absconding with intellectual property in china. that is a -- contrast that to tesla where testify as a lot of bands. patens our commercial companies. ..

much more than any other country from a government standpoint. so i think we will continue to be the biggest spender on space, the united states. but i think the budgets will decrease because of overall compression on the federal budget. we have a huge budget crisis and largely have our head in the sea and were ignoring the reality we are spending far more than were bringing in. that chicken will come home to roost. so i think we can expect massive pressure of hold budgets including base just because we won't have any other choice. >> i want to get more to the space expertise. does he not just talked about

the political issue that is out there about how -- what are the appropriate role of government and encouraging job creation? your 1500 employees at spacex. you have the shots in the united states. you're the launch facility in the marshall islands. >> yes, our facility is at cape canaveral and we are building a launch site at her first base in california. we are not currently using the launch site that we did use initially with logistics are too difficult getting out there. but a world out there. so it's convenient in some ways, but inconvenient on the logistics and point. so society is cape canaveral and brandenburg and were also planning on establishing a commercial launch site, which would -- brandenburg indicate air force bases make sense to

concentrate air force at those two facilities and then concentrate commercial launch activity at a commercial website of the curse of aviation. >> said levasseur sense of the political debate in washington? gear trouble creating jobs within your company because of the way government is operating currently are what you envision as the way the properties manage generally quite >> well, they should first of all say that spacex would not be where it is about the help of nasa, both historically, the great things nasa has done and currently what nasa gives us and the expert advice and everything. so i should make sure to strongly credit nasa in this arena in terms of how helpful they've done. we do have a bit of a challenge with the air force.

this is something where i insert a surprise that there's no not more journalistic interest because the air force is currently proposing to extend the socialist monopoly of bellied and lockheed until 2014. in the reasoning given for that is preservation of the industrial base. for some reason not be enough we are not included in the industrial base. and this is doubly hard because the main market is the russian main engine in the center airframe interstage and a ford airframe maintenance switzerland. so which industrial base are we talking about preserving? the one in russia that doesn't make much sense. >> said he sensed the political problem. >> you know, we have 1% of the leading power growing and

lockheed. >> that's a political problem. >> if this decision is made of the function of loving, we are screwed. [laughter] >> i think you just earned attention. but scanty space business because we questions i want to be fair to the audience to getting questions as time permits. these are far-flung questions literally as for his figuratively. someone asked him what with today's announcement -- how will today's announcement divert the international space station and i would probably notice that all? >> i wouldn't consider this an emulated version. this is a parallel effort and so it's not really impacting sending cargo to the space station, nor is it affect gene arguments a slight development activities we are doing in partnership with nasa, which is going really well. so think of this as sort of a

parallel thing. it doesn't really affect the ascent phase of the vehicle, but we're really trying to have the descent phase not be hitting the atmosphere and it explodes. that's actually what happens to a rocket otherwise. >> that's a good goal to keep. given that cramming a precious raucously covering discussions with nasa to accelerate launch dates for the international space station mission and what happens with your scheduled november launch with the possibility that the iss may need to be evacuated? >> we've heard recently that actually -- it will likely result in a delay to the space station because it sort of pushes out the other missions. a nasa greatly wants to have the appropriate level of astronaut -- the right astronauts a number of

astronauts at the right training onboard the space station when we arrived. so it looks like soapy or late january for the launch of the space station. and that is contingent upon the russians -- the russians meeting the schedule is currently stated. >> had evaluate the fact we are using russia is an important partner in our space program right now? how do you feel about that? what are the risks of what are the benefits? the next essay the recent failures come it is actually good vehicle, good traffic court. there may be concerned to go going future long-term with russia in a lot of their expert rocket engineers have retired because it's much more compelling financially to go into the oil and gas industry in russia than the rocket industry.

so that expertise is peeling off anything that may lead to decreased reliability for russian rockets in the future. hopefully it doesn't. >> dissected the dynasty china than? >> long-term, china is the serious competitor long-term. if you look at russian rocketry is in the soviet union, there's no significant developments. the technology he has really progressed. no new rockets have launched good% of the technology level has succeeded then they are rendered redundant and have nobody to compete i think is likely what will occur with the russian industry. >> how much longer do they have unless they start doing some serious work has been a viable space program there? >> five to 10 years. >> and how soon at that point

china moves than? essentially in a space they and click >> i'm quite confident we can take on china. >> let's get to another question. you are on the record and i think you have a lot of people cheering for you. so obviously we'll see what happens. we'll invite you back to check that. >> could be famous last words. >> in the field progress launch and trusting the very survival of the international space station entirely for years to come, they're something of a state of emergency until u.s. cruise begin. can you fast-track development and human rating to result in crude launches beginning about two years? if not, can you speak of the process by any amount? could you launch an emergency? >> i think it's important to clarify, what can the system do that we are launching today,

what can it do? is the degree of safety required was proven to that of the shuttle, we could launch astronauts on the next flight on the one going up, which will likely collect in january. the system is fully capable of carrying biological cargo coming in though, which is people. so what it doesn't have is an escape system. and the shuttle also doesn't have a launch escape system. but nasa and we agreed that a launch escape system is a wise move. so we are -- it will take us about two years, maybe in the outside greed to qualify the north escape system. and the way we are doing this escape system is a significant innovation between what's been done in the past with the state

testers both in a cycle the spacecraft so you can actually use those same thrusters for propulsive meaning, which is cool. were actually talking with nasa about potentially doing missions to mars and other places using drag and say things delivery platform to various places in the solar system. so that's an important distinction. we could launch next flight if the required mint for the shuttle. but if we want to add a system, two or three years. >> nasa has a legacy of openness and transparency unlike private companies would. while you are find private payloads, once the american taxpayer starts putting the bill, i guess the position is here more aggressively, what assurances can you give that transfer will be as open as

transparent as nasa and other aerospace systems or need you be? >> well, billeted was peaking or open transparent company. there are some restrictions here, which are not restrictions that we have initially says is an advanced rocket technologies are protected to elegy. >> you could do harm it does. >> bright, we can study just published to the general public detailed analysis of failure investigations that contain secrets on how to make rockets. that's actually a violation of the law. all that information is available to nasa and to the faa, submissions are due for nasa, nasa has a detailed oversight role and the faa as well has an oversight role. so if you're comfortable flying

commercial aircraft, then you should be pretty comfortable with what we are doing in commercial rocketry. >> with nasa, and there is any number of tragic events, where human life was lost. in the sense they are using private companies or partners, but essentially under the nasa government land, essentially flying the american flag, can a company like yours sustain a loss like that is a private enterprise, would people give you this much dare i say space in the event of a tragedy that they would be their own government? >> yeah, i think that'll be okay. if you look at all of the modes of transport, aircraft, boats, cars, you're familiar with cars. the loss of life in every mode of transport. and if one side is standard

issue of lafollette, there'd, there'd be no transport. he would be allowed to what. so you have to allow for some amount of risk. it needs to be a reasonable and measured, but you have to allow for that. i think the commercial company arguably would be better able to deal with that and the government entity because the government you have a congressional hearing and it tends to become sometimes political for. >> congress has a willingness to investigate private companies as well. >> sure, yeah, yeah. i think when something occurs and seems like there is then sorted a violation of the rules or something like that. obviously there are fatal car accidents every day, but she don't get a congressional hearing on it. >> i'm trying to think. i'm a follow-up. someone asked if he took nasa out of the equation and the

sense of being responsible or important for your future business, is there enough private satellite payload business to keep you going to for some reason nasa was in the picture, or aesthetic or not all? >> well, assuming nasa is the largest customer and the most important customer, but if you look at the manifest, we have over 35 emissions on a contract. 13 of those there with nasa. so effectively we've got about 40% or so for your business with the government. but if you consider -- let's say you make pencils. about 40% of your business would be with the government. so that's not an unreasonable number. >> fair enough. we are getting to the workforce issue. someone writes in the audience today, my son, not me, it's a mission controller johnson space

center, which obviously is relevant to the future of your business as well. any of his friends with the shuttle program have been let go and they are interviewing via video for jobs with your comp me. any suggestions on what you're looking for? [laughter] >> sure. well, if you look at the amount of money allocated to commercial space relative to the overall nasa budget, you'll see it's a pretty small number. you know, sort of last fiscal year is about $300 million, but that was split over for companies. so we got about 75 or something like that. so that's about half a percent of the nasa budget. so bear in mind that would love to hire about more people than we currently hired, but we also can't run out of money and died. so they can only hire a few people. in terms of what characteristics

for the quarter, we generally are quite engineering centric because what if people done from a hard-core engineering project standpoint. what type of engineering problems that they solved? how did saw them? and we were less interested in more of the paper oriented role that they've had because you try to minimize that at spacex. >> are demanding an employer that nasa would've been? >> that's a tough question to answer your >> give it a shot. >> i think we're probably more demanding. nasa is a large organization, so the level of demand that people face in different parts of nasa are very conservative and i'm

sure there are parts of nasa that are just as demanding, maybe more demanding than spacex. the spacex is extremely demanding organization and be very good at their job. >> given that tesla sold their city commuter response among other is to climate change cannot you answer politicians who say they are not sure it's actually happening? >> okay, well i think -- the chronic debate is a serious one. if you ask any scientist, are you sure that human activity is causing global warming, any scientist should say no because you can't be sure. on the other hand, if you set, do you think we should put an arbitrary number of trillions of

tons of co2 into the atmosphere just keep going until something bad happens, they probably say no, too. we essentially are running an experiment in the experiment is to test the carbon capacity of the oceans and atmosphere. that experiment may turn out to be fine. it may also turn out to be really bad. and i just don't understand why would run that experience. especially when you consider we have to get you something sustainable. we have just sustainable production of energy and consumption of energy. of course logically unsustainable you'll run out of it. let's say hypothetically co2 was good for the environment. i must say hypothetically the united states possessed all the oil in the world. you'd still have to get oil because it's a finite resource.

as you run out of it, you drive the cat to enforce economic collapse. so why not do it sooner? and another thing that needs to be a radical or immediate change in people need to inject a great deal of mr. into their diets to avoid co2. but we should lean in that direction. you know, we should lean in the direction of supporting type allergies that are sustainable and lean slightly against technologies that are unsustainable. that just seems pretty sensible. even if the environment is defect to. as a matter of fact, my interest in electric vehicles predates the current climate issue. i mean, i was interested in electric vehicles for 20 years when no one was talking about global warming because i thought it was the obvious means of transport.

but i do think the climate and did add urgency and i do think we will see quite a significant increase in the cost of oil just from a demographic standpoint. you've got china, india and a few other countries that represent almost half of the world's population mouth very few cost of the road. you can expect a doubling of demand and i think it's going to be difficult to achieve a doubling of supply. >> have you changed anything in the wake of the federal investigation into you have any concerns about an inquiry into government loans and contracts? will tesla see a wave of applications stand up under such scrutiny? >> yeah. so in the case of splenda -- the wonder has become somewhat of a political football here.

you know, the d.o.e. programs necessarily our portfolio programs, where some number of things that are funded their are going to fail. that should be assumed. you should not assume that it's a 100% success. in the case of the wonder, people forget that private investors last twice as much as the government did. there was some really first-rate venture capitalists and these were. so she got first-rate venture capitalists, you bus twice as much money as the federal government, you have to say okay, i mean, it is a bet. but that didn't work, but that doesn't mean it's something really terrible happened. the most you can say is that executives were too optimistic. you now, they presented a better

face to the situation that should have been presented in the final few months. but if they didn't do that, it would've become a self-fulfilling prophecy -- as soon as they say wigle said i is coming your way. you know, people are making too much of this team. i mean, do i think there are parallels would heal them? an income was cut to infinity elite, from a different program i should point out. but in our case, we have significant capital reserves and we have more money at tesla and we need to complete the program in question. we don't face the same issue, which is extreme competition from china on a commodity product picture of the cost up front panels down to one. that's the fundamental reason why so underwent down as it

would've been okay at $2, but not one. and that's it. and here's the other thing, with which is, how much money do you think the chinese government put into solar? estimates are about 40 billion, okay? so we've got our team with operating -- china operating on 40 billion. that should be no surprise. the >> do you worry that that is tarnished if you buy the american public of the solar industry in the united states? >> you know, there's probably a little bit of tarnish. but you know, it's unwarranted tarnish. the story that occurred was something i thought i expected would occur.

so somebody asked me come at you think it's a good investment? i would've said no, you're going to get your skates. so solar city works on a balance system, where they do everything except the pound. they're kind of like dell or apple. the cpu or the memory of the hard disk, up they design the overall system and they provided to customers through a sales marketing service. and that's what solar city does. solar city is doing super well. and they are growing at 50% to 100% a year with positive cash flow, which is pretty incredible. and yeah, it's really great. all credit to those guys. and for them, the more the competition on solar panels, the better. >> well, if you wouldn't mind, we will do some finishing

business here. if i can just step up for a second look at a couple more questions. if you just stand by. as many of you know, we're almost out of time. before asking the last question of the day come a couple of housekeeping matters to take care of and first among those is just reminding that immediately upcoming lunches. ken burns, documentary film maker would be hearing monday to talk about his new film, prohibition. on october 5, ron pollack candidate for the gop presidential nomination is the fifth of october in that event is sold out. we just announced october 24, tmc's harvey levin will talk about the changing landscape in entertainment news. before he gets the last question, if you come over here, we present our speakers on a routine basis with our token of our appreciation in thank thanku very much. our national press club coffee mug. [applause]

>> we will see if we have time for more than one question on the yen. the piece on the lighter side as many people in the audience. first of all, what's the one great idea to you seeing from somebody else has the slogan goes, i could've had a v-8. why didn't i think about? there's probably been more than one. which of those loom largest in your mind? please stand up to the microphone. a great idea he saw someone else have any wish you do yourself or express that idea. >> well, there's lots of great ideas we come up with all the time. i don't necessarily wish i had them myself, that certain he was leery of serge came up with google was really smart with the backward links to pages. obviously, what facebook has done, great examples on the internet.

indiana -- >> those are american companies. >> i've had obviously an iphone. i think apple, google, facebook wonders examples where it's like, you know, you're sort of lakers are competition? you're not even sure. [laughter] >> how is it that america is able to innovate so well given all the challenges we have great companies like that performing so well? >> in other words, the nation is a great innovator. how do you explain that? how does i continue to have been? >> it's kind of like a statement about democracy. you know, it's a bad system, but it's the least bad. well, the united states is the lease that encourage innovation. in silicon valley actually everything is particularly good at encourage innovation. the silicon valley orders of

magnitude that is in any place in the world for creating new companies and fostering innovation is quite remarkable. so i don't think we actually need to worry about another country out there out innovativeness. i think like him a like him salinization in the world comes from america. it's true. a ridiculous percentage. that doesn't mean it couldn't be better. i think we need to be concerned about the excess regulation, but a tax structure that potentially doesn't promote innovation. the thing to remember is when companies have about their light tadpoles. they just die very easily. and so, you need an environment which tries to protect little companies and help them get bigger. and silicon valley does that really well and america in

general does that very well. most other countries tend to foster and protect -- they tend to protect the big companies. >> at big companies don't need protection? how about a round of applause for speaker today? [applause] thank you to all of you for coming today. would like to thank the national press club staffing predinner library broadcast center for organizing today's event. you can find more information about the national press club on a website to get a copy of the program. please check that out at www.press.org. thank you and we are adjourned. [inaudible conversations] [inaudible conversations] >> less than a year after dia's creation, it faced its first great test when the cuban

missile crisis brought the world to the edge of war.

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>> at the next comment james mulva, chairman and ceo of conoco phillips at the detroit economic club. he spoke for about 50 minutes after a short introduction. >> one of the fortune five companies can the nation's third-largest energy company.

conoco phillips is engaged across the value chain from exploration to production to natural gas processing, refining, marketing and kennels. headquartered in houston, the company operates more than 30 countries worldwide and has over 30,000 employees. mr. mulva has not only worked there for 30 years, he was instrumental in building conocophillips to its current major status. he joined predecessor phillips petroleum freshened of the u.s. navy in 1973 after bachelors masters degree in administration and finance from the university of texas. he advanced the financial ranks, became chairman and ceo in 1989 in response to recent competition industry and the need to gain economies of scale as well as the opportunity access to me that the rapid expansion of the company. he initiated acquisitions in refining alaskan oil international growth and a broader presence in north america natural gas and the entry into the global liquefied

natural gas business. nontenure basis, conocophillips is but a scripted total shareholder returns. not an easy thing to do, i know. mr. mulva is known for support of federal macnair conference of energy and climate policies and for his advocacy of natural gas as a dual solution. incidentally, he's from green bay. i think that if he was for some of our competition there. he serves as a director for general lack direct added member of the business council or the m.d. andersen cancer center in houston. ladies and gentlemen, please welcome jim mulva. [applause] >> steve, thank you very much for that kind introduction. i'm very pleased to be invited here to the economic club. yes, i did grow up in the great lakes area and i can assure you this is a special part of the country for me. i actually can recall the big

four carriers on lake michigan. nice to see them from time to time. they pulled iron from the north throughout the entire region. one that manufactured oils such as building cars, tractors, trucks and machinery, so did the ship errs, miners and support industries. as a result of the great lakes area, it it flourishes really was a good lesson in how we've come to learn to need each other. that is industry from the states and throughout interdependent. clearly, job retention and job creation are foremost in everyone's minds today. of our president, to the state capital, jobs are the most pressing need. i give you my view on this issue, speaking as the ceo for the company and i do serve on a

number of our corporate boards. one of the ways we enhance the value of said 10 to our shareholders is too careful allocation of capital. so we must provide capital businesses that can escrow. the growth is either limited or declining. we have to make discipline investments. and generally, only the very best projects go forward. they're also investor return expectations that we have two me to share performance, dividends and purchases. we must continually adapt to changing market conditions. in our case, we plan to split our company into its two logical elements. that is x duration and production, define and develop energy and, refining and marketing to transform energy into the can timber products that we need. our success at implementing the

strategic element is a key to keeping the enterprise healthy. so if we do this correctly, but will also retain and create the maximum number of jobs that our business can support. in turn, we need are many other society obligations to help enhance the health of the american economy. so like energy, the either industry has the same capital allocation need and challenges as well as changing markets. it has adapted in the past. it will do so again. as always, the adult industry remains foundational to our economy, both here as well as nationwide. the auto industry account for 20% of all u.s. manufacturing, jobs directly or indirectly. the manufacturing is absolutely essential. so this then brings me to the topic i want to focus on india

too is very essential. it is the area where we have chosen to devote a substantial share of our company's capital and that is natural gas. we have done this because it is important to our business. also because it contributes to a nation energy security into american job creation. natural gas, as you know, he's our homes, schools, factories and helps generate electricity and she has another vital characteristic with any attack shares. it creates jobs. president obama visited detroit on labor day to talk about jobs. unfortunately, he did not mention natural gas either then or drawing his speech this past week. but i can assure you that gas is already helping spark the american job creation machine. and we intend to grow that into

a plan. i conocophillips, we believe so strongly natural gas that it's a major portion of our company's portfolio. we believe that natural gas must be part of any discussion strengthening our company's long-term economic health. they should also be part of any discussion on improving energy security, protecting the environment and gas, creating jobs. like a president, i'm very enthusiastic enough to turn around the prognosis for the u.s. senate industry. you have added 115,000 new jobs since 2009 than those in 13 years. sales are up, quality is rising and are our exciting new domestic cars. my wife and i just bought one and we love it. the automotive future is all so exciting. fuel economy is rising.

plug-in hybrid cars are building a following. via publicity to recharge these cars must come from somewhere in here again, natural gas can help. there's also congress for natural gas powered vehicles. at least where they are practical. inflate trucks and buses that can be refueled and central facilities at night. so it's fair to say he can come a detroit and the energy industry are in lockstep. a strong american job creation machine and natural gas is an important part of that future. we have ample reserves here. we can access them in a safe and environmentally sound way. these resources are generating new jobs by the tens of thousands. this isn't just our story. it's yours too. for every job created by natural gas as to the customer base for

cars, houses, appliances and essentially about everything else. the availability of natural gas of low cost represents a key, u.s. competitive advantage. very few countries can match our expanded energy resource base. we can use it to strengthen competitiveness of energy of american manufacturers. i'm both a direct and indirect basis, natural gas currently sustains 2.8 million u.s. jobs. and then there is more. the consulting firm recently looked at the oil and gas industry's future job potential. now with predicted, half a million new jobs would be added by 2030 under existing government policies. but if government adopted more favorable policy, we could create another million new jobs on top of that. and that would be at no cost to the government. in fact, government revenue would rise by about a hundred

billion dollars, which would certainly help deficit reduction. now companies are really big numbers. say you might ask, are they really achievable? to answer what we've heard it done, and a relatively few years, the north american natural gas output has been completely transformed. we now recognize over 100 years of survive. that's enough for children, grandchildren and beyond. the novices creating jobs and not just in the traditional producing states. shale gas now comes from at least 15 states, including kentucky, new york, ohio, pennsylvania, west virginia, indiana, illinois and yes, even michigan. this has been made possible by no less than a modern industrial revolution. it has been known for decades that shale rock and many in the

united ditzel's natural gas and sometimes form. weisbrod deposits of this rocking cover thousands of square miles, even entire states or multiple states. but until recently we didn't have technology to produce economically. then, in the 1990s, we started complaining to different innovations. one was hydraulic fracturing. this is the pumping of fluid down under pressure to create micro-fissures in the rock commit tpd for surface of the earth. these features are very tiny and we prop them open by and check sand with water. and then, that provides pathways for the gas to flow and ultimately produce. now, fracturing isn't something new. it was developed in the 1940s and has been used safely on a million wells over several

decades. but in the case of shale rock, this still wasn't enough. another innovation require, this time a new one called horizontal drilling. unless they start with a vertical well control down thousands of feet and at the bottom recurve the well out the other side. these horizontal wells can extend a mile or more in a targeted formation. dan, this exposes the well tomorrow i guess. rock. so these long, horizontal wells combined with fracturing a production possible for the first time from a number of these rap tapes. i may also help reduce a surface footprint since only one well can replace it would have been required for a number of wells. so combining these two technologies to create major shale production online has any

real game changer for our industry. as recently as the 1980s, natural gas was considered a sign that industry in the united states. production, reserves and demand were declining. the turnaround fence has been so dramatic that we shale now refer to natural gas is nature's gift, partly because of its abundance and its low cost. also for his benefit the national energy security and the environment. in fact, natural gas is essential to helping both short-term and long-term environmental goals. it produces nitrogen, sulfur compounds that cause acid rain and smog. when used for power generation company produces only only half the carbon dioxide of coal. it requires one 20th the land footprint of equivalent wind energy.

power plants fueled by natural gas use 60% less water than coal plants generate the same amount of electricity. and they do it without producing site or ash. also, the availability of natural gas facilitates the use of renewable energy. gas power plants have very flexible with respect to ramping up in ramping down. so they can easily ramp up when the wind doesn't blow for the sun doesn't shine. electric vehicles catch on in the future, we could recharge them with electric power generation and do it cleanly and efficiently. so let's bring this home to michigan. as you probably know, there is a shale gas here. it was produced from the formation as early as tonight team for these, but intensive development related to take place at the 1890s. nearly 10,000 wells are online

today and after all these years, production is starting to fall. there are two new shale glucagon tram and they are called hollywood in the utica permissions. that is attracted $170 million in lease payments to michigan state government this past year. acceleration development is still in the early stages. natural gas currently provides 80% of michigan's home heating and also provides 10% of michigan's electricity so there's plenty of room for growth. gas is an important option for midwestern utility can be used. the epa is tightening standards on emissions of mercury and other substance is. this may cause a shutdown of some of the older coal-fired plant. some natural gas we believe is the best option to sell them. by the way, you probably use natural gas in more ways than you know.

besides energy, it's about material and fertilizer, plastics and chemicals. this combination means that natural gas plays a role in the production of countless household products. now let's take a look closer at some of its job creation benefits. the barnett's shale trend is located in northeast texas and that has created 100,000 jobs. in south texas, a new field he go for it will create 60,000 jobs by 2020 and so thousands of jobs already exists. the surrounding area is booming for new trilling and increase business across the board from restaurants or grocery stores to hotels. a marsalis trend is located in the northeastern part of the united states and as the largest resources of them all. it covers all or part of seven states. according to penn state university, gas development now supports 140,000 jobs in

pennsylvania alone. natural gas benefits other industries. for example, petrochemicals. the american chemistry council said it would be keen for greater domestic use of natural gas production. they see a 25% increase in supplies associated with gas production because this is used as feedstock for making chemicals. this would create 17,000 jobs in that industry at 395,000 more jobs outside it. the numbers like these are really very, very encouraging. so we had a powerful job creation machine available if you put it to its full use. but capturing the full potential of natural gas, our industry faces a number of challenges. some are not unlike those faced by detroit. we recognize we must always continue innovating. we must keep on innovating -- inventing new technologies to

minimize our environmental footprint and enhance safety. we must overcome some mistake in public perceptions. for example, the silver bullet. this is the belief that there's a great new energy source just around the corner and that it will be cleaner, cheaper and easier to port than the use of fossil fuels, while also creating this wonderful new green jobs. well, i've got news for you. natural gas comes closer to being that silver bullet than anything else does. it's here today. it's increasingly abundant, cheap and clean. the infrastructure already exists. rather than merely promising jobs in the future, gas is creating the now. by the tens of thousands without special government subsidies. this is not to say that natural gas is the only energy source

needed. we believe all sources will be necessary in the future. also feels, biofuels, wind, solar, even some sources not invented yet. this would be particularly true if the national economy rebounds. that natural gas is far more than a bridge to the future as a key part of the one term solution. since the shale gas is breathed new life into the natural gas industry, it's unfortunate to see a serious threat emerged to its further development. and that is the perception that hydraulic fracturing pollutes groundwater. the record is in our favor. those million wells safely fractured since the 1940s. now come and epa has studied the environmental record of fracturing the past. it concluded no additional federal regulation was required. a new study is underway and we expect the results sometimes next year. that is not to say that there is

no reason for public concern. there have been some problems, but they are rare and they were caused not by fracturing, but by faulty drilling and well completion work for an proper handling of fluids on the surface. the fracturing is not inherently risky to groundwater. it occurs far below drinking water aquifers. typically thousands decorated by multiple heirs of solid rock. in the wells are carefully cemented in place to seal them off from groundwater. but to address the public concerns, our industry must follow good practices. these existed we must adopt a and make them standard procedure. there is a role for government oversight in this and also we must demystify fracturing. conocophillips supports disclosure of a nonproprietary

substances contained in fracturing fluids. over 99%, say 99% of these foods by content or water and sand. the rest is so-called toxic chemicals are primarily traced out a taste. each serves a purpose. you can find some of them in everyday products that use. food preserver to cause mandates , detert chair, table saw come into others. so next, let me spend a moment or two when government policy. washington talks a lot about encouraging energy development and probably believes it does a great job. but the walk doesn't match the talk. for example, the energy industry faces threats of tax increases the target us alone. this despite the fact they're effective global tax rate far exceeds those of other industries. we face the imposition of new

regulations that cause unintended impacts. regulations to protect the environment may not adequately be assessed for their impact on consumers and on business. the cost-benefit analysis used to justify enactment of regulations may use skewed numbers that support solution. regulations are required, they should be affect even reasonable and should not duplicate the thousands of federal and state requirements that are already in the books. we also face political risk resistant to opening new areas for exploration. this despite the fact the public favors expanded, domestic energy development. also many states have enacted renewable fuel standard that may require utilities to use certain muscles that renewable energy. these sources are more expensive than natural gas so they can try the consumer cost and the

retired demand for natural gas itself is a clean energy source. so government should not and the retired demand for natural gas itself as a clean energy source. so government should not and the retired demand for natural gas itself as a clean energy source. so government should not and let the market determine the best way to need it. these are challenges ahead of us as we strive to deliver the full job creation and let the market determine the best way to need it. these are challenges ahead of us as we strive to deliver the full job creation potential of natural gas. we have work to do. we're going to have to tell her story and that has never been easy for industry. most of our people would rather focus on developing energy than debating public policy. but for the good of the country, we are going to try. for that reason, we just introduced the public information campaign in recognition that natural gas is an important issue for america. we want ever to be able to make informed decisions and we believe as the u.s. centers action campaign season, energy policy will be a point of debate.

perhaps not because the energy prices, which are somewhat more moderate comments that hopefully the debate will center in using energy development, particularly natural gas, to drive job creation. we further believe there is cooperation. rather than polarize ideological petition simply talk to to each other as americans instead of as democrats and republicans, instead of liberals or conservatives, we will succeed in anything we do. it includes creation of a comprehensive energy policy. the policy that is balanced in economically and environmentally sound. just as important a policy that puts more americans back to work. thank you very much for the invitation to speak to you. i appreciate your patience listening to my comments and hopefully we now have time to take questions or observations from yourself.

[applause] [applause] >> thank you, jim. what a number of questions, some still coming in. let's start with one about conocophillips. what percentage of conocophillips's revenue comes from natural gas and went to future projections look like? >> well, i think it's not so much revenue because much of our revenue stream by the refining side of their business. we reproduce or buy crude oil and run it and refineries, it's refined product for customers. it's really gorgeous birds or investor capital of a percent of our portfolio is really natural gas? and that represents 40% of our company. we know that the prices are quite low. that's good for the consumer, good for the economy. to the extent energy prices are the is actually a stimulus to help consumers restore and

improve the economy. we do think natural gas prices will improve somewhat. we're thinking more in the $5 or $6 range over the long-term. this promotes investment, but it also provides clean energy in an affordable way. >> a number of questions about understanding the pipeline infrastructure and other ways of transporting internationally and so forth. how does that interact with their own use here in the states? >> essentially we have established over many decades the infrastructure of transporting natural gas and that is best accomplished safely and efficiently through pipelines. the thought waves, about 10 years ago, maybe five to 10 years ago, we didn't have this abundance course because the type elegy development of unconventional natural gas amira going to import about of gas in the form of allergy. imported energy we are building terminals. the concern was we're running out of natural gas in the

concern was that al and she would be priced more closely to oil. the prices at the gas to be going up and down. that this change to magically transform because the technology advances we don't really have to be importing any significant amount. .. we provide historically the fuel that runs the automobiles, the

tracks and the heavy machines that are produced here in detroit, so obviously oil reserves how can we provide fuels and develop engines and motors to create more and better mileage café standards meeting requirements for rules and regulations and also how do we develop engines and fuel that are best with respect to meeting and improving the cleanliness of the fuels that are used in the transportation sector? now with the development of natural gas obviously we will keep working on the things we have in the past. pass. we are now have had the opportunity how can natural gas be used in terms of transportation fleets and we believe that it's best in large metropolitan areas where it can be used for local area, more for deliveries, for trucks or whatever transporting and the large metropolitan area. where you have the ability of

refueling and much better and can be done efficiently, so we seized this opportunity for transportation but probably more in the metropolitan areas. but we work very closely with them to produce these transporting vehicles because we provide the fuels that are required and will do this in a way that is affordable. >> one of the students asked about the million potential new job see reference from the natural gas bringing to our economy. where would you see those jobs come and? >> where do i see those jobs coming? >> when and where. >> we are always looking for employers to help out in their own companies that rely very much on the service in the contracting industry to help us develop our unconventional natural gas. where the areas? i said in my comments the marcellus areas in the northeast. we see in the middle part of

north america, the states of north dakota wyoming, montana. we are finding new areas in haynesville barnett which is located in arkansas and texas but we are also our geologist and our people in our company as well as other companies are looking for the new haynesville in the new barnett. we are trying to find those and in other parts of the united states. we know we have a lot of natural gas resources and now we are trying to find them and we are looking at things we have merit and looked at because of the technology developments our industry needs people. is highly technical. we also know that we need to meet the environmental requirements that society and the government demand of us are go so we need the jobs now and they will be growing over the next several decades. is going to take place essentially many if not most of the states in the united states. once we develop the natural gas we have to get into the market so the marketers everywhere, all

50 states. so i look at our industry. i feel i work for a very noble industry because we have the growth and development of our country and our economy if we didn't have the development of energy. we need to continue to develop that energy. is becoming more and more technological, very high-tech in the way we are going to succeed like we have in the past is that we need three things. we do have really good people which we have always had in our industry and need to continue to attract people. we need technology and policy. it is important in the development of our indigenous resources. >> eight question here. what is conocophillips latest going green initiative? do you consider yourself a leader in environment with respect to them are mental concerns? >> when we say concern, very concerned because it relates to our ability to operate to

continue to operate in a very safe and efficient way but also addressing the government and society's demand from us with respect to the energy that we produce. it has got to be affordable and it must be claimed. with the company of always endorsed the sustainable operations which means our run very efficiently being a good corporate citizen. we want to be safe and continue to reduce our use of water, continue to emphasize the metrics with respect to our releases of emissions. we want to continue to improve bad as every year that goes forward. we have also been a participant with u.s. cap climate change initiatives that we can work with the ngos and we can work with other industries and a in a way that comes up with what is technologically feasible in the short-term and medium-term and we believe in the power of cooperation that we talked to everyone because in the way we talk with each other all

industry government as well as ngos. we believe we can develop a more informed, make more informed decisions and judgments in how we proceed with energy policy in our country. >> another question from one of the students about recycling and energy conservation programs that are actually looking on for tips on what you recommend to help them get started? >> one of the best ways you can get started is to -- a wealth of information that is available on the web and so you can go and you can find not only what our company is doing in terms of sustainable development, but you get into the web and you can see all of the different ways by which you can promote energy efficiency just by how you conduct your own lives, how you drive your cars, how you utilize energy in your homes. there are many ways you can be done without brearley and a significant way altering your lifestyle in a way that promotes use of less energy.

because, we help climate change first and foremost, the best ways to use energy more efficiently so if use it more efficiently and use less of it as the most significant way you can take actions. to help in terms of climate change. and, also translate with less use of energy leads to less cost for your energy for your lifestyle. one of the best ways i think is to keep more informed and one of the best places to be informed is get into the web and you will find an incredible wealth of information about how you can participate through conducting our own lives as well as participate with others in talking to become more informed and more involved. >> we have a question here about the air arab spring and i know you mentioned earlier that you have been involved in libya. what do you see this having long-term impact on the oil industry and particularly on pricing? >> i don't know for sure with respect to impact on pricing. obviously when production has

taken off it as a result of the unfortunate situation that has taken place in libya there is less production. it generally is to higher prices because they're such a fine balance between what the world supply of oil is and what the demand is. currently it is in the neighborhood of about 87, 88 million barrels a day of oil is consumed, and so it is so finally balanced because many people look at is what is the reserve capacity of oil. around the world that is generally centered around the middle east with only two or 3 million barrels so if you lose one or 2 million barrels of production and it has quite an impact with respect to price. now what has taken place in north africa and the middle east is going to have a long-term impact i think and certainly on pricing. i think there is not an easy replacement in the short term or the long term for oil to really have superior transportation

fuel and so we work need fossil fuels, oil natural gas and coal and it will represent more than 80% of the energy supply for decades to come. we need to use it more efficiently, but i think because of the growth of the worldwide economy the growth in population and the expectation for higher standards of living will lead to increased demand, and that will result in some upward oil prices. the other thing is what is taking place in north africa and the middle east as a result of expectations of society and changes is not just a short-term phenomena in my thinking is going to go on for a long period of time as adjustments with respect to governance, adjustment to the economy and expectations of the people. as a result of technology, the knowledge that is available to everyone around the world is certainly made more available and the expectations of people has grown pretty dramatically. this is going to cause quite an

adjustment for the area and the world over the next several decades but because there is no easy replacement for oil and the growing population and the expectation for growth and economy and standard of living so many people live in poverty. we see in upward bias on oil supply because of supply and demand. >> a question about problems in the oil industry. this one relates to the gulf of mexico. last year do you see this having continued impact and look forward to future drilling in that region? >> it certainly has had an impact with respect to the growth and development in the gulf of mexico. we have a substantial amount of discovered and expected to be discovered oil and gas resource in the gulf of mexico. it is very unfortunate what took place with a macondo incident because we believe two things. one, certainly could have been

preventable and second, having that amount of oil or any oil hit the water and stay on the water and go to shore and response capability industry is not acceptable so obviously we must learn from what took place and ensure these incidents are not repeated and second that the response capability industry is dramatic we improve. now, we along with four other companies and quite a few others that have joined us a one to 2 billion-dollar broke and that essentially should such a situation occur in the future, we have in place the assets and the equipment that can immediately within a few days essentially take of blowout will condition like like that and essentially with the assets that we have constructed and made available, can actually control the flow in a way that it produces more like a controlled

well, not lack of low out well and captures all of the oil that is being produced. thereby having a minimum impact with respect to the incident and the pollution and the oil getting onto the water. so we have got bad and we believe we will have that in place within the next 12 months. that helps address the response capability of the industry. now, we have had a moratorium on drilling. it has been essentially starting to restore drilling in the gulf of mexico but nowhere near the pace of drilling that we have had in the past. it is really important for us we believe. we can certainly develop these resources and they are indigenous resources to the united states so we can develop these resources which reduces the importation of oil, so there is less money leaving the united states and there is more investment and more job creation and it leads to more revenues paid to the states, the

communities and federal government so for every reason we understand our responsibility that we have to drill and operate in a very safe efficient environmentally sound way but it is time for us to get back to business them back to work in the gulf of mexico. it is having quite a dramatic impact with respect to those communities and states and also as i said in developing our own resources and it has quite an impact on imported into jay and helping with respect to jobs in the deficit. >> someone asked the question quoting this, why do you feel this administration rarely talks about natural gas is part of our energy independence solution? >> while the administration and running for election and immediately after election was really pushing very hard new energy sources, getting off fossil fuels and the result of that was essentially the

expectations were created very high that we were going to develop the silver bullet and we were going to have all these new green energy jobs and we are not related to oil or natural gas or too cold and the result was very quickly that the technology wasn't developed nor was the investment capability. all these millions of jobs that were essentially discussed and with expectations very high never really materialized. i think it was because such a strong approach and view towards green energy which means anything but fossil fuels, which essentially did not materialize requires quite a dramatic change and approach by the administration. i believe the administration and the representatives of congress understand natural gas and that we have a lot of it. it is affordable but now is the time to embrace its come in dorset and push it so that is what we need to do. >> there's a question here about billing rates for natural gas being sent by state or federal

government. who controls drilling rights? >> well, it depends on which lands you are on. if you are on federal lands or state lands and all we would save is an industry, a lot of land is not available to our industry. to go unexplored. and we believe the public opinion in the united states is really moved dramatically. let's get people back to work and let's develop our own resources so let's open up more land access availability so we can develop our own resource in their own energy. that helps energy security, health investment and helps jobs and helps with respect to revenues for addressing the deficit. >> we need more acreage. to put our industry back to work, more than it is today. >> the question is do you think what a company should continue to receive the subsidies they get?

>> well, it is a very popular discussion by many people and when we think about quote subsidies for the oil companies, it is a very unique industry. some of the things we are saying is rules and regulations that say promote employment. if we promote employment we would like to get the same benefits and incentives to promote employment that all other industries do. don't take that away from artistry versus a job as a job and we think we should get the same incentives for that as well. second, in our business when we drill wells one of the hot buttons people talk about intangible drilling. when you build the facility and i will say in a different industry you build a manufacturing facility. you are putting concrete steel and other -- say you pay 100 for that a 100 is the cost and it depreciates. when we drill wells the steel for the wells might represent certainly less than half, less than half of the cost of the well because it takes a lot of

completion and a lot of contractors and suppliers and in support to drill the wells. that results in costs and that is payments made to other people. all we are saying is whatever the cost of the total well as we would like to be able to depreciate it and that is where you get into intangible drilling costs. some of you view that as a subsidy and we view it as the cost of drilling a well. then another point that is important is don't discriminate to the oil industry when we pay taxes in a foreign land. we would like those taxes to be credible against taxes in the u.s. for operations outside the u.s.. don't treat us differently than you would all industry. given all these issues and points that i just talked about, we really favor, i do come our company, we really favor -- let's get back in reform or tax system. let's just make it more simple. let's just make it the same for everyone. let's lower the tax rates and do

away with all these different issues of what is deductible and what is not. let's just make it simple. flat tax rate and make it the same for everyone. we really support that. [applause] >> one final question, jim. a a question for monitor students. i'm a student at cass tech high school. what career advice would you give an aspiring biostudent? >> well the most important thing i would say is stay in school, study really really hard. it is important because the better you do in school the more you learn the more you develop yourself, the more first of all you are going to feel good about yourself but does the rest of the road really need to? the best advice i can say to you is keep studying, keep working hard in school, stay very focused on your objectives, not just what is ahead of you for the next day or the next week. look out five years, three years, 10 years where you want

to go and another thing, stay in school and another thing that is really important, make sure you surround yourself with good friends and people who have similar objectives and the other thing is don't forget your responsibility to your family, to your brothers sisters into your parents. [applause] >> you wow. i am not sure, i'm thinking how do you keep all of -- keep up with all that in your head. jim mulva thank you very much. last time mr. mulva was here, this is your third visit and we are so delighted. leaves from my perspective really help me understand the global picture of energy security versus independence and now i feel like you are coming back and kind of here is the next big thing, natural gas, so

thank you so much for being here and enlightening us with some things to think about and future directions and energy security obviously which is so very important to our country. steven pulled as always a terrific job. thank you so much in wow i'm telling you we had so many great question so thank you all of you for making that happen. and in our usual on time kind of way, we know that you have been spending a couple of hours with us. we appreciate you doing that because we know you are all very very busy. with that, this meeting is adjourned. have a great day. thanks so much. [applause] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] the head of the american association of university professors says that tenure and academic freedom are in jeopardy and need to be protective. >> tenure creates an atmosphere on campus where people can speak

freely, not just in their teachings but also in terms of state government. if you don't like a proposal the board of trustees or the president makes you have to be able to speak freely about it. administrator should be able to do that as well so that shared governance speech is part of what academic freedom protects. without that you really don't have expertise in the faculty of it available to you. >> kerry nelson author of millet -- no universities and island sunday night on c-span's q&a. >> in a few moments a discussion of u.s. trade initiatives in afghanistan and central asia. in a little more than an hour and a half the postal workers union on the future of the u.s. postal service. then, a discussion on the future of human spaceflight and later we will re-air the speech by james mulva the chairman and ceo of the energy company, conocophillips.

>> this is a dangerous time for britain and a dangerous time for britain's economy. the governments austerity plan is failing. you can sense the fear people have as we watch the economic crisis that stalls our country and 2008 threatens to return. >> with the british house of commons still in recess annual party conferences are continuing

in the u.k.. what's labour party leader ed miliband keynote from the labour party conference sunday at 9:00 on c-span. >> that language specifies the state medicaid plan must provide for the payment of rates which the state find makes assurances matter-of-factly to the secretary. >> listen to c-span radio in washington d.c. at 90.1 fm nationwide on xm satellite channel 119 and on line at c-span radio.org.

>> now a discussion of u.s. trade initiatives in afghanistan and central asia. this 90 minute event is hosted by the central asia caucasus institute and silk road studies program which is affiliated with the school of advanced international studies at john scott ince university. [inaudible conversations] >> good afternoon ladies and gentlemen. my name is fred starr the chairman ofd the central asia caucasus. the program today is cosponsored by the center for strategic and international studies and i'm pleased to introduce our coconvener and friend from csis, and are cogens. let me also note that there are

various books and studies on today's topics, some of them free, and these are available outside after the program. on the 20th of july inia, cr chennai, india secretary of state clinton had this to say. d she said, i want to be very clear, the united states is committed to afghanistan and to the region. we will be there. yes, we are beginning to withdrawb combat troops and transfer responsibility foraw ca security to the afghan people, n process that will be completed in 2014, bob lutz, drawing down our troops is not the same as leaving board disengaging. and she continued, historically the nations of south and central central asia were connected to each other and the rest of the

rantinent by a sprawling tradin network called the silk road, let's work together to create a silk road, not a single thorough fare but anroa international web and network ob economic and transconnection. she then continued further and spoke about spoke about railroads, highways, oupelines, i'll e railroads inton met at the united nations which are in with german foreign minister vester valley and afghan foreign minister, bristol to pursue the concept of a new cranes taught mental transported trade corridor to afghanistan. on the same day, the world bank hosted a meeting here in

washington on the same subject. now, the purpose of this program is to ask, what is the united states do silk road strategy? where is it headed? and how does it relate to other initiatives worldwide? to let us start with the context, a so-called trained to initiative has been the initial development strategy if the government of afghanistan for three years. we are honored to open today's program with a statement from his excellency, sham bathija, who is minister of economic affairs that the government of afghanistan and senior advisor to president karzai. he is connect you with us from new delhi. thank you very much for participating in today's program. you have the floor.

>> i am on official duty tellier, so i amegressing from first of first of all, i am pleased to ,ee you, professor pleased discussion. i recall an occasion when i saw and remember very well, when and

where sadat of egypt visited israel. a sort of noise came out from this site announced the next president, what took you so long, and wire? that's what the prime minister. and when he heard that, he responded that, very nicely he said i am just here to uphold me. it is similar for you that you called and here i am. it's a pleasure to be with you. and good to see everybody.

let me start my remarks. your excellency and secretary broughthormats, professor miranda, secretary starr, sudbury and dr. subfloor at the sis. ladies and gentlemen, i would like to extend my appreciation to the essential asia caucasus institute at johns hopkins site and the center for strategic and international eddies for kindly hosting the foreign on a new silk road strategy. at the heart, this dialogue and dialogue in kabul and elsewhere lately today, such as during the

u.n. general assembly last week with contributions from more than 20 foreign ministers, senior u.n. leaders in the head of the asian bank seeks to advance a vision of regional economic cooperation to achieve a stable democratic and prosperous afghanistan for the benefits of the surrounding regions and indeed for the wider international community. if i stress when i am launching the new silk road initiative one year ago at the fourth regional economic corporation for afghanistan, held in istanbul, only a genuine regional economic strategy and regional cooperation efforts involving all countries near afghanistan will ensure the country is

placed on an enduring path toward stability and prosperity. though when i accept the invitation to speak, i had every intention to be with you in person today, but it is quite fitting that i am able to use modern technology she's to have a conversation with you by a long distance from the indian subcontinent, which has historically served as a major component of the silk road trading routes for many hundreds of years. secretary clinton's statement has so greatly indicated so. this region is also expect that to grow as an increasingly important trading partner for afghanistan, especially with introductions of south asia free trade agreements and

afghanistan, pakistan transit trade agreement. it is no coincidence that the secretary of state clinton chose a reason speech in chile, india to announce the need for a new supervision invests and critical infrastructure and adopt a new trade rules for the 21st century across the vast continent of asia. similar to europe and china, india sheer market size today makes the measure destination and an end-user and other regional goods and services that make transit to afghanistan. indeed afghanistan strategy, strategic geographic significance lies in the centrality in facilitating to great asian trade and

intelligence corridors. first, the traditional east-west corridor that link to asia with europe, but ever more important is the second, lesser-known north-south corridor connecting russia and the energy rich central to afghanistan with pakistan, india and other energy resources will countries of south asia. and history shows us, commerce utilizing the silk road, which is a collection of intertwined groups like the chinese roman civilization while passing through territories dominated by the persian and in and cultures. it's therefore truly represented the conversions of civilization and the source of interest across the regional and beyond. once again, it is this culture

and interest of the initiative that we have joined to discuss today. we believe that this initiative can once again revived the shared prosperity that the asian silk road was provided across asia, consequently my government reveals corporation of the new silk road initiative as an integral part of afghanistan national development strategy and the kabul process. a final transition to increase alignment behind national priorities or common goal of full ownership responsibility and sovereignty. the nsi will incrsovereignty. the nsi will increase regional prosperity and stability to increase trade and investment.

the resulting shared prosperity and job creation will reinforce efforts to promote reconciliation and reintegration of former confidence, which suffered an enormous setback last week with the assassination of my countries late president, professor rabbani. though not a comprehensive solution for all solutions at the alcan stayed, afghanistan views the wider close of the new silk road initiatives as operating hand-in-hand with my countries after to help create the conditions for political dialogue and successful transition. working closely together, afghanistan and international communities have made tremendous progress together over the past decades. for example, a great deal of

far-reaching reforms have been made in areas of customs revenues, border management and other political, legal and regulatory reforms to facilitate international trade and investments vis-à-vis afghanistan. together, we have also message in afghanistan's most important resources as people by vastly increasing education, improving health health care for all outcomes. beginning with the start on the fifth of december, 2001, which i had the privilege to participate in, we have also established institutions of democratic governance that promotes and guarantee the rights of all citizens, women and men, young and old. numerous challenges however my

in fully implementing this initiative, which will enable citizen throughout the region to leverage a multitude of potential benefits and opportunity. obstacles to regional economic cooperation, such as complex regulatory requirements and roads and bridges significantly impede cross-border commerce. and for example, afghanistan may today the market to transport our feeds by road to regional and international markets. or to transport iron ore by rail to customers. naturally, potential investors hesitate to make the plunge and instead the channel capital and emerging and economies. but i call myself afghanistan come in the future frontier and

a new emerging market. but you do not have to be president of our fate. we note a parking organization plan, one that unifies our efforts in afghanistan with our neighbors and with our broader international partners. we believe that the new silk road initiative was an agreed set of priority and for start your crack is an emphasis on removing the barriers to efficient trade and transit can become the unifying strategy. specifically, the silk road initiative will pursue this ambitious yet practical undertaking by building the necessary transportation and energy infrastructure and establishing afghanistan is an efficient trade cannot team europe in southwest asia and

russia and the central asian republics in pakistan and india. besides large-scale infrastructure projects such as new roads and power projects, the msr i initial group initiative emphasizes the importance of capacity building, trade reforms, communications and harmonization of cross-border procedures such as customs. having an efficient and harmonize the go attorney for you mark will bring predictability and consistency, creating a much more conducive environment for attracting foreign investments into our region. this is an area for which u.s. technical expertise has been particularly valued and beneficial over the past decades. and given the relatively low

cost involved, we expect and hope that the united states will continue to provide leadership in this area among the major donors. finally, his chief economic performance of afghanistan's economic transition, division of the new silk road initiative is driven by both common aspirations and sheer challenges but the silk road based on the belief that commerce, based on a win-win proposition can raise the likelihood of the people across the region. to increase regional con activity and private dvd, are common initiative and partners across asia and beyond aims to transform our region by better leveraging the current high level of technical, political and financial resources being made available by the

international community and attracting private sector investments. opportunities and challenges to regional trade and transit. some may wonder at the time of declining aid and military drawdown, how support for such a large undertaking can be achieved. edited by considered view that by threatening private capital to private -- public-private partnership, we can avoid losing additional versions on donor nations and traditions to a new economic development and prosperity. by choosing this fact, will also transform the nation of the economy from one dependent for an eight in contention to one propelled for foreign investments, domestic production

but more specifically, this desire policy. moreover, for a strategy to be successful and rightly accepted, it must extend job opportunities for ordinary advanced and generate substantial economic growth in the reasonable timeframe. job creation is the highest priority for us. we will not be able to stabilize afghanistan without a vigorous job creation strategy. given that afghanistan's mineral weapon has been u.s. dollars in two to $3 some estimate even more, we believe that minimal development and regional con activity can maximize the use of local labor and generate export led growth in afghanistan and her neighbors. beyond are abundant natural resources, transit fees from the transfer of national gas and

natural power, as well as transmit of good services about dan also maintain the potential for generating hundreds of millions of annual dollars for the afghan government. practical measures for action now i address a word for that. at present, all in tradition trade accounts were on the about 15% of the total trade, the road, rail provided by the new silk road initiatives can boost regional trade significantly. the new silk road initiatives was built on an initial, successful original organization such as the south asian association for regional cooperation and essential cooperation and essential regional economic cooperation and the solace of their bilateral agreements. here i want to highlight specific examples of progress

already made in this regard. first, following more than three years of negotiations, afghanistan agreement was signed by the government of afghanistan and pakistan on july 18, 2010. with an extensive and skillful convening role performed by the united states in support of the afghanistan and pakistan government, expected to serve as a model for further bilateral and wider trade and transit agreements. the new silk road initiatives can also have to expedite after effectively implementing the for the benefits of the wider region. second, the government of afghanistan is strengthening border management cooperations of neighboring countries to ensure the united approach to address crosscutting issues, such as threatening trade

facilitation, custom harmonization, environmental protection and encouraging regular and deeper dialogue on border security and management with the regional papers. breaking down barriers to trade and transit by reducing excessive democratic besiegers end of the government seeking activities could represent a hallmark of the new silk road initiatives. as the cost to start with ways to advance market progress in the near term. third, we have also taken significant steps forward in afghanistan, pakistan, india, which caused the international gas pipeline projects in recent months and i've witnessed it myself lathers with the president. and we have even commended for but many outside observers viewed as inconceivable in recent years. establishing a national railway,

which i am now committed to, but the concept now for creating a national institution on the railway, which i have to report back to the cabinet at some point. bishara sharif has been already built. we are also in the process of contract team one of the biggest deposits in the world. some of the distinguished participants may wonder why and how private capital could be attracted by afghanistan. some even wonder if we are making a realistic assessment. indeed, a presence in afghanistan, we have a highly underdeveloped transportation infrastructure. we need to further strengthen procedural framework and to reduce unnecessary practices at the border. we have unfriended crack says

especially at border crossings. we have continued insecurity and instability in afghanistan. yet, we have no choice but to forge ahead for a simple reason. they are all not simply observed unless afghanistan does not have a comprehensive regional trade-based economic strategy. for my country, the region in the world to be more secure, we must implement division of the new silk road initiatives. the way forward introducing the strategy for regional cooperation. specifically, we need to take full advantage of the comments is in istanbul to advance this vision to the new silk road strategy for regional, economic cooperation. the strategy should build on the dialogue and commitment made in

regional foreign or past decades such as star, echo, operational organizations as well as the kabul process. at the same time, it should be rooted in the current unique historical context in afghanistan and its neighbors. in short, afghanistan finds itself at an historical crossroad today. either it continues to depend on foreign aid as the principal driver of economic development as well as foreign forces to safeguard its security or quickly shifts to a new model of development rooted in the dirt as the main generator of jobs and afghan national security forces is achieved guarantor of the national and personal

security. for afghanistan, a landmark country to succeed in this transformation must break down the barriers to regional trade and transit. it must invest in the transportation and energy infrastructure to facilitate the growth of a transnational corridor and must attract foreign invest in it for near and far i've killed previously unforeseen and afghanistan. as i always believe, afghanistan is the future emerging markets. a nature into strategy for economic cooperation to advance this overreaching vision by presenting key principles, object design program priorities for consideration in istanbul. the key principles put and confidence elaborated upon recently in regional forms such as breakout, cairo, the strategy

at jack is good further drop on the cochair statement prepared fine last week's new silk road foreign minister meeting in new york and programming and project priorities highlight new initiatives, such as national railways, energy pipelines from central asia in the extension of afghanistan agreements to afghanistan and northern neighbors. and while consultations towards the development of the strategy should be brought to us in both afghanistan and the international community and linked closely to ongoing consultations about afghanistan's national priority launch, special attention should be giving to afghanistan's immediate adjacent and wider regional partners, including pakistan, iran, central asian states in india. their active participation and

shared division can determine the economic integration, resulting in a range of economic benefits of cross central and south asia. in closing, i'm thankful for the united states and that wider international community's many sacrifices to afghanistan transformation into a peaceful, democratic and self-sufficient member of the community of nations. our partnerships form the bedrock for catalyzing future efforts to both engage afghanistan's neighbors more effectively, as well as unleashing the full potential of our shared partners in the business community. we look forward to our continued cooperation for peace, prosperity and justice for all of our citizens as well as for the citizens of all countries in central and south asia and

beyond. i thank you, sir. >> thank you very much. transport speaking from new delhi. [applause] thank you very much, sir. against this background, let us ask again, what is the united states new train to strategy and where is it headed? we are now going to hear from robert hormats under economic and agricultural affairs of the long-term senior member of the nsc and is vice chair of goldman sachs, he's uniquely qualified to address these questions both from the public and private to. mr. cheney.

>> thank you very much, fred. it's a great pleasure to be here today and i'm particularly honored to be on a panel with sham bathija and juan miranda to talk about our new train to strategy. .. this event and for all of you who have had the interest in this for attending. i am sure all of you a are where fred is one of her country's leading experts on central asia and along with andy he is champion for some time, not just recently, but for a number of years the idea of establishing afghanistan as a regional trade and transit hub. critically, this idea has alsote

been voiced for many years by manyny afghani's. most notably for instancee president karzai who has said afghanistan should aspire to be an asian -- . the importance of improving connections between south and central asia and indeed between south and central asia and other parts of the world from china through to western europe and indeed parts of southeast asia with a center or a roundabout places like afghanistan and pakistan has made all the more urgent as we and our allies begin the transition process in afghanistan which will ultimately result in the complete handover of security responsibilities to the afghani's themselves. indeed the transition process announced last november in lisbon is well underway.

already, seven provinces and municipal hell of these have been transitioned to afghan security leadership. today nearly 25% of the afghani people live in these areas. but i want to be very clear about one thing. just because we are drawing down our military forces does not mean we are abandoning afghanistan or the region itself. as president obama said in june, our efforts are aimed at building a partnership with the afghan people that indoors. this transition must be sustainable and the political and security effort must be complemented by progress toward increasing economic opportunities for afghanistan and the broader region. as the minister put a creation of jobs and economic opportunity are critical elements of the future of afghanistan if it is to be a stable and a productive

place. that is why when secretary clinton announced the diplomatic effort aimed at wringing a political and to this decades long conflict, she included as a key component of this vision to integrate afghanistan into the regional economy and hopefully over a longer period neck of time into the whole continental economy which is an even broader issue. the basis of the new silk road vision is that afghanistan is firmly embedded in the economic life of the region it will be better able to attract new investment, benefit from its resource potential and provide increasing economic opportunity for its people and increasing hope for its people as well all of which are credible critical to its future stability and its future vibrant as a participatory economy and participatory economy.

we also believe the new silk road initiative will be of importance to pakistan and can be an important way for pakistan to further develop its economy and provide jobs for its people as well. indeed we believe the new silk road initiative can provide a critical economic boost for all of afghanistan's neighbors. far to the east and far to the west. that is why secretary clinton cochaired a foreign ministerial meeting with 30 of her counterparts including all of afghanistan's neighbors in the new silk road vision one week ago today in new york during the u.n. session. the purpose of the meeting was together regional and international support behind the notion that as she put it, lasting stability and security go hand-in-hand with economic opportunity. of course as many of you well know, this vision for the region

is deeply rooted in history. that is why it is called the new silk road. for millennia a spawning trading network criss-crossed asia, connecting east to west and north to south. it was a robust network on land and on sea. if you look at the history of the silk road it wasn't just one road. it was the network, spider web of roads and a spider web and network of transportation that involved .. the region. silk comities and porcelain came from the ease. ivory, textiles and spices came from the south and precious metals and wind and carpets came from the west. many religions were spread as well along the silk road including islam and buddhism. the places in between benefited from these connections in many

ways. the once prosperous markets of herat and mazar-e-sharif grew as waypoints in the continental trading realms. over the years these trading realms whence morbid as faster sea routes came into use in regional divisions and rivalries, many land routes unpredictable and in fact very dangerous. as a result of afghanistan and much of central asia were increasingly cut off from the rest of the world. though it is located right in the middle of a rapidly growing continent, afghanistan became in many ways an economic dead end from any direction. afghanistan's isolation was deepened further by the soviet invasion and by the insurgency that emerged after the soviet invasion. this isolation was also a key you are in the taliban's rise

which further isolated afghanistan from the region and from other parts of the world. in the future without jobs or the opportunity to choose a different more productive path, the afghan people were and would be left to the mercy of extremists, and that was the problem that they faced before the current government took over and before afghanistan and its friends had begun to come together to create a new vision, a new set of opportunities and new prospects for job creation throughout afghanistan, and this is a very major departure from the difficulties afghanistan has faced in the past, and the recent past. this presents a whole new vision of growth and opportunity for afghanistan which is not taste on isolationism, not based on extremism but based on

connections, interconnections with the rest of the region, with the rest of the world and novels of new productive opportunities for the afghan people. afghanistan is today beginning to emerge from this isolation and has planned for continuing to do so and the minister has very eloquently outlined many of those plans and many of those ideas. though the infrastructure gap today remains large the answer is not only about building new roads and rail lines as important as they are. the region as a whole must focus on setting the broad context for sustainable growth, because all the countries in the region have an economic as well as the security incentive to do just that. and the international community must continue to find ways to support and encourage that growth. as secretary clinton said in chennai last july in a speech to which the minister referred, the new silk road vision means

upgrading the facilities at border crossings such as india and pakistan are now doing at at the walk across thing which i had the opportunity to visit several months ago. there are many ways of doing this throughout the region. that is one particularly important example but there are many others. and it means also as the minister has alluded to, removing the bureaucratic barriers and other impediments to the free flow of goods and people are good means casting aside the outdated trade policies that are still major problems in the region and adopting new rules from the 21st century. and i want to underline again that the entire region stands to benefit from this expanding economic connectivity and not only the entire region, many countries to the east and many countries to the west because afghanistan is really in the middle of the whole continent and therefore more

communication, more transportation and more connections can have a much wider benefit for afghanistan and for other countries in the region and for other countries across the continent just as the silk road did several thousand years ago. that is why we are supportive of initiatives that harness the selective economic strength of the region. for instance just today, and this is a very important new development, the indian and pakistani commerce ministers for the first time in 35 years, concluded meetings in new delhi and announced it path of further normalization of trade relations between these two countries. it was joined by hundreds of indian and pakistani business leaders who participated in this conference as well and last year afghanistan and pakistan took the brave step of agreeing to an up david transit trade agreement. the agreement that they reached will enable the international

best practices and order crossings to take place and will harmonize customs arrangements. also they will reduce smuggling and increase government revenues from legitimate trade. both countries have discussed the potential for expanding the agreement to cover all of central asia. eventually i hope that the entire region from us donna to mumbai will enjoy expanded trade and transit cooperation. other initiatives seek to match energy from central asia with pakistan and india, to markets with significant electricity needs. the tapis pipeline would bring onshore natural gas from turkmenistan across afghanistan to markets in pakistan and in india. other efforts would facilitate the transmission of electricity from central asia to afghanistan, pakistan and

construction of new projects would create thousands of jobs across the entire panorama of central asia and unlike private enterprises suppressed by the lack of reliable electricity. critically, the new silk road vision also includes an emphasis on the role of women. the chinese have a saying that women hold up half the sky and today's world you cannot build a modern economy when you exclude half of your human capital. fad is just one reason among many that we have pushed and emphasize women's empowerment in this region and indeed around the world. we also view it as important to include not just the immediate region, but also the wider asian and international communities, and this is reflective of the fact that central asia has always been a part of a larger asian economy. for instance throughout the region there are increasing

linkages of energy, roads, trade and communication with china which has also played an historic role in this region. indeed, just recently china conducted and held and hosted a major meeting called the china eurasian expo. at fedex though they invited countries including russia, turkey, and many other countries in the region including india, pakistan and afghanistan in this conference. so china has long been a major player in this region and if we are going to continue to develop this idea, working with china which is moving west as part of its go west strategy, china also needs to be and will be a major player as well. we also need to include at the other end of asia, turkey which has played a stark role in the

region and wants to be supportive of development in this region. now, indeed turkey has a very impressive private sector and their business association which is called the tobb emphasized to me on a recent visit that they want to be more involved in all the initiatives in central asia as well as other parts of the world. so this is not just in the immediate region. it will engage a wide range of other countries including china, turkey and others that i will mention in a moment. of course all these efforts cannot he come a reality overnight. but as the businessmen and women of their region find common cause across borders, economic connections can reinforce political efforts to promote regional stability. as prime minister singh recently put it so beautifully, i dream of the day when retaining our respective identities, one can have rec list in the punjab,

bunch in lahore and dinner in kabul. that is how my forefathers lived and that is how i want our grandchildren to live. i think you could also think more broadly that you can perhaps have a greater degree of communication and transportation between hamburg and hans joe although it may take a little longer, but thinking in terms of an even broader and more extensive vision over the course of many years is another way of looking at the broader term in connecting western europe with east asia. to get to the point that we are trying to get to in terms of this greater connectivity, the afghani stem cells must knowledge that they have a lot of work to do in clarifying their own future. some progress has been made in implementing the afghan national development strategy, but progress has been slowed by

policy, regulatory and legal difficulties. and the private sector has not been sufficiently engaged in the process. indeed, in all of our focus on the security transition, it is important to recognize indeed for afghanistan to undertake another transition from and aid dependent economy to one based on sustainable private sector led growth. so while there is a clear need for international support now, our shared vision of afghanistan's economic future is based on the fact that afghanistan, like its regional neighbors, have a lot to offer across the wide variety of sectors and their private enterprise can and must play a major role in any improvements in the economy and it must also be consulted very actively in improving the regulatory environment in the country.

agriculture for and since accounts from a state% of employment in afghanistan but the sector remains largely driven by subsistence farming. significant opportunities for private sector led growth in private sector investment. modern systems have already been established in many places. cold storage networks can be built to support agricultural exports and that is beginning. customs processing barriers can be reduced by implementing a regional transit trade cooperation framework and that has as i mentioned has begun between pakistan, india and afghanistan. so there is progress but there needs to be a lot more using these kinds of models that i have described. light manufacturing and especially value-added agricultural products like wool, textiles and afghanistan's famed carpets can serve as a second source of growth.

local production can be modernized, including as the small and medium-sized enterprise level by managing the regulatory burden of these firms and working with the afghan financial sector to make reliable financing available. infrastructure, even if it is not elaborate, can play an important role in expanding trade and commerce in allowing new product producers of goods and services including small and medium-sized enterprises, for instance small shops and local distribution networks and local companies that sell goods and services and move goods around the country, can be better integrated into the economy and they can be in many cases the big job producers that result from a greater degree of infrastructure. it doesn't all need to be modern highways. we use existing highways for greater communication and more transportation.

a lot a lot of smaller industries and smaller businesses can spring up. indeed in our own country the construction of canals railways and roads played a similar role in the development of the american economy. and starting immediately, afghanistan must take the steps required to develop the -- not only these infrastructure industries but it also has enormous potential in the extractive industries which in turn can be helpful in supporting the communications and transportation networks that i have been describing. as you you are all very much aware the u.s. geological survey has verified that afghanistan sits on top of at least $1 trillion worth of mineral wealth including iron, copper, gold, rare earth elements and others. some of these deposits are at the the under development in many more will be soon. the copper and iron ore mines

could enter into production as soon as 2016 and according to world bank projections, they could each create 90,000 jobs and up to $500 million in annual revenue for the government when they are fully developed. the afghans have a lot of hard work to do to fully benefit from this potential and i applaud their focus on transparency and the need to establish systems to protect afghanistan from what the comp and -- has come to be known as the resource curse. however it is very important that corruption he reduced through initiatives that increase transparency and predictability in business operations. situations like the one that arose at kabul bank cannot he allowed to occur. land rights need to be defined and investor protections must be put in place. and as we pursue this course, all of the plans that are being laid in and around afghanistan must fit within a realistic

assessment of the availability of government resources. with governments all around the world facing enormous economic challenges, at least in most countries certainly the oecd countries we have to focus on the way to make this work with limited government support. so for the new silk road vision to realize its potential, it is critical that the afghan government and its neighbors take ownership of this effort. to get their their region must ultimately be responsible for facilitating the web of connections that will create a new silk road. it is particularly important in this resource scarce context that the private sector play a leading role, as i mentioned a few moments ago in the region must be highly proactive and reaching out to the private sector and addressing those barriers that could scare off investors. many industries can be involved.

opportunities for-profit potential are plentiful. export credit authorities and the industrialized countries and development financial institution such as the world bank and the asian development bank can also be very helpful but of course government resources will still need to be involved and will need to play some kind of role as well. that must start with a solid commitment to the transition plan agreed by afghanistan and our nato allies last november in lisbon whereby afghanistan holds the lead responsibility for its own security by the end of 2014. the international conference on afghanistan in bonn germany this december will not need a donors' conference but we hope that the international community will be ready to make a political commitment to reinvest a portion of the savings from their declining security presence, the so-called transition dividend, back into afghanistan on top of

existing commitments. for our part, the united states is negotiating a strategic partnership framework that will signal our long-term commitment to the afghan people through 2014 and beyond. nato has already made an enduring partnership with afghanistan that committed to supporting afghan security institutions after 2014. other countries and organizations are considering similar gestures of enduring commitment to afghanistan. in closing i just want to reiterate what is at stake are go for america, for afghanistan, for the region and indeed for the entire global community. we must not forget that this effort is about ringing lasting peace to a country that has spent much of the past three decades at war. for countries like america that have lost many of brave young men and women and spend billions

and billions of dollars in afghanistan over the past decade, it is important to know that continued investments are putting afghanistan on the path to sustainable self-sufficiency. we cannot forget that as history has vividly shown us, simply abandoning afghanistan could potentially have terrible consequences for this country, for the region and indeed for the broader global security. but i also want to remind his audience and of course i know this audience hardly needs any reminding, of all the potential that also exists in this region. over the last several decades many countries in many regions of the world have been able to build dynamic arose -- growth and opportunity for their people, not just china and india which are all this but also south korea and malaysia, brazil and turkey and so many more countries have emerged from poverty and from periods of

economic weakness. hundreds and hundreds of millions of people in these countries and others have been lifted out of poverty and this region can follow in their footsteps. the people of afghanistan and the entire region have enormous talent. the reintegration of afghanistan into this region and into the global economy can be of tremendous benefit not just to afghani's themselves, but also to the neighboring peoples throughout the region. and to the global community. over the long run it will be millions and millions more men and women working in the great areas of progress that can be produced by bringing the afghani's and others more actively into the global economy in terms of scientific achievement, medical breakthroughs and other kinds of economic it to the these. it will mean increased hope and security for generations to come. that is the vision we have been sacrificing for and that is the vision to which our commitment

in doors. i want to thank you for your attention and i just want to say particularly to the minister that there is enormous support in this country for the kind of vision that you have outlined, the kind of very hard work that you and your people in your government are doing and we see implementing this vision is good for afghanistan, good for the region, good for the entire continent and certainly a very powerful benefit to the world. now it is up to us, all of us, to implement this new plan to help the afghani people to realize their potential and in so doing afghanistan will benefit and so will we all. thank you very much. [applause] >> finally, for 10 years, the asian development bank in central asia regional economic cooperation program has been

pursuing the development of continents expanding east-west transport routes. here to speak of this very important work is mr. juan miranda, director general of the central and west asian departments at adp and with a lot of experience in both private banking and his native spain and elsewhere in europe and a seasoned professional in the world of international finance. and development, he has the right one to speak on this topic. juan miranda. [applause] >> good afternoon everyone. thank you for inviting me and inviting us, and thank you minister speaking from delhi in our offices and secretary

hormats. i enjoyed both presentation very much. they were well-structured. they were good. so what i will do is not read the presentation which i had but to show slides that i produce and to share with you a few observations and then maybe have time to change notes with the audience here. i thank you very much again for the invitation. now one of the messages i want to convey to you, the first one is to convince you, and i'm sure that you are, but i will try anyway just in case because i don't want to run any risk. the regional cooperation matters and it matters a lot in this part of the world. .. but particularly, it delivers a message about the mission.

and why is that important? because we have not been sitting in our laurels for the past 10 years. we haven't been doing that. we've been actually acting, all of a sudden they made state and other countries on the type of projects you need to put together to get the job done. however, talking about the debate is crucial because we are crucial things coming up very shortly, particularly in 2014. my third point that i will share with you is that we've been doing many of the projects that we have to do and none of thempa are complete. the job is not done and we have to finish it. otherwise, we don't have the means to an end. my fourth point -- message will be to sit just how we can move now from a division to putting this project together. the ones that have not been done

or the one that had been finished. and in that context, i will make some suggestions for all of us in here today. let me start with the first first, why regional cooperation and wide region. first of all, we know, we heard because we know it thought why with a few exceptions then we have to convert than loughner's into family nurse. why is this important? because it is in between large commercial centers, not supermarkets, but clients in the east and west and of course in the south. and unless we develop a comic judy to make things have been, there is no way that this region without the benefit, but there is no way this region will get out of poverty, which is something we need because it's

in everybody's interest. the nearest port, a lot of countries in a region is about 2000 kilometers away. how can he compete if you have anything to sell unless he has access to the places in between. an important one is getting on the way to develop at 8%, 9% growth over the past two years needs access. unless we have that access, investment, competitiveness, productivity ain't going to be there. those are some of the reasons why this makes sense. what other things make sense? the logistics of the place they are lying in and also the things they have to sell. so it's not just a conduit for east-west trade and for

north-south. it is also because we have minerals. we have commodities that we need both in the south, in east and west. we can't do without. what is the significance of all this in relation to afghanistan? very simple. the significance address he said quote, unquote, afghanistan is a place in between. you have things that you can sell and will talk about some of those than a minute, but it has sold for the rich, the markets and in particular to access the ports in pakistan to crack she and this is good to reach markets in those places, but also important to reach markets elsewhere. either way, pakistan has become the 10th member of a regional economic cooperation program, the so-called eric and this gives us a new opportunity.

an opportunity for all. so the system of the reasons for the work that we do in the work that has been proposed here today by both the secretary hormats. in other messages that we believe in without practicing in doing so for 10 years for care at. herod is a voluntary arrangement. it has no treatments. it has 10 countries and he has a very practical approach, which is to focus on projects that deliver infrastructure, deliver products both for the domestic market and for exports. and it's been going well. we invested over the past 10 years close to about maybe $16 billion in different projects. and we, the world bank and others, particularly the countries in the neighborhood have done a lot of that investment themselves with contribution to the finance.

i may talk a little bit about my second message, which is about the new silk road initiative. what we like about it and why do you think is both appropriate? we like about it the fact that it focuses homes in on the core problem and it is the sovereignty of the economy today impose 2014. and what does that mean? it means the one the troops that are out in economic activity that is related to in this town. we do have something to replace it, to create jobs, income and hope for retail. and if we tell, we don't have a situation there that provides benefits, probably has a situation that provides all the others. so the economic sovereignty is in question and the initiative focuses on the problem first and foremost, but we like it because it talks about the solution.

if a solution that has two critical components. one, infrastructure as a means to an end into common in the regional dimension. it's not quite like the effort of the statement of this defense making airplane for me ask you to a gas mask on your first before putting it on the little ones. and distinguish between what is big and small, but he means that i must be sorted out a common activity in the central asian countries, we're not going to be able to do very much for afghanistan to become a connect their coming to become a conduit for others. so we do have to start about that. original dimension not only because they want to get to points, but then get us to markets, but because those are the things that need connectivity in order to be good for you. in fact, when afghanistan was negotiating with pakistan the cross-border trade agreement, one of the key messages and

perhaps maybe not a driver for getting it done, but certainly a message that will drill down and can be very clearly to other parties that afghanistan can bring not only afghan products, but it can bring the whole central asia to pakistan and beyond. i hope that was one of the factors that continued the end, but we like the projects and regional dimension and we like that as part of the solution. we like it so much that we've been doing it for 10 years. we've invested in afghanistan alone, close to $1 billion with almost the same amount they will tell you on what's in a few minutes. so the message, it is a good initiative because it talks about a vision again, it repackages the message, to me that well, clearly. i was talking about the problem and solution in a cause for

projects. projects is something we have two kerrick. characters a platform to getting that job. most of the jobs we talk about today in the initiative, but in fact also in the program and while not competing here at the initiative simply states that they make sense for that period of time. buddy make another point. if it is the fact that minerals and hydrocarbons are a means to nine, the infrastructure will be a means to that particular means. and in this case and in this point, i like to acknowledge the excellent work of the task force business instability cooperations hear from the u.s. has been driven this country. they are trying to place while helping others place public assets of the private sector, to 19 and hydrocarbons that is absolutely fundamental for those jobs demand in coming years

years to come. it focuses on three things. 3.5 perhaps. one is transport, conductivity, and that the mail. the second one is energy, the various parts of it including trading with other countries in the region. the fourth one is trade facilitation, getting most cross-border agreements time. in the fourth one or the half his knowledge, sharing experiences not only on a regional cooperation but particularly on the role of the year and the things that go with it. once again what undersecretary hormats said, women in that particular development. otherwise we will get inclusive growth. now, let me come back to some challenges and then i'll finish with a proposal on the initiative itself. to get things done in afghanistan, we have to take into account now, but also in the future that security will

matter. it's going to be huge problem to attract investors and investment and it's not easy. it's not easy today. it won't be easy tomorrow, but at least we acknowledge that it's going to be part of putting projects together. the second point is that we need to develop the nonbinding, the non-hydrocarbon sectors as well because those come as important as they are come with billions of dollars of resource, untouched as they are come if they will not be -- we cannot make ends meet without a transition in between. i'm not probably takes us to what some manufacturing and other services. so we can forget about that. and that is not yet been finished. at least the job hasn't been done. the third point is that we need finance. we must not and cannot have unfunded mandate. and it's okay to name the projects than we do. we are also asking for us to

make sure that we have the money to back it up. now the private sector will have to raise the funds to build the big projects, mining and hydrocarbons, but we also have to raise money for facilitating infrastructure through various vendors that we have available, whether it's the asian development or special transcends unless the job is funded, it ain't going to happen. so we have to think about that it is surely a challenge. the institutional makeup in afghanistan needs to be strained and because back to provides credibility and credibility basically allows the private or another's to mention the risks are meant to operate within that sphere unless we have that fixed, we are going to have some difficulties to attracting investment and the investors. and finally another challenge, maybe not the only one, reforms are about the ambience for doing

business in these countries. we are short. we have got a number of areas in the sky to fix them. so with this work in progress, i also add that if the original dimension elsewhere, that things happen in the rest of central asia, then the possibilities, the opportunities for business in afghanistan will also be impaired. the mitac and about the initiative. i think that what he means is that continue a strong messaging, a strong outreach. it does no harm at all to put what it is and to put it to others so that we focus around the important than the essence of having economic sovereignty in this country in years to come. but we need to focus. we can't spread it too much. we have to convert into an action plan. as we do that, we have to do

prioritization. we've got to define what is first, second and third. it won't kill to do it all. remember that we have long-term projects, but we've got to pay for the short-term ones first. let me add the third point, which i alluded too early on. we need other sectors like agriculture and manufacture to be in place. and the fourth one -- the fourth point is that we need constant agency alignment among both here in the united states, but also with other donors and multilateral banks. if are not on the same page, will be talking different language. and that will do good to no one. but that message in my view is important because the job is not easy. let's not make it more difficult by not being together and turns that the priorities in the way forward is. if it problem is how to play for the long-term projects with the

private sector. and i've highlighted the job that it's been done for the support provided by the task force with the department of defense, we need to professionalize the weight the assets have placed and we need to probably find ways to underwrite or minimize some of the risk that those investments do indeed take place. i also believe we need the platform to execute projects. it is not easy to prepare investment plans for projects particularly in the railway, the public sector projects at the private sector isn't going to do. and so we've got to go to places that have been practicing, but i've been doing the job against the times. it takes time and takes money to prepare an electricity system operation. so we need following from that, dollars. we can't do the job without financing and i've highlighted

earlier on the essence of mandates. there is a need for leadership. and finally, for always bearing in mind, taking into account the original dimension matters constantly doing the job in afghanistan. so what is my proposal? my proposal is that we moved the initiative to an action plan into shortcoming medium and long-term projects. that we surrounded the enablers, things that must have been for us to have been properly and on time and that would leverage on existing programs, including kerrick. the way of clear, unequivocally clear financing plans that would bring in the reforms for doing business within the country of, that we align ourselves and we talk about it time and time

again. that is part of the outreach and that's what the initiative has given us. what a way to? and what can we offer to this endeavor. number one, we have a platform. it's a platform with experience, with a track record, with an honest reputation. we can make it available to others in particularly projects like this. however, it doesn't come cheap and you give us a freelance. we will not do any freelances at this because we had our amendment to trying to convince the donor community that putting money into afghanistan, which is one of our most important hindsight now and rightly so needs cash. the only cache we can put in this country is grants because they are not able to borrow. not yet. and to do this, we have to

galvanize the international community for the same purpose. otherwise we will not succeed. we have an afghanistan infrastructure found in the making. we haven't yet we haven't yet we haven't yet rhodin because it takes time to do so. if we look down and we look ahead toward building the green road, which is absolutely essential to compete the growth network, to build the railways, we've only done phase one of three types of faces for projects to complete the energy projects, including games that we will need millions and millions of dollars. so let me conclude. i represent in my house and therefore my house is not night, but is the house where we think the initiative is good. we think it's timely. we also think that it needs to shift into action planning a

period i believe that it is compatible with current program, including kerrick and i know and therefore i say that adb is a good partner for both the united states and other donors than i am here to say to all of us, to say to you, let's get down to work. thank you. [applause] >> thank you very much. and all three of our speakers. the floor is open for just a few minutes of questions. we are happy that you're able to stay with us. thank you so much. and mr. miranda is also here available. >> yeah, leif grossberg or, economic adviser done at centcom. we've heard about the importance of afghanistan getting on with all its neighbors. we have heard much about every. iran is a big neighbor of

afghanistan. afghanistan has economic interests and good relations with iran at the same time, the united states has problems with iran. it's certainly an understatement. how do we reconcile these competing national interests? >> who wants to address that? [laughter] who wants to own it? yes. >> i should have welcomed many other people, and the investors they react in this area. former ambassador from afghanistan here, but is there anyone from ulster and the u.s. government that can speak to this? [laughter] >> well, sir [inaudible]

>> the energy source is coming to brisbane built, pipelines are being built. what is already at the iran border and meanwhile the exemption up or down the hills began to push. >> if i could just make a quick note with regard to iran, very interesting. two quick note. first, the iranians and the pakistanis have both built ports as you know very well. kandahar and childish heart and the u.s. has been, as i observed as nonmember of the government has spent quite content of a lot of traffic coming and from central asia. further to the west down to chow bar, the virtue which was built by india from afghanistan. now, apparent as it also wishes to go east.

but the u.s. hasn't taken a stand on not as far as i'm aware. second, the road north, one of the roads north coast or tajikistan. the u.s. built the bridge over the punch river. you take the right route up through the 10 years and over tacoma past and to send john. you are taking a road that was built by china. if you take the route north, you are taking a road to bridges and tunnels of which were built by iran. there is a case of clear collaboration that i would never, ever acknowledge. server. >> guesstimate thank you. bob kalina ase investments. question, you talk about this afghanistan infrastructure fund. what do you envision to be a hurdle rate that would be appropriate for that and secondly, are there industries that do not allow control investments and the lake they

are in terms of this going forward? >> thank you. >> if i could first of all make an observation about iran and china. we are not and i hate to name iran and their and i still want my bacon can't open at the end of this meeting, but we do build the roads up in the north end of railways will go through have wrought i am not going to suffer to get into whatever port those products want to go to. we have other issues with iran. conductivity should be one of them and i have heard that it is. it is however the plant because it looks attract this, looks economically right. i'm sure it would be for the private operators to go down to karachi and ported them.

those two are competitive sports and i don't see any contradiction in that sense. that leaves the network goes around the country and it would become whatever is more convenient for the operators. if it happens to be pakistan would be, if it happens to be other ports, so be it. as far as china is concerned, remember it's not just about dragons here. it's about competition. we have had the empires before an afghanistan now is no longer a cushion. it shouldn't be. it should be a conduit. and what we do and what we should say is a not then back off petition. we had those mandates that both the u.s. and others are trying to put together. but the best guy come in and take them. and it's pretty good at the east-west trade makes sense. it totally justifies the corridors of building and investing in him another south corridors that make hopefully

just as much in places like india, southeast asia in general with trillions of dollars in trade potential would be a really good thing to happen. about the afghanistan infrastructure fund this concerned, if the private sector one and they put the money together turn a company or many, but we are doing so from primarily the public sector. the reasons for this is when we went to projects, public sector projects, we can charge money for them. i know it sounds great. you and i couldn't benefit from that, but afghanistan does. and that's because as the instability problems. so we don't have that in play. as far as the questioning and may be the answer on what is possible and not possible in the hydrocarbon sector, i'm sure that our colleagues here from the u.s., from the task force could probably give you with that. at least the way understood the question. >> i wonder if i could turn to

michael stanley from the world bank who has devoted more time than anyone in the room i suspect to the problem of mineral =tranfour and markets and minerals. can you provide a comment on this? >> a daylong topic. thank you. i did have a comment. i think one just said it so i'll just parrot what he said. these are commercial commodities going to global markets. at the end of the date they will dictate what direction the commodities will slow. within that there are technical barriers, using iron ore is an example. if the bulk commodity. some ports are not bulk commodity course. so i karachi port is not. there are others in the region that are like that. so it's a little bit difficult for us to set today and try and engineer and direct something that at the end of the day the

markets will tell us. and so i think -- i think we are all on the same page and i think we are all in alignment with the bank is reading the resource coordinator initiative which is in response to the adb's program in the silk road initiative. what we are proposing from our site is to just improve coordination and dialogue among the donors in the commercial market and to reach out now and have these conversations with the global market people. what do they need? and get more pull from the demand side and was pushed from supply-side. so maybe i'll stop i'm not in others can react in a statement. >> thank you very much. just please, sir. please stand. >> my name is mohammed. i don't know whom to ask this question about security. this existed in the time that

ground realities of today, especially a security. so what the security issue facing today is that we're talking a security issue which is not in control of anyone. >> mr. bathija, we can turn to you on that. >> at the dawn i think, right? well, thank you very much. let me take this opportunity to thank mr. miranda and to provide just that his ability to communicate with each other from this corner of the world to you. thank you. the question of security i need much to elaborate except one small sentence. we have to start somewhere,

whether it's a reasonable security or whether it's another security. the opportunity which we bring to westmont pa security and that may be one way to look at it and therefore i believe in it. other race will be staying for the next century to create a security, to expect 100%. there's no such thing. we are working on it. i think the world has seen very well that our forces will be taking in 2014 with the help of our donors, particularly the united states are getting very much ready for it and i hope by the time the silk road initiative comes into full blown, we should be in good shape. >> let me follow this up if i may, theriot, with the following question: are you suggesting that these activities should be done very on them?

for security and then development? or are you suggesting the possibility that they could become simultaneous and mutually reinforced? >> thank you. they take your second card. it has to be done hand-in-hand because i believe whatever activity is taking place as result into some sort of creating a proper security. so i take the second part of what she said in fully agree with you on that. >> can i ask ms. veranda to comment on the same thing? >> at happy to do that. but let's not make it abstract. we both close to 1000 kilometers of roads in afghanistan. and we've been doing so so far i don't have any words attached i can tell you without any

problems of any problems of significance. we built the transition land that takes electricity 24/7 to everyone in the city of kabul. four years ago we had about two hours of electricity supply in that city. today we have 24 hours. and this is about any other problem. we just built the railway line to massage every. we did so in record time. the project was supposed to take three years. we negotiated for a wide and the contractor finished it in nine months. there is no project in recent time that has been done as fast and i may say as well as this particular one. in the history of add, for other countries that we have and this is in afghanistan. so what do we do? we work with the ministry of

interior. so when we say that we transition and pass responsibility to the ministries, we actually does what we are talking about here. so we have a lot of people that we put in there. and yes we have to finance it and yes, the cast aside, but it's necessary so we do. we have been without in the future. the next railway lines were required maybe two dozen people at the brick road with just in a word to contract to an american firm, they'll probably need two or 3000 people there. we are not using private contractors. we rightly so think that is an appropriate do in this country now. forgetting the job done despite this problem. >> a railroad from pirate time

was built right they are. they are labor costs are a little less than ours. why are we contracting -- where you contract and with an american firm probably six or eight times the cost? is that a political decision or is it a principled decision? i don't understand. >> it was political -- >> or people or issue that know how to build roads in tajikistan. >> the greenberg contract with dugout and the american group of joint with the turkish one answer they put a deal in front of us. use back -- the railway operation was done with the news that company because among other things were using the north gauge system. we think it makes sense because it's both efficient and cheaper mark perspective, from the government's perspective and because much of that trade will

come from the north shifting down. so why use any other system? but even in the border between iran and herat come in the line being put together will follow that particular system because there's always certain pressure that one of the country supporting the finance of their own system. but we will end up with is probably three or four if we don't take care of it. and that's something we're not prepared to go into. so why use that? well, they were competitive. they were. they did it well. and of course, just make sure we also verified with a very good engineer outside the quality was not compromised. we have three criteria to get the job done. the budget, the time and the quality. and they performed exceptionally well on all fronts. i have to say.

>> thanks, fred. i want to address the security question. and the insight i got it this was the studies we did on the northern distribution network from the transit quarters into afghanistan and the labor they won off in my head when i learned that, you know, these transit orders are bringing in nonlethal good. until the opening of the new transit quarters from the north, everything less to the point of karachi and up through the shaman case, going virtually through enemy territory. and the loss of a was less than one half of 1%. these are not military commonplace. these are shipped by commercial carriers. nonlethal goods. they had a loss rate due to filters blowing up or whatever.

less than found in new jersey. that was quite amazing for me to realize. >> this is not a comment on the possible candidacy? >> nothing against new jersey. >> some of my best friends are from new jersey. but it was quite a stunning to realize and of course we think, how do you explain this? i mean, the major explanation is that there are people that are making money and it's facilitating the transit and trade. and that was one of the insights that let us to think about what we learned from that project for trade and transit strategy for afghanistan. >> thank you very much. they even john, i wish we had more time. we are out. how to think our three speakers, mr. bathija, it's really wonderful you could arrange to take this time and of