>> which is something i think of a tragedy, if not a central one, certainly one that in many terms is going to affect the future of the country unless that is reversed and there don't seem to be signs of that happening. i think that many of us can be delighted and pleased with the changes that have taken place in tunis. one only hopes that our efforts to wish them well continue to speed them along the way. the monarchies present a deficit situation but my long association with jordan and the fact that i the privilege of living in morocco for several years lead me to believe that they are perhaps the most taxed, and at the same time capable of showing the most resilience and, indeed, the most capacity to adjust to the new changes. we will have to wait and see. in the gulf i think there is no question at all. that attention has been heat and sparks, that their large efforts on the part of the gulf states to use the very considerate resources i would not include bahrain i think in the really

guardedly optimistic view i have the at the adjustments in that part of the region, but i think nevertheless there is a start that has been made and how and in what way over longer-term they respond to the needs and the economy and the need for social change, and more importantly the needs for some political change remain open questions, and whether indeed the short-term and medium-term efforts to undertaken will see it through. in yemen and libya, and, indeed, syria present serious and important challenges. for yemen, i hope that they avoid the process of becoming another somalia. in libya i am deeply distraught the regional differences and tribal differences and other differences have seen more of an effort of a centrifugal character that he centrifugal character as the new yemen seeks -- the new libya seeks to emerge. and in syria one can only watch closely and hope that the efforts that are now underway

will bear fruit. let me talk a little bit further about syria, because i think that is a major player in the region, a country of significance and the country certainly on the verge of becoming almost a genocidal state. we have great reason to worry and great reasons to be concerned. i am very pleased that kofi annan has accepted the dual mandate of the arab league and the united nations to engage himself in an effort which undoubtedly has to pay its first attention to the question of negotiations, and whether they can produce useful results. the early aspects of this are far from encouraging and far from clear, but nevertheless it represents an important step here i was pleased to see over the weekend that the russian foreign ministry in the arab league them closer together in their own views as to where things might go. certainly, the notion that

bashar al-assad should remove himself from syria as a precondition has every sense of correctness and write in my view, and the direction and, indeed, the purpose. on the other hand, to demand that kind of precondition as a requirement before negotiations can start is unfortunately and diplomatic terms for me to reach too far. and i think we have to come to grips with the notion as indeed i think the arab league and foreign minister did in cairo with an effort to try to start it without the. i think the concomitant for successful negotiation in syria undoubtedly have to involve such elements as making sure that all parties in syria are represented in the negotiation. and that indeed they are represented in a balanced way and they are committed to change at a future for the country, that represents the best interests of the people of syria, in the sense that they are demonstrating those

interests in the streets of syria, even if the risks of their lives as we speak. i think it is also important in achieving that kind of a political consensus to take into account that certainly one has to make provision, particularly for the alawite minority which is not necessarily been the gentlest factor in recent syria in history and its role in governance. they have to be protected against the notion that don't become the victims of genocide if, in fact, they make a move. the international community has to undertake something of help in that particular burden. it is undoubtedly true that kofi annan's first instinct was cease-fire are very important. whether they can bear fruit or not remains a very open question. but the killing has to be stopped in some way. it is a tragedy mounted upon a tragedy in that sense. we also have to look to the humanitarian aspects of syria in the efforts that can be me. whether it is safe havens or

corridors, or indeed international support of food and medical assistance, or all of those questions. i despair of the notion the military force at the present time can make the kind of change that we expect to see. we have had our own experience with military force as a substitute for diplomacy. in iraq and elsewhere. and i have to tell you, my frankie is that the results in no way in my sense requite the efforts put in to make that happen. the fact is that we need to exert all diplomatic efforts, certainly backed by our considerable power as world's largest economy and the world's most powerful military force, but coupled with actors who are playing on the international scene. certainly we should all take notice fact that the arab league has emerged from silence entity

videography to a new and enforceable rule in the region. and it needs to be seriously taken into account as indeed as the role of the organization of islamic states. they represent a very considerable assets in moving ahead with these questions, and while many may believe that they are seeking only narrow and, indeed, particular advantage, i have a great sense that they are adding to the equation for the future. let me turn from syria to its non-neighbor come if i could phrase it that way, to israel, palestine and the arab-israeli question. i think in all frankness i have to say that i'm terribly discouraged. we're in a situation now where we can expect little movement from the united states certainly before the elections take place. and, indeed, my hope is that this status will be required right a serious effort following the elections. in the meantime, we are prisoners of what i leaked

national what i you'd like to call the bicycle principle if you're not writing for which are falling down. if anyone who believes the status quo is permanent maintain or necessarily going to even keep a situation on an even keel, as also got to re-examine history in the area. it is a very difficult and dangerous time. counting on the status quo to continue is in my view a pious hope over the stark reality in the region. what can be done in this intervening period is important. i, for one, have long believed that we occupied a quiet way to help the palestinians pull themselves together. and by that i mean quite seriously that hamas need to continue the talks to come together. i was ambassador in israel and have the unenviable duty of calling prime minister shamir on the evening we decided to talk to the plo. it was not an edifying

conversation. but i have to tell you that you need to cast your minds back to that particular period to find a period when indeed our animosity and our unhappiness with the palestinians was overcome. not because the record had changed but because, in fact, the posture had changed. hamas is far from going to leave the negotiations, but i think it's posture towards the decorations is gradually shifting. we will not expect hamas in the immediate future to recognize israel, but they have it in some ways with it would not begun to ask you violence because they know it gets them nowhere. while they were not accept immediately the notion that everything has been agreed on the table, is going to be there cup of tea, they have accepted the view, lease this is what they say and they need to be tested on it, that if they can negotiate a deal, and that deal is supported in a referendum by

the palestinian people, they will be there. these are moves. they are not the answer but it's important. the palestinian side, negotiating in two separate halves is ultimately on my view unable to come to grips with the notion of a two-state solution and peace for the people of palestine, and that needs to be pursued ahead. the second thing the united states up be thinking about is parameters for negotiation. and, indeed, the president's took an important step in that direction when he said in enacted in 1957 lines should be the basis for the future and it should be the basis for swaps. and i hope you meant equal swaps or nearly equal swaps for fair treatment to arrive at a two-state solution. there are other things that could be put on the table, indeed as parameters. a jerusalem serving divided by neighborhoods with the two parties settling on a machine for the old city that at a minimum permits access and certainly access to the religious shrines of all. we need to find a way i think to

introduce third party assistance in helping with the security problems of matching israel's need for security in the region with palestine's need to have its sovereignty full and fully recognize. and i believe the united states to play a leading role in that kind of endeavor. there are other issues. my own view has been for a long time that the right of return of palestinians can be recognized without flooding israel, with palestinian refugees. and i believe there are ways to proceed along that particular course that are reasonable and, indeed, reasonable men can except for the future. there's always wonderful to set up and tell everybody how to solve the problems. the truth is that the big issue is of course that neither side finds it convenient, easy, or indeed finds themselves capable of undertaking the enormous political responsibilities of seeking an answer. here, too, i think the united

states and the quartet all in the elections will need to play that kind of an important role. and signaling now indeed if that is the objective will be very significant in my view, and bridging this difficult gap over the period of time when the bicycle is peddling against us. it's been very interesting to be with you and i will only mention two other things. i think that i share a concern that all share, that iraq is less than fully stable. they still have problems of in fact coordinating majority rule with minority rights. and, indeed, the nature of the federation, whether it is of 18 provinces or three units. and, indeed, how to distribute the oil income. and, finally, iraq's role in the future of the region, not only from the inside as a major player, but indeed from the outside will the other major players play in iraq if indeed differences and difficulties are

maintained among the groups inside iraq that continue to contest for power in one way or the other, shiite, sunni and kurds. in iran, it's worth a whole hour here alone with you to talk about the future of iran. my own sense is that there are only two big problems to be resolved, and they are horrendous. want to do about iran's nuclear question and what to do about all the other differences beginning in afghanistan that we have with iran. my own sense is, and i remained a consummate optimist because otherwise i, too, would be in the loony bin, about the future of a nuclear equation in which we can get iran that going to say it renounces a-bomb, but to act in ways that are fully comporting without. it is important that we use the leverage on our site to do that and those levers are important. we badly need now more and more capable inspection by the iaea. it is the one safeguard, the one

firewall we have in iran's not creeping over the civil line into the nuclear arena. and, finally, we need to use the sanctions, not just to bring iran to the table which seems to be having some success, but to induce iran to understand that is nonnuclear future any weapons of sense is the best and, indeed, the most useful posture for it in the days to come. i suspect i'm almost over my time. it's been sure of it to be with you and i thank you very much for giving me this opportunity to share some ideas and some views but i wish you all good luck in the panels ahead. thank you. >> thank you, for that. it was very interesting. we will convene now our first panel. i guess full attendance. and i think perhaps, shall we start down at the end with ambassador gray, and if you

could all just give us five minutes of introduction and then we'll start with our q&a. >> great, thank you very much and thanks to all of you for coming this afternoon. and i want to thank our host, and particularly david a mood, even though he couldn't be with us today to do previous commitments overseas. my name is gordon gray but on u.s. ambassador to tunisia and, obviously, 2011 was the year of profound political change in tunisia. and in addition to these political changes came the realization of the importance of job creation to the success of the transition in tunisia. and this led in turn to the further opening of tunisia markets to foreign trade and investment. because without those opening of those markets and easing of

regulations, job simply are not going to be graded to the degree that they are necessary. one of tunisia's advantages for investors is its location. it is within close proximity, obvious, not only in north africa but also europe and sub-saharan africa, obviously the market come with a population of just over 10 million people. it's not an overwhelmingly large market for u.s. goods but its regional platform, it's very appealing market. it's also the only country in north africa that country with all its neighbors, it's ported to other trading agreements such as the agadir agreement that allows it to trade freely with egypt, jordan, and morocco. this means that the several

opportunities for u.s. businesses. there are more than 80 u.s. companies in tunisia now. some of the companies present in tunisia have had success in the i.t. sector, manufacturing, also. and some of the exports that u.s. companies have made to tunisia include things like oilseeds, cereals, machinery, chemicals and the like. looking ahead as far as opportunities for u.s. companies, infrastructure is very important and very much needed. large-scale tourism projects, industrial mega- products -- projects, and these include things such as highways and railways, tourism, phosphate plant and others. franchising is another real opportunity for u.s. companies

because with such a comparative advantage there. and because there's a large middle class in tunisia. and for all the opportunities that i've mentioned, the overseas private investment corporation can help u.s. investments. they have a $2 billion fund for the middle east and north africa. and that figure to spend some of this money in tunisia. we just had a team from opec this at the end of last month with a particular eye on franchising, franchising opportunities. i mindful of the need to keep the panel going, so i will stop now and allow time for questions and answers after my colleagues give their presentations, but we do have an information sheet on tunisia. a summit at the back of them and i've also got some copies and i have the business card of our commercial attaché if he wasn't interested and wants to get in touch with her. thanthank you very much. >> thank you, ambassador gray. i would like to turn out to

ambassador kaplan. >> good afternoon. it's been a great pleasure serving in morocco. morocco is a country unlike some of the other countries involved where its stability is its greatest claim to fame in the business world. when you consider all that has happened in arab spring and you realize how little the impact has been on morocco in terms of its stability, in terms of its health, it's a very impressive, and i was sitting with my wife at lunchtime today and i was saying, what is the principal thing that morocco has going for it? and she, without batting an eye lash, said its brand. the morocco brand. and that's true. this is a country that has been built in a very significant way on the basis of tourism.

and you'll go all through the united states and you'll find all kinds of people who know very little about the politics of the part of the world that i currently serve in, but they will tell you they've been to morocco, or they've read about morocco or they know about morocco, and to know about it's welcoming quality. they know about its positive feeling of its people. i frequently say that the first two words of a rock concerned in english are you're welcome. you're welcome into our house, you're welcome into our business, you're welcome into our country. i think that's a very telling fact appear to be sure ever spring has had an effect, a very positive effect i think in that there has been a change in government, a changing constitution, and now you have a coalition in government headed by a man who is part of a real political party and organized in a way that she said that this country could have reforms in a

meaningful way. his majesty is still the most powerful figure in the country, but is doing so is acting in a manner that is consistent with the sharing of power with government. so briefly, what you have here is the opportunity or american companies to come and. we already have 150 or more in the country. thank you very, very, very well. we have a very, very strong central bank. the understand what they think they understand the nature of commerce in the country. and i think it's a very powerful thing. are the concerns? of course there are concerns that there are concerns that all of the reforms will not turn out in a way that you would hope, but i think you can set that aside for the purpose of this meeting today and say that there's real reason for optimism. >> thank you, ambassador i like to turn now to ambassador cretz.

>> five minutes on libby is a little difficult. as secretary clinton said last week, what a difference a year has made exactly one year ago we were working on putting together an international coalition to deal with the brutality that moammar gadhafi was visiting upon the libya nation. and one year later we have just experienced a tremendously successful whirlwind trip by the prime minister of libya, which resulted in a renewed commitment on both sides to pursue a new and close relationship of partnership with each other in every possible sphere. if you read the newspapers, headlines of the last several weeks, you get a sense that libya is a country beset by militias fighting each other,

tribalism, and economy in tatters, regional flareups, et cetera. even, i think, there are issues. there are challenges here for sure. and even pick up passionate even the government itself acknowledges there have been mistakes in its publication and the way it is pursue the issues of transparency. but i would argue that one should also look on the positive things that have happened. over the past four months, if you saw prime minister trannineteen any of his vineyard you have seen a man who is serious, dedicated, committed to human rights, committed to a democratic libya, and in his cabinet very much reflects his personality. civil society is burgeoning. political parties are exploding all over the place. you can't go tonight in tripoli

without being invited to the launch of a new political party. the election is preceding the pace. the u.n. has been working with the new electoral commission as electoral law. sure, there are many complications to overcome before the election does take place, but it is moving. the liquidity crisis has eased. february 17, in which the one year anniversary people have been predicting dire explosions and gadhafi elements running rampant in the streets and violence passed without a whimper. basically, happy families walking along the streets, hundreds of thousands of them come and the celebrity gunfire, thank goodness. oil, which are experts, among others, declared all last year during the revolution which would never be up to prewar

levels until several years is now up to 1.4 million barrels a day, out of pre-level amount of 1.7. they hope to be back there during the summer and are even talking about going up to a 2 million by the end of the year. the budget we understand was passed today. that will begin to give the ministries that money that they need to make, to do their projects. and just in terms of the commercial environment, you know, that up until the revolution there was 175, $200 billion worth of contracts that were given out for infrastructure from a-z. you name it, and libya needed. unfortunately, it was done very much in a helter-skelter manner, and right now the new government before it gets any new contracts

is reviewing those contracts to make sure that they are rational and viable, and that they were not subject to the corruption that dominated the gadhafi air. i would say to you that it's a great time to come to libya right now. i know the security situation is a little dicey. for some of you. we live and work in libya, and i can assure you that european companies are coming and that there's a real desire on the part of the libyan government in living people for american products and goods as it was before. and the prime minister told that specifically to the president, secretary of state, and everybody else he met with. so i think it's a good time for americans, business, to come to you will be welcome. you will get a contractor for state but you will begin to establish the context that you will need that will stand you in good stead as this country makes its march towards democracy. thank you to. >> make you, ambassador cretz.

now i'd like to call on ambassador jeffrey. >> thank you very much. it's a pleasure to be here today. it's also -- from the national u.s. chamber of commerce, including his visit to our pavilion during our recent iraqi recent trade fair. you've heard that the mock of morocco is to build but many would argue that's what ambassador pickering was saying that the mock of iraq is so potentially instability. and we can't deny that to some degree but i will try in a second to put that into somewhat of a context that led to talk about the business opportunities and the economy. iraq is that if it can keep its political security situation stable, to explode. it's got a per capita income of about 31, 3200, which is very,

very low even for, quite low compared to the rest of the region and even compare to sub-saharan africa. on the other hand, its hydrocarbon reserves, 140 billion barrels known, probably 30 billion if not more in the kurdish area. plus huge tracks of unexploded terrain west of the country, bring it up close to saudi arabia 240 million oil reserves. and in addition, iraq has unquestionably more natural gas. selections of hydrocarbons it can underline a venture with saudi arabia. and it's got plans over the next eight or nine years to increase oil exports up to very optimistic 11 million barrels a day. we think they will be lucky to get to eight or nine. but nontheless, they've got an extraordinary process underway

with been international oil companies to develop their southern fields. they've got tremendous potential in the west as i said and also in north. many political issues are related to all of this but nonetheless they are on the move. gdp fueled by the increase in oil prices and increasing exports about 300 to 400,000 barrels last year. we think 400 to 5000 barrels this year is expanding into double digits. u.s. trade is expanding equally from 2010 to 2011 an increase of about 50% from the 1.6 billion to 2.4 billion. that's what we're doing in other countries but in time with hundred 50% increase we are happy. the areas of concentration of u.s. access first of all, the oil and gas sector. secondly, heavy equipment, particularly electrical generation. to some degree chemicals, pharmaceuticals, but in particular agricultural goods, defense obviously, and

information technology and telecommunications. and also we are very proud to say automobiles. so there's a wide variety of american firms interested in this at the trade field, the largest of over 80 countries. and as i said david attended to represent his organization. we're happy to see that. we have a keen meaning many resources at our embassy. is a very large embassy that are committed to both working with the iraqi economic system and with the iraqi government's to explore its natural resources and develop its business sector, but also to work with the american business community. now, let me get to the $800 question, which is what about security, what about the political situation? iraq remains a democratic will of our country but it's a tremendous stresses as it has been since 2003.

those of us have been there over the past eight years can attest to the fact that it's a much better shape now than it was six, seven years ago. nonetheless, while the security situation has improved dramatically in just the 20 months i've been there, it still is an issue of concern for american firms, as it should be and we have a very strong osac. we were closer to ensure that americans are safer and for a good long time american private sector representatives have been safe. in terms of working with iraqi government are two kinds of problems. first of all at macro level you have difficulties with the iraqi system funding large-scale infrastructure projects. the iraqis don't want to take out loans and is an international legal limitation on what they can do. this makes the process basically you have to get a legislative decision or a law for each project, very cumbersome and it's slowing down the development. we're working with them on that but that's the first constraint.

countries need to find models to fund infrastructure development. they're putting about a third of their $100 billion budget into infrastructure, so some of that, large part of the flow to the international community but nonetheless other creative models and other countries have used, there is a real need for that in iraq. at the retail microlevel, operating in iraq is a daily challenge. from visas to finding communications to communicate with your government interlocutor, it's very, very demanding environment but we are but we are a very, very supportive embassy and we urge people to look at our websites. we urge people to consider the iraqi alternative. it is a huge market there. american products, as elsewhere in the middle east, are in demand. we're doing well and i urge you to make the effort. thank you very much. >> thank you.

it's been our privilege to work with you so closely in iran. thank you for the opportunity to do that. i'd like to now go on ambassador patterson. >> thank you very much. and let me say that i'm very pleased to say a few words to today because i think economic engagement is going to be the key to our engagement in egypt because of that theory in which are passionate really coincide. there's been a huge transformation and think that in the last year, two rounds of elections which i might say unexpected results, 70, 75% involvement with parliament. presidential elections began in two, and that his transformation underway. the next six weeks are going to be very, very dynamic, and the next six months ago and to be very unsettled its i want to start to talk about the short run and the long term because i think they are vastly different pictures. political uncertainty is going to coincide over the next few

months with fairly sharp economic declines and i want to talk about the measures that are underway to reverse the. i think the long-term prospects for american business and all sorts of aspects are actually quite promising in egypt. they've had a sharp drop in foreign exchange reserves. the pound is under very considerable pressure. inflation is up. the deficit has increased, and perhaps most relevant to this audience, business problems have soared because it's a difficult to get paid by the government. people are reluctant to make decisions. there's been some top -- talk of privatization but i think this will begin to settle down as the new government comes into office. there's a lot of caution on part of foreign ministers, particularly from the gulf. my own observation is that american investors and people doing, americans doing business in egypt have been less hit with some of these problems than those from other countries. the good news is that the imf is getting ready to go into egypt.

i think egypt will be able to raise the substantial amounts in foreign exchange is required for a stabilization program, and the momentum should begin to turn around very quickly on the economy. i talk a lot about citibank reports and indicate that egypt could be one of the top 10 economies in the world in the next generation, and from my own observation i think that, that's probably true. we're just going of a very difficult period over the next few months. the long-term indicators are good. 2007, egypt had almost $10 million of direct american investment. it's down to about 1 billion this year. so i think it will recover. and nearly empowered government, this i think is very important, has reached out to us repeatedly to make reassurances about their commitment to free markets and a commitment to a level playing

field with america and other foreign investors. they have a market orientation, and they have been careful to reassure us on issues of corruption, too. this will be one of the first issues that they're going to tackle. is a very strong domestic business community in egypt. they have put a little shellshocked by what's happened but i think they will recover and play the role that they have always played. very strong existing business community for those of you who are looking for partners. we see large opportunities over the next few years, telecommunications is obviously one. penetration is still low. 40,000 people live in villages outside of cairo so there's infrastructure to build on in the telecommunications industry. we anticipate that electric power generation will be another area of very substantial growth. and infrastructure. the infrastructure in egypt is

very seriously deteriorated, and the new government has made every indication they're going to invest heavily in infrastructure. there will be some sort of subset of infrastructure like rail. if they modify necessity, rail will become more attractive as a long-term investment. this will require capital and will require engineering services. it will require construction and transport equipment. but again, our embassy is i think provide good services to american business. we are very eager to help you in these areas, and please get in touch with us because we think there is a lot of long-term opportunity there because the underlying demographics and strength of the business community. thank you. >> thank you, ambassador patterson. and i just want to say, just

with regard to presentation, now particularly iraq and libya, and certainly egypt how appreciative we are as americans of your being there and the incredible service and dedication required to do your jobs. and on behalf, if we don't get an opportunity later, on behalf of all of us in this room, i'd like to thank you for your service to the united states. [applause] >> i'd now like to call on ambassador krajeski of the u.s. embassy, bahrain. >> thank you. thank you very much and thanks for being here today with such distinguished colleagues whose jobs are much more difficult than mine is in bahrain. i think if any country deserves or my deserve a dual over passionate do over, would be bobbing. if you look at the situation before federal or of last year,

bahrain was a model of stability and prosperity. it was a great place to do business. they had succeeded in diversifying their economy beyond petrochemicals, building diversified manufacturing, banking, financial, services sector, and creating a moderately vibrant middle and working class. in 2010, bahrain was ranked 33 of 183 countries on the world bank's ease of doing business index, indicative of a record our environment that was conducive to investment and business development. between 2002-2010, bahrain succeeded in tripling its banking and financial services sector to more than $225 billion. and attracting 152 offshore banking units and representative offices, including many american businesses. in 2006, we negotiated a free trade agreement with bahrain, one of the few such agreements

in the middle east region. and since 2006, the volume of bilateral trade has risen slowly but steadily. but political insecurity realities have eclipsed certainly my focus on business and economy in bahrain. recent civil unrest continuing unrest has we can bahrain's economy, and has presented with a series of challenges that are profound. today, it faces the drop in tourism revenue, particularly among saudi visitors. businesses leading rather than coming to the country. lost investment opportunities driven by a perception that unrest has affected the business climate, credit downgrade of bahraini bonds, and the cancellation of some major revenue-generating events, most particularly last year the formula one race. if they don't, if they don't

reach a political resolution, this climate could continue to stagnate, and causing rising unemployment and even deeper economic divide in the country. unemployment, underemployment hardship are the future without a political resolution. and while the reasons for the recent unrest are complex, they need economic growth in order to address some of these grievances. nonetheless, as ambassador pickering said, we're all constant optimistic and i am optimistic today about the government of bahrain and the reins to build to overcome the challenges that confront and realize its potential again. and we are working with our rainy from all segments of society to seize that opportunity. we are advising several steps,

continued diversification away from petrochemicals. using the free trade agreement to promote bilateral trade volume come and increase participation in the economy from all segments of the society. implementation of political insecurity sector reforms will address many of the root causes of this unrest. finally i would want to underscore that while this is a dramatic transitional period for bahrain, the arc important investment opportunities out there for you. and i would repeat, i'm confident and optimistic that the government of bahrain knows what it has to do. it's in the process of doing it, and will succeed in establishing greater stability both political and social, to the island which will enable economic investments to return. thank you.

>> thank you, ambassador krajeski. and our final speaker on the panel is ambassador ensher from algeria. >> the thing to do here is to start with a little good news-bad news. the good news is that algeria reminds me of a great deal of my home state of california. [laughter] the potential is vast. and effect is a mediterranean climate like much of california. it's about the same size, population. it's a larger country, and also as a highly educated and diverse population. also has effected security forces and a lot of money in the banks, somewhere between $180 billion-$200 billion in the bank, that cash. and a willingness to spend it. so that's on the good news side from a business perspective. bad news side is much about shooting economic macroeconomic

policy seems deliberately designed to thwart the fulfillment of the potential. there's movement, there's progress, there's an increasing number of companies coming into algeria outside of the traditional hydrocarbon sector and that includes increase american interest, and one can certainly see huge potential, and for example, the pharmaceutical areas. i would point to ongoing defense articles, height and defense articles of various sorts including those used for surveillance and reconnaissance, various types. there's a particular ongoing issue having to do with the conflict of u.s. law with algerian concern for sovereignty that remains a significant issue that again we are working through, and they see signs of progress there. and and finally maybe just because i'm from california i would say potential for agribusiness as well. so a lot of money to be made in

algeria and if, not to sound too much like one part of the u.s. political spectrum, if the government would get out of the way a little bit things would rapidly improved. when we think about ways to do business in algeria, the areas where there's the most potential than we tend to think that sort of a three-part, can't do with my fingers, then diagram. this would be an area in which the outshooting people really want whatever it is. the government is willing and sees a strong regions to do whatever that is, and then thirdly, we the united states i really good, almost uniquely good at that thing so that's we get into areas like pharmaceuticals, agribusiness and communications, and the sorts. so those are the three major areas of potential and the major issues. when we decide have spent our time at the embassy, we focus on

security cooperation, which is deep, broad and growing in both directions i would say, that it will be increasingly important for algeria to put a regional leadership role in addressing the growing security threats posed by series of events, including events in libya, and the potential for the department of an al qaeda sanctuary, particularly in northern somalia. and this is an area that requires algerian leadership because it's the country that is best posed to act in that area if necessary, and with the support of the u.s. and other foreign partners. we are interest in expanding commercial relations outside of the hydrocarbon area, while maintaining a privileged and historic position in hydrocarbon. and, finally, we're there to reach out to civil society, both because that's a policy

objective on its own. we support democratization and human rights all over the world. but also because if there is continued and significant change in algeria we want to make sure that we have friends throughout the society, and so we are very aggressive in broadening our contact throughout the country and civil society. and then finally i will just mention the fact of a couple of election cycles coming up. first for the parliament, there's a huge diversity of parties and we would expect that such elections which will be heavily on served by the international community and by algeria to be free and for her, and to produce a result reflecting the new political realities in the region, put it that way. and then there's perhaps even even more important local elections in the fall which will decide control over algerian communities and municipalities.

i will stop there, except to say that if anything wrong, my ambassador and colleagues will clean things up afterwards. >> thank you ambassador kirk with several questions. if i could just begin to pop into those. unfortunately, by our strict schedule we have all of 15 minutes. so i am going to help would be able to bend that time a little bit. to the great detriment of the panel, but i will. i'd like to start some of our questions, if i could. ambassador cretz, you think libya must -- to really cranks up, and is there an effort now being made by the national council to reform the antiquated label structure for doing business? >> i don't think that this is need weight for the elections. you know, the process would be

that on june 21, hopefully, there'll be an election for 200 people who will be tasked, two tasks. one is to write a constitution, and also to choose the next transitional temporary government for the period of one more year. you can keep saying well, let's wait until than, let's wait until that point, to that point. i think that what is the time to come to libya for business because even if the top names change, the people are going to be dealing with contracts and economy, and commercial ventures will be part of the political and economic fabric of libya for years to come. so i don't think there's any purpose served by waiting until the elections, because the fluidity of the situation could be very similar to what it is right now. the point is you must, establish

yourself, make contacts that will stand you in good stead for the years to come. like i said, the government is in no position right now to award the contracts for several reasons. but they are, but you are in a position to make contact with the people who will be making those decisions ask the days and weeks go by. >> and the second part of the question was, are their efforts underway to reform the somewhat antiquated structure of the old regime? >> they are redoing all the laws from the gadhafi air. those that are appropriate will stay and those that need to go will go. i will tell you that in terms of transparency and terms of getting rid of the pandemic destruction that so characterizes the gadhafi years, this government is very

committed to doing that, in creating a new environment for business to come. this doesn't mean that the entire system, the rot that characterize the gadhafi regime will be gone. one of the reasons i might add that the government has been so reluctant to start new projects, to get that new contracts is because they are so keenly aware of the eyes that are upon them with respect to corruption, they're being very, very meticulous almost to the point of inefficiency so as not to be tainted with any kind of brush, you know, in the corruption thing. >> thank you, ambassador. ambassador jeffrey, as you know our chamber has supported your efforts to get more u.s. business, more business invested in the right. there are problems that remain as you indicated is that maliki government serious about making

reforms required to attract and maintain foreign investment? that is, the whole process by which -- you mention finance in particular as a proper, particularly on infrastructure. but a lot of american businesses would say it's also entry-level problems, getting permits, getting registered, some problem with corruption, et cetera. is there a focus on that currently in the government's? >> it is a problem when government focuses, even not particularly well organized, like the iraqi government, is a marriage image of the us government. i can assure you all sitting here today that some within three or four miles of us as a federal bureaucrat is worried about every single issue in the world that is quote focus on. whether he will achieve anything is another question. so the our focus on these things because we tell them, other

people tell them, the imf tells them. the formal entity what you said would be they would rule out commissions, special envoy some people are sent out to look at this. but the real answer they will say is hey, lots of people are coming your. turkey, iran, the e.u. as i said in certain sectors the americans. they're figuring out ways to work through the oceans of bureaucracy and the pools full of red tape and making profit here. that factor is true. nonetheless, it's our job as the american embassy to try to streamline these procedures, to an extent we can, with the iraqi government in some areas such as these as. we made some progress in the last three or four months but it is a very tough process. working in iraq is not for sissies.

okay? [laughter] trust me. somebody works in iraq. but i've also, i think most of, many thousands of people as you read about in the newspapers from the famous american mission would say it's a profitable and enjoyable undertaking because iraq does want as much american and foam as possible. one of the ways that we try to do with the political issues i cited earlier, ambassador pickering also listed, is to try to encourage the sort of business involvement and engagement. it is tough. on the other hand, there is much money to be made and there are good, long-term contracts debate. our assumption is it's not a completely certain assumptions but it's a pretty good one, that iraq will remain the unified relatively stable country, will improve in terms of security, and will grow enormously thanks if nothing else to increase oil exports. so come on and.

thank you. >> thank you, ambassador jeffrey. ambassador patterson, could you give us some insight into presidential election upcoming in egypt will likely occur in may, and while the president possibly lineup in some kind of alliance with the military, vis-à-vis the new parliament? is bad enough in one question? >> that's enough. i think the last i saw from -- [inaudible] spent the last i saw from him as he is hundreds of people have decided to run for president in egypt, which is a reflection of the new democracy. there's probably a half dozen serious competitors. let me say that you learned in the foreign service never to predict elections, but i will say who is well-known to most people in this room was leaving in all the polls the american polls, egyptian pools, other airports and is probably still thing. these are the same polls i might

add that were astonishing mistaken about the vote because it wasn't a single poll that predicted they're going to show up of 5%. they got 22%. so you can't rely on polls, demographic analysis of egypt is not very good. so i think it's really an open question, and who's going to win the presidential race. it's beginning to heat up and their promise to be very interesting and i think, we might be surprised. we might be surprised. we'll just see how it plays out. the military, you know, i think military is going to play a positive role for years to come in egypt, as it has in many other countries from latin america to turkey. it will take a long time to disentangle the military from public life again, it's it has all over the world. but i at least have been

reassured by the military's initial relationship with the parliament, which is noisy at times it has been very successful so far. >> i have a question for ambassador krajeski. which the status of bahrain as a banking center per se for financial services, is there still investment inflow in that area, and what in particular would you advise u.s. business? >> thank you. most certainly bahrain remains one of the strongest centers of banking financial services in the gulf. despite the unrest of last year and perhaps even more impact of the economic crisis 2008 and competition from the other cities in the gulf, most particularly dubai for their services. this tournament a very

attractive place for banking, for financial services. and we see an inflow of those companies, along with worrying outflows for some of the banks. a couple of banks have moved as i said. some of the major banks have established offices in other cities. most of offices in other cities in the gulf, and quite frankly a fallback position should the situation in bahrain deteriorate again. i do believe it's one of their strongest sectors and it will be for years to come. assuming, as i'm doing today, they do find a way forward on the political side. >> unfortunately i am giving a sign that we are very tight on schedule. so we will unfortunate have to wrap up q&a for this panel. i want to thank you again for being here. just extraordinarily

informative. thank you again for your service to the united states, and hope to see you soon in your countries, and you're always welcome here at the national u.s. air chamber. thank you very much. [applause] >> were going to have three quick photographs with the ambassadors, the arab ambassadors and our sponsor. so i could just keep you guys here. [inaudible conversations] we have to present it so i like to reconvene our forum at this r tight schedule with one our remaining for our second panel. same procedures will pertain for

questions from the floor. so please again sending them up as the panelists give their opening remarks. monitoring our second panel is the honorable alan larson his biography you have in the event booklet. i'm sure all of you in the room and certainly we at the national u.s. air chamber remember fondly his days as undersecretary state for economics and his many years prior to that in the bureau where he was a champion for u.s. trade and international fair treatment for u.s. companies. so is a particular pleasure to call on ambassador larsen to moderate this panel. >> thank you very much. good afternoon, everyone. we are looking forward very much to this panel. we're going to be considering this set of challenges that perhaps paradoxically are just as difficult and daunting in many ways as those of the economies in transition which we

just heard discussed in the previous panel. experience around the world has shown, sadly, that ample endowments of natural resources, which should be a blessing for a national economic development, can on occasion be a curse. nations that are rich in natural resources need to figure out ways how to translate that potential wealth under the ground into enduring forms of wealth aboveground that can create high and rising standards of living. ..

>> of a sound regulatory environment for business. i think this should be a really interesting set of discussions, and i think what we would like to do is begin it as we did last time, the far right end of the panel with some remarks by ambassador corbin. >> what i'd like to do is start off this panel by saying that the uae is very much open for business. i'd like to say that this is for two reasons. one, the uae has benefited from a certain extent from the problems of other arab countries as tourism is going there, but i

would also argue it's because the uae has positioned itself as a transit hub with the two major airlines, with dubai's ports and airports, abu abu dhabi coming online, the new sub-saharan market is developing, and stands are developing. but i would also like to focus on the subject of this panel which is alternative energy. while the traditional areas of business -- aviation, defense, infrastructure -- are moving ahead in uae, there was a pause, but now they are moving ahead, they are continuing in those areas, the world future energy summit earlier this year provides an opportunity for u.s. companies to enter into a country where there is planning for the future. and what i see is the uae is a place where we can do real competition with the indians, the chinese and the turks in areas such as alternative energy. i'd also point out health care, i'd also point out education.

the u.s. brand is extremely popular still. what we're facing is sometimes a 30% of the costs of our products and services when you look at india, china, turkey and other competitors. what we need to do and what i see in the u.s. companies who are willing to go to the united arab emirates, i see a real pursuing the potential in that country with its young, dynamic leadership, with its vision for the region. as i said last year, there was a slowdown in projects, but i think the world future energy summit moving beyond traditional oil and gas into areas such as solar and other areas offers great potential for u.s. business. i see, um, u.s. businesses, the small and medium companies, coming to the uae and finding an atmosphere there that is very con deuce i have to business for the -- conducive to business for

the region and beyond. as i said, that transit hub. we have almost 800 u.s. companies there already, there's more coming. we need to encourage companies to come there and do battles with the indias, the you are the can keys, the chinas of the world. and i think we can be successful if we can just beat our competition on price, and we can when you look at things, um, such as our follow-up services, our reputation and the way we do business. and i'll stop there so that we can -- so we don't run into too many ambassadors talking for too long, and i'll leave it for questions and answers, and alternative energy is a great, great area which i can address more. thank you. >> thank you for that overview. saudi arabia's certainly the largest economy, and in ways, the bellwether. ambassador smith, we look forward to your comments. >> well, let me just start by agreeing that, you know, saudi arabia's open for business. we've had a very successful

three years. and the combination of the state department, eb policy efforts combined with foreign commercial service. we in this last year increased our nondefense exports to saudi arabia 20%, and it's been double-digit growth in exports over the last three years. we increased our ag exports to saudi arabia 103% in the last year. so big, big shift. in the last two years we've had 208 companies that have exported to saudi arabia for the very first time. 80% of those small, medium enterprises. so those of you who still are waiting on the sidelines, get in touch, and we'll connect you up. the focus today was diversifying away from hydrocarbons, and i'll leave you with three areas to consider because you will see a shift in that direction or at least the conventional way of looking at hydrocarbons.

and in saudi arabia the first issue is domestic consumption. i make it a matter of policy to never do math in public, but saudi arabia uses domestically about 20% of their oil in the winter time, 30% in ther is time. their domestic energy consumption is increasing by about 10% a year. so that's the first issue they've got to deal with because you then going from being part of opec to onet which is the organization of petroleum nonexporting countries. that's not where you want to be. second issue is opportunity cost because if you consider the value of a barrel of petroleum, you realize that the current method of dealing with

hydrocarbons as an exporter doesn't make a lot of sense. if you drill a hole in the ground, pump out oil and sell it to somebody, the value's about $100 a barrel. if you refine it, it's worth about $300 a barrel, created three times the number of jobs that upstream does. been incredible successful in the downstream, but at the end of the day you're putting your natural resources in pellet or liquid form on a ship and sending it halfway around the world to make something with it. if you can make some of those derivatives and turn them into products that barrel of oil is worth about a thousand dollars a barrel to you and creates ten times the jobs that upstream does. and if your problem is as it is in saudi arabia, jobs, jobs, jobs, three million people entering the work force in the next decade, then you've got to consider diversification of your economy because it makes no sense then to use that oil and

dump it into furnitures and charge people for their electric bill and 60 cents a gallon of gas when you could be using it more productively as something else. so it's an opportunity cost. i'm not very sanguine about how quickly they're going to move because the debate is about cost per kilowatt hour. it's the opportunity costs here of using your high trocar bonnes for -- hydrocarbons for something that doesn't make sense. and the third i would lay out is global market and where the global market is going. and i say that because i don't know where it's going, i refuse to predict, but i know the current projections are probably wrong because three years ago everybody was talking about peak oil, today nobody is talking about peak oil. but over the last two years the united states has shown a significant reduction, i say significant, but single-digit

but flatlined reduction in consumption. now, if that continues at that pace, say, over a decade, we put a debit -- dent into the u.s. conception and use that as a model for other people, then you have significantly changed the view of the demand. if you add to that the improvement in nonfuel or hydrocarbon wind, solar, nuclear -- because the current projections still only call for about 15% of the global energy to be renewable by 2035. if that curve changes, then it makes a huge impact. and the third which is, again, an issue nobody talked about

five years ago but everybody's talking about today is shale oil and shale gas. and if, in fact, our reserves are somewhat what people are projecting and if you can overcome the technical environmental challenges and then you can move to shift some of our economy away from oil into natural gas for any number of reasons, those three things together fundamentally shift the global demand curve. and i would argue that if they come together with the kind of technological innovation that is possible, we could be having a very different conversation ten years from now than we are today. thank you. >> thank you very much. let reremind everyone if you have a question for any of the ambassadors, get the attention of the ushers, and we'll have an opportunity to pose those questions. now, ambassador ziadeh, the last

time we talked, you were in riyadh, you're now in doha. be interesting to get your assessment of economic opportunities in doha and things that our audience should keep in mind. >> well, thank you very much. um, as my two colleagues from saudi arabia and from the united arab emirates have said, the same thing is true for qatar. we are open for business, and we are open for business with great interest on u.s. products, u.s. services, u.s. technical know-how and opportunities for joint ventures and investments both in qatar and in investments in other parts of the world or the united states. qatar is the world's richest state by per capita, it has the highest gdp in the world. it is also the world's leading supplier of liquified natural gas. in 2011 alone qatar's gdp rose 20%, and it is estimated in 2012

to rise at a slower rate, but still between 6 and 10% which is a healthy rate by any standard but particularly in these economic times. and a lot of the drive on this has been due to the emir of qatar who has developed a vision for his country over the last 15 years and has put forward a vision for 2030 with the development in a whole array of areas of human development, economic development, economic diversity, diversification and social development. and as part of his vision for 2030, a good part of that is also the infrastructural development in the country and the diversification of the economy that moves away from the simple upstream energy production that has been really the growth engine of the country. now, it's true in the last five

to seven years with the addition of new megatrains that have been developed in qatar, a lot of which has been joint production with american companies like exxonmobil and conocophillips -- exxonmobil in particular over the last few years has invested more than $16 billion in qatar in the gas section alone -- has fueled a lot of the wealth for the country. but the leadership in the country understands that the wealth in gas needs to be diversifies from upstream to downstream products. there has been a tremendous emphasis on the development of petrochemicals and other kinds of related industries in the carbon sector. in fact, while qatar has just been producing 9.5 million ton per year in the petrochemical sector, it hopes to reach 23 million tons by 2020. that's its goal. so, again, while not totally moving away from the hydrocarbon sector but making sure that they

are producing downstream products that increases the value chain for production and, also, diversified uses within their country and markets outside of qatar. now, linked to that is, also, a way of looking at the country away from the carbon sector. how to make themselves a center for education. which they have done through the qatar foundation in education city where i'm proud to say education city hosts six major united states universities there with branch campuses providing education not just for qataris' education, but for people of the region. so even though we don't always think of education as an export, actually in qatar it is, and it's contributing to the development of the next generation of qatari students and workers. they are looking to the area of sports. they hosted the asian games in 2006, they just recently hosted the arab games this past

december and january, and as many of you know, they have won the bid for the world cup in 2022. this has meant that a all of their infrastructurallal development that was onboard for the vision 2030 has now been moved up by eight years to the year 2022. so let me just give you a little bit of overview of the major projects that are being undertaken in this regard because this is an area in infrastructure where we as a country have tremendous capability, we have tremendous breadth not just in program management, but also in the development of design and building infrastructure, training and maintenance. the highlights of this are the airport that is being built. it is a $15 billion international airport. bechtel has had the program management of this. it's due to be completed in

12/12/12 which is when the opening is going to be, and there are going to be ancillary, additional parts to the airport that will be built after the new international airport is built. this is area ripe for u.s. businesses and expertise. there is a deepwater seaport, $7 billion. part of that now is being developed by the company, i believe it's acom, as part of the project management, and there will be more bids to go in terms of the construction and all of the management of that project. $35 billion in rail projects. that's light rail, that's trains, that's people movers, that's metros. all of this needs to be constructed between now and 2020 to be able to accommodate all of the people coming in for the world cup and to be able to promote the business and transportation that is needed. and the road networks, there are currently on tap 30 projects for

roads that are going to be bid. american companies so far have done well on a lot of these projects from kbr, parsons, parsons brinker of, acom, etc., but these new projects that are going to be built, 20 billion in the next few years. so a lot of work in that. and then in the water and electricity segment which needs to be expanded, another three billion in the next six years. this is not even to mention all of the work that they're doing in renewables as ambassador smith rightly pointed out, the issue of shale gas is going to revolutionize the whole region. but qatar is now as the leading export of lng and continuing to develop its capability is increasingly shifting its markets away from the u.s. still exporting to europe. i might add the u.k., i think, is almost singularly dependent upon lng from qatar. but now in shifting its visions

towards the east, india, china after the catastrophe that took place in japan recently, japan has now emerged as one of their top importers of lng. so, again, more markets going to the east and no end in sight in terms of the demand for their products. so they are expanding in all areas, diversifying in science, technology, renewables and making a mark for themselves as a diversified economy with much more than just the energy sector as their focus. thank you. >> thank you, ambassador. next we'd like to hear from ambassador schmierer from oman. >> thank you. let me just start by saying just like our neighbors in the gulf, we also have a country which has a growing economy. it has, it's very welcoming to international visitor and particularly to united states business. it has a lot of needs.

it has a young population, and so they're really looking to do exactly what the title of our session here is called, and that is diversify their economy to insure that beyond the area of hydrocarbons they will have a well structured, well diversified economy. when we look at oman, maybe let me just conceptually divide the commercial opportunities into two elements. one so man as a market, and the second so man as a platform because i think that's a very important way for businesses looking to engage in the region should look at oman. as a market, oman does need a lot of things and is doing a lot of things. they've been very successful in not only maintaining, but actually expanding their hydrocarbon production, so where they had anticipated some reductions and actually had a decline for a period, they've turned that around and now are generating record revenues and

are using those revenues wisely to invest in the future, and i'll get to that in a minute. one aspect of that which, again, is another example of where american companies can play a very important role is probably the single greatest contributor to oman's ability to turn around its previously declining petroleum production was when occidental petroleum went in and increased production there by over tenfold. and that turned around o mono's decline -- oman's declining production. so that's a very good example of america bringing in its technology but working closely with the omanis. i visited the field, it's run largely by omanis, and it's a great success in terms of american technology leveraging to such investments. the areas domestically for oman, it's not a large country in

materials of population. there are about two million omanis. but there are looking to expand their -- they are looking to expand their economy in a number of areas. tourism is probably their highest priority, but they need -- they're also looking at services, certainly training, franchising which has been mentioned. but consultancy, they're very much looking for good consultants to support the projects that are underway there. in terms of the structure of the market, they have a couple of specific advantages. one is we do have a free trade agreement with oman and more and more companies are leveraging that in order to be able to base production there for the oman market and beyond because of the advantages that accrue through the free trade agreement. and that sort of leads to the second element of oman's attractiveness, and that is oman as a mat form. if you look at the map very

quickly, one sees it has the great advantage of lying outside the gulf, outside the strait of hormuz, and oman, i think, is consciously leveraging that gee photographic location -- geographic location in order to make itself the preferred location for companies that are producing and marketing into the gulf. and so they're building ports, they're expanding the northern port of sohar, building a new port in the middle of the country and expanding their transshipment hub in solala. they're building airports, and they will be tying into the rail line that susan mentioned. so they're setting themselves up as a location where companies that want to produce or market anywhere into the gulf can do so very conveniently and very safely by bringing their goods into or out of a port in oman and avoid having to go into the gulf itself. they've set up free zones with all of these locations so that you can actually do your

business without having to deal with local taxes. they have an ambitious training program. one of the responses the sultan had to last year's event where young people were asking for more opportunities and more employment was a significant ramp up in education and training, so they are training young omanis to be a viable work force, and they do have a large thurm of young omanis who will be, can be that viable work force. so it does provide a lot of advantages there. they, as you know, have very wise and very stable leadership, and i think they've used those elements that they've had such as the free trade agreement to modernize their commercial, legal infrastructure in ways that also make them an attractive location for investment. so i think most people find that oman is a very welcoming country. people who live there enjoy living there, and so people -- companies like to put their people there in order to be able

to work them elsewhere in the gulf, but to know that they're in a safe, comfortable location which is what they find when they're in oman. let me stop there and answer any questions during the -- >> thank you very much. our last speaker is ambassador tueller of kuwait. >> thank you. i very much appreciate the opportunity to address this particular topic on diversifying away from hydrocarbons. traditionally, the american companies that know the kuwaiti market best and have been most involved have been in the hydrocarbon sector and the defense sector. they know kuwait well, and their contributions and involvement have contributed immeasurably to the security and prosperity that kuwait end joys today. however, just as many kuwaitis recognize that the future sustainability of their economy will depend on their ability to diversify. i believe, also, the health of our relationship will depend on our ability to take that same step p and diversify the u.s. private sector engagement in kuwait.

one of the primary advantages of kuwait as a business and investment destination for u.s. firms is the historically positive and very strong relationship between our two countries. kuwaitis at the same time recognize the value and quality of u.s. goods and services and expertise and regularly reach out to me to tell me that they are interested in seeing more u.s. firms come to kuwait, invest in kuwait and operate there. as part of kuwait's experience of the arab spring, discussions within the government and throughout the society have begun to sharpen their focus on developing strategies for sustainable economic growth. kuwait's held parliamentary elections, and in the runup, many of the candidates called on the government to jump-start large-scale development projects designed to diversify kuwait's economy outside of its dominant energy sector and to create new opportunities for private sector growth. even before that in 2010, kuwait's parliament passed a five-year development plan with

those specific aims in mind. implementation of that plan has not moved forward as quickly as many would have hoped, but progress is now beginning to take shape. apart from the continued energy sector development, kuwait's infrastructure plan is likely to be the driver of economic development over the next 5-10 years. the budget for the plan has reportedly reached $130 billion, and it will fund over 1,100 projects in a number of sectors including education, health care, transportation, telecommunications and information technology. in spite of the challenges of doing business in kuwait, i believe u.s. firms are well positioned to succeed in a number of these areas, so i'm going to touch on a few of the opportunities that i see as particularly fruitful for u.s. companies, particularly in the fields of education, health care, telecommunications and information technology. on education even before the liberation in 1991 our countries enjoyed a remarkable educational history largely due to the many,

many kuwaitis beginning in the late 1940s, early 1950s that began to travel to the united states for their educations. every year today, still, thousands of kuwaiti students travel to the u.s. to pursue educational programs. beyond providing those educational opportunities for kuwaitis in the u.s., however, american business is involved in all aspects of education will find new opportunities for potential involvement. the kuwaiti government plans to invest over $8 billion to develop its education sector over the next five years. that development strategy includes university expansion plans, building new educational facilities, training teachers and developing think curricula at all educational levels. in the field of health care, another area where u.s. expertise is facing demand growth, over the next phi years the ministry of health plans to upgrade and expand existing public hospitals as well as to build a number of new medical complexes. kuwaiti health officials have already expressed an interest in

working with u.s. hospitals and medical schools on these projects including in the areas of project management, health care consulting, human resource development, hospital administration and technology transfers. kuwaitis regularly express to me their preference for u.s. medical services and treatment. many feel that the government in kuwait continues to sponsor medical services abroad for about 12,000 nationals, and the u.s. is a primary destination for that group of patients. kuwaitis like american doctors, hospitals, technology and medicine, and given those presences i think u.s. companies will have a natural competitive advantage in bidding on health can contracts. in the field of i.t. and telecommunications, there are a wealth of opportunities particularly for u.s. companies that are able to provide the level of technical expertise that kuwait requires as it aims to upgrade existing infrastructure. over the next 5-10 years, kuwait's development needs will require to embrace new technologies for use in a

variety of fields from government to education to health care industry. one potential partner for the u.s. in u.s. i.t. and telecommunication firms the ministry of -- is the ministry of communication cans tasked to oversee the upgrade and has embarked on a plan to install a comprehensive fiberoptics network over the next five years. phase one of that plan was just completed, and the tendering process is now entering the second face as the ministry looks for qualified firms that will be able to supervise the implementation of this project. more broadly, kuwait is looking for ways to improve government efficiency and expanding services for kuwaiti residents. some of the projects under discussion include improving data security, streamlining paperwork for different government agencies and increasing the number of public services that are available online. so in summation, the bilateral commercial relationship, i believe, will continue to form,

a core part of our relationship with kuwait both as governments and people. at the embassy you can count on us to be there to help support your efforts to do business in kuwait, and i encourage all of you to contact us either through the foreign commercial service or directly to my office with any requests for assistance that you may have. i sincerely hope you'll return to kuwait often. if you haven't been there, i encourage you to visit, take advantage of these new opportunities to support kuwait's development of its education, health, telecommunication and information sectors as well as in the hydrocarbons and defense sector. thank you. >> thank you very much. each of you. um, the first question that actually came in from the audience was for you, ambassador smith, and it has to do with alternative energy, but a very particular kind; nuclear. the question really is where is saudi arabia on nuclear energy? has the cabinet approved nuclear? does k care have a plan?

>> yes, yes, no. [laughter] k care was given, stood up about a year ago. the king abdullah center for atomic and renewable energy given the charter of coming up with a plan for, a long-term energy plan for saudi arabia. k care only has about 15 employees in it, so they're mostly contracted out to a whole host of other people to look at this. they're proceeding, and i think wisely, to canvas the globe for the best technologies for wind, solar and nuclear. so in the case of nuclear, they have signed mous with us, the brits, the french, the south koreans, the chinese, the russians. and the whole idea here is to

understand all the technologies that are available and then to identify the technologies that would be most appropriate for saudi arabia. so, no, they don't have a plan yet. they're headed in that direction. and i think you'll probably see a balanced plan that'll focus, first, on solar. saudi arabia wants to become an energy country, not a petroleum country. and cass university has been given the technical challenge with coming up with a plan to generate the equivalent of eight million barrels day in electricity from solar power. and saudi arabia has sun, and they have a lot of space. so they'll be rolling photovoltaic sails off like a printing plant. not worried so much about that. they're trying to solve the

technical issue of transportation of electricity. our square problem. and if they can do that, they're going to make money off solar in three ways because they'll put the equivalent of a million, million and a half barrels back on the open market, they'll take the excess and sell it to their brothers in the renal because they're focused on -- in the region because they're focused on a gcc grid and, third, you know, the saudis do not export natural gas. they use that as feed stocks or as energy advantage. they never use the word "subsidy," of course, but an energy advantage to business. you can do that in electricity instead of natural gas, and you can start putting natural gas on the open market. so these guys are going to make money three ways off of this. wind is a bit of a problem because the theory works good, but the pitting of -- for wind is a problem they haven't been able to overcome. nuclear they seem committed to

moving that direction, and we're working diligently on a government-to-government solution. if we're able to proceed ahead with that, then you'll see them identifying some technologies. the reality of it is they're singularly focused on the small modular reactor idea. and we really don't have that yet, that technology's about ten years off. so short answer is they're move anything that direction -- moving in that direction. little longer answer is a plan is coming together, it's not there, but i need to make sure that american companies are there because i think there will be a huge opportunity for us. >> thank you. the second question really is directed, i think, to any of the panelists. i might ask ambassador corbin to address it first because it has to do with advice on how to engage with gcc countries on private equity funds and

sovereign wealth funds. certainly, i have had some experience with such entities in the uae. if you might offer a few words on that, and then i'd invite other panelists whose countries do have either sovereign investment funds or very active private equity funds to offer their comments as well. >> i would just say this is, um, an area where, obviously, the emirates have a great interest in this. they're, um, there was, you know, the 2008 crash in dubai which also affected abu dhabi was a wake-up call, and they are moving beyond that. um, as i said last year, there was a hold on a lot of outward-looking projects. that has been lifted. they are moving forward with their investments, they are, um, again, open for business. again, there were arab spring concerns which they've addressed now. um, they are moving forward.

i think that the overall message is that the pause that we saw last year is pretty much over, but there are, there will be concerns as they go forward, and they're certainly focused on what happened in dubai, and they're not going to spread their money, way around the way they used to because of the model of dubai. but there may with ambassadors who have more -- this is not an area that is something we get into too extensively, but i don't know if other ambassadors have things to say about that. >> okay. others? yeah, please. >> well, the qataris are now focused more on sovereign wealth funds and the types of investments that they can do. they are not as old as the ones in kuwait or in abu dhabi, nor as large. but they are very quickly making up in a short time because of the tremendous wealth that they have accrued from the lng that they are exporting. they are looking for investments

overseas. a lot of it looking to europe, to the east, some in the united states. but, again, looking for the kinds of things where they can pick up the kinds of industries or properties that are a little distressed and figuring out how they can turn them around and buck them up. you see a lot of their buying of greek debt and companies in luxury 'em bigger and these -- luxembourg and these kinds of things, but i'm or very happy to say they also have a very big investment in the city center project near washington, d.c. which was a project in search of capital. it's a $700 million project, so they've taken a big step into the u.s. market with this project. so we'll see how this goes. but i think it has whetted their appetite for more prompts. it's just -- projects. it's just finding the right fit. >> others? >> i would just add and echo

what matt was saying before when he said go on the web seat and connect. -- web site and connect. i have the luxury of having a very robust foreign commercial service in riyadh and jetta. and as companies come in, i'm amazed that american companies are confused sometimes about how to connect. and i say just go on the web site, and i would ask you to encourage american companies -- those of you in the business -- just go on the web site, and it takes you right to fcs, and we're in the business of connecting you. and our fcs over the last few years has connected more than a thousand american companies with other counterparts in saudi arabia. so it's something they do for a living. so ask them not to be shy, just contact us, and we'll help you. >> on the question of the investment funds, kuwait, of course, has one of the oldest, best managed of the sovereign investment funds in the region.

it's notable for its success. it does, it follows a very conservative investment strategy, it works very closely with a number of well known investment banks not just in the u.s. and europe, but around the world. it diversifies well. and it's done very well. i'm not sure how i'd advise or they probably are not too open to approaches from potential consultants or advisers. on the other hand, there are a number of private equity funds, a lot of those were very, very highly leveraged, some were wiped out in the 2008-2009 period. but kuwait still has an awful lot of private wealth, and as those begin to rebuild, i'm sure the u.s. is still regarded as the preferred destination for investment. >> thank you. um, there's a general question about unemployment and youth unemployment and it's addressed to ambassador smith, and i'm going to ask you to respond to

it first but, again, i think this has somewhat wider applicability, and i'd encourage any of the ambassadors to pipe up on it. the gist of the question is that many of the jobs in the saudi private sector are occupied by foreign labor, skilled and unskilled. at the same time, there's very high youth unemployment rate in saudi arabia. and so the questioner asks, do young saudis object to working in jobs young americans or others might take? how real is the problem of youth unemployment? i assume this is perceived as both a political and economic problem in saudi arabia. so i'm sure it would be great to have your reflections on it, and i think there are variations on this theme that probably play out in all of the countries that these ambassadors represent. >> yeah. i think the youth unemployment problem today is overstated.

the challenge in a generation understated. and certainly within the center of the country there is this tendency to not migrate to jobs that they can have someone else do. not as true in the eastern province or in the hajaz. go to hasa, and they're begging me to get american companies to set up factories, they want to work. the refinery, exxonmobil facility, 92% of the work force is saudi; blue collar, white collar. so it's hard to say. the challenge in saudi arabia is a bloated public sector, and saudis represent 90% of the public sector and about 10% of the private sector.

and the reality of a situation like that is then the government becomes the biggest obstacle toward developing the private sector and entrepreneurs in small and medium enterprises. that really is the challenge with diversifying the economy, and they're tackling it, but, you know, you look at the saudiization issue today, and it's good that they're targeting jobs and the expectation is that you go get a job. but when you target third country nationals as your problem, you've essentially identified the solution as similar to if we were going to solve the california unemployment problem by sending all the mexicans back so there's more jobs to pick strawberries for americans. that's not going to solve your problem. you've got to create new industry, new enterprises.

it's all about technology creation and new industry with this hugely educated young generation coming of age that you bring in at entry-level management and know they have a career to develop over time. that really is the answer. and you've got to really focus on the private sector to do that and entrepreneurs, and we're certainly helping with that. but it will be a challenge for that transformation. >> thank you. are there versions of this youth unemployment issue that play out in the countries to which others of you are credited and that you'd like, any of you would like to comment on? >> i would just add for the uae they have abundant opportunities. they have dynamic leadership, and i would say the prime example of this is the employment of women and finding ways of getting women into the work force. they realize if they're going to do defense, air license, hospitals, peaceful nuclear energy, they just with a million

population they really need to use all their human resources. i think there are issues with amortization, but i think the leadership is really focused on youth, and i think there is, there's a positive story going on in the uae in general. >> yeah, please. >> i think there is somewhat of an element of correlation in oman. oman is a minority country in the sense that the majority of the residents there are omanis. and so you do still have much of the economy run by omanis at our embassy. a majority of the employees at the embassy are omanis, but our per capita income is $20,000 per year. when you have $100,000 per capita income your need to enter the work force and the kinds of jobs that are typically available are much less. so i think that plays a role in what the expectations and the needs are. i think in if our country, the

omanis, are doing a very good job of training and identifying where employment can be made available and then training omanis to take that employment. >> susan? >> it's a little bit different in the sense that it's a small, native qatari population. the country is 1.8 million, but of that maybe the 250,000 are qatari. women and men are entering into the work force, increasingly women because they're very educated. the interesting thing is that good, skilled qataris are really, can practically ask for their job and almost ask for their price. and so because there are so many, there's so much expansion and not enough qataris who are skilled to go around in these jobs, actually, there are opportunities for non-qataris this the work force -- in the work force at a skilled level, at a high-paying level, and you're not taking any jobs from qataris. there's just too much work to go around, and the local population

can't fill the jobs, so it's a very different dynamic there. >> thank you. look, there's one last question that really, also s a group question, so i think i might be a good one to end on. the first part of this question i'm going to have to ask you is you'll have to address, is this a true perception, and then if so, what should be done about it. the questioner asks, why are european businesses in general so much more successful than u.s. businesses in your countries? is it true? if so, what's the problem? why don't we start, ambassador corbin, with you. >> i would just say it's not the europeans we need to worry about, it's the turks, the chinese and the indians that we need to worry about. the europeans were competitive and the french and the british are very active, i think they have very good business councils, they're very competitive, and they're prepared to go overseas in a way we're only seeing u.s. companies do now, but i think it's not the europeans we need to worry about, i think it's the other countries, and i think we need

to be more aggressive, we need to highlight the fact that we have innovation. i'll just, you know, the example of food. when you look at 80% of 'em ratties have some form of diabetes, the fact that we have healthy to do, diet-conscious products, del monte just won all sorts of awards, it's because we do things that our competitors aren't doing. the same thing in health care, the same thing in other areas where we have a real advantage. i think that's what we have to take on. i don't think it's the europeans, i think it's the other countries i mentioned that are a problem. >> with others? did you have a different view or same view? >> no. i hear this from bd guys all the time who say sarkozy comes in, so they win off the contracts. that's whining. [laughter] you know, if you follow the money, it takes you to riyadh. the economy's twice the size of any economy in the region. there are 51,000 saudis going to school in the united states today.

that's their choice. they want to come here for a reason. and they want to connect with american businessmen and businesswomen. we came home after 9/11 and left a void. i mean, we were unaccompanied at riyadh for five-and-a-half years. my wife, janet, was the first spouse to come back in five-and-a-half years. well, guess what? the world doesn't like a void. so who filled it? the south koreans and the chinese. and if you want it cheap, go to china. but here's the problem. china wants to be the world's manufacturer, and they're doing an exceptionally good job of that. what is saudi arabia's problem? jobs. and if you want technology transfer, if you want training and education, if you want to develop your own infrastructure, you're not going to get that from the chinese.

you're not going to get it from the south koreans. you will get it from americans. so i repeatedly talk to american business withmen about the value -- businessmen about the value proposition that they're offering. and if they ever let a competition result in a price competition with the chinese, they are going to lose. if they can present a value prop is decision that come -- proposition that comes with an education and training package where you're going to create an entity that the saudis can run over time and creates an industry there where you're creating a job here as you're creating one in saudi arabia, you've got a winning combination. so american business and industry is very competitive because of that value proposition. >> others? jeff. >> i do hear the perception, and i think maybe it's sometimes fed by the fact that european governments are generally follow a very aggressive policy of supporting commercial travel and visits and often senior

government officials from european countries will be accompanied by large business delegations. and we might look at doing more of that. but i certainly don't see that bearing out in the trade figures. at the end of the day, it comes down to a what's the type of product. and those areas that i touched on, what i think they have in common whether it's education and health care and that type of infrastructure, this is where in kuwait they want the u.s. involved because that's where they feel, that's where -- this is where it's touching my life, this is where the value is, this is what i want the best of, and they turn to the u.s. for that. >> good. look, don told us we're on a tight schedule. i think we need to close. before we do that, i just want to thank all of you for your insights and your service. [applause] >> thank you, ambassador larson. i just want to really thank all the ambassadors today.

i'm an old guy, and when i started kicking around the middle east back in lincoln's second term -- [laughter] the last place you would visit was the american embassy. where no one knew anything about what was gown on commercially, and anything -- going on commercially, and anything you said was going to go in the cable and get slugged to recipients in 45 countries. so as we saw it, it was a one-way street. we gave information, we got painfully little in return and certainly no great commercial wisdom. and i are -- i can remember back when -- i'm having a senior moment. wonderful secretary of state who just died recently -- larry eagle berger. in many ways i credited it to larry who said, you know, we've got to change this, we've got to

make this very user-friendly. we've got to help our american companies. and i was a das over at commerce and be skeptical about this, but larry made me a convert. and it's just extraordinary today. i don't think that there is a better cadre of informed ambassadors at any country -- that any country has than ours. not only informed about what's going on commercially, but understand what's going on commercially. and as ambassador smith says, you know, he even gets down to the value proposition, understanding that. and how to increase business. so on behalf, i think, of all of us in the room, i want to salute you guys, thank you very much for your service, and i hope you can come back and we do this again next year. thank you. [applause] god bless you.

[inaudible conversations] >> live coverage of several hearings today, steven chu will be testifying about a federal program that provides government backing of loans for clean energy projects. solyndra, a solar panel maker that received a $535 million loan through the program, filed for bankruptcy last year. we'll also hear from herbert allison, the former treasury department official who was chosen to lead the white house commissioned review of the program, and that begins at 10 a.m. on c-span. over on c-span3, the generals responsible for security operations in north, central and south america will testify before the senate armed services committee about their 2013

budget requests. and that gets under way at 9:30 a.m. eastern. the senate today continues work on the highway and surface transportation bill that would extend programs for two yearses. senate majority leader harry reid said he expected to debate and vote on a number of amendments today with completion of the bill expected sometime this week. the house is out this week. speaker john boehner has said that he'd hold a vote on the senate-passed bill or something like it if members fail to agree to a house version. you can watch live coverage of the u.s. senate on c-span2 at 10 a.m. eastern. three years after receiving government funds to stay afloat, general motors reported a profit of $7.6 billion in 2011, its most profitable year ever. gm's chairman and ceo, dan akerson, sat down last week for a discussion about the auto industry, gas prices and the future of electric cars. hosted by the commonwealth club of california in san francisco,

this is just over an hour. [applause] >> good evening, everyone. we're very excited to have dan akerson back in the state where he was born, and i believe it's your first visit as ceo in california. fantastic. so now be i will start the radio program, and we'll get going. welcome to climate one, a conversation about america's energy economy and environment. i'm greg dalton. today we're talking about the u.s. economy and auto industry with general motors' chairman and ceo, dan akerson. three years after the obama administration bailed out the humble giant, a leaner general motors is firing on all cylinders and recently posted its most profitable year ever. the new gm has paid back about half of the $50 billion it received from taxpayers, but the

government's remaining 30% stake in the company could be seen as a financial and political liability. over the next hour, we'll discuss this american comeback story as well as gas prices, fuel economy and the move toward or electric cars such as the chevy volt. along the way we'll include questions for dan from our live audience here at the commonwealth club in san francisco. before taking the reins at gm in 2010, mr. ackerson was head of global buyout at the carlyle group, a private equity firm in washington d.c. he previously was ceo of general instrument where he succeeded donald rumsfeld, and prior to that he served as ceo of nextel. please join me in welcoming gm's chief dan akerson to climate one. [applause] dan, welcome. thank you for coming. >> thank you. >> so gm's just had a good year. where is it now and where are you trying to take the company in the years ahead? >> well, actually, we had the

best year we've ever had in 103-year history, and we posted record profits. [laughter] i hope that's not the last applause i get. [laughter] >> profits next year. >> you're only as good as last quarter. [laughter] where are we today? you know, i've been ceo of a couple companies, as you mentioned, and being in private equity actually helped coming into this industry. first, i was criticized for not being a car guy, and that's okay. there are three non-car guys in detroit today, and it's, i think it's the first time in 20-odd years since all three of us, all three of the major american manufacturers are profitable. [laughter] we had to go through some difficult times, and, um, there's been a lot of political dialogue on that to and fro, anti and pro. but where we are, we are at the

two-year hiatus. general motors is, again, the largest auto manufacturer in the world. as i said, we had our most profitable world. between '10 and '11 alone, we grew our revenue $15 billion. that alone would put us in the fortune 250. so our revenue today is about $150 billion which would be larger than the gross national product of 100 countries in the world. so it is a huge, i think, it's an american company, it's a global country -- company in the sense that we compete in 117-odd countries. we export around the globe. we're very successful in most of the high-growth markets. we have the largest market share of any manufacturer in the world. i think the lessons learned is we can't be as internally focused as we were before, and i mean by that we had internal

metrics. are we better than the last model we made? are we looking at the aspirational competition and saying where do we think they'll be in 3-5 years. as wayne gretzky said, he skates to where he thinks the puck is going to be. we would often say, well, we have a car, and it's going to be xyz, and the obvious question is, yeah, but by the time we get to the market, are they still going to be static? and they won't be. we're much more external, we benchmark against the best in the industry, and we're producing great cars. you see it when i think about what are the things that keep me awake at night, first of all, we can't rest on our laurels. it would be very easy to say a great year. the first thing we did, and we announced is we've really got to attack our cost structure and make sure we're viable and producing cash and we're going to be competitive. our margins are not