• This is a partial transcript from "Your World with Neil Cavuto", February 18, 2004, that was edited for clarity.

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    NEIL CAVUTO, HOST: All right. So maybe this is a sign the economy in Iraq is off to the races.

    Let's get a read on that from Jim Saxton, the Republican in New Jersey who spent a good deal of time in Iraq and can really testify to the comeback there. Major General Paul Vallely has also been to Iraq, and he can attest to some of this improvement.

    Congressman Saxton, to you first. Is it real?

    REP. JIM SAXTON (R), NEW JERSEY: Sure. I couldn't see the picture of the racetrack, but what I heard described verbally is typical of what you see in Iraq. As you ride down the street in Baghdad, for example, or in Tikrit, where I visited last week, you see people going about their business in a kind of a more normal way than you would ever imagine by looking at television reports from here.

    But in addition, I think there are two sectors of the economy that are really going to begin to grow. The oil industry, where we had targeted -- or the CPA had targeted two million -- two billion barrels -- two million barrels a day, excuse me -- we've actually surpassed that target. We're now at 2.3 million barrels per day. So that is certainly encouraging.

    The other real sleeper I think in Iraq is agricultural. The fertile land in the central and northern part of the country is really a great asset, and an untapped one. And as soon as the Iraqis begin to adapt some modern methods of agricultural production, I believe that will begin to grow and feed a good part of that region of the world.

    CAVUTO: General Paul Vallely, a lot of the media attention is on hot spots like Fallujah and Tikrit and the attack on our troops in and around those areas. But you argue it is a bigger country and we are missing the bigger picture. What do you mean?

    MAJ. GEN. PAUL VALLELY, FOX NEWS ANALYST: Well, that is exactly right, Neil. And Congressman Saxton hit a couple really key areas. When you fly over Iraq, the vast array of a water distribution system throughout that country is just phenomenal that has been developed over the centuries. And so the agricultural production element of the economy will fuel this economy, very, very well for even exports throughout the region.

    The electrical utility business over there is now proceeding, getting above 4,500 megawatts, going to 6,000 megawatts a day. But private industry needs to be prepared, Neil, as well, because destination resorts, we looked at a possibility down in the Babylon area, beginning of civilization. To have some kind of a hotel complex down there, where now they can develop travel services, vacation services later when the security becomes reality there.

    CAVUTO: But that is a big "if," right, general?

    And congressman, I want to raise this with you. If you're going to get resorts in there, and follow the lead of some brave U.S. companies, let's say, like Pepsi Cola, that opened a bottling plant there, you're going to have to convince them that it is safe to do so. Are we doing that? Can we do that?

    SAXTON: Well, that is a goal that we have for some time in the future. I also visited Israel recently, and the hotels in Tel Aviv are pretty much empty for that very same reason.

    CAVUTO: Right. Right.

    SAXTON: And I might say, the security in Israel, in spite of what we see, is a whole lot more secure than it is in Iraq at this point. So I think that is a good point for the future, and I think it will take us a while to get there.

    CAVUTO: General, you have talked to a lot of the Iraqi people, and how they feel. And we have heard there are restaurants opening and shops opening. That, by and large, they feel pretty good. But why don't we see that, or what is the problem?

    VALLELY: Well, we have seen it from time to time, Neil. Some of our reporters over there from Fox have done some great stories, just like on the racetrack. Some of the restaurant that have opened up, the markets, the bazaars that they have, continuing to bring in new products.

    The cable -- not cable, but the dish networks over there, every place we went we could see new dishes on top of all the buildings in the area, as well as the cell phone networks are taking off. But jobs, we need to really push the jobs. And that will only come about as we provide more and more security for the people to work, not only in the private sector, but also the public sector. So very important that we create and develop the greatest security we can over the next four months before we move to that critical June 30 date.

    CAVUTO: All right. General, thank you very much.

    Congressman, thank you. Appreciate it.

    SAXTON: Thank you.

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