Kent (Kresa, World Affairs Council Chairman), thank you very much. Curtis (Mack, World Affairs Council President), Board Members of the World Affairs Council, and distinguished guests. Mark Twain, who apparently spent a lot of time in California, said, "A man could live for a month on a compliment." And I want to thank you, Ken, for extending my life expectancy by several years at least with that gracious introduction.
One of my favorites stories, whenever I face a new audience, is that of Henry Ford who, after having made all those millions, wanted to go back to his fatherland in County Cork, Ireland. And his reputation for wealth had long preceded his arrival. When he finally stepped off the plane, there were a group of local town officials seeking contributions for the construction of a local hospital. And Ford was quite accustomed to being touched in that fashion. He took out his checkbook and he made a check out for $5,000.
The next day, in bold print, headline news, it said, "Ford Contributes $50,000 for the Construction of the Local Hospital." The town officials came running back to him and they said, "Oh, Mr. Ford, we're terribly sorry, it was not our fault. It must have been a typographical error. We'll be happy to see to it the retraction is printed in tomorrow's press."
And he said, "Wait a minute, I think I've got a better idea." And that's where that phrase came from. He said, "If you give me my wish, I'll give you the balance of $45,000." They said, "Anything you want." They couldn't refuse. "Anything." He said, "I want, when the hospital is finally complete, to have a quote taken from a source of my choice." They said, "It's done."
He pulled out his checkbook and gave them the $45,000 and the hospital was built and, in fact, is there today. And it has a plaque over the entranceway with a quote taken from the book of Matthew. And it says, "I came unto you as a stranger, and you took me in." (Laughter and applause.)
So I come unto you a little bit of a stranger, not exactly to Don Rice, former Secretary of the Air Force, but I hope you'll take me in this morning, not quite in that fashion.
Let me say it's always a pleasure for me to come back to California for a visit. My oldest son lived here for nine years before I rescued him and sent him back to get his MBA. And he was a screenwriter, of course, as every young man who comes out to California. But it's a pleasure for me to be back here. In so many ways, California, of course, is always at the forefront of great issues that define our time, be they economic, political, environmental or strategic.
I see a table filled with RAND personnel here this morning. But you may recall that at the end of the cold war, a book was written by Francis Fukayama and he talked about the end of history, which then prompted a South African academician by the name of Peter Vale to say, "Rejoice my friends, or weep with sorrow. What California is today, the world will be tomorrow."
Now, Californians take a different view of that than perhaps South Africans but, nonetheless, it does reflect the fact that California has been in the forefront and will continue to be in the forefront of many issues for years to come. It's a state with a progressive future, driven by a very vibrant trade-oriented economy. It's a tolerant future, enriched by a tapestry of cultures. And it's a stable future informed by a pragmatic and global outlook on the world.
I have a long prepared text this morning. I'm going to look at my watch and spare you that. I will perhaps just give you a brief overview of our defense policy and strategic policy. Then I would prefer, since we have such a large audience -- and I'm truly astounded by the number of people who are here at this hour -- perhaps engage in a colloquy for the rest of the time.
When I took over as Secretary of Defense, it was really quite a remarkable transition for me. Having spent 24 years on Capitol Hill, I was anxious to become a private citizen and then I got that proverbial phone call and an offer that I couldn't really reject. And it's been one of the most beneficial, exciting and demanding experiences of my life.
It is quite a transition from being a legislator to being in the Executive Branch and being in charge of the largest agency in government, in terms of the amount of money that we have to budget for, plan for, and then spend on being your customer -- one of your customers. But the first thing I had to do was to confront something called the Quadrennial Defense Review. Congress mandated that the Defense Department review itself, look internally, and say: Where is it you want to be? What is your role in the future? How should the military be structured in order to deal with the problems and the challenges of the 21st century?
So we have the Quadrennial Defense Review, which is known as the QDR in Washington. I had about two and a half months to indulge myself with this project, and we produced a strategy, which I believe is relevant not only for today but for future years as well. And it's summed up in three very simple words: shape, respond and prepare. We repeat this almost as a mantra in the Pentagon. But, in essence, it says that we want to be forward deployed. We want to have our forces forward deployed throughout the world so that we can shape events in ways that will be advantageous to the American people and to our allies.
So when I first took over, I said, "Everything is on the table for review." And then I was on my way to Tokyo at that time and I said, "Except, we're going to keep 100,000 people in the Asia-Pacific region. That's off the table." We want to make sure we're forward deployed throughout the Asia-Pacific region so that we can help shape events in ways that are friendly to us. And we do that by having a presence. When you have a presence -- and the kind of presence that we have -- of the dedication, the professionalism, the competence and the patriotism of the men and women who are serving in our military, and you have them forward deployed, it sends signals. It sends signals to your friends and allies that, "This is a country I want to be associated with. I want to be their friend. I want to have an alliance." It also sends a signal to your potential adversaries -- "This is a country we don't want to challenge."
So by being forward deployed, we're able to have an influence on people's judgements about us in a positive way. Now there is some sentiment on the part of either the Left or the Right in our political spectrum saying, "Let's just let the Asians take care of Asia, let the Europeans take care of Europe, and let's come back to the continental United States," as if we could somehow zip ourselves into a continental cocoon and watch events unfold on CNN. We all know that's not possible and so we want to stay forward deployed in the Pacific certainly, in Europe as well.
So that's part of the shaping aspect of our military and foreign policy strategy: Being forward deployed with not only our warriors, but also with our diplomats and our businessmen and women, which I'll talk about in a moment.
The second part (of our strategy) has to do with "responding." How do we respond to all the challenges that we are called upon to respond to? For example, what Don would tell you NEO operations, Noncombatant Evacuation Operations. You've got a country that is starting to go under and it may be off the coast of Africa. We suddenly have people in Guinea-Bissau. And now the country is embroiled in some kind of a civil war. We've got American citizens there. How do we get them out?
So we've got to have the capability of going into those kinds of environments where you've got a collapsed state but we need to get American citizens out, so we have to be agile and flexible enough to be able to go in and pull them out and get them out safely.
You have the NEO operations, you have the humanitarian operations, when you suddenly have a typhoon or a tidal wave or whatever suddenly inflict immense human suffering. And we have to be able to deal with that as well, and we do. So you have the NEO, the humanitarian, you have the peacekeeping missions that we have in Bosnia. We have to have forces that are, again, flexible and agile enough to deal with peacekeeping missions and we're doing an outstanding job, by the way, in Bosnia. In fact, we have the highest reenlistment rates. All the soldiers who once were serving in Bosnia, that's where we have the highest reenlistment rates.
And then you go all the way up to being able to challenge and confront a Saddam Hussein. You have to have that capability as well, to fight a major type of regional conflict. That, and also on the Korean Peninsula, should it ever come to that. In addition to having an ability to defend the national integrity of the United States. So we have to have that full range of response capability.
The next part (of our strategy) is perhaps the most difficult part and some of you perhaps are most interested in that: How do we prepare for the future? How do we save enough money in our procurement budget in order to invest in research and development in new technologies? And that's where we have been failing in recent years. We have been very prepared as such to deal with the current contingencies, but we have been really slicing down our procurement budget. Since the height of the Cold War we have reduced our procurement budget by almost two thirds, about 66 percent. Last year it was down around 41, 42 billion dollars. It should be up around 60 (billion dollars) and we now have to climb up to that level. But how do we get there?
We're living in a relatively flat budget environment. We have a balanced budget that has been agreed to by the Congress and the White House, and so looking for additional dollars in the future is going to be very hard. So we have to make a number of changes in how we do business. We've got to squeeze our operations down, not only have a revolution of military affairs but a revolution of business affairs. So we're now adopting and adapting to the business community's genius. Restructuring, re-engineering -- we're doing the same thing in the Defense Department and trying to save enough money to invest in procurement that will give us the ability to stay one or two generations ahead of our nearest competitor. That's the "prepare" part of our strategy.
So I think whatever year we're talking about -- 2010, 2020 -- we will want to have the same basic strategy of shaping, responding and preparing for the future. It's a dynamic process. As we look to all of the areas of the world, the Pacific perhaps poses the greatest rewards but also some of the greatest risks. You have many of the arteries of our economies flowing through the Pacific nations and yet it's a tinderbox all the way from the Korean Peninsula, right through the Taiwan Straits. And you have, of course, the situation in Indonesia now, the economic difficulties that all of the Southeast Asian countries are now experiencing. And so there is a great challenge for us as well: How do we maintain stability in that region?
I just came from a conference at which Senator (Ted) Stevens of Alaska was saying: Look, we're spending too much time and money in Europe; we have to focus on Asia and the Pacific. That's where our interests are going to lie predominantly in the future. How do we maintain that kind of stability in the Asia Pacific region? The engagement part (of our strategy) is the most crucial. As we look at Indonesia or Thailand or Taiwan or China, that's the area that we really have to focus our energies most specifically. How do we do that?
Bilateral relations are going to be key to maintaining that stability in the future. We have a very strong relationship with Japan. That really is the arc that we depend upon for fueling our ability to have influence in the region. We have a very strong bilateral relationship with Japan. We had just upgraded and modernized the U.S./Japan defense guidelines. It has been something of concern to China and to others. And so what does this mean? It means we have greater clarity and greater ability to work with our Japanese allies in terms of operating in the region, and so we want to make sure that that bilateral relationship remains strong.
We have a strengthened relationship with South Korea. President Kim has stated publicly on several occasions that even when that day finally comes where there is a unification of the two Koreas, that we will have a presence there. We will have a presence on the Korean Peninsula because it's important for the stability of the region.
I can tell you I have to be careful what I say as Secretary of Defense because when I first went over to Japan, I was asked a question by the traveling press corps who travels with me wherever I go. They asked me about the QDR and about the 100,000 troops; "Are they going to be deployed throughout the Asian Pacific region?" I said, "Absolutely, and they will be there even if the Korean Peninsula is united." I stepped off the plane and the Tokyo paper headline story said, "Cohen Dashes Hopes of Okinawans," because I said we were going to have a presence on the Korean Peninsula even when there is a unified Korea.
We also have relationships with other countries in the region. I was most impressed, for example, when I went to Singapore this year. They are building a pier that will accommodate U.S. aircraft carriers. When I arrived in Singapore in January, we had a press conference with the defense minister and they announced that the construction of the pier would be completed by the end of '99, and they want the United States to send its aircraft carriers as often as possible. That's a big change in terms of the attitude on the part of those countries in the region.
At the same time that we were announcing the attractiveness of U.S. carriers coming to Singapore, we were signing an agreement with the Philippine government, namely that our forces visiting there will have a legal environment in which they can operate and be protected. That, too, is a significant change. So we have a number of these bilateral relationships that we are building and strengthening.
The third component is having also additional multilateral types of arrangements. The one that is most frequently referred is the ASEAN Regional Forum. And, again, we want to have strong bilateral relations, but also strong multilateral relationships.
Then, of course, you finally get to China. I suspect that some of you in the audience have been watching CNN and the coverage of our networks of the President being in China. I believe it was the right thing for him to do. I think there is no alternative but for us to engage China in a very constructive, clear-headed, hardheaded fashion. I have been traveling to China since 1979, and I must say there has been a remarkable transformation of that society since I first went there.
In 1979 I traveled there with Senator (Sam) Nunn, Senator (John) Glenn, Senator (Gary) Hart and myself; the four of us went. I had yet to be sworn in as a senator, I was still a Congressman. And on the plane on the way over they decided what our topics were going to be when we arrived in Tiananmen Square and went to the Great Hall. I got the subject of human rights. And, of course, that was the shortest part of the discussion with Deng Xiaoping at that time, but they thought that being the newest member, I should be the boldest and the brashest and I should have the toughest subject, which I did.
But I saw a society at that time which was really quite monolithic. There were no automobiles to speak of, no private cars. There were only buses for transportation and military vehicles. No private cars were allowed, but there were hundreds of thousands of bicycles and everybody wearing the Mao suit. It was a very dreary kind of society at that time. There was one hotel. It was called the Peking Hotel at that time. And I've been back on many occasions since that time.
For those of you who have traveled to China, you will see a society which is very different. If you go to Beijing today, you will see four and five-star hotels. You will see a plethora of automobiles. You will see air pollution caused by those automobiles, and California knows something about that as well. You see a remarkably transformed society. If you go to Shanghai, you will see one of the most energetic cities in the world today with 18 million people and a floating population of another three million people. So you've got 21 million people in a city that is very dynamic, which is not to say that China is in any way going to replicate or look like the United States as far as our political or societal systems are concerned. But there is a vast change that is taking place. I have talked to ministers in Shanghai. They are developing a criminal code based on western standards -- right to an attorney at time of arrest, et cetera.
So things are taking place below the surface that I think many people have not been aware of. And for us to simply take the position, as someone argued, that we should try to contain China is folly. China really can't be contained. It is a power. It is a regional power. It is rightfully so and we have to engage it in a way to hopefully bring it into the world community and establish international norms of good behavior. And we do that not by ignoring it or trying to contain it, but rather trying to engage it. The way in which we engage it is very directly, as President Clinton did during his televised discussion, which turned into a mini-debate -- a historic event in China. Many people were completely surprised that that debate, as such, was televised live. I don't know how many were watching television at the time. Estimates were 600 million people were watching that engagement. But that is the way in which we have to deal with China in the future, being able to articulate what our ideals are, what our goals are, and how we can engage China in a constructive type of relationship.
I went there in February, and I had the opportunity to be the first defense official, perhaps the first Westerner, to be invited to visit their air defense center in Beijing. I also addressed the Academy of Sciences in Beijing and I looked out and I saw a sea of three or four hundred of their uniformed intellectuals. And I gave a speech about our goals and our strategic policy for the Pacific and why our presence in the Pacific was there, why it was going to stay there, and why it was in their interest for us to be there. I had started to read a number of articles, for example, that talked about it being time for Asians to take care of Asia and for China to perhaps adopt a larger role and maybe for the United States to reduce its presence.
So I pointed out that without our presence in the region, China would not be able to prosper. Because if we were not there in the numbers that we are and with the presence that we have, who would fill the void? It would be a contest, certainly, that would be undertaken. Japan would not likely see the void go unmet. China would not see the void being not fulfilled. You have India and Pakistan, who might have some desires as well. You would have a tremendous contest for influence and dominance in the region. So we have had a very beneficial impact upon all the ASEAN countries who are not engaged in an arms race by virtue of the fact that they know that we are an honest broker. We're not out to conquer any territory, we don't want any more territory. We're there as a stabilizing force. So they've been able to prosper in the years past and China has been able to prosper. So I was able to say that and then to engage the Chinese academicians in ways that perhaps wouldn't have been possible a couple of years ago.
Something else took place while I was there. There was a tragedy. They had an earthquake, a major earthquake, about a day before I arrived. I arrived as we prepared to go to war in Iraq because Saddam Hussein was threatening to shoot down the U-2s and to perhaps attack our forces. But China had a major earthquake in which 10,000 people were without homes in bitter cold with 30 mile an hour winds and 25 degree below zero temperatures. The U.S. military flew in a large aircraft to bring supplies. We brought supplies, medical supplies, to them. And I met with President Jiang Zemin the next day and I said we will be prepared to send another aircraft in if that would be agreeable. And he said, " Of course."
I can tell you from my personal experience, five years ago that never would have happened, that they would be willing to allow an American aircraft to -- not only allow it to come in to help provide assistance to their suffering people, but to put it on television, to film American crews unloading an American aircraft sending those supplies up to people who were in deep difficulty. That is a remarkable change in attitude in a very short period of time.
So I think that anything is possible if you talk to people, engage people, confront people when you have to confront them and challenge them on specific issues. And that is precisely why the President is in China. I thought he did an outstanding job as far as talking about human rights, the value that we place on human rights and criticizing what took place in Tiananmen Square. And to do so with the President of China there, trying to rebut it, saying, well, we have a somewhat different viewpoint on that in terms of our maintaining of order. But it was a remarkable exchange and one that we ought to applaud.
Let me finish up here. I was talking about China but there are so many other areas. You also have Latin America. I made my first official visit as Secretary of Defense to South America last month. Again, another area that we have not been as deeply engaged as we need to be. There is a tremendous opportunity for all of our companies in this country to participate in that economic prosperity.
Let me simply conclude with a quote from Churchill. I remember this from a book that was written by Stuart Alsop many years ago, a noted journalist who was suffering from cancer at the time. And he kept a diary, called, "Stay of Execution," and he talked about his year-long fight against this terrible disease.
And in it, he recounts a meeting he had with Churchill. He went over and sat down with this great diplomat and they had dinner, several bottles of wine, some champagne and, after dinner, some brandy. I mean, it was kind of a typical dinner for Winston Churchill. And at the very end of it, Churchill looked at Alsop and he said, "America. It's a great and strong country, like a workhorse pulling the rest of the world up out of the slough of Despond and Despair." And then he looked at Alsop and he said, "But will it stay the course? Will it stay the course?"
Fifty years later, we can say we have stayed the course. We have stayed the course because that has been our obligation and it's also been our destiny. And so if we continue to confront issues as we have done so in recent years by being forward deployed, by shaping, by responding, by preparing, we will continue to have the kind of influence throughout the world that we do today and for the benefit of all mankind. Thank you very much. (Applause.)
Published by the American Forces Information Service, a field activity of the Office of the Assistant Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission.