Karl F. Inderfurth
Assistant Secretary of State for South Asian Affairs
Remarks at Paul H. Nitze School of Advanced International Studies (SAIS)
Washington, DC, October 6, 1999

Engaging South Asia

It is an honor and a pleasure to be with you today to help inaugurate the new South Asia program here at SAIS.

I particularly want to thank Ambassador Shirin Tahir-Kheli for inviting me to speak. Shirin is a one-person State Department and National Security Council rolled into one. She has been enormously creative and energetic in pushing ahead an agenda of political and economic confidence-building measures in South Asia. She has been tireless in her work on Track II related activities with India and Pakistan. She has also been a valued friend and occasional advisor to me--first during my tenure at the U.S. Mission in New York and now at the South Asia Bureau. Thank you, Shirin, for trying to keep me out of trouble. I think you have only partially succeeded.

Shirin asked me to focus my remarks on the future of U.S.-South Asian relations. But before I take out my astrology chart to look into that future, I believe we should first ground ourselves in the reality of today.

South Asia and U.S. Policy Today

South Asia is in the news and receiving higher-level U.S. policy attention than it has for a very long time. Indeed, if one looks in the index of A World Transformed, the recent book by former President George Bush and Brent Scowcroft, you will see that India appears only once and Pakistan not at all. I have no doubt that if George W. Bush writes his memoirs as President, or Al Gore, or any of those now running for President, South Asia will figure more prominently! I can tell you it certainly will for President Clinton and Secretary Albright in their accounts of their years in office.

There are a number of reasons for this increased attention--some decidedly positive and some unfortunately negative. Let me begin with the negatives.

First, there is the danger of nuclear and missile proliferation. Last year's nuclear testing by India and Pakistan, which included India's first tests in 24 years, and the first ever by Pakistan, were of enormous concern to the United States and the international community. Today there is the risk of accelerated competition, including missile delivery systems, affecting regional stability. In many respects, the tests have dominated our approach, our thinking, and our activities in South Asia for the past 16 months. They are also playing into the current debate over ratifying CTBT, which I will want to say more about in a moment.

Second, we have seen renewed conflict in Kashmir, specifically the Kargil crisis. This summer's fighting along the Line of Control was the most dangerous escalation of Indo-Pakistani violence since 1971. The crisis between the two nuclear capable states dealt a severe blow to the efforts of Prime Ministers Vajpayee and Sharif toward reconciliation that they started at the Lahore Summit last February. We are concerned that if matters drift and a modicum of trust is not restored, and if the Lahore process is not resumed, such clashes between India and Pakistan could occur again-and escalate further. That is why President Clinton has pledged his "personal interest" in seeing the bilateral efforts of the two countries accelerated and intensified in the search for resolving their long--standing and fundamental differences, including Kashmir.

Third, terrorism is on the rise in South Asia. After 20 years of conflict, Afghanistan now serves as a base and training ground for Usama bin Ladin and other terrorists who threaten our interests--and those of the states in the region and the international community world-wide. This week's edition of India Today has bin Laden on the cover with the headline: "Jehad on India: How Serious is the Threat?" Recently we imposed economic sanctions through an Executive order on the Taliban for continuing to provide bin Ladin safe haven. We are now working at the United Nations to see international sanctions enacted. But terrorism in South Asia is not confined to the threat emanating from Afghanistan. In Sri Lanka, the LTTE has recently stepped up its brutal attacks against civilians in the 16 year-old conflict. In 1997, Secretary Albright took the step of declaring the Tamil Tigers a Foreign Terrorist Organization.

Now, let me turn to some of the more positive reasons for increased U.S. attention in South Asia. These involve the global issues on which we hope we can focus more fully as we step into the 21st century. Two stand out: the economic potential of the region and the extremely solid and encouraging development of democracy.

As many of you know, the South Asian region is potentially one of world's largest markets, and commercial opportunities are growing. Liberalization is improving the investment climate for U.S. business throughout the region. India is one of the 10 major emerging markets, especially for the high tech sector; and both Pakistan and Sri Lanka offer considerable possibilities. We also have major energy interests: Bangladesh gas deposits and Himalayan hydropower potential could be major energy investment opportunities for U.S. firms.

Democracy is another positive reason for increased U.S. attention. Today the ballots are being counted in India's most recent national elections. As Foreign Minister Jaswant Singh recently reminded us in his address to the UN General Assembly, the Indian electorate of around 600 million people matches the combined populations of the U.S., Canada, and Western Europe. But India is not the only country with elections this year. Nepal recently elected a new government with a ruling majority I might add, and Sri Lanka will be going to the polls next year. Democracy is taking root in South Asia.

For these reasons, and many others, we are seeing an increased focus on the region. President Clinton is determined to see our relations broadened and strengthened. In July 1997 he approved a policy of enhanced engagement with the region. At his July 4th meeting with Prime Minister Sharif at Blair House this year, he made it clear he intends to travel to South Asia soon. Indeed he has been trying to do this since his second term began, but events have intervened. We are hopeful there will be no further unexpected occurrences between now and early next year so that his proposed visit to India, Pakistan, and Bangladesh can go forward. It will be the first visit by a U.S. President to the region since President Carter traveled to India in 1978.

I should also mention there is heightened Congressional interest in South Asia. This is in part due to the growing size and influence of the South Asian-American community--well over one and a half million strong.

And finally, it is worth noting--especially in this setting--that the region is attracting greater attention among policy "elites." Indeed, we have seen a "proliferation" of academic and research programs on South Asia. We are confident the SAIS program will make an important contribution in this regard. This is one type of proliferation that we can support without reservation.

Looking Into the Future

I have sketched a brief outline of where we are today, but as we look beyond the immediate, the question is: What would we like to see with regard to our future with South Asia? What are the possibilities? What are the problem areas holding us back--and what can we do about them?

CTBT

An immediate challenge we face--heightened by the fact that the Senate is considering a vote-- is ensuring that the Comprehensive Test Ban Treaty (CTBT), which prohibits all nuclear testing, comes into force. Over the years, Congress has passed and the Executive branch has implemented a number of sanctions--including the Glenn and Symington and Pressler amendments--designed to halt or, at a minimum, inhibit nuclear proliferation.

Now, with the impending CTBT vote, the U.S. Senate has an opportunity to support an international regime that advances these same non-proliferation goals in a positive, not punitive fashion. We have an important opportunity to lead by example. Moreover, failure by the United States to ratify the CTBT would produce negative consequences, jeopardizing our interests in South Asia. Since their nuclear tests of a year ago last May, we have made substantial progress on the nuclear testing aspect of our dialogue with India and Pakistan. Both countries have adopted moratoria on further testing. Rejection of the CTBT may cause them to question the wisdom of their moratoria, if not now, then later. Recently, we have received clear signals from India's National Security Advisor that India is moving toward signature of CTBT. We are hopeful that Pakistan would then sign as well. That forward movement could be stopped dead in its tracks.

We are also concerned that refusal by the U.S. to ratify the test ban treaty could also encourage those in and beyond South Asia who seek nuclear capabilities that would, by their very acquisition, impact adversely on regional security in Asia. We do not want to see an arms race reminiscent of the Cold War repeated. The Comprehensive Test Ban Treaty is one means to prevent that. We hope the Senate will agree.

A New Structure for our Relations with South Asia

Against this backdrop of CTBT and our other nonproliferation and security concerns, we also recognize a broad range of important American interests in South Asia. We would like to see a greater emphasis on trade and investment, cooperation on science and technology, the environment, health, and stabilizing population growth. This recognizes the many priorities we share and would provide a solid foundation for our bilateral relationships in the years ahead. Indeed, if you will permit me a moment of optimism, I believe we have a real opportunity today to build a new structure for our relations with the countries of South Asia, not only with India and Pakistan, but also Bangladesh, Sri Lanka, Nepal, the Maldives, and Bhutan. I do not want to diminish the importance of the issues where we diverge, but focusing exclusively on them is not the way to build a stable and sustainable foundation for the future.

Let me focus briefly on two areas where United States' interests and those of South Asia converge.

Prosperity

As we look ahead towards the future, we would like to see a South Asia that is living up to its economic potential. The region, with the tragic exception of Afghanistan, is ripe for growth and development.

Bangladesh is a prime example. We have seen a dramatic surge in foreign investment in Bangladesh, mostly in the energy sector, where U.S. companies have landed a significant number of contracts and can be partners with the Government of Bangladesh in moving the country to middle-income status. Predictions are that Bangladesh could achieve that status by 2020.

Because we see so much potential in Bangladesh, we have formed a U.S.-Bangladesh Energy Partnership, led on our side by our colleagues at the Department of Energy. We want to work with Bangladesh as it devotes a greater priority to the energy sector overall, as it develops a regulatory framework for gas and power, and as it considers its options on how to best utilize its gas resources. We believe the Government of Bangladesh's support for the export of gas reserves, including to the ready-made market in India, will be key to Bangladesh's ability to achieve that middle-income status. We are strongly advocating regional energy cooperation as a win-win proposition.

Let me also note that another measure of this recognition of Bangladesh's economic potential is the formation last year of the U.S.-Bangladesh Business Council, under the initial leadership of Ambassador Frank Wisner--who served with distinction in South Asia and virtually everywhere else in the world! The Council is taking a leading role in activating the private sector not only on the energy front, but also on a whole host of commercial opportunities in Bangladesh.

Good Health

We also want to see a South Asia that is healthy --not only in economic terms, but in terms of basic human needs.

We want to work with the countries of South Asia --well into the next century--on the important issues of population growth and family health. Of particular concern is the threat posed by HIV/AIDS. By 2000, the number of HIV/AIDS cases in India will far surpass any other country worldwide. The UN estimates that India currently has approximately 6 million cases. Recognizing the alarming increase in HIV/AIDS in Africa and India, President Clinton has recently launched a new global initiative to fight AIDS. USAID and the Center for Disease Control estimate that we would need $1 billion to address this issue adequately.

Enjoying good health also means living in a healthy environment. Under intense population pressure, coupled with economic growth, South Asia's environment is being degraded on a massive scale. Three of the world's 10 most polluted cities are in India--New Delhi, Mumbai, and Calcutta.

We want to work with the governments of the region and the private sector on the full range of environmental challenges they face. In fact, Energy Secretary Bill Richardson will travel to India at the end of the month to address an industry-sponsored conference on energy and environment. While Secretary Richardson has a broad agenda for his trip, one important item is to demonstrate support for the so-called Clean Development Mechanism initiative, which seeks to create partnerships between industrialized and developing countries with the goal of reducing greenhouse gas emissions.

Conclusion

Let me conclude with a few remarks on our goals in South Asia and our resources, or lack thereof, to fulfill them.

I would note that our ability to pursue our agenda in South Asia--and around the globe--depends in large part on adequate funding for our foreign affairs budget, a point that Secretary Albright makes repeatedly. Yet, after years of small cuts, this year we are facing a reduction of $2.4 billion--or 12%--to the President's FY 2000 budget request. That will impact on what we are trying to do in South Asia.

If the proposed cutbacks are enacted, the Administration will be forced to reduce our efforts to counter terrorism, prevent conflicts, and fight drugs - all of which are clearly in the interests of the American people and key to our agenda for South Asia. Did I mention earlier that Afghanistan has now become the leading opium producer in the world, surpassing Burma? In addition, programs we want to pursue-those in support of regional democracy, HIV/AIDs prevention, and our initiative to address trafficking in women and children--will be sorely under-funded.

America cannot lead without resources. And what we are asking is not unreasonable. Today, the full range of international programs costs only about one penny out of every dollar the Federal government spends. Moreover, the United States is already dead last among the world's industrialized countries in the proportion of our wealth that we allocate to building democracy and aiding development in other countries. Clearly, the investments we recommend are affordable. The President's budget would finance foreign policy without detracting from our defense and domestic needs, while still yielding a surplus. As Secretary Albright has said: "America cannot be secure if we do not lead; and American cannot lead without resources."

In pursuing the agenda for South Asia that I have identified, I hope that I have convinced you that there is great value to be gained not only for the United States but for the countries of South Asia themselves with our policy of greater engagement. If I have not done that, I leave it to Shirin and her colleagues in the new South Asia program to continue to persuade you.