curtain raiser, as we used to call it at the "wall street journal," ahead of next week's i.m.f. meetings i will engage in a conversation also drawing upon audience questions here and on line. so i encourage you to continue to submit your comments and questions using the hashtag, #acglobalecon. it's no secret that i and the atlantic council more generally are fans of the managing director of the international monetary fund. i first ran across madam lagarde christine when the "wall street journal" europe was putting together its 2002 top european women in business rankings. to celebrate women who were pushing through the mostly male ranks of corporate europe. the jury of experts ranked her among our top ten finalists. but then they had a dilemma. as a french lawyer at a

partnership organization was she really a business leader? and as she chaired a chicago-based company though it was global, did she count as a european executive? but the editor intervened and the judges were taken by her accomplishments and the certainty that she would only achieve more. it was revolutionary at then the world's third largest law firm had elected her as the second non-american to ever run the firm. our "wall street journal" jury marveled at her remarkable consensus-building skills. such and under ees plated and historically crucial talent that she demonstrates at the i.m.f. our jury placed her then at number five at the list which i referred to as a result of the chicago penalty. but if i name the other four for you today you wouldn't know them. nine years later in 2011 another jury got it more right.

when we gave her our highest recognition in new york alongside the u.n. general assembly the atlantic council's global citizen award. by then she had been finance minister in france, atop the baker & mckenzie experience of steering lawyer egos, good preparation for running the i.m.f. and its impressive staff of more than 160 nationalities in 182 countries, often in unstable and corrupt settings. in presenting the award to you world economic founder clause schaub said i would define a leader with four characteristics, soul, heart, brains, and good nerves. leaders by and large don't get to choose the challenges they face. they only get to choose how they address those challenges.

and how you've done so at your time at the i.m.f. has been remarkable. we look forward to hearing your opening comments today on the state of the global economy and how we might best address its most pressing challenges. we often speak of how we together as the atlantic community, alongside our likeminded global friends, confront a defining moment in history perhaps as pivotal as 1919, 1945, or 1989 when the decisions of leaders like yourself and that of the member countries have represented have outsized importance. so as i turn the podium to you let me paraphrase in thanking you for making the sacrifices that public service requires at challenges times and in his words salute your soul, brain, heart and nerves. [applause]

ms. lagarde: well, thank you so much, fred. i know you are a true friend because you're one of the very few who introduces me without referring to my muscles, because people typically refer to my belonging to the synchronized swimming national team in france. so thank you for that. and don't believe that fred and i always coordinate our colors. but it so happens that we are black and white together. the council, fred, board members, and members of the audience is renowned for its capacity to actually bring together top international policy members from both sides of the atlantic and from further afar. and this is clearly something that is in common between our two organizations, the atlantic and

the international monetary fund. next week we will be hosting the spring meetings of the world bank and the i.m.f. and we will be welcoming to washington d.c. representatives of our 188 member countries. finance ministers, governors of central banks. and they will focus their discussion on the state of the global economy. since our last annual meeting in october, there have been a lot of developments on the global scene. i would say that it has first of all inherited from a big shot in the arm as a result of the decline of oil prices. in addition to that it has had the benefit of a strong economic performance by the largest economy in the world, the united states of america. and overall, we would say that

macro-economic risks have decreased. so the global recovery continues but it is moderate and uneven. global recovery continues but it is moderate and uneven. in too many parts of the world it is not strong enough and in too many parts of the world people don't just feel it. in addition to that, in macro economic risks have declined financial and geopolitical risks have increased. it is not that overall growth is bad -- 3.4 in 2014. it is not bad. it is actually in line with the average growth that we have had in the last three decades. so what's not so good about it? what makes it moderate and uneven? well, it is rather that given

the lingering impact of the great recession on people, it is actually generating hardship for many people around the world. including those countries where more than 50% of the youth population goes unemployed. so growth is not good enough. six months ago, i warned about the risk of a new mediocre. new mediocre, low growth, for a long time. now, today what we must do is avoid that new mediocre becomes the new reality. we can do better and we must do better. that great john fitzgerald

kennedy once said there are risks and costs to action. but they are far less than the long-range risks of comfortable inaction. so comfortable inaction must be avoided. and that's what i would like to focus on. how to lift growth today by using all available tools and policy space available. how to lift tomorrow's growth and prevent that new mediocre from becoming the new reality. and how do we work together to strengthen the international financial system first for development and make growth more inclusive and actually sustainable? let me begin by a quick health check of the global economy. now, those who follow the i.m.f. know that the world economic outlook will be published next week so i am not going to focus on numbers.

i am going to talk about the broader trends and policy recommendations. as i indicated earlier, growth remains and we forecast it to remain moderate. roughly, roughly the same as last year. advanced economies are doing slightly better than last year and as you all know the recovery is firming up in the united states and in the united kingdom. and the euro zone is doing slightly better as well and is promising. but if we look at the emerging and developing economies they're doing slightly worse than last year. with lower commodities being the driver. and while they still represent and probably will continue to represent about 70% of global

growth this year, there is tremendous diversity within that group. do you remember the talk about the bricks? well, the picture has changed. and if india is a growth bright spot in that group, china is slowing, although its growth is certainly more sustainable. sub-saharan africa continues to perform strongly but russia is experiencing economic difficulties, brazil is stagnating at best, and many parts of the middle east are beset by political and economic turmoil. so we should not think of emerging economies as just one single group. each country faces very specific circumstances, some of them easier, some of them more difficult. so what does it imply in terms of policies? with overall growth moderate

the global economy continues to face a number of significant challenges. there is, for instance, what i have called last year the low-low, high-high risk. that is low inflation, low growth, high unemployment, high debt. and that risk persists for a number of advanced economies. clearly as a result all policies space and levers must be utilized and it begins with demand support. how is that implemented? first of all, continued monetary policy, accommodation, is needed especially in the euro area and in japan. fiscal policy needs to be calibrated to the strength of the recovery without ever losing sight of debt sustainability.

but the effectiveness of those demand support measures can be significantly improved because they've been at work for some of them for a little while. they can be improved. for example, unclogging the channels through which monetary easing and fiscal policy work in the euro area. how? well, effective insolvency frameworks are crucial to tackle the private debt overhang and deal with the total stock of no less than 900 billion euros of nonperforming loans that is blocking credit channels. in japan, the authorities need to sustain the momentum of the second and the third arrows, one is fiscal consolidation, the other is structural reform. if that country is going to take the full benefit of the first arrow, which was indeed monetary easing in order to lift both growth and inflation.

the third way of being more efficient. by leveraging lower oil prices to reduce energy subsidies emerging and developing oil importers could save on average a full 1% of g.d.p. in 2015 alone. and those resources could be put to better use in order to invest in infrastructure, in education, in health. so those are some of the macro economic dimensions. as i said, macro economic risks have decreased. what has increased, on the other hand, is the risks posed by the financial dimension. financial stability is more at risk now than it was six months ago.

the new mediocre that i talked about, that new mediocre growth is not a comfortable place with respect to financial stability. financial risks have migrated. for example, they have migrated from banks which are far more regulated, better supervised and heavily tested to nonbanks. they have migrated from advanced economies towards emerging markets. let's go through a few of those risks. for one, there are adverse side effects of the very low or even negatives, as we clearly saw including on the primary markets today, very low if not negative interest rates caused by otherwise necessary accommodative monetary policies. these foster a higher risk tolerance on the part of investors which can lead to overpricing. and if the low interest environment persists, it can

create solvency challenges for life insurers and defined benefit pension fund. so the purpose of these policies is to actually kickstart the growth. but if it were to last longer, then it puts some of those business models at risk. think of another one. the wide movement of exchange rates that we have observed recently. over the past six months the u.s. dollar has appreciated against the basket of major currencies by 12% in real terms. now, some countries with more difficult macro economic conditions and less policy space have of course benefited from the relative depreciation of their currencies. in others, large amounts of

dollar denominated or foreign currency denominated debt, these dramatic swings can be destabilizing. and this is particularly the case for corporate. india emerging market economies that are wedged between a strong u.s. dollar on the one hand, lower commodity prices on the on the other hand, and with my third hand higher borrowing rates. on the top of which they might not have hedged. and that is a bit of an uncertainty where we have little information. now, these risks taken individually can be manageable. but we also have to contend with a structural decline in market liquidity. it is a risk we had flagged about six months ago due primarily to recent changes in the structure of asset industry which have created a

mismatch between the maturity of assets and of liabilities. which means that liquidity to evaporate quite quickly if everyone rushes to the exit at the same time which could make for a bumpy road when the federal reserve begins to raise short-term rates. so this new configuration of financial risks underscore the importance of strengthening financial policies. at the global level, it means ensuring market liquidity during times of stress improving macro and micro-prudential policies for nonbanks in particular, and following through on the regulatory reform agenda particularly the too big to fail institutions. at the country level it means curtailing excessive risk-taking and managing existing vulnerabilities. and again, while the appropriate menu of measures must be

country-specific, the overall set of policies can help us to lift growth today. so much so for growth today. as i said, moderate and even but recovery on the way. but what about growth tomorrow? and that's a big issue. because growth tomorrow as we analyze the potential for growth is also moderate. in both advanced and emerging economies, potential growth is being paired down. and this largely reflect several factors. one is lasting scars from the financial crisis that the world experienced a few years back now, and probably scars that we had underestimated. but also the undercurrents of changing demographics and lower productivity.

so to prevent the new mediocre from becoming that new reality structural reforms need to go hand in hand with macro economic and financial policies to raise confidence and generate investment. and frankly, when you look around there are too many countries that talk about structural reforms but don't actually do structural reforms at the debt at the speed where they should be done. and structural reforms really span a wide range of policies. some reforms have immediate effect. most reforms have more medium-termed effect and take a bit longer to bear fruit. i will give you an example of

one -- i wouldn't call it a reform -- but it's a set of me shfers which requires often reforms and a bit of creativity around p.p.t.s, for instance. but some are root at the intersection of what can have an effect in the short term and will improve productivity in the medium and long term. and this is infrastructure investment. our research shows that boosting efficient infrastructure investment can ima powerful impetus for growth boats in the short run you still late activity, construction sites start employing people and in the long run. you improve productivity infrastructure, make sure that good people can actually travel properly. other reforms, such as those that affect the labor, the product, and the services market, are likely to unfold positive results over a longer term horizon yet they are essential

to enhanced productivity and innovation which in turn can be powerful antidote to the impact of something we cannot do anything about, and that is affecting all of us aging. we have done a bit of research not so much on aging. other people can do that a little better than us. but we've done research on structural reforms and we've tried to flesh out priorities and payoffs in the area of productivity growth. labor force participation. and trade. so let me take them very quickly one after the other. let's look at productivity growth. reversing that decline in advanced economies requires lowering barriers to eebtering entry. our research shows, for instance, that improving the allocation of labor and capital across sectors can significantly increase total factor productivity. t.f.p. as it's called. another example is the potential benefit from improving access to finance for smaller

businesses. f.m.e.'s. of course because they generally in most countries, certainly the advanced economies but also now to a much larger extent in emerging market economies represent most of the employment and they represent the largest number of companies. well, unfortunately if we look at europe, for instance, they also hold a share of nonperforming loans that is 50% higher on average than larger corporations. so clearly putting the small business sector on a firmer footing would yield a big payoff. this is the same story in china. where small businesses play a critical role in the economy in terms of output employment, tax revenue and innovations, and where access to financing is extremely difficult. i discussed that matter with the prime minister of china and it is one of the angles that they want to use in order to

stimulate activity by the corporate world. if we look at emerging market economies such as indonesia and russia, they can reap productivity by easing restrictions. and brazil, india, south africa, should certainly focus on reforming the education labor and product markets. in low income countries as well as in the middle east and central asia, improving governance, eradicating corruption, or trying to, as well as financial inclusion will help lay the foundation of a thriving private sector. so that's for the productivity improvement as far as capital and investment is concerned. if we look at labor now, there's an important set of measures that is needed to remove barriers to labor force participation, and that is key to tackle

inequality. and ensuring a broadbased world. i'll give you a few for instances. in japan and in the euro area there are too many tax disincentives that exist. and where a change of tax policies that would be more growth friendly, more labor supportive, would be very welcomed. and they could be budget neutral. in too many countries, legal inequities still exist. and what do they do? they create barriers to greater participation by women in the economy. we've done a very interesting study. and from all the countries that we've studied 90% still

had legal inequities in the books that prevent access of women to the labor market. and as we know, closing the gender gap is one of the goals by 25% in the next decade could result in the creation of 100 million jobs. that means something. finally on trade. there are potentially huge global gains to be had from further trade reform and integration. as we know, trade has been a major driver of economic progress over the past three decades and yet again in 2015 and for the fourth year now trade will be below average trade in terms of growth. recent efforts have been welcomed. the balli agreement which was a subset of the doha long expected long agreement could

actually generate a lot by way of trade facilitation estimated to deliver economic boost of 1 trillion u.s. dollars annually. not only should this agreement be implemented but we need to be more ambitious because trade remains a very major engine of the global economy. to lift growth, create jobs, and dispel this new mediocre that is lurking on the horizon. of course it's difficult. those are political reforms. and anything that is structural reform or that requires international consensus is difficult. they involve tough choices tradeoffs, and there are winners and losers in the short run. but in the long run everybody can win. so how do we win? well, our view, my view is that we can only win by working together.

and i am struck by how action to lift growth is becoming increasingly country specific. gone are the days when you could say the advanced economies the emerging markets, the low income countries. no. it's a matter that is far more complicated. which probably includes something like 128 boxes depending on what criterias you use. yet all those issues that i have referred to macro economic, financial risks, productivity increases, all of that is also very strongly interconnected and multilayered. so the challenge for policy makers around the world is to combine the policies needed to boost today's growth with those that will fortify tomorrow's prospects. how can you actually use your short game to make sure that the long game is going to work? and to leverage those national

initiatives that are needed to the benefit of the global community. and if you look at it, think of it, what is good for a country is going to end up being good for the whole community. if countries strengthen their banks, domestic banks, it will not only serve them well and their clients, but it will reinforce the global financial system. if countries anticipate and hedge against volatility it will not only serve them and their own financial sector but it will support global financial stability. and if countries implement climate-friendly policies, it will benefit their population and also contribute to reducing global emissions. so to all those who will say oh, we have to wait until the others come on board and reach an international treaty or agreement or something that is

intergovernmental no. national policies will actually take the global issue further. but we also need a multilateral system that can actually leverage these national benefits and help avoid inconsistencies, risk of arbitrage that could actually generate negative spillovers. in a highly interconnected world with new and dynamic centers of political and economic gravity, generally east, there is simply no alternative to what i have called new multilateralism. so what is that? and what needs to be done to reach that new multilateralism platform? well, first of all everybody must find its suitable seat. emerging market and developing countries must have greater

weight and voice in global economic institutions to reflect the actual new reality and that of the contribution and responsibilities in the global economy. i have a clear example in mind. the i.m.f., 2010, quota on governance reform. which is intended to precisely meet such objective. listen to that. virtually our entire membership agrees and we now only will wait one ratification by the u.s. congress. it is overdue. if you meet any of them, tell them. and we're not going to give up. i'm going to continue to ask them to please do it.

if only to assert u.s. leadership in a key institution for global financial stability. but, you know, we can't wait forever, either. so our membership is currently considering interim steps -- i'm not saying substitute -- interim steps that can take us a bit closer to the ultimate objective. now, there are further measures as well to strengthen the resilience of the international financial system. and that would include enhancing cooperation with regional facilities and institutions including the new asian infrastructure investment bank as i have said three weeks ago in china. there are many institutions that have burgeoned over the last few years in europe, in asia, in various places. and we need to work together. we need to cooperate to coordinate. the second option, increasing the role of these special

drawing rights. as a global reserve assets and facilitating the integration of emerging markets into the global economy. and of course firming up the i.m.f. resources, which again relate to the quota reform. that was intended in 2010. as a result of that, the international monetary system would be reinforced and become more stable. so that's for the international monetary system. what about the international development system? well, 2015 is really a very special moment for development and an opportunity to make a tangible difference in the lives of a very large number of people, particularly the poorest. there are three critical issues on the 2015 agenda. one is financing for development which will be discussed, in july.

the second is the development goals which will be discussed in the united nations in september. and the third is climate change which will be discussed in paris in december. and they all interlink in many ways. now, the i.m.f. will be a committed partner in this effort and i intend to discuss with our partnership next week how we can contribute through not nice words, not good intentions, but actually deliverables in the three core areas of our business. we cannot suddenly invent ourselves as the new development experts or the climate gurus. but we have areas of business which are our core businesses which we can certainly contribute. let's look at financing first. actually, we've already made a down payment by recently contributing $390 million to the ebola affected countries

including which is very unusual for the i.m.f., $100 million in debt relief. the i.m.f. doesn't do that. but on that particular occasion the board very strongly endorsed that proposal. what we have done as well is that we have set up a catastrophe and containment relief trust. because we realized on the occasion of this drama that affected liberia and guinea that we had to repurpose resources. we will in addition to that explore the potential to increase access to i.m.f. resources for our poorest members. the second core area, policy advise and analysis. we will continue to help our members with a essential support for what very often the low income countries need badly domestic resource mobilization.

capital market development and where it exists deepening. in addition we will push further on macro economic issues, some who consider a little on the side of our core business, which are core business and matter. and i'm thinking about the role of inequality and excessive inequality. the role of women's india economy and their contribution to the labor market. the energy subsidy reforms where we have extensively now published and given some very practical set of recommendations using a range of countries that have actually either succeeded or failed. and carbon taxation, which is a very interesting proposition. and we all know that time is right to price it right. and if we do that, it can help us get it right on climate change.

our third and last core business area is capacity building and technical assistance. and here we are expanding services including through nine regional technical assistance center and seven regional training centers in africa, asia and the middle east. and we have involved on moocs. massive online open courses. in courses as complicated as for instance, debt sustainability analysis. or removing energy subsidies. as i said, we can only get it right if we work together. this applies to all the areas that i have touched on, from stronger growth today to better growth tomorrow. from a more resilient international monetary system to

a more robust international development system. from the world we live in today to maybe a better world that we will help build. success will require a recommitment to the principles of international cooperation that have served us well for the last 70 years, and particularly in moments of crisis. but this new multilateralism is urgently needed to boost growth and generate confidence in our common future. wouldn't it be nice if a year from now i might come back if a year from now, instead of rejoicing in the a.i.i.b. and the silk road and this new belt out there, we could also celebrate the tpp, the ttip, the imf reform, a strong green fund with good governance. paris 21 with actual deliverables.

these are the challenges we have ahead of us. so i began this morning with a great atlanticist, president kennedy. i'm going to use another from the other side of the pond. winston churchill who once said, i never worry about action only inaction. well, we can and we must lift better growth today and tomorrow. thank you. [applause] mr. kempe: thank you so much for that very important speech. and also that not entirely convincing british accent at the end. and you're right that i failed to mention the synchronized swimming because one sees it too often.

but i also read as i was doing my research that you were a french tour guide at alcatraz prison. ms. lagarde: correct. mr. kempe: but there is so much meat in that to follow up ond an we have a brief 15 minutes here to follow up. so let me try to go through some of it where i think we really need to drill down just lail bit further. first of all, did the greeks repay their loan? ms. lagarde: yes. i got my money back. mr. kempe: good. so we can get that out of the way for all the press that is now confirmed from the i.m.f. you met with the greek finance minister last weekend. this week he was in moscow.

i would like to ask you two questions. what do the next steps look like? and perhaps you can put that in the overall context of how resilient you believe the euro zone is both economically and structurally. you see the low oil prices, the quantitative easing, the reduction in the euro's value all helping. but on the other hand you also point to reforms that haven't been done et cetera. so is there a light at the end of the tunnel or is it a oncoming train, to quote a country western? ms. lagarde: let me take the second part of your question and i will touch on the first part as well. you're right. i think that the euro zone has the benefit of three shots in the arm, actually. the ones that you've just mentioned. and that moment which is actually rare in economic history for a particular economic zones, especially one as large as the euro zone, is really a moment, a window of opportunities when countries that have not yet conducted the reforms, that have started conducting the reforms have to actually get on with it. because they have the benefit of low oil prices.

very low cost of financing. i mean, we see on the second markets negative rates even for reasonably medium-term bonds. and the quantitative easing that is intended to really support and kickstart the economy. so with these three factors, if they don't do economic reforms now, it's to despair. so i very much hope that they're going to really continue the process. some of them have started and others i hope will continue. now, one thing that i would like to add as well is that since some three years ago when we were both talking about those issues and the risks on the horizon, the euro area as a monetary zone has strengthened. built the european systemic fund to protect itself which is endowed with over 500 billion euros. it has reinforced its fiscal union. it has certainly built a banking union. and of course it can do more and better, but it is a lot stronger than it was three years

ago. which takes me to the first part of your question. what is now badly needed is not to talk but is to actually get on with the work. and greece authorities together with the representatives of the three institutions as we call them now have to really sit down go through the work, focus on the objectives of what is intended for the better for greece, which is restoring the economy, stabilizing it, and by so doing re-establishing and reinforcing the sovereignty of the country. so we are for our power completely committed, including on weekend, wherever, in brussels

and washington, to actually help the authorities navigate through the measures that will actually deliver object objectives of the program while respecting some of the commitments that have been made in the course of the political cycle. it's a difficult path but it is one that has to be walked and which will just improve the situation. mr. kempe: thank you for that. let's talk a little bit about your new mediocre. you've coined this term and it's a great term. we must prevent the new mediocre from being the new reality you said. you then talked about the bottom line as a risk to financial stability arising. and again it's not a comfortable place with respect to financial stability. is the new mediocre another term for secular stagnation?

is this what you're worried about? and is that what we're facing, where the world economy faces a prolong period of low growth? and what impact might that have on security and stability? how great is your worry? ms. lagarde: i think it is distinct from the secular stagnation which has been borrowed by larry somers to explain. my concept of the low the new mediocre is that we can get out of it. it's not something that is intended or that we risk seeing for a long period of time. if the measures that i have identified earlier are taken all tools used on the macro economic front, all space made available utilized. and if financial stability is strengthened and if structural reforms can be implemented each very specific based on

countries characteristics, and needs, then we will not be in that new mediocre. but it's a risk that is there which is i believe accent waited -- accentuated now by the fact that potential for growth has been affected by the three factors that i've mentioned. the scars of the crisis, the aging of population, and particularly in the advanced economies but also some emerging market economies, and the fact that productivity is not where it should be. mr. kempe: so i think that's a very good differentiation where secular stagnation may be a description of a case that's unchangeable a new mediocre is a warning that you're trying to avoid. ms. lagarde: yes. mr. kempe: let me get to the

issues and let me put together the issues of the asian infrastructure investment bank and the 2010 quota and governance reform. you described the establishment of china's infrastructure investment bank as a massive opportunity. that said, larry summers this week in an op-ed called the u.s. approach to the a.i.i.b. a failure of strategy and tactics and said, this past month may be remembered as the moment the united states lost its role as the underwriter of the global economic system. number one ms. lagarde: if he is right i think the best re if he was right the best response is to ratify the reform of the i.m.f. mr. kempe: you finished my sentence.

usually i just steal your ideas. this time you finished my sentence. so that is really what i was getting at. number one, does the formation of the aiib in some way signal a new reality? and in that context, do talk a little bit even more in-depth of this reform. is the jumplet undermining its role as the leading country to contribute? ms. lagarde: i think that the asian infrastructure investment bank was part of a broader project by the chinese authorities to actually develop growth, build infrastructure projects, and stimulate growth and economic activities not only within china but also with many neighbors along that old silk road and down along the maritime road. so it wasn't a huge structure if i may say, but it was part of a thinking along the lines of we need to develop broader and and there are countries along the way pointing towards europe that will actually benefit from that.

and so will our internal manufacturing infrastructure. i think it has been elevated a bit because of the general context in which that bank has been thou set up as of march 31st. but it's a great initiative in the sense that it's broad-spectrum, it reflects the transformation of the global economy with new key players and it embraces a regional approach which could actually be extremely stimulative for economies that matter more and more today than they did a few years back. so it's both i think it is part of something which is broader, and it really reflects a new landscape for the global economy. now, what can the united states do to reinforce its natural leadership role in the global

economy as well as in the international monetary scene is to effectively ratify a reform which is governance as well as a quota reform that was engineered by many countries particularly by the united states back in 2010. what does it do? two things. number one it gives a bit more space to the likes of the emerging markets and some underrepresented countries. so a bit more space at the table. it reduces a little bit the participation of the europeans which has been probably excessive to their size in the global economy. you double the quota which does not have any implications, because the new arrangement to borrow -- some of it has to be put into the form of quota which

gives the institutions mobility. gives more financial resources if a financial crisis occurs. so the united states does not lose its veto rights. it continues to be the key shareholder. it takes zero financial risks so i think it is a no-brainer. mr. kempe: let me ask one more question that you touched on. john kerry secretary of state john kerry is here next week at the atlantic council ms. lagarde: here with you. oh, great. mr. kempe: with us really launching a campaign around these trade issues. and we are particularly

highlighting the geostrategic and geopolitical importance of trade issues. instead of focusing on the gains that would be had from the tpp and ttip, look at the other side. if we get to the end of this administration, there's no trade promotion authority, no ttp and no i.m.f. reform ratification, instead of saying everything we would gain, what happens if none of that goes through? which could be an outcome. it is a possible outcome. ms. lagarde: well, i'll put my sort of corporate hat for a second. and i'm a big u.s. corporate and i want to invest i know there is a massive growing market out there in the east. and if there is no facilitation of trade, if there is no better tariff arrangements and no more alignment of standards around the world, instead of necessarily investing in the united states of america i'm going to look at other investment opportunities and probably

invest where there are very serious growing markets either in terms of purchasing powers or in terms of population. i always think of mr. heinekin when he was investing around the world. he was generally looking at where there was a lot of light because he knew that that's where people would actually buy and drink beer. well, big corporate that's what they do. and if there is no facilitation, no lowering of the barriers, then you have to be everywhere to expand and you have to invest outside. so to those who say it's going to reduce employment, it's going to be bad for labor, i don't think so. mr. kempe: i'm sorry that we really have run out of time. ms. lagarde: it's my fault. i spoke too long. mr. kempe: it was a brilliant speech. let me against the wall please. you had your hand up first. >> the u.s. dollar is at an

all-time high along with the growth of the world we've seen the growth of indebtedness much of it held in u.s. dollars. repayment schedules in u.s. dollars. if interest rates rise here, that problem could be exacerbated. are you concerned that it could create a crisis with any of the world's currencies? ms. lagarde: i'm sure you listened very carefully to the risks that i've tried to identify. and that's the one that i have flagged, together with the persistently low interest rates which causes another type of risk but clearly the exchange rate and the currency risks and the volatility that it creates is one of those rising risks. also migrating risk as we call it. because it is probably going to affect more some of the emerging market economies and particularly the corporates and

those economies that have actually borrowed in u.s. dollars or pegged currencies. because it is not just u.s. dollars. that's where we see the potential origin of risk that could be significant. >> thank you for that ms. lagarde: and as you rightly said, exacerbated by the potential rise of interest rates likely at the end of the year. mr. kempe: so thank you. let me close and thank you on behalf of the audience. and also ask people just stay in their seats for a couple of minutes because i know you have to get to another meeting right outside here. this was a great, terrific conversation. wonderful speech. i am going to hold you to what was on the podium. we'll get you back a year from now. we'll see how we've done. and i really look forward to

having you back. ms. lagarde: i'm absolutely coming back if we can celebrate the tpp, the tpip, and the imf reform. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> monday night on the communicators, spectrum communicator on the importance on spectrum for the public.

>> on spectrum, when i first started and management back in 1979, i came out after being artillery officer. i do not know anything about spectrum. those people i met and worked with did not understand much about spectrum. now everyone realizes the part of our daily lives that we rely on our ability to communicate. >> monday night at 8:00 eastern on c-span2. >> woman secretary of state hillary clinton officially announced her candidacy for presidency today. that is next on c-span. then a discussion on the future of iraq with the ambassador. later, terry mcauliffe talks about early childhood education

in his state of genia. -- his state of virginia. ♪ >> i am getting ready for a lot of things. getting the gardens ready. i am legendary here in my own neighborhood. >> we are moving. >> [inaudible] >> after five years, i am now going back to work. >> every day i am trying to get more money and more prepared. >> right now i am applying for jobs. >> i'm getting married this summer. that is all i care about.

>> [indiscernible] >> i am getting ready to retire soon. >> most important a, we wanted to teach our dog how to take out the trash. >> i started out recently with a fifth-generation company. this country was founded on hard work and it feels good to be a part of that. hillary clinton: i'm getting ready to do something to. i'm running for president. it still stacked in favor of those at the top. you can do more than just get by. you can get ahead.

when families are strong, america is strong. i am hitting the road, because it is your time. i hope you will join me on this journey. >> plenty of reactions to hillary clinton's announcement today. good luck to her. it is going to be a tough primary. i have not decided who i'm going to support in the primary yet. clinton has a good chance of winning me over. still cannot believe that the dems are going to run her. those and other comments you can find at facebook.com/c-span. jeb bush was featured in a video

released earlier this morning from the political action community -- political action committee. >> in the coming weeks and months i look forward to an exchange of ideas area i believe every american deserves of the right to rise area and the opportunity to achieve the american dream. and america should be respected by our allies is feared by our enemies. that is why it's critical we change the direction our country is heading. we must do better than the obama-clinton policies. better that are failed bit policies that throw our debt is stand in the way of real economic growth and prosperity. i think it is conservative ideas that will america and put our fiscal house in order and make

our great country even stronger. i know we can do better. and together we will. >> a road to yesterday? hillary clinton represents the worst of the washington machine. corruption and coverall. conflicts of interest off the leadership with tragic consequences. destroying the the american dream. it is time for a new leader. rand paul. rand paul players to defeat the washington machine, balance the budget encourage congress to read legislation before they pass it. rand paul: i have a message. a message that is loud and clear and does not mince words. we have come to take over. >> [indiscernible]

rand paul: i am rand paul and i approved this message. >> our road to the white house coverage continues with an announcement from marco rubio. he is holding an event in miami where many believe he would declare his candidacy for president. we will have that around 5:30 p.m. eastern here on c-span. >> were you a fan of "first lady" series? it is now a book looking inside the personal life of every first lady in american history based on original interviews with more than 50 preeminent historians and biographers. learn details about all 45 first ladies, their lives, ambitions and partnerships with their presidential spouses. the book "first lady's,"

provides lively stories of these fascinating women who survived a screw the of the white house as sometimes does the scrutiny of the white house. and even changed history. c-span's first ladies is an entertaining and inspiring read it is now available as a hardcover or e-book through your favorite bookstore or online bookseller. >> iraq's ambassador to the u.n. on the future of his company. he spoke about the military and political challenges at an event hosted by the middle east institute. this is one and a half hours.

mr. serwer: good afternoon. my name is daniel serwer. i am a professor at john's hopkins and as well as a scholar at the middle east institute.

so it is a particular pleasure for me to welcome ambassador lukman faily and a co-professor, abbas kadhim, on the future of iraq. we are meeting at a time of particular sensitivity to our country that many of us have been engaged with one way and another for many years. i made many trips in iraq from 2004 until 2010. others may have been on the ground as troops there. others are native to iraq, and i think it is fair to say that we are all concerned with this country's future.

let me introduce abbas, and he will introduce the ambassador. abbas is a former employee at the iraqi embassy. but most importantly for today a real expert on sectarian and ethnic relations in iraq, which i think it is fair to say he does not think always about. -- think are always bad. mr. kadhim: good for me. mr. serwer: it is a pleasure to have abbas with us. he will introduce the ambassador. the ambassador will make remarks, and then we will take q&a from the audience. abbas? mr. kadhim: thank you for the introduction and putting together this timely and important panel and also for inviting a man who is really -- i feel great respect and appreciation of.

dr. serwer has asked me to wear a couple of hats on this panel. i will do that. first, ambassador faily comes from a long line of the excellence of iraqi diplomacy, when we think about it from the days of the monarchy until these days. we have names that are to be proud of as iraqis, and one can think of people like others, and definitely our guest of honor today. ambassador faily has a long and impressive cv, and i will not go through it. i will highlight a couple of things, just to mention that he combines both the work of

previous position to dictatorship and oppression in iraq, where he spent a lot of his time. he has lived in the u.k. for over 20 years doing two things one of them again carrying the burdens of iraq on his shoulder, and also the personal excellence he has pursued, the agenda of education that you have and we have entered into a biography, and also degrees in mathematics and business management. he is an engineer of sorts. and he also has served in the diplomatic field and first in japan between 2010 and 2013, doing an excellent job there.

he was given a harder job, so this award was the hardest job of any ambassador who would be an ambassador to the united states of america, and it is an honor also, because it is a recognition that does not come to too many people. he came in 2013, started i believe july of 2013 officially, as an ambassador. i am biased towards ambassador faily. i worked for him from 2013 until 2014, getting close to him. i found him to be an intellectual of a genuine type. he is a real intellectual when you talk about the intellectuals, and those are rarities these days. also, he is a highly professional, very good and demanding in the positive sense

of demanding of his team. he is also an amazingly kind man and down to earth, and a good family man, i must say also, having known that side of him. he also is the only one i know among those ambassadors to the united states who run a marathon. you are talking about someone who is very hard to touch when you are trying to chase them in any way, intellectually or in the athletic field. it is my distinct honor to introduce him to you, and after he speaks, we will start -- the rest of the panel. thank you, mr. ambassador, for coming. ambassador faily: good afternoon, everybody. let me thank the professor for the opportunity.

i was recently speaking to his own special class, and we discussed iraq in a very diverse, focused, and productive way with his students. students usually enjoy the session because you never know what are the normalities and how they view lives, with their simplicity of background or what they read. thank you, abbas, for the introduction, music to my years. -- ears. i did not want you to stop anyway. [laughter] ambassador faily: i am honored in a number of ways to talk to a diverse audience and also for the media, and also to talk about this just a week before the prime minister's visit here. we hope the prime minister to have his first official visit to the united states for a visit in which he will have discussions around the topics which we are

talking about today, and i'm sure the q&a will highlight that, which is, where are we going with iraq? it started with a project in 2003 in relation to as far away from dictatorship as possible and near as possible to democratic, free market economy, defined by a unified constitution, highlighting federalism, talking about freedom, expression, democracy and all those features which a lot of nations take for granted, which is what i must call a dream for any iraqi to have any such discussion, let alone for him to practice it. that has been a key feature for us over the last 12 years. what have we done so that we can define how do we move forward? i am obviously talking about the future of iraq, a very difficult topic for anybody, even for

myself. mainly because there are so many parameters which control the path of a nation. it is not just what resources they have or remain to have or if the region is supported or how much focused the country is for the unity of the country or what national project we have which we can talk about nation-states or nationalism or others. or the national support that we will get as a precondition for us to get to develop in the future. if anybody can tell you that the future of iraq within a decade or more, then i am afraid he will move more to the picture than the reality, but there are so many parameters. i can also assure you that those iraqis who were involved in the 2003 project may not believe

-- beliefs that they do now, a central function of that country, not in relation to the dream. that is always there. the iraqis' dream has been the catalyst of why we have been able to survive so many tsunamis in the political and social sense we have had over the last decade. bearing in mind also that that dream is always there and will always be there, simply because the nation, regardless of whether -- the borders, we're talking about, and people say this is only 100-year border as communities. they have more or less every day realize more and more that the have interdependencies among each other. the kurds are talking about having their own country. post-isis, i will doubt that now, certainly for the next

decade or so. the majority of the shia forces that can govern, they are certainly finding out that the inclusion aspect requirement for the nation to suffice its key foundations of adherence to the constitution, in spirit and literacy, is a key challenge. the majority of the remaining societies, such as minorities and others, they may not need to be involved in the politics, and that is a subject to keep them safe, and they found that with isis, with sectarian and other isms in the region, that they cannot feel safe on their own. they need to be part of the political discourse. and let's not forget what people in d.c. call the arab sunnis.

that is well, they are trying to find a new social contract with each other. if someone asked me, do we need to have this discussion after 12 years of post-saddam? i would say we have just started that discussion. at a very high cost and the stability of direct, true, but when you look at nations, what is a decade in terms of nations? what is a decade in terms of a vision of a country when we are talking up moving to the other end of the pendulum with the heritage of saddam hussein? here, i'm not blaming anybody, but i am also aware and wary that after a decade post-saddam hussein, the majority of the population do not know about his role, because if they were born after 1990, then they would not know saddam hussein.

we cannot go and put the blame on saddam hussein, even if he is blamed. we know he is blamed because of the social engineering and what we see now in the territories or in the dictatorship or in the socially destroying the fabric of society. we know that. nobody is disputing that. for the academia, it is clear cut where the foundations and whose strength supported -- but for the society, the young ones who seek to be employed and have a job and so on and who, by the way, are very active in social media, so they have a very good awareness of what part they take in the region and elsewhere, they have the question. we in iraq need to answer that question. post, current and future generations need to answer that question. i will talk about it in five parameters, and i think i will finish in about 10 minutes.

first is -- i will give you an observation of my trip in iraq. i saw quite a few people, so i was able to get -- as to the status of the country. i will also talk about the current recent military operation in the city of tikrit. finally, i will talk about the government focus or vision moving forward. those are inclusion or decision-making and the relation to military capability in relation to combating corruption and in a developing economy, national reconciliation, and the foreign policy relation issues which will be highlighted by next week's visit by the prime minister. in my visit, which i came back

only yesterday, i was able to do a good compare and contrast, it was clear to me that the country in a very ironic way with isis and the media at the focal point, the country -- i was in baghdad and a lot of other cities, they felt they are at the safest point they have been in a long time. very few car bombings, assassinations, no clear militia or anybody in the street curfews no longer there, and removing a lot of concrete blocks, so free traffic. that was one of the key highlights i realized from day one. obviously being the spring, the weather was the best part of the year, so that helps a lot. so it was important that everybody talks about not just

tikrit -- but also what is the post-isis scenario. and to me, this early on with our engagement with isis, with them still occupying cities, i would say it is a healthy discussion to have. i started having it six months ago, but for the majority of the people who are not politically savvy enough to talk about what is the scenario post-isis in relation to the national guard. i think that is a good healthy political position to be in. there are a lot of key points -- how do we all stabilize and strengthen the government? prime minister abadi is new to this position. he certainly does not have what you might call a healthy environment to start governing from, because he came in on the trail of the elections and everything else. how can we help him? that was one of the key issues.

the majority of politicians were frustrated by not lack of ability, but it has not materialized because of the politics. so that was a sign of frustration. the tikrit operation, for those that are clear as an ambassador coming for the united states people ask me, why is the united states not doing x, y, and z? we can talk about what is this x, y and z. but primarily looking at the united states as a prime partner in our fight against isis, we're looking at a records the american perspective might be the geopolitics of the region and syria and everything. the iraqis do not appreciate that. they say we have a problem with isis. you need to help us now. syria, everything else, good, we need to resolve that, but we

have an immediate threat because isis -- we cannot coexist with isis. so help us now with your intensive campaigns, with your military, training, ammunition everything else. that is another issue to take into account. the politics of d.c. is not an area of concern for them. congressional discussions, that is not their concern, and i think they are right in that sense, because of them menace of isis. that is an area where it is important to appreciate. so in that sense, that tikrit operation was what you might call a roller coaster, and obviously support from our neighbor and advisers and so on, then there was a hope and then the u.s. campaign and others

taking part, a significant part, an effective part, and more or less everybody working together with the liberation of the city of tikrit. the key concern for the government was in minimizing collateral damage and iraqi forces, such as people properties, and so on. isis was able to booby-trap hundreds of houses, posts, so it was not an easy terrain to walk in. what keys we took away from the iraq operation was that we need to have a closer cooperation with our neighbors, that each theater is unique, and therefore, what took place in tikrit may not have to take place in other places, but we have to learn from. and thirdly, we need each other. but the good news out of that

was primarily that the tribes in the region significantly went -- worked with the popular mobilization forces and the iraqi security, so there was a clear engagement. and also, even a few days after the liberation, it was handed over to the provisional government and the civil society to manage, and those mobilizations -- and sometimes i hear them called militia -- pulled out. we will talk about that, i hope later. the third point, which is a five-point vision, and after that i would finish, the government issues are about to make sure that the government is inclusive. the prime minister seriously believes in decentralization and he seriously believes in cabinet-making decisions. he sometimes delays decisions to the frustration of partners because he says i have to get the buy-in of x, y, z.

he's that. he's not where he will not make the decision and say tough luck to the rest. he is not that type. that i think has been people are appreciative of that. the sense of urgency sometimes people want him to make that decision, and he usually says i need to be more inclusive to mitigate the risk in the day-after scenario. after the military has been in major restructure, more to come, i can assure you of that, in the military and the interior ministry there has been more hands-on role for the prime minister and military, and they have engaged in outreach to the training of the tribes. there are discussions in relation to the national guard that have taken place.

there's more to do. people ask me -- one senior official once asked me to talk about the national guard de-baathification -- the name for it. accountability and justice. he asked me about that -- where are you with that? and i said that de-baathification is a history aspect. national guard is the future. that is what people have to bear in mind. people no longer talk about de-baathification. if they do, it is because of happiness. it's no longer a show-stopper. national guard, no, that key issue of how we mobilize those who are at the periphery, a

military establishment in iraq and how do we integrate them into the government and let the prime minister manage that? that is where the future is, and it will take time. i kept saying we would not do it to your timeline. we will do it in our own timeline. so in that sense, to provide you weapons to the other tribes and others, it is not because we do not have the weapons ourselves. we are not plain politics with that. it is a pure -- problem we have. because in a month, we also have the financial crisis, which means we do not have the luxury of the funds and we cannot just buy any weapons in the markets. there will also be a significant reduction in violence. there were for a time, what you would call people want to take

advantage of the security lack. that is significantly late. three other points before i will finish. it has to do with the economy. the budget was signed, and we still do one year at a time budget, not a five-year plan or anything like that, which means unfortunately, we still catch up, we're still in a catch-up mode. that's not helping us in our development. corruption is still a major challenge. we have more or less now only -- touched the surface of that. it is an issue of culture, structure, it is an issue of change, and legislation has to be there. and we need to move away from the current three methods of monitoring into what you would call a more integrated approach, and i can talk about that later on. however, what has taken place as

well is major steps from the prime minister's initiative in relation to decentralization. that will certainly be the way forward, including what i will call the taking away some ministries, and giving them to the local authorities. that is also a plan. reconciliation -- the prime minister came yesterday from the first trip he did as prime minister. the steps he has taken was very positive, but they are all in what i call the theme of confidence-building measures. we will do one step at a time rather than having packaged solution in which we all sign it in blood. that is not the culture in iraq, it more step by step because the

issue of trust has to be regenerated. the communities of iraq now realized they have interdependencies, but at the same time, the maturity of the politics has not allowed for a predictability of the politics and i can talk about that. so you have to be cautious and you have to think twice and you have to take into account a myriad of issues rather than a few parameters for any decision-making. and that is one of the complexities of iraq. as far as human rights abuses -- that has been a major focus for the prime minister -- and support of possible. we are not saying they are not taking place. we are saying that we are there to monitor, and once an abuse takes place for us to be aware

of it in fact in figures, not in perceptions or rumors, for us to do something about it. at least we have that understanding, and i will call it we have that big chest where we can say, tell us what you have taken place, and we will look into that rather than say our police are driven by whatever sort of negative connotations we have towards the national media or others as well. we are saying that is not the case. at the same time, please bear in mind our world is a messy war. all wars are messy, but when we have is not a trench war. we have a street war, an enemy who does not wear a uniform, who does not show themselves, and who are conniving and have more or less broken every rule of engagement of any ethics of any war to achieve their objectives. this is the type of fighting we have to do, and unfortunately,

casualties. it is unacceptable. it has to be zero tolerance. but please bear in mind that is the environment we are working in. the final point is with the relationship with foreign countries and others. the prime minister and cabinet have been very active in doing an outreach to all countries. he has done a tremendous job going to all the major conferences where i know for a fact that previous prime ministers did not because of language barriers and other things, but prime minister abadi has done a tremendous job of reaching out and accepting delegations, and his trip to the united states is one sign of that. the key message is we know who we have relationships with neighbors that we need to address. we know there are camps where there is a strong american pro-saudi and others, and we can

be a part of that feature, and we can be a part in a ownership against anyone who fights against sectarianism and others. we are there, and we will still be there. iran will always be our neighbor. bear that in mind in any evaluation you have. the region is going through tremendous social and political upheaval. the arab spring has been hijacked. no clear mandate to the governments in the region governing pre-arab spring. so please bear that in mind. so in that sense, i would say that in iraq, you have a reliable partner, but at the same time, help us to help you in the fight against international terrorism. somebody asked us the other day a question, a senior official said to me, he said, let's say we get through isis. will you be a partner with us in the fight against isis

elsewhere, or are you happy just being content in iraq? my response was no. we know we will have a responsibility that we will take seriously, but we have an urgency now which we want you to help us with, and let me thank both of you and the audience for the q&a. thank you for your time. mr. serwer: thank you, mr. ambassador. [applause] mr. serwer: i want to invite those, i see people standing in the back. i have seats up front. i am selling them for a good price. if you are too embarrassed to come down, you can come down to the room next to this one. by all means, i want to try to get people seated. professor abbas kadhim? mr. kadhim: thank you for the excellent overview of the current situation in iraq.

your outlook into the future and you have the vision of the iraqi government, you are the best to speak about what the iraqi decision is on all various issues that you address. i will talk or i will take us to what we might call post-conflict iraq, because part of the aspects of it will deal with the future of iraq and where iraq is going. and just like the ambassador succinctly put his talk and his -- in a few points, i will put in three letters. all of them are r. three r's. washington loves these kinds of classifications. the 3 r's would be -- reclaiming the iraqi territory, reconstruction, and reconciliation. what each one of them means to me.

my first academic book was "reclaiming iraq." reclaiming of the territory, it is sine qua non for any future for iraq. there is nothing that can be done of meaning without extending iraqi sovereignty and iraqi authority over the total iraqi soil and governing the entire map of iraq. you cannot leave and govern or semi-govern or weakly governed spaces in the country and do any kind of governing from baghdad. this is and it has been one of the problems in iraq -- too many ungoverned spaces that has led to flares of violence, flares of weakness, and let's face it, isis was a phenomenon of an ungoverned space, or spaces in the country.

so that is an important aspect and it has to be coming first before the other two. and before even talking about any kind of future plans on all fronts, the extending of iraqi authority over the total soil, getting back mosul, anbar, and getting back those territories in the true sense, not in the fashion of squeezing a balloon where you take one place and the terrorist will go to the other chase you there, and then be in the place you just liberated and they keep chasing you and you are chasing them, and that is not going to work. the united states tried that in iraq before, and we only succeeded when we moved from the squeeze method to grabbing and

holding the land that you liberate and then moving forward, slipping your way until you get to extend all your authority over the entire soil. so that is an important task right now, and i think the government is aware of this, and they are working that way. but with this, you have to do more than one tack. unfortunately, for the last 12 years, iraq has not done many issues that would have made life easier for now, not just because of the iraqi government -- yes the iraqi politicians and the iraqi political process bears much of the blame for what has not been done -- but definitely there are other governing issues, arming and procurement of arms of military command, etc., these are contradicted -- complicated processes. you know very well in this town how it goes. but definitely you have to do both of these things. iraq needs credible force that

can do what it can do to keep forces equally strong throughout iraq, which means we have to re-do the iraqi military. iraq now has 10 divisions running at 50% personnel, and the rest of it, to make it functional, is really from the pmu's, popular mobilization units, and there were two divisions that were recently constructed that are at capacity. so that is not what iraq needs at this point. it needs to be much stronger, an air force, logistics, which is a very important part. this process has to go hand in hand, reclaiming the land and building a force that can be enough to hold iraq inside iraq in peace and also deter future aggressions if it happens, god

forbid. the second one is reconstruction, and i do not mean reconstruction as a series of contracts to restore the houses, restore the roads, and whatever the war and conflict have destroyed. but i am talking about reconstruction in the sense of our historical understanding of the term "reconstruction" when i speak to an american audience, the post-civil war united states, the reconstruction era. reconstruction of what was just destroyed by the war, but reconstruction of politics, the political infrastructure economic infrastructure, the social infrastructure, and the construction of the nation that can function into the future and does not fall again with the next challenge into the same trouble that we were just -- or we are coming out of.

and that is very important. iraq does not and should not take this task alone. i do not believe that we have in iraq enough expertise to do this. iraqis as a government, as a political class, needs to be humble a little bit and look at what other countries have done in post-conflict situations, learn from their own history and history of others, and seek as much expertise rather than invent the wheel, or given the task, to come again, similar to the quota system of politics in iraq and not doing the job right and having to redo it time and again. so that is the other issue. the third is reconciliation. and reconstruction and reconciliation should go hand in hand. as i said earlier, reclaiming iraqi territory has come first

before anything else. what is reconciliation? a couple of days ago, professor serwer and myself were at a conference and there was a talk about the conflict between those who are urging us to think in the box and those who are urging us to leave the box and think completely out of the box. here i think we need to think out of the box. the box in iraq has been the following -- as follows -- reconstruction, or reconciliation meant giving more power to politicians from this sect or this ethnic group or that one. and if you gave 3% of the -- 33% of the positions to a group and all of those politicians did such a lousy job that their own people voted against them, giving two more ministries to them, would not solve the problem. out-of-the-box thinking is to look at the construction

reconciliation, where it has not been done. iraq for the last 10 or 12 years has been doing reconciliation among the wrong places -- among politicians. every time it a politician doesn't do his job and become a rabble-rouser, and again it is like we never did any reconciliation. you need to reconcile the people with each other. we have not done any reconciliation. and as long as there are people disenchanted disenfranchised and i am not talking about one group or another. there are people who are louder and they get in the media. and there are people who are silent. i can tell you that every iraqi right now out of the ruling class is disenfranchised disenchanted, living in subhuman conditions. there are some people who are probably less vocal about it and because of their

backgrounds, let's face it, if you ask every iraqi, they will look at what they were and what they are right now. the shia think life is great right now, because they have the same terribles position under saddam hussein but their lives as a right, not a privilege. so it looks better a step forward. but i would not argue that a place in basra is better in any way of governance or services or anything like that that is from haditha or anyplace -- etc. it is all right now underserved. it is all unserved in many places. and the problem with iraq right now is you need to get out of the fixed idea of reconciliation by reconciling the political

groups, to reconciling the people. if the people are content, are happy -- they are happy with the system, we know that. they are unhappy with the government and with the ruling class. you do not find iraqis saying go -- let's go back to dictatorship or let's destroy what we have right now. no. they have a problem with the governance, not the constitutional framework, not the way iraq is going. so these three things, if we start thinking about them creatively, i think we are going somewhere. if we do not, then we are not just trusting, but we are guaranteed to run another round of trouble in iraq, and the ball is in the court of the iraqi government, the iraqi politicians. again, i would say the international community that is dealing with iraq, because we all have to think about this in the right way.

thank you very much, and thank you, again, mr. ambassador. thank you, professor serwer. mr. serwer: thank you. [applause] mr. serwer: i am going to open the floor to questions. i see the microphone that i was looking for. you have to come to the microphone so that the audiovisual stuff will work right, or the microphone will be brought to you. if you're in an inner slot. the floor is open, and i ask you to identify yourselves before you speak. i will take two questions at a time. one there. >> thank you very much for a very interesting panel. i wanted -- mr. serwer: please identify yourself.

>> alexander kravitz. sorry about that. i want to talk on the three r's. some will make political hay out of it. i wanted to talk about the reconstruction one. when we think of reconstruction in the united states, some people say it took until the 1960's until it was fully implemented. my question is -- how do you see -- on the reclaiming of land, it is obvious that we have to reclaim ninevah. that is obvious. what about the disputed territories between the krg and the rest of iraq, kirkuk? how do you apply the thinking of reclaiming? mr. serwer: thank you. let me take another question right here. >> thank you. executive director of a foundation. i like the three r's, too.

my question is about reconciliation of peoples. of course, i agree with you. it is just, how do you think of doing it? mr. kadhim: doing what? >> reconciliation of people. mr. serwer: at the popular level. mr. ambassador, would you like to start us off? ambassador faily: sure. i mean, kirkuk, disputed territories, some people think that that should be a historical discussion because of the situation arises because the facts have forced themselves. that might be true and maybe in an academic sense, but in the reality to the history of iraq in which the tribal society, people's pride is important for them, or perceived pride is also as important.

people's understanding that things were not taken under duress, but it was more in what you might call a constructive way. for us, for the constitution to be implemented, there are sometimes loopholes in the constitution, which people have taken advantage of in that sense. so there is a lot of -- to be made. getting rid of isis has been an important factor for all parties. people are not taking advantage of that now. they no longer are resigned to the fact that isis can be used for the politics of the iraq because ofeverybody is losing out. the majority of the sunni politicians are in exile because of that. the shia, although they feel safer now than before, they know

that isis will keep being a threat to them, certainly with the kurdish krg, the the 1000-kilometer border with isis moving forward. so in that sense i will say the kirkuk question is still outstanding. there are questions regarding the oil share and others. we have not resolved the consensus for the counting our peoples in the census. that is so an outstanding issue. i would say what we have done is try to do initial steps of confidence-building measures. one of the things that we are part of and it is important to understand, or highlight, i'm sorry, and that is we are not a very reflective society. we do make mistakes. for a number of reasons, a, and these are what you call the heritage of dictatorship. it did not allow you to think,

let alone it allowed you to have the infrastructure of civil society or others to come up to a decision, to reflect in a very open, constructive way, see where the box is, inside outside the box, or others. that was not allowed. so here now we are learning democracy in a harsh way, in a tough area, in a tough neighborhood, and as a result, because you are not very reflective, we do same mistakes again and again. that is not something i like but that is the reality of it. time itself, the whole region is relative. i am not talking about from any standpoint here. i'm talking about in the politics point of view. time is still relative. and by the way, this frustrates the majority of our western partners.

they ask us -- what does that mean? it is another issue to bear in mind. we need to define boxes. that box might be a timeline or a precondition. but because of the myriad of parameters involved in decision-making, we sometimes think we'd leave it to god. that is another problem we have, an area we need to look at. i would say, to be honest, in a very open view, the answer is the jury is still out as to how we resolve these disputes. there are confidence-building measures. it is important that we trust each other. an element of trust because of the interdependencies, which we now realize. there was a stage when children were brought up they go to from dependency, to independence, to interdependency.

we are at the interdependency stage. post-isis has told us that, that we need each other. it still has not told us how do we need each other. that is for us to find out in our politics. mr. serwer: personal reconciliation? mr. kadhim: just quickly, i also have a word about reclaiming. when i spoke about reclaiming, i was talking about reclaiming ungoverned spaces. a space that is governed well by their region or the government at this point, and may be the ambassador and myself are coming from different points of view. he is more with -- again, the government affairs -- and they pay you for it. but i'm talking about my personal convictions that i held all along. i think at this point who governs kirkuk, it does not

matter. this is not similar to isis getting hold of mosul or getting a hold of a chunk of anbar. the disputed lands between the center of the federal government and kurdistan has to go with a reconstruction and reconciliation phase. that is where you need to decide, because at the end of the day, it makes a difference if kurdistan is going tomorrow -- and tomorrow is here long-term or short-term to be another state then it matters who governs this place. then it becomes, who cares were 10 kilometers of land is, here or there. one of the things that has to have over the reconstruction iraqis have to settle the issue of the future of kurdistan in the immediate future.

there has to be a decision, a referendum, whatever it is, to answer that question once and for all, and i believe that the kurds, if they decide to go for that, it is their right, and no one in the 21st century would tell people to stay with a country or not, but that would be the reconstruction and the reconciliation phase. how do we make the reconciliation? i'm thinking here of two issues. one is good local governments, good government at the local level. it will deny the politicians who want to create trouble for the government, for the system, and also the other demagogues will deny them the support and backing. i supervised a thesis one day when i was in the old time at the nts on the amman experience, to investing in those areas, to

making their life better, to change the place to a world-class place, and then the people who work in that area who were raising weapons against the government would tell our leaders, we do not really need to revolt anymore. just go away. you are looking for your political future, and we are happy with what we are getting. that is the kind of system. and again, this has to go all with the country. there's more disenchanted within basra than in anbar. the other part is to think about the reconciliation, really to think about a national level reconciliation rather than just looking at the political class. you need to look at all the experiences that were there -- and iraq has different sets of historical facts. you need to borrow from the

others, not copy their systems but definitely, there needs to be a very good international effort. it has to be done scientifically. that is not the way iraqis have been going about it. these are the things that i'm thinking about, just make people's lives better. you will not have politicians who will threaten you with demonstrations and isis every year or every six months. mr. serwer: as i teach these three r's here at sais, maybe i can offer a sentence or two about the reconciliation issue especially at the more interpersonal level. i think the literature is very clear that the absolute prerequisite for reconciliation is acknowledgment of harm. in the iraqi case, it will have to be neutral acknowledgment of

-- mutual acknowledgment of harm in several different directions. that is a very difficult thing to do. it is not easy when you feel you have been harmed to acknowledge the harm that has been done to others. but that is the step that gets you out of the spiral, the downward spiral. i have not seen it happening yet in iraq, but i look forward to the day when it begins. i have two questions here, somewhere. let me -- >> thank you. mr. serwer: introduce yourself. >> thank you very much for a sweeping and very candid presentation, and thank you, dr. kadhim.

you are an ambassador in washington after all. we want to hear about washington. as ambassador to washington and you wish to encourage the united states support for prime minister abadi's government and for the change that happened since september 2014, what do you ask for? what are your bullet points when you speak to the u.s. government, to the u.s. congress, to ask them to support the iraqi government? thank you. mr. serwer: you're contemplating thinking about all of the iraqi government. >> we want you to be as candid as you were in your presentation. >> thank you very much. thank you for the ambassador and for dr. abbas for their remarks.

my question is, analyzing a situation that happened in tikrit. you mentioned that sunni tribes played a role in expelling isis from the city. how important it is for the iraqi government to have the best cooperation of the tribes not only for the outcome of the operation to clear mosul? ambassador faily: to your second question -- and that is -- unless it is catastrophic. but geopolitically, what was requested is we get the engagement of locals.