Deputy Secretary of State Richard Armitage has invited international donors to raise their commitment to Iraqi reconstruction, particularly in the humanitarian sectors of electricity and water infrastructure, following the United States' decision to shift $3.46 billion in funds away from these areas and into programs aimed at strengthening Iraq's security forces.

"I have no doubt that many of those who pledged monies at Madrid a year ago are looking for sectors in which to put those pledges and I think the electrical and water area are two areas which will find great favor internationally," Armitage told reporters, following the October 13 Iraqi Donors' Conference in Tokyo.

The deputy secretary thanked Japan for its leadership in sponsoring the conference as well as its continued commitment of troops for humanitarian activities in Samawah, Iraq. He said that the Japanese involvement in Iraq serves as "a sort of a signal or a landmark to other countries who want to involve themselves in humanitarian activities."

Armitage said that U.S. disbursements from the $18.4 billion supplemental appropriation for Iraqi reconstruction now amount to $1.4 billion, and that U.S. officials aim to step up disbursements to a rate of $400 million per month.

The deputy secretary was unable to say exactly how much of Iraq's $125 billion in external debt has been forgiven following former Secretary of State James Baker's meetings with Iraq's international lenders, but he affirmed, "It is our view, shared by some in the international community, that the way to go is to forgive the majority of the debt."

He said, "Eliminating that debt won't guarantee the success of Iraq, but without it, there is no ability for Iraq to be successful."

In response to concerns that countries would be reticent to disburse funds to Iraq for fear that it would be lost to corruption and mismanagement, Armitage said that the Iraqis are addressing this problem through inspector generals in each of the ministries. "They're serious about rooting it out, and that's a pretty good basis on which to start," he said.

Following are excerpts from the transcript of Armitage's remarks to the press:

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[U.S. Department of State]

Richard L. Armitage, Deputy Secretary of State

U.S. Embassy-Tokyo Press Office

Tokyo, Japan

October 13, 2004

Press Conference in Tokyo

14:00 local time

MODERATOR: Good afternoon everyone. We are "on the record" today with Deputy Secretary of State Richard Armitage. First, the ground rules. We do have simultaneous translators, so when you come to ask a question, please give your name, your organization, ask one question and ask it in the microphone so that the interpreters can hear it. That said, Deputy Secretary.

DEPUTY SECRETARY ARMITAGE: Good afternoon. It's kind of fun to see so many friends, and meeting you in Washington a lot, it's a delight for me to be seeing you in Tokyo. I'll tell you what I've been doing for the last couple of days and then I'll do what I'm supposed to do as to try to answer your questions. I arrived two nights ago, and since then I've met with Abe-sensei, and discussed political developments and foreign policy developments in and around Japan. I've engaged in a very extensive strategic dialogue; the Japanese side was chaired by Vice Foreign Minister Yukio Takeuchi. This dialogue has taken on increasing importance as the world has become increasingly complex and Japan's role in the world has become increasingly more pronounced. Given that Japan is our most important ally in this part of the world, it's perfectly appropriate that we have these very in-depth discussions. I also had the honor of meeting with [Senior] Vice Foreign Minister Aisawa at the Foreign Ministry yesterday, and last evening with the Director General of the Boeicho, Ono-sensei. This morning I was able to meet with Chief Cabinet Secretary Hosoda. I also took part in an Iraqi donors' conference. Again, Japan, showing a great leadership role in the world, has stepped up, taken that leadership position, and hosted this follow-up Iraqi donors' conference; a follow-up to the Madrid conference of a year ago, and I must say having heard the presentation of the Iraqi delegation this morning, one can't but be amazed at the courage, the conviction and the clarity of their vision that they've put forward for their country.

I was here because the President, the Secretary of State, were determined that the United States should go and support the Iraq delegation, particularly as the United States has recently moved some of our money from the water and the electricity sectors in Iraq to security, in order to more rapidly stand up security forces -- both police and military in Iraq. I met with Yamazaki Taku. Laterally, today I'll be meeting with the leadership of the LDP, Mr. Takebe, the leadership of the Komei Party. I'll also see Minister Koike and laterally I have a meeting with the Foreign Minister Machimura. I'll stop there and try to handle or answer any questions you may have and look forward to the exchange.

QUESTION: Tim Johnson, Knight Ridder Newspapers. I would like to ask

DEPUTY SECRETARY ARMITAGE: Say hello to John Walcott for me.

JOHNSON: I will. I would like for you to delve a little more into the Iraq issue on water and electricity, the amount that the U.S. had to transfer for security and specifically whether you've gotten any commitments yet from other nations and whether they're concerned about the security issue as they implement funding for those sectors?

DEPUTY SECRETARY ARMITAGE: Thank you. This morning, as I've said, we, the United States, had pledged $18.4 billion in our second supplemental toward Iraq, of which we've spent a total of about $3 billion, but we just requested or petitioned the U.S. Congress for permission to take $3.46 billion and shift it away primarily from the electrical sector and the water sector into security and governance and immediate impact jobs for Iraqis. We believe that shifting the majority of the money into the security area will allow us to stand up the Iraqi forces much more rapidly and bring much more rapid betterment to the security situation of Iraq.

This morning, at the Iraq conference, the Deputy Prime Minister and the Minister of Planning both acknowledged that they understood the reasons for this shift. They both asked that the donors step into this void it's not a complete void; we have a lot of other money going into this area but that other donors step up and that was a plea that was echoed by me at the request of our President and the Secretary of State. The Deputy Prime Minister noted, as the Prime Minister had noted a couple of weeks ago in Washington, that there are many provinces of the 18 in Iraq which are absolutely clear and have had no security incidents. As a first step, the delegation from Iraq suggested that perhaps donors would find it easy to start projects in those areas in which there has been no security problems, and the Deputy Prime Minister acknowledged that there were 9 or 10 of them that were, in their view, completely free. I have no doubt that many of those who pledged monies at Madrid a year ago are looking for sectors in which to put those pledges and I think the electrical and water area are two areas which will find great favor internationally.

QUESTION: Mr. Secretary, Steve Herman from Voice of America. Bit of a follow-up on the last question there. As you mentioned, the United States has pledged $18.4 billion dollars, but according to a State Department report last week, only about $1.2 billion has actually made it into the pipeline. What's the holdup and what are you doing to get more of that money to the Iraqis?

DEPUTY SECRETARY ARMITAGE: Actually, that report to which you accurately refer, has been changed now to be about $1.4 billion, because we are moving out a little more rapidly with dispersements of money. We took, I think, longer than was necessary to get our act together prior to turning over sovereignty and hence June 28th, when we turned over sovereignty to the Interim Iraqi Government, we had dispersed only 400 million dollars. Today, I was able to report to the conference that in the last three months, we've been able to usefully and correctly push out the dollar about a billion more in dispersements and I'm looking, and have publicly told the U.S. Congress, for an average of about 400 million dollars a month being dispersed from the U.S. supplemental. We're going to do this by: one, hiring many more Iraqi firms, because that will have the dual benefit of increasingly employment; two, we've engaged U.S. Ambassador Bill Taylor, who previously ran the reconstruction program for me in Afghanistan. He's now in, actually he's in Tokyo today, but he'll be back in Baghdad in a couple of days to run this program. And, I have no doubt that we'll correct the errors that we made before the slowness that's a better way to say it and really start pushing the money out the door.

QUESTION: Thank you very much Mr. Boyle. Mr. Armitage, my name is Shogo Kawakita with the Japanese news wire service, Kyodo News. I have a question on Iraq. Following the deteriorated situation on the ground, some European allies are now thinking more seriously about their exit strategies. You know, the Dutch troops are going to leave next March, and the Polish will follow after them. By contrast, the Japanese government is now thinking, mulling, to extend the period of the deployment of the Japanese troops now stationed in Samawah in southern Iraq. My question is how would you appreciate the plan of the extension, and do you think that the Japanese troops could do more beyond the current activities. Finally, how long would you expect the Japanese troops to stay on the ground? Thank you.

DEPUTY SECRETARY ARMITAGE: The United States Government, and certainly me personally, could not more highly evaluate the presence of the Japanese forces, the Jieitai, at Samawah, and note that their humanitarian activities there have gained the favor of the population and I think stand as a sort of a signal or a landmark to other countries who want to involve themselves in humanitarian activities. The Government of Japan dispatched these Jieitai forces because they were supporting, or because of the fact that Saddam Hussein had violated consecutive UN Security Council resolutions. We think this was appropriate. As to how long the Jieitai should stay, that's a governmental decision. We would hope that the government could extend the length of time in Samawah. We think that we're going to be on a winning path with this Iraqi government. We're going to stand firm for elections in January. We're standing up security forces so that security will be better in Iraq. Finally, as to how long the Jieitai will stay, or for that matter, how long American forces will stay, I'm unable to answer and I think it would be foolish to try to give a date certain. We don't want to stay, speaking for Americans, in a military way, in Iraq one day longer than is necessary. I think that most Iraqis, including the Iraqi leadership, doesn't want us to stay any longer than is necessary. They want to provide for their own security, and our job is to give them every opportunity to do it.

QUESTION: Jessica Smith, Market Place Radio. Going back to the question of donor funds and disbursements, is there a concern among donor countries, potential donor countries, of corruption and misuse of funds, and how much of a problem is that in getting people to donate? Thank you.

DEPUTY SECRETARY ARMITAGE: After the problem of security in Iraq, I think fear of corruption is the second largest problem. In fact, Deputy Prime Minister Barhem Saleh this morning in the donor's conference addressed this, and he said, "Look we're just beginning. We've started anew after thirty years of corruption and incompetence." You can't expect it to go away overnight, but they've already put inspector generals in the different ministries. They're serious about rooting it out, and that's a pretty good basis on which to start, but it is a real concern.

QUESTION: My name is Yokota with Nikkei. I want to ask about Iraq. I guess that a few weeks ago Secretary Powell admitted that the situation in Iraq is deteriorating. Do you still believe that the election would be held on schedule in January, and would be on a nation wide scale? Thank you.

DEPUTY SECRETARY ARMITAGE: We believe that along with the government of Iraq that elections have to be held by the end of January. This is the course on which we embarked and it's one that we won't waver from. Of course, elections have to be nation-wide, you can't hold elections in two-thirds or four-fifths of the country. We wouldn't hold an election without California, or without Texas, and I don't think that the people of Iraq should be expected to hold an election without having all citizens of Iraq having the opportunity to cast a vote. Now the trick here is obviously to enfranchise and empower, if you will, primarily the Sunnis in the so-called Baathist Triangle make them confident that they will have a part in the future of the new Iraq, and that's going to take some doing, but the government of Iraq certainly understands it, the coalition certainly understands its, and some of the tribal elders, the notables, the tribal sheiks in the so-called Baathist Triangle understand it. Our job is to make sure they all understand it and believe it.

QUESTION: My name is Ogata from Kyodo News. One quick question about Iran. Can you explain to us where this issue of the nuclear issue stands right now? To my knowledge, I think the G-8 will hold a meeting, I think, Friday in Washington, and would you just explain to us where it stands and whether the U.S. is planning some sort of concession? Thank you.

DEPUTY SECRETARY ARMITAGE: You're very well informed. The political directors will indeed meet in Washington on Friday. I'm going to go back to make sure I can meet with them as well, and they will be discussing a paper that our European friends primarily have drafted on their ideas of a way forward. I think several things have happened over the last several months. First of all, we're very happy with the efforts of the EU-3 the Foreign Ministers of Germany, Great Britain and of France as they try to bring the Iranian government to a better position, a better understanding of the need to be transparent in their nuclear program. Unfortunately, the very hard work of those three has gone a bit, has been wasted a bit, because the Iranians have made a different decision. They have made a decision, apparently, to hide, to continue to hide their program, and indeed to add to that they've made some very scurrilous statements publicly. We hold the view that Iran needs to be brought to account, and we would like to move to the UN Security Council after the November Board of Governor's Meeting, but we're open to all ideas that people have, because one thing has become clear and that is that we all share, in the G-8, the same end, desire, and that is that Iran should be free of nuclear weapons, and be transparent and let the international community have sufficient confidence that that is the case. So, that's a good basis on which to move forward, but we'll wait until Friday to see what our friends come up with.

QUESTION: Just getting back to Iraqi debt, Mr. Secretary. Vice President Cheney recently said that other nations have agreed to forgive debt to the tune of 80 billion dollars. I'm just wondering if the donor's conference or the State Department, if their numbers jibe with that number?

DEPUTY SECRETARY ARMITAGE: The former Secretary of State Jim Baker, who was sent by President Bush around to the major creditors of Iraq, and each and every one agreed to significant reductions of the debt. Now "significant" to the United States is 95%. I would not say that all of our colleagues signed up to that. The United States, however, has taken 360 million dollars, and we will apply it to the Iraqi debt and it will buy down slightly over 4 billion dollars of Iraqi debt. The IMF, the World Bank, have done a study on the Iraqi debt. It's 125 billion dollars. Eliminating that debt won't guarantee the success of Iraq, but without it, there is no ability for Iraq to be successful. And so, we are using all of our political persuasion, as well as our own money--witness the buy down of the 4 billion dollars worth of debt to demonstrate to the international community the worthiness of being a very generous forgiver of Iraqi debt. The fact of the matter is people are not able to get paid now anyway in an Iraq that's mired in 125 billion dollars worth of debt. It is our view, shared by some in the international community, that the way to go is to forgive the majority of the debt, but I'm not going to, I can't myself name a specific figure. But if you figure, by the way, that 125 billion dollars is the debt, and that the major creditors have agreed to significant reductions, even half of that would be 60-odd billion dollars, so I'm sure that the vice president has done his sums correctly.

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