I would like to thank Shuja Nawaz and the Atlantic Council’s South Asia Center for organizing this conference. It is also nice to see so many friendly faces in the audience – new and old. In many ways this feels to me like a Pakistani version of “This is Your Life.” I particularly want to thank my predecessors – and former bosses – Jim Dobbins and Marc Grossman. I greatly appreciate their continuing friendship and support. I’m also glad to share the stage with my friend Ambassador Jalil Jilani, whom I know is looking forward to fielding your hardest questions.
I also want to take a moment to thank Shuja for his tireless efforts. Even when I started working for Ambassador Holbrooke in 2009, Shuja seemed like an institution unto himself in U.S.-Pakistan relations. I know we are all looking forward to seeing his next book, and I at least hope to keep hearing his advice and insight in his future positions.
When Secretary Kerry asked me if I would succeed Jim as his Special Representative for Afghanistan and Pakistan, I knew the transition would not be easy. For over a year, we had been working to support the Afghan political transition – which has now reached a peaceful conclusion with the election of President Ghani and Chief Executive Officer Abdullah in Kabul.
It is no secret that for the last decade, the American approach to the region has been filtered through the lens of our mission in Afghanistan. The U.S. effort in Afghanistan – in human, material, and financial terms – drove our focus.
Perhaps no relationship has been more affected than Pakistan. Pakistan benefited from increased political attention and increased access to resources – over $13 billion in Coalition Support Fund reimbursements, and about $8 billion in civilian assistance, $5 billion of which have been delivered in the last five years via KLB.
But Pakistan has also suffered dramatically. As Prime Minister Sharif said before the General Assembly a few weeks ago, over 50,000 Pakistani lives have been lost as a result of terrorism.
Pakistan’s economy has suffered dramatically. Growth prospects have fallen. In recent times, inward investment and exports have declined, as security concerns have compounded the energy deficit.
It is easy to be overwhelmed by negative headlines. But there are reasons to be optimistic. A democratic government completed its constitutional term for the first time in history, and was succeeded through a peaceful democratic process. And there are signs of economic progress. Pakistani consumers can now access 3G/4G wireless spectrum for the first time. Pakistan outcompeted China and others for the contract to produce all of the Adidas soccer balls used for last summer’s World Cup in Brazil. The question for this group is whether the trendlines of the U.S.-Pakistan relationship outpace the headlines.
I would just offer a few additional thoughts, before we open the discussion.
First, I’d like to say a word on the North Waziristan operations and counterterrorism efforts. This operation has been planned for several years, and now that it has finally been launched I think it is worth reflecting on what they have accomplished thus far. I know that many in Pakistan were surprised by what they discovered in Miran Shah and Mir Ali – including networks of tunnels, IED factories, and heavy munitions. These discoveries should underscore the risks of allowing safe havens to exist.
The operations clearly disrupted militant activities – but the job is not done. Militant groups, including the Haqqani Network and the Pakistani Taliban, continue to pose a threat to Pakistan, Pakistan’s neighbors, and the U.S. It is vital that these operations continue, and that every effort is made to prevent the safe havens from being reconstituted.
But our strategic interest extends beyond the Haqqani Network or any other particular group. The ungoverned vacuum allowed for a multitude of threats, both militant and criminal, that threaten first Pakistan, then the region, including Afghanistan, India and China, and then the broader world including the United States and Europe. Eliminating these safe havens is not just about eliminating one group, or one leader. It is a job that requires continued vigilance.
This is an area where we need continued cooperation between civilian government and the military, given their shared interests. While the military can clear a region, civilian administration is required to establish rule of law, extend the writ of government, and provide aid to IDPs, providing the enduring solution that closes the space for militancy.
It is Pakistan that has the clearest stake in this fight, as it is the Pakistani people who bear the brunt of terrorism today. The attacks in the past few months – including on a Pakistan Navy facility in Karachi – reveal the depth of the threat, and the serious risks of allowing space for violent extremists to find space to operate. We have all appreciated the vocal leadership of many senior Pakistanis – including Prime Minister Nawaz Sharif and Chief of Army Staff Raheel Sharif – in this regard.
Our ability to improve the bilateral relationship; to build on the progress of the past few years, is dependent on Pakistan’s continuing efforts to eliminate the safe havens from which militants in Pakistan plan and execute attacks not just on Pakistanis, but also on U.S., Afghan, and other personnel and facilities in Afghanistan and around the world.
We have made good progress in our counterterrorism cooperation, particularly since the darkest days of our bilateral relationship in 2011 and 2012. Today our joint counter IED efforts are significantly expanded, as is Pakistan’s direct action to interdict and disrupt IED networks. More can be done to ensure these networks are fully destroyed – but we have come a long way in terms of our cooperation in this.
Second, let me say a word about relations between Afghanistan and Pakistan. Over the last three or four months, I have spent dozens of hours with President Ghani, Dr. Abdullah, and their respective teams. I am confident when I say that there is tremendous potential for progress in relations.
As an early hint into what could be possible, I know that Ambassador Jilani and I were each happy to join Pakistani Finance Minister Ishaq Dar, Afghan National Economic Advisor Zakhilwal, and Dr. Kim, the President of the World Bank, at an event to commemorate agreement between Afghanistan and Pakistan on the transit tariff for electricity sold via the CASA-1000 transmission lines. This is the proof of concept project for regional connectivity — it is over a decade old, and the two countries had been in negotiations on this issue for more than a year. It is telling that one of President Ghani’s first acts in office was to instruct his staff to break the impasse and move forward.
There are also other areas of potential. President Ghani and Dr. Abdullah agree that a renewed effort at reconciliation is important, and each also envision a role for Pakistan in that effort. They each desire improved military-to-military cooperation to manage the border is also a key priority to reduce tensions and eliminate the safe havens that exist on both sides of the border.
We are ready to be helpful, including by renewing trilateral cooperation in each of these important areas.
Third, let me say a word about relations between India and Pakistan. There is no relationship more critical to Pakistan’s future than its relationship with its neighbor. And I am convinced that India’s rise in prosperity and global leadership cannot be fully realized until it has a better relationship with Pakistan.
We are extremely concerned by reports of violence over the last two weeks along the line of control and the working boundary. I’ve personally raised these concerns with each side – and urged them to engage in dialogue to reduce tensions and end the violence.
Finally, let me say a word about the future of relations between the U.S. and Pakistan. This is a relationship that I am proud has already grown significantly, and I am convinced must continue to grow. The Kerry-Lugar-Berman authorization, which expired on September 30, spelled out a set of policy principles that continue to guide our relationship – support for civilian democratic institutions; parity in assistance to civilian and military entities; expanded economic cooperation; and expanded people-to-people ties.
Those principles remain as important today as they were in 2007, when then Senators Biden and Lugar introduced the legislation. Or in 2009, when the bill was signed into law by the President.
To take the next step, we’re going to need a common conception of what this relationship can achieve. It cannot be solely about Afghanistan, or terrorism. It cannot be solely dependent on relations with the continents great powers. The U.S.-Pakistan relations cannot be the sum of negative parts.
Getting the U.S.-Pakistan relationship right is critical to managing some of the most difficult challenges of the 21st century – from non-proliferation and counterterrorism to ensuring peace and stability in Asia.
For the U.S.-Pakistan relationship to grow, it is going to have to be less about what our two governments do than about what our peoples and businesses have to offer. Growing the space for the relationship is a challenge that those inside government and those outside government can help advance.
It will mean that our economic relationship needs to move beyond a one way, assistance dependent conversation.
America is already Pakistan’s largest bilateral trading partner, export destination, and source of foreign investment. There is no silver bullet solution to growing our economic relationship – expanding trade and investment will mean improving Pakistan’s competitiveness. A free trade agreement won’t make that happen, nor will any other action on the part of the U.S. government. Pakistan’s competitiveness is ultimately up to Pakistanis.
One of the things I am proudest of in the five years I have been working on this relationship as a policymaker is how far we have come in redefining and focusing our economic aid to address these challenges. Under KLB, the U.S. government has accomplished tremendous things. In the traditional sense, this aid package made a demonstrable difference in the lives of millions of Pakistanis – especially by responding to urgent crises, like the historic floods of 2010.
We have also made demonstrable progress in addressing some of Pakistan’s key priorities. I see Hina Rabbani Khar and Hafeez Shaikh here – I can still hear their voices echoing as they asked us to focus our efforts. We didn’t go as far as they had hoped – it isn’t realistic for us to pursue only one or two projects. But we have come a long way.
We do hear that interest — and recognize the importance of large projects. That is why we’ve also tried to play an enabling role to reinforce Pakistan’s own campaign of support for the Diamer Basha dam. The Diamer Basha Dam business opportunities event at the U.S. Chamber of Commerce last week was the latest example of the utility to Pakistan of this engagement.
Much attention has been paid to our energy, stabilization, and economic growth assistance. In energy, we’ve already added 1,400 megawatts to Pakistan’s grid – about 7 percent of Pakistan’s total electricity production today or enough electricity to benefit 16 million people. By the end of next year, we expect an addition four to six hundred megawatts to be added. In terms of infrastructure, we’ve build over 1,000 kilometers of roads in the border region, helping to extend the writ of government into the tribal areas, including repairing all four roads between Afghanistan and Pakistan. We have launched three private equity funds through the Pakistan Private Investment Initiative, which will invest over $150 million in small and medium sized enterprises in Pakistan. I expect these funds to begin reaching financial close, and making their first investments, by the end of the year.
One of the stories that has gone underreported is what KLB has done for people-to-people ties. Over the past five years, under KLB, Pakistan has been the largest recipient of U.S. government funded exchanges in the entire world. Over 1,300 Pakistani students each year come to the United States to continue their education, including about 200 under the Fulbright program. An alumni network of over 14,000 students who benefited from these exchanges is active in Pakistan. Seventeen partnerships between U.S. and Pakistani universities are now active. There is prospect to grow these connections, with more resources.
Thus far only the U.S. government has funded these exchanges – I hope that the Government of Pakistan will consider committing some of its own resources to this effort. These exchanges are investments in the future of Pakistan, and of U.S.-Pakistan relations. They will yield dividends for decades to come.
Our two governments are going to have to play a central role in achieving this vision. The U.S.-Pakistan Strategic Dialogue will be the center piece of that effort. We are looking forward to convening the next ministerial early in 2015.
In both Islamabad and here in Washington, there is much focus on preparing the way ahead. The set of working groups under the Strategic Dialogue continues. The economic working group just happened last week. Talks on defense, law enforcement, and non-proliferation are scheduled to happen before the end of the year.
I am also happy to say that we are adding a sixth working group, focused on Higher Education and Science & Technology, to the Strategic Dialogue structure.
So this is a time of great opportunity for Pakistan, and for U.S.-Pakistan relations. An opportunity for Pakistan to improve relations with its neighbors – particularly given the new leadership that has emerged in Delhi and Kabul. And it is a time when Pakistan can take its place as a leader in the community of nations.
With that, I’ll be happy to answer your questions.