2007.10.03: October 3, 2007: Headlines: COS - Pakistan: Journalism: Foreign Relations: RPCV Jim Moody questions Pakistan's Foreign Secretary

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RPCV Jim Moody questions Pakistan's Foreign Secretary

RPCV Jim Moody questions  Pakistan's Foreign Secretary

Jim Moody with Merrill Lynch. I wasn't an ambassador but I was with the Peace Corps in Pakistan in the early days. My question is this. I'd like to connect two data sets that have come to light recently. CSIS, which you probably know who they are, came up with an exhaustive study analyzing the data, and they discovered, which was heretofore not published or really known, that about 90 percent of U.S. aid to Pakistan goes to the military, either directly or through budgetary support.

RPCV Jim Moody questions Pakistan's Foreign Secretary

U.S.-Pakistan Relations: An Update

[Rush Transcript; Federal News Service]

Speaker: Riaz Mohammad Khan, Foreign Secretary, Islamic Republic Of Pakistan

Presider: Daniel Poneman, Principal, the Scowcroft Group

October 3, 2007
Council on Foreign Relations

DANIEL B. PONEMAN: Good evening, everyone. It's my great pleasure on behalf of the Council on Foreign Relations to welcome Foreign Secretary Riaz Mohammad Khan back to the United States. He is no stranger to the United States. I just learned a few moments ago he actually spent some time at Georgetown, which I'm sure is a place that many of you have spent time writing, and he was actually writing and finishing writing a book which many have started, not all have completed.


QUESTIONER: Jim Moody with Merrill Lynch. I wasn't an ambassador but I was with the Peace Corps in Pakistan in the early days.

My question is this. I'd like to connect two data sets that have come to light recently. CSIS, which you probably know who they are, came up with an exhaustive study analyzing the data, and they discovered, which was heretofore not published or really known, that about 90 percent of U.S. aid to Pakistan goes to the military, either directly or through budgetary support.

The other data set is that America's standing in Pakistan has plummeted over the last several years. Would it be time for us to consider to redirect or restructure our aid to Pakistan?

KHAN: The aid package, which is there, the aid package, that is divided 50-50 percent -- 50 percent on the military side and 50 percent for the economic and socioeconomic programs. That was a five-year program, and that is going to come to an end, I think, in 2008 unless we are able to renegotiate and continue it. So in that sense, I think that 90 percent figure, because this is well-known thing.

The other thing are some of the things in terms of logistics, et cetera, for which there are charges. That is a separate -- that is not aid. That is not assistance. That is a very different thing. That may be going to army, because that may be providing some logistic support for various things. So that is quite different, and that is under the Operation Enduring Freedom. That is not assistance.

So we have this assistance program which, as I said, about $350 million for the MFM and the almost $350 million for socioeconomic programs, especially for education, primary education, health care.

We would like that there should be targeted assistance. But on the military side also we have needs, because we feel that a strong Pakistan is important for peace in the region. So we cannot also allow that our capabilities on the defense side are degraded.

It's not just that we will be banking on our unconventional deterrence. The conventional deterrence, also conventional level, has to be kept at a level that is viable and that is credible. So that is why we need some assistance and we also (make sure we ?) acquire equipment to modernize our air force or our navy or our army. There is a legitimate need.

But more than that, more than everything else, what we need is access in trade. We need access to your markets. ROZs, which has been going on now for almost two and a half years; now sometimes you see there is this thing that you cannot have textiles. If some items, some tariff lines of textiles are added, as I mentioned in my preliminary remarks, that is not going to be disruptive to the American market. It will not disrupt your economy. It will help there.

Similarly, if we have some trade access, if we have investments, that is the name of the game. That will help us counter all these negative phenomena and negative forces which may be growing or which we are now countering. We will counter because we are determined, but that time will be much longer if there is economic-socioeconomic transformation, growth, economic growth. Time will -- (inaudible).

So that is the area where basically we need help. We need investment from the world. But some of your travel advisories, for example, are such that people don't want to travel to Pakistan. But Pakistan is not North Waziristan and South Waziristan. There are many areas there is investment which is taking place from many countries. From the Gulf we are getting. From Southeast Asia we are getting.

But if there is some relaxation and some investment that we will do, that will be very helpful for Pakistan. But it will also be helpful for this larger challenge that everybody seems to be facing, which is the challenge of modern times, the post-Cold War challenge, in the shape of what we call terror and extremism.

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