Moderator: Mr. Secretary, thank you very much. I think many in this room will have noted the emphasis that you placed in your remarks on the need to find new and innovative ways to connect the states of Central Asia to those of South and East Asia, and also, your appeal for the countries represented in this room to share their knowledge on security sector reform, on counterterrorism, narcotics control, and on the training of ministers and civil society. And I think it was also important to have heard your optimism about the potential progress in U.S.-China military-to-military relations. The Secretary is kindly agreed to take questions, so as I indicated, if you could raise your name plates and keep them raised for a moment, so I can capture as many of you as possible. Thank you very much. The first question, from Francois Heisbourg.

Question: Mr. Secretary, a personal thank you for a broad spectrum and thoughtful speech. In your presentation, you very naturally talked about Iran and the threats posed in terms of nuclear proliferation. For a number of years now, the United States has been, at least according to the press and national intelligence estimates, foreseeing the possibility of Iran crossing the nuclear threshold within a period of around ten years, sometimes less, sometimes more. That estimate doesn't appear to change much over the years, although from what I understand, and you have reiterated, that Iran has actually been doing stuff. And if I believe the latest newspaper reports concerning the IAEA's assessment of Iran's progress in terms of deploying and running centrifuges, the arithmetic would tend to point towards a threshold date much, much, closer than the ten-year timeframe which the United States has been putting forward. The IISS itself has been talking about a three-year timeframe. What is the current estimate? Thank you very much.

Secretary Gates: I think that the general view of American intelligence is that they would be in a position to develop a nuclear device, probably sometime in the period 2010, 2011 to 2014 or 2015. There are those who believe that that could happen much sooner, in late 2008 or 2009. The reality is because of the way that Iran has conducted its affairs, we really don't know, and it puts a higher premium, it seems to me, on the international community coming together in terms of strengthening the sanctions on Iran so that they begin to face some serious tradeoffs -- in terms of their economic well-being and their economic future -- for having nuclear weapons. I don't think anyone begrudges Iran the capacity to have peaceful nuclear power under proper safeguards and supervision. The key is whether they will have nuclear weapons. And so I think there is a way to move forward in this, but it does require all of the nations in the world to come to an agreement that Iran having nuclear weapons is a dangerous prospect, and increasing the pressure on Iran to try and make some very difficult questions in terms of the role they want to play in the international community and the impact on their own economic well-being. I think probably everybody in this room wants there to be a diplomatic solution to this problem. Having to take care of this problem militarily is in no one's interest, but it does put a premium on unanimity in the international community -- and I would say especially in the U.N. Security Council -- in terms of ratcheting up the pressure on the Iranians, not next year or the year after, but right now, in line with the uncertainty about when their capability actually will come online.

Moderator: Simon Chesterman.

Question: Secretary Gates, thank you for a comprehensive and, as John Chipman said, optimistic assessment of this region and indeed beyond. Dr. Chipman announced last night an agreement with the government of Singapore to extend this dialogue at least until 2011. I wonder if I can invite you to speculate on what you or perhaps your successor would regard as the key strategic issues and challenges in the U.S.-Asia Pacific relationship in 2011.

Secretary Gates: I think that the key challenges that will face these nations in 2011 are very similar to the challenges that I just described. It is, how do we strengthen, how do we work together to strengthen newly emerging independent states to ensure that they move in a direction of responsible government toward greater democracy, and help their economic and governance development? How do we integrate them into the international community in a productive way so that they don't become failed states and potential sources of disruption or extremism? Clearly working out our security and economic interests, where many of us are both competitors and partners -- and doing that in a productive and constructive way -- I think will remain a continuing challenge. There will be new areas where we are going to have to pay attention and work together. Clearly the whole arena of the environment, and I think by 2011 global warming will be much more central and part of an agenda of a group like this in terms of security interests. And we will still face, in my view, the challenge of radical extremism in many of these countries, and the need to work together to prevent it from creating new failed states that are sources of difficulty for all of us.

Moderator: Yuriko Koike, National Security Advisor to Prime Minister Abe of Japan.

Question: Thank you very much, Dr. Chipman. I thank you very much, Mr. Secretary, for giving us a broad idea of the international military affairs. And thank you for not neglecting Asia. About North Korea, do we have a resolution or oppose? And how long should we be prepared to wait if North Korea fails to shut down Yongbyon? This is my question. Thank you.

Secretary Gates: I think the unexpected development that has delayed going forward has been a technical one, having to do with the return of some monies to North Korea as part of moving forward. As best I can tell this is really more the Secretary of State's business than mine, but as best I can tell the Secretary of State is still quite optimistic that this technical problem will be solved and that North Korea will fulfill its commitment in terms of de-nuclearization. But we have made pretty clear that our patience is not unlimited in terms of getting this technical problem solved.

Moderator: Dewi Fortuna Anwar, from Indonesia, do go ahead.

Question: Thank you, Dr. Chipman. Secretary Gates, the fact that you are here, I think, is testimony that the United States does pay attention to Asia - we are very heartened on that. I've just come back from a semester at SAIS, teaching in the Southeast Asia department, and I'd just like to make two observations. First, from your speech, you liken the current conflict, you know, against extremism and so on, as an ideological conflict similar to the conflict during the Cold War. But here I think we need to be much more cautious here where we could de-legitimize communism, a whole nation can forget about it and move on. Clearly, this is not the case when one talks about extremism terrorism related to one of the world's religions, Islam. And unfortunately, we clearly need to have much greater knowledge and expertise about how to isolate the extremist groups without alienating the vast majority of the people. And now I'd like to come to the second observation. I noticed that there is a severe lack of regional expertise, at least around the Washington, D.C. area. There are a lot of policy think tanks and so on, but the number of people who are working on regional issues, particularly on Southeast Asia, is severely lacking. And I was very alarmed to hear from a colleague that when the crisis hit Indonesia in 1998, there was in fact not a senior official knowledgeable about Indonesia, either in the National Security Council or the State Department, so that a relatively junior colleague was promoted straight away to take up that position. Now I do not know what the United States is planning to do in the future to ensure that whatever decisions that are made that impact the rest of the world are in fact based on well informed positions with sufficient expertise that give input to the kind of policies that you would like to make. Thank you.

Secretary Gates: The latter point that you make is clearly an issue that I have thought about and worried about for a long time, both as the Director of CIA and then as the president of a huge university, and now as Secretary of Defense. This is a problem that has been a long time developing and it is a problem that will take quite some time to fix. And a number of initiatives are underway in a number of different areas to try and begin to remedy the lack of regional expertise and linguistic capability that you described. The Director of National Intelligence, Admiral McConnell, is here and he is changing the way that people are brought into the intelligence community, to try and create an environment in which is easier to get first generation Americans who come from Arab countries or come from Southeast Asia and elsewhere into our intelligence organizations to bring that kind of expertise. We're looking at new initiatives in terms of how to encourage young people to take more foreign languages. As many of you know, we have programs across United States for reserve officer training in many universities, and one of the initiatives that I am pursuing is how we can add a financial incentive for those students in ROTC to takes specific languages, whether they be Arabic or Chinese or others, so that we have a growing cadre of young officers in the American military who have a bilingual or trilingual capability a few years from now.

It is a reality, though, that many of the privately funded efforts that supported foreign language study or foreign studies, regional studies, in the United States dried up during the 1970s and the 1980s. We have a unique situation, I suspect, in the United States right now in that both the Secretary of State and Secretary of Defense have doctoral degrees in Russian and Soviet history. I'm not sure how much that advances us, but both of us with that kind of background. But it is a serious problem, but it is a problem that is just beyond the capacity, frankly, of the government alone to be able to solve. It is a problem that business needs to confront because they need people who are bilingual and people who understand other cultures and regional issues. And obviously those people can move in and out of government. So all of that is simply to say you've put your finger on a real problem in the United States. It is one a number of us are concerned about. It is one a number of universities as well as a number of government agencies are looking at to see what we can do in terms of trying to encourage young people to move into these areas and gain expertise.

Moderator: General Raghavan from India.

Question: Thank you, Mr. Secretary. We see, as professional soldiers with not a little admiration, the tremendous job being done by the U.S. forces in Iraq and also in Afghanistan. A difficult job under demanding conditions. But if there is one issue that comes out of that, it is the changed nature of conflict to which you have referred as asymmetric war, where overwhelming technological and military power by itself is found to be not sufficient to obtain the political ends that are required. And that is likely to be the nature of conflict and war in the decades to come. Therefore there seems to be a contradiction in applying military force in resolving issues of failing states or, for that matter, states driven with ethnic or sectarian conflicts. With your great hands-on experience as a military officer and as an intelligence head and now as the Secretary of Defense, to this audience of serving and retired senior military officers, what lessons would you have to offer?

Secretary Gates: I think that the principal lesson of our experience in both Iraq and Afghanistan is one that has been articulated repeatedly and over some protracted period of time by our senior military leadership, and that is that these conflicts cannot, as you suggest, be won purely by military action. These are fledgling societies, fledgling governments, they lack capacity, they lack the ability to extend services to their people. They often lack infrastructure. They usually lack any experience or a cadre of experts in the government who know how to make things work, whether it's a power plant or fostering greater agricultural productivity. And so I think that one of the lessons certainly the United States has learned in both of these places is the need to partner whatever military force may be required to take care of the irreconcilables in a country or in a situation like this, while at the same time trying to help build a government and an economy that serves the interests of the people. And quite honestly, this is one of the areas where the United States pretty much unilaterally disarmed itself after the end of the Cold War. When I left the government in 1993, the Agency for International Development had 16,000 employees.

Today it has 3,000. We had a strategic communications arm in the United States Information Agency. That's largely been eliminated and folded back into the State Department in a much reduced way.

I think, if anything, it is our military officers on the scene who have the best appreciation of the importance of economic development, social development, building schools, providing services, as part of creating a population that is supportive of a moderate approach and of moving forward, as opposed to moving toward extremism. I think the challenge that we all face is figuring out how to strengthen the capacity of each of our governments and how we can work together in building those capacities in places like Afghanistan and Iraq. One of the things that I think is most heartening in Iraq is that we have 42 foreign governments and 12 NGOs all working together, and many of them are focused in these provincial reconstruction teams, in these efforts to build the kinds of institutions and capabilities that I've just been talking about. My own view is we need to do a much better job of sharing with each other what we're doing in a place like Afghanistan and coordinating those efforts, so that we can benefit from the experience that each has had, both lessons learned and both in the positive and negative ways. But you've put your finger on a huge problem. It is one that I think the military recognizes more than anyone. Our Congress is interested in trying to help solve this problem, in trying to figure out the best way to do this in the American government. There are obviously differences and different points of view. One of the proposals of the President is to create a civilian reserve that would have people who are agronomists and engineers and others that are critical to the kinds of capabilities that I'm talking about, who -- like our National Guard -- could be mobilized in the event that we have to go in and work situations like this. But the fact is many of the problems that the international community has confronted over the past fifteen years involve the kind of issues you are talking about. It's not just Iraq and Afghanistan. It's the Balkans, it's Haiti, it's a variety of places. And so we all need to think about how better -- for both the public and private sectors -- to build capacity to deal with these challenges.

Moderator: Senior Colonel Yao Yunzhu, of the Academy of Military Sciences of the People's Liberation Army.

Question: Thank you, Chairman. Mr. Secretary, you mentioned in your presentation that the mil-to-mil relations between China and the United States have made some very encouraging progress recently. But you still have some concerns about the Chinese military's lack of transparency, and also in one place in your presentation you also mentioned that you think that some of the Cold War approaches are still relevant in coping with today's security issues and security threats. So my question is, do you think there are still any Cold War approaches that are valid or relevant in coping with U.S. concerns about China in general and about the Chinese military in particular? And also, do you think that there are some more approaches, some post-Cold War approaches, that the United States should adopt to deal with mil-to-mil relations between China and the United States? Thank you.

Secretary Gates: The references that I made to some lessons learned from the Cold War really were directed more at how we combat radical extremism than in dealing with state-to-state relationships. And what I was referring to was, among other things, recognition that -- like during the Cold War -- it is an ideological struggle against these radical extremists, that it is a struggle that will take many decades, and that it is a struggle that will require many nations working together. It seemed to me those were the principal lessons that can be drawn from the Cold War in terms of dealing with radical extremism, and that was the context in which I described it. My own view is that one of the ways in which conflict was prevented during the Cold War between the United States and the Soviet Union was a steadily growing range of interactions, first diplomatic, and then in the military sphere. I've always believed that the years-long negotiations on strategic arms limitations may or may not have made much of a contribution in terms of limiting arms. But they played an extraordinarily valuable role in creating better understanding on both the Soviet and American sides about what the strategic intentions of each side were, what the strategic thinking was, what their motives were, where they were headed. That dialogue that continued intensively for something like twenty years built a cadre of people who were accustomed to working and talking with one another, who were on opposite sides of a major conflict, and I think that -- while we have no conflict at this point -- this kind of transparency, this kind of discussion is the kind of thing that prevents miscalculation and helps each side understand where the other is headed and what its intentions are. That kind of dialogue, whether or not it involves specific proposals for arms control or anything else, I think is immensely valuable, and I think it's one of the great assets of the developing military-to-military dialogue between the United States and the People's Republic.

Moderator: The next question is Ross Babbage.

Question: Mr. Secretary, thank you very much for a most thoughtful presentation this morning. You mentioned this morning the struggle against international terrorism, and I'd like to draw you out a little bit on this. In particular, I wonder if you'd be prepared this morning to just give us a frank assessment of how you think we're progressing. How much progress has been made in the struggle against international terrorism? Are we winning? Or are we losing? And what need to be the key priorities as we seek to win this struggle?

Secretary Gates: I think that we are still early in this contest. I think that in the short term there are some heartening developments, certainly from the standpoint of an American, the fact that -- contrary to what I think almost everyone would have envisioned -- the United States has not suffered another terrorist attack since September 11th, 2001, God willing. A degree of international cooperation, I think, has developed that in many respects would have been unthinkable prior to September 11th. So there is a wealth of sharing of information among almost all countries. We have eliminated one sanctuary for al-Qaida in Afghanistan. We still have to deal with their activities elsewhere. Clearly they are continuing to expand. I had a map prepared that basically showed in one color all those countries where al-Qaida had cells, and then in a different color all those that had al-Qaida-affiliated terrorist cells, and then in a third color those that had cells that wanted to be affiliated with al-Qaida but had not yet earned the secret handshake. And it's a lot of countries. So the challenge I think is there. It is significant.

The fact that a number of different countries have been hit by the terrorists makes clear to a broad range of countries the need to work together on this. So I think that the positive aspects that I would say on the side of the ledger is the growth of cooperation and partnership in trying to deal with these terrorist threats and in bringing them to justice and preventing terrorist acts from happening. A growing understanding of the need to work together in places like Afghanistan to prevent failed states or states that are in trouble from becoming failed states that may become safe havens for extremist terrorist groups. I think all of those things are on the positive side of the ledger. On the negative side of the ledger, I think that we have not made enough progress in trying to address some of the root causes of terrorism in some of these societies, whether it's economic depravation or despotism that leads to alienation. There are people out there: one of the disturbing things about many of the terrorists that have been caught is that these are not ignorant poor people. These are educated people, often from professional families. So dealing with poverty and those issues is not going to eliminate this problem, but it certainly can reduce the pool of people prepared to give their lives for this cause. So I would say we are early in the struggle. Some very positive things have been accomplished. But I think that the danger remains very great and is going to require even more intense collaboration among most of the nations of the world, if not all the nations of the world, to deal with this problem, including some creative thinking about how we address the root causes of this phenomenon over the longer term and how we try to reduce the pool of those prepared to give their lives for this purpose.

Moderator: Mr. Tan, if you could go ahead please.

Question: Thank you, Secretary, for your comprehensive presentation. And just now you mentioned about the DOD's report on the PLA, and gave a very good analysis and expressed concern that the intent is more important than the capability. And intent is a concern, is a more of a key issue to the regional security rather than the capability, and certainly you advocate transparency. Now very recently, there's a new approach initiated by some countries in the Asia Pacific. The U.S., Japan, Australia and India tried to organize a cooperation based on similar political values. It's called the 'same value cooperation' and the question is very simple. What is the intent of this cooperation or this initiative of security work? Is it open to all the Asian countries? Just now, you emphasized that America is an Asian country. Is the same value cooperation open to all these Asian countries? And the second question is, what is the intent for this kind of political value cooperation for security, and does that intent have some specific aim towards any country? Or not?

Secretary Gates: First of all, I'll have to confess that still being relatively new in the job, I'm not deeply familiar with the background of this cooperation. But I would tell you that I think it is entirely appropriate for the militaries and navies from democratic countries to exercise together, to work together, to develop common capabilities. In terms of whether other countries can participate, I think we would have to look at that and see. I certainly think there should be no secret about what its intentions are, and I think that the same principles of transparency about the purposes of this cooperation should exist that I'm calling for in another areas. In terms of whether this is the right group, in terms of others joining, or whether there are other bilateral opportunities for joint operations and joint exercises and things like that, I think are things that have to be looked at. But I think the key in all of these things, including the group that you mentioned, is transparency, particularly with respect to intentions.

Moderator: Mr. Secretary, with your permission, we will take two last questions now. I think I'll ask both questioners to ask their questions in sequence and then the Secretary can answer both with any concluding remark he'd like to make. First with Tommy Koh, and then afterwards Fleur de Villiers. Tommy Koh, Ambassador-at-Large of Singapore. Thank you.

Question: Mr. Secretary, welcome to Singapore and to the Shangri-La Dialogue. I have a question about the United States, China and Japan. One of the unresolved legacies of the Second World War is the bilateral relations between China and Japan. There is a view in Asia that historic reconciliation between these two great countries will not take place until the United States gives its blessings and urges these two great countries to do so. What's your view on this?

Moderator: And Fleur de Villiers. Thank you, Fleur.

Question: Mr. Secretary, I too would like to thank you for a very wide-ranging and very thoughtful and enlightening talk. I think it was also very refreshing to hear the Secretary of Defense speak as supportively of the growth of nation building in this constant battle against the new insurgence in al-Qaida. The problem is, which I'm sure everybody realizes, is that the role of nation building can play in making a country resistant to insurgency and terrorism is equally understood by the insurgents and the terrorists themselves. And can only really take place behind a very effective military commitment and the question remains as to whether that commitment, both by the United States and its coalition allies, is big enough -- and will be persistent enough -- to construct the wall behind which nation building is free to take place.

Secretary Gates: With respect to the first question, I would say that the United States would be very supportive of efforts related to reconciliation between Japan and the People's Republic of China. That is, at the same time, it seems to me a matter for those two sovereign nations to address. Obviously, we would be supportive of such a thing, but it's really up to them. With respect to the second question, the honest answer is I believe the United States is prepared to commit the resources necessary and we have done so, both in Iraq and in Afghanistan, and in the Balkans, and in Haiti. I think that we have demonstrated our willingness to do this, because -- as I indicated -- it is our military commanders on the ground who understand the need to have both the capability to provide security in a nation that is trying to develop, and in order to create the breathing space as I said for institutions and economies to develop. And I would tell you, quite honestly, that there aren't very many other countries in the world that are prepared to make that kind of a commitment, who understand the need for both the ability to provide security and the need for the civilian side of nation building. One of the concerns that we have in Afghanistan right now, is here is the world's most powerful military alliance, and we have in NATO -- apart from the United States -- something like 2.3 million soldiers, and we are having trouble finding 3,000 people to go to Afghanistan mainly to train the Afghan national police. Now, what's the disconnect here? And so, I think that there is really a concern.

The heads of all of the NATO nations have made commitments, both on the security and nation building side, but even those who have provided troops in many instances have put limitations on the use of those troops, in ways that make it difficult for them to contribute to building a secure environment. There are other nations that are fully prepared to step up and play their part: the British, the Australians, the New Zealanders, people you would not think of in terms of providing these capabilities: the Georgians, the Macedonians, the Estonians. El Salvador is in its eighth rotation in Iraq, so there are a number of countries that understand the important of this connection. Unfortunately, there are too many who do not. And my view, and the view that I expressed at Munich, is that we've divided the countries into categories of East and West, old and new, and this and that for too long. It seems to me the only division that matters today when it comes to dealing with these kinds of problems are those countries that live up to their commitments and those who do not. Thank you very much.

Moderator: Mr. Secretary, thank you very much for posing so many challenges for yourself and for the states of the Asia Pacific and for expressing so clearly your willingness to meet those challenges with force when necessary, but as often as possible with tact and with diplomacy. Thank you very much for sending us this message today. Ladies and gentlemen, as you thank the Secretary, could you please keep your seat, because we will begin the next session in one minute. Thank you very much.