Pakistan US Relations

Remarks by Ambassador Mahmud Durrani

World Affairs Council

4 December 2006

Pakistan-US relations offer an instructive study in interstate relations.

Pakistan has been a steadfast ally of the US on almost all major issues confronting the US in the post-war period - the Cold War, the Soviet invasion of Afghanistan and now the global war against terrorism. Pakistan was the conduit through which President Nixon visited China in 1972, to begin a new chapter in relations between the two countries. At one point Pakistan came to be called the most “allied ally” of the US , quite an accomplishment in the presence of UK and Israel . Yet Pakistan also has the dubious distinction of being the most sanctioned ally of the US .

In the mid-fifties Pakistan became a member of US led CENTO and SEATO security arrangements, essentially designed for the containment of the Soviet Union . While NATO contained the Soviet Union from the West, CENTO AND SEATO contained it from the South and the East. From the mid-fifties to the mid-sixties our relations were outstanding. The US was probably the most popular country in Pakistan during that golden period.

Unfortunately relations between the two began cooling off in the second half of the sixties. We became the forgotten ally and in the seventies we had a number of sanctions imposed on us for a variety of reasons.

In the closing days of 1979 the Soviet Union invaded Afghanistan and the US , once again, badly needed Pakistan . Pakistan obliged. Thus began another decade of close relations between our two countries

The US , in close collaboration with Pakistan , supported, funded and trained mujahadeen from Afghanistan , Pakistan and some other nationalities. This cooperation led to the defeat of the Soviets in Afghanistan and their ultimate withdrawal. This defeat proved to be the last straw which broke the back of the Soviet camel.

Unfortunately the US after its victory in Afghanistan allowed itself to be diverted elsewhere, leaving Pakistan to contend with the wreckage of the jihad in Afghanistan . Therein lay the seeds of the present day Taliban. The US believing that it no longer needed Pakistan chose to invoke dormant legislation such as the Symington and Pressler Amendments and stopped military sales to Pakistan citing concerns about our nuclear program.

The slide in the relationship continued through the 90s. This was the time of the rule of the warlords in Afghanistan , followed by the rule of the Taliban and the birth of Al Quaida, also in Afghanistan . As if this was not enough, India conducted nuclear tests in May 1998 followed by very offensive rhetoric, leaving no choice for Pakistan but to conduct nuclear tests of its own. These tests resulted in fresh sanctions and the downslide in Pakistan-US relations continued.

Yet once again it was Afghanistan , in the wake of 9/11 that pulled back the relationship out of the rut to the present day when Pakistan is once again an important ally and a frontline state, this time to fight global terrorism.

I strongly believe that this rollercoaster of the past has to stop. One main reason for this yo-yo syndrome was that the relationship between Pakistan and US was founded on a narrow base of security considerations. If we are to rid the relationship of its past oscillation, we must broaden it and give it depth. We have to develop a more sustained relationship capable of weathering the irritants of the day. Fortunately the leadership of our two countries is now making earnest efforts to lend substance and sustainability to the relationship - in brief broadening the base of our relationship.

Today Pakistan is playing a pivotal role in the fight against Al-Qaeda and the Taliban. If the international coalition against terrorism is a team, Pakistan is the player with the most touchdowns to its credit. Pakistan has arrested some of the most senior Al-Qaeda leaders and rooted out Taliban strongholds from its tribal areas. Pakistan has also taken some of the heaviest hits in the war against terrorism. It lost more than 700 soldiers in operations against the Taliban with twice as many wounded. Only last month forty three of our army recruits were martyred in a suicide bombing. Pakistan played a critical role in uncovering the plot to blow up airliners flying to the US with liquid bombs. Today the cooperation between the US and Pakistani intelligence agencies and armed forces is very good.

Despite sniping and the usual aspersions in the US media about Pakistan 's commitment to the global war against terrorism, we are resolute in our resolve to eradicate the menace of terrorism from our region.

President Bush visited Pakistan in March this year. The two countries announced a long-term partnership and initiated a strategic dialogue process to lend sustainability to the relationship. Pakistan and the US are today engaged in cooperation in the fields of economics, trade, science and technology, energy and education. Our security relation continues to be the center-piece and within that is our joint commitment to defeating global terrorism. Incidentally, terrorism is a bigger threat to Pakistan than it is to the US .

Since the visit of President Bush to Pakistan , a number of delegations from Pakistan have visited the US to add substance to the relationship. We are moving briskly in the areas of science and technology, energy and education. The Education Minister of Pakistan was here last week, as he held a day of intensive discussions with his counterpart in the US , Secretary Spellings. The two agreed to cooperate in a number of areas. It is my belief that education also offers great opportunity to bring the people of Pakistan and the US closer.

A positive of the new US Pakistan relationship is the presence of a mechanism to conduct a periodic review of the relationship at a very senior level. This mechanism is called the Strategic Dialogue, to be held alternately in Pakistan and the US . The first dialogue was held in the US . We are now preparing for the second dialogue between your Under Secretary of State Nick Burns and our Secretary of Foreign Affairs Riaz Mohammad Khan. Hopefully it will be held in Islamabad in February 2007. This dialogue reviews the full spectrum of the relationship with the purpose of providing impetus to the relationship.

Now focusing on the area of business and trade, Pakistan and the US are now close to the signing of a bilateral investment treaty (BIT). Lot of hard work has gone in to bring the position of the two countries closer. I finally see a silver lining. In my mind sighing of the BIT is not an end product but it will certainly be an important stepping stone towards the final goal of reaching a free trade agreement (FTA). From a Pakistani perspective it would be better if the BIT is signed as a component of the FTA.

Pakistan has achieved economic recovery and sustainable growth as a result of financial discipline and a consistent policy on liberalization, privatization and deregulation of the economy. Our economy is now on a high growth trajectory. All macro-economic indicators are positive. After a GDP growth of over 7 % in fiscal year 2004-05, the economy grew by 6.5% last year and is expected to grow by 7% this year. All sectors of the economy are showing progress including manufacturing, agriculture and services sectors. A growing middle class has increased consumption of goods including automobile, consumer durables and telecom.

To attract investment Pakistan has fully liberalized its incentives framework. It has the most liberal investment climate in the region, with no limit on foreign equity participation, free remittance of foreign exchange including for profits, technical fees, royalty and capital. The government is also trying to improve governance, especially of those organizations that interact closely with businesses. Pakistan is committed to continuous economic reforms. This has been recognized by international agencies that show improve ranking for Pakistan [Doing Business Report 2006 – World Bank].

For Pakistan , economic development is critical for its national security. We believe that international trade and investment relations will sustain our high growth rates and are, therefore, key components of Pakistan 's development strategy. We also consider international economic relations necessary to economic development and to sustain high GDP growth.

There are enormous opportunities for economic cooperation between our two countries. As mentioned earlier the Pakistani economy is booming. The average growth rate for the past three years is about 7%. Pakistan is importing large quantities of capital goods to expand and strengthen its growing industrial base. There are tremendous opportunities for investment in many different sectors in Pakistan . More than 600 foreign companies are doing business in Pakistan and posting impressive profits. Pakistan is acknowledged to be the most liberalized economy in South Asia . The US therefore needs to discover the Pakistani market.

The visit of President Musharraf in September this year to the US and his meetings with President Bush has further added impetus and breadth to relations between the two countries.

In conclusion I would say that I see a new phase of Pakistan US relations. Rather than focus on short term and narrow interests the relationship is now deepening, based on long term common interests and a shared vision for the future of this planet.

I thank you for your attention.

December 04, 2006