact that you do not want any 
sudden action at this G-7 summit with regard to the dollar; that you 
feel that if there were international concerted intervention currency 
markets or a common strategy to raise or lower interest rates to 
stabilize currencies, that that, in fact, would hurt the recovery and 
the growth that you're talking about?
    The President. Well, first, let me answer the first question. We 
have participated twice recently in interventions, and what we see is 
that sometimes they work for a little bit and sometimes they can make a 
real difference. But over the long run, the economic fundamentals will 
have to work themselves out. And I think that the best thing to do to 
stabilize the dollar and the other currencies because, as you know, in 
the last few years we've had some terrible problems with other 
currencies which massive interventions have not reversed--the best way 
to do that is to send a signal to the markets that we are working on the 
economic fundamentals; that we are trying to build the economy, not just 
the economy of the United States but the economy of Europe, the economy 
of Canada, the economy of Japan and the global economy, that we're 
seriously working on Central and Eastern Europe and Russia.
    These things, it seems to me, together offer the promise of 
strengthening the dollar over the long run in a realistic way but also 
strengthening other currencies as well. Keep in mind what I wanted the 
United States to do when we drove the deficit down and we got our 
interest rates down for a time--very low, and they're still modest by 
historic standards, recent historic standards--was to be able not only 
to generate more jobs here in the United States, or back in the United 
States, but to also spark growth in Europe, Japan, and elsewhere. So 
what I want our trading partners to consider and some of them have 
already mentioned to me is, we don't want to adopt a strategy in the 
short run that is just a short-run strategy and could choke off growth 
in the other G-7 countries and in other parts of the world.
    I very much want a reasonably priced dollar. I'm not for a weak 
dollar. We have not done this intentionally. No one has tried to talk 
down the dollar. But I think it's important not to overreact to these 
movements. We need to work on the economic fundamentals. Markets that 
involve some amount of speculation and calculation about the future need 
to, as far as possible, reflect long-term fundamentals. And that's one 
of the things I was encouraged about in my conversation with the 
Japanese Prime Minister today, when he reaffirmed his commitment to 
economic growth in his country, because that will help a lot.

[[Page 1444]]

Russia

    Q. There are elements in Russia who are not happy with the current 
borders, and they could come to power in our lifetime. When you say that 
there's no gray area in Europe, are you saying that the tripwire for war 
for the United States is now the eastern border of Latvia, Poland, and 
other former Soviet satellites?
    The President. I do not believe that we should be discussing the 
matter in those terms when Russia has recently signed an agreement to 
join the Partnership For Peace, which means that it has recognized the 
integrity of the borders of its neighbors, and when it has already 
signed an agreement to withdraw troops from Latvia by August 31st, has 
already withdrawn troops from Lithuania, and when we're on the verge of 
getting an agreement for withdrawal from Estonia.
    It seems to me what we ought to be doing is making it clear that we 
support the integrity and the independence of these countries and that 
we have embraced them in the Partnership For Peace but that we are 
working toward a positive outcome. And I don't believe that it furthers 
the debate to conjure up a future that we hope we can avoid and that we 
believe we can avoid.

Economic Summit

    Q. Some State Governors think that this extravaganza of the G-7 is 
too expensive and doesn't really produce much. Now that you're 
President, do you think that the personal contact is worth it, and does 
lead to things that affect working people?
    The President. Absolutely. But let me answer you with two points, if 
I might. First of all, last year, we, the leaders of the G-7, agreed 
that the conference had become too stilted, too formal, too 
bureaucratic, and in a sense, too expensive. We decided to pare it back 
some and make it more informal. So we begin tonight with a leaders-only 
dinner, with no set agenda, that is not dictated by staff work and 
driven toward a final statement that often has been the lowest common 
denominator. And throughout this meeting we will have more flexibility, 
more informality, and I think it will work very well.
    The former Prime Minister of Italy, Mr. Ciampi, very much wanted 
this kind of meeting, and when Prime Minister Berlusconi took office, he 
was eager to embrace this as more consistent with his own background in 
business. So I think you will see that this will be the beginning of 
something that will become a lean and more efficient operation.
    Now, secondly, does it affect Americans back home or Italians back 
home or Germans back home? I believe it does. If you look at what we did 
last year, we made a commitment, first, that we would try to finish the 
GATT round; we did that; second, that we would do everything we could to 
try to help integrate Russia and the other former Soviet republics into 
the mainstream of the world economy, and we are making progress on that. 
That has made a significant difference. And just since then, we have 
started working on things that world leaders never talked about with 
each other before, like education and training systems and how to have 
adaptable work forces. All these things have a direct bearing on the 
livelihoods of our people back home. So I think this is a very important 
and valuable forum. And I hope we will continue it but continue to make 
it as lean and efficient and as economical as possible.

Haiti

    Q. President Endara complained about miscommunication. Is there any 
validity to that complaint, and is there not a risk that the reversal in 
Panama will lead peoples of the other countries you're dealing with to 
decide they don't want to participate, either--to put more pressure on 
their governments?
    The President. Again, I can't comment on that. All I know is what 
was said to me and what was clear. But the other countries have been 
quite steadfast, and I think that, again, right now what we have to 
focus on is building a network of support for the Haitians who are 
entitled to protection. And that's what we're doing, and I think we'll 
be able to do it.

Algeria

    Q. Mr. President, eight Italians have been brutally murdered in 
Algeria yesterday. The situation seems to be growing politically and 
towards instability over there. What is the position of your government 
toward the gov- 

[[Page 1445]]

ernment of Algeria and towards the situation over there and towards this 
atmosphere?
    The President. Well, we're very concerned about the developments in 
Algeria. When I was in France recently, the discussion of Algeria 
occupied a fair amount of my time with Prime Minister Balladur and with 
President Mitterrand. And I'm actually looking forward to having the 
opportunity to discuss this matter with the other G-7 leaders.
    What we have hoped to do is to support the government of Algeria in 
its attempts to restrain terrorism and destructive and illegal conduct 
and still hope to help it and to find a way of accommodating legitimate 
forces of dissent so that a democracy, or at least a functioning 
government, could occur that would reduce the amount of violence and 
destruction there. It's a very troubling thing, particularly given 
Algeria's history and strategic location and its enormous potential for 
good in that part of the world. And I look forward to discussing it 
more.

Haitian Refugees

    Q. Mr. President, back in 1980, as Governor, I think you learned 
firsthand that the refugee problem can be especially politically 
volatile. Does that help you appreciate a little more President Endara's 
decision? And how does your personal experience weigh into your 
deliberation now, especially given the political situation in places 
like Florida?
    The President. Well, there were two problems with the 1980 situation 
in our State, which I'm very mindful of, which do not apply in this 
case. If you will remember, a lot of the people who were released from 
Cuba in 1980 had either serious mental health problems or criminal 
backgrounds.
    And the two problems that existed there that the United States does 
not face now with the Haitians in any kind of general terms were that 
the refugees that were brought to my State, number one, weren't screened 
in advance, which is something that had been done with the Vietnamese 
refugees, for example, when we took large numbers there in our State 
with no problems and with open arms.
    And number two, the military authorities who were charged with 
maintaining order denied that they had the capacity to maintain order. 
So one of the things that I have done is to reassure all the leaders of 
the countries with whom I have talked that if they were willing to help 
us with the safe havens or with processing centers, depending on which 
country we're talking about, that they would bear no cost and that they 
would not have to worry about the security problems. Those are the two 
things that, I think, that are legitimate concerns.
    Now, in Florida the main problem there is the cost problem. And 
since I have been President, I have worked very, very hard to increase 
the allocation of Federal assistance to States that have 
disproportionate refugee or illegal alien burdens. That's not only 
Florida but also California, Texas, New York, New Jersey--they are the 
major ones, and some other States. And we've increased that aggregate 
assistance by, oh, about a third, by several billion dollars since I 
have been in office.
    Q. You said that, first of all, you referred to the lifting of the 
policy of direct return. Can you explain why you think it's appropriate, 
given the human rights deterioration that you cited in Haiti, to force 
people between choosing the right to political asylum in the United 
States and leaving Haiti? And second of all, you say your position has 
not changed on whether military invasion is an option, but has the 
deterioration and conditions in Haiti made that option more likely to 
pursue?
    The President. I think the conduct of the military leaders will have 
more than anything else to do with what options are considered when. And 
their conduct has not been good.
    Now, secondly--but let me answer the first question. What we owe the 
people of Haiti is safety. There is no internationally-recognized human 
right to go to a particular place and to have a particular response. We 
have increased our processing in-country. We still know that's the 
safest and best way to get out. And we know that people are able to get 
to those processing centers. We've increased our processing in-country, 
and as the human rights situation has deteriorated; the percentage of 
people in-country qualifying for refugee status has increased as based 
on the objective conditions in the country.

[[Page 1446]]

    So we are still doing what we said we would do, and we are going 
forward. There is a limit to how much the United States or anybody else 
can do given the facts that now exist. We are spending a lot of money to 
manage this problem. We asked some of our neighbors in the hemisphere--
as I said last May when I announced this policy, we asked some of our 
neighbors in the hemisphere to help us when we needed it, and some of 
them are doing so, and we are very, very grateful to them for doing 
that.
    Thank you.

Note: The President's 62d news conference began at 5:30 p.m. at the Zi 
Teresa Restaurant.