U.S. Department of State Daily Press Briefing #62, 98-05-19

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U.S. Department of State
Daily Press Briefing

I N D E X

Tuesday, May 19, 1998

Briefer: James P. Rubin

INDONESIA
1-3		Soeharto announces plans for new Presidential elections,
		  will not stand as candidate
1		Protests continue; currency, stock market fluctuation
1-44		US desire for govt reform, political dialogue; assessment
		  of successful resolution
2-4		IMF unable to conduct review; likely to reassess situation;
		  regional reaction; aid level
2		Link between political reform and ability to implement
		  economic reform measures
3		EAP Asst. Secretary Roth on contacts with Soeharto; next
		  steps re contacts
4		Future leadership should be determined by Indonesia's
		  people
MIDDLE EAST PEACE PROCESS
4-8		Readout of Albright-Arafat London mtg; no US intent to
		  significantly adjust key elements of proposed ideas;
		  Arafat agrees in principle to US ideas; next steps 
4-7		Invitation is not an ultimatum; serious efforts to resolve
		  issues are ongoing
5-6		If we conclude agreement is not possible, we will say so;
		  that day is not far off
6-7		Israeli claim of Palestinian incitement to violence via TV
		  broadcasts
8		Next stage of discussions; third stage re-deployment; US
		  stands by Christopher letter
CHINA
8-10		Investigation whether unauthorized missile technology was
		  transfer to PRC
9-11		Second license with tightened restrictions issued to Loral
9-10		Believe US licensing safeguards deter unauthorized
		  transfers of technology
INDIA / PAKISTAN
11-12,14	Contacts w/ Pakistan to discourage nuclear test in reaction
		  to Indian testing
11		Reaction to Indian Home Minister warning remarks to
		  Pakistan on Kashmir
11-12,14	Rumored China nuclear security guarantee for Pakistan; GOP
		  not seeking international security guarantee in
		  considering response to GOI tests 
12		US consultations with Chinese on India testing and
		  Pakistani response
12-13		Administration view of Pressler Amendment; Pakistan would
		  benefit by not testing
13		Refer to last week's remarks re effect of potential
		  sanctions on India, discrepancy
13		International condemnation, sanctions against India nuclear
		  tests
13		US does not support permanent UN Security Council
		  membership for India
GREECE / TURKEY / CYPRUS
14		No new US proposal linking resolution of Greece-Turkey
		  dispute and Cyprus dispute
14-15		No decision on Secretary's travel plans to Greece, Turkey
15		Al-Hayat interview w/ PKK's Ocalan re moving to Greece or
		  Germany, claims Western diplomats mediating between
		  Turkey and PKK
15		S-300 missiles reportedly to arrive in Cyprus equipped with
		  powerful radar systems
15-16		Reported Suleyman Demirel statement that war against Greece
		  is "vital need"
ERITREA / ETHIOPIA
16		AF Asst Secretary Rice travel; Ethiopia, Eritrea dispute
MEXICO
16		Drug money laundering operation shut down by US law
		  enforcement agencies
16		GOM efforts to counter money laundering inside Mexico;
		  certification decision
DEPARTMENT
16-17		Congress reviews govt computer security, GAO audit finds
		  hacker risk at State Dept
CUBA
17		Helms-Burton waiver; new EU policies fighting trade in
		  expropriated property

U.S. DEPARTMENT OF STATE
DAILY PRESS BRIEFING

DPB #62

TUESDAY, MAY 19, 1998, 1:05 P.M.

(ON THE RECORD UNLESS OTHERWISE NOTED)

MR. RUBIN: Greetings. Welcome to the State Department briefing this Tuesday. I have nothing to report to you in the form of a statement, but I would be delighted to take your questions for as long as you would be delighted to throw them at me.

QUESTION: Any comment on the announcement about 12 hours ago by President Soeharto?

MR. RUBIN: As we understand it, President Soeharto in a major speech announced plans for new elections for President and Vice President, under revised electoral law. He indicated he would stay in power to oversee reforms, but that he would not stand as a presidential candidate. He promised to put together a reform Cabinet and a reform committee to assist during a period of transition.

As we understand the current situation on the ground, 10,000 student demonstrators continued peaceful protests outside the parliament building after his speech. Military forces continue to patrol the streets, and some protest leaders have called for demonstrations scheduled for tomorrow to go forward.

The Indonesian stock market and currency rose in reaction to Soeharto's speech, though trading was thin. The rupia moved from 1,700 down to 11,500 to the dollar, and the stock market was up 6 percent. This is a general reaction to the speech.

Our understanding is the situation in Jakarta is calm but tense. With respect to the specific question of his promise to hold new elections and President Soeharto's other comments in the speech, let me say this: President Soeharto's recognition that wide-ranging political reform is necessary is long overdue. Indonesia needs both political and economic reform to solve its problems. We want to see a restoration of order without violence, and a genuine opening of a dialogue on political reform. We believe this dialogue and this reform program should begin as quickly as possible so that the Indonesian people can work together to determine the course of reform.

As President Clinton noted yesterday, giving the people of Indonesia a real voice in the country's political affairs can make a real contribution to stability. So we want a timely, credible reform plan. We think the fact that President Soeharto recognized the need for reform is long overdue. And if there are to be elections, we would want to see any elections to be free, fair and credible.

QUESTION: Does the US Government take any position on whether the IMF loans should go ahead as announced already, or should they be contingent on this dialogue and promised reforms?

MR. RUBIN: Well, let me say this: As a result of recent unrest, the IMF mission was supposed to conduct the next program review in Indonesia, and they were unable to travel to Jakarta as scheduled. This means that it is unlikely the June 4 board review will occur as scheduled.

The political and economic situation in Jakarta -- and Indonesia -- has deteriorated dramatically since the last disbursement of IMF funds at the beginning of May - on May 4. The political unrest has heavily influenced market developments, with the rupia depreciating significantly relative to the levels envisioned in the IMF program. This has important implications for the budget deficit and the inflation outlook in Indonesia, and these developments will likely result in a reassessment of the economic assumptions and targets that form the basis for the IMF program. So they're not going to be able to travel there as a result of this current political situation, and the political instability has caused changes in the economic situation that require a reassessment of some of the market assumptions and the assumptions about the budget deficit and other economic indicators.

With respect to a broad kind of linkage that you described, what we can say is that in the absence of political reform, in the absence of dialogue, we do not believe the Soeharto Government will be able to have the kind of relationship between the governed and the government that will enable true economic reform to move forward. As we saw when a price change was announced, it lead in part to some of the violence in the streets in recent days. So part of the reason why other countries in Asia have been able to pursue economic reform is because the consent of the governed has existed. In the absence of this kind of political reform, we do not believe that the economic steps will be as easy to take. The economic and political reforms are inextricably linked.

QUESTION: Are there other factors besides what he has said in his speech that lead you to believe that he might actually do this?

MR. RUBIN: He made a speech, and clearly there was a signal in that speech about his willingness to step down; but this play has not fully unfolded. This is the beginning of an important act in the history of Indonesia, and the first scene may have involved his speech; but there are other scenes to unfold, including the prospect of demonstrations tomorrow.

We continue to urge that the Indonesian Government permit peaceful demonstrations, that security forces exercise maximum restraint and that all parties avoid violence. We do not want to be tied to any specific reform program that he put down; we want Indonesians to decide what is appropriate. We do not want to dictate a political fix for them. Instead, what we want to see is this dialogue begin, and through the give-and-take of dialogue, for a result to yield the kind of political stability and consent of the governed that I referred to earlier.

QUESTION: Has there been any reassurance to anyone in our embassy there that he, in fact, means what he says? To what extent can we trust his word that this will actually happen?

MR. RUBIN: We will know what unfolds in the coming weeks. We do not know specifically what the timing for him stepping down according to his own plan is. The phrase, I believe, was "as soon as possible." So at this point, it's not a question of us trusting his word; it's a question of whether in the ensuing days the political situation will adjust what his initial indicators suggested he was going to do. All we're saying is that we want an Indonesian solution to this Indonesian political problem. We are not going to dictate a political fix for them. As far as our general reaction to his speech, it is that the recognition of the need for political reform was long overdue.

QUESTION: Yesterday Stanley Roth said on the Hill that he believed that nobody from the US Government had spoken to President Soeharto since February or March. Is that true, and are there plans to try to communicate directly with the President of Indonesia soon? And also, what is your reaction to the idea of elections? Are you in favor of elections? I presume you are.

MR. RUBIN: We have long called for elections in Indonesia to be as free and fair and credible as possible when they occur. What I am suggesting is that we are not going to be tied to a Soeharto political reform program in the absence of the dialogue between the people and the government that we have called for. That will not simply happen by the delivery of a speech. It requires a true political reform program and a true dialogue with the people.

With respect to contact with President Soeharto, if Stanley Roth said it, I presume it to be true. With regard to any next steps, I do not have any next steps to report to you of our plans to contact President Soeharto. When we have such plans or any such communication is made, I will try to do so at that time.

QUESTION: What do you expect will be the financial impact in Southeast Asia of the IMF's completely stopping its bail-out package for Indonesia, which you seem to be indicating is happening?

MR. RUBIN: I was very careful to not say that it was stopped. What I indicated was that a trip wasn't able to go; that political reform was part of the picture; and number three, that the economic indicators that made up the last assessment would have to be re-examined. Certainly, we do believe that we have worked very hard to try to avoid the contagion of economic decline to spread in Asia. And we've worked very hard at that in Korea, in Thailand, worked with the Chinese; and we will continue to do that. But we are dealing with a situation that is unique, and that is an Indonesian political crisis coming on top of an economic crisis.

That has required us to take the position that Secretary Albright took last week, in which she made clear that the time had come for political reform and for a political dialogue. We will obviously take into account economic factors in thinking about what we do here. But right now, Indonesia is sui generis, and we will continue to treat it as such.

QUESTION: A technical question. Do you happen to know the size of the next tranche of the IMF?

MR. RUBIN: No, I'll have to get you that for the record.

QUESTION: Do you think it's important that the next leader of Indonesia have no family ties to Soeharto, and not be a military man?

MR. RUBIN: What we think is important is that whatever leadership emerges in Indonesia is a leadership that has the consent of the governed, that is the result of the kind of dialogue and reform that I have talked about and that Secretary Albright and the President have talked about. It is not up to the United States to dictate the specific make-up of the Indonesian leadership. We don't have a political fix in mind. What we have is a process whereby reform and dialogue is the sine qua non of a legitimate and stable political leadership.

QUESTION: Different subject - a lot of conflicting reports about what's going on in the Middle East peace process. Can you bring clarity to the situation?

MR. RUBIN: I certainly can, and those conflicting reports about the Middle East peace process continue to surprise me. I never know which newspaper to read to get it wrong; and sometimes I can't figure out which wire service is right, either. But clearly that reflects the interest that all of the world has in the Middle East peace process, and the obvious interest of the United States in it.

Let me say this: Secretary Albright had a 90-minute, one-on-one meeting with Chairman Arafat yesterday in London. She laid out for him the current state of play, where we were as a result of her discussions with Prime Minister Netanyahu last week. Obviously in discussing the fact that Chairman Arafat has agreed in principle to our ideas, most of the meetings like this also include discussions of refinements of those ideas, and such discussions did take place. But let me reiterate the United States has no intention of adjusting downward in any significant way the key elements of our ideas.

With respect to people commenting on the change in tone or the change in timing or some other change they feel compelled to comment on, let me say this ; an invitation does not an ultimatum make. We made a conditional invitation. Chairman Arafat accepted in principle, and Prime Minister Netanyahu did not. We indicated that in the absence of agreement to our ideas, that invitation was not valid. So the meeting did not take place last Monday.

It is now eight days since then, and during that week we have done what those who care about the Middle East peace process would have wanted us to do, which is continue serious work. That has gone on for the last week. We've been working closely to find a way that would enable Prime Minister Netanyahu to say yes to our ideas. That's the work of diplomacy. We're not interested in some confrontation for confrontation's sake. We're interested in advancing the Middle East peace process.

We are in the middle of that effort right now, and therefore, it is not appropriate for me to get into any specifics of any of these ideas. We don't know if we will be able to succeed. We've exerted the extra effort because we believe if the objective is to reach an agreement, which is our objective, we want to do so. But, we have said from the beginning that if we conclude that we simply cannot reach an agreement, then we will need to come out and say so and explain why; and that day is not far off.

QUESTION: What's next - what steps are next --

MR. RUBIN: The Secretary will be briefing the President on the results of this round of talks in a series of discussions -- she began that yesterday - - and will make an assessment of how best to follow up. I can say that there are no meetings scheduled; that Ambassador Ross is not at this point, to my knowledge, planning to go to the region; there are no meetings scheduled in Europe. At this point the telephone works, and we'll be discussing with the parties, as we think is appropriate, any additional factors that will go into our judgment as to whether we can reach an agreement.

QUESTION: Is the ball in Prime Minister Netanyahu's court?

MR. RUBIN: Again, as has been my practice in this briefing room, you can write your own leads, you don't need me to write them for you. I have said that Chairman Arafat has agreed in principle to our ideas; and I've said that we have been working on how to find a way to enable Prime Minister Netanyahu to say yes to our ideas. We're in the middle of that effort; we're going to continue to make it; we're trying to be as creative as we can, but frankly, we don't know if we'll be able to succeed. If we conclude we cannot reach an agreement, we will come out and say so; and as I said, that day is not far off.

QUESTION: Presumably you were discussing refinements that, perhaps, Prime Minister Netanyahu has proposed, or perhaps, the US has come up with in response to his concerns. What was Mr. Arafat's reaction to those refinements?

MR. RUBIN: As I indicated, we do not think it's helpful to discuss the Middle East peace process before the T.V. cameras or in another public setting in any detail, because the goal here is to get the agreement of the parties and not to satisfy a daily need of the media, which we certainly understand.

With respect to what happened at the meeting yesterday, it was not simply a discussion of refinements. On the contrary, the bulk of the meeting was a description of where we are, how far we've come, a confirmation that Chairman Arafat was agreed in principle to our ideas, and then refinements were discussed -- but it wasn't the bulk of the discussion.

QUESTION: Would the Chairman have to agree to the refinements or would they fall under the category of US - your deal?

MR. RUBIN: We would keep both parties informed of what the process was. This is a process of a lot of transparency; there's a lot of discussion back and forth. We want to be sure that there are no surprises, and that's why we have so many meetings and have so many discussions. At this point, the refinements are not in the category of private assurances between --

QUESTION: (Inaudible.)

MR. RUBIN: I think I was just about to answer your question. They are not in the category of private assurances between one party and the United States. The refinements are not of that category that we've been discussing. So therefore, they would involve give and take in terms of discussing them with everybody.

QUESTION: Okay, so I think that answers it. The refinements would require --

MR. RUBIN: That doesn't mean there aren't some refinements that may be in the category of private assurances or something of that nature. What I'm saying is that the things that we've been talking about to try to get the parties to yes are things that are not simply on one side.

But let me be clear: Chairman Arafat has said yes in principle, but "in principle" is a term of art. When one moves from "in principle" to "in fact, " one gets into additional detail. So it's perfectly normal, as this process continues, for us to continue to discuss what that detail is and to make sure there are no misunderstandings.

QUESTION: But nothing happened on Monday, yesterday, to indicate that he's changed his in principle acceptance?

MR. RUBIN: Absolutely not.

QUESTION: Okay, he was happy with all the refinements?

MR. RUBIN: Was there something I said that suggested that?

QUESTION: No, no, I just wanted to make sure.

MR. RUBIN: You were just confirming that.

QUESTION: Right.

MR. RUBIN: If we're still on the Middle East - let's make sure we end this discussion with total clarity.

QUESTION: While Netanyahu was here in town last week, he and a number of other Israelis talked about Palestinian T.V. broadcasting incitements to terrorism or to - is how they described them. Did the Secretary talk with Arafat about these incidents of these T.V. broadcasts? Children saying that they were --

MR. RUBIN: First of all, I'm unfamiliar with the subject you're raising specifically. I did indicate last week that we do not believe that in the current climate it's wise for the Palestinian Authority or any entities associated with it to incite violence; and that remains our position.

Exactly what we say in every meeting, I am not going to make a practice of getting into. I don't really have much more to add.

But on Sid's question, let me make sure we end with clarity here, and your question, Judd. Chairman Arafat has agreed in principle to our ideas. That's not the end of the road; it doesn't mean you never talk to him again or never have a phone conversation or never have a meeting with him again.

These are a complex set of ideas, and they benefit from continued discussion and continued assurances. What happened yesterday - as has happened since the time that Chairman Arafat agreed in principle to them - is there is a continuing process of running through them and making sure there's clarity. There is also a process of refinements that may be discussed and, as I indicated, have been discussed in the last week. In addition, there can be discussions between the United States and Israel about issues that are primarily between us. So there are a whole set of possibilities here that happen in these meetings; and having sat through them, I can assure you that in the vast majority of the meetings that I've sat through, all three of those categories of discussions take place. Does that clarify it?

QUESTION: Not really.

MR. RUBIN: Jeez.

QUESTION: Sorry to belabor it, but it cuts to the heart of your statement that there will be no watering down of your proposal --

MR. RUBIN: Right.

QUESTION: -- and your statement that Arafat has accepted the deal in principle.

MR. RUBIN: Correct.

QUESTION: Now, if those two things are true, then you are not re- negotiating this deal with Arafat; is that correct? There is nothing - in other words, the refinements you took to him do not cross the threshold that would cause him to re-negotiate his in principle acceptance?

MR. RUBIN: No.

QUESTION: Can we go to something else, or --

MR. RUBIN: I have a certain sense where we'll go next; let's delay it a little longer.

QUESTION: I don't know if you'll like this much better, but you know - task at hand. Is the State Department concerned at all about --

QUESTION: (Inaudible).

QUESTION: I'm sorry - do you want to stay on this?

MR. RUBIN: Let's go back to the Middle East, yes.

QUESTION: I have one final question. In the spirit of continuing clarity, whatever the percentages that the US suggestions are - whether it's 9, 11, 13, whatever that percentage is -- is the understanding that should Israel accept this, that we would then jump to final status talks? That we would then go to the third redeployment? What would the next stage be?

MR. RUBIN: The question of the third further redeployment is a subject that has been discussed; and exactly how that will be handled is part and parcel of our set of ideas that we do not care to discuss publicly. We have not forgotten about it; neither have the parties. Clearly, it is a subject that is part and parcel of coming to an agreement on how to move from the current stalemate to accelerated permanent status discussions with the first and second further redeployment covered and the third handled. As far as how it would be handled, that is a subject that we're discussing privately with the parties and we don't think would be helpful to be more specific about.

QUESTION: But you are - without saying you stand by the Christopher letter?

MR. RUBIN: We stand by the Christopher letter.

QUESTION: You do think a third redeployment is an integral part of this arrangement?

MR. RUBIN: We stand by Secretary Christopher's letter.

QUESTION: Are you concerned about the - can we go to a new subject now?

MR. RUBIN: Yes. I think we're done with that.

QUESTION: Are you concerned at all about this computer missile technology that two US companies are said to have passed on to China, in light of the fact of the State Department's efforts in this area with the Chinese Government? And do you think that this in any way undermines the work that you are ongoing with them.

MR. RUBIN: Let me say this - the question of whether an unauthorized transfer of any information or know-how to China occurred is a subject that's under investigation. Therefore, to get into it in any detail is not possible from this podium.

However, we did make clear - and I can make clear for you again today - that we do believe that our licensing system and our process for ensuring that the US technology and know-how is not transferred to China allowed us to provide a second license to one of the companies involved. That is because the licenses in the second case tightened up or eliminated any uncertainty on the question that there must be no contribution to China's capability to design, develop, operate, maintain, modify or repair a launch vehicle. This policy was developed during past Administrations, and the US and China memorialized the understanding in a bilateral satellite technology safeguards agreement.

There was an issue of whether an after-action report was shared with the Chinese; and I can assure you that we felt confident that such an event was not going to occur again in the light of the discussions that were going on. So we take nonproliferation as seriously as we can. We push very hard to make sure that while advancing America's interest in allowing American companies to compete in the global marketplace by placing satellites in space in an efficient way, we are not undermining our determination to prevent unauthorized technology from going to China.

We believe we've been doing that. Obviously, there is a case that's under discussion, but in no circumstance do we believe that the policy of allowing China to launch American satellites is ipso facto providing China technology that will enhance their capabilities. The short way of understanding this is that when one of these satellites is placed on a Chinese booster rocket, it's essentially in a black box and the Chinese don't have access to that satellite or its mechanisms. What the Chinese do is boost the satellite cheaply, and frankly, from locations that provide orbital advantages for where the satellite ends up in the orbit.

That is the reason why we think there is a way to advance America's economic interests by allowing these satellites to be launched without harming our nonproliferation goals.

QUESTION: So you don't think in any way this information, should it be proven that it was indeed passed on --

MR. RUBIN: You've got to be more specific, you're just --

QUESTION: Well, the information from, let's see, the two companies: Loral Space and Communications --

MR. RUBIN: That's under investigation.

QUESTION: -- and Hughes Electronics. Now, I understand it's under investigation.

MR. RUBIN: Right.

QUESTION: But should you have a concrete, hard and fast conclusion that this information helped the Chinese in their ballistic missile program - the information that was passed on from the two companies to China - wouldn't that indeed undermine the work that you're doing now with them?

MR. RUBIN: That's what we call, in this business, a hypothetical question. What I can say to you is that we believe that the tight safeguards we build into these systems deter the unauthorized transfer of technology.

The fact that all of this discussion is going on about a potential violation demonstrates the stringency of our control system. No control system is perfect, and what we have to do is weigh the risks of not allowing the Chinese to launch American satellites and damaging the economic interests of the United States and its companies against what we consider to be minimal risks as a result of these tight safeguards on technology transfer. That is how governments make policy. People afterwards can always know that it was wrong to weigh the risk one way or another; but what we do is balance the risks of not allowing these satellites to be launched against the tight safeguards that we have in place.

QUESTION: I believe you said that you went ahead and issued a second license.

MR. RUBIN: Correct.

QUESTION: To either Loral or Hughes, if you could clear that up.

MR. RUBIN: Right. Loral.

QUESTION: To Loral, after you found out that they did share the after- action report with the Chinese?

MR. RUBIN: No, I referred to that as a reported situation in the newspapers. What I'm saying is that is under investigation.

But whatever might have happened in the first case, in answering the question of why we think the safeguard system is a good system, I'm indicating that even though there was a question raised, we went ahead and allowed an additional launch because we were weighing, again, the risks of not allowing American companies to have access to space -- which is an area of competitive advantage for the United States that makes us the global superpower that we are because we can exploit the high tech advantages of satellites in space. It would undermine our national security if we weren't able to exploit fully the opportunity to have satellites in space. We weighed that against the risk of unauthorized transfer with the safeguards that we put in place to prevent that, and we went forward with that second launch.

QUESTION: How long had you known - maybe this is too much detail, but at what point were you in the investigation when you issued the second launch - -

MR. RUBIN: I'd have to get someone to answer that specifically, but they'll probably tell you that it's under investigation.

QUESTION: What - (inaudible) - proliferation - Pakistan; is that a continuation of this discussion?

MR. RUBIN: Go ahead.

QUESTION: What can you tell us about ongoing dialogue with the Pakistanis on trying to discourage them from responding to the Indian tests?

MR. RUBIN: We are in regular consultation with many countries around the world. We're consulting closely with leaders and diplomats of all countries having strong concerns about nonproliferation. We're discouraging this potential Pakistani test and urging them to make the more difficult but the better call -- and that is to take the high road and not go forward with this test.

In that regard, let me say that yesterday's remarks by Home Minister Advani, like India's recent nuclear test -- these are remarks about urging Pakistan to back off on Kashmir, which I though you were going to ask me about -- seems to indicate that India is foolishly and dangerously increasing tensions with its neighbors and is indifferent to world opinion. We call upon India to exercise great caution in its statements and actions at this particularly sensitive time, with emotions running high.

With regard to Kashmir specifically, we urge both sides to respect the line of control and refrain from provocative actions, including support for militant forces or cross-border pursuit of militant forces.

QUESTION: How would you feel about China extending a nuclear security guarantee to Pakistan?

MR. RUBIN: I have heard that only from rumors from journalists; I've not heard any serious analysts proposing that or suggesting that China is pursuing that. What we want is Pakistan to see that, in the long run, it will be better off, more secure, more respected if it chooses not to test. With regard to any nuclear security relationship, which we're unaware of, it's hard for me to comment on.

QUESTION: I didn't ask you if you had read about it --

MR. RUBIN: Right, I'll take the question for the record. We've heard so little about it - it's never been discussed in diplomatic circles - that we haven't studied the matter.

QUESTION: Well it was a very high level meeting in China today, and apparently --

MR. RUBIN: Right, and inaccurate speculation, as far as I can tell, based on that meeting, is causing the issue to be raised in a way that we've never studied it because we're not aware that China is about to extend a nuclear umbrella to any country, nor would it.

QUESTION: Is China one of the countries we are consulting with about the situation in Pakistan?

MR. RUBIN: Yes. Secretary Albright has been in consultation with the Chinese Foreign Minister, and consultations have been at lower levels. Frankly, we were very pleased with the fact that China and the United States see eye to eye on the dangers of allowing the nuclear arms competition between India and Pakistan to spin out of control. China has played a very restraining and helpful role in this regard, and we certainly hope that what happened in their discussions with Pakistan would be leading Pakistan towards the kind of decision that President Clinton and Secretary Albright have spoken to.

QUESTION: Jamie, in light of the bellicose statements coming from India since their five tests, doesn't a nuclear balance of terror, as it used to be called, make a certain amount of sense for Pakistan?

MR. RUBIN: We certainly understand the political pressure they're under, but they're not going to make themselves more secure by accelerating a nuclear arms competition between Pakistan and India. On the contrary, we believe that both Pakistan, India and the world will be less secure if they were to go forward with tests. That is the position of the United States; it's one we've shared with them. We certainly understand the great political pressures they're under, but we do not think that some sort of balance of terror, as described by you, would improve the situation that currently exists.

QUESTION: Is the US proposing a new policy of solving the Greek-Turkish differences and the Cyprus problem as a package deal?

MR. RUBIN: Yes, last question on Pakistan.

QUESTION: Actually, I had a few questions just to clarify. There have been contradictory reports coming from Pakistan about whether or not a decision has been made to test.

MR. RUBIN: We're not aware of a decision.

QUESTION: You're not aware of a decision being made. Okay, second question is, what is the government's position on the Pressler Amendment, overturning it?

MR. RUBIN: Well, what we've said is we've been working with members of Congress on different aspects of this for some time. National Security Advisor Berger made clear that he thinks the climate would change remarkably and dramatically if Pakistan did not go forward with testing.

QUESTION: Have you taken a position on it?

MR. RUBIN: Again, the Pressler Amendment and all that goes with it is a very complex set of legislation. What I can say is that certainly Pakistan would benefit and we would try to assist them in that regard in their relationship, military and otherwise, with the United States if they didn't go forward and test. National Security Advisor Berger has made clear that the climate in Congress, in his view, would change dramatically.

QUESTION: My final question on the matter is that there are contradictory estimates of the effects of the sanctions in India. The new government --

MR. RUBIN: I put out an extraordinarily large amount of detailed material about this last week, and we'd be happy to get that for you for the record.

QUESTION: Okay, and it addresses the discrepancy between the two estimates?

MR. RUBIN: I'll do the best we can on the details of that. But again, estimates tend to have discrepancies by their very nature -- estimates.

QUESTION: Jamie, I just want to ask a follow-up on Pakistan. It seems a bit of a catch-22 for Pakistan, because on the one hand you have Prime Minister Sharif saying he's waiting to see what benefits can come towards Pakistan if they don't test. They're also waiting to see what the international reaction is to India's test, which to date has been rather muted, with the exception of the United States. But at the same time, you're saying that the US, or at least the State Department doesn't want to come out and say that the Pressler Amendment would be rolled back until you see if Pakistan is ready to test or not.

MR. RUBIN: Let me make two points. Number one, we do not believe the international reaction is muted. When the eight leading countries in the world condemn something, I think even in the language of critics, that could hardly be described as muted.

Secondly, a whole series of countries have announced economic sanctions against India. It may not be every country in the world, nor do every country in the world have the automaticity that the United States has had. But clearly, this decision will redown to the disadvantage of India for a long, long time to come. Generally speaking, we're talking about billions of dollars of economic assistance and bank loans that will not go to India that would otherwise have done so.

With respect to Japan and Canada and New Zealand and a whole set of countries, economic sanctions have taken place. So clearly, India is far worse off. With respect to their aspiration to be a permanent member of the Security Council, we most certainly could not support this. Therefore, in terms of India's standing, in terms of its economic future, and in terms of its political role in the world, it has been damaged, and damaged severely.

With respect to what Pakistan's decision-making will be based on, it is our understanding it is not going to make this decision based on a few million dollars here or a few tens of million dollars there in military equipment. This is an existential decision for them, and will be made based on whether they think they will be safer or less safe, on whether they think that India will be moved out of the mainstream or not, and not so much based on what they think would happen in their relations with the United States. In their discussions in Pakistan, Deputy Secretary Talbott concluded that their thinking was much more based on the two questions I referred to than on the prospect of the Pressler Amendment or some additional aid package.

QUESTION: In terms of Pakistan's perception of its own security, I think one of the things that Pakistan would have liked to hear from the United States is that it might be included in the US nuclear umbrella.

MR. RUBIN: That didn't come up in Pakistan, so I guess --

QUESTION: So what kind of reassurances would Pakistan need to hear about its security? What would have to happen?

MR. RUBIN: Well, I'm trying to indicate to you that they are not looking to the United States or any other country to solve their security problems for them through some set of arrangements. They are making a decision over whether they should move from the status of a country that we believe has a capability to put together a limited number of nuclear weapons in a relatively short time to a country that conducts such tests and what will the results of those tests be for their status in the world, for their economy, and for their relationship with India. Will they end up being better off? Will the people of Pakistan end up being better off - not will they have an additional plane or an additional repayment of an additional loan or will they have a new military arrangement with some country or another. But it's a much larger question than simply a matter that can be resolved - I grant you that a security alliance of some major proportion might have an impact on them; but I've just not heard anybody talking about that other than journalists and commentators.

QUESTION: Let me ask my question again. Is the US proposing a new policy of solving Greek-Turkish differences in the Aegean and the Cyprus problem as a package deal; because President Clinton made some statement and it seems to have been misunderstood?

MR. RUBIN: No, there is no new policy in this regard. The President's statement speaks for itself in reaffirming long-standing US policy. We want to help Greece and Turkey resolve their problems peacefully; we want to help resolve the Cyprus problem; and we strongly support Turkey's EU aspirations.

The US is not proposing a new set of negotiations or any other approach that would link these issues in some sort of package deal. We do, however, believe, as the President indicated, that progress in one area can improve the climate and the atmosphere for progress in another. But they are still separate issues being dealt with separately through diplomatic channels.

QUESTION: On the same subject, do you have any indication whether the Secretary is planning to travel to Turkey and Greece very soon?

MR. RUBIN: I don't think any decision has been made on that.

QUESTION: Jamie, can you update us on the --

QUESTION: On the same subject --

MR. RUBIN: Well, I doubt I'll have much more to add than that, but I'll give it a shot.

QUESTION: Okay. In an interview published in the Arabic newspaper Al Hayat, which they publish in London, the PKK terrorist organization leader, Mr. Ocalan, he said that he is planning to settle in either Greece or in Germany. What do you advise on this subject to your very close friends and NATO allies?

MR. RUBIN: We'll take that question.

QUESTION: And also, in the second part of the question, in the same interview he said that some of the Western countries' diplomats are playing the mediator role between Turkey and the terrorist organization. I wonder, do you have any US diplomats in charge of this kind of mediation role?

MR. RUBIN: We'll take that question.

QUESTION: There are press reports that the S-300 missiles that will probably arrive in Greek Cyprus in August, Russian missiles, will be accompanied by powerful radar systems that can monitor NATO flights and communications in the area. Is it fair to say that these radars are one more reason why US should be concerned?

MR. RUBIN: We'll take that question.

QUESTION: Any comment to my pending question about Suleyman Demirel of Turkey's statement the other day that the war against Greece in the Aegean is not a criminal act, but a vital need?

MR. RUBIN: Please repeat it; I didn't understand it.

QUESTION: Any comment to my pending question about Suleyman Demirel's statement the other day that a war against Greece in the Aegean is not a criminal act, but a vital need?

MR. RUBIN: I believe, if you're not aware, we've posted an answer to that question; we'd be happy to give you that.

QUESTION: No, the answer was - the statement - (inaudible) - I would like you to comment on the statement by Mr. Demirel. This is my question.

MR. RUBIN: Well, we'll try to adjust our posted answer.

QUESTION: Can you update us on the mediation efforts of Assistant Secretary Rice in the Horn of Africa; and where is she at this precise moment?

MR. RUBIN: Yes, I don't know which particular country she's in, but I can say this: We deeply regret the use of force between Eritrea and Ethiopia, and both of those countries are close friends of the United States. We have urged both governments to practice restraint and to avoid any actions that might aggravate the situation.

Assistant Secretary Rice has visited both Ethiopia and Eritrea in the last couple of days. She is consulting with the leadership of both countries at the request of Secretary Albright. She is urging restraint on both sides. Her mission is ongoing, and she continues to consult with both sides. But she's not in a negotiating mode; she's in a dialogue with the parties. We're using our good offices to facilitate an understanding that could lead to a peaceful resolution of the conflict.

QUESTION: Do you have anything more on the Mexico drug raids?

MR. RUBIN: Not much more than what the Justice Department and the Treasury Department put out; other than to say that money laundering has been a major concern of both the US and Mexican Governments for some time. While this was a US-based investigation, we will seek to work with Mexico to build on this breakthrough to combat and to deter such financial crimes, and the departments involved will be sharing information with their counterparts that might be useful in pursuing corresponding investigations in Mexico.

The Zedillo Administration in Mexico has taken the problem of money laundering very seriously and put forward a series of penal code and regulatory reforms designed to make it more difficult to hide money laundering. We have been working with them on that, and we have not had an opportunity yet to analyze the full impact of this case on the financial sector in Mexico.

QUESTION: With the rampant trafficking and laundering, why have you not re-examined decertifying Mexico?

MR. RUBIN: As you know, we made a series of decisions in the last two years about Mexico based on the judgments that we provided to you at that time. We don't believe the fact that we are working to fight money laundering changes the basic fact that we are receiving cooperation from the President, which is the standard involved in the law.

QUESTION: There's a hearing on the Hill today, as you're probably aware, about security of government computer systems and there's a General Accounting Office report which particularly points to the State Department and the FAA as having problems and being at risk to hackers. How concerned are you about this problem, if at all?

MR. RUBIN: We're always concerned about the security or our computers. As you know, we take security very seriously here. The GAO did conduct an audit of the Department's unclassified computer networks last year; this audit found some vulnerabilities in the security of these systems. We take the GAO's findings very seriously, and are currently working to improve the security of our unclassified computer systems, which is what this was about. We believe we have corrected a number of the vulnerabilities. As to information relating to specific vulnerabilities in classified security systems, I think you'd understand why I couldn't discuss that in public.

With regard to a specific allegation that a hacker accessed the computer system of two overseas posts, we do not believe that to be correct. No systems were shut down as a result of an alleged incident in that regard. We take computer security very seriously and will continue to work to resolve any problems that have emerged from our own work and from any of the additional information that the GAO provides.

QUESTION: Yesterday, in a statement about what might happen with the arrangement between the EU and the United States, the US had said if Congress upholds the decision, certain provisions of those laws could be waived. Senator Helms has said in no uncertain terms that that's not what he'd like to see happen. Has there been a response from the Administration?

MR. RUBIN: Under Secretary Eizenstat spent most of the plane ride yesterday briefing members of Congress about some last-minute discussions, which we believe do provide rather dramatic new policies on the part of the Europeans to fight trade and commerce in expropriated property.

We have a whole set of disciplines that involve major transformations of the positions of the European countries, acknowledgment that these investments that we've been talking about were indeed illegally expropriated by the Cuban Government. We hope that the more the members of Congress learn about what did in fact happen in these negotiations, the more they will support a waiver in Title IV that would permit us to achieve the objectives of the legislation, which is to curtail and deter trafficking in expropriated property.

QUESTION: Just a quick question? Was the Mexican Government aware of the US investigation in Mexico from the outset? If not, when did the Mexican Government --

MR. RUBIN: I don't believe so, but I believe the Justice Department addressed this question yesterday, and specific information about that should be directed to them.

QUESTION: Thanks.

(The briefing concluded at 1:50 P.M.)

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