Deputy Assistant Secretary of State for East Asian and Pacific Affairs Matthew P. Daley told reporters in Manila November 5 that the "key components" of U.S.-Asian efforts to combat terrorism in Southeast Asia are "law enforcement, intelligence cooperation and working together on financial controls."

"It's fair to say military activities ... draw the most attention in the press," Daley said at a press briefing with the Foreign Correspondents Association of the Philippines.

"They lend themselves, if you will, to press coverage. But I think intelligence, cooperation, law-enforcement cooperation, and cooperation on the financial aspects of terrorism are equally important fronts in this struggle," Daley said.

"Where appropriate, the United States has increased its military cooperation as part of the effort against terrorism," he added.

"But I'd like to underscore that that's only one area of activity, and in Southeast Asia, it's not necessarily the most important area of activity."

Daley said the United States is making some counter-terrorism fellowships available to the Armed Forces of Indonesia, but called the program "very nascent."

"Our hope is that, as Indonesia deals with the problems that have arisen in the human rights area, that we'll be able to expand that relationship, and to have a relationship with the (Indonesian military) is appropriate to the security challenges that Indonesia faces in the areas where their interests and American interests coincide. One of those areas, of course, will be counter-terrorism."

Daley noted that Southeast Asian nations such as the Philippines have expressed concern about the negative impact State Department public announcements, travel advisories, and travel warnings have on their countries' tourism industries.

"In the United States, too, we're concerned about that," Daley said.

"If you go to New York City and ask the people who are involved in the tourist industry about the impact of terrorism, they'll tell you it's had a real impact. If you ask American Airlines about their profitability in the last year, they'll tell you that they're having a hard time. So we're acutely aware of the impact that terrorism has on, not only our economy and important sectors in our economy, but on the economies in other countries," he continued.

In the final analysis, Daley said, terrorism and feelings of vulnerability are "part of the reality of today: All of us are vulnerable, and we've got to be very alert because these groups will take advantage or the opportunity to attack at any weak spot."

EAP Deputy Assistant Secretary Matthew P. Daley
Press Meeting with the Foreign Correspondents
Association of the Philippines (FOCAP)
Manila Hotel, November 5, 2002

GABINO TABUNAR, CBS News: Good morning ladies and gentlemen. Thank you for being with us. And we thank our guest for gracing our professional meeting this morning in spite of his heavy schedule. Our guest joined the Foreign Service in 1976 and he has had numerous assignments in Washington and overseas. In 1978, he was detailed with the Arms Control and Disarmament Agency and participated in several arms control negotiations in Geneva, Switzerland. And in more recent assignments, our guest has been a Special Assistant to the Assistant Secretary of State for East Asian and Pacific Affairs Bureau, and Director of the Office of Philippine Affairs in the Department of State, and Deputy Chief of Mission of the American Embassies of Bangkok, Thailand and New Delhi. And upon returning to the States in 1997, our guest was Deputy Special Representative for implementing the Dayton Peace Accords and Senior Advisor of South Asia. In August 2001, he joined the Bureau of East Asian and Pacific Affairs as Deputy Assistant Secretary of State. Ladies and gentlemen, our guest this morning is Assistant Secretary Matthew P. Daley.

A/S DALEY: Thanks for your warm welcome. I'm glad to be here. I've got fairly brief prepared remarks, which, if you'll permit me, I'll make, and then I would be available for your questions.

I'm delighted to be back in Manila. I'm here as part of the normal process of consultation and dialogue that we carry on between countries that are long-standing friends and allies. I did not come with a particular agenda or issue area to try and address.

I've had meetings at the Departments of Foreign Affairs, Defense and Finance. I met with other executive branch officials and with some members of Congress. My discussions took the form of exchanges of views on a wide range of topics and the purpose was to help inform me about the issues that I deal with concerning both the Philippines and the region.

While this process of consultation is ordinary, I think the times that we are in are, obviously, not ordinary. There is an understandable focus around the globe on terrorism and this topic has been the focus of considerable collaborative efforts between the Philippines and the United States and between the states in the region and those beyond the region. I think it fair to say that the international community is increasingly aware of the dangers that we all face. This threat is transnational. It spares no country. It spares no region. We're fortunate that we're becoming increasingly effective in concerting our efforts. The recent designation of Jemaah Islamiah as a terrorist organization by the countries of the region in support of an Australian initiative is but one example. The action of the European Union with respect to the New Peoples Army is another.

It perhaps is going to be a good idea for me to now share with you my response to a question that has been put to me often since I've been here, and which I suspect is on your minds as well. Usually the question is phrased as to whether I feel safe, coming from Washington to Manila. And the short answer is that I was actually relieved to be out of the range of the Washington sniper. I'm not the only American official that you will see here. But the reality is, and I don't want to make light of this, that the danger we face is such that no one's safety can be guaranteed one hundred percent any place.

In the State Department, we are charged with the responsibility of making available to American citizens the information and judgments about circumstances that they might encounter when they travel abroad. The judgments that we make are informed by events, they're informed by reporting from a number of sources, and they're informed by our estimates of the determination and capacity of governments to protect, not only visitors, but to protect their own citizens. Where appropriate, we distinguish between different regions of a country, and in some cases, we advise Americans to defer non-essential travel to a particular country or to exercise particular caution. In some cases, we have reduced our official American Embassy presence and required or advised that the family members of our diplomats depart the country of assignment. Since September 11, on occasion, we have closed embassies for periods of time while we re-assess security practices and put new practices and procedures into place. These are things that are done in collaboration with and with the active support of host country governments.

I know that there's been a lot of interest in the Philippines about or recent Public Announcement. I would note that the actual text is available on our website, and we brought copies with us for those of you who may not have had an opportunity to see it. In that Public Announcement, we describe recent events, we draw attention to organizations that are threatening, and we note the areas in which they commonly operate. None of the information in our Public Announcement of a couple of days ago, three days ago -- November 3rd -- will be news to any of you here. You are already aware of the circumstances in the Philippines and the impressive work that the government of the Philippines is doing to both internally and in cooperation with states of the region. Our job in the State Department is to inform and advise prospective American travelers who are not familiar with this country or other countries in the region; our Public Announcements try to do that.

As you read the full text, I think you will see that we do not warn American citizens against coming to the Philippines. In fact, we continue the full range of official visits -- I'm here -- and many members of our Embassy community look forward to visits over the holiday season by their own relatives. And I can tell you -- and I'd like to make a point of telling you -- that we very much appreciate the efforts that the government of the Philippines in the global war against terrorism, and in the leadership that it has exercised in this region. We appreciate in particular, the specific steps that it has taken to enhance security for members of the official community, and we've carefully noted the sorts of steps that it has taken to protect the ordinary citizen in the Philippines and the ordinary visitor in the Philippines.

Why don't I stop at that point. My agenda this afternoon will take me on to Bangkok and from there I go back to Washington.

MODERATOR: Thank you very much, Mr. Secretary. For those of you who are very new here -- in fact 3 or 4 people -- and they were wondering whether there are other people here beside the secretary. To his right is Ambassador Francis Ricciardone, a good friend of FOCAP. Thank you for coming out here, and the Public Affairs Director of the Embassy, Ron Post, who just took his position two months ago. A member of FOCAP, is that right? And of course, Karen Kelley, who is the Press Attache and also an associate member. So we begin with the first question.

Q: Cecil Morella of the Agence France Presse: Sir, your government has recently warned governments in Southeast Asia about the possibility of a post-Bali attack. Please tell us more about this.

A/S DALEY: Virtually everyday, the United States and our partners in the region receive information about possible terrorist activity. Sometimes that information is so vague and general as to be not actionable. It does not form a basis for taking concrete steps to avert attacks. Sometimes it has, even though it may not be actionable, it has sufficient credibility that we feel the obligation to alert other governments to a need to be more careful about security measures, to enhance security measures, and also to alert our publics that they, too, need to exercise a greater measure of care. And to look for things that are out of the ordinary. Sometimes this can be as simple as scrutiny of a bag that's been left behind in a public place. For our official Americans, we will often typically request that the host government enhance police checkpoints around our well-known official premises that are likely to be targets. And for unofficial Americans, we note and welcome the kinds of security measures that one sees at the entrance of this hotel where there are checks in place. This is a process that goes on virtually every day. We receive information from friendly governments. We receive information from private citizens, we receive information from official sources. We try to assess it. We try to see if there are patterns, and where appropriate, we share our judgments with others -- be it the public or be it with other governments -- about what sort of posture we should be in. I wish I could say that the information coming to us and to other governments was perfect. Had it been perfect, we would have been able to work with, for example, the government in Jakarta, to try and avert the Bali bombing. But we didn't have that kind of information.

Q: Viswa Nathan, New Indian Express: From what you are said, are you suggesting the Southeast Asian governments, as well as people in the travel industry, misread the announcement or over-reacted?

A/S DALEY: I didn't follow the question, exactly. I'm not suggesting that anybody has over-reacted. Each country finds itself in somewhat different circumstances. The nature of the threat can be different in each country. It's compounded because the organizations that we worry about are truly transnational. They have an amorphous but important series of contacts with each other that began with -- sometimes shared training, in Afghanistan, for example, shared sources of funding, shared passive supporters who help with logistics, with housing -- and the kinds of challenges that are faced in the United States may not be precisely the same kind of challenge that's faced in the Philippines or in Egypt or in the United Kingdom. So that the responses in each case are going to somewhat different, and the capabilities in each country are going to be somewhat different. We all operate under slightly different legal authorities. We have different internal organizations. We have different judicial practices. And so there's no one template that's available to us. I'm aware that in the ASEAN meetings concern was expressed about the impact on tourism from public announcements, travel advisories, travel warnings, as the case may be. In the United States, too, we're concerned about that. If you go to New York City and ask the people who are involved in the tourist industry about the impact of terrorism, they'll tell you it's had a real impact. If you ask American Airlines about their profitability in the last year, they'll tell you that they're having a hard time. So we're acutely aware of the impact that terrorism has on, not only our economy and important sectors in our economy, but on the economies in other countries.

Q: Xioyang Xia, from Wen Hui Daily in China: In view of the new situation of terrorist activities here in Southeast Asia, does the United States have any new arrangements or considerations for anti-terrorist [activities] here in this area, like more involvement or [more] military presence here?

A/S DALEY: I think it's interesting that, in part, the situation involving the dangers from terrorism is both evolving but in some ways it's not new, it's just that we found out about it recently. As we learned more, we found that the problem has been here for a good number of years and one of the aspects of it that I find striking is that not only months but years can elapse between when one of these terrorist groups conceives of an operation and when they actually carry it out. And different parts of the operation may unfold in different countries. The initial brainstorming or conception might happen in one country, operational planning might happen in a second, securing the weapons - the means by which the act will be committed can happen in a third, and the attack itself might be carried out in a fourth country. So our response has to be an international response. It's one in which I think it's fair to say military activities, which were part of your question, draw the most attention in the press. They lend themselves, if you will, to press coverage. But I think intelligence, cooperation, law-enforcement cooperation, and cooperation on the financial aspects of terrorism are equally important fronts in this struggle. Where appropriate, the United States has increased its military cooperation as part of the effort against terrorism. It has not been appropriate in every instance but where it has been appropriate, we have done that. That has been one part of our collaborative activity with the government of the Philippines. There's been an enhanced military cooperative effort, and I don't think dollars or monetary figures are a good expression of the seriousness of intent or the importance that we attach to something, but in our supplemental appropriation in fiscal year 2002, we had an addition of 25 million dollars in military cooperation with the Philippines. We're enhancing our cooperation with other countries in all of these areas. But there's no template that works with every country because each country has a different geography, a different history, and a different kind of threat, which presents itself. So we are enhancing military cooperation, but I'd like to underscore that that's only one area of activity, and in Southeast Asia, it's not necessarily the most important area of activity.

Q: Good morning Mr. Secretary. I'm Raissa Robles from South China Morning Post Newspaper, Hong Kong. When you were in Hanoi last September, you gave a speech before the American Chamber of Commerce where you said that the U.S. was considering naming Jemaah Islamiyah as a terrorist organization. And you specifically pointed out that it was the Abu Bashir organization that you were referring to, and you wanted to distinguish this from other organizations with similar sounding names. Can you elaborate on that? Are there other Jemaah Islamiyah organizations that are not part of the terrorist group, and why is it that the Mujaheedin Council, which is led by Abu Bashir, was not named as a terrorist group?

A/S DALEY: The expression Jemaah Islamiyah translates into Islamic community, and I think it's very important to understand that the United States does not see the war on terrorism as a war on Islam. Nothing could be more fundamental. We draw a very sharp distinction. We have the highest respect for Islam -- it's the fastest growing religion in the United States -- and so by referring to this organization as the one associated with Abu Bashir, we're trying to underline that differentiation. It would be beyond my brief to try and list all the different organizations that may have variants of that name in the different countries in this region and beyond this region. That's a task that's beyond my capabilities, particularly right here. And that's why we used the designation that we employed. Other countries, when they made their submissions to the United Nations, used slightly different ways of describing this organization because it has a different face in their countries. But I think what this effort showed is that the international community is able to deal with these different formulations, recognizes common danger and recognizes that with respect to their particular country, one formulation works and that's the formulation that they adopted. A number of countries, in their submissions to the United Nations, listed other variants. Each country has different laws and their laws have different requirements as to how they make these listings and each country has different mechanisms to implement seizure of assets. In some countries, a very general formulation is adequate for the regulatory process. In other countries a very specific formulation is required. We judge that the formulation we use was specific for the purposes of the United States to enable us to deny visas to members of this organization, to seize assets of this organization, and to share information with other countries. So that the formulation we used was what was workable, what was necessary, in the American context. But again, that's not necessarily what's desirable, workable, or necessary from the perspective of another country. So, this was an example where all the countries of ASEAN united in support of the Australian initiative. They used slightly, they all used certain variants that were appropriate to their circumstances.

Q: How about the Mujaheedin Council? Why was it not named specifically as a terrorist organization, considering that it's led by Mr. Bashir?

A/S DALEY: We didn't have to do that in order to give effect to the American law and policy that enables us to stop, as I say, stop visas, stop financial transactions. It's a subsidiary. We see it in that light, and we didn't have to specifically illustrate it.

Q: Just one follow up, sir. I understand that you cannot name right now, all the variants of the Jemaah Islamiyah here. But I've looked all over in your Department of State website and I've tried to look at what you, the Department of State, actually means by Jemaah Islamiyah. The reason why I'm bringing this up is that I've asked my sources in the Muslim community, and they feel that they are all alluded to when you say Jemaah Islamiyah. And so is it not possible that all Muslims with that same name are being blacklisted and blackballed so that they feel that they are also being targeted by the U.S.?

A/S DALEY: Well that's precisely why we referred to Abu Bakar Bashir, as one of the founding members of this organization. In Singapore, in Malaysia, they use slightly different formulations. They refer also to one of the other founding members and that was our purpose. I would note that we prepared, in the United States, a very extensive record on this. As part of the initiative which was announced by the Philippines, I believe, in Phnom Penh, to hold a regional conference on terrorism here at the end of this week, we will have Frank Taylor, who is our Coordinator for Counter-terrorism, in Manila. If you want to pursue that level of detail in your question, you'll probably have better luck with him since it's his office that's principally responsible for this.

Q: Manny Mogato from the Asahi Shimbun: What is the progress on the U.S. and ASEAN coverage on counter-terrorism? There was this signing of an agreement in Brunei last July. Has there any progress or any cooperative arrangements between the group and the U.S.?

A/S DALEY: I would say that there has been considerable progress. Much of it doesn't make news, happily. Other parts of the progress are more visible. You can see the activity in the meetings that we've been having. In the exchanges of information. Some parts of it are not on an ASEAN-wide basis but with the government of the Philippines, for example, it's taken an initiative for cooperative arrangement with some other countries in the region. It's going to be a work in progress, not for days and weeks, but for months and years. We are not going to be able to put an end to this problem in days and weeks. This is going to be an effort, a challenge, that's going to face us for months and years and we're all going to have to find new ways of working together. Just within the United States we've had to make a major effort since September 11 to find new ways for our own government agencies to work together. And the attacks on September 11 demonstrated to us some very considerable gaps in how we do things internally. And how to fill those gaps, how to link things together, is not easy. It's not easy just within the United States and, of course, it becomes more complicated when we try to do this on an international basis. Again, because we have slightly different constitutions, we have different laws and we have different ways of doing things. In short, I think we are making important progress. But we're at the beginning part of the process. We're not at the end. We can't see the end of this process yet.

Q: So are you saying that the American government is now happy with how Jakarta and Kuala Lumpur are cooperating with Washington in counter-terrorism?

A/S DALEY: Please don't put those words in my mouth. (Laughter). We're not going to be happy until this problem disappears, when it's been dealt with completely. That's when we'll be happy. Until then, we're going to be determined. We're working our way through this process with virtually every country in the world, and I don't want to make comparisons between countries because, again, every country is situated differently.

Q: Sir, you said that in Southeast Asia, military assistance with the United States is not necessarily the most important area of activity in the fight against terrorism. What to you view as the most important activity?

A/S DALEY: I would put the emphasis on the other three areas that I mentioned; law enforcement, intelligence cooperation and working together on financial controls. I think in Southeast Asia, those are the key components of the effort against terrorism. That's not to say there's no military dimension. We certainly get very effective cooperation, for example, with the Philippines in the Balikatan exercises, and part of our effort was to help increase the capacity of the Philippines to deal with those kinds of groups. Where appropriate, we do that in other countries. But again, I think in Southeast Asia the emphasis is going to be on the other 3 areas, not on the military one.

Q: Would you say that there could be room for improvement in this area?

A/S DALEY: I think there's room for improvement in virtually every country in the world, including the United States, in all of these areas.

Q: Financial controls -- how do you describe that -- can you elaborate on it?

A/S DALEY: The Financial Action Task Force has set a lot of standards, which deal with suspicious transactions, which deal with reporting requirements, cooperation between governments. That is something that is under consideration here in the Philippines and we hope that the proposals that are now in front of the Congress will be acted upon as possible. Stopping the money flows is a major challenge. It's not easy but it's an important part of the effort.

Q: Do you see the anti-money laundering efforts in other countries as sufficient, to your sense?

A/S DALEY: I'm reluctant to say sufficient. It sort of goes like -- Will I be happy? You know, we'll be happy when this problem no longer is in front of us. When we've got control of it. And the efforts will be sufficient, I think that we can declare sufficiency, when these guys run out of money, which they have yet to do.

Q: Mr. Secretary, I am Reuben Alabastro from Reuters. Would you say that after flushing al Qaeda out of Afghanistan, that fighting terrorism has become more difficult for the United States, and in what way?

A/S DALEY: No. It's not become more difficult. I think after getting al Qaeda out of Afghanistan we had a major success in denying them a base of operations, in denying them area to train; their financial flows, their logistics chain have all been severely disrupted. And I think it would be a major setback if they were able to re-establish themselves either in Afghanistan or in any other country. But blasting them out of Afghanistan, while necessary, is not sufficient. We've got an awful lot more that we have to do. Both with respect to al Qaeda, and with respect to helping Afghanistan develop in such a way that the government there can resist efforts by the Taliban, which hasn't vanished completely, to regain influence and to make sure that al Qaeda stays out of Afghanistan.

Q: Do you have any information as to where, after Afghanistan, to which country al Qaeda and to which country they are now trying to establish as a base?

A/S DALEY: I think their effort is multi-pronged, and I'm reluctant to name particular countries. I don't think it's appropriate for me, given my responsibilities, to do that. Suffice it to say that we are trying to follow them as carefully as we can, and to pick them up wherever they appear, and we've had some successes as you know. We've enjoyed the cooperation of the neighboring countries Pakistan, in particular, and we've enjoyed the cooperation of other countries, including countries in Southeast Asia, in trying to run these guys down. But it's a work in progress and it's going to remain a work in progress for sometime to come.

Q: How does a superpower feel to be vulnerable at any place in the world?

A/S DALEY: You know, the same way anybody else feels when they're vulnerable. It doesn't matter whether they are a superpower or not. It doesn't matter whether they are six foot six, or like me, five nine and a half. Nobody likes to feel vulnerable. But that's part of the reality of today: All of us are vulnerable, and we've got to be very alert because these groups will take advantage or the opportunity to attack at any weak spot. They've shown an ability to shift their focus from targets that are well-defended and alert to targets that are less well-defended. They're looking for softer targets. That's what they did in Bali. So it's a global vulnerability. The terrible attack in Bali killed at least three Americans that have been confirmed. We've not yet accounted for all the American citizens. It killed something over I believe a hundred and twenty Australian citizens, killed a large number of Indonesian citizens and citizens from other countries, and the process of identifying the bodies is still ongoing. And so we don't have a final assessment of which countries lost how many citizens, but it's a problem that we share in common. None of us are exempted from being attacked, and these attacks can happen in any country. So, we feel the same way everybody else does, and being called a superpower doesn't make us feel any better about it.

Q: Could you please tell us the newest developments on the MLSA, the Mutual Logistics Support Arrangement?

A/S DALEY: Well, I'm not sure there are new developments. It's a technical logistics agreement of the kind that we have with over five-dozen other countries in the world, approximately five dozen. I think the exact number is 57, 56 in that ballpark. Don't hold me down on the number. Over 50. It's a technical logistics joint agreement. It's under consideration in Washington and in Manila. I don't have the latest developments to report to you on it.

Q: Could you please give us an idea when the two governments will sign that?

A/S DALEY: I can only speak for the American side. I hope, and our process of consideration on this is not complete -- I would hope that we would be able to complete in the near future. And you would understand if I'm reluctant to speak for the Philippine side on this. I would address you to Secretary Reyes for an answer on that.

Q: Well, in the light of what the United States knows about the global threats of al-Qaeda and all these networks, how do you consider, I mean in the light of what you know now about the militant movement here in Asia, how do you regard Asia now? Do you think this would be the next flashpoint in the world of terrorism?

A/S DALEY: If you mean by flashpoint where the next attack will occur, I don't know. I wish I could tell you that. Again, what we have seen are groups that have a demonstrated record of operating without respect to national boundaries, which have done so and have established connections or networks over a considerable period of time. There is no way that I can forecast whether the next attack will take place in Africa, where we saw two of our embassies subjected to a severe attack, in the United States, in the Philippines, in Indonesia, in whatever country. We just don't have the capability of doing that, but what we do know is that these groups again can operate on any continent. So, we all have to be very attentive to the need for increasingly effective security procedures. We've got to get better at the things that we've been doing and we have to work together more intensively than we have done in the past.

Q: I wasn't only pointing to the possibility of more attacks, but given the knowledge that some of these militant movement in Asia is now talking about pan-Islamic area or state in Southeast Asia to embrace two countries and parts of another country. How do you regard the situation? How dangerous is it for the allies and the fight against terrorism?

A/S DALEY: I don't see these organizations as having the capability to shake countries apart. I don't believe that they have the capability to disaggregate the states of the region and form a new entity. I believe that's well beyond their reach. These are minority extremist groups. I don't believe they have anything approaching significant political support in any country in this region. What they do have the capability to do is to inflict damage on people, on businesses, on economies, and to divert resources from the process of development into security institutions. And I think all of us have had to increase the resources that we devote to security and those are opportunity costs. Those are resources that we cannot devote to enhancing education, enhancing public health, creating more efficient economic systems creating economic growth, and that's how we're paying for this. All of us, in different ways, but I think in ways that have important commonalities. So, I don't see the terrorist groups as prevailing.

Q: Well, given that don't you think that they would be successful if they sustain the continuity of attacks and undermine the economy and divert resources here, divert resources there. Don't you think that erodes the stability of the countries that they are aiming at?

A/S DALEY: Well, it has a negative impact in all of these areas but I don't think they're going to be successful, again, in disaggregating countries. I think that, in the end, the international community is going to prevail and these groups will not only be contained, they will be substantially reduced to the point that they do not present the kind of danger that they present today. I think the international community will be successful.

Q: New Indian Express: You mentioned earlier on the statistic of that toll in Bali. There are similar events that are happening in Kashmir, between Arabs and Israelis, what effort is America making to solve these problems? Do you consider this as part of the global terrorism or do you label them as two separate issues?

A/S DALEY: The conflict in the Middle East between the Palestinians and Israelis is something that long predates what we currently call the global war against terrorism. It has been an area where the United States has been extraordinarily active, both behind the scenes and in our open diplomacy, in trying to bring about a solution. I think it's pretty clear -- and don't take my word for it go back to the published announcements of al-Qaeda -- that the Middle East conflict has not been the driving force behind that organization and behind many of the other terrorist organizations that are active today. So, I tend to see them as separate. Kashmir is a conflict that has roots that precedes what (incomplete on the record of session). It's an issue where the United States has encouraged peaceful resolution between the parties where we have offered to be of assistance if India and Pakistan both decided that that would be useful. But I think it's an area that's pretty distinct from the challenges that face the Philippines and the challenges that currently occupy the United States and the challenges that occupy the countries of Southeast Asia. I think they're actually quite separate.

Q: Can you summarize the main points or the new characteristics of mutual cooperation between the States and the countries in the ASEAN region, especially with the Philippines, Indonesia, and Malaysia? And will the Bali bombing incident be, can we say, a turning point for those military forces to enhance this mutual cooperation? Can you comment on this?

A/S DALEY: Our military cooperation with countries in the region, where we have military relationships, and we don't have military cooperative relationships with all countries in the region, has evolved over time. Particularly with the end of the Cold War, it has assumed a focus on global issues. You have seen military exercises that in decades past might have focused on defending against an invasion from a hypothetical enemy to focusing on humanitarian relief, peacekeeping operations, and even counter-narcotics operations. We'll continue to have an evolution that has a focus on counter-terrorism where that is appropriate, and this can involve activities such as hostage rescue, dealing with groups that have seized an offshore oil platform, and these sorts of things. And again, I'm a little bit reluctant to generalize, because we don't have military relationships with every country in the region, and the relationships we do have are very much a function of the circumstances of that country -- their interest in having a relationship with us which is not equally distributed shall I say, and very particular circumstances.

With respect to the attacks in Bali, and I presume that you're going after or looking at an interest with our military relationship with Indonesia. It's a limited relationship. It's been limited because of concerns that we have over human rights abuses that have yet to be addressed satisfactorily. It's a fairly limited relationship. We are making available some counter-terrorism fellowships to the Armed Forces of Indonesia. This is an effort that is very nascent. It's just only beginning. And our hope is that, as Indonesia deals with the problems that have arisen in the human rights area, that we'll be able to expand that relationship, and to have a relationship with the TNI that is appropriate to the security challenges that Indonesia faces in the areas where their interests and American interests coincide. One of those areas, of course, will be counter-terrorism. We have asked our Congress for the authority to provide international military education training to Indonesia, and that request is under consideration by our Congress. It has not taken final action.

Q: Raissa Robles, South China Morning Post: Mr. Secretary, I know you don't want to talk about money, but with our huge budget deficit, we just had word yesterday that the second part of the training program of the military training exercises here will be postponed to next year because of lack of counterpart funding on our part, and apparently the equipment that was needed was not procured on time. Could elaborate on that aspect, sir? Apparently we need counterpart funding?

A/S DALEY: Actually, I have a different appreciation, but I'll ask Ambassador Ricciardone to speak on this as well. From my perspective in Washington, the reason why there has been a delay in the second part of Balikatan has more to do with our budgetary process, and we have had but we're moving as quickly as we can with the FY-02 money that were in our supplemental appropriation on this, our budgetary process and procurement process can be a complicated one. It's taking us longer to do this than we would like, but we're doing it as quickly as we can, and it's certainly my hope that we'll be able to get this next phase underway early next year.

Q: Could you also clarify, sir the cut, the supposed cut, in the military assistance from $55 million it was cut to $25 million, and President Arroyo recently announced that it has been restored?

A/S DALEY: Well, I think your frame of reference is a little bit off. What happened was that in our supplemental appropriation for fiscal year 2002, the Administration requested an additional $25 million for the Philippines. Now, that was part of what I would call a global request for the counter-terrorist efforts. When our request reached the U.S. Congress, the Congress, which does have the power of the purse, if you will, the power to appropriate money, made a number of additions to the request. It made a rather dramatic number of additions to the request, above and beyond what the Administration felt our budget could afford. So, the President was not prepared to approve those additions. We are in a circumstance where we have, as a result of the 9-11 attacks is, in fact, an increase of $25 million above and beyond what we originally forecasted. That's what we have. The term we use colloquially in the United States to describe these certain circumstances is a 'Christmas tree effect.' When a budget bill goes through everybody wants to hang their particular ornament on the tree, and so sometimes the budgets as they emerged from committees only bearing a certain resemblance to what the original request was. And what the President had to do, for reasons of our own budget requirements, was to bring that appropriation back into more recognizable shape, and it simply reflected the necessity for us to live within our means. So, we ended up with $25 million increase for the Philippines.

Q: Rustu Soydan, from Cihan News Agency (Turkey): Sir, my question is about the security measures in the airports, and some of the lately introduced immigration procedures, like finger-printing of some nationalities and removals -- there were reports that the Filipinos working in the immigration areas were to be removed from their posts. So, in your opinion, sir, do you think the United States is now being perceived as an unfriendly nation to go visit or to do business with, or will this have an impact on the perception of the United States abroad?

A/S DALEY: Look, I think anybody who travels has experienced frustration with security measures at whatever airport. I don't think there's anybody here who takes pleasure in having their brief case or their purse examined and taking their shoes off or having someone frisk them or put them through a magnetometer. My teeth are bad enough that my fillings would set off the magnetometer. (Laughter.) I mean, none of us appreciate that, and this is a frustration, you know, that's universal. It's sadly necessary that we do these things. We have to do them in the United States. We have to do them throughout the world, and anytime I find -- and there have been times when I've been so frustrated at some security measures, including ones, in particular, in the United States, that my neck was bulging with anger. We've got to make these measures more user-friendly. We've got to make them more effective from a security standpoint. The one thing that we cannot do is to abandon them. We've got to improve them. In the United States, one of the things that we have felt it necessary to do is to say that, in certain positions, certain security-related positions, someone has to be an American citizen. This is not directed against the Philippines. It is not directed against any other country. It's a judgment that we made that's reflected in our law. It's the kind of requirement, in one capacity or another, that any country has. I don't believe there is any nation in the world that does not require -- for certain sensitive positions -- that the employee be a citizen of the country. Now, different countries have different requirements, and I'm not going to criticize the requirements in other countries, but this requirement in the United States is being applied on an absolutely non-discriminatory basis. And I realize that it's a terrible dislocation for someone who has competed for a job, has secured it and suddenly has lost it because of a change in security requirements. That's not easy. It's not pleasant, and I wish those things did not have to happen. But when my frustration reaches the boiling point, I sort of replay those images of September 11th and what happened to the World Trade Center, and it brings me back to reality. I hope I covered your question.

Q: But, sir, to follow up, will that be generalized, the security measure, like you said it's because of the security that only American nationals will occupy [certain jobs] ... so the removal of Filipinos from their posts, will that be in other areas of security in the future? Will there be a follow-up operation?

A/S DALEY: We are going to be in the process of refining our security measures for some time to come. We're in the process, for example, of considering a new cabinet department of Homeland Security. That's been before our Congress. It's being debated. There are very complicated issues. I can assure without any doubt whatsoever that there are going to be new security measures. What I can't tell you is exactly what they're going to be, but there will be new security measures, and I hope that some of the new security measures will deal with the difficulties that we've had in the recent past. For example, at one stage we had a tremendous backlog of visa applications because the systems we employ within the United States Government to share information between different parts of the government simply were not designed and were not capable of meeting the challenges that we face since September 11th. And we had periods where the waiting to have a visa considered, a process that would, you know, normally take a couple of days or a couple of weeks, stretched beyond a couple of months as we tried to cobble together systems to check information and to share information. We're a little bit better on that than we were, say, in July and August to this year. I think the backlog has substantially been eliminated, but we've got an awfully long way to go. We've got to create new systems that are designed work together in a way that we did not do in the past. And all of you have seen examples of this. I mean all of you are aware that -- I forget what technically happened but after the September 11th attacks, but we approved a petition for change of status for one of the September 11th hijackers. I mean that's a stunning example of a system that was not up to the challenges of today. And I cannot tell you that we've fixed that. It's going to take us a while longer to bring our systems up to the point where they can function effectively from a security standpoint, and efficiently from the standpoint of the general public. So, you look at the problems we're having just within the United States, and it's easy to imagine the kinds of problems of harmonizing these systems on an international basis, and that's the process we're working our way through.

MODERATOR: Thank you. We'll have the last question from John McLean.

Q: John McLean, BBC: Sir, in the immediate aftermath of the September 11th last year, President Bush announced a list of 25 individuals and organizations whose assets he would like frozen and seized, and one of the names on the list was that of the Abu Sayyaf. Since then, have any assets of the Abu Sayyaf been traced, or frozen, or seized anywhere in the world?

A/S DALEY: I'm not the right person to answer that question, given that you're going to have Frank Taylor here -- that's his turf, not mine -- towards the end of the week. I'm going to pass that ball to him, or I'll leave it sitting here on the table with the expectation that you will get back at him.

MODERATOR: This will be the very last question, go ahead.

Q: Manny Mogato, Asahi Shimbun: Apart from the Jemaah Islamiyah and the Abu Sayyaf in the Philippines, has there been any other organization in Southeast Asia that the U.S. is considering of putting on their blacklist?

A/S DALEY: Well, I seem to recall that the New Peoples Army crossed our radar screen.

Q: But it's already been listed....

A/S DALEY: Right, and you'll forgive me if I don't speculate on which organizations may be added in the near future. At the time -- one of your colleagues raised the question of my observing in Vietnam a few weeks ago that Jemaah Islamiyah was under active consideration -- at that time when I made that observation it was, I think, a matter of rather considerable public knowledge that Jemaah Islamiyah was a focus of attention. So, I don't believe I was making any news there, but precisely because one of the things we try to accomplish in making these designations is to have an opportunity to go after the assets of the organization. As a matter of principle, I would be reluctant to foreshadow those, and so, I'm not going to. But let me say that we're looking actively. We're trying to find -- we're finding out more every day. As people are taken into custody, as they begin to divulge information we learn more and we learn more about what was happening five years ago, or six years ago or seven years ago.

Q: So, you're not considering the Moro Islamic Liberation Front as another ...?

A/S DALEY: I'm not going to comment on any group that we may be considering in that area. You know, our effort in Mindanao has been to try to bolster reconciliation between elements of the population that were disaffected. Well over half of the American civilian assistance program in the Philippines is targeted on Mindanao and, in particular, we have what -- I don't want to sound prideful, but working with the Government of the Philippines and the ARMM -- I think we've had a very creative partnership in trying to provide employment for people who decided that they no longer wanted to participate in an armed struggle. I think that's an exceptionally creative model. It may even be one that governments in other parts of the world that have similar problems may want to look at. That's been our focus.

Q: Thank you.

MODERATOR: Well, thank you very much, Mr. Secretary. Thank you very much ladies and gentlemen. That concludes our session. Thank you.