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MR. DRUMMOND: Well, good afternoon, everyone. Welcome to another great day at Google. I am distinctly honored today to welcome to Google Secretary of State Condoleezza Rice, as well as British Foreign Secretary David Miliband. As you know, they wrestle with some of the world's most important issues on a daily basis, so it's a huge, huge honor for us to have them to come out to see us today. You know, Secretary of State Rice obviously needs very little introduction to all of us. All of us Stanford folks here remember her illustrious career on the farm. And of course, she has served as Secretary of State since 2005 and before that, National Security Advisor. British Foreign Secretary Miliband became Foreign Secretary last year, June of 2007, and before that, had - I knew that was right. SECRETARY RICE: That's right. MR. DRUMMOND: And before that, had served in a variety of other positions, including Environment - Environment Minister in the UK and is very much a leader on climate issues in the world. We're also happy to report that he's one of - he is the first MP, I believe, and minister in the UK to start using blogs and Wikis and he has his own YouTube channel, so a kindred spirit, indeed. (Applause.) So we're really gratified that you're both willing to come here and share your thoughts today. Now perhaps a good way to get started, Secretary Rice, is maybe to just talk a little bit about kind of why you're here and the purpose behind the visit. You know, you're showcasing innovation and we like to think we do a little bit of that here, but perhaps you could talk a little bit about that for us. SECRETARY RICE: I'd be very glad to do that. First of all, David, thank you very much for all the hospitality. Thanks to all the members of the Google family for inviting us here. I want to say hi to Sergey. He did well despite the fact that he was around as a student when I was at Stanford. (Laughter.) I apparently didn't do any harm to you, Sergey, even though you were a student. And I wanted to come to the Silicon Valley to what has become my home and bring one of my best friends among the foreign ministers to look at innovation and technology and new ways of thinking and new ways of doing things. Because as we struggle with any number of problems, but particularly those that relate to innovation, to the need for new sources of energy, for clean technologies that will allow us to be both countries that can grow our economies and countries that can provide environmental stewardship, we need new ideas and we need new ways of thinking about it. And I don't think there is any place in the world that is better at bringing about people who want to think differently than the Silicon Valley. And this trip really started with our first dinner, when David first came as Foreign Secretary and we started talking about some of the challenges of climate change, of energy security, of innovation. I talked a lot to David about the important relationship that we've developed in the United States between basic research in universities and then commercialization of that research. And I promised at that time that I was going to bring him to the most dynamic, innovative, interesting and fun place to be on the entire planet. And we're here in Silicon Valley. (Applause.) MR. DRUMMOND: Great. So our format today is, we have got a few things and topics to chat about and then we're going to - you know, we have a moment to open it up to Googlers after that. So maybe a place to start is on the innovation question and, sort of, global competitiveness. And Foreign Secretary Miliband, maybe you can jump in on this to start, but I think few would disagree that it's pretty much a given that going forward, the West, particularly the United States, UK, are not going to sort of dominate the world economy, that it's become much more competitive. You see China, India, Brazil, millions of countries making enormous progress. In light of those developments, how do you think the U.S. - or the UK in particular, and perhaps Secretary Rice can talk about the U.S. - how do we stay competitive? FOREIGN SECRETARY MILIBAND: Well, maybe I could talk about the U.S. and you talk -- MR. DRUMMOND: Yeah. FOREIGN SECRETARY MILIBAND: -- about the UK. SECRETARY RICE: (Laughter.) FOREIGN SECRETARY MILIBAND: That would be quite interesting. I think the first thing to say is that what unites us very profoundly, as we think about challenges of the modern world, is that you can't solve the big problems with government alone. And if you want to solve the big problems, you have to engage with the hearts and minds of millions of people around the world, be the problem of climate change or be the problem of international terrorism or be the issue of nuclear proliferation. These are issues that require governments, but they also need businesses and markets aligned behind a common set of goals and they need mass mobilization. And I think it's interesting, as we've had the presentations over the last two hours, you've talked a lot, or we've talked a lot about how we bring or how you bring information to individuals. And we've seen maps and we've seen the full range of help projects that you're developing. But actually, one of the most interesting things that you do is that you bring together communities, you create communities. And if you buy the argument that to achieve change, you need government, you need markets, and you need the mass mobilization of individuals, then I think one of the things that we have to think about is how the communities come together, because they're not going to come together in the old ways in drafty trade union halls. They're going to have to come together in new ways and that's why I think -- the significance of being here, not just in Silicon Valley, but here at Google. I think in respect of the changes and the nature of the global economy, I think there are a couple of things I would say. First of all, let's not get this out of perspective. Chinese income per head is between 1/20th and 1/25th of the American level. In ten years time, China will be richer. It'll be closer to the U.S., but the U.S. will still be a superpower economically as well as politically and militarily and culturally. So the first thing is, let's keep this in some kind of perspective. This remains a massive jobs and wealth machine. Why does it remain a massive jobs and wealth machine? Because it brings together people, money, and ideas in a unique way. And I think that's the key not just for the U.S., but for a country like mine. I mean, the UK is 60 million people, so it's a couple of Californias maybe, and - if only. The - we're 60 million people and if you look at the successful parts of our economy -- and I think this is something that's important in politics. Often, we look at what are the problems and how to resolve them. Sometimes it's better to look at what's working and why does it work. If you look at the most successful parts of the UK economy, which are in London in the southeast, which I think rival California for income per head, the reason is that people, money and ideas are coming together in a unique way. And I think that is the absolute key for nations. Just one final point: It's got to be part of an open trading system. We, as the United Kingdom, have been big winners from globalization. And globalization brings big problems, climate problems, inequality problems, insecurities. But the answer to globalization is not less globalization, but more. More trade is actually important and I think we might return to that in the course of the discussion. SECRETARY RICE: Let me pick up where David left off because it's an interesting question. Where will the United States or the UK or Europe, for that matter, be relative to the emerging powers - India, Brazil, and certainly China, the dominant emerging power? I think that the - the way that the United States thought about this after World War II gives us a clue, because at a time when the U.S. probably controls almost 50 percent of the world's GDP because of the war and the devastation of other countries, we didn't think, "Well, let's protect that 50 percent." We thought of the international economy as having infinite possibilities for expansion. And if it continued to expand, there was plenty of room for everybody to expand and no one had to be a loser if others expanded. And I think that's the essential key now to going forward. It means that if we are afraid of competition, if we start to try to close ourselves off somehow from competition, if we try to protect that part of the economy which we have, then I think we're going to end up losers from the next round of globalization rather than winners in the way that we were after World War II. Secondly, I'm a strong believer in the light hand of government and the strong power of innovation through the private sector, and particularly a private sector that can be open to people and ideas from all over the world. As I look out at the folks here at Google, I see that the United States is succeeding because we are not putting up barriers to people who want to come here and be a part of this great growth of international capital, but made here in the United States. Because I doubt that Google really thinks of itself as an American company. You are really a global company. But you found your home here in this little part of California because the environment is right, because creativity is encouraged, because both success - success is rewarded and if you fail, you get up the next day and you keep going. There are a certain set of values that are very much endemic to this part of the world, so you found a way to create the culture of innovation here, but you're contributing to the global economy. And I think as long as the United States remains open to people from around the world who want to come here and be part of the international economy from here, we'll be fine. And the final point I'd make is, as an American, I am not at all fearful of competition. But the United States has to recognize that perhaps our most serious national - national security challenge may be in providing an educational system that makes it possible for Americans born right down the road here in Mountain View, or born across the Bay in east Oakland, to acquire the skills and the education that's going to make it possible for them to compete. Because I can - I can assure you if we don't provide that, if it ever becomes the case that it's no longer true in America that it didn't matter where you came from, it only matters where you're going - if we ever lose that, which is essentially at the core of who we are, then we are going to be fearful and we are going to be protectionist and we are going to try to hang on to that little piece of the economy that we have. So I think those are some lessons that we've learned, but because I'm very confident in the ability of America to compete, of Americans to compete, and of our ability to stay open to the best talents from all over the world, I think that when some Secretary of State sits here in 20 or 30 years, still be talking about American leadership of the international economy. MR. DRUMMOND: Great. So - okay, so let's talk about Iraq. (Laughter.) SECRETARY RICE: Kind of abrupt, but all right. (Laughter.) MR. DRUMMOND: You knew we'd get there eventually. Let's just get there right away. So - (Laughter.) FOREIGN SECRETARY MILIBAND: You're looking very uncomfortable. I don't know why. MR. DRUMMOND: No, I'm comfortable about it. (Laughter.) SECRETARY RICE: I was just there a little while ago, so -- MR. DRUMMOND: So you have a firsthand perspective, of course. So - okay, so roll forward five years. It's 2013. How far has Iraq come? How many British and American troops are going to be there? What does it look like? I'd like to hear each of your answers to that. SECRETARY RICE: Yeah. Well, let me start and then maybe David will fill in. I - we all have - there are many differences of view about why we decided the liberation of Iraq was in our interests. There are many differences - differences of views about whether or not we did our work well. I have said on any number of occasions there will be dissertations and many, many, many books written about the mistakes of the Bush Administration. I will probably oversee some of those dissertations myself. (Laughter.) But the time to judge all of that will come later. What we're looking at right now is the birth of the first multiethnic democracy in the Middle East. And it's hard. It's really hard. Because this is a place that has known nothing but tyranny, has known a lot of violence in its history, but that is slowly trying to emerge as a place that can provide a decent life and a decent political system for its people to resolve their differences by politics, not by violence and not by repression. And lest we think that there's something wrong with the Iraqis that they haven't gotten it right in five years, I would ask people to remember that the United States was born with a certain birth defect. My ancestors were relegated to three-fifths of a man. And the Iraqis have not made a compromise nearly that bad. Secondly, I come from Birmingham, Alabama, and still, in 1964, which I know for all of you is ancient history, but for me, I was ten - you still couldn't guarantee the right to vote for blacks living in Alabama. So democracy is hard. And we cannot afford to be impatient with people in the Middle East as they try to find a way to reconcile individual rights with old traditions, Islam, and democracy, the role of religion and the role of the state. Many of these, we resolved many, many centuries ago. They haven't. And it's going to be hard. So I can't tell you exactly what it will look like in five years. I can't tell you what the American and the British posture will look like. I suspect it'll be far, far less than it is now if we do our - continue to do our work well. But I can tell you that the last time I was in Iraq, or maybe the time before that, I sat in a provincial council in the city of Kirkuk. It is a place where Arabs and Turkmen and Kurds come together and it has been a place that has been racked by violence or by repression for its entire history. And I sat with the provincial council as they talked about how to share power peacefully. The Middle East needs more of that because in too much of the world, difference is still a license to kill. And unless countries learn to resolve their differences through political processes and through democratic processes, you only have one of two other choices: they do it violently or they do it by repression. And neither should be morally acceptable to the United States of America as we sit here in freedom. (Applause.) FOREIGN SECRETARY MILIBAND: Let me just say three quick things about this. First, I think it's significant that you're asking about the next five years and how we shape it, not "Let's diagnose the last five years." Because I think in my country, as in yours, the Iraq war was a very, very divisive political issue. But I think whatever the depths of the divisions about the origins of the war and the decision to go to war, I don't think it's impossible to forge unity about the next five years. Secondly, why do I say that? There are three things that actually, everyone can agree on. One, there needs to be a massive improvement in the security situation. Secondly, it's got to be founded on political reconciliation of the different groups that Condi has talked about. And third, they've got to be able to build a decent economic and social life for themselves. In all three of those dimensions, I think we've got a role to play. Our focus is in the south of Iraq, around the city of Basra, a city of about 2 million people near the Kuwait border. We've got about 4,100 troops there. They're focused on training up a division of the Iraqi army with about 10,000 troops in that division. And that is a city that has undergone big change, even in the last three or four months because there's been major change there. Third thing I wanted to say is that there are different Iraqs if you go to the north and talk to Kurds, which I have. There's a different Iraq if you're in Baghdad, where you've got deep divisions between Sunni and Shia, and actually, within the Shia. And there's a different Iraq in Basra, which is a 95 percent Shia city. And there are different challenges of security politics and economics in those three different parts of the country. And I think it's important that some of the reporting I've seen in the U.S. over the last three days since I've been here begins to reflect the complexities that exist. And I think that's a good thing. SECRETARY RICE: Could I just add, David, on the reconciliation? Because it is absolutely true that they need to achieve political reconciliation. And there were a number of laws that we hoped that they would pass. And I think it is - it's somehow begun to - it hasn't gotten the publicity that it was getting when they weren't passing the laws, that in fact, they've now passed a de-Baathification law, they have passed two budgets, which, by the way, the United States seems to be having trouble doing in our Congress. They have passed an amnesty law. They have passed an elections law. They have passed a provincial powers law. And the one law that remains to be passed is a hydrocarbons law that will look at - not revenue-sharing. They've agreed on how the revenue will be shared among the various parts of the country, but on how contracting will be handled and the like. And so this is a political system that is moving forward and starting to make progress. It is still very fragile. As you know, David, in Basra, where Britain has done a lot of the heavy lifting, Iraqi forces are now in control of Basra rather than the militias that were there just a couple of months ago. And so this is a difficult situation, but it's a new democracy that's being born. And it's something that, if it succeeds, and I believe that they will, it will change the face of the Middle East. MR. DRUMMOND: Foreign Secretary Miliband, continuing on Iraq and the war, you talked last year at the Labor Party conference about repairing relationships with millions of Muslims around the world who feel alienated with the West -- about the war, about Western, sort of, participation in Middle East affairs in general. What do you feel - how do you feel - what are the concrete steps that you think need to be taken to repair those? FOREIGN SECRETARY MILIBAND: This came home to me just by way of preview when I went to the meeting of the Pakistan Youth Parliament, 120 people between the ages of 20 and 40, really. And it struck me that it's one thing for people to disagree with our actions, which many of them did, but they also distrusted our motivations. And I think it's important that we address the motivational question, because the truth is that the terrorism that you suffered on 9/11 and that we suffered on 7/7, the 7th of July, 2005, is different from the sort of terrorism that certainly, we faced before from the IRA or elsewhere. It's based on a global jihadist ideology which has got a very clear narrative at its heart. And that narrative is that the West want to humiliate Muslim populations in Muslim countries. And we'v