Capcity and Security

(8:30am EDT)

Ambassador Pascual: Tom [Lynch], thank you very much for that introduction, and for laying out the issues so well because what you really highlight is the importance of the challenges that we face today and the nature of the difficulty of some of those challenges. I want to thank General Schoomaker for the invitation to participate today and in particular, the support that we have gotten from the U.S. Army in developing these capabilities; in serving as a counterpart, especially looking at issues of transitional security; and in particular, we have gotten special help from the Peacekeeping and Stability Operations Institute at Carlisle. Just a tremendous organization, which is headed up by Colonel John Agoglia who has been a tremendous partner to us. General Dayton, thank you for the opportunity to participate today and for the partnership that you have had with us as a principal counterpart on the Army staff. And mostly, let me thank the military and the civilians who are in this audience, many of whom have risked their lives to be able to help others achieve a sustainable peace.

We have seen so much of those efforts recently in Iraq and Afghanistan, but it is not just Iraq and Afghanistan. If we look over the history of the last ten to fifteen years. It has also been Haiti, Somalia, Kosovo, and Bosnia, and many other places where the U.S. has not been as directly involved in such as East Timor; but it has become indicative of the nature of the foreign policy and security challenges that we face today, and indeed, what I would suggest is that today the nature of the security and foreign policy challenges that we face have completely changed from the last half of the twentieth century.

If we think of that period of time and the very words and vocabulary that we used on security issues, it words like they detente, containment and balance of power. Our focus was on relationship between power states and nation-states, and how those nation-states interrelated with one another, and how the scrutiny among nation-states as rational actors would avoid egregious behavior. And then we had September 11^th. What it began to underscore to us, in a very powerful and tragic way, was that weak and failed states when there are voids of power in the ability to direct a country can be filled with forces such as terrorism and organized crime and trafficking in people, which can create a direct threat to our national security. Indeed, the most significant strike against the United States on our territory was coordinated from one of the poorest countries in the world.

It forced us to recognize the danger of those voids in governance and the dangers of state failure. And it forced us to recognize that in fact, one of those areas where we may have the greatest potential for state failure is immediately in the transition after conflict where state systems have collapsed and still have not been put in place again. And overtime, what we have come to learn is that unless we deal with an effective transition to state governance capacity and to a sustainable peace that we do not have an effective exit strategy for our military operations and our peacekeeping operations. And as these strategic realities have honed in on us, it has also forced us to take into account certain operational realities.

In particular, we have to come to see that we need to be able to prepare ourselves to handle two or three significant stabilization and reconstruction operations around the world at any given time. We also need to think about these as operations which have to last at least five to ten years. If we look at the history of post-conflict stabilization and reconstruction, fifty percent of the countries that have been through conflict have lapsed back into conflict after five years, which sends a warning sign that if we are not prepared to be able to stay with this for the long haul, we will not achieve success. It was in this context that this office for stabilization and reconstruction was created in the U.S. Government and was specifically located in the State Department.

The office was established after a meeting by National Security Council Principals in April of 2004. We had an opportunity to go back and present our strategy and rationale to Principles in December of 2004 and get their complete, unanimous endorsement to move ahead with the types of approaches that I’ll outline for you today. The President underscored the importance of this initiative in his budget request to the Congress in February of 2005, and then again in May of 2005 in a speech that he gave to the International Republican Institute, underscoring the need to have this type of capability in order to address today's challenges of transformational diplomacy. The mandate that we were given was to be able to lead, coordinate, and institutionalize – and I underscore the word institutionalize – U.S. Government capabilities so we are not just responding on an ad hoc basis, but we have the capacity to actually sustain over time the lessons that have been learned on stabilization and reconstruction and apply them into the future.

The mandate that we have given also calls for us to look at prevention and preparation for conflict because if we do not work at the front end, we are not going to be able to do what is necessary to respond quickly to help stabilize and reconstruct societies that are in transition from conflict and civil strife. But just as important as this, we have stressed the importance of asking early on the questions about what is going to be necessary to put a country on a sustainable path towards peace, democracy and a market economy because if we do not ask those long-term questions upfront and do not have a clear understanding of how to help a country get on to that path, then we will make mistakes in the short term and it becomes much more difficult to correct course later on after a country has been on a certain vector for a period of time.

In a phrase what I would say is that we have been given a mandate to help establish the capacity for joint operations in stabilization and reconstruction, and I think that the analogy to the role the Joint Staff plays generally is appropriate and useful. We are a coordinating entity and our job is to help ensure that individual agencies such as the State Department, USAID, Treasury, the Department of Justice, and the different elements of the Department of Defense have the capacity to work together in an interoperable way to achieve a unified strategy within a given theater. And just as within the military, having joint operations does not mean that you do not need an Army, a Navy, an Air Force, and a Marines. You absolutely need every single one of those capabilities, but they have to operate together in a unified way within a given theater. So we have to create a similar capability within the civilian world and between the civilian world and the military world on stabilization and reconstruction.

A few words on where the office stands right now. Even though we are located in the State Department, we are an interagency office that currently has over fifty staff from State Department, AID, the Office of the Secretary of Defense, the Joint Staff, the Army Corps of Engineers, Joint Forces Command, the Army, the CIA, Treasury, the Department of Justice, and the Department of Labor. I think it is one of the most unique places to work in the U.S. Government that actually has this range of capabilities embedded within it, both strengthening the skills that we have to apply to any given problem, but also strengthening our ability to reach back to individual agencies and get their support.

Thus far, I think we have been able to create and introduce more effective coordinating mechanisms for stabilization and reconstruction policies. We have been able to work on creating mechanisms for early warning and linking early warning to early response. We have had considerable success in working on developing international partners with the UN; the EU; individual countries such as the UK, Canada, France, Germany, the Nordic countries; and we are working to strengthen relationships with regional organizations such as the African Union. And of course, we have made, I think, significant strides in building a strong partnership with our military counterparts. In particular, I want to thank Joint Forces Command, especially when they were under the leadership of Admiral Giambastiani for the tremendous support, material support, that was provided by Joint Forces Command and intellectual leadership, that they showed as we were launching our planning processes.

I would say that to date we have developed a strong capability as a Washington-based management body, and the challenge that we face today is to achieve or to get the resources that are necessary to be able to move from conflict prevention and developing the policies on conflict prevention to actually implement the activities that are necessary to sustain it, and to have the kind of strong response capability on the ground that is necessary to affect the dynamic of a conflict. And a key factor affecting that obviously will be the budget that we are able to obtain in the next six weeks or so from the U.S. Congress.

What I would like to do in my remaining time today is to spend some time first on some of the conceptual issues that affect the way that we think about prevention, and the transformation from conflict to a sustainable peace, and then some of the tools that we have put in place, or are in the process of putting in place in order to be able to achieve that. Let me start with conflict prevention. When I first took this job and had my first discussion with Secretary Powell about the work that we needed to do, one of the things he underscored was that if you can ever prevent a conflict and have to avoid going in and cleaning up after a military operation, obviously that is preferable to the investment that has to be made particularly if there are lives that are going to be lost and the resources that have to be used. But what is also important to recognize is that conflict prevention is one of the most difficult things for us to do.

It is important for us to understand as well that there is a difference between prevention in a long term sense and prevention when you have two parties that are ready to go to war. In the long term, what we have come to recognize is that investments in stronger economies, in the private sector, in a more prosperous society, in a more open political system, in health care, and in education, that these are the kinds of things that will help a society prosper and can serve as a preventive force against conflict. But in order to achieve in those areas, we have learned that what is necessary is to have local strategies, local leadership, local ownership, and local credibility of the approach, and when two parties are about to go to war, that is exactly what is absent, making it all the more difficult to achieve success in that environment. What it begins to tell us is that simply dumping resources, in that environment is not going to be successful if we don’t understand how to target those resources, whether they be diplomatic or financial, and use them effectively to promote change.

We have also seen over time that we understand a great deal about what some of the situational drivers are that might promote conflict, but we don’t always know what some of the triggers might be. And so in a sense what we might be able to do is to understand when there are a lot of leaves on the ground in the forest in the fall, but we do not necessarily know who is going to throw that match, which at times makes it very difficult to move from early warning to early response.

What has also made conflict prevention difficult and a challenge is the risk of failure. If you think about what is involved, where you have two parties with constituencies behind them, who generally want to go to war, and an outside party comes in and says, you know, you should rethink that and perhaps actually look at a peaceful way to resolve your differences. They are not going to do that simply on the basis of personality. They are going to do it if they think that a country and an organization and the international system is behind it, and that resources can be mobilized and that they can actually have a better life as a result of a compromise. And the only way that you do that is to actually commit your countries and your organizations to this process of conflict resolution, which indeed involves risk and which we have sometimes had a difficult time bearing. And so it requires us to rethink the nature of the risk of failure and conflict prevention.

I think, in order to be able to achieve these things, one of the things that we are going to have to do is to be able to move conflict prevention from a simple crisis response of moving in when there is a critical situation on the ground, to a mainstream part of our policy, and I will come back in a couple of minutes and discuss how we are seeking to do that. As much as we do to try to prevent conflict, what we have also learned over time is that conflicts will occur and it is important for us to understand the nature of the transition from conflict to sustainable peace if we are going to be able to respond to it effectively and help put countries on a path towards sustainable peace.

Now, in the military, a great deal of attention has been given to focusing on Phase IV. And one of the things that I would hope to encourage you to think about is to actually wipe Phase IV out of your vocabulary or think about it completely differently. For one reason is that there is usually a tremendous amount of ambiguity of when you end military operations and move into a situation of post-conflict operations. What we have seen over time is that you generally have a mixture of the two, but in addition to that, the whole process of post conflict transformation or transformation to a sustainable peace, I would offer in and of itself has to have a number of different phases.

The hypothesis that I would put out to you is that there are four stages of post-conflict transformation, and that these stages can actually proceed concurrently. Some might move forward, some might move backwards, but indeed, we have to move forward on all of these eventually if in fact peace is going to be sustainable. The first of these is the one that we tend to hear about most, the one of stabilization, which usually involves a focus of promoting order and peace in public safety, providing food and meeting basic services. It involves the beginning of a political transition process where the international community moves from being the principle doers to starting to think about how to transition that to local ownership and leadership. But simply doing stabilization in and of itself is not going to be sustainable and simply doing that from the outside, as outsiders who are enablers or doers is not going to be a successful operation, and hence we need to think about a number of other pieces, as well.

The second element is clearly the importance of dealing with some of the root causes of conflict – those elements of corruption or state failure, ethnic differences, or religious tension in a society that might have started the conflict to begin with. The irony that we have seen, however, is that as you start to tackle those very causes of a conflict that that can be destabilizing in and of itself and so we need to think about the kinds of safety nets that are necessary in order to help countries sustain those transitions. Think about a country like Iraq and the state economy that it inherited. If you started to tackle immediately the dismantlement of those state enterprises and the implications that would have for employment and unemployment, that in it of itself would be a major destabilizing factor. Yet we know, we know, that if we cannot help Iraq move off of the economic dependence of those state entities that it cannot be successful economically. And hence this dilemma, that at the very time that we are trying to promote stability, we have to tackle forces which in and of themselves can be destabilizing.

The third phase of transition to sustainable peace I would offer is the creation of the supply side of governance where the laws and the institutions of a market economy – think of those things that we take for granted in our own economic and political systems: tax systems, banking systems, the ability of a government to collect revenue, of having a dependable budget, of having dependable regulatory policies, of having political parties of parliament, the election of its political leaders, of court systems that can actually implement the law in a civilian controlled military and police force. In most of these countries these have to be created from scratch and if we put this into the context of what it means to promote order, and that we recognize that in many of these countries, they are coming from an authoritarian past, order was something that was imposed from the top and essentially pushed down through the society through force, and what we are asking the societies to do is move to an environment where order is based on openness and competition and freedom, with laws that regulate the way that people interrelate with one another, and a court system to mediate the disputes, and a political system which is based on election of leaders who are accountable to the population. That isn’t something which is just a change of laws that can be written overnight. It is a fundamental change in culture that will take time to be able to achieve and which will require local ownership of it because it cannot be imposed from the outside.

Finally, I would offer that the fourth stage of this transition to sustainable peace is creating the demand side of politics. The development of a civil society, non-governmental organizations, media, that can hold leaders accountable because if there are no checks and balances on those leaders outside of government, there is a tremendous risk of going back to the type of authoritarian roots that in many cases resulted in the creation of conflict to begin with.

Now, what are some of the lessons here? Very basic. First of all, it takes time to put a country on a path to sustainable peace. Often, elections have been seen as an endpoint. I would offer that in many cases, that’s a mistake. Elections can be a benchmark for progress, but generally, they are not an endpoint, which indicates in and of themselves that there is success. And if we do not make a commitment for the long term, the chance of a country relapsing into conflict are extraordinarily high.

If we have these different stages of transition, it means that we need different tools for the stages as appropriate, and so in some cases, we need to understand how to apply those different tools, and in some cases, we need to understand when we actually need to turn some of those tools off, and a good example of this is humanitarian aid. When do we actually stop that humanitarian assistance or food assistance because it runs a risk of destroying local agricultural markets and the development of an indigenous private sector? It is absolutely critical that from the outset, we begin thinking about the transition from outside leadership to local involvement and ownership. Outsiders can play a critical catalytic role at the beginning. We can help promote stability and order, but what we have seen over time, that if a society does not have the capacity for itself to define its future and implement that and carry out the basic functions of security and political process and run its economy, that an outsider cannot sustain that in a way that is successful over a period of time.

Finally, I just wanted to underscore the importance of thinking about absorptive capacity. It is a concept that sometimes seems technical but in fact, is actually very practical and real. As you move from external leadership and outsiders doing to local involvement in ownership, what we tend to find is that there is a slow down in the process of transition. It takes time for local actors to develop a consensus of how they want to move their country forward and change it. It takes time to develop the capacity for them to be able to move forward and achieve the kind of changes in their security and political and economic systems that they want to achieve for themselves.

Usually, this is completely off schedule with the flow of resources that we have to apply to a process of transition. What we generally find is that early on in the process of change, we can actually mobilize resources because of an interest in the nature of the problem. And then we hit this wall where a society is beginning to actually decide for itself how it wants to transform itself, and there is a frustration that the resources don’t actually flow. And you start to move along and work with that society and you get to a situation where in fact they are starting to achieve a consensus of how they want to move. They are starting to achieve a consensus for how they want to move. They are starting to build the capacity. And what has happened? Those resources are generally moved to the next problem. So at that very critical time when you actually need the resources to be able to sustain change, we often don’t have the money available that we need in order to support this process.

Based on this understanding of conflict prevention and post-conflict transformation, we have begun the process of putting in place ten sets of tools that will help us respond more effectively to conflict. The first is an early warning system. We have begun working with the National Intelligence Council where every six months, they will produce for us, for the interagency community, a list of countries that are at risk of instability. We bring that back to an interagency working group. We also bring it to the State Department and the State Department will work it with the Under Secretary for Political Affairs and the Regional Assistant Secretaries, and the purpose of it is not simply the early warning portion of this – there are a lot of early warning lists out there – but by having this as a management tool that we can use with the Under Secretaries and with the Assistant Secretaries in the Regional bureaus, we can review with them where there is a risk of instability and where there is a need for support to undertake policy roundtables or gaming exercises, or looking at conflict prevention programs that can be put in place in anticipation of conflict to mitigate the chances that conflict might occur. It is a starting point to actually try to move from conflict prevention as simply a crisis action set of activities to conflict prevention as a mainstream part of our policy process.

Secondly, we have begun to put in place a common planning framework for the military and for the civilians for stabilization and reconstruction. The military is outstanding at planning but generally planning for military operations and the immediate stability operations after that, but not necessarily for transformation of the civilian types of forces that are necessary in a society in order to achieve sustainable peace. In the civilian world, USAID has had a culture of planning, but generally the State Department and other agencies have not. So what we have needed to do is introduce a set of planning tools that will allow the military and civilians alike to have a common planning framework and a common vocabulary for the ways that we think about stabilization and reconstruction.

We have now begun using this planning framework in Sudan and Haiti. We have been testing it for Cuba. We have been working with the military that will issue it as an experimental pamphlet through Joint Forces Command to the Regional Combat Commanders so that it could be tested throughout the combatant commands. The intent of this is to build up the experience in both the civilian and the military worlds over the next year, so that we can then bring that back together and have a common doctrine for stabilization and reconstruction planning that can then be injected into training programs throughout the civilian and military worlds, that we have a common ability to plan and to act. Once we have that stronger capacity to plan, it will strengthen the ability to undertake other types of operations such as we indicate here in number three, which is an agreement in principle to deploy civilian stabilization and reconstruction teams to combatant command when they have been asked to develop a war plan. What it will give us the ability to do is actually have civilian interagency teams there embedded with a combatant command to work on stabilization and reconstruction planning from the outset. We just undertook the first such planning exercise with SOUTHCOM about two weeks ago and I think we both found that we have tremendous skills that we complement each other with and be able to bring to bear on any given situation.

We have been putting in place new mechanisms to strengthen coordination in Washington across the interagency where we will create policy coordinating committee level or what we call Assistant Secretary level policy groups that will become the focal groups for coordinating policy recommendations to Deputies and Principles at the National Security Council on Stabilization and Reconstruction. Those groups, which we call Country Reconstruction and Stabilization Groups, will then have the responsibility for pushing the implementation of those decisions throughout the interagency system and reporting back to our Deputies and Principals on progress.

We have reached agreement in principle as well for a very basic concept, which I think will have tremendous payoffs, which is the development of what we call Advance Civilian Teams, which can embed with the military at a division or brigade level from the beginning of military operations. The intent is to have civilians who can begin to work with the military from the outset on those things which are fundamental civilian functions – working with local ethnic groups and leaders to try to achieve a viable political situation in municipalities, looking at transitional security situations at a local level, of getting economic activity started again, of looking at when we can be able to pull in much bigger and broader interagency support teams and non-governmental groups to roll out their operations on the ground. In the past, we have not had in the civilian world the capacity to be able to deploy like this with the military, and we are establishing that capacity for the first time.

In six and seven, what we have underscored is the importance of creating a stronger response capacity in the civilian world. Let me describe that division as follows. In six, what we are trying to get out is the importance of having a U.S. Government capacity to exercise diplomatic and technical leadership on the ground, and so we are creating Advance Civilian Teams or an Active Response Corps of civilians, who will be able to deploy upfront and have a mix of political and economic and diplomatic security and administrative and communication skills that are linked together with technical capabilities that we are seeking to develop with agencies such as USAID or the Department of Treasury or the Department of Justice, so that we can put on the ground those individuals who can provide the core diplomatic leadership, establish a diplomatic presence and begin the development and design of programs that the U.S. Government needs to be able to put on the ground to effect change.

What we will try to get at in number seven is that beyond those U.S. Government capabilities, there is a need for strong capabilities in the non-governmental world, the private sector, think tanks, universities, individuals with specific skills who need to be able to be tapped to actually implement these programs – things like civilian police or police trainers or rule of law specialists, or economic development specialists, private sector development specialists, those who can work on transitional security or on political governance and transition. And so we are in the process of working with the interagency community to put together a database that will help us get access to pre-competed contracts that will allow us to move much more quickly when we need to deploy them on the ground.

We are also at early stages of doing a feasibility study of a civilian reserve corps that would be akin to a military reserve that would allow us to tap directly for U.S. Government service specialized skills such as civilian police or police trainers, or civil administrators. This is going to take some time to develop. It is going to require legislative change to put in place, but we feel that it is critical to actually have this mix so you will have individuals who can directly be pulled into the U.S. Government and can be deployed more quickly with advance training already done ahead of time.

It has been absolutely crucial for us to be able to think about development of these operations, not just as the U.S. Government, but as part of the international community. And indeed, what we have seen is that if we want to see successful transformation to a sustainable peace, we need to do this with our international partners. So from the outset, we have been working with the UN and have been heavily engaged as the UN has been working to create a Peacebuilding Commission and a Peacebuilding Support Office for greater coordination among its bodies like the Department of Peacekeeping Operations and the Department of Political Affairs and UNDP, so that they have a much stronger interoperable capability out of New York. We have been working with the EU as they develop their civilian response mechanisms. What is interesting to see is that most of our bilateral partners have now begun to create similar capabilities as well, reflecting their similar understanding of the security challenges that we face today where we have seen that we have to have a coordinated international capability to be able to anticipate conflict and respond to conflict if we are going to protect national security and promote a more stable global environment.

We are building a capacity to capture lessons learned, so that over time, we are not simply reconstructing operations over and over again, and perhaps not only trying to learn from the past, but perhaps not repeating some of the mistakes of the past. We do not need to do that and what we need to be able to do is have an institutional memory that works across the interagency community. So a key challenge over the coming year would be to develop a common agenda across key bodies across the interagency community that will help us assess lessons on issues such as how have the Provincial Reconstruction Teams worked in Afghanistan. Or what are some of the lessons that we can extract and learn on NGO and military operations as we have seen in some of the exercises that we have recently conducted, most particularly an exercise that was sponsored by the Naval Post-Graduate School in Monterey that helped us learn a great deal of how the NGO community and the military can work together because in the end, we have a similar set of goals, which is the transformation of a society and building an indigenous capacity to address the needs of the people in a country.

Finally, in order to make all of this work, it is going to require resources and one of the things that we have sought from the Congress is the development of a Conflict Response Fund. This Conflict Response Fund would be about $100 million. As most of us know that is not enough to completely address a full conflict transformation, but what it would give us sufficient resources to do is to plug in an initial thirty, forty, or fifty million dollars upfront to target a key sector, for example, the development of indigenous police forces while we are deploying international civilian police and rule of law experts – that we can get that process of change on transitional security moving upfront, and give us then a greater opportunity to work with the Congress and across the interagency community to find where we can actually obtain then the greater set of resources that are necessary to support the full stabilization and reconstruction operation.

In addition to that, the Administration has requested of the Congress, particularly underscored in a joint letter that was sent by Secretary Rumsfeld and Secretary Rice to the Chairman of the Defense Authorization Committee and the Ranking Minority Member, proposing the authority to allow the Department of Defense to transfer up to $200 million to the State Department for stabilization and reconstruction operations in cases where they determine it’s an absolute emergency. So what it would actually allow us to do for the first time is operate in a way that is utilizing the resources of the State Department and the Department of Defense to apply to a common set of civilian transformational objectives that are in the end, going to have a fundamental impact on the ability of the military to achieve its objectives and withdraw successfully from a conflict environment and achieve a sustainable peace.

I just want to take a moment on looking at how we transfer these concepts into specific capabilities and a key element of this is how we apply them to country situations. There are three types of responses that we are dealing with on individual countries. One is where we work with the Regional Bureau in co-management of a post-conflict response. This is the most labor intensive set of activities that we might undertake. At any given time the maximum of activities that we will be able to address are two to three conflict transformations at any given time. Right now, the two countries that we are focusing on are Sudan and Haiti.

Secondly, there are prevention activities, as I described before, where we will be able to work on a consultancy basis with our partners in Regional bureaus to focus on how they might be able to improve their capacity in advance to be able to mitigate the prospects for conflict. A couple of examples of these are with the Democratic Republic of Congo where we worked together with the Africa Bureau in simulating what the upcoming elections might look like, what could go wrong, what could go wrong immediately after the elections and on the basis of that, asking ourselves, what would we do differently today in order to prepare for those situations. We have done a similar exercise on Nepal. We are beginning to work on a similar set of activities on Bangladesh. These are the kinds of gaming and strategizing activities that the military has regularly done in the past, but generally have not been a mainstream part of the civilian policy process.

Thirdly, we will engage in contingency planning either for specific country exercises or in some cases, for specific sectoral challenges. One of the areas of contingency planning that we have been involved with is Cuba. At some point, there will be a transition after Fidel. There, I think, is common international agreement that what we would like to see as an international community is a Cuba which is democratic and run by the Cuban people. And so it is up to us to begin thinking now about how we would respond to that situation so that we can be as effective in mobilizing and helping to mobilize a strong international response that gives a voice to the Cuban people in promoting a democratic future.

In addition to that, we have been applying our capabilities as I indicated earlier to military coordination, international coordination, and development of civilian response mechanisms. At this point, the way that I would characterize it is that we have a much stronger planning capability in the U.S. Government. We have been able to do this with personnel who have been taken to some extent on an ad hoc basis throughout the interagency community. But when it comes to the point of actually deploying overseas, we are still dealing with the same pool of people that we have had in the past. When it comes to dealing with resources that are necessary for those deployments and for conflict transformation, we are still working from a reallocation of existing resources, which inevitably means that it is a slow process. And hence in the second and third stages that we are proposing here, the second being in Fiscal Year ‘06, contingent upon appropriations that we might be able to get from the Congress, and then finally in ‘07, what we are looking at is a stronger capability to actually have the capacity to deploy staff to the ground to have resources for immediate conflict responses that can help have an impact on the conflict situation early on in the process of change where you can really affect the dynamic of a situation on the ground.

Now, often we have unfortunately tended to characterize these kinds of investments as spending money rather than saving money and most importantly, saving lives. But let’s look at this from this perspective. If we look at the budget request that the Administration has on the Hill right now for Fiscal Year ‘06, we have requested $124 million in Foreign Operations and State Operations money -- $100 million for a Conflict Response Fund, $24 million for the planning and exercise and staff capacities in my office and a more effective rapid response capability – and then the $200 million transfer authority that has been requested for the Department of Defense. If we just take the hypothesis that by having this capacity to be able to more effectively deploy skills and capabilities early on in a conflict, if it would allow us to simply withdraw one division from Iraq one month early, it would save us $1.2 billion. If we would look at what it would save us if we can withdraw an international peacekeeping mission six months early, generally, it would be on a scale of $400 to $500 million. So this is not just simply spending resources, it is an investment of resources to save money and to save lives, and address our national security.

Twenty five years ago, we might have been in a situation where we would have said that we might have empathized with the people of a country if they were undergoing conflict, but that in some cases, it just simply wasn’t in the interest of the United States to become engaged and involved, and indeed, we cannot become engaged and involved in every circumstance. But what we have also seen is that even the poorest countries in the world, if they become a base for terrorist operations and organized crime can become a threat to our national security. We have an opportunity today to actually invest the resources that protect our security and make an investment in the transformation of societies that will make them more stable and peaceful, and that would in the end be better for them and a better investment for the United States, as well.

Thank you for your attention and I would be happy to answer your questions.

Yes, over here. I am going to need your help on waving your arms because this light is so bright that I can see about three or four faces in the audience, but most of you I can’t see.

Question: Sir, I am Captain David Buffalo. I am a Joint Staff intern going to Georgetown right now. Last week, at Georgetown, General Zinni gave a speech where he identified the need that it seems like you have addressed and that is for the interagency of the Federal Government to work, not just at the art of becoming engaged not just at the strategic level but also at the operational tactical level and seems like you have brought a blueprint for making that happen. As a young entry captain responsible for bringing peace to a region in Afghanistan, I thank you for your efforts. It would have been a help back then. But my question, however, addresses one of our speakers from yesterday, Mr. De Soto gave a very interesting compelling argument that we cannot establish peace or establish lasting development or stability or capitalism or democracy in basically eighty percent of the world without three specific things, and what those are is establishing a legal system within a country of property ownership, of incorporating businesses and establishing a personal identification system. I was just wondering, sir, do you see within the planning of your organization when you tackle how to establish peace, development and reconstruction in a country, do you see yourself addressing these three goals?

Ambassador Carlos Pascual: First of all, let me just comment very quickly on General Zinni and thank him as well for some of the help that he gave us early on as we were developing these operations. He was very generous with his time and sitting through with us and brainstorming some of these capabilities that we were seeking to development. So if some of this actually seems to respond to the kind of operational and tactical requirements that Zinni was laying out for you in your course, it is probably not just happenstance; it is very much as a result of some of the direct input that we got from him.

On your comment on Hernando De Soto who has played a revolutionary role in the international development community and thinking about some of the prerequisites of helping informal societies and communities actually become legal, and as a result of that, become more prosperous, I think he very appropriately targets a few key questions on establishing a legal framework for businesses to operate in particular for the creation of property ownership and incorporation of businesses, and giving individuals a sense that they are a part of society and therefore legitimate. I think those are very much key elements.

If you think back to the stages, the four stages of transformation or transition from conflict to sustainable peace that I talked about earlier, one of those I indicated was developing the laws and institutions of a market economy. I don’t want to say that there are the same laws and institutions for every society, but there are some basics that we have learned over time that are particularly necessary to address. We have tried to capture some of those basic issues in what we call an Essential Task Framework. That framework is based on work that was started by CSIS and the Association of the U.S. Army. We brought it back to the interagency community and what we did was we looked at five different areas: transitional security, humanitarian and social issues, economic development, transitional justice, and infrastructure. In those areas, we looked at what are some of the things that are critical to do upfront and immediately; what is necessary to be able to transform or move from international leadership to local leadership; and then finally, what is necessary for a long-term sustainability. In the economic section of that peace, what you will find is a checklist of some of the key questions that need to be asked or addressed in being able to move toward a sustainable economic transformation. Actually, the slides are not up yet, but the slides will be handed out and at the end of them, you will find our website which is www.crs.state.gov and on that website, you will be able to pull down that essential task list and I mention it because I think you will find on that, not only those issues that are highlighted or underscored there but a range of others.

The final point that I want to make on this is, it goes back to the point on joint operations that I made earlier. There is no way that one organization in the U.S. Government -- my office right now with fifty plus people, eventually, we hope to be able to get to eighty people -- can actually do all of those things in any given environment. It means that we do have to bring in the capabilities of the individual responsible agencies. In this case, the most appropriate agency would be USAID. The task is or the challenge is to bring that together in the context of one overall U.S. Government planning strategy so that we have an overall strategy for the government rather than ad hoc pieces that are undertaken by each individual agency. And so what we are seeking to do is exactly raise these kinds of questions as part of our overall strategic approach – identify who has the lead responsibility, where the resources are going to come from, and be able to tie that back into our long-term goals, rather than set for ourselves the long-term goal of trying to do every single piece of this ourselves because if we try to do that out of one central agency, then we will relearn the lessons of Communist authoritarianism and we will see that it simply fails because it is impossible to carry out. It does require individual capabilities of different agencies.

Question: Yes….George Schwab, National Committee on American Foreign Policy. I wonder whether you would consider Albania a failed state, a state in the process of failing and what you are doing about it. Thank you.

Ambassador Pascual: It is probably not useful for me to put a label on whether Albania is or is not a failed state because I am sure that given the magic of international communications right now, that would provoke a debate in Albania on what the U.S. Government policy is and whether we think they are failed state today as opposed to keeping the debate focused on the specific policy issues that need to be addressed in Albania. My office is not working on Albania today. One can argue that there are a whole range of countries throughout the world that can merit attention either for conflict prevention purposes or for addressing some of the transitional challenges that exist after a society has gone through a major transformation, and obviously, Albania has gone through a very significant transformation.

In my previous job when I worked as the Coordinator for Assistance to Europe and Eurasia, I was very actively involved in Albania. In fact, the last time I was there was in December of 2003. I would underscore two things. One is the importance of the rule of law. In Albania, one of the very strong challenges today has been to move from a society which is extraordinarily laissez-faire to one which can apply that kind of entrepreneurship in a context of rules for society and a court system which is broadly respected and respects the rights of individuals, and if that kind of transformation can be made, it can actually be a tremendous platform for building on the entrepreneurship that exists in Albanian society.

The second point that I would make is the importance of what I had mentioned earlier, which is to ensure that conflict prevention and conflict response activities, but in particular conflict prevention, becomes a mainstream part of the policy process. Because if you think about the Balkans, if you think about Africa, if you think about different parts of Latin America or Southeast Asia, there are a tremendous number of countries that are potentially at risk of instability. You can look at the websites of the International Crisis Group or Human Rights Watch or International Alert and come up with a list in a few seconds, right? And if it is dependent on one part of the U.S. Government, one organization of the U.S. Government, to stimulate attention to those countries that are potentially at risk, it isn’t going to work. What needs to happen over time is that we need to have strong sensitivity to these long-term transitional issues and prevention issues in the mainstream part of our policy process to ensure that we can address them effectively. So what we are trying to do is to be a catalyst for that process. We cannot ensure out of one office that we undertake all of the kinds of preventive activities that are necessary around the world, but what we are beginning to do is to put in place a policy process that will focus attention on those places that potentially could be unstable or where potentially conflict could arise, so that our colleagues in the Regional bureaus are giving them greater attention and thinking more creatively about the steps that they might be able to take. Yes, back here.

Question: Jeff Clark. I am a Chief Historian of the Army but also for many years, I have been a Civil Affairs Officer and worked in DOMS, the Director of Military Support. I understand everything you said about what you are trying to put together and what you are trying to do, and it all makes very, very good sense. Our problems really have always been, from the Army's point of view, of getting Treasury, Justice, INS, and Interior to get involved with the planning and to encourage them to have the ability to put people on the ground as quickly as possible and not in two, or three, or six months, but now. It has always been very tough to do. It strikes me, whether you’re doing it domestically or abroad that there is a lot of overlap between what you are trying to do that involves changing job descriptions, budget things, financial instruments, and what FEMA is trying to do. You have the same kind of problems regarding planning and deployment of say the other government agencies and working together in an interagency group. Is there any synergy between you and FEMA? Do you work kind of closely with them too, because it would seem to me you are both interested in the same sort of personnel and budget instruments that would enhance your ability to do things? You are a very similar organization it would seem to me. Thanks.

Ambassador Pascual: A few comments, first of all, I think it is important just to mention that we have been working with our Civil Affairs colleagues to look at how we can coordinate with the strong capabilities that they bring to bear on the ground. We have had several visits down to Fort Bragg. In December, we will be running an exercise where we look at how Civil Affairs officers and individuals in the Advance Civilian Teams that I mentioned would work together on the ground and be able to combine our skills and capabilities. As General Altshuler put it to me, in a sense that the Civil Affairs folks are the paramedics. They can get on the ground quickly, they can apply a tourniquet to stop that bleeding, but unless they have partners who are there to work with them, that can take a longer term perspective, they are not going to actually be able to fix that wound. And so this is the sort of philosophy that we are working towards and we are going to be running through an exercise that helps to start to run through some of the nitty gritty requirements to be able to work together effectively on the ground starting in December.

In terms of bringing together various agencies for planning, getting the right people, being able to get them now, it is a big challenge, and you know, we need to be realistic. Again, when I started this job and was discussing this with Secretary Powell, one of the things that we reflected on was that, in the military, after Goldwater-Nichols, where there was legislation, resources, and a history of a hierarchical culture, it took the military a good fifteen years to really get good at joint operations. What we are proposing here is to develop a joint operations capability in the civilian world with no comparable legislation. If you just simply compare the Foreign Affairs budget of $30 to $35 billion between the State Department budget and the AID budget, and the military budget of some plus or minus $450 billion, obviously, a phenomenal difference in resources. This is going to take time. It is going to be a challenge and we need to be realistic about that, and we can’t let that keep disappointing us, but it means that we have to be deliberate in our efforts.

Now, part of being deliberate means that you have to have a planning framework, you have to change a culture, you have to identify individuals in advance, you have to have rosters that you can tap, you have to have individual agencies that are identifying individuals who can be made available for planning exercises and for deployment, and so that process is getting underway and we are starting to put those kinds of rosters in place.

Regarding your question about FEMA, early on we had discussions with FEMA about how we might be able to learn from some of their experiences. We had some staff who actually were embedded with FEMA for a few days during the response to Hurricane Katrina to be able to help them with some of the issues that they were dealing with on responding to international offers of assistance. One of the things that we learned is that for FEMA to be able to operate effectively, it has to do it on the basis of the National Response Plan and that National Response Plan is based completely on reimbursement of resources. And we are in a somewhat difficult situation here because, right now, we do not have an operational budget to reimburse resources. So it makes it difficult to operate quite through that mechanism.

What we also saw from the FEMA network was that they have the ability to tap U.S. Government agencies and then use the contracts in those agencies, so that those contracts can be applied for domestic relief and reconstruction activities. In some cases, we will have the capacity to actually tap those same kinds of contracts through U.S. Government agencies. In other cases it may be more expeditious to just go directly to the private sector directly, and in some cases, it may be necessary to have a direct civilian response capability in something like a Civilian Reserve Corp for things like international civilian police, because that really actually does not exist anywhere in the U.S. Government right now. We have no national police force, and so when we deploy international police to a foreign country, they are being taken from all different parts of the United States without any common doctrine and we can change that if we have some form of a civilian reserve.

So we are trying to learn from FEMA's experiences and the mechanisms FEMA has created, but what it has taught us and showed us is that when you apply FEMA's capabilities or the kinds of contractual mechanisms that they have to an international environment, that in some cases, we are just going to have to change the operating modes because it doesn’t always tap the skills and resources that we need overseas.

General Dayton: Carlos, we can take one more question.

Ambassador Pascual: Okay.

Question: Thank you, Ambassador Pascual, my name is Dave Louden. I am retired Navy and a government contractor now. So much of your last ten minutes keep reminding me of the role that deliberate planning plays in some of your goals in the Civil Affairs side of that deliberate planning seem to be something you could certainly take advantage of. My question is very short. In your concept of a crisis response fund, how do you approach that where the U.S. Navy considered a belligerent or to have its own motivation in this, do you conceive of the support of allies that would play that role and the reason that comes to mind is my former boss Rear Admiral [inaudible] said that it is amazing how much success we can achieve when we do not worry about who gets the credit for. Thank you.

Ambassador Pascual: If I can interpret your question as whether or not that Conflict Response Fund can be used in support of international partners, is that correct?

Question: (inaudible)

Ambassador Carlos Pascual: Okay. It’s a good question and I agree with you that one of the things that we need to do is be able to look at how the job gets done and not necessarily who obtains the credit for it. There are also going to be some practical realities that we need to address for the U.S. Congress on how we use those funds and the accountability for those funds. There are practical questions that we’re going to need to address as well on how we use those funds to leverage the participation of others. I would not want to exclude that funding could be used to be able to channel it through another international partner or a multilateral organization. In some cases the United Nations, particularly through UN Ops has been establishing very broad contractual capability internationally that can be quite attractive to utilize. But what we also want to be able to do is to challenge our partners and say if we have $50 million to put on the table tomorrow to get activities X, Y, and Z going, I want to be able to go back to the EU to the French to the German's and the Nordic countries and say we need you to establish that same kind of capability so that you can get on the ground quickly, as well. So, while I want to leave that open as a possibility. I want to use this as a tool that gets us the maximum impact with the most resources that we possibly can on the ground at any given situation.

General Dayton: Let me jump in here because we are going to have to move on in the schedule, but the overall theme that we have is shaping national security. And what you have heard this morning, if the United States Government continues to sustain the vision and resources what Ambassador Pascual is up to is one of the most profound reshaping of national security events that we have had probably since the end of the Second World War. What he is trying to do is truly cutting edge. It is truly the view of the future, I think. The Defense Science Board last year did a study that very much reinforced what Ambassador Pascual is doing. They are going to do more of that this year. The Quadrennial Defense Review that the Department of Defense is finishing up now has stability operations at the center as part of a new overall military strategy for the United States. So what you have heard this morning is pretty profound stuff and I hope all of you can take this away as something that you have not heard the last of.

I have to admit that sometimes I think of Ambassador Pascual as sort of a modern day Rumpelstiltskin who has been taken into a room and has been told to turn all of this straw into gold and yet when he walked into the room there was not even any straw there. This is a man who I just have to say has individually, with his team, created something out of nothing. He has created what may be the first truly functioning interagency process on a national security issue that we have seen in a very, very long time. So Carlos, on behalf of the Chief of Staff of the Army, and I know I do speak for General Pete Schoomaker, we want to thank you for being here today, but also for everything you do everyday because what you are doing, I think is the key to the future of the national security of the United States. So thank you very much.