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Diplomacy in Action

Preview of September 22 New Silk Road Ministerial

Senior Administration Officials
New York, NY
September 21, 2011

4:30 p.m., EDT



MODERATOR: All right, everyone. Thank you for waiting and thank you for coming this afternoon to the New York Foreign Press Center. We will have a briefing by two Senior Administration Officials on background. I will introduce them so you know for your records. But in reporting, again, they will be speaking on background as Senior Administration Officials. [Senior Administration Official One] and [Senior Administration Official Two] will be speaking on background as Senior Administration Officials.

And I turn it over to them now. Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Thank you very much. Am I one or two? (Laughter.) I’ll be one. Okay, all right. I’m Senior Administration Official Number One.

First of all, thank you all very much for coming. We thought that we might take a few minutes this afternoon just to try to put into context the New Silk Road Ministerial, which will take place tomorrow in the afternoon at 2:30. And this is an event that’s hosted by – excuse me, can I get some water – the foreign minister of Germany and co-chaired by the foreign ministers of the United States and by the foreign minister of Afghanistan.

Well, we’re just calling it the New Silk Road Ministerial. And what I’m going to ask the other Senior Administration Official to do is take you through, exactly through that New Silk Road piece. We thought it would also be important to just step back for a moment and put this ministerial into its context with upcoming international meetings in Istanbul on the 2nd of November and Bonn on the 5th of December, and I would like to spend a couple of minutes doing that.

The idea that we have is to see if it’s not possible to believe in and follow up on an idea that a secure, stable, and prosperous Afghanistan will only really be able to exist inside of a secure, stable, and prosperous region. And so the idea that we have is using both substance and the calendar that we can try to create the conditions for that regional support for Afghanistan.

And so the ministerial meetings that have been held so far already around the United Nations General Assembly, and very specifically the ministerial tomorrow, are part of that idea and a part of that effort. And looking forward, we hope that it will be success tomorrow, that people will find the vision of the New Silk Road to be interesting, and that it will then move on and help us frame the rest of the year.

If we look ahead to Istanbul on the 2nd of November, I know Turkey as the host and Afghanistan working closely with the Turks are trying very hard to bring people together, the neighbors and the near neighbors of Afghanistan, and to try to put out a declaration there that will speak in support of a secure, stable, prosperous Afghanistan inside of a secure, stable, and prosperous region. And so the near neighbors and the neighbors of Afghanistan would be speaking to the Afghan people, with the Afghan people, about the future of politics, about security, a vision moving forward.

And then we move onto Bonn on the 5th of December, where we hope, at least as the United States, that the Afghan chair and the German hosts will be able to produce a number of outcomes, and let me give you three. First, that we would, at Bonn, welcome the statement from Istanbul; in other words, that the international community gathered at Bonn would be able to say, “this statement in Istanbul is a good thing, it’s how the region itself sees its future.”

Secondly, as you will see from the meeting tomorrow on the New Silk Road – and you’ll hear from the other Senior Administration Official – we hope that Bonn will be a little bit more specific about the New Silk Road, that people will say we learned something on the 22nd of September, we worked on it, and now here we are on the 5th of December, we want it to be part of our regional vision. So that when people stand up at the end of this meeting in Bonn, you’ll have the security and political piece talked about in Istanbul, and then have a piece of regional economic integration, which we think is so important to the future of the region, connected then to it through the meeting in Bonn. So as I say, we see both substance and timing and chronology working for us here, and tomorrow is the beginning of that sequence of events.

So with that, I’d turn it over to my colleague and then we’ll both come back and answer any questions anybody might have.

SENIOR ADMINISTRATION OFFICIAL TWO: Well, thank you, Senior Administration Official Number One. (Laughter.) I think I’d like to start by just taking you back to when the Secretary first articulated her vision of the New Silk Road, which was in a speech that she gave in Chennai, you’ll recall, after the U.S.-India Strategic Dialogue in July.

And at that time, she said that it would not be a single thoroughfare, but really more – much more of an international web of economic and transit connections that would include things like rail lines, highway infrastructure, and new energy infrastructure. And indeed, the New Silk Road is really the economic complement of what my colleague just spoke about, and it’s part of a wider effort to help to build up the Afghan private sector, to help create sustainable economic development in Afghanistan, to create this economic integration between South and Central Asia that would be so beneficial to Afghanistan and indeed would help to create a stable and prosperous Afghanistan within a stable and prosperous region.

So let me just give you a few concrete examples of what we’re talking about so we can get a little bit more specific. On the transit side, we’ve talked a lot about trade and how important that is to this vision. And as you know, Afghanistan and Pakistan have agreed to a transit trade agreement and they’ve also agreed to try to implement that and to extend it to Central Asia. And obviously, that’s a very welcome development.

And ultimately, of course, we hope that it can be extended to India as well. The Indian and Pakistani commerce secretaries have been engaged in very important talks over the last several months to try to increase the volume of direct trade between their two countries that goes across the Wagah border. And I think they hope to announce some new measures in the next month or two. And again, the ultimate goal is to try to reduce trade and other barriers so that products from Afghanistan or from any of the Central Asian countries could transit through Pakistan and into India, Bangladesh, or even beyond.

And I think this is really a truly transformative vision, because all of you know is that India is going to be such an important economic anchor for the region. It’s going to be the world’s third-largest economy in the world, if projections hold true, by the year 2030. So it’s obviously an important economic partner for the United States, but even more importantly, it’s an important partner for all of the countries of the region.

Another very important priority is to try to expand the regional energy infrastructure. Already, with the leadership of President Berdimuhamedow of Turkmenistan, the countries of Turkmenistan and Afghanistan and Pakistan and India have made quite important progress on the TAPI pipeline, which would bring natural gas from the fields of Turkmenistan to the energy markets of India, which, again, are growing very, very rapidly. It would also bring very important transit revenues for Afghanistan and Pakistan.

Another good example of the energy infrastructure that we’re talking about is the CASA-1000 project that would bring surplus summer power from Kyrgyzstan and Tajikistan down to Afghanistan and particularly to Pakistan. And this is particularly important for Pakistan because, of course, their energy needs are greatest in the summertime. So there, I think, again, a very complementary and positive vision there that we hope can succeed and we’re giving a lot of thought and attention to.

I should say that a lot of the Central Asian countries already have been doing a lot of what we’re talking about. Uzbekistan, for example, has been very helpful working with the ADB and others to develop the rail link from its own border down to Mazar-e-Sharif. Uzbekistan Power is also a very important part of lighting Kabul right now. Turkmenistan has been very active in trying to promote its own electricity exports into Afghanistan and has quite an important vision for expanding those exports. And even Tajikistan – Pamir Energy of Tajikistan has been very involved in creating smaller but still important regional transmission lines that would help some of the poorer regions of Afghanistan, like Badakhshan.

So again, there’s already quite a lot of important work that’s being done. And I guess I’d just come back to say that all of these projects would create new economic opportunity for the people of Afghanistan and for the people of Central Asia and for the people of South Asia. And if we can do our small part to help to unite these markets, we think it will have a real – make a real benefit for the people and really help to create a stable and prosperous region that my colleague talked about.

So let me stop there. And again, we’d be very glad to answer your questions on anything we just talked about. Thank you.

MODERATOR: So they can take some questions for the next few minutes, if you just identify your name and your outlet when you ask.

Who’d like to go first? Sir.

QUESTION: Azim Mian from GeoTV in (inaudible). Now, with all this description, looks like – and that’s the perception in the region – that Afghanistan and India are being prompted by the U.S. as major partners, whereas Pakistan is being neglected. And just because of its geography, it’s a kind of compulsion to drag Pakistan into it. Otherwise, there will be two major players. One will be Afghanistan, which is being built, and the other one is India. How do you react to that?

SENIOR ADMINISTRATION OFFICIAL ONE: Well, I would react to that – you mean Senior Official Number One? (Laughter.)

I would react to it by saying that, as far as I’m concerned, that doesn’t comport with any of either the facts or the ideas as I know them. For I believe that Pakistan, in fact, because of its geographic location, number one – number two, because of the possibility of mineral and other wealth in Pakistan, and third, because the Pakistani people are entrepreneurial and resilient people, that Pakistan could be among the major countries that take advantage of this opportunity. And I think it would, sir, be a shame if it turned out that somehow Pakistan would miss this opportunity.

So as my colleague said, if you’re going to take goods from Central Asia to India or India back to Central Asia, well, Pakistan ought to be a part of that. And that’s one of the reasons that we, both my colleague and I and all of the people who work with us, put so much attention on the Afghan Transit Trade Agreement, which was – went into effect on the 22nd of June and, as my colleague said, why we pay such attention and support the efforts of the two commerce secretaries, Pakistan and India, to work out as much trade as possible, because we want Pakistan to be a major beneficiary of this.

One of the things that strikes me – and again, I’d ask – you all know more about this than I do – one of the things that strikes me is until, in Afghanistan and Pakistan, there is sustainable economic development, private sector-based, where people have a job, then a lot of the other the things we’re trying to do on the political side of this are not going to be nearly as successful. And so, as my colleague said, this new Silk Road vision is a complement to all the other things we are doing, and yet is also simultaneously a foundation. And so we want Pakistan to be a big part of this, and that’s why we’re having this ministerial and why we look forward to having the foreign minister of Pakistan there tomorrow, and why this was such a topic of conversation between the two foreign ministers on Sunday evening.

QUESTION: [Senior Administration Official One], you know that transit trade between Afghanistan and India through Pakistan has always been the problem, it seems. What is your information? How much progress these commerce secretaries have made in this regard?

SENIOR ADMINISTRATION OFFICIAL ONE: Well, I’d ask my colleague for help here, but he and I have visited this morning – had the good fortune to call on the Indian foreign secretary. And I think, actually, a fair amount of progress is being made. If you look at kind of the efforts where they started a year or so ago, they were talking about kind of the most minimal things. And now we’ve moved forward, at least a little bit, negatives to positives.

There is lots more to be done. And for example, as I told the foreign secretary this morning, I’ve been very impressed with the amount of money, for example, and resources that the Indian side has put into the border at Wagah. And if a similar effort could be made on the Pakistani side, I think it would be to everyone’s advantage. I’d ask my colleague to help me here.

SENIOR ADMINISTRATION OFFICIAL TWO: Yeah. Let me just add on that, that I think what the Indians and the Pakistanis are trying to accomplish now is to take what is a lot of informal trade that goes via Dubai and make that direct trade and have that go through Wagah. And I think they’re putting in place now the building blocks to enable that to happen. So, of course, I don’t want to get ahead of their own announcements on this, but I think their hope is that by doing so, they would be able to almost double trade – direct trade – between their countries overnight, and then go from there. So I think they themselves share this optimism.

I’d just like to add, on the point that was just made about Pakistan, too, that when I talk to the Central Asians, as I do very frequently, they are equally excited about the opportunities inside Pakistan. And they look at all of the South Asian markets as true growth opportunities for them. And a country like Tajikistan, they are – when they talk about access to the Indian Ocean, it’s usually through Pakistan, not necessarily through India. Pakistan’s the shortest route for them. So they themselves are very focused on Pakistan, as are we. And again, I think Pakistan will be a major beneficiary of this New Silk Road if we can make some progress on it.

QUESTION: My name is Massoud Haider and I represent Daily Dawn of Pakistan. I just want to find out from [Senior Administration Official One] what kind of role do you envision –


QUESTION: What kind of role do you envision for China to play in this whole road thing? And do you – have you taken that into consideration?

SENIOR ADMINISTRATION OFFICIAL ONE: Yes. A very good question. Thank you for asking it. We hope that the Chinese will play an important role in this. They are what I would consider to be a near neighbor of Afghanistan and certainly a very important friend to Pakistan.

And so we have invited – I know the Germans have invited the Chinese to the Silk Road event tomorrow. I believe they will be represented at a very senior level. We have consulted all along with the Chinese at every opportunity. I will have the opportunity to visit there in early October, and although a long list of things to talk to them about, Afghanistan and Pakistan, but I can assure you that this vision of the New Silk Road will certainly be a part of my conversation there as well.

QUESTION: (Inaudible.) My question is (inaudible) have talked about the transit trade (inaudible) the Kashmir issue stand in this case. How (inaudible) the transit trade between Pakistan and India and going to the Afghanistan if Kashmir issue is standing still?

SENIOR ADMINISTRATION OFFICIAL ONE: I mean, we’re not trying to politicize this in any way. Obviously, we’d like to see greater movement of people and goods across those borders as well. And I think that’s part of the vision that the two countries have as well. But for the moment, I think the great focus is on what can be done at the Wagah border, and that’s what the two countries are focused on, and obviously we’d like to support their efforts.

QUESTION: Lachlan Carmichael from AFP. How much does the ongoing security problem or problems in Afghanistan inhibit investors in all these projects?

SENIOR ADMINISTRATION OFFICIAL ONE: Two important points here. First of all, I appreciate the question on investors, because I think one of the things that both my colleague and I want to stress here is that this is, we hope, going to launch a private sector fueled economy, and that one of the visions of the New Silk Road is that as we transit away from – or transition away from official development assistance, that the private sector will take its place.

Now, you raise a really important point on security. Of course it has an impact. It would have an impact for any CEO or any president of any company reporting to her or his board of directors about what’s going to happen there. And so security is an extremely important part, certainly in Afghanistan.

The second thing is I would say – and I think this will come up tomorrow, and I would imagine it would come up also in Bonn – is it isn’t just security, but it’s also, of course, getting the right regulations in place and the protections for investments. And so those are things that the Afghans I know have promised to do, both from the Kabul and London conferences. And I think this will be coming in sort of clear and clearer, clearer focus now, as people say, “Well, gosh. Here’s the possibility of an investment. What will it take to make it?” So security is important, but I would also say regulatory frameworks and other things are important as well.

QUESTION: They’re not really lining up yet – the investors. I mean, the security has inhibited them to – what kind of degree – how would you describe how much they’ve been inhibited by the security problems?

SENIOR ADMINISTRATION OFFICIAL ONE: Well, I’d say – well, first of all, this vision of the New Silk Road is something that we’re going to launch tomorrow, so to say that there’s a line of people who’ve lined up for something that we haven’t launched yet, I’d give – I’d ask for a little bit of patience here.

But I think when people do consider it – and I’ve had a chance to talk to a number of American companies and CEOs about this, and I’m sure other people have as well – is they say, “Okay. Let’s take the vision. There are these possibilities.” As my colleague said, there’s extractive possibilities, all kinds of possibilities in the area. And then, yes, among the things they would have to take into account is security. Of course they would.

SENIOR ADMINISTRATION OFFICIAL TWO: Let me just add on that. I think there’s already been quite a lot of interest in things like TAPI pipeline, where, as you know, the two countries have made quite – the four countries – sorry – have made quite significant progress already towards a pricing arrangement of some sort.

The next step would then be to try to line up, hopefully, a major international oil company to sort of help shepherd this project through. And I think there’s great interest on the part of that. Part of the challenge there is that they’d like to have an upstream stake in Turkmenistan to get some of the gas there. But I wouldn’t say that there’s been any private sector concerns about security. It’s much more about the pricing arrangements and so forth. And that’s really what is going to govern how they go forward.

And so I think I’ve been impressed that, in fact, security has not played a major factor in the decision making. It’s much more about what are those economic opportunities. And as we develop those economic opportunities, that itself will help to enhance the security situation. So it’s a – it will have, I think, a positive effect.

MODERATOR: Can we go to Washington? Lalit, you have a question?

QUESTION: Yeah. Thank you for doing this. My first question is to Senior Administration Official Number One. Can you give us more specifics and logistics of the New Silk Road? Is it going to be a road network or it’s going to be railroad? And where is this funding is going to come from? Who is going to fund it? And secondly, how do you think this is going to help achieve Afghanistan’s goal of economic independence or self-reliance?

My second question is to Senior Administration Official Number Two. Every time we mention about this New Silk Road – and you talked about Secretary Clinton’s speech in Chennai, where she mentioned it for the first time – can you give us an insight why Chennai was chosen as the place for announcing this – such an important initiative? And secondly, what specific role do you see for India in this New Silk Road?

SENIOR ADMINISTRATION OFFICIAL ONE: Well, thank you very much for those questions. Let me answer the first one that was posed to me. I think at this point, my answer to you would be all of the above. As my colleague said, and as Secretary Clinton said in China – in Chennai – this isn’t a one – one thing. It’s a network of things. And so I can envision this as being roads, rail links, all of those kinds of transportation connections. And as I said to your colleague, we’re kind of launching this vision tomorrow, and so I think the expectation that we would be able to bring you a map here with 500 miles of roads laid out and 15,000 miles of railways, not yet.

But I wouldn’t exclude anything at this point. I mean, for example, if you consider questions of mining and the extractive industries, sometimes you need railway to take some of that extractives out to some point and road the rest. If you think about, for example, the agricultural production around Kandahar moving into India, well, that wouldn’t – that might be all rail – might be all road, but it might be that you’d need refrigerated trucks to do so. So I think it’s a combination of these things.

And then secondly, how it helps Afghanistan, the two wonderful quotations in the Secretary’s Chennai speech, one was, to quote President Karzai, who said, “Afghanistan is an Asian roundabout.” And secondly, the quotation from the prime minister of India, he hoped his grandchildren would someday be able to have breakfast in Kabul, lunch in Islamabad, and dinner in New Delhi. And I think the way this helps is that it’s – it creates sustainable economic growth. Your – I can only speak for our country, and we give a substantial amount of assistance to Afghanistan today, to Pakistan today, but sustainable economic growth will only come from private sector-fueled development. And that’s a private sector not just from outside of the region but inside of the region as well.

And so that leads me to the third: Who’s going to pay for it? I think it’ll be a combination. There’ll be a lot of private sector investment, I believe. Maybe some of these infrastructure projects will be public-private partnerships. And then the other thing I think is that a number of countries like the United States have Ex-Im, OPIC, and other kinds of governmental entities that can help the private sector make some of these investments.

So I would say on your first question, it’s a combination. And on the third question, who’s going to pay, it’ll be a combination as well.

SENIOR ADMINISRATION OFFICIAL TWO: And of course, the multilateral development banks --


SENIOR ADMINISTRATION OFFICIAL TWO: -- the Asian Development Bank and many others will have very important roles and are already doing quite a lot.

As to your second question, Lalit, about why did the Secretary give the speech in Chennai, you will recall that the speech was not just about the New Silk Road but about how we hope that India is going to play a greater role in Asia, and how we feel that India’s going to be such an important strategic partner for us in Asia and in the Asia Pacific. So she chose to go to Chennai because you’ll recall that it was really traders from Tamil Nadu that first began to extend India’s trade into Southeast Asia and beyond, and so they were really the pioneers of India’s Look East policy that we’ve now seen come to fruition. So we thought that Chennai was, in fact, the perfect place to do this.

And again, it was not just about the Asia Pacific but also to talk about the important role that we see for India in Afghanistan and in Central Asia. And indeed, India already itself has been a leader in this, as we saw during Prime Minister Singh’s most recent visit to Kabul, where they announced a significant new increase in the assistance they’re providing to Afghanistan and are very much a part of this effort to create the infrastructure that will be needed in Afghanistan to establish and incentivize private sector development.

MODERATOR: More questions?

Well, you’ve already asked one, (inaudible). I apologize. Maybe on the corner here.

QUESTION: [Senior Administration Official], my name is (inaudible). I’m from Online News agency, Pakistan. My question is, as [title withheld], the U.S. senior military personnel (inaudible), Secretary Panetta, John Brennan, and other official like (inaudible) in Pakistan, they (inaudible) it would make Pakistan further destabilize. On one side, you emphasize on the secure and stable Afghanistan and also (inaudible) Pakistan, when on the other hand, in general perception in the public and the media, the U.S. is further destabilizing Pakistan regarding the Haqqani group and other. As [title withheld], where do you stand, where your effort, if these diplomatic efforts are failed?

SENIOR ADMINISTRATION OFFICIAL ONE: Oh, I think that we’re running one policy here toward Pakistan, and that is to say that Pakistanis, in the first instance, need to recognize that terrorism is a threat to Pakistan. When I think about the 19,000 Pakistanis that have been killed in terrorist attacks since 2003, I think that the United States and Pakistan, and many other countries in the world, we share this role as victims of terrorism. And so I think the message that – the first message that people are giving from the United States is that terrorism is a threat to Pakistan, and that we ought to be doing all that we can together to work on that threat.

Second is that, once that is in train, then there’s a whole range of other things that Pakistan and the United States could and should be doing together. And this New Silk Road is one of those issues, but there are many other things as well, and working together to support Afghan-led reconciliation, for example. We are working today with the Government of Pakistan on issues of development and training. One of the things we’re very proud of, for example, is that in Pakistan we have the single largest educational exchange program of any country in the world. And if you look at, over the past few days in particular, what the United States has done to respond to the floods in Pakistan to help individual Pakistanis, I think that’s something to be proud of.

And so just like we were talking about before, you can’t take security and say security lives over here without economics, or economics lives without security. And so our message to Pakistan, just like it’s a message to ourselves and to the region, is that these things are related and that you have to deal with the security questions, in this case very much the questions of terrorism, and then open up the possibilities for sustainable, long-term economic growth, because that’s what’s going to make successful societies in the 21st century.

MODERATOR: Thank you very much, everyone. Thank you. Sorry we have to --


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