through the red tape and put people back to work. i will be here to answer any questions. hi, everyone. my name is penny pugh. i am the social services director in the district, working with all of you one-on- one and trying to solve all your problems that you might have paid through the federal red tape. we have plenty of it. i am the fifth generation arizonan. i know the issues and the district. i have been here a long time. i look for to meeting with the to you afterwards. >> hello, everyone. my name is rachel ihoaha. i am here in the congressional office. be helping with a issues you have with federal agencies and moving those issues through the system. i look forward to meeting all of you. >> hello, everyone. my name is stephanie zimmermann. i work on e congressman's

communication. please check out his website. he is also on twitt, which is -- his goal is to get his message to you. you can e-mail him by going to his website. you can get news that real time on twitter and his facebook page. we want to make sure you get the news that is important to you and so that you know where he is on the issues. stay tune then let us know if you have any questions. >> thank you. one of the things that i thought that government was about was customer service. that is where i came from, competition, but customer service. profs service is rewarded. that is what we have to do. the reward is the american dream, in the america we grew up in. first, we have to come up with some big isss, like health care, the welfare of our

country, and what it will take is a personal commitment by each one of us. the america that i believe we were rsed in had personal accountability and personal responsibility. those are the principles that we all have to undertake. but we also have to be involved. who are you not to sit by and not give us your idea. you may be the one to give us that opportunity. customer service and commication, hoping that we would put our websitep, one of the ideas i had is, number one, let's bring the ideas out. i am calling it idea ranch. it is seeking an issue, putting it out there in the forefront, and starting a dialogue with you. if there is an issue you want to take up, be my guess. that is how we should start to look at it. if you are le me, all of a

sudden, his idea comes out and it starts me to think began little differently. that's how we come up with some solutions. but all we can d is take those solutions and the amount them -- and put them out them -- but the mouth there for everyone. the second part, you will know when you open it. what you will hear is a pig swill. we' broke. that is my whole point. you have to hands holding that began squeezing it. when it swims, out comes some money and it goes into a bank. the whole point is to find the system that does not work. show us, be specific about how it is, why does not work, what it will cost us and what it will save us. then also give us a solution. does it need to be abandoned totally? or does it need more to help us on the community level and main street america? if you have another idea, we would love to hear it. but those are two opportunities that we want to start driving.

it is inexpensive. it is real time. technology allows us to be in real time in our diverse districts. do not tell me you can i get this done. that is not the america i know. every time we had a series of problems, this -- the america i know always rose to the occasion and got the job done. this is our turn. and i think, if you look at it in a positive light, we will get something done. so i will end with that. and i want to talk with you and have a listening session, listen to your questions. hopefully i have some answers. hopefully i can give you some direction on where we are going. we have some big decisions coming year. we have a continuing resolution coming about. we are broke. we also have a debt ceiling have to have a discussion about. that is coming here shortly.

this is an issue that we all can partake in. this is an issue that applies to every single one of us. so, folks, thank you so very much. it has been humbling to see the up for new people coming from all the worst parts of this district, from flagstaff to press get to navajo nation to show low to superior. it has been unbelievable. stay engaged. it matters. it really does matter. let's show them that the first district is the district that shows us the way out of recession and its american shining again. thank you very much and let's hear your questions. >> state your name. i like to be personal. >> my name is personal. i would like to talk about foreign aid. you spoke about several things where you're saving money.

and you call that small amounts. i think their big amounts. >> thank you. but so much foreign aid is going to countries that do not even like us. and it never gets to the people or where we intended to get. it just gs to corrupt government officials. it seems like that would be a big place to save money. there people in this country, there are people in this district who could use some of that money. why do they never mention for an aide when they talk about -- why did they never mention foreign-aid when they talk aut cutting. they want to cut my social security and medicare when they talk about cutting. but they do not want to cut foreign aid. >> 30% of this class has no

legislative experience. but they have experience and the have wisdom. we have a rancher from south dakota. we have a pizza maker from downtown illinois. we have the banker, a private community banker and they all got involved because they saw the america they grew up in falling apart. their idea is that everything is on the table. nothing will be left until we look at everything across the table. but remember, all we can do is what we can do from the house. we still have to have the senate golan and the administration. that is when you get involved. i will ask you to keep the pressure on. you found me. how all the members of congress and the senate and the administration. your voices need to be heard and you need to be directed along those lines. yes, foreign aid will be looked at like everything else on the

budget. you're welcome. and thank you for all of your voluntr work. >> i have two questions. >> hi, rape. -- hi, ray. about the cold weather? [laughter] god is doing this for some kind of reasoni. >> based on your personal experience, can you explain to me the efficacy and the wisdom of continuing the bia? >> great question. thank you very much. first of all, on another side about the weather, we were at - 23 yesterday.

and there was no wind, folks. house tried to get my staff to stick to their town the flagpole. it did not work. [laughter] these are things we have to look at and we have to have that dialogue with our native american friends. i told you what trust is in my definition. it is promises kept. what part of the trust does the bia give to the native americans? that is a discussion we need to have with them, not at them. all of these things, all these agencies, all of these ways of doing business cannot work anymore, folks. i think we realized that. business can continue as usual. so everything is on the table. be inclusive in those decisions and not exclusive. let's make sure that everybody

is on the table that are affected by those agencies so we can be thorough about how we correct and read designate this america that we will have in our future. ok? i am following the lizard. yes, sir. >> my name i gregory shuler. under governmental root affairs -- government affairs, can you put a stop to the bureaucracy's going around congress, putting out laws like the epa and others, that we do not elect those people. i do not believe they should have any business putting out any type of law that does not go through the congress. >> thank you for a great question. that is wonderful. let me ask you a question and tell you where we went. i am that person that, when i have been involved i'll whisper is my hand and go why?

there is a whole bunch more freshmen asking the same question. they say, you know, is there a way that congress should have some authority over the rulemaking in the ancies? and this is the answer was? yes. but you have never used it. so not only can congress have the ability to build those laws, but he agency's answer back for it. i wonder if that is what you will start to see. i also believe that, when we do laws, we have to have a sunset clause. they sometimes lose their application or they may have to be tweaked. there's no reason why a law has toit on the books for forever. we should demand that those agencies answer that for their behavior. if i am asking you for personal accountability and responsibility, so should the agency.

>> my name is phil rodriguez. i'm here representing my wife who is down with the flu. she wanted me to ask about the constitutional convention. she has been hearing stuff about it and she wanted more information. she read somewhere that you were the list of persons we would have to ask. maybe i'm too close to. tell your wife first of all to get better. ok? one of the things we can look at is that we have to look up a framework of what we have going on right now. there are a lot of things can do differently with the constitution. the first thing we're starting to look at now is looking at the constitution and how it applies to bills. we have taken the first set at looking at the new bills coming through. i am sure we will look at that

hand look at the applicant it -- the applicability of laws. we have to try to resurrect what we have already. that is where i want to start there is no tomorrow. the financial debt we see right now, $14 trillion, so when i talk to you over here about $35 million, i felt bad because we were talking about trillions. i am still trying to count those zeros. my take is less try to work with the reforms we have right now because we have a great start in this last election. w have to carry the ball through. >> congressman, thank you for coming. for decades, seniors like myself have stood in front of politicians like you and said that if you do not give me a

free till, you'll not get my vote. that has to come to a screeching halt. also, thank you very much. [laughter] i am do a free till just because i got old. there is one old codger in your constituency who says that my country owes me nothing and i owe my country everything. [applause] what never m. payne -- whatever pain you in the ghandi you have done so so that my daughters cannot afford their future. whenever you have to do to me to get that burden off of them, i ask you to do it. thank you, harold. [applause] >> folks, once again, trust, a series of promises kept. one of the things we saw in the previous congresses th they raided the cookie jar. it is not fair what has

transpired here. it is not. i wish i could have a -- have an answer for you to find that money tree. i have been looking. i have gone through the dumpsters trying to find that money. but what we have to do is hold up some of our promise that we did to seniors. a lot of people are banking on that. at the same time, we have to take our youth and not make them indentured servants. i do not have all the right answers for how we have to progress on this. i have some ideas. but that is also where you have to come to the table. make it so we're all in or we're all out. i am tired of the federal government making winners and losers. that is what we have been doing, making winners and losers. the way i was taught about america is that i have the right, the ability to succeed or fail. yes, succeed or fail.

anif i fl, i have the ability to pull myself up by my bootstraps and succeed again. that is what america is all about. and this is whe we are at. once again, this is a dialogue. i do not have all the answers. i ajust like you. i spent 25 years next to my patients getting health care. i think i am pretty good -- i think i am and up -- i am a pretty good authority on health care. and did better include you. but that is what we have to do. i want to uphold that promise made by previous congresses who also caused you to have some distrust and rightly so. they stole the money from you. we need to have that dialogue. i believe in the exceptional is some of you, the american people, and you're achieving what we have to have happen in this country right now.

yes, ma'am. >> my name is nancy hopkins. i know rand paul is proposing a balanced budget amendment and i was just wanting to know your opinion and what you think as far as washington and how they will receive that and what the polls would be on that for them. >> we have to have a balanced budget. but there also has to be some caveat in there so there is some benchmarks. you can take an equation and skew it f a balanced budget. you have to tie to mainstream america. a balanced budget has to have a caveat that ties it to us so it cannot be spewed out of whack. i think we have been down the process. what does that mean? first, our financial house is still out of order. right now, we are paying over 40 cents to the dollar right now just going to debt service.

and you are lucky, folks. you are absolutely on that number. because if we get the inflation that should normay occur right now, we cannot pay our bills. so this is the first part. this is where the freshmen are uncomfortable and so are other members of congress. we cannot keep spending. we have -- there has to be concrete ways of cutting that will be on the table like benchmark, just like you and me. that is where we have to go. and it has to be bipartisan. it has to be across the aisle. and it has to include the administration. so thank you very much. yes, ma'am. >> my name is barbara manning. i am a compared -- a committee person in precinct 27. the republican senate has

indicated they will propose a health care plan. i wonder if the house has a plan ready that they will submit. if so, does it carrin any of the suggestions by paul ryan, our congressman from wisconsin who wrote the path to recovery? have you been considering his suggestions? >> thank you very much. one of the things we did immediately was repealed the law of obamacare. we also remitted committees immediately about how to resurrect it. there are some pieces in the legislation that a lot of people like. there can be some cornerstones. we are all talking about that.

we should be mixing all this i did better on the table. this to fix have the individual market place? if we are all competing on the same front, shouldn't they do the same thing on a competitive match here? -- matter? i wanted them to succeedn an individual way and not on a monopoly. when we have a personal plan, it helps us. it is the first breakdown of portability. once again, you know what is best for you. you should be making the decisions. it is a direct relationship between you and them that. it should not be between you and your provider. those are already on going.

to ask about the resolution. i was wondering if you could give us some optimism. is it wise for us to keep doing it? i want to know where ware. i have asked for time to meet all the players. it goes like this.

it would make other problems down the line. if you spend time at the front end during a wry comedy will move fast. -- front end, i do will move fast. there are other programs in the senate. we want to makeure we do not compromise resolution's for that project with what is going to happen. we want to make sure they have the incentive to stay alone. we were around nine. i was very impressed. @ positive the time to sit down.

we had a wonderful discussion. once again, i do not think he felt that either. it will be tremendous. we should be there. it is priority number one. >> how were you? >> i am wondering, where you stand on the issue of education? i know it is reducing its. the current level is 5500 per year. it really does help low-income students. i believe it is a big equalizer.

wonder where you sta? i am begging you not to balance it. >> thank you very much. can we agree that the one-size- fits-all -- that is exactly what i heard -- one size does not fit all. it is part of the solution process. it is going to the bureaucratic aspect. it is not have to have the ability havflexibility. to do you need accountability? yes. how abt if you took that money and allow part of that to go to the teachers and students?

that is why we need the help. that is an opportunity that we have right now. >> you are right about one size does not fit all. the thing that will be acting this area is a designation that we do not want, the designation of being an area for ducks. this is arizona. we are being compared to spaces

that receive 50 inches of rainfall a year. it is going to have some really serious consequences. we are forced to comply with preventative measures. we really need to be looking at fema and the impact fee man has on certain properties. i spent a great deal of is -- a great deal of time working with these companies. it ia pretty arbitrary steady. they are wondering if they want to be here.

>> thiss the same tng i heard. one size does not fit all. we are going to dictate to you what is going on inside of working with you. isn't it about time? i remember we did not have an epa. i remember when they came back. we were into them. they had practical implications. they were helping the situation. now we have a disconnect. people we educated. this is where we have to start.

we can move them in and tell us how they were communicating. it is not just limited to air quality. it is in the foreign services. they put energy in it. once again, i was disappointed. everything should be on the table.

it is time that they demanded it. they should be answering to you paid in you control the purse strings. it is fast. you are not one to get any money. we have than spending time with everyone listening. i wanted to get back to you. >> living impose 9/11, i believe that we need tdo something about the security of our country. one of orchitis main goals is

to do the economics. the united states says that we can absorb 9/11. i completely disagree. we spend so much money on our security. al qaeda it is raining. -- al qaeda is winning. we need to secure the borders. we have the numbers to prove it. people have said that they have been coming through this for years. they control a sector. i know you know what i am talking about. two weeks ago, there was an attack by a border patrol agent. people were praising marchers. if we have another 9/11, i do

not think we can absorb it. if we do not secure our borders, and the democrats want to have amnesty i believe that we secure our borders first. t's secure our borders first. he gave 2.9 million cizens to other countries. the democrats ran the house. they never held up their side of

e bargain. they never secure their borders. if we want to come to the meadow, but secure the border first. then l's talk about immigration reform. thank you. i'm going to go to three cases. one thing we did once or meetings. we had to group sessions. we have an orientation about this very hour where you had to go into were your friends. the second one was an early december. we were starting to look at policies. we have a policy on terrorism and hot spots around the world that were of considerable interest. most of us can pick them out. if we had to pick, most woul say iran.

we had egypt on our radar site. that was exempt. when the answer became mexico. the gentleman talked about this. there is an acknowledgement that we have the problem. we have homeland security. have a federal government that does not want to do their job. do in commerce. they pick winners and losers. they do not exist. thank god we are pushing that issue forward to the supreme court. our forefathers gave us this. we have an executive branch, and

judicial branch -- we have to bring that legislative part there. once again, we can do everything we can from the house. the rational person will say that i am a numbers guy. you give me some numbers and i can give you an equation. you have one that keeps going. we have to get them to come to the table to do that. i suspect it'll go to the

supreme court. i hope they have to enforce that. last but not least, i hope they work with people on the ground. we know a few things. we have talented people up and down. we have those who been doing this over and over again. ho can our border agents not go through this? excuse me? i thought this was america. there is the other discussion. that is the discussion. we have an effort across the board. i've had delegations come across the country that say we would

like to sponsor delegation. it is about time the federal government dropped losses. [applause] >> i am not here to talk about education. [laughter] i am concerned about the budget. it is way out of control. i want to compliment ian on the first -- on the first 35 million. with the approval levels being so law, it seems that people in congress are refusing any raises i think congress needs to

have the same health service as everybody else. the second thing that wanted bring up their dipping into the trust accounts and all they put it in is and i owe you. that is a real concern. we can go to jail for that kind of operation. it seems that the block boss needs to be stopped. i just leave that as food for

thought. craigslist talk about healthcare. -- >> lets talk about healthcare. i would refuse it. and slightly above the american family. that cost me $1,400 in help savings account. the federal is a little over 300. i guarantee you i will make an example of that about what main street arica is going through. we live just like you. that is what our job was. no law should be passed with exemption including congress. it is about time that we start learning what the laws are packing. maybe we could -- would put some restrictions on them.

what we ha done is the ponzi scheme. people that create ponzi schemes go to jail. we have personal accountability. where is that for our federal government? where is up for our regulators? it haseen circulating more and more. bureaucratseen a fired for not making a decision. i am not making a decision. the problem is that i am one person. we have about 150 people here. everybody has to take that personal responsibility. we are allowed our liberties and

our freedoms. out of sight, out of mind. it is going to be difficult. it cannot happen overnight. we have to dig in and dig out. a shovel is the mantra for the gay men and women. it is a pile that they are surrounded by. they are beyond that point. we have to start looking at what do. we are making winners and losers if youook at the banking schemes and the scandals of the oil spill, wasn't it a problem of the private sector? absolutely. the other part was government oversight. they were asleep at the bill.

a lot to the downside was because of the federal government. when i was as the question who do you feel most from any foreign country, and. the folks i ran against said china. i said the enemy is me. it is us. make government accountable. keep my food to the fire. i am fine. i know how cold it gets. keep on the pressure. >> i am the county director pour

the project. yesterday we had meetings. i learned -- since she spoke about the navajo generating station -- it is 336 miles that brings the allocation of colorado riv water into the canals. most of the water and up in that county. it is very important for our arms and cities. one thing i learned as the epa -- rules and regulate its common.

one of the roles they are tryi to make is based on their quality and bayard this ability. yet, there is no baseline. they do not have a baseline reading. we got everybody out of there. they are returning to all of its natural glory. there is no baseline reading. i would like to see, where is the baseline. but was already here before the epa came in. if we all left, i'm pretty sure there would be best.

are we looking at what the base line is? we have to look at baseline ratings. this is right down the money. i should be able to take the same parameters and hand it to somebody else with the same results. that is where we were misng out. the road and maybe five or six journals.

kenyan that people were trying to make sure -- he knew people were trying to make sure the st interest. now there is well over 35. talk about power. you have to look at the title. who paid for go see a it. we have been talking about the health care bill and how much it will save. and keeps going against the congressional budget office. it has no sides appeared to make sure you a fair. but me ask you this question.

why wasn't the doctor part of e bill? if you put garbage in, you will get garbage out. if you put quality in, make sure you put all the information in. that is what is happening. you have to keep everybody accountable. it starts with you. you are holding the agencies accountable. to have a golden opportunity. the greatest disarray is a great opportunity for change. and there is no money, a great time to correct it. use the facilities of congress to bring those reservations to the front and allow the american people to speak on them paint

let's start cleaning up our house. we will have to do them in a fast order. >> i am from precinct 27. our rich uncle harry reid decled today that the mocrats will not get any budget or reduce federal spending in 2011. how are you going to vote on raising the national debt level? >> thank you. great question. what do you think i'm going to do? do you know what? this is a recurring theme over on the new members of the house.

there is a concrete timetable. perfectly clear. you will find out that eric cantor went to talk with congressman boehner. the president made this following comment. the no, elections have consequences. think about that. sears the thing about that.

my job is on the house. i take care of what i need in the house. i will take care of whatever pressure i can. we also needed to raise the debt ceiling. you all have senators running for reelection. most of them are democrats. i would be careful on how my leadership speaks. well we ha been told is that you have to raise the debt ceiling. all the financial markets are going to fall. the sky is falling. maybe it will. maybe it won't. let me put it back to you.

tell me what the currency has done for you and what the federal government has done for you. please tell me what all the systems have done for you. this is a time to have that adult conversation. i am reminded that i am an adult. that adult moment is now. i challenge century to come to the table. documenting cut when they are going to happen. that is the only way the debt selling one not be lifted. >> educating our children has

always been a local issue. it is handled bleakley -- it is handled locally. i have been thinking for quite some time now that i do not remember when we turned to educating our children over to the federal government. you talk about one size and not fit all. can you remember when we did that? i do not. thank you. all these things have occurred over time. we had kids to raise. that you became involved in politics or politics will be in new. our governor is talking about ideas.

i saw my family the rail bit. you can do this. you can do this. you are exactly right. the gamma but it does not know how to educate our children. -- the government a budget does not know how to educate our children. the relationship is just about money. i do not have to tell you that. i have a wonderful education from a small rodent town. at the end of my sophomore year, i ran out and massive finances. i saw the superintendent reach out to the private sector. i got to work with the fish.

i understand a lot of biology. when i went to college, the instructors did not know how to run the equipment, i did. do not tell me we cannot get that from a public institution. i have seen it. i'm the first 10 kits. i saw it all the way along the line. this is part of the equation we are forgetting about. you cannot put a teacher in the situation where they have to feed a child or do behavior modification. cannot do a teacher making sure theyave to do the homework.

chrysler beginning. how are you? -- >> good evening. how are you? we really beat up the epa. thank you everybody. those are all things i have been preaching for about two years now. it is a classic example of the administration picking winners

and lose. we have an air quality control director who has decided toet rid of agriculture. i do not know if he has his own garden or the gross his own cotton for his shares, but it is a sad deal. i can go on about that with their staff. it is so important. >> what do you do as a family? the duracell. it is a real crucial issue. i think it covers multiple states. i like to talk about the economy. i know it is difficult for the government to have anything to do with sparing on business.

there is an awfully large projects that has come to the county. is there any insight to that and you could share with us? >> you are right. there are few things the government do except for one, get out of the way. >> we can cut all the programs we want. but if we do not have businesse producing, we cannot get out of the pool. you are dead on. with the road, it is something we are looking at. i hope we can keep that in arizona. i hope we can creative about keeping it in the county. we can look at that aspect.

the person living in south carolina and north carolina came through the county. why do we focus on this effort? i person dissenting opinions. my family were railroaders. it is a major conduit. we can keep the project right here. i hope we come to the table to work together. it can be an asset and not a deterrent. if we are not going to agree, it is going somewhere else. >> of the answer all the things?

i'm sorry. >> just to touch on education, i have been on the school board for years. arizona is a leader in the country as far as charter schools and letting thearents make the decision what is best for their child. [applause] if you were to just touch base, specifically will you support the opportunity for the program? it might come up in the near future. >> i believe in competition. it works

i need to base my practice of making you happy and that you value the services. if we can have competition in our schools, we have it. you got me. the ultimate product is the udent. we have to make sure those parameters are carried through. you see that is a project that speaker boehner is passionate about. no bill carries it back. we have to see that reenter dues. >> just a yo know, we will read every bill. we will not say anything about

the bill until we read it. hold on one second. the beauty is in the details. >> welcome back. >> thank you. the administration is holding all these corporations and companies accountable for equality except for one. g e. they have given them an exemption. i would like yoto comment on that. the predecessor did something i thought was remarkable, she cut her staff by $200,000. i know you had a small staff

why can we have the rest of congress do the same thing? >> we did cut our budget across the board. it is over to $1,000. we are the 10th largest district in the country. we are diverse. i had to buy new car because all my cars and over 180,000 mileon them. theederal government cannot make winners and losers. you are right. what will we do with the bill? all of you have passes. i got a great legislation included us all. here is our legislation. this echoes across the board.

it is not limited to our oversight there. we have got to get the government under control. >> i have a problem that i am looking at. i've been trying to resolve this for over 12 years. i purchased my finance home in 1984. it to a six months after the ronald reagan administration drew a line through sections 5 02 of the 1949 housing act that

has sealed the intest-rate at 4%. i am paying 11.8% interest on my mortgage. i cannot by law refinance my house through the program. the last letters that the respondents had the audacity to say that i should be grateful that i am paying only 11.80% interest. most of the mortgages that they financed in that year were between 12.99% and 14.75% interest. the program that they have set up is that we can go through this and mortgage it through a bank. that sounds really good on paper. i tried going through that

process. i owe over $23,000 on my phone. no bank will lend thamuch back to me. most of these houses, and this is thousands that are mortgaged i literally pai over $100,000. there were too. in my life when i was built. they have not told me how they figure it. you can get the subsidies wiped out. to get the mortgage from the

bank, and they can do the remodeling. we have to borrow 23,000 and the 20,000 subsidy. that is way too much in the bank. they will say no. poor people have to be financed through the usda. if they cannot do it for a bank. >> you are exactly right. i cannot speak for senator mccain. we have a problem. i have been approached by the small banks. last year they had to more audits coming here. in decembe they have money to loan.

you are not alone. i need to alkaline the issues. we want to make sure we are thankful for you. >> if anyone had the usda home, and it was financed in the 1980's. >> we need to have an example. this is my neighbor to doors down. this was six months before i did.

chanel then all the paperwork. she did not procs. but was not in her name. her pipe burst last night and she had the whole ceiling collapsed. she is uninsured. she could not get the papers because usda will not process them in 1.5 years. >> i agree with you. this is brought unusual. we had the fire last year. we forbade private industrs from going in defending it.

we defended everything in not allowing that to occur. it is a habit. there is something about that mountain. over time, he can read it. and does something a little funky. it turns to a crystal. it is 45 degrees and ankle. right after that happened, it was raised. guess what happened? with 800 to 100,000 house it -- to 1000 houses affected by sand bags.

we have a problem. you are ready to buy a hundred to 1000 homes. that is what they call a government that is non responsible to the people they need to be serving. we need to learn the lesson to bring back accountability. thank you for sharingf.

i'm with the middle east. thank you for joining us today.

these are the challenges and opportunities for peace. i want to thank the foundation for middle east peace. the middle east is there by the points. they are >> we are also witnessing the danger posed by a change of the new order. we have seen bloodshed in libya and the refugees from tunisia, the recent passage through the suez canal of iranian warships and so on. many dangers presented by this front. there are many countries in the

middle east to are worried about the future, but no one country feels this more acutely than israel which fears losing its primary allies in the east and west. there are many who believe israel must concur down and guard the status quo, and lane not seed any land but there are others who believe just the of seven. -- believe just the opposite. it is during this time of change that israel should reach out and one way to do so would be to begin to try to pursue a peace treaty with palestinians. the recent prime minister was quoted as saying there is a danger this could mean it's and it -- mislead some for hope and peace. my advice is don't wait, move,

lead and make history. there will not be a better time. is that the case or is that too late? with the peace process virtually dead, we are very fortunate to have with us two men who know the israeli-palestinian crisis inside and out. they are going to bring their own very unique views about the challenges and opportunities posed by the crisis at this unique time. the hon. robert wexler is the president of the s, daniel abraham center for the middle east. he represented florida's 19th district before retiring. he was named one of the 50 most effective legislators in congress. in 2008 he was named to the list

of one of the most influential leaders of the american jewish community. he served as an adviser on middle eastern issue to president obama during his middle eastern campaign. dr. yoram peri is the director of the new institute for israel studies at the university of maryland. he is also a former political adviser to the late israeli prime minister and former head of the institute for politics and society at televisa university. -- at tel aviv university. we will begin with dr. yoram peri. thank you. >> thank you very much. to say that a new chapter has started in the middle east would be the most banal cliche ever made.

the status of our discussion is to talk about israel but it would be a mistake not to put it in the wider framework. there are very many questions. at least four questions that have been opened. the future of israel within the middle east depends on these questions. for four millennia egypt was the leadg power in the region and [unintelligible] terrorism and even to modern cinema and the peace with israel. the question is what half will egypt take? will they continue to be a leader or withdraw into domestic issues and more introspective approach? that is a question we cannot

answer. what will be the developments in the region at all. what will be the path of the process of democratization? are we seeing something similar to the fourth wave of democracy or is it more like the league of nations which did not have any immediate effect. what is the compatibility between democracy? a very interesting question. there are so many interesting articles that will be published. many of u have read most of them. the tension in between islam between the two major perceptions is jihad. each one of them we can discuss at length. this is the future of the

egyptian military. each one of these questions will have an impact on a smaller demand we are discussing that is israel and the arabs. i want to present to you the perspective of the israelis that developed in the last month. like any other case you have at least two positions. this one is very limited and very small. the other one which represents the public opinion and positions the political class. i will start with explaining them. there is a clear understanding that israel has been

dramatically affected with the developments. not only that it lost 32 years ago a strict magic ally -- strategic ally, it will probably lose egypt. and other questions what will happeno other countries in the region particularly when uc a decline and a more critical approach taken by the european states. the government tried to build new coalitions, new europe instead of western europe, via instead of other [unintelligible] but that will not suffice.

so you see the analysis is deterioration. already in the last three weeks use of very many states bilateral between israel and egypt that shows unpleasant tasks in the future. the many palestinian prisoners ran away from jails in egypt and came back to gaza. there was a bomb in the gas pe between israel and egypt. the flow of gas did not ntinue. many took ovesome of the police stations and killed more than 25 policeman and there was a danger they will continue to

support terrorist organizations against israel. gaza is more open than it used to be. then you have the positions of the muslim brotherhood on which so many people wrote. you have different voices. you have the moderate voice which was presented by the article published three days ago. he will present one of the two faces of the muslim brotherhood. you have other positions and other ideas, including demands to put the peace process with israel -- to make it linked to the palestinian issue. the issue of linkage was a very fundamental issue that was

discussed during the negotiations. we have the former ambassador who remembers very well the issue olinkage. suddenly it is again an issue. and you have ve many other expressions within cairo. not all of them were monitored here but with israel which calls for even more harsh positions. he came back after many years of exile and spoke about the liberation and the victory over israel. in the best and said the holocaust was a deserved punishment. even some of the moderate arab parties you hear different voices.

that is perceived by the israelis -- which i will explain in a minute. then you have for the first time since 1979 the i iranian warships crossing the suez canal. legally they are entitled to do so because of the agreement of 1888. it should be oped by for the last 30 years they did not. all of that is en as a beginning of a change of positions. the last one happened two days ago at the un where israel fought because of the disappearance of president mubarak, egypt did not play a more moderate tone in trying to push the palestinian position to become more moderate.

>> they had a very negative stereotype of the arabs. these are not shades of position. there is one position that is anti israel. that began to change in the 1990's. within the last month you can see expressions were only one sort of error of. the prime minister used to say the seas is the same sea and the

arabs is the same kind ofrab. mainly there is only one kind of error of. there were many cinemas showing this. this came again and went to see- so many articles printed. second, the traditional perception of the policy which is the worst-case scenario got very strong. it declined a little in the last 20 years and again it came back. on the alex said wanted to express his policy attitude towards any democracy so he said we wish egypt the best but we have to be prepared for the worst. that is a very typical way of thinking by most israelis.

you can understand a nation where one-third of its children disappeared in the gas chambers has that approach. third, something i see-is a change of the traditional perceptiononfirming e question what is the source of the israeli conflict? the political class of israel believed the source of the conflict is the un readiness of the arab people to recognize the existence of the jewish faith in the middle east. he was the man who would express this change. he realized the core of the problem between israel and arab states is the israeli- palestinian issue. in the last month we referred to

the previous recession. now everybody is talking about the danger of israel in the middle east. the problem is not the palestinian, it is the unwillingness of the arabs to accept israel. fourth is the descendant of the religious element. the conflict is a multi layer conflict. you have tension between western civilization and eastern civilization. you have a conflict between two national liberation movements. both leaders were capable in the past to contain the religious element. in the last several years that

element that dramatically pushed and becam much stronger. and the israeli knows there are three words in arabic, slaughter the jews. my father used to tell me when he lived in jerusalem. in a 30's he had palestinians shouting this. slaughter and jews, not the israelis. it is the religious element. israelis were used to it for so many years and it declined with the beginning of the peace process. now it came again. uc four very negative changes in the perceptions of the israelis confirming the conflict. therefore what is the solution?

the majority school would say security comes to for everything else. so israel should look at their military dimension more than any other dimension. israel should strengthen its military position. israel should put more of layers on the wall separating the arab world or more barbwire, go back to the iron will perception or using a modern term the defense minister says, israel is in the jungle. you have to be more ready for that. that is the majority if you read the think tanks. many of the journalists you talk

to -- this is what you hear. the prim minister asked his cabinet ministers -- ministers not to talk too much about the issue. this is what you read in the newspapers. this is the majority. the other school of thought is the opposite. the fact that when the revolution started in tahrir square, israel was not the issue. it was a domestic egyptian problem. however, if things will continue, it won't take much that the israeli-palestinian issue will become the focus of the issue in the middle east. therefore the interest of israel

is to diffuse that. the only way to do it is to take a very brave step already three weeks ago to take a very brave stepped. if you read the minutes of the 36 meetings that the prime minister had with the president, they work very close. it should be at the top level of the palestinian ahority and negotiate this few issues that are still open. it is through that we see some change in the palestinian position. it seems that the palestinian position has become more

entrenched lately because of the feeling that time works for them. that the public opinion moves towards their position. i think both the palestinians and iaelis will lose from this. they cnot continue. it will have an horrific impact. therefore israel should negotiatwith palestinians. two other points should be mentioned. israel and syria and the arab league initiative. they were very close to an agreement. 10 years ago the chief of staff of israel told me -- i forgot

his first name because israeli generals are always called by their nicknames. he told me we need three days to conclude an agreement. the israeli military since then continue to advocate an agreement between israel and syria. you need only the political will by the prime minister to do that. if you have a military that supports an agreement and security issues were resolved it can be done. this is something else that should be done. the israelis are not happy with the u.s. administration on this issue because of the arab initiative. once they realize the entire arab world will be willing to support an agreement, it will change many of the positions of the israelis.

either of the three should stop as soon as possible because the alternatives is not very positive. you see very few who advocate that. the president does not have a strong political position. you hear some slight pronouncements from the chief military -- the head ofhe military intelligence units and even the chief of staff when he left last week. he said israel should work hard to take out one of the state's from the anti israeli exit. i guess he meant syria.

but if you ask me whether this will happen, i will give it one against 10. because of many reasons. i believe netanyahu basically will accept the analysis ice -- i explained to you earlier. he has a serious pressure from the more extremist parties. third, we are getting closer to the election year. after the second year they will start with the elections. we still had five months this year to pursue negotiations. we still have a very short period of time. even within his coalition the moderate forces like the defense minister became weaker, so i

don't see a future move by the political class in egypt -- in israel to the second school of thought. thank you. [applause] >> thank you very much. i want to thank the middle east institute for inviting me to participate. i would like to start with the conventional wisdom. sometimes conventional wisdom is just that, wisdom. in this case it actually represents more of a wisdom of fantasy rather than of reality. what is it i am referring to? whether here in washington or

jerusalem, the conventional wisdom as we speak today is essentially -- t wds of change have overcome the middle east. arab nations have enormous domestic probls. the turmoil has created the necessity and urgency for arab leaders to focus on their own domestic issues. the notion of an appetite for an israeli-palestinian negotiation being what they are going to wake up in the morning and think about first is just utterly nonsense. in israel, as the doctor has correctly pointed out, israel

has seen its bedrock relationship with egypt being twisted upside-down. what is happening in sinai i terms of lack of rule of law i terribly it unsettling to the israelis. the israelis are cautiously hopeful, but rightfullyo wonder what will be in jordan three months from now and two years from now. prime minister netanyahu, who had already stressed the security of his nation in the context of any negotiation with the palestinians as doubled down and although he would not put it in these terms he is going to build a fortress israel. who could blame him and the israeli people for not having

that desire? having more recently lived through the -- now witnessing turmoil thats definitely unsettling to israelis, who would engage in some bold initiatives that causes the israeli public to have to pay a significant price. -these circumstances i could not imagine the political commercial he would run to support such a position. in ramallah, president abbas still reeling from disastrous political consequences having seceded to president obama's request not to pursue the cold ston report with the vigor he might have otherwise done and a whole host of different

political affairs such as the exposure in terms of the leaking of information. go to the un and engaged in an international campaign to delegitimize israel. go to the u. n with creative resolutions that attempt to litter american language and put the u.s. in a different -- difficult position. those are much more comfortable positions. i will talk about ourselves. unemployment is still not resolved. americans are most concerned about our own fiscal conditions. we still have to create millions of jobs in america.

the president's wants to talk about an economic message in ohio and wisconsin. he is not necessarily interested in putting a step one in terms of the american public not because he does not understand the seriousness about it and the calamity that could result, but he is tied for two years. he has gone to battle on both sides of the issue. he has not seen a great deal of success. who could blame the american administration after the november elections for reaching the conclusion we need to take care of america? that is the conventional wisdom. in most normal times i might accept it.

but if there is one message, 1 message to be extracted from the events in egypt, it is this. if anyone rationally believes that the israeli-palestinian conflict, events-the west bank and gaza will sit idly by while other leaders in a comnfined way deal with their set of priorities, we are sadly mistaken. unlike the events in libya or iran where america has limited leverage, it is fair to conclude one of the few places in this neighborhood in which america still thankfully

contains a significant amount of leverage, along with our israeli allies, and the moderate arabs, this is the arena in which america, israel and moderate arabs still have a great deal of leverage. although the conventional wisdom has its obvious merits, we have two choices. neither one is a prerred joyce, but these are our choices. we follow the path of conventional wisdom. it may be one week from now or six months from now or 12 months from now, but we will wake up and the headline will not be egypt, it will not be iran, it will be the west bank or gaza. and some catastrophic event has

occurred and the israelis will exercise their right of self- defense. we will spiral into a catastrophic situation in one of t most emotional spots on earth. we can follow that path and hope it will be two years or that i am just totally wrong. or we can take a different path th requires -- if any of us are waing for prime minister netanyahu or president abbas to make a bold move, i wish that were the case. i wish both gentlemen concluded it was in their self interest to do so but i am afraid neither gentleman will do so. the decision rests here in washington. it rests with the obama administration. i would suggest the

administration in its reconfiguration of american choices conclude that now is the best time -- i would not have argued this three months ago that the american president should put out parameters upon which the isrli-palestinian conflict should be negotiated, but i would argue in the near term that is what the american administration should do. let me go back to last week. there were a number of esteemed diplomats in this town and very well-meaning groups that urged the obama administration to veto the legislation before the un security council condemning israeli settlement activity. i think that urging was misdirected. it was not strategic. the obama administration did

exactly the correct thing in issuing its veto. everyone understands it causes america short-term damage in the arab world. the president is trying to get out in front of arab public opinion and heait is. we stand alone against the world in condemning the resolution that attempted to mirror american politics. why is it it was correct for the obama administration to veto them? i would argue this, regardless of what one's position is, settlements are but one issue in terms of the conflict. just as it would not be appropriate to bring the settlement issue to the security council, nor would it be

appropriate to bring the right of return to the security council. nowould it be appropriate to have the security council say israel is a jewish state and say noing more. nor would it be appropriate to just handle the issue of jerusalem. there are many interlocking parts of the israeli-palestinian conflict. i would suggest to highlight one is not a proper course of action. if we were too allow that resolution to pass, what does it y to palestinians? why bother negotiate? just continue with the un security council. for those of us who believe the palestinian people deserve a state of their own to live in dignity and have their own economy, it is almost the

rational to believe this strategy and planning the security council will get them to their gls. what needs to follow that the tell is an american initiative -- i would suggest the president take this opportunity to visit jerusalem and ramallah a outline a set of principles that state the following -- two states for two people. srael will be the homeland of jewish people. palestine will be the homeland of the palestinian people. the borders will refct the 1967 borders with subsequent developments. there have been a variety of different negotiations. president abbas has gone high in

terms of the exchanges. prime minister olmert went as low as 6%. we can do the basic math. if olmert was at 6, it is fair to sassume t -- assume the conclusion would be 4% in terms of the land swap. what it means is something importan it is quite apparent from the israeli negotiations strategy in the past that the issue of settlements and territory is less about security and more about how many jewi israelis will have to be moved. it is an entirely rational policy of the israeli government to want to have to move as few

jewish israelis as possible. the magic of 4% is 80% of the jewish israelis who find themselves on the eastern or outside of the 1967 line will find themselves with and recognized borders of israel. there needs to be the most explicit security arrangements between the u.s. and israel to make them comfortable with what would be in about to occur. there are anti-missile defenses being tested as we speak. ere needs to be an international force, whether it be in nato or what ever the compilation will be with a significant american role. that needs to be coupled with

prime minister netanyahu's demand that there be an israeli command. that needs to be married together by able diplomats so the israelis had enough presence but not so much that president? abbas feels his -- not so much --t president abbas else's going a bit further, the jewish neighborhood of jerusalem will need to be under israeli sovereignty. and a special arrangement made for the holy sites in the holy rt of this city. we can go further in terms of the right of return. it will be to the state of palestine. this is tedious states for two

people. this is one state for the palestinians and the jewish state of israel. with the rights of the minority protected as they must be in any democratic state. these are the principles. they are not shocking. they have been discussed ad nauseam, but no american president in a public way has said we will resolve the israeli-palestinian conflict based on the 1967 lines with modifications that reflect subsequent developments. american presidents have talked about the goal and the palestinian position. i would argue it is time to state and american position. it is unfortunate but only through mine humble opinion that

we will avoid a catastrophic siation in e west bank in insured amount of time. the prime minister of the palestinian authority has done an extraordinary job in building its institutions. he has done an extraordinary job in creating the elements of a state. we need to give that effort a boost. a presidential statement should do just that. i would respectfully are the president should not do it alone. we should invite chancellor merkle and prime minister cameron. he should invite dmitry medvedev or vladimir putin to travel to jerusalem so the israeli people understand this is a worldwide effort and invite the un secretary general to join with us.

i would argue this one point. as we see the beginning of democracy break out in the middle east and who knows where it will land, but one not as americans argue that we actually will place our confidence in the democratic process that is a vibrant and exists in israel and to a cerin degree in the west bank and to a lesser degree in gaza. let the president make that presentation with his colleagues. hopefully prime minister tanyahu and abbas will take that opportunity to notiate. but if they don't, we should not fred or conclude that our effort was unsuccessful.

what we then should do is challenge the israeli public to have a debate. i am confident the israeli democracy -- the democratic process will lead them to the great choice. think the same applies to the palestinian people. i may be right or wrong but it seems to me that process has at least two advantages. for the first time in a long time i will be comfortable with success or failure knowing we have done the right thing. we have outlined what is a just solution to a very complex problem we provided an opportunity and provided it to two states thawill have a democratic opportunity to debate it.

and simultaneously from a purely american perspective it will reassert american ldership at a time when many questioned our leadership capability. i believe we will reinvigorate america if we do this in a strategic way. that will be mine respectful suggestion. one. in terms of what dr. yoram peri said. he talked about the fact that turkey is no longer a strategic ally of israel. we can argue whether that is the case or not. i will concede that. but what i will not concede is that that should always be the case. just the opposite. the events in egypt -- unfolding events in the arab world make a

reconciliation between israel and turkey more urgent. thissu that divide israel and turkey are far less complex than the issues that divide any of these parties in the region. it is a matter of apology a compensation. it is a matter of acknowledging what happened in e flotilla and reconciling both sides point of view. thank you very much. [applause] >> thank you for that interesting analysis. he has written an op-e publicd yesterday. we should have a copy and you can find it on line. a lot of interesting issues raised. we have a lotf questions about the viability. we only have one microphone so we will bundle two queions at a time.

if people could please state their name and affiliation. can we handle teo questions at a time? >> [inaudible] a point with regard to teh veto at the un. i was very concerned about. i think [inaudible] not in the context of whether that was the right decision for the region. any resolution is going to involve israel getting some territory. perhaps the un declared this illegal would make it infinitely

harder for the palestinian leaders to get the public to except that swap. even in that context one could are that is a big decision. it seemed a little bit like listening to you -- you did not mentionhat the u.s. position should be on hamas and the problems for abbas. what would your comment be about that? >> >> one more question. we will take this gentleman in the front. >> we strongly support a two- state solution. we are an interfaith group in the washingtonrea. i want to congratulate you for your bold admission concerning the obama peace plan. this is what we have been pushing, but there is a flip

side to this. it is called congress. this is why your experience with congress is so important. if a majority of congress don't support obama in a peace plan, whenever that might be, then he is going to be undermined significantly. on the other hand, if they do it would have to be a strong majority. it would send a strong signal to the israelis and palestinians. what do think about the prospects of that happening? >> let me answer the second question first. as to the politics of an american initiative, this is not an arena in which congress will lead. as a person who has the deepest respect for the institution of the house of representatives and

the senate, that is not a bad thing. what i think is very important in analyzing our politics there for the president if he wishes to make this step, i would argue yes, but it is depended on a certain set of factors. members of congress need to understand the president is not 80% committed but 110% committed. the president is going to the mat on this. he has put the prestige of his office on the line. that is also why i outlined not for show but the significant desirability of bringing world leaders with them. that this not just be an american initiative but it be an initiative that is blessed by our european allies and russia so that this be one of those extraordinary moments where

reason and silverne -- soberness prevails. i have every confidence that people in congress will always play politics, but reason and rationality will prevail because members of congress care deeply about the american-israeli is rich -- relionship. they will conclude this type of strategy is advantageous both for america and israel and for the region as a whole. the american public also will play a role. i have absolute confidence based on a variety of dierent polling that at least two- thirds of the american public will be highly energized by such an effort. there will be skepticism and

there will be questions coming but that public opinion not only in america but also israel will be supportive of the efforts. but what about hamas? that is an important question. i would argue this from two different perspectives. israeli concessions in the context of security positions need to be contingent upon performance. the israelis are not going to evacuate 70,000 people in 15 days. the evacuation from the sinai when the peace treaty took place took a considerable amount of time. the palestinians will have an enormous burden. before anyeace treaty would to become aective their need to be a referendum on both sides. it should not become effective

until both sides pass it. palestinians need to have a debate. president abbas is highly confident if they were to put such an initiative to the people that theikelihood of it passing -- the importance of seeing world leaders in ramallah is significant. that is how you beat hamas. part of this security understanding is how you disarm or in some other fashion coopt hamas from causing the problem it will be likely to cause. some would point to statements that ham has made that said they would abide by a democratically conceived decision by the palestinian people.

i don't rely on that but that would not be correct not to int that out. >> i would like to hear dr. yoram peri's response. how do think the israeli government would respond t what obama should do? what are your though about hamas? the majority of t people would not suppor it but i can give you an argument why you suld follow this idea. i think it is very positive. if you look back at the history of israel and its relations with arab states and do this from students of the middle east -- you will see whenever the israelisnd arabs negotiate directly they could not solve the problem because of this perception that the cost is a zero sum game. if you win, i lose.

you need a third partner to chge the structure of the game. look at the israeli-egypt agreement. the issue of peace for territory. it was something they had to give to the israelis to gain territory. israelis got peace but through -- but gained peace. it was beyond that because a u.s. was a partner. both parties could gain more. both egypt and israel got a huge amount of military and economic support. $3 billion for 30 years. a third partner can only be the u.s. can change the structure of the conflict to a non-zero sum game.

therefore, without american support it will not be achieved. >> just to follow, i have a feeling we may be saying the same thing differently. public opinion polls in israel for the past decade -- the results are the same. two-thirds of the israeli people will support a peace initiative based on the principles that i outlined, bayh it is important to point out more than the two-thirds of the israelis have confidence it will happen. if you got past that reservation. if the israeli people saw an american president flanked by world leaders and got an impression this was different then all the other efforts that have failed before, you uld t all lacey the support would materiize, it would be greater.

as confidence grew this was not just a silly photography exercise, you have a consensus developing among society. i believe the same would be the case in the palestinian areas. >> i will take questions from this side. anyone over here? >> i am a graduate student at american university and the originally from israel. my question is for yoram peri. you presented these two scenarios. one in which israel closes off and the other is beautiful piece in the middle east. considering it will not actualize, my question is what can we do to prevent the deterioration of the situation between israel and arab neighbors? >> any other questions on this side?

>> stephen stern. in terms of notions of zero sum game and the formulation that robert wexler gave, i think you have brilliantly set up a path forward that speaks to american political situation and the israeli political situation, but there are other aspects of regional and israeli american politics that are waiting. the ones the question of settlements. i would be easier with the veto if somebody else stood up and wanted t go in that direction. there is a level throughout all negotiations in terms of american and israeli politics which has been allowed to fester within the israeli litical dynamic and within the

u.s. political dynamic. we have become enablers of occupation through stlements. this will be a hard nuto crack if what you say in terms of the airline could be great, but getting ere is a big political level. then there is the dimension of the political turmoil and notion of palestinian politics between hamas and others. these will politically come into play. >> how to prevent deterioration. the problem -- it is not in your situation now. the weakness of the pition of the right is those have more resonance with the security concerns. they did not have a good solution for the future. that was a major problem since

1967. the peace camp had positive solutions but were seen too soft on security issues. the only solution we could say about how to solve the problem is the perception of the iron wall. we have to be strong and one day the arabs will realize we are here and they will not be able to push us and they will accept us. how many mor years do we have to wait for that? i am afraid we don't have a good answer from the right wing camp how can we prevent deterioration. the fact that this broke is a total surprise. because that perception which is strong enough and the palestinians will not result it failed overnight. i am afraid this will happen

again in the near future if no serious political stepsre taken by the leadership. point, i think's you rightfully point out the danger of issuing the veto and following it up with nothing meaningful. if the veto is the last or most important message america makes and let's stand in isolation, i would say we are in a very difficult situation. that is why i would save the tell and now follow with a bold initiative. i think we would be remiss and not so popular possibly in this group to apply now with respect

to the issue. in faiess, some of th points that prime minister netanyahu makes are actually valid in this case. prime minister rabin and others, president paris has actually indoctrinated the town of nouriel. he may have a signed orders -- the town of eriel. he may have signed order left wing governments have been a part of it. it has been a part of the israeli strategy. but also, in fairness, those settlements never prevented the

palestinians from negotiating before. that is true. what is also a valid point to bring up is that, in fact israel did provide a fairly significant settlement freeze for 10 months. secretary of state clinton correctly went and pointed out how it was unprecedented. the settlement freeze was mocked in the arab world for the better part of eight months. when it expired, all of a sudden, that was the key to continuing. you cannot have it both ways. you cannot block it as having up busy having an insignificant sum and freeze and said it cannot continue without -- you cannot block it as having an insignificant settlement freeze and then say you cannot continue. >> it can only be taken by an

american president and not by anyone else. it has been over a decade since any american president has taken a bold american initiati. i'm talking about bill clinton. through two bush administrations and the better half of the first obama administration. how'd you explain that? how is it tha americans president -- american presidents have done relatively little beyond rhetoric and aadmonishment? >> saying that is different that the palestinians have not already publicly rejected while privately conceding that it might be necessary? correct me if i am wrong. the second is just a statement.

you talk about the fact that netanyahu has faced an election. so has barack obama. i think that the issue that most americans should be concerned about in the middle east is the rising price of oil very soon. and that will be their concern. item know if there is political capital to use on this. -- i do not know if there is political capital views on this. correct toyou're point out the impact that the palestinian papers had. you ask the question what has changed? in terms of what i am suggesting, the change is that it would be an american position. it has never been an american position advanced by the american president. you're correct. the thi tanks have lked about it. one part of palestinian society has talked about. one part of israeli society has

talked about it. there have been needed issues. there have been all kinds of things, but no american president has ever stood before the world and said here is america's position and i expect both the palestinians and israelis to negotiate, to begin negotiations based on these principles. that would be what is different. and if he did it, as i said before, flanked by world leaders, that would be a remarkable change of events. with respect to the pollen sticks and the price of oil, it is a very valid observation. the policies of barack obama, i would argue, are far more tied to the american economy and whether the unemployment is 8.8% or 7.8% or 6.8% or whether it is perceived as doing is of the meaningful in the budget. there are a whole host of the factors that we could get together and outline that would

dramatically impact barack obama's is electability in two years far more than the israeli conflict. i agree. but that to me does not change the equation as to why the american president should take the initiative now. and the price of oil, i grant you, as far more important in terms of the political impact. as to mr. block's point, the way you phrase the question, i am happy to defend both president bush and president obama, which is not a position i am usually in. in fairness to president bush, all times are not critical. president bush came to office the second president bush, came to office having watched president clinton make the perot effort, devoted himself to a degree that no american president had devoted himself to reserving -- to resolving the palestinian-israeli conflict and

it was eventually a failure. president bush, i think, russell concluded, you know what? i will not continue that fiasco. -- i think, rightfully concluded, you know what? i will not continue that fiasco. i have other things to do. an intern-fata is not a time that you can pursue a resolution or a treaty. it is not apples to apples. bush was presented with an entirely different equation. ultimately, from american's perspective, 9/11 took away our focus and took away our perspective. it is not fair to issue a great deal of criticism relative to president hussein th he had all this opportunity to make wonderful for president obama, d also differ with you. there has been little or no success, that i would granted.

but unlike president bush, from the get go, he said he would focus on this. i would respectfully argue that we did not pursue a particularly successful strategy in terms of putting forth the settlement freeze and step no. 1. i would have argued and i did argue at the tim when i was a member of congress that asking a and israeli prime minister whether he or she is look to or labor or anywhere in between, just right of center of the coalition to make concessions on jerusalem as an opening act. what mr. netanyahu was asked to do is unrealistic. why would he do that. that is what you would do at the very end. that is that you understood all the different issues. for an american president or an erican administration to pursue a strategy after the arab allies did not give

normalization -- remember, the king of saudi arabia said, no, soy, mr. president, i am not givingt to you. even the saudi arabia is not stepping up to the plate, you need to step up to the plate and have a policy for east jerusalem that would be very different than past policies of israeli government. i do not think that was particularly wise to do as an opening act. >> being a veteran of the peace negotiations, i have the look a different take on the issue of the peace plan. i have advocated for that for almost 10 years. we know the solution would be most israelis and most palestinians know what the map would be. it started with the clinton agreement ended went to the other agreement and to the geneva accord and then to the negotiations.

we know how it is going to happen. there are slight differences here and there that are marginal. what we lack is the will on both sides. only will will make it possible to negotiate half a meter here and half a meter there. that isot the issue. the issue is the will. until now, there was no strong will on both sides. now, we are in a new situation. the young lady left already. the question is the prize. what will be the price for not will privilege one of our own scholars with a question. >> mr. wexler, with all you have accomplished, you do not strike me as a personal failure. what you're saying is that basically challenging the united states to really move out. in a sense, you are providing

the will or hoping to spark the will that he just talked about. but i cannot imagine, given your political experience, that you would throw up something like this without having taken some soundings and put some balloons and so forth. either that or uc desperate times quire spacts [laughter] >> maybe you are the balloon. [laughter] >> i do not want to give any incorrect impression. my statement is mine. it is not the administration's. it is not a trial balloon for the administration. however, i think there are a number of far more talented people that die in this town who are coming to at least a similar perspective. they're very concerned that the lack of initiative, as was

rightfully pointed out, will create price that was untenable. while conventional wisdom would suggest otherse, a significant bold stroke by the presidenmay, in fact, be what is required. i believe that there are very capable people in the administration of that are considering these elements. for my role, i will take this show wrever i can take it d tried to persuade people respect greatly in the administration. i am confident that secretary clinton and her team are extremely capable of analyzing both of the cost and the benefits of each one of these strategies. i think they are, as we speak, reevaluating as they should do. >> i think we have a joualist over here. [laughter]

hold on,ir. in the microphone. >> i have trouble being heard. the do intensely explode some of the political arguments? -- did you intentionally exclude some of the political arguments. how many people would be held sitting there are giving it fuller acctance? i just want to challenge my friend over there. >> could you speak in the microphone, please? he gave up more than an inch to get peac but israel is already damaged. it -- it will give up an enormous amount for peace. >> i did include great britain and russia in the piece that i wrote.

i think it would be wise to invite them and hope that they would participate. sure. question think those misunderstood. whether israel would have to compromise on 1.5 or two 0.7 -- >> i think i was misunderstood. whether israel would have to compromise on 1.5 or two 0.7, the issue is the principal. whether the armenian court will be part of israel or it will be part of palestine, that is less important than whether they will have an agreement between the two sides. so the principles -- when you talk to people who are involved in the notiations for the last 20 years, they have always agreed. take the right of return. every palestinian will continue to -- we know in track to that knows really would accepit.

they're not willing to give it up. this is the reason he had to resign. he showed there that he understood the pnt. we know what he says to the public. unfortunate, the truth is not sent to the public by both sides. but the people involved in and of it -- in the negotiations know exactly what the resolution would be. >> i agree i part. however, in fairness, the security requirements for the state of israel have been dramatically changed in the last several weeks. and the eves that are unfolding in the arab world has created an entirelyifrent dynamic that has not yet been negotiated before. although the principals may be similar, i do think that there are parts of this resolution that had yet to be determined. >> that is true.

i thought, until a month ago, that israel could except not having sovereignty or israeli forces in the valley. >> during this historic year of change, i would do more panels like this as well as panels on egypt and libya. please consider becoming a member. we have membership forms outside. thank you for joining. give a hand to it -- to are very fine panelists. -- to our very fine panelists. [applause] [captioning performed by national captioning institute] [captions copyright natial cable satellite corp. 2011]

thank you very much. i gave a stirring introduction to the secretary of labor. some people wept i think as i read that. it was very moving and so it was a great introduction that i spent all night working on. but we really are grateful that you are here and are doing extraordinary work. you are someone who has lived your life mission in many ways coming through the summer job programs, and now on the cabinet of rock obama.

we are grateful that you have the batman to your rep or the robin to batman, the starsky to your hatch, jane oates. i did not call the furniture leaky there. you are truly partners in progress. you are doing so much to help transform our country to do extort many things. we are extraordinarily privileged to have you here. the fact that cavern secretaries are making their time available to sit with us and focus forums like this and that numerous opportunities we have to meet with you one-on-one which is profoundly grateful to thank you for joining us. we know you have treaded upon the generosity of secretary duncan who has been with us for sometime some time now but we know you have programs working together to break down walls between departments and wallowed working on extraordinarily -- we welcome earmarks and we are grateful that you were here.

[applause] >> thank you so much. thank you secretary arne duncan also. if i can sit here. i want to say how, what a privilege it is to be here with some of you again to be able to talk about where we have come now. i think the last time that i spoke to some of you, we were talking about the recovery, and where we were with our economy and while much has changed i think in the last year, i know that there still remains that question about how quickly will this recovery occur? i want to remind folks again that it is very important to look at, to look at where we come from and how we started. i took over the administration of the department of labor almost two years ago. next week will be my anniversary and it feels like a lifetime as already past. but with that, i would say to

you that we have done with you and with others at the local level and at the state level h. treman to separate to get people back to work and to provide them with that safety net that we talk about often and that you are concerned about her go first of all i want to say while unemployment remains still relatively high, it did come down from nine .4% to nine -- 4% and for some of you and for us it is still not good enough because we know some sectors are still up in the teens and even higher. so we know we have more to do but i will say to you that looking at this last year, we have created more than 1.1 million private sector jobs and i underscore private because there is a lot of criticism out there with the believe that all the recovery act money was exclusively made available to create public-sector jobs.

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as we're providing training for someone in a particularly manufacturing industry that we're thinking, as we look at the providers, providers who may be operating in a vacuum, how their training stacks into pathways that lead to the next

job, to the next job up after that. and i know through some of the departments or community colleges are doing that more explicitly now, but there are still a wide array of various nonprofit, community-based, and education partners all doing different kinds of training, the need for real coordination around those pathways, around certificates and credentials becomes more and more critical, and it seems as though your leadership is really going to be critical in that regard. so many community colleges, only 20% to 25% of students actually complete a degree, a transfer, or certificate. there's a lot of money on the table there in terms behalf we're spending today. if appropriately deployed, could provide real important training and career development. last on this, and this is a constant thing across all of our work, the relationship between us and the states. as we look to reauthorization, states don't compete as economic units. i mean, you know this better than anyone, coming from california.

california is not -- we don't compete as california. we compete as the los angeles-orange county region. we compete as the san francisco bay area region. we're competing against singapore. we're want competing against other provinces in other areas. we have its toe in the water with that with the investment boards, but we have needs to be shifted more from states, even further towards the local and regional workforce investment force so we can set appropriate priorities and not have to deal with the barriers and, frankly, with a lot of states who are trying to use as much money as they can from these sources to plug their budget gaps. >> christopher, thank you for your comments, and i agree with you on your last point that it would be wise in the reauthorization that we have these discussions and that we can get language in the bill that would address this issue, because i'm a big believer that it's not from the top down, it's from the bottom up. it's going to make a heck of a lot of difference if we can start to look even across

states where we have regional sectors that are coming together because we have contiguous roads and railways and high speed that may potentially bring customers and people and workforce development in these troubled areas. i think that there's an opportunity to hear that and would love to challenge this group to help put some of those thoughts in writing so we can begin to also share that, and you should also share that with the elected officials that are on the key committees of jurisdiction. the whole issue about the community college and the role that you have to play in the workforce development, i can't see a more opportune time for community colleges to really step up to the plate and begin to have very serious discussions with the local entrepreneurs and businesses in that region and not to just plan out what's going to happen in the next six months or funding sibling, but t into rural areas. they have equipment, they have

computers, they have everything ready to go. it's kind of an incubator lab that's happening where factories, line workers can go in and spend two or three hours at the same location getting trained up, getting their certificates. so we've got to think, it's not so much out of the box, it's just relying on other patterns or models that are working and to share those. the t.a.a. money that will be coming out, $500 million, that's the first year, every state will be able to receive up to $2.5 million. this is a three-year program. we know that this isn't going to solve everything, but it will certainly address, for example, those areas, like in sacramento, one of the programs i visited there, highly impacted in the nursing area. c fund to acquire equipment, classroom space, and provide the necessary curriculum that's needed to expand and build out the good programs that we know are meeting the local need. so that's what i would encourage the community colleges to do. and yes, i am a big believer that even though you may start

in the job corps program or youth build program, i am not going to be satisfied that someone from those programs just gets a g.e.d. so i would challenge people to make sure that our community colleges are partnering with our youth build programs and with our job corps programs. i want to see these successful students becoming entrepreneurs or getting higher level of education, those that want it. and obviously not all of them will take it, but i know many will, once given the choice and presented the opportunity. >> i'm from davenport, secretary solis, thank you very much for being here. i know of your record as a congress woman in the past, all you've done to promote jobs and economic opportunity. but i guess a couple of questions. first of all, whatever happened to the humphrey hawkins full employment bill, law? this fight's been going on for years, and that was enacted way back when, and i don't know if it's ever been implemented.

secondly, i see students coming out of school today, $130,000 in student loans. they get them defered as long as they can, but they're still hounding them. is there some way perhaps that you could coordinate with the education department, whoever gives it out, or the banks, whatever torque lay off these kids, $1,400, and they can't make that. there are no jobs, and yet they're hounding them, hounding their parents. thirdly, we have a very successful weed and seed program through the department of justice, where actually young kids that are working and volunteering in neighborhoods, that could be something to augment your program for youth employment, because we've identified them, and it's a positive thing in law enforcement working with children. i would specifically like to know what's going to happen this summer, and perhaps you

need your department to go out across the hinterlands of the country and take the fight to the people who are fighting this fight to go to work. people want those jobs. some minority groups, 70%, 80% unemployment in cities, and there are no jobs, at least they're not out there. all the training is great, but it isn't get any work anyway. so bottom line is, secretary solis, you know, if the private sector can't or won't put american people to work in the public sector must, and i think this administration's got to get out front on that jobs issue. >> thank you very much, mayor. one of the things that strikes me as very important in our role at the department of labor is that we also talk and have a good dialogue with businesses across the country. recently, just in the last two months, i've been having discussions with some of the bigger companies and firms asking them, have you taken advantage of our programs for

training? how do you project where your labor force is going to be? is it your exclusive investment that you make or have you ever utilized any of our training programs? in some cases, some have never. in some cases, some have. and the ones that have, i'd say by and large, are interested in working with us to create entry-level positions, because they can see the value in the training that comes forward from our efforts and the investment in terms of having that person work there creating loyalty and productivity and really investing in people that are going to stay with them. so employers still want the somebody that's valued, and somebody if they know that money and time is well spent, that it's going to pay off in the long run. so we're entering into those conversations right now with some of the bigger corporations that are going to be opening up opportunities for the summer. now, i want to also say this. we need to make -- we need to make available any support for those individuals that are

currently dislocated workers that can, under the law, also be eligible for the pell grant program t. i'm sure secretary duncan might have spoken about that. if he hasn't, that's the other bridge that we need to be articulating, because if you're unemployed, we're not going to go back to your history and your assets, because much of that obviously is not going to play a big role at this time. so there are avenues for people to begin to seek financial aid and what's available. there are efforts on the part of this administration to try to take out the third party when we're looking at financial loans to students. i would say that was a big undertaking by this administration. granted, we probably need to do much more. i remember having to pay off those student loans in my professional career and how that becomes a big anchor on your back and knowing fully that we need to make more support available. so that discussion has to keep happening, and i would, again, ask you to work with us on

that. if there are some certain particular items that we can help address, we'd be more than happy to sit down to work with you, because i realize, i think our biggest challenge is, as you said, that 78% that isn't getting anything. that is troublesome for this administration, and in particular, for this secretary of labor. >> other questions on my right. >> just one quick comment, ms. secretary, and thank you, mayor booker, for recognizing me. i come from iowa, and much as mayor gluba down here, we're seeing it, with the last census, shrinking out in the areas that used to be the place for employment, the areas that were the bread back of the future, and we see populations shrinking so that the employment on the farm is going

down. we see places like maytag close down and the jobs exported to another country. so we're trying to figure out, how do we connect people to the 21st century jobs? and i would challenge you, and hopefully maybe you can give us some direction on how we can help, but there's a lot of folks out there that would like to think that business as usual is going to be really great and we're going to move ahead if we can just remove some of the restrictions. i will tell you that i think that the job growth that we're seeing in iowa is not connected with some of the visions that were created 40, 50, or 100 years ago, but they're actually in the future. i hope that you will connect your training opportunities and hopefully we can help you get refunded the workforce investment act and all other training opportunities that we have out there. but we have to connect people to real jobs in the 21st century, not stick them in jobs that are in sunset industries, and we have to figure out how we can help do you that. and these people around this

table meet those people on a day-to-day basis. a lot of the folks in here, as you probably well know, are sort of disconnected from that day-to-day person that is trying to figure out how to pay the rent and how to keep the kids well and healthy and fed and educated, and how do we connect all those different pieces, break down all those problems and understand this is a changing world and we need some help and we need to train people that are ready for the 21st century. >> thank you. it just happens that this morning i was at a meeting with our cabinet members, and our subject matter was rural america, what are we doing to address the challenges there. and as you stated, it is a very disturbing picture that we're finding, high unemployment, poverty, a lot of folks that

are leaving and migrating out, and the fact that not enough jobs are being created. our focus will be on trying to help systematically bring all the tools that the different agency heads have and have made available in the last couple of years. one of which is, believe it or not, out of the 3,000 that are operated and that we have authority over, about 520 of them are exclusively found in rural areas, came as a shock to me to hear that, but believe it or not, and, in some cases, that may be the only other federal or state federal entity next to the post office, but that's a place where people can come, get information about assistance, but also what we want to demonstrate is we want to look at building businesses also, because there's a lot of folks that come from the farming industry that could use some assistance in becoming their own business owner. so we're looking at a program called gate that has been

around now for some time and pushing that out so that we can provide technical assistance, planning assistance, and hopefully maybe even some seed assistance to help jump-start some small entrepreneurs, where the real change is occurring in new technology, whether it's biofuels or use of ethanol and all these other things that come from the particular rural areas that can be, if harnessed, can really help put a lot of people back to work. so we're looking at that, we're looking at providing incentives to make sure there's a large population of young veterans that come from our rural communities. they're going to be coming home , but in a greater magnitude. are we going to be ready to meet their challenge? in some cases, we may not, unless we start planning now. so that we're doing also is creating a demonstration program where we can have our division in the department of labor whose sole mission is to help create jobs, is to talk to

other small businesses in the surrounding area so we can start pushing ahead, making sure that these young individuals are trained, that they get the training that they deserve, because most of it is -- most of it can be funded by the federal government, but to make sure we're making the right connection for them and that we invest in them so they can stay in their particular rural area if that's what they choose. we're also looking at expanding broadband, which will create more jobs. we have tools in our tool kit that are now online. one is my skills by future, people can go online, figure out what skill sets, what talents they have, and then figure out where the nearest job is, but also what the salary is and what the required training might be and where the local training center is. all this is in the last year and that i've been on board, but we want to roll that out as we talk about expanding broadband, especially into the rural communities, because we know that's also going to create jobs.

>> military seems to get full funding, but how do we get you adequately funded? >> let me point out you pointed out something that was very important. we have come under attack, and all evidence sort of shows that it is really unfund and had highly biased data that was put forth. .

was a result, a positive result that came out of this. in fact, the hearing that i attended last week, there were several job corps students in the audience. it was very moving to be able to see that members could see actual constituents that had been products of these programs and had no successfully now met their g.e.d., going on to high school and finishing that and going on to college and getting into a career that is going to be competitive. when people see the human face, that is really what makes a difference. they are not going to care necessarily about all the statistics but they what i think that attitude once they do meet a human being and they get the message that these programs have actually changed or saved lives.

>> excellent. and you talk a lot about demonstration projects and i would like to have the last question from mayor tom barry who knows a little bit about demonstration. >> thank you very much. thank you. [laughter] i want you to know that two days ago i had my steist city speech and delivered it at our brand new job corps center. thank you very much. i'm very proud of it. i think we have a penchant for state government. we want the resources directed to us. in my instance, 73% of my region's low income people live in the city. the challenge, whether it is a democrat or republican governor, we want the resources. i'm facing a new challenge and we talked about high-speed rail or broadband. i now have a governor has who has turned back and california has benefited immensely, $800

million. the only governor in the nation turn back broadband money. my concern is with some of these new governors, they don't have an interest particularly in the programs that serve cities with a high proportionate of people living in poverty. and i need now more than ever the ability to come directly to you because i'm not convinced that my zpwover even going to ask for the money and if he gets the money that he is not going to turn it back. and so there is this ideological war that is going on now and we're the ones as mayors who have the low-income people who are served by these programs, it doesn't hurt their base or constituency because that has never been part of their recipe because if he we allow this money to be stocked at the state borders or turned back, we're in a world of hurt. >> i hear you and something i just want to bring to your

attention, when you think about all the human disasters and catastrophes that have happened just in the last month, we had, you know, tremendous climatic changes, weather, right? storms and all kinds of things napping our country. as a result of that -- happening in our country. as a result of that, there has to be some job loss. places are shut down. people can't go to work. there are some grants that go directly to communities and cities that are affected. not just by disasters but also by layoffs and shutdowns and by businesses, corporations that close up and move to another country or just give up and move out. and we have the ability to target that money to your disstressed areas. >> but if it goes through the governor, we may never get it. >> the point being here is that's why your voices have to be loud and clear, in fact, with all of your partners. it could have been a corporation

that just shut down that had maybe 400 people and that employer didn't leave. they are still there and they would like to come back but they also need help. we can provide the training and assistance to make sure that that happens and provide coverage for those dislocated workers while making that transition. that employer should also step up to the plate, that haven advantage of these programs through national emergency grant program. something i know every governor will want to learn more of. it is a safety net when a catastrophe of layoff occurs. we have seen it happening in florida and in my state and 4200 people were laid off. we knew in advance it was happening and we could target funding and worked with the republican governor, arnold schwarzenegger to make sure we could get it on the ground and services up and going and i would say as a result, 70% of those people who went through

our training program were given assistance and some have found jobs. so that is an important aspect to be able to articulate to members of the house, the senate and also the governor. so i'm with you. if there is ways and mechanisms that i can help you amplify that, please let me know. please let me know. >> all right. i want to just get -- sort of ask one last question. we're trying do a lot and pull together on manufacturers. we have hundreds of manufacturers creating thousand s of jobs and they continue to press us about the idea of really getting some value-added manufacturing. taking it places to china and the major ports in the new york area and finding ways to get the -- have sort of a shared space manufacturing, partnering manufacturers together. there are a lot of innovations that we are thinking about and wondering are there funding screens for that? will it create jobs?

>> well, i would say that the programs that i mentioned already, the innovative fund that is coming about, that fits in our budget, would take a look at existing funds that we have and help redirect and look at new innovative ideas. that would be in my opinion something that obviously would be new and would help provide efficiencies and i think that would be something we would want to take a look at but also the t.a. money that i talked about earlier is still a way of helping to train providing for those individual s that aregoing to be using and imported for another use. i would say that yes, this is the time to engage with us and to get your partners together to work with your community college and any other authorities, the port authority, whatever it might be where we can be of help to you. >> great. i would just add finally that we were the benefit of a department of labor grant.

the requirements, taking our 60% rate down to 23%. we have actually got it below 10%, almost at 7% so those grants are showing that new programs can work and really liberate the workforce. >> i would just draw your attention again to the upcoming e.t.a. funding opportunities list. take it back to your staff. have them look it a and make sure that you connect with jane oates on our staff, the e.t.a. assistant secretary if you need any further assistance. we're here to help. we're partners with you all. >> mayors, ladies and gentlemen, we're very, very privileged to have the secretary spend so much time with us as well as jane oates. give them a hand. thank you for your extraordinary leadership in difficult times. thank you very much. >> in a few moments, a forum on the economic causes of unrest in

the middle east. and "wall street journal" is live at 7:00 -- "washington journal" is live at 7:00 eastern with how states deal with prisons and convicts. and we'll visits with the mayors of charlotte, north carolina and oklahoma city. we have several live events to tell you about today here on c-span. former arkansas governor and presidential candidate mike huckabee will be at the national press club to talk about his new book. it is titled "a simple government: 12 things we really need from washington and a trillion that we don't." that's at noon, eastern. at 1:00 p.m., how the palestine center looks at how political unrest in the middle east is affecting relations between those states and the u.s. and at 4:30 eastern, we'll join nasa tv for the launch of spate shuttle discovery, the last scheduled

mission for the shuttle fleet. they have traveled nearly 143 million miles already and will take six astronauts and supplies to the international space station. >> it is critically important that the house move this to avoid a government shutdown. >> we all have a responsibility to make sure that there is no government shutdown. >> we have concerns about a possible government shutdown. see what was said when the federal government did shut down in 1995 online at the c-span video library. search, watch, clip and share, any time. it is washington your way. >> now a discussion on the economic aspect of political unrest in the middle east. the carnegie endowment of international peace hears from the tunisia leader. he was forced to leave last month following widespread

protests. this is an hour and a half. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> good afternoon. thank you for joining us today. this discussion of economic dimension of unrest in the arab world featuring who is -- has just been appointed, perhaps a little over a month ago as the new governor to have central bank of tunisia and also joining discussions is the director of the middle east and central asia region.

at the international monetary fund. you have both of their bios with you so i'm not going to say very much, except on a personal note, that these are two friends of mine of quite long vintage now, for many years at the world bank and also that i have the greatest respect for them in terms -- in all respects but in terms of -- [laughter] of economists. but especially in terms of superb understanding of the region. of the middle east. very few people in the world

have the expertise knowledge that -- that the two gentlemen on my right have on the middle east, which does not mean that they get it right because a little under two months ago, we were on a panel discussing the prospects for the middle east and north africa and my conclusion at the end of it was well, it just sounds like it is going to be business as usual for many years to come. therefore, please take anything you hear from me today with a grain of salt. but again, let me welcome you and let me begin -- we'll structure it this way. i will ask a series of questions . i'm going to start with tunisia.

then i'm going move to the region and then i'm going to move to the world. the implications for the world. and i have a series of questions and i'm going to alternate between our two panelists here and then we hope to have about half an hour at the end of this for questions and answers from the audience. so we will get there. but i thought given the complexity of the subject that we would be best to start in a structured way. so let me kick off then with the first question. which is what happened in tunisia? why? why now? and not 10 years ago? not 10 ye? [laughter] >> ok. i think it is going to be and

for many years to come that people will try to understand this question. i don't know if there will ever be a good answer to that. let me try to give you my answer. i have been thinking about this question for a long time. since i do not have time to make my argument, let me summarize very quickly. i think there are three ingredients which came together recently which were not present in the past and to the intensity that they have been present recently. the first ingredient is the increase corruption. the corruption of the system has reached unprecedented levels. corruption has been there for some time, at least 15 years, but the level is reached recently was unprecedented.

it became well known. in the media, the knowledge was becoming much more prevalent. the impact of the corruption was in the sense of unfairness. it has created a deep sense of unfairness for the population. people were getting rich. people were getting extravagantly wealthy. there was a sense of this is not fair. so the sense of unfairness became deeply ingrained in the population of people. that is the first ingredient that has not reached that level before. it has been for a long time. the intensity of it, the strength of it was not there. the second ingredient, which

also contributed, was the nexus.ent,-education we knew this was a problem. and unemployment has been high in the middle east and north africa for a long time. we are in a demographic shift. what happened in the tunisian, the strength of the high university educated people becoming unemployed has reached a level that was not seen before. the level of unemployment, males and females, it became so high. the thing that people did not see, prospects for improvement in the future. i know people have been asking

whether the recent crisis and the impact of the global crisis was a contributor. i think it did because tunisia has seen its growth rate slow down by two points in growth over the past two years. i am sure that the prospects are not there anymore. when the country was growing near 5%, people were seeing that something was happening. when growth slows to 3.5%, you do not see the prospects anymore. this lack of prospects, lack of hope became so high and so strong, it added to the sense of on fairness and became very strong. the third ingredient in my mind that came to be seen as important is that the prevalence of modern technology. modern technology in tunisia was pushed very late.

the mobile phone, the internet. it took many years for the regime to allow internet to be introduced. more recently, tunisia has reached more than 100% pervasive pervasive rates. i think the prevalence of the modern technology has contributed to not the starting of the events but the implications. i know there has been this whole debate about whether modern technology was the cause. it was not the cause that. it facilitated the transmission implications of the process. modern technology introduced the

cost of a collective action for people to organize and to act on something. the costs became essentially zero. this was the costs for spreading information, agreeing on actions, and then moving on. so i think these ingredients have never been there with such intensity and in such a clear way as recently as now. did they explain it happened on december 2010? probably not. it took some singular event, a singular unexpected event, to ignite the spark. the explosive mix was there. this spark was the thing that made this exploded. >> thank you. unemployment, corruption,

technology. unfortunately, these factors are present in other places in the middle east. we will come back to the broader region. first, let me ask masood ahmed if he has any further thoughts on the situation. >> i think the first thing i would like to say is in addition to the fact that these factors were known for a long time, if you look around the room, you see the community of the fan club that has existed for many, many years. on tunisia, i think there is one issue worth getting a sense. these three things were there. it was a pretty good way of organizing the framework. it is very hard to say whether the combination of them gets to a point which is a tipping

point. we were here two months ago. we identified some of these things. we talked about unemployment, etc. we could not say then this is a certain number of weeks away from the first spark. in this case, one even triggered a broader thing that got magnified. what about another spark, food and commodity prices? i am not sure in my own mind that in tunisia possessive case, high food prices or high fuel prices were a big part of the trigger. in other countries, food and fuel prices have been an approximate trigger in some cases for people to react. it is interesting to me that you did not include food and fuel price increases at all in your triggers. maybe that is because they were not that big in indonesia's.

the tunisian i do not think of food and fuel prices have been a factor in tunisia. but the fact of the matter, there has been no major changes in food or fuel prices in it to an asia or in egypt -- in tunisia or egypt. the response was different. it did not take the same route or the same outcome. my sense of this whole event -- this collapse of regimes was not -- the rise of food and fuel was not a part of it. there was certainly a sense that

the cost of living was increasing, people were sensing it and so on. i followed very closely what people were saying and what people were talking about during these events. i have not seen a single time people talking about food prices or energy prices. on the other hand, people were talking about corruption and other things. it was clear that that was the issue that was center stage. >> what is the economic situation you are confronting in tunisia right now? how is it economic governance being handled? what economic risks do you see in the short term? >> in terms of the economic risks, for now, i think the major risks we have been able to control in terms of the short- term issues.

the short-term issues are the external balances, the reserves, and i think we have not seen any run on the currency. the currency is stable. transactions are continuing almost normally. we do not have immediate pressure on the external accounts. we do not have major pressures on fiscal accounts either. the major challenge we have now is social pressures. the opening up of the political system and so on, trying to catch up with the past in terms of wages, jobs. this creates risks to the economy. broadly speaking, as we speak,

[inaudible] with the exception of terrorism. -- tourism. there have been some damage of property, some factories are not functioning anymore. exports have been reduced in some sense. you are seeing a lot of factors working and export continuing and so on. however, the lack of a deterrent to the social peace and the like, this is putting a damper on the prospects for exports over the next few months. so the major risk i see in three months or in four months, if the production does not come back, then we might face external

pressures on the external side. we might face on the fiscal side as well because clearly a slowdown in economic activity is going to impact fiscal accounts, revenue, and so on. we might be squeezed between the expenditure side and squeezed on the income side. now, the good news, fortunately, we had some buffers. we do not have high debt, either domestic or external debt. we have a reasonable level of reserves. we can hold out for a few months. if we do not return back to work, and that is what i have been saying, we really have to go back to work to start production and exports and sings

so we do not follow in -- we do not fall into any of these risks. what i hope does not happen is these economic tensions are happening at the same time we are having elections. if we are having elections, and at the time the economic situation is tense, we might be in a bad situation. what we need to avoid is to have the elections taking place at the time when there are economic pressures. >> masood ahmed, do you want to elaborate? >> i think i agree with what was laid out. i would at one point to it, which is in some ways, it would be surprising if we had all of this change and transition and you did not see in the short term some effect on the level of

economic activity, some effect on the level of tourism. right now, tourism is down. i think will be a few weeks or a few months before tourists come back. there is probably some slowdown in foreign investment. so, all that will work its way through the economy. you start from a strong point. one thing we should not be as surprised if the negative short- term impacts work their way

through the system. we should expect them. we should recognize this is the result of events that have happened working their way through. the second thing that is important is on the government's side, you start from a relatively small fiscal deficit. the fiscal situation is managed. there will be some pressure to spend and there will be some impact on lower revenues because economic activity goes down. it would not surprise me if that happened. it would surprise me if it did not. if you look at the numbers, the main point i take away from my colleagues, given the range of pressures, a broad range is

still manageable. that is what i take away. i am not so focused on the fact things will be slightly worse than they were last year. that is almost inevitable. i am focused on the fact that a broad range of scenarios and things that could happen still remained manageable. >> when you look at the risks, what are they? the initial was the security situation. we have come a long way. security has come back to almost a normal level. we're back. this second was the social front. on the social front. pressures for all kinds of things. this we're on the way to do with in this is taking its course and something that is expected, taking its course. in the next few weeks, this would be more or less

[unintelligible] the third is the political. now that security is back, social problems, people will turn to politics. that is where the game will be in the next few months. people are going to be focusing on the politics and elections and things like that. that is where the risk will be. that is why my own view is, that is why we want to make sure that there is no development of the - move -- negative move. >> in the longer term, beyond this transition over the next three or six months, do you see the transition as a risk to deepening market reforms, but do you see the possibility we go back on the market reforms, that apparently have served to nasir

well over many years, or do you see the opposite? the process of democrat positiization may enable more mt reform. >> that is tricky. let me say about market reform and all the have done. market reform is attributed to the development of corruption and that is what we need to keep in mind. a lot of the corruption that was taking place was taking place on the basis of market reforms and taking advantage of doing market reforms which was for the benefit of some. there were not really market reforms the way we think of them in the good sense. there is no doubt that some

reforms have a bad name and it will not be easy to go back to them. we have to be expecting the rebuilding of trust and develop market reforms which are for the benefit -- not for the benefit of the few. whether it is about privatization or non-competitive bidding and all kinds of things. we are benefiting. there is no doubt that there is the question of the market reforms. making sure they have social benefits. in a sense, the answer will be slowed down -- a slowdown. i'm not sure -- i do not think that going full speed if they're

not public is something you want to do anyway. >> do you agree that this facilitated corruption in tunisia? >> that is where we should start from. contest ability in markets. is the other half. the two points of the opening up of the economic and political state. the market reform, any reforms to be sustainable have to be reforms that people see the benefit flowing. if you have non-competitive

privatization of state assets, that is market reform. it may be what was implemented. what i take away is we have to focus on how things are done rather than saying this is the objective and hoping it will work out. the economic reform can be captured just as much as other kinds of reforms can be captured. in the interest of a few. i would say it is an inclusive, can testable market-based reforms which will bring broader acceptance. it will not be feasible to implement any policy anywhere. >> thank you. does tunisian need help today?

-- tunisia need help today? what help do they need? >> three weeks ago, i address this question and i said the help is please do not do any harm. i thought there was something that there were doing harm. they think agencies would downgrade the debt the next day. it concerns the time that everyone was looking for is not helpful. it does not -- it is not good. not only the cost of debt but it is because of the cost of finance. i want to make sure that

international banks and financial institutions keep funding and financing trade in the usual way. the first thing, do no harm. we will have a phase where our financing needs will be higher. for the external financing and budget. we're going to -- we are working with the world bank and imf and the african development bank and the european investment bank, eu and arab funds. we expect to have support that is higher than normal. it is something that is expected

that should be dealt with and we hope to do that. we are organizing a conference by the end of march, early april to, it is not a donors' conference. we will talk about political reform as well private-sector role and public sector contribution. that is where we have to mobilize. it is something on the donor funding search. we are expecting the private sector to come in and investment to come in to create jobs and to develop the capacity of the country. also, we expect the support of the enforcement of the political institutions and political system. there is lots of needs on that

level. going from organizing elections to helping political competition take place and helping the media. needs andalo lot of we're working with our partners. >> thank you. let's widen it to the region. let me ask the question, we talked about unemployment and technology as the factors that came together in tunisia. these factors are present to a more or less similar degree in other parts of the region. how do you see the situation in the rest of the region? i the same issues present today in egypt and in libya?

how do you see the picture? >> what is clear if you look at the countries where they have been -- there has been the most social unrest, it is clear that even in those two, their differences and similarities. it is important not to take the view that there is some kind of substandard model or solution that will go around. having said that, what is the common theme and common responses? one common theme is this sense of disillusionment and hopelessness amongst young people who are coming out of universities and colleges and schools and not being able to find a job. when we did our last outlook, we tried to put together some stuff on youth unemployment and the

numbers are staggering. half of young people are working. many are unemployed and many more are not in the labour force. clearly that issue is in many countries and you look at the issue of the fact that the sense of opportunity for enterprises, small businesses, to create employment, to create businesses, their access to finance, their access to the way rules are applied, to dispute resolution are unevenly applied. you have to be connected to get the right kind. those issues are there. the other thing that has happened already -- by stepping up the subsidies they are providing on food and fuel and housing and by providing salary increases to public employees, different kinds of fiscal

measures. many countries are doing that now. they vary between half of 1% of gdp to 3% or 4% of gdp. others are stretched because the use of their fiscal space in the past two years trying to do with the global recession. they did not have that much fiscal they're trying to use that to do this. one message we have been pushing, it is the job of governments to help protect the most vulnerable. that is not the issue. the issue is, is the best way to do it by subsidizing products or creating safety nets focussed on vulnerable people and families and giving them support? there are people here from the world bank. there is expertise to set up a good safety net. i do see across the regso