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Atlantic Council Report Calls for India and Pakistan to Reinvest in Economic Relations

Atlantic CouncilWASHINGTON – A report released today by the Atlantic Council’s South Asia Center argues that heavy military spending in India and Pakistan has in fact been detrimental to the citizens of both countries in terms of security and economic growth, and calls on leaders to reinvest in trade and confidence building.

In India and Pakistan: The Opportunity Cost of Conflict, Atlantic Council South Asia Center Director Shuja Nawaz and Nonresident Senior Fellow Mohan Guruswamy explain how high defense spending and low economic integration into South Asia’s regional economy have come at the expense of those living in poverty. Although many now favor rapprochement, Nawaz and Guruswamy argue that unless both sides begin a dialogue on economic and military relations, these issues will only worsen.

In addition to military spending, a lack of strong bilateral trade relations between India and Pakistan has also exacerbated South Asia’s socioeconomic challenges. From GDP to job losses to investment, the non-fulfillment of trading potential is a cost that “neither of the two countries can afford to ignore.”

Nawaz and Guruswamy provide a set of actions both countries can take to decrease military spending and promote confidence building:

  • Increase the distance between land forces by withdrawing from border areas
  • Engage in direct communications between militaries, including exchange visits
  • Invest jointly in energy, water, and export industries
  • Open borders for trade and eventually tourism

Such measures will have a lasting impact beyond India and Pakistan, as the authors note: “economically intertwined and mutually beneficial economic systems in both countries will create a huge peace constituency that will not only be good for the two nations, but also for the region and the entire world.”

Read the full report here.

Listen to audio from the Report Launch here.

The dawning of a new era?


This month has seen significant developments in the hope for peace and stability in South Asia. President Zardari traveled to Delhi for one-on-one talks with Indian Prime Minister Manmohan Singh. Both sides reported that the meeting went very well, and Prime Minister Singh has accepted an invitation from the Pakistani president to visit Pakistan soon.

The bilateral meeting preceded an unrelated trade fair in New Delhi where Pakistani businesses showed off their products to Indian buyers and investors, and India opening up to foreign investment from Pakistan “to deepen our economic engagement.”

But it isn’t just economic ties that have improved recently. President Zardari’s trip almost didn’t happen after an avalanche buried over 100 Pakistani soldiers stationed on the remote Siachen glacier a few days prior.

The tragedy at Siachen served as a stark reminder of the decades-long military standoff that has dominated security concerns in the region, diverting vast resources to defense budgets in both Pakistan and India. From Delhi, Pakistan People’s Party (PPP) Chairman Bilawal Bhutto Zardari Tweeted, “It is such a shame tht 2 countries w/ such large segments of our population live in desperate poverty must spend so much on weapons” – a sentiment soon echoed by Pakistan’s military chief, Gen. Ashfaq Parvez Kayani.

“Peaceful coexistence between the two neighbours is very important so that everybody can concentrate on the well-being of the people,” he told reporters…“We in the army understand very well that there should be a very good balance between defence and development. You cannot be spending on defence alone and forgetting about development,” he said.

“Ultimately the security of a country is not only that you secure boundaries and borders but it is when people that live in the country feel happy, their needs are being met. Only in that case will a country be truly safe.” He said national security should be a comprehensive concept.

In a further sign of progress, India’s Defense Minister, M.M. Pallam Raju, welcomed Gen. Kayani’s remarks.

With general elections expected in Pakistan next year and the year after in India, either government could change hands. Fortunately, the political environment appears to have changed to such an extent that even President Zardari’s biggest rival, Pakistan Muslim League – Nawaz (PML-N) President Nawaz Sharif praised Zardari’s visit to Delhi and encouraged further efforts to improve bilateral relations.

Looking back over the past four years of democratic rule, Pakistanis are asking themselves what democracy has delivered. With the economy and internal security situation suffering from the effects of terrorism, it is a complicated question for many. A breakthrough on resolving longstanding differences with India, however, could lay the foundation for a new era of peace and prosperity in the region. That’s a success many long believed unachievable.

Domestic Politics, International Effects

On Tuesday, Pakistani journalist Zahid Hussain spoke at the Wilson Center on the topic of Pakistan-US relations. During the course of his speech, Mr. Hussain touched on several important issues including blowback from increased drone strikes, differences in priorities vis-a-vis Afghanistan, and the burden of perceived historical rebuffs. One issue in particular, though, stood out – the effect of domestic politics on foreign policy.

Domestic politics is a reality that affects foreign policy not only in Pakistan, but in all countries. Recently, President Obama was overheard telling Russian President Dmitry Medvedev that he will have “more flexibility” after this year’s elections are over. The situation in Pakistan is no different.

Earlier this year, by elections and Senate elections in Pakistan boosted the Pakistani People’s Party’s (PPP) representation in parliament. But general elections for the National Assembly scheduled for next year puts the majority of seats in play. As a result, politicians are under intense scrutiny not only by the public, but by their opponents as well.

It is through this lens that we should view debates about redefining terms of engagement with the US taking place in Pakistan’s Parliamentary Committee on National Security (PCNS). Recommendations from the PCNS were expected weeks ago, but the process has been slow due to both boycotts by opposition parties and a general cautiousness about tackling sensitive issues such as drones and re-opening NATO supply lines with elections looming.

Despite taking longer than anticipated, however, the committee appears to have achieved a breakthrough as the PPP and opposition parties have managed to find consensus on tough issues. Pakistan’s Ambassador to the US, Sherry Rehman, remarked at the beginning of the process that the parliamentary review of US-Pakistan relations was “a success for democracy,” and it appears she was right. Democracy has never been fast moving, but by building consensus among political parties, it is the only way to develop sustainable policies.

Not all foreign policy decisions can be made through pure consensus, though, and it is in this area where political leadership is put to the test. In 2009, President Barack Obama demonstrated took the extraordinary step of addressing the Muslim world from Cairo, seeking “a new beginning between the United States and Muslims around the world; one based upon mutual respect; and one based upon the truth that America and Islam are not exclusive, and need not be in competition.”

Obama’s speech drew sharp criticism from many American conservatives, including Mitt Romney, for “apologizing” for past American mistakes.

Similarly, Pakistan’s President Zardari transcended historic mistrust last weekend when he became the first Pakistani head of state to visit India in almost a decade. Right wing organizations in Pakistan vocally opposed the president’s trip. Zardari made the trip anyway, and a few days later India’s Foreign Secretary Ranjan Mathai told The Wall Street Journal that his country is willing to open a new dialogue with Pakistan about resolving issues over the disputed area of Kashmir.

In the modern world, domestic politics is rarely confined to domestic issues. Complex issues of international relations are widely reported and discussed among local populations, and political leaders must make decisions based not only on what the believe is in the best interests of their country, but within a range of policies that can receive domestic support.

In mature democracies, this means that foreign policy is informed by consensus derived from the people’s elected representatives, and executed by the country’s leadership. The people of Pakistan have long cried out for change in relations with both the US and India. Recent events give reason to believe their democracy has matured to a stage that can deliver it.

Rep. McDermott Speaks About the Path to Normalizing Pakistan-India Relations

Rep. Jim McDermottCongressman Jim McDermott was the keynote speaker at a panel discussion at the United States institute of Peace (USIP) in Washington DC earlier this week. The discussion, “The Quest for India Pakistan normalization: The Road Ahead,” examined key challenges to opportunities for India and Pakistan to work together towards mutual peace and prosperity, and what role – if any – the US can play in facilitating dialogue between the two South Asian powers.

Rep. McDermott served as a Foreign Service medical officer in Congo, and is a founding member of the Congressional Caucus on India and Indian Americans, which remains one of the largest country caucuses in the House of Representatives. His unique experience in developing countries has informed his views on the critical role of U.S government in helping countries build global coalitions and address global challenges.

During his keynote speech, Congressman McDermott observed that, when attitudes become habitual, it is extremely difficult to change them. This is particularly true in the case of Pakistan and India due to ongoing tensions that have existed since the two countries gained independence in 1947. For this reason, Rep. McDermott noted, dialogue is crucial to improving bilateral relations.

According to Rep. McDermott, the US needs to stop sending mixed signals to Pakistan. The sensitive geo-political environment exacerbates misunderstandings. He noted that the only example a working bilateral treaty between Pakistan and India is the Indus River treaty – one that was drafted without over US intervention. In fact, he said, when his team inquired about the dynamics of the treaty in the past, both Pakistani and Indian officials discouraged the US from becoming involved. This demonstrated, he concluded, that Pakistan and India are capable of working together, and that often overt US intervention can actually be an obstacle to successful dialogue.

Rep. McDermott also mentioned his distaste for the term “AfPak”. According to the Congressman, “AfPak” gives the impression that the US has a narrow counterterrorism focus in the region, ignoring the important development work that is aimed at improving the health, education, and economic opportunities of all Pakistanis.

When discussing cross border tensions, Rep. McDermott gave the example of fishermen being arrested and jailed for accidentally crossing an invisible border in the open water. Fishermen from both sides are often held for years despite the fact the fishermen’s only fault lie in trying to earn a living. This example tied into Rep. McDermott’s second major point, which was that economic cooperation can be a catalyst for cooling political tensions.

Congressman McDermott urged Pakistan’s political leaders and opinion-makers to also focus on economic development and opportunities and expand the middle class – a crucial element of social and political reform. Projects that foster regional economic connectivity, such as the proposed Trans-Afghanistan Pipeline which would transport natural gas from Turkmenistan through Afghanistan into Pakistan and then to India, he said, can benefit all nations in the region as well as build a foundation of trust and cooperation that can aid in resolving more difficult issues.

Congressman McDermott concluded his remarks saying that, though the task is enormous, it is not impossible. Where there is political will and neutral third party facilitation, Pakistan–India relations can be transformed from one based in mutual suspicion to one of mutual benefit. While the US can play a facilitating role, however, it should be one that respects the centrality of Pakistan and India in determining their own futures.

The Path to Peace and Prosperity

Stanley Weiss, Founding Chairman of Business Executives for National Security, offers four recommendations for bringing peace and prosperity to Pakistan in a column for Huffington Post.

Stanley WeissBin Laden’s death within 30 miles of Islamabad has put a spotlight on the Pakistani military. The U.S. should take advantage of this moment to continue re-crafting the relationship from a short-term military alliance to a sustained economic and social partnership, in four ways:

First, root the relationship in trade, not aid. Hussain Haqqani, Pakistan’s ambassador to the U.S., recently called for Washington to “move beyond the begging bowl.” A new report from the Center for Global Development provides a good starting point: offer duty-free, quota-free access for all Pakistan exports to the U.S. market for at least five years. As Haqqani says, it would create economic opportunity and foil extremists’ designs to exploit unemployed Pakistani youth;

Second, increase U.S. incentives for investment, including credit programs for Pakistan’s small and medium-sized businesses;

Third, publicize the many economic benefits that would accrue to both nations if India and Pakistan were to normalize relations, an idea a top Indian official told me is “supported at the highest levels of the Indian government.”

Fourth, use leverage from the recent U.S.-India nuclear deal to nudge India, as former Indian Foreign Secretary M. Rasgotra suggested to me, “to create a final settlement on the existing line of control in Kashmir, but then soften it by turning both sides of Kashmir into a Free-Trade Area.”

“Do Not Underestimate the Pakistani People.”

Bruce Riedel

The Brookings Institution yesterday hosted the official book release for Bruce Riedel’s new book, Deadly Embrace: Pakistan, America, and the Future of Global Jihad. The author, Bruce Riedel, is a career CIA officer and has advised four US presidents on South Asian policy. He is widely regarded as one of the United States’s preeminent experts on Pakistan.

The auditorium at the Brookings Institution, one of Washington’s oldest and most prestigious think tanks, was filled to capacity with representatives from several governments as well as the military. The rear of the room was packed with journalists from across the world. Mr. Riedel began his remarks by thanking several people, but he paused to give special praise for the former Pakistani Prime Minister Benazir Bhutto whom he recognized for her courage and inspiration.

Mr. Riedel noted that Pakistan is one of the most important countries in the world not only for its proximity to the war in Afghanistan, but because it is home to the second largest population of Muslims in the world, it has the world’s fourth largest nuclear arsenal, and it is a long-time American ally. Despite its importance, however, most Americans know very little about the country.

According Mr. Riedel, there are three main issues that he deals with in his new book: Pakistan’s domestic politics, US-Pakistan relations, and the growth of the global jihad movement.

Pakistan’s domestic politics, he said, is influenced largely by two primary struggles: one between the military and the civilian government, the other between the moderate majority of Pakistanis and the vocal but minority of Islamists. He mentioned that these struggles are often exacerbated by an irresponsible press.

But Mr. Riedel pointed out that there is one thing that has always trumped these struggles over the history of Pakistan – “the yearning for democracy has pushed dictators out of power over and over.” There is, he said, a constant underlying push for democracy, rule of law, and accountability. This was a key theme of Mr. Riedel’s remarks – more than anything, the people of Pakistan want to decide their own fate.

On the second issue, US-Pakistan relations, Mr. Riedel was honest and open about the fact that the US has not been a consistent friend to Pakistan. He referred to the relationship between the two countries as ‘a deadly embrace’ – one in which neither side knew if they could trust the other – and urged the members of the audience to change this from a deadly embrace to a friendly embrace.

Mr. Riedel pointed out two major mistakes made by the US:

First, that over the history of US-Pakistan relations, too much has been built around secret projects that are not really secret. He referred to the U2 base in the 1950s; the role that Pakistan played as intermediary between the US and China during Nixon’s presidency; the cooperation between the US and Pakistan in arming the Afghan mujahideen during the Cold War; and most recently the drone attacks on al Qaeda. By continually basing our relationship on secret agreements, we allow an air of intrigue to mischaracterize what is often a healthy cooperation.

The second major mistake the US made, of course, was the support for Pakistan’s dictators over the years – an error of both Republican and Democratic administrations, and one that set back Pakistan’s democratic progress by decades. Mr. Riedel urged the US not never repeat this mistake again.

The third issue Mr. Riedel addressed is Pakistan’s relationship with the growth of the global jihad movement. Here, Mr. Riedel says, we should understand that Pakistan is a nation at war for its soul. While the vast majority of the country are peaceful, moderate Muslims, Pakistan is also home to the largest number of militant groups in the world. As such, the country is divided between those who are loyal to the vision of the nation’s founder, Muhammad Ali Jinnah, and dark forces who seek to convert Pakistan into a jihadist state similar to Afghanistan under Taliban rule.

The roots for the global jihad movement, Mr. Riedel explains, can be traced to the dictatorship of Gen. Ziaul Haq during the 1980s – a dictatorship supported by the United States. Make no mistake, he reminds, the US shares responsibility for this situation.

The good news, however, is that Pakistan’s military is engaged in the most serious counterinsurgency efforts it has ever conducted. While there may be some elements of the military and intelligence agencies still supporting militant groups as a holdover from previous doctrines of “strategic depth”, the military has realized that the nation most threatened by these groups is Pakistan itself. In answer to a question from the audience, Mr. Riedel said that if you had told him two years ago that Pakistan’s Army was conducting counterinsurgency operations in six of the seven tribal areas, he would have said you were dreaming. Today, though, that dream is a reality.

So what is the solution that Mr. Riedel proposes?

First and foremost, he says, the future of Pakistan is not up to the US. Only Pakistan can decide its own fate, and the US must not repeat past mistakes and try to push Pakistan one way or the other.

The US must not undermine the civilian government or the democratic process. To those who question whether one or another politician is preferable, Mr. Riedel reminds the audience that democracy is not about individuals, but about a process.

The US must also support Pakistan’s efforts to normalize and improve relations with its neighbors, especially India. Mr. Riedel gave special praise for the efforts of Pakistan’s current President Asif Ali Zardari to improve trade between the countries. While these may seem like small steps, he said, it is this path of incremental change and trust-building that will ultimately succeed.

Above all, however, the US must not try to broker a peace between Pakistan and India. It will not work, he said, and we must trust and support the Pakistani leadership to develop a path to normalization that satisfies their own needs and strategic interests.

The people of Pakistan have shown a remarkable determination to hold on to Jinnah’s vision of Pakistan as a nation at peace with its neighbors and itself. There are no magic solutions, he warned, and progress will take time. But, he advised, we should never underestimate the people of Pakistan’s desire for democracy and peace. If there was one message that Mr. Riedel left the audience with that day, it was this: “Do not underestimate the Pakistani people.”

Who’s Vexing Whom?

Gen. Kayani and Adm. MullenThis morning’s Washington Post features a front page story by Karin Brulliard and Karen DeYoung that claims “US courts Pakistan’s top general, with little result.” While writing that Pakistan’s top military commander, Gen. Ashfaq Kayani, is hesitant to follow American timelines for battling militant groups, however, the article actually explains that a key obstacle to progress in the fight is America’s inability to view the conflict through a broad historical lens.

The US has approximately 1.5 million active duty personnel – fewer than 100,000 of whom (about 6 percent) are stationed in Afghanistan. By comparison, Pakistan’s active duty personnel number around 617,000 – 140,000 of whom (23 percent) are on the Western border with Afghanistan. Either way you cut it, actual numbers of troops or percentage of total military force, the fact is the Pakistan military actually has more boots on the ground dedicated to fighting terrorist groups.

But the real concern is not that Pakistan is not doing enough, its that Pakistan’s military is not moving against groups in the remote areas of North Waziristan on the timeline preferred by some in the Pentagon.

As I explained last week, this could be addressed in part by giving Pakistan the resources it needs to carry out clear and hold operations against militant groups in the remote tribal areas – namely, helicopters. But the deeper issue is one of trust between the two countries, particularly around the question of America’s “end game” in the region. Pakistan needs to be not only assured but convinced that the US is a long-term ally.

In fact, this morning’s Washington Post article even says as much.

Like the influential military establishment he represents, he views Afghanistan on a timeline stretching far beyond the U.S. withdrawal, which is slated to begin this summer. While the Obama administration sees the insurgents as an enemy force to be defeated as quickly and directly as possible, Pakistan has long regarded them as useful proxies in protecting its western flank from inroads by India, its historical adversary.

“Kayani wants to talk about the end state in South Asia,” said one of several Obama administration officials who spoke on the condition of anonymity about the sensitive relationship. U.S. generals, the official said, “want to talk about the next drone attacks.”

As I’ve argued before, Pakistan will not be able to change its strategic calculus vis-a-vis Afghanistan until it feels secure against conventional aggression by India. The Pakistani brass see two possible outcomes that they want to avoid facing following an American withdrawal: Fighting militant groups alone or bordering an Afghanistan with a government under the influence of India, effectively leaving them encircled by a historic enemy.

Like any responsible national security team, Pakistan’s strategists must weigh these potential outcomes against the risks of driving historically unaligned militant groups together – a threat that is already materializing, and losing what influence remains with the groups.

For Pakistan’s national security interests to become fully aligned with American interests regarding militant groups in the region, the unacceptable outcomes identified above must be perceived as unrealistic enough to justify the risks. We know this because Gen. Kayani and the Pakistani leadership continue to tell us as much.

Here at home, domestic concern in about the ongoing fight in Afghanistan continues to center on the “end game.” The American people want to know what victory in Afghanistan will look like, and what how long we’ll be in the region. The Pakistanis do to. Until the US can answer that question, it will be vexing Gen. Kayani as much as he’s vexing us.

Helicopters for Pakistan

Apache Helicopters

On Monday I wrote that the answer to whether or not the US can trust Pakistan can be found in the answer to a related question: Can Pakistan trust the US? Like an iterated prisoner’s dilemma, each side is searching for an equilibrium of cooperation despite a past of defections. The Tuesday New York Times article speculating that the US wants to expand raids over the Pakistani border didn’t help matters, instead seeming to confirm Pakistani fears of American duplicity. While the US immediately rejected the Times report, the US needs to give more than verbal assurances to our Pakistani allies. We need to give helicopters.

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Pakistan's People Should Decide Their Own Future

Pakistan elections

According to information contained in diplomatic cables released by WikiLeaks, several countries have been working behind the scenes to influence the direction of Pakistan by undermining the democratic government. While the nature of international diplomacy involves influence and persuasion, these nations have been carrying out covert programs intended to destabilize and, in one case, determine the government of Pakistan. The US must support the right of the Pakistani people to choose their own government, and use its international influence to convince other nations to do the same.

According to the leaked diplomatic cables, Pakistan’s then Director General of Military Operations, Gen. Ahmed Shuja Pasha, presented evidence to members of Pakistan’s parliament that he had evidence Russia, India and the United Arab Emirates were directly involved providing support to Baloch separatist groups. Other cables reveal that these three countries are not the only ones attempting to interfere with Paksitan’s sovereignty.

Perhaps the most disturbing example is a cable that reveals that Saudi Arabia has attempted not only to influence the Pakistani government, but to overthrow it, the Saudi ambassador to the US, Adel al-Jubeir, saying in 2007 that “We in Saudi Arabia are not observers in Pakistan, we are participants.”

According to Guardian reporter Declan Walsh, the Saudi’s prime motivator appears to be ethnic and sectarian bias.

The anti-Zardari bias appears to have a sectarian tinge. Pakistan’s ambassador to Riyadh, Umar Khan Alisherzai, says the Saudis, who are Sunni, distrust Zardari, a Shia. Last year the United Arab Emirates’ foreign minister, Sheikh Abdullah bin Zayed, told Hillary Clinton that Saudi suspicions of Zardari’s Shia background were “creating Saudi concern of a Shia triangle in the region between Iran, the Maliki government in Iraq, and Pakistan under Zardari”.

Whatever the excuse, neither the Saudis nor anyone else but the Pakistanis themselves have a right to determine their government. This, of course, includes the United States ourselves. As a far more cooperative relationship between the US and Pakistan than is often thought.

Pakistani columnist Cyril Almeida writes that once you move beyond the rhetoric and “the myth of American influence in Pakistan,” the real issue is that Pakistan’s democratic government is new and fragile.

Various power centres with differing interests competing for power, some centres more powerful than others, but none so powerful as to always dictate the course of history — that, more than a great puppet master at home or abroad choreographing the dance of chaos, is what best describes power politics in Pakistan.

This is where the US can play an important role in protecting Pakistani sovereignty. The United States should use its influence to stop India, Russia, the UAE, Saudi Arabia, and any other nation that attempts to influence Pakistan’s internal affairs. Pakistan is a sovereign, democratic nation and the people of Pakistan must be allowed to decide their own future without undue influence from foreign interests.

What the Pakistani government needs is not influence from the outside, it needs space to work and grow on its own. By using our influence in the global community to help provide that space, the US can help ensure the people of Pakistan are masters of their own fate. In the long run, doing so will protect not only Pakistan’s security, but our own.