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 Home > News & Policies > January 2004

For Immediate Release
Office of the Press Secretary
January 13, 2004

Background Briefing by Senior Administration Officials on the President's Meetings in Mexico
Parque Fundidora
Monterrey, Mexico

2:30 P.M. (Local)

MR. McCLELLAN: Good afternoon, everybody. I have a couple of senior administration officials here to do a background briefing for you all. I apologize to the larger press corps, but because of logistical reasons, we'll have to do it here to the press pool.

These two administration officials will give you an overview of what we've accomplished here at the summit, talk to you about the goals that we came in with and the successes we've achieved here during the summit, as well as touch on some of the bilat meetings that went on, and then answer what questions you have.

Q Are you on the record?

MR. McCLELLAN: I was. I'm on the record; I'm always on the record. And now, with that, I'll turn it over to the senior administration officials.


MR. McCLELLAN: You're on background.

SENIOR ADMINISTRATION OFFICIAL: The President had a very successful summit. He came to the summit to urge leaders to strengthen the foundations for democracy and economic growth in the region by taking concrete actions to promote democracy and good governance, to urge further efforts at private sector-led growth, and to encourage efforts to improve the quality of health and education. As the President has said, good governance is the framework within which development takes place. Healthy, well-educated people are the agents of development. And enterprise is the engine of development.

And in each of those areas, we got, in the summit declaration and out of the discussion, as well -- and we can fill you in on that in more detail -- a series of commitments that I think clearly advance that agenda, particularly with respect to the agenda on transparency and anti-corruption.

You know the World Bank has identified corruption as the single greatest drag on economic growth -- single greatest drag, shaving a half to a full percentage point off GDP growth rates annually. And what summit leaders agreed to do is make a series of commitments with respect to corruption and transparency.

First, they agreed to strengthen what they call the culture of transparency in the Americas. Secondly, they committed to deny safe haven to corrupt officials, those who corrupt them, and their assets. And as you know, the President signed shortly before coming here a presidential proclamation that gives the United States that same authority. He urged leaders -- he urged leaders in his speech, as you know, at the inaugural ceremony, to take similar action.

Third, they agreed to strengthen what's called the follow-up mechanism, which is a peer review mechanism that is part of the Inter-American Convention Against Corruption. And, fourth, they agreed to promote transparency in public financial management, government procurement and the letting of contracts. And finally, and most significantly, they agreed to hold consultations in the event that adherence to the transparency and anti-corruption objectives is seriously compromised in any of the summit countries. That mechanism, the holding of consultations, that same mechanism is used, for example, to address serious political crises, such as where there's a breakdown of the democratic order in a country. So this mechanism is a potentially very powerful one.

So that's the package of commitments that we got on anti-corruption and transparency.

In terms of promoting private sector-led growth -- and we emphasize private sector-led growth because that is the engine of growth; it is the only sustainable path to economic growth -- in terms of private sector growth, we focused on a couple of key drivers of enterprise development, particularly regarding small businesses. And we also focused on using capital flows more effectively.

You know, a lot of folks at the opening session referred to the so-called Monterrey Consensus that was developed here a couple years ago; the President attended that meeting. The Monterrey Consensus talked about three things: namely, developing countries have responsibility for their own development by putting in place sound policies. Secondly, the Monterrey Consensus talked about a new partnership for development whereby developing countries put in place sound policies; developed countries respond with greater resources. And third, the Monterrey Consensus, in particular, talked about the importance of other flows of capital that dwarf aid flows, and they talked about in trade and investment. But there's another flow of capital that's equally significant and that's remittances.

Remittances total $32 billion a year in this hemisphere alone. They're four times total aid flows to the hemisphere. The problem is those remittances, which is money sent back home from immigrants abroad, those remittances have a very high transfer cost. And we've been trying to lower the cost of those remittances, and when we do so, that's money in the pockets of people.

We've done that successfully bilaterally with Mexico. Working with Mexico, we've actually lowered the cost of remittances by almost 60 percent. Summit leaders today agreed to cut in half the cost of remittances by 2008.

Secondly, they also agreed to -- what's the next thing on our private sector list -- strengthen property rights. Very important. And there's very strong language in the declaration on property rights, that talks, among other things, about ensuring that property can be used as collateral. Because that's the key, of course. In some of these countries in the region, 50 percent of the property isn't even registered, so it's dead capital, you can't use it. If you register it and you have laws in place that allow you to use it as collateral, you can turn it into capital to start a business or to grow a business.

Third, we -- one of the key things that we talk about in terms of economic growth is new business formation. One of the biggest barriers to new business formation in the hemisphere is the time and cost of starting a business. It takes longer to start a business in Latin America than in Sub-Saharan Africa. So summit leaders agreed to significantly reduce the time to start a business by the time of the next summit -- actually, the time and cost to start a business by the time of the next summit.

Q When is the next summit?

SENIOR ADMINISTRATION OFFICIAL: 2005, and Argentina is the host.

We also agreed -- the triple credit from the Inter-American Development Bank. The Inter-American Development Bank -- we've been urging them and many of the other multilateral development banks to pay more attention to lending to the private sector, again, consistent with our theme of private sector-led growth. And the Inter-American Development Bank has agreed to triple the amount of credit it makes available to small and medium-size businesses in the hemisphere. And summit leaders supported that.

And finally, trade, of course, is the biggest driver of growth. And the summit leaders welcomed the outcome of the Miami meeting on the free trade area of the Americas. They reaffirmed the commitment to complete the free trade area of the Americas on schedule, by January of 2005. They also noted the importance of making progress in the Doha Round of WTO trade negotiations.

So that's private sector-led growth. In terms of health and education, the President, as you know, feels very strongly about the need for leaders to address directly the threat of HIV/AIDS and the pandemic. Actually, in the summit plenary, itself, he made remarks.

You were --

SENIOR ADMINISTRATION OFFICIAL: He did a follow-up to CARICOM remarks -- some CARICOM leaders talked about AIDS and the terrible impact it's having in the Caribbean and also in Central America. And the President made a spontaneous intervention, underscoring how difficult this challenge is, causing a pandemic in the 21st century, and indicating it requires strong leaders who are prepared to take strong action; and underscored his own emergency plan for AIDS relief; highlighted the $15 billion that are going to be spent over the next five years; and indicated that a lot of this money is going into Haiti and Guyana.

SENIOR ADMINISTRATION OFFICIAL: Those are two of the 14 countries that are --

SENIOR ADMINISTRATION OFFICIAL: -- so he committed himself to working hard to make sure that antiretroviral drugs are available at a reasonable price, but called on other leaders to make sure that these drugs can be distributed within their countries; and indicated that it really is up to them to -- that the United States and the hemisphere is making the commitment, but it's up to individual leaders to make sure that these drugs get to the people who need them.

SENIOR ADMINISTRATION OFFICIAL: And, in fact, the summit leaders agreed in a collective commitment to make antiretroviral therapy available to all who need it, and to at least 600,000 individuals by the time of the next summit or by -- we'll check the date for you. So they came together to show leadership on HIV/AIDS.

On education, at the summit in Quebec, you may recall, the last Summit of the Americas in Quebec, the President focused on teacher training, and we proposed the establishment of a series of teacher training centers throughout the hemisphere. And we've established those. At this summit, we focused on the issue of accountability for results in education.

And one of the mechanisms for achieving accountability is getting countries and school systems to publish performance reports, assessments, and make them public, so that reformers can use them, so that parents can see how schools are doing. And in the summit declaration, leaders commit to developing these performance assessments by the time, I believe, of the next summit, and making those publicly available.

So that was the three baskets that we looked at in the summit. By the way, those three categories -- investing in people, promoting private sector-led growth to create jobs and reduce poverty, and to improve -- promote democracy, good governance, and anti-corruption -- those are, in fact, also the three pillars of the Millennium Challenge Initiative that the President proposed here in Monterrey two years ago, and which really remains the epitome of the Monterrey Consensus, putting it into action -- more resources from developed countries directly linked to developing countries putting in place sound policies to fight corruption, to promote growth and to improve the quality of health and education.

SENIOR ADMINISTRATION OFFICIAL: The only thing I'd add to that is, of course, the Monterrey Consensus was formed here in Monterrey in March 2002 at the U.N. Conference for Financing for Development. That was a world conference. To a certain extent what this summit is doing is taking the Monterrey Consensus, adopting it as a hemisphere project, and indicating through the themes, the themes of this summit, that the summit leaders are lining up with the Monterrey Consensus. And from my point of view, that's a very important step, because the Monterrey Consensus really was about a new partnership for development.

SENIOR ADMINISTRATION OFFICIAL: It's a groundbreaking accomplishment. And now it has to be put into action. We're putting it into action, ourselves, the United States. And as my colleague said, I think the hemisphere is trying to come together to put the Monterrey Consensus into action, as well.

Q If we could take you back to the agreement on the consultations in the event of a transparency problem, how would that work? Who would be in charge of calling together the group? And how would it work?

SENIOR ADMINISTRATION OFFICIAL: Well, there's actually a lot of precedent for it and it's been used several -- more than several times in the hemisphere. It was used in Haiti; it was used in Guatemala, as I recall.

SENIOR ADMINISTRATION OFFICIAL: Effectively, the consultation mechanism within the summit process is not clearly defined. What it is, is heads of state agreeing to consult. That obviously requires a trigger. This mirrors what was done in Quebec City, as my colleague noted. When the democracy clause was agreed to in Quebec City, effectively what they agreed to is that any country that fell off democratic constitutional government would not be able to participate in the summit process, but that before a country was excluded from the summit process the heads of state needed to consult to determine just what exactly had happened.

At that time, the heads of state also instructed their foreign ministers to negotiate the Inter-American Democratic Charter. So, to a certain extent, what they did is they established a precedent for democracy and then called on the hemisphere to define what democracy is.

The hemisphere has already defined what corruption is, through the Inter-American Convention Against Corruption and through the follow-up mechanism. We have defined to a certain extent the standards of transparency and standards of corruption that this hemisphere must adhere to. And we've set up a follow-up mechanism that is evaluating how countries match up to those criteria. And what the leaders have done here is kind of the reverse of what they did with the democratic clause in the sense that you've got standards set up, you have a follow-up mechanism, and now you have the heads of state recognizing that if any country dramatically falls away from the standards established in the Inter-American Convention, that the heads of state -- and any head of state can trigger this -- that the heads of state can begin a process of consultation.

SENIOR ADMINISTRATION OFFICIAL: It's a way of operationalizing the commitment and bringing hemispheric pressure to bear on those that are backsliding.

Q Is there any provision in there for actually excluding them from the summit process if they don't come around?

SENIOR ADMINISTRATION OFFICIAL: Conceivably, it could result in that. The outcome of the consultation is open-ended. I mean, the ultimate outcome you want is them to come back into line and adhere to these principles. But as I say, it's been -- the same mechanism has been used in Haiti, in a political crisis in Guatemala. These were under the OAS. And it's proven to be an effective tool for bringing an enormous amount of public and hemisphere-wide pressure to bear on folks.

Q Wasn't part of your goal to get a clear statement, though, that if you're corrupt and don't straighten up, you're out of here?

SENIOR ADMINISTRATION OFFICIAL: Our goal was to get a clear statement in action on corruption. There's a lot of talk about how much corruption undermines people's confidence within the hemisphere in the institutions of democracy; a lot of talk about how it's a drag on growth. In fact, we heard it in the third plenary session, which was devoted to good governance, among other things. And a lot of leaders shared experiences in what they had found. What we needed to do was find a way to operationalize that and turn it into action.

And by having some clear commitments to strengthen the follow-up mechanism, this peer review mechanism, to deny safe haven -- critically important so that people know that there is no safe harbor in this hemisphere if you're a corrupt official or someone who corrupts them or their assets -- and you know we announced at this summit that we're actually returning $20 million to Peru that was secreted away in the United States by --


SENIOR ADMINISTRATION OFFICIAL: The former head of the intelligence service. But the thing that was missing was a way to bring hemisphere-wide pressure. And that's what the consultation -- the commitment to consult is. We think that that is a huge step forward for this hemisphere, and frankly, for any region in the world, to take that kind of stand on corruption.

Q Are there any countries that currently meet the criteria that you would need to have a peer review on?

SENIOR ADMINISTRATION OFFICIAL: At this point, what we're doing is -- there will be a meeting of states parties in February to look at the follow-up mechanism. And then I believe in the summer of 2004 --


SENIOR ADMINISTRATION OFFICIAL: -- that states parties are meeting again to look at how transparency can be advanced in the region. And what they're basically doing is they're starting to -- through the follow-up mechanism they've effectively set up kind of an informational base on where countries are in terms of their transparency legislation or anti-corruption legislation.

SENIOR ADMINISTRATION OFFICIAL: It needs to be strengthened.

SENIOR ADMINISTRATION OFFICIAL: But it needs to be strengthened. And that's what will be done in February, looking at how the follow-up mechanism can be operationalized. And then in June they're going to be looking at -- states parties will be looking at how transparency issues can be advanced. And all of this, of course, will be leading up towards the 2005 summit. So this gives us an opportunity to build off a base we have right now, take the political commitment that comes from the agreement to consult, and then go back and report on where we are at the 2005 summit.

Q A question about Iraq contracts. The President said today that Canada could bid on the second round of contracts. What about France and Germany?

MR. McCLELLAN: Do you want me to take that? I'll be glad to take that.

First of all, we said back at the beginning when these -- when this initial wave of the money was going out for the reconstruction contracts, that we would -- that if other countries wanted to join in and participate in our efforts in Iraq, then circumstances can change. And now in the second tranche, as the President pointed out, Canada will be eligible. Canada made an important contribution to our efforts in Iraq during the Madrid Donors Conference. And so in the second tranche, countries that had made contributions in the Madrid Donors Conference, like Canada, will be able to participate, and others may be able to, as well.

Q France and Germany provided debt relief, so does that qualify?

MR. McCLELLAN: Well, again, those discussions -- and I'll defer to my colleague here to talk a little more about that, as well -- but those discussions are continuing. We are pleased that countries have committed to significantly reducing the burden of debt on Iraq. And we are continuing to have discussions about the exact amounts -- we will do so in the future. But we continue to have discussions with other countries, as well.

But again, there's different issues we're talking about here. We're talking about the reconstruction contracting and you're talking about the debt restructuring. But we've always said that if other countries want to participate in the efforts of the coalition and other countries that are participating in Iraq right now, then circumstances can change.

Q It's still under consideration whether France and Germany can participate?

MR. McCLELLAN: Again, I'm not pointing -- I'm not putting to any specific country. I'm just saying that we have previously said and made that statement that if other countries want to join in our efforts and contribute to the efforts to build a free, peaceful and secure Iraq, then circumstances can change.

Q What was Canada's commitment in Madrid?

MR. McCLELLAN: I'd have to check the specific amount. Do you recall?


MR. McCLELLAN: It was an important contribution.

SENIOR ADMINISTRATION OFFICIAL: -- close to several hundred million dollars --

MR. McCLELLAN: We greatly appreciated their efforts. Yes, we can get you that exact number.

Q That was the tranche --

MR. McCLELLAN: You had the first wave of reconstruction contracts --

SENIOR ADMINISTRATION OFFICIAL: I just hate that word, tranche.

MR. McCLELLAN: That's why I said, the first wave of money that went out for the reconstruction contracts. And now the second wave will be going. And remember, Canada was already eligible for the subcontracts under that first wave of money that was going out. Now they'll be eligible for the second wave of contracts.

Q -- in that second wave?

MR. McCLELLAN: I'd have to check on the exact number on that. I mean, the Pentagon could give you that number.

Q Back to the meetings. Were you in on the meeting with President Lula, and if so, can you tell us a little bit about the exchange on trade and the FTAA and what the --

SENIOR ADMINISTRATION OFFICIAL: Actually, the President had six bilateral meetings. He saw Lula; he saw President Lagos of Chile; he saw -- he started with Fox, then he saw Lagos; saw Lula; this morning he saw Prime Minister Martin; and then he saw President Kirchner and President Mesa, and he had a very brief pull-aside with President Moscoso of Panama.

Q Was there any discussion of the FTAA with President Lula?

SENIOR ADMINISTRATION OFFICIAL: Just a recognition by Lula that the Miami ministerial was a big success, that it definitely advanced the trade agenda and reaffirmed the timetable established by the heads of state at the Quebec City summit, of January, 2005.

Q Did you get exactly what you wanted on that one, on the timetable? You weren't looking for any firmer --

SENIOR ADMINISTRATION OFFICIAL: It's as firm as it can get. Remember, it was Quebec that -- it was the Quebec summit that established or reaffirmed -- established the 2005 deadline. And it was reaffirmed at Miami. And the language in the declaration says that we -- something to the effect that we remain committed to doing it on the agreed timetable. So -- let's put it that way.

Q Did the Latin American countries get anywhere or make any movement with their plan for a new humanitarian aid fund?

SENIOR ADMINISTRATION OFFICIAL: There is -- the answer, I think, is, it came up in discussion once or twice. It's, quote, noted -- "they noted that some have raised it in the declaration." But there isn't language welcoming it or endorsing it, it was simply noted that it was discussed.

As you know, one of the issues that is very much on the minds of a lot of the developing countries in this region, as well as globally, is how do we use assistance more effectively. It's not just more aid, it's how do you use the existing aid more effectively. We think we're doing it through the Millennium Challenge Initiative, and I think we're going to prove that we are. There's also language in the declaration that encourages further efforts to look at ways of improving aid effectiveness. And there's a lot of discussion going on in both the World Bank and IMF and among the G-8 and others, always ongoing discussions about how do we do a better job of getting the money where it needs to go and ensuring that we see the results that it's intended to achieve. And as you know, that's one of the President's main objectives here, is ensuring results.

One of the big, groundbreaking changes at Monterrey is that for so long, the debate about aid was always about the inputs, how much, how much. And the way Monterrey changed the debate was -- and through the President's initiative -- was to say, look, the debate ought to be over outcomes, not inputs. It ought to be whether we're achieving the results that we want with this money or not. And if we're not, then we've got to do something differently with it. That's what the Millennium Challenge Initiative is designed to do. It's going to put our aid to work in countries that are putting in place the kinds of policies that are proven to lead to growth and poverty alleviation, and we're going to support those folks with these dollars.

Q How much dissatisfaction was there with sort of the IMF kind of policies that discouraged government spending on social programs? Is that a minority view?

SENIOR ADMINISTRATION OFFICIAL: Well, it's interesting. We were kind of both in the meeting, in the plenary sessions at various times, but I didn't hear a lot of that.

SENIOR ADMINISTRATION OFFICIAL: There was some general discussion about the necessity of making sure that policies of international financial institutions understand and respect the specific circumstances that some countries face. And in particular, the Caribbean countries indicated that their economies are undergoing very unique kinds of stresses and strains, and that the international community needs to keep that in mind as they develop their financial fiscal policies, and also their trade policies.

But it was -- it was kind of a sub-theme. The much larger themes, curiously enough, were the themes that my colleague has just talked about, which is the Monterrey Consensus, the importance of private-sector-led growth, especially using small businesses and micro-enterprises to drive jobs and drive development, recognizing that that's where most of the job growth is coming from.

SENIOR ADMINISTRATION OFFICIAL: It's interesting. I jotted down -- Chile talked about the benefits of private capital and how they were building highways and airports and even prisons now with private capital. Barbados talked about the importance of building an entrepreneurial society and the importance of entrepreneurship. Colombia -- Uribe spent one of his interventions talking about how they're building a micro-finance program in Colombia, and the importance of micro-finance. Honduras hailed the completion of the Central American Free Trade Agreement negotiations, which we announced recently; noted the importance of remittances. Very important with some of these smaller economies. As I noted, it actually -- remittances actually represent some 10 percent of the GDP of countries like Honduras. Belize talked about the importance of enforcing property rights. Dominican Republic, the need to fight corruption. So that was the general tone of our discussion.

Q What did the President have to say to President Kirchner about his efforts to restructure the country's debt?

SENIOR ADMINISTRATION OFFICIAL: In the meeting with President Kirchner, President Bush made a couple points. Number one, we're committed to Argentina's success. A successful, strong Argentina is vitally important for the stability and well-being of Latin America. And we're prepared to work with Argentina in a variety of fora to achieve that.

He congratulated President Kirchner on what he's been able to do so far in terms of consolidating his own political power, also in achieving a significant amount of economic growth, and in doing a deal with the IMF with solid commitments. And then he used the opportunity to underscore how important it is to meet those commitments as we move forward under the IMF review process, because it's the degree to which Argentina meets those commitments that underscores the ability for the IMF to continue to provide the kind of support it's providing now.

It was the same kind of meeting the President had with Kirchner in Washington; a very good meeting, a very open meeting, a very frank meeting, in which both sides indicated that they share common values, they share common goals, and they're going to work together.

Q Can you talk about specific goals? Because there is some deadline coming up now for Argentina to hire private banks for consultations, and they apparently might not meet those. Did the President get that specific at all?

SENIOR ADMINISTRATION OFFICIAL: Well, I don't -- did he get into those kinds of details?


SENIOR ADMINISTRATION OFFICIAL: As with all these IMF programs, there are periodic reviews. And that's what you might be referring to. There's another review coming up, I believe, in March. They just successfully completed the first review under the program. And the programs build in these reviews to make sure that countries are moving forward with the kinds of reforms and commitments that are called for in the programs.

And there's another review coming up in March. I forget when the next one is. Those may be the deadlines you're referring to.

MR. McCLELLAN: Anything else for these guys? All right, thank you all very much.

END 3:00 P.M. (Local)