US
Ambassador to India, David Mulford
'Granting
MNNA Status to Pakistan is Not a Huge Strategic Issue'- US Envoy
By
V. Sudarshan
NEW DELHI: The US Ambassador to India granted his first interview
to Outlook during a week when the US decision to grant
Pakistan the status of a Major Non NATO Ally (MNNA) came out of
the blue and sent shock waves into the Indian foreign policy establishment.
Ambassador Mulford answered questions head on.
Below
is a transcript of the interview:
Q:
Would you agree with the assessment that relations between India
and US especially where Pakistan is concerned is a tricky minefield
to negotiate at the best of times?
A: Well, I think there are certain,
many sensitive issues. Your question is … can you read the
question again because it seems to me you’ve asked about
the broad relationship.
Q:
Would you agree with the assessment that relations between India
and US especially where Pakistan is involved is a tricky minefield
even at the best of times?
A: I would say that the relationship
between the India and US is in general a relatively straightforward
relationship where discussion and negotiation of issues is orderly,
it is polite, for the most part it is constructive. There are
areas of sensitivities where Pakistan is concerned.
Q:
Do you believe that granting the major non-NATO military ally
status to Pakistan when Delhi is in an election mode could have
any consequences at all on Indo-US relations?
A: On Indo-US relations? I do not
see why it should.
Q:
Because the Spokesman just the other day, I think, the Government
of India said through the Spokesman "It will have significant
implications." Do you have any idea what was meant by this?
A: Significant implications?
Q:
On Indo-US relations. He specifically said so.
A: I have no detail on that.
Q:
But you certainly do not subscribe to that assessment?
A: I don't see that as being justified
by the decision that we made and announced.
Q:
Did the question of granting Pakistan any special favors or dispensation
come up in Secretary Powell’s, in any of his, meetings in
New Delhi?
A: It did not.
Q:
How come New Delhi was not informed of it. Could it be that Secretary
Powell assumed that the Mission here had done the necessary spade
work?
A: No, I think the reason it wasn’t
discussed is that Secretary Powell was visiting here for the purpose
of discussing US-India relations. And US-India relationship
is a bilateral relationship, it’s a free-standing relationship
which has many, many elements to it that are significant to both
parties, such as the Next Steps in the Strategic Relationship.
And then the focus was on that issue and then very heavily on
economic issues, where there is enthusiasm to begin to prepare
to resuscitate and revive the Economic Dialogue and so that we
can move forward on that at a more senior level. And those were
the main focal points.
Q:
Exactly. But you know the relations between India and the US
is always had the Pakistan factor in it. So even though India
-US relations stands on its own, Pakistan is always a factor
that cannot be separated from this entire thing. So do you think
in retrospect this entire issue of MNNA could have been handled
any better?
A: Well, you made the question and
so I guess I don't have to answer it. You haven’t asked
a question.
Q:
No, I asked you whether it could have been handled any other way.
A: No, it was handled the way it
was because that's the way it was appropriate to handle. By that
I mean the India-US relationship, as I said before, is a relationship
which stands on its own. Just as the US relationship with Pakistan
stands on its own. So that I don't think it is reasonable to think
that every single issue has to be viewed through the prism of
the other aspects of the other relationship. There is clearly
a fundamental containment to each of these relationships that
are in and of themselves to do with those countries. That is the
basis on which the Secretary came and conducted his discussions.
Q:
Reading from State Department web site whatever we see from the
press, there seem to be apparent contradictions in explanations
provided by various people in the Bush Administration as to why
India was not told about the MNNA. Powell himself was on the record
saying that this has been in the works for months and months and
months and months. He mentioned the word months four times, whereas
Adam Erelli said that this was something Washington did not care
to advertise about. And yet Powell has been reported in the Hindustan
Times as telling Yashwant Sinha that the decision was not taken
even while he was in India. It got taken only when he reached
Islamabad. What's the real story?
A: Well I think the real story is,
this is an issue that had been discussed, and, my understanding
is that there was no conclusion to this discussion. And part of
it because it was unclear whether Pakistan was really interested
in the issue. Because we are talking about something here that
isn’t absolutely a huge strategic issue. It is a relatively
small item. You can look at the web site and see the things that
are laid out there confirm that it is not in the same league with
the strategic alliance, the Next Steps, that we have been discussing
with India. But I think that until they got to Pakistan, they
didn’t think that it was an issue that would come to a head,
and then I think all of a sudden it did in the context of the
situation out there at that time, and not only did it come to
a head, Pakistan apparently said they wanted to go ahead with
this because it was thought to be a good idea at that time because
of what was going on up there, to decide, yes, Pakistan would
go ahead. And so they did go ahead.
Q:
Can I draw your attention to Boucher’s statement on March
22nd. He mentions the trinity issues as examples of increased
enhanced cooperation between India and the United States, but
he mentions, but he fails to mention expanded dialogue on the
missile defense about which over here there has been a lot of
emphasis on. Is this an inadvertent omission or?
A: I suppose, it must be. If you
look back at all the exchanges that have taken place on the "so-called"
trinity issues have been mentioned and usually followed with this
idea in mind, as I did in my speech the other day which indicated
that, in due course, missile defense is also an issue to be discussed.
Q:
It is simply a case of oversight?
A: I think so.
Q:
I want to move away from this MNNA thing and come to the other
thing that agitates our mind a lot, which is the proliferation
question in the region. So far, people, audiences over here which
are keenly following this have not got one single convincing explanation
that whatever happened in terms of proliferation was largely,
entirely the handy work of Qadir Khan. No government agency, no
security agency, none of the Pakistani government was involved.
Can you offer our audiences here one convincing argument that
this was indeed the case and that nobody else was involved except
Qadir Khan?
A: Well, I think that the Secretary
when he was here cleared the US position, which was, namely, we
haven’t got to the bottom of this. We don’t know the
answers. And I think he also explained that the United States
is focused on getting to bottom of the network, rolling it up,
and pursuing the various elements of it to try and contain the
situation and make sure they got the whole thing under control,
and when the question was raised about exactly who knew what when,
the whole process, his answer was we don't the answers to those
things yet and it will be some time before we do. Ultimately,
we will know most of those answers.
Q:
Did this issue come up for discussion when Secretary of Powell
was here?
A: It did come up. Yes. It was framed
just the way I explained it to you. He volunteered that information
to our friends here, explanation, just as he did in his public
statements here, in the press conference.
Q:
So is there is any justification to the view over here, which
is a very dominant view, that here is an instance where United
States is plainly rewarding somebody who has been the worst proliferator
in history?
A: No, I don't think so because the
United States has a relationship with Pakistan which is based
on certain objectives that have to do, as you know, with catching
terrorists, al Qaeda, and so on. And these are very high priorities
in the relationship that's been successful on those fronts. And
Pakistan has been an important ally to the United States. The
United States is keen to continue working with Pakistan to build
that relationship and make further progress on those things.
So the AQ Khan thing has come
up and is being looked at in the context of what I just described,
namely, the aim is to try to understand exactly what happened,
how widespread it was, who was doing what, roll the thing up,
dismantle it so that it is ineffective, cannot be reconstructed
and maximize the ability we have, as you’ve seen from Libya,
to sort of derive advantages from the process of rolling it up.
It is a significant step. And it is impossible for us to know
at the stage exactly the full details of who knew what within
that structure And that hasn’t the important thing for the
time being. The important thing is rolling it up.
Q:
But you will get to the bottom of ....
A: Well, the Secretary said that,
ultimately, we will, but there may be things that are, you know,
never fully established. But he seemed to think we would make
progress on it over time.
Q:
Coming to the entities list. There is a revised entities list
still active and ISRO is still on it. Is there is any chance of
getting the ban on these entities removed?
A: Well, I mean, what has happened
as you probably know, the Next Steps initiative which was announced
in January, has been under discussion. It is a complex process
and what has to happen is that both sides have certain things
to fulfill in the various phases as we move forward and certain
things will happen, among them the certain thing that you mentioned.
But certain things haven’t
yet happened and the framework for getting these steps done isn't
fully in place yet. Until that is in place, I think we are very
close, I think the Secretary’s visit was extremely helpful
in this regard, to sort of get this in position, so that we can
get that framework involved. Until that’s involved, there
will be the types of actions that you mentioned, but when the
frame work is involved, it is established, then I think we will
see those steps and we will see an expansion of the commercial
aspects of those relationships because liberalization of export
licensing is a very important objective here.
But, of course, that has to be linked
to a very careful, convincing and credible system of making sure
that there are no onward leakages and those sort of things. So
these are largely technical issues at this point, but they are
complicated. And they need patience, they need time to get into
place. But I think we are making progress.
Q:
I saw Powell saying on the way that there are lot of things that
India has yet to do on these issues and has there been any movement
among those things?
A: Well there has been. And I think
there was some important movement during this visit, and now we
have a good chance of seeing that movement arrive at the point
where the significant aspects of the framework are put in place.
Q:
I want to ask you what are the priorities of your Ambassadorship?
A: Did you see the speech I did the
other day?
Q:
I saw it, but I would like you to tell the Outlook readers.
A: The priorities, first of all,
are to build on the strategic relationship that has been so clearly
laid out by President Bush and Prime Minister Vajpayee and to
complete the work on that which we have just been talking about.
To make absolutely sure that the vision that they have captured
is in fact successfully implemented and we begin to see that become
a reality because as that becomes a reality the strategic relationship
is going to be very, very important alliance basically for the
United States and India.
And then beyond that there is the
vision of building on that a more comprehensive relationship with
India because, as I explained, for reasons that I think essentially
of history, this relationship today is very heavily a bilateral
government-to-government relationship and the private elements
of the relationship for a whole variety of reasons are relatively
more modest.
When you compare this relationship
with other major relationships around the world the United States
has, where perhaps the bilateral aspects are 20 per cent of the
relationship and the balance is private. Here it might be roughly
reversed. So there is clearly a major job to be done to build
a balance in that relationship and that involves doing things
in virtually every field you can think of. Obviously, business,
trade, commerce, finance.
But also the programs that underlie
our common interests: HIV, for example, health issues, polio,
AID projects of various kinds and in some cases helping improve
certain things such as fiscal disciplines at state level in this
country. And these things, universities, strong relations, the
virtual movement of people, foundations, cultural events, media.
All these things can and should and will, in my opinion, be important.
So the vision is to sort of begin the process of building our
relationship, which if we do, in my opinion, the US- India relationship
at the end of a few years will be one of the most important relationships
in the world.
Q:
You have an enormous background in business, economics [inaudible].
How hopeful are you that we’ll have much greater market
access at the end of your tenure?
A: Well, I think, very hopeful, very,
very confident that there will be significant further changes
in India which are driven from within India, not by the United
States, and obviously we are interested in seeing those succeed.
Even if they do succeed the task of getting better access, for
example, on trade, better arrangements for foreign direct investment
and a variety of different things, will improve. Because we think
this government, and really all parties today seem to have embraced
growth and reform as the priority to keep India moving in a significant
direction of strong, sustained growth.
And I think, in my view, if India
continues to grow somewhere between 8 and 10 percent a year on
a consistent basis with low inflation and reasonable fiscal discipline
and so on, the progress is going to be really eye-popping. And
this is significant because, not only there will be growth, there
will be rapid expansion of the middle class which is one of the
things driving the process. But there will be a reduction in poverty.
With that will come other changes,
consumption, education and so on. And that will also, there is
going to be a very significant emphasis here on, it seems to me,
on infrastructure and on reforming the economy. Because you can’t
really grow an economy consistently at 8 to 10 per cent unless
you open your economy, you make reforms, you open to the outside
world, take advantage of opportunities for cross border operations.
Indian companies will began to think
multinationally themselves and I think you will see major transformation
in the financial markets and beyond from what there is today,
and well beyond. Because there has to be sources of finance made
available for long-term capital investment in infrastructure.
And these things are going to happen. So, in a way, when you talk
about access, I think some of the issues that will be discussed
between the two countries will be issues where you will be pushing
on an open door. I think there is willingness and interest.
Q:
Do you want to identify four or five areas specifically?
A: I think, for example, further
reforms in the financial market are an area you can expect a lot
of profit to exchange. There are a few access issues there, but
there is also areas where, insurance, for example, pension funds,
and the rules are written for how they invest and so on. This
will be important for the future creation of the institutional
market in this country.
Ultimately, I think there will be
probably some willingness to look at the issue of retail, not
now, but at some point because malls are developing in India,
discounters are moving into those malls, changes are taking place
that are not just generated by foreign companies but they are
happening within the Indian economy. So as those things happen,
then the whole question of giving access to outside retailers
will be easier.
Agricultural issues, I think we will
see some progress there. India is already showing a willingness
to reduce tariffs. They recently reduced taxes. There is probably
scope here for tax reforms, especially between the State and Federal
governments where there are structural issues that can be addressed.
I think they want to address those issues. We can help with that.
The energy sector, there are opportunities there. Better access
to constructive investment. So, the list is long and I think it
is a very positive list.
Q:
The other question I wanted to ask you is, there has been a lot
of attention focused on this outsourcing business. Is it overblown
all the concern that we have over here and over there?
A: No, well I don't want to say its
overblown because it is a very sensitive political issue in the
United States at this time. The reason it is sensitive is because
people have lost jobs and the loss of jobs is always a very sensitive
issue anywhere, whether here or in the United States. And it is
particularly sensitive in an election campaign. On the other hand,
the outsourcing process is not new, its been going on for years.
It is not just between the United States and India. I remember
outsourcing from New York banks to different areas in the United
States. Call centers and things like that. Now it seems some of
those have been out sourced to other countries.
I remember manufacturing jobs leaving
the United States and moving to Mexico and subsequently moving
from Mexico to China. So outsourcing, as we call it, is part of
the global economy, part of the rapid Internet, high-tech based
global system that we live in. As barriers have come down and
instant communication and exchange have increased the pace and
capacity to process huge amounts of information cheaply has advanced,
outsourcing is just a natural part of that process.
So all of a sudden in the United
States the issue has surfaced the way it has, and it is focused
to some extent on India, because India has been very successful.
But frankly the number of jobs actually outsourced to India from
the US at this moment in time by our estimate is between 100
and 150 thousand jobs. So it is not a large of number of jobs
when put against the total jobs creation in the United States
or even the number of jobs every month that are destroyed and
created in our economy which run by different accounts into the
millions.
But it is important because people
are losing jobs in a sector that was thought to be safe for the
future in the sense (manufacturing jobs not service jobs ) not.
But it turns out that for reasons I have already described some
of those jobs [inaudible] did not, for both of those jobs. And
the key thing is, in my opinion, how to create programs that address
the relocation and re-training, but above all the policies that
create new jobs. And those policies are going to be based on the
technical abilities of the United States to innovate and implement
new ideas.
We have a successful economy that
recreates itself regularly, generates new jobs, new ideas, new
businesses and so on. As long as the United States grows and invests,
the chances are there are going to be new jobs created . But sometimes
retaining, encouragement and some temporary rearrangement is needed.
And that’s where we need to put our thoughts.
And then finally, I would point out
there is the whole question of what you might call "insourcing,"
and that has not been discussed very much. That issue is a little
harder to get a handle on. But there is obviously a huge service
sector in the United States that provides services, exports services
to other countries. We have a positive account of 57 billion dollars
in the service sector. Lawyers, engineers, architects providing
services to foreign countries, selling US services. So we have
a huge surplus there and people haven’t really focused on
that aspect.
So
I think over time this is an issue that as people digest it and
they realize that the United States certainly, the economics of
this are compelling, for reasons I described it is already there,
its happening as part of the global economy. So to actually reach
in and stop it is very intrusive, very intrusive into the private
sector decision-making process, which is again not characteristic
of the United States. And if all you do is pass new rules about
outsourcing in government contracts, you are not touching a significant
part of the problem. But it will be a difficult election this
year. - Outlook India
