[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
                    REGIONAL SECUIRTY IN SOUTH ASIA

=======================================================================

                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                            October 20, 1999

                               __________

                           Serial No. 106-70

                               __________

    Printed for the use of the Committee on International Relations


                               


                       U.S. GOVERNMENT PRINTING OFFICE
61-551 CC                      WASHINGTON : 2000



                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVE CHABOT, Ohio                   EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE P. RADANOVICH, California     JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    Richard J. Garon, Chief of Staff
          Kathleen Bertelsen Moazed, Democratic Chief of Staff
                                 ------                                

                  Subcommittee on Asia and the Pacific

                   DOUG BEREUTER, Nebraska, Chairman
JAMES A. LEACH, Iowa                 TOM LANTOS, California
DANA ROHRABACHER, California         HOWARD L. BERMAN, California
PETER T. KING, New York              ENI F.H. FALEOMAVAEGA, American 
MARSHALL ``MARK'' SANFORD, South         Samoa
    Carolina                         MATTHEW G. MARTINEZ, California
MATT SALMON, Arizona                 SHERROD BROWN, Ohio
JOHN McHUGH, New York                ROBERT WEXLER, Florida
RICHARD BURR, North Carolina         JIM DAVIS, Florida
PAUL GILLMOR, Ohio                   EARL POMEROY, North Dakota
DONALD A. MANZULLO, Illinois         GARY L. ACKERMAN, New York
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
JOHN COOKSEY, Louisiana
             Michael P. Ennis, Subcommittee Staff Director
         Dr. Robert King, Democratic Professional Staff Member
                         Matt Reynolds, Counsel
                  Alicia A. O'Donnell, Staff Associate



                            C O N T E N T S

                              ----------                              

                               WITNESSES

                                                                   Page

The Honorable Karl F. Inderfurth, Assistant Secretary for South 
  Asian Affairs, U.S. Department of State........................    10
Dr. Arona Butcher, Chief of Country and Regional Analysis 
  Division, Office of Economics, United States International 
  Trade..........................................................    15
The Honorable Teresita Schaffer, Director for South Asia, Center 
  for Strategic and International Studies........................    31
Mr. Selig S. Harrison, Senior Scholar, Woodrow Wilson Institute; 
  and Fellow, The Century Foundation.............................    35

                                APPENDIX

Honorable Karl F. Inderfurth.....................................    48
Dr. Arona Butcher................................................    55
Honorable Teresita Schaffer......................................    63
Mr. Selig S. Harrison............................................    68

Additional Material Submitted for the Record:

Editorial submitted to the record by Hon. Sherrod Brown, A 
  Representative in Congress from Ohio...........................    70
Question submitted to the record to Hon. Inderfurth by Hon. 
  Sherrod Brown..................................................    71



                    REGIONAL SECURITY IN SOUTH ASIA

                              ----------                              


                      Wednesday, October 20, 1999

                  House of Representatives,
              Subcommittee on Asia and the Pacific,
                      Committee on International Relations,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 2:20 p.m., in 
room 2172, Rayburn House Office Building, Hon. Doug Bereuter 
(Chairman of the Subcommittee) presiding.
    Mr. Bereuter. The Subcommittee will come to order. The 
House has completed its media vote.
    The Subcommittee on Asia and the Pacific meets today in 
open session to receive testimony on regional security concerns 
in India and Pakistan. South Asia, of course, defies easy 
generalizations. It is a region with enormous potential, yet 
much of that potential remains unrealized. India, which is the 
world's largest democracy, has just experienced a remarkably 
successful election, but elected officials remain extremely 
reluctant to take the reforms necessary to restructure and 
modernize the country. At least that is the perception.
    In Pakistan, the governments of Prime Ministers Nawaz 
Sharif and Benazir Bhutto have been plagued by mismanagement 
and corruption. However, concerns about the ineptitude of 
civilian government in Pakistan have been overtaken by events.
    The military coup in Pakistan has, of course, fundamentally 
changed the security equation in South Asia. We now face 
pressing questions regarding the stability of Pakistan's 
nuclear arsenal. We ask whether a military regime will be more 
belligerent or adventurous than a civilian government, whether 
civilian rule will soon return, and whether the coup provides 
an entre for Islamic fundamentalists to increase their 
influence.
    The recent events in Pakistan also have an impact upon U.S. 
sanctions policy. Legislative authority was granted to permit 
the President to waive for one year the mandatory sanctions 
imposed on India and Pakistan following their nuclear tests. 
That one year waiver is due to expire in two days. I, for one, 
am very suspicious or skeptical that unilateral sanctions or 
the threat of sanctions will alter Indian/Pakistani behavior.
    Despite my reservations, I am interested to hear the views 
of our witnesses on the role that the U.S. might play in 
promoting peace and stability across the entirety of the region 
during this difficult period. Certainly peace and stability are 
at risk in South Asia. Both India and Pakistan appear committed 
to developing a meaningful nuclear capability, together with 
the means to deliver that weaponry.
    In addition to last year's nuclear tests, both nations are 
moving forward on intermediate-range ballistic missiles that 
would be able to carry a nuclear payload. The Indian National 
Security Council has released a strategic white paper that 
calls for a nuclear triad of 500 air-launched, sea-launched, 
and ground-launched nuclear missiles. Such a force would be 
greater than the nuclear arsenals of Britain, France, and 
China. If India would actually pursue such a nuclear force, it 
surely would trigger an arms race with both Pakistan and China 
and certainly would leave the entire subcontinent at far 
greater risk of nuclear war.
    The threat is not exclusively on the nuclear level. This 
summer's fighting between the Indian Army and the Pakistani-
supported infiltrators in Kashmir highlighted the potential for 
events to deteriorate rapidly at the level of conventional 
warfare. The Indian Army suffered severe losses and was under 
great pressure in some corners in Delhi to strike an insurgent 
basis deep in Pakistan. If that had occurred, further 
escalation might have be unavoidable. Fortunately, cooler heads 
prevailed, and the situation has, at least temporarily, 
quieted. Nonetheless, tempers remain high, and when the Indian 
Air Force recently shot down a Pakistani military aircraft that 
was flying near the border, the situation threatened once again 
to spin out of control. It is, needless to say, a situation 
fraught with danger.
    Amidst such setbacks, nevertheless, there is reason to 
hope. The Lahore peace process, which Prime Minister Sharif and 
Vajpayee began last year, continues to hold promise as a means 
to resolve differences. We should not minimize the differences, 
but there clearly is broad support in India and Pakistan for 
resolving the disputes that have divided these countries since 
independence. If the Lahore process has taught us anything, it 
is that the people are tired of war and are tired of 
politicians who are forever seeking to gain some minor tactical 
advantage vis-a-vis their neighbors.
    If Pakistan and India could ever resurrect the Lahore peace 
process and surmount their deep divisions, the way would appear 
open to resolve many of the other regional problems.
    The Subcommittee is privileged today to have witnesses with 
wide-ranging and exceptional expertise on South Asia. 
Testifying for the Administration is Assistant Secretary of 
State for South Asian Affairs, the Honorable Karl F. 
Inderfurth. Mr. Secretary, we welcome you back to the 
Subcommittee where, on a number of occasions in the past 
several years, you cogently have provided us with the 
Administration's perspective and policies on key South Asian 
issues.
    Secretary Inderfurth assumed his current position in August 
1997 after serving as the U.S. Representative for Special 
Political Affairs to the United Nations where his portfolio 
included U.N. Peacekeeping, disarmament, and security affairs. 
Mr. Secretary, your testimony today comes at an interesting 
time, so closely following the Indian elections. We certainly 
are interested in your views regarding the importance of 
extending the waiver authority on existing U.S. sanctions and 
how the Administration will exercise any renewed waiver 
authority. We are also interested in your views regarding 
whether the Lahore peace process can now be jump-started and 
what it means to U.S. interests if the peace process flounders. 
In addition, we would like you to address the U.S.-Pakistani 
military-to-military relationship, particularly in the wake of 
the coup.
    We are also pleased to have Dr. Arona Butcher, Chief of the 
Country and Regional Analysis Division at the U.S. 
International Trade Commission (ITC). Dr. Butcher is also 
Adjunct Professor at Howard University. She comes before the 
Subcommittee for the first time. The ITC has just concluded a 
study of the impact of the Glenn Amendment sanctions and the 
possible repercussions of reimposing the sanctions.
    Dr. Butcher, I am interested to learn the ITC's assessment 
of how effective the sanctions were and whether the 
inconvenience caused by the sanctions justified their 
imposition. In particular, have U.S. agriculture and commercial 
exporters had difficulty in regaining market share after the 
sanctions were waived?
    We are also honored to have a highly qualified second panel 
to share their views. The Honorable Teresita Schaffer completed 
a long and distinguished in the Foreign Service, including 
service as Deputy Assistant Secretary of State for South Asian 
Affairs, at the time the most senior post available. She has 
served as a Foreign Service Officer in India, Pakistan, and 
Bangladesh and was U.S. Ambassador to Sri Lanka. Ambassador 
Schaffer is currently the Director of South Asia's program at 
the Center for Strategic and International Studies (CSIS).
    Mr. Selig Harrison is Senior Scholar at the Woodrow Wilson 
Institute and Fellow at the Century Foundation. He was for many 
years the Washington Post Bureau Chief for South Asia and is 
presently an adjunct professor at the Elliot School of 
International Affairs at George Washington University. He is 
the author of five books on India and Pakistan and security, 
and his writings frequently appear in the Washington Post, the 
New York Times, and scholarly journals.
    Gentlemen and ladies, as is consistent with the practice of 
the Subcommittee, your entire written statements will be made a 
part of the record. I request that you limit your introductory 
remarks, if you can, to no more than 10 minutes so we can allow 
adequate time for members' questions.
    Let me turn, however, first to the distinguished gentleman 
from California, the Senior Democrat of this Subcommittee for 
his introductory comments, and then we will start the 
testimony. Mr. Lantos.
    Mr. Lantos. Thank you very much, Mr. Chairman. I will just 
take a minute. First, I want to commend you for holding this 
hearing. I want to welcome Secretary Inderfurth and Dr. Butcher 
to our hearing, and I would very much hope that the Secretary 
will deal very candidly with the rather dramatic developments 
in his region.
    I happened to tune in on General Musharraf's televised 
speech, and I was watching that speech with one of my 
grandchildren. The general spoke slowly and eloquently and with 
great deliberation, and he said, ``We shall not have a military 
government,'' and I interrupted him and said, until it is 
absolutely necessary, and those were exactly his words, ``until 
it is absolutely necessary''.
    It reminded me of General Zia's tenure, which I believe was 
equally temporary at the outset. He advised us that he will 
restore civilian government as soon as possible, the military 
will stay in only as long as it is absolutely necessary, and it 
was 11 years, as I recall, that the Zia government stayed in 
office.
    So one of the things that I am very anxious to have you 
expand on, Mr. Secretary, is what in our judgment is the time 
line that the Pakistani troops will be back in the barracks, 
because however bad civilian governments may be in developing 
countries--and we could certainly be here ad nauseam and ad 
infinitum criticizing the various civilian governments Pakistan 
has had in recent years--it is still obvious, at least to me, 
that on balance a military coup and disposition of a duly 
elected civilian government is not a desirable phenomenon in 
South Asia or any other place.
    I would be grateful if you could give us your insight, both 
with respect to the personal circumstances that may have led to 
this, to what extent General Musharraf's background as a 
Pakistani who lived in India in earlier periods and his rather 
blunt statements in recent days indicate that this, in fact, is 
only a temporary phenomenon, that a civilian regime will be 
restored and that the troops will return to their barracks.
    I also would be grateful if you could give us your 
appraisal of the Indian elections. If my memory serves me 
right, it has been over a quarter century that an incumbent 
Prime Minister's party was returned to office, even though this 
is a very complex coalition of, I believe, 17 parties; because 
on the surface it appears, and I don't wish to interfere in 
Indian domestic politics, it is a sign of stability and 
continuity which at the generic level we must welcome. It is 
not desirable in Eastern Europe or East Asia to have 
governments turned out of office at every election, which is 
the phenomenon we had in a number of newly independent 
societies such as the Baltics where, with every election cycle, 
we had the incumbents turned out of office.
    I realize that Indonesia is outside of your purview but you 
are knowledgeable about Indonesia, and if you are able and 
willing to say a word about the new President and what we can 
expect in terms of his attitude toward developing stronger and 
better relations with the United States and what his attitude 
is likely to be with respect to the very tragic developments in 
East Timor.
    Thank you, Mr. Chairman.
    Mr. Bereuter. Thank you, Congressman Lantos.
    Congressman Rohrabacher has asked to make a brief opening 
statement. I extend that opportunity to him and to other 
Members who desire that. Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much. Mr. Chairman, for the 
last three years I have repeatedly warned this Subcommittee and 
the State Department that the Clinton Administration's policy 
on the Taliban, which has been decidedly pro-Taliban, would 
create great instability in Central Asia and would undermine 
democracy in Pakistan. Today, Mr. Chairman, the chickens are 
coming home to roost.
    The recent instability in Uzbekistan and Tajikistan and the 
conflict in Chechnya to some degree can be traced to drug money 
and fanatical Islam coming out of Afghanistan. And talking 
about drug money, the Taliban's opium production in Afghanistan 
doubled last year, and now democracy has fallen in Pakistan. 
This is not a result of personalities. It is a result of 
policy, bad policy, bad policy on the part of this 
Administration.
    Eight years ago, after the fall of the Soviet Union, there 
was a tremendous opportunity for South and Central Asia. The 
lack of courage and the incomprehensible policies of the 
Clinton Administration have created a crisis in Central Asia 
where there was none. This Administration's policies have been 
more than a failure. It has been a disaster for millions of 
people whose lives have been affected, including a recent 
influx of 300,000 destitute refugees from the Taliban into the 
Panger Valley hoping for some sort of refuge from their fury 
given to them by Masudin and some of the last resisters to the 
Taliban, whom we have never helped.
    Mr. Chairman, this Subcommittee as well as the Full 
Committee needs to go on record condemning this Administration, 
including Mr. Inderfurth, for clear attempts to thwart 
congressional oversight into its policies. It took more than a 
year from the time when the request was made for documents 
concerning this Administration's Afghan policy to be delivered 
to this Subcommittee. The first batch of documents was made 
available more than six months after Secretary Madeline 
Albright assured the Full Committee on the record at a 
Committee hearing that the documents would be forthcoming.
    In no way have we seen all the documents, although some 
documents have been presented, and I want to thank some other 
Members of the Committee who supported my request all along, 
including Chairman Gilman of the Committee. Mr. Ackerman, for 
example, let it be known that it was important when requests 
like this were made that they be followed through. Yet, it took 
over a year to get even some of the documents, and the first 
documents that were delivered, Mr. Chairman, had newspaper 
clippings, insulting this Committee.
    Even in the selected documents that have been disclosed 
thus far, I might add and to let my fellow members know, there 
is evidence of past support by this Administration of the 
Taliban, a policy that was altered only after pressure by the 
Full Committee and by women's groups over the defiance of the 
Taliban over Mr. Osama Bin Laden, a terrorist in Afghanistan.
    Still, there is no recognizable effort by this 
Administration to contribute to the defeat or removal of the 
Taliban. Furthermore, there has been little effort by this 
Administration to assist the refugees in the Panger Valley and 
other areas of Afghanistan that are just facing a horrible fate 
due to the Taliban's continued campaign.
    The chaos and suffering in South and Central Asia, and now 
Pakistan, has been escalated, this suffering and the chaos, by 
the policies of this Administration. And as far as I am 
concerned, it is a shameful record, and the cover-up of the 
information for us to determine what that policy was is even 
more shameful.
    I am looking forward to receiving, Mr. Inderfurth, the rest 
of the State Department documents that you have kept from us. 
And again, Mr. Chairman, let me note in the scant documents 
that have been delivered to me, we have already found evidence 
of a dual-track policy.
    Mr. Lantos. Would the gentleman yield?
    Mr. Rohrabacher. I don't think I have the time anymore.
    Mr. Lantos. I think in all fairness we will need to respond 
to this broadside----
    Mr. Bereuter. Are there other Democrats who wish to speak? 
Perhaps he will yield you time, Mr. Lantos. The gentleman from 
American Samoa is recognized for an opening statement, and he 
yields apparently to Mr. Lantos.
    Mr. Faleomavaega. Mr. Chairman, I yield time.
    Mr. Lantos. I thank my friend and colleague for yielding. 
Apparently it has become customary to open every hearing of the 
House International Relations Committee with an intemperate 
attack on the Clinton Administration, and I deeply regret that 
this particular hearing is no exception. I would be grateful if 
my colleague from California would supply this Committee in 
open or closed session his evidence of the support of the 
Clinton Administration for the Taliban, because I consider his 
statement to be absurd and delusional, and I am using my 
adjectives carefully. I consider my colleague's statements 
absurd and delusional.
    The Clinton Administration has been steadfast in its 
opposition to the Taliban. As a matter of fact, the Clinton 
Administration has led the international attempt to weaken and 
minimize the Taliban, and since my colleague made reference to 
the unspeakable attitude of the Taliban vis-a-vis women, let me 
remind all of us that this Administration has been in the 
forefront for women's rights, both in the United States and 
internationally.
    So while this interjection has provided us with a moment of 
levity and amusement, I have to state categorically that I do 
not consider the gentleman's statements to be a serious 
statement but a statement which, unless backed up by evidence, 
evidence to which Members of the Full Committee are fully 
entitled, if Mr. Rohrabacher has such evidence, evidence that 
in fact the Clinton Administration is a secret supporter of the 
Taliban and their policies vis-a-vis women. I look forward to 
receiving that evidence from Mr. Rohrabacher.
    I want to thank you for yielding me that time.
    Mr. Bereuter. Does the gentleman yield back?
    Mr. Lantos. I yield back my time to my colleague from 
American Samoa.
    Mr. Bereuter. The Chair would like to proceed as soon as 
possible with our witnesses. I would say the gentleman from 
California, Mr. Rohrabacher, is within his rights to present 
these concerns, and the gentleman from California, Mr. Lantos, 
has been critical of that but not of the gentleman's intent or 
integrity, and so this is in accordance with the Subcommittee 
and Committee rules at this point. Does another Member who wish 
to be recognized? The gentleman from American Samoa.
    Mr. Faleomavaega. Mr. Chairman, I reserved my time, but in 
the essence of time, I am going to pass on my opening statement 
and I would gladly yield----
    Mr. Bereuter. I think the gentleman's time has expired, but 
I would hear from the gentleman on this side, and then I will 
come to Mr. Ackerman. Is that all right? I think that is the 
way we should proceed. You may proceed, the gentleman from 
Louisiana, and then I will come to Mr. Ackerman.
    Mr. Cooksey. I, too, share some concerns about some of the 
events that have occurred recently and in the not-so-distant 
future. I also have shared some of my colleague, Mr. 
Rohrabacher's concerns also about maybe the way it has been 
handled. But we came here to hear the witnesses, and I have 
another Committee that I am on. This morning we had some 
important witnesses, and we dispensed with all of these opening 
statements that it seems always sound the same from both sides. 
We went right to the heart of the business, and we got a lot 
done. It was a lot more efficient. It was a better utilization 
of my time and everyone else's time.
    I am a surgeon, and, as a surgeon, we go in, we make a 
diagnosis, and then we either operate or do not operate. Well, 
I am ready to operate and get rid of a lot of the rhetoric and 
proceed.
    I think that the Committee Chairman should consider doing 
what one of my other Committee's Chairman has done in 
dispensing with all these opening statements hear from the 
witnesses, and have closing statements. Then maybe everyone 
would stay to the end of the hearing.
    Mr. Bereuter. I thank the gentleman. I would very much like 
to proceed. It is a different arena that you are operating in 
now, I would say to the gentleman. [Laugther]
    The gentleman from New York, Mr. Ackerman.
    Mr. Ackerman. I thank the Chairman and I greatly respect 
the good doctor for his goodwill being inserted into the 
process. Thank you, Mr. Chairman.
    Let me join you in welcoming the witnesses before the 
Subcommittee today. In particular, I want to commend Secretary 
Inderfurth and his team at the South Asia Bureau for the way 
they have led our policy initiatives in a very tough region.
    The contrasting events in India and Pakistan over a single 
24 hour period speak eloquently about the new challenges and 
opportunities that we face in South Asia. In India we have seen 
hundreds of millions of voters enthusiastically exercise their 
votes in a free and fair election. Although there has been some 
concern about election fatigue, it appears that a sort of 
political stability has returned to India with a strong 
majority given to Prime Minister Vajpayee's coalition.
    On the other hand, we saw an awful turn of events in 
neighboring Pakistan where a democratic government, however 
flawed, was overthrown by the military. Notwithstanding General 
Pervez Musharraf's moderate words, we should not be lulled into 
thinking that this will be a moderate government. After all, he 
has suspended the Constitution and the elected national and 
provincial assemblies, dismissed the government and declared a 
state of emergency. He is also the author of Pakistan's ill-
fated invasion of India last summer.
    I am concerned, and I believe the Administration is as 
well, over what we did not hear from General Musharraf. We did 
not hear a clear timetable for new elections for the 
reestablishment of democratic government. I believe that we 
must remain engaged with Pakistan, but that we should do so on 
the side of the Pakistani people. We must identify and support 
democratic elements within Pakistan so that the people of 
Pakistan can again enjoy their democratic rights.
    The people of Pakistan are not celebrating the demise of 
democracy. They are at best celebrating the demise of an 
allegedly corrupt government.
    The waiver authority contained in the Defense 
Appropriations Act should not be used to reestablish an arms 
pipeline with Pakistan, and I am pleased that the 
Administration is not considering that. When democracy is 
restored however, the waiver authority should be used to 
strengthen democratic institutions and promote economic growth.
    That same authority should also be used to move U.S.-India 
bilateral relations to a higher plane which would allow India 
and the United States to forge a strategic partnership in South 
Asia. In the past, we have neglected our relationship with 
India, and the legacy of that neglect has been mistrust.
    I believe it is time to re-examine our basic premise 
regarding U.S. policy in South Asia. We should look beyond the 
simplistic prism of Pakistan-India rivalry and see that Indian 
democracy is our natural ally within the region. The best way 
to demonstrate our commitment to the people of India is by 
ensuring that the President travels to India, which I encourage 
him to do as soon as possible.
    I thank you, Mr. Chairman, and look forward to hearing the 
witnesses.
    Mr. Bereuter. Thank you, Mr. Ackerman.
    The gentleman from Ohio, Mr. Gillmor.
    Mr. Gillmor. Thank you, Mr. Chairman. I seek recognition 
for two reasons: First, to associate myself with the spirit of 
the comments by Dr. Cooksey; and second, to yield to my 
colleague from California, Mr. Rohrabacher, on the condition 
that he doesn't use all the time.
    Mr. Rohrabacher. Fine. Thank you very much. I will just say 
a few words concerning Mr. Lantos' attempted rebuttal of my 
opening statement.
    Let me just say that for a year I requested documents. This 
is not a laughing matter. It is not a laughing matter when the 
Secretary of State comes before a hearing, a public hearing, 
makes a promise for documents, and then not only drags her feet 
but stonewalls that promise and stonewalls the request. This is 
not a matter of levity, Mr. Lantos. This is a very serious 
issue.
    Sixty percent of the world's opium is now produced in 
Afghanistan. These billions of dollars are spilling over, as I 
warned they would for so long, into Pakistan and into Central 
Asia. The fact that the Administration repeatedly has been 
unwilling to provide the documentation for exactly what you 
asked us to do, to determine what the policy is. And I will say 
that there is indication that I have already read in the very 
small number of documents that Mr. Inderfurth managed to give 
to us of a past support for the Taliban, and I see no reason 
why the other documents--this is a legitimate request.
    Again, I applaud Mr. Ackerman. At least Mr. Ackerman didn't 
call it delusional and laughable that we were trying to get to 
the heart of this policy matter by requesting documentation 
from the Administration. That is our job here. This is not a 
matter of levity in terms of laughing it off. This is matter of 
seriousness, and I have taken this job very seriously. That 
statement that I issued in the beginning, right from the start 
of this, was something that has been three years' worth of work 
on my part. I have been to the region time and again. I have 
talked to the leaders there. There is every indication that 
this Administration has done nothing to thwart the Taliban, and 
then we have foot-dragging on requests for evidence. What else 
are we to conclude except there is something they are trying to 
hide?
    I am trying to do my job, and I am serious about it, and 
those who accept this sort of brush-off that I am being 
delusional or that someone who is asking for this information 
is delusional I think is undermining the credibility of this 
Committee, and I yield back the balance of my time.
    Mr. Bereuter. Would the gentleman from Ohio yield?
    Mr. Gillmor. Yes.
    Mr. Bereuter. I thank the gentleman for yielding. I hope 
the gentleman from California understands that I believe that 
we have oversight responsibilities, and I have supported his 
request for information from the Administration. I would like 
now to move forward.
    Mr. Brown. Mr. Chairman, I have a very brief opening 
statement.
    Mr. Bereuter. Mr. Brown, gentleman from Ohio.
    Mr. Brown. I am not going to express, as Dr. Cooksey and 
Mr. Gillmor did, my opposition to opening statements, as I am 
making one.
    Mr. Chairman, thank you for just a real short moment. I 
want to enter into the record, ask unanimous consent to enter 
into the record A.M. Rosenthal's October 15th op-ed piece from 
the New York Times called ``The Himalayan Era,'' and its 
subtitle is the ``Tilt Toward Pakistan.''
    Mr. Bereuter. Without objection.
    [The editorial referred to appears in the appendix.]
    Mr. Brown. Thank you, Mr. Chairman. The events of last week 
I think underscore the errors of our ways in South Asia under 
presidents of both parties, going back for more than a 
generation. We have seen 40 years of a pro-American military 
government or at least influenced by the military in Pakistan. 
We have seen 40 years of U.S. military support in Pakistan. 
Next door, we see a country for the last 50 years that has 
practiced democracy, the 50 years that recently has been 
warmed.
    We have built a closer and closer relationship with India 
over the last few years, but I just think the coup in Pakistan, 
the pro-Pakistani tilt of our government through most of the 
post-World War II years underscore to me the importance of our 
building our relationship with India much better than we have 
in the past. It is country of a billion people. Pakistan is a 
country of one-seventh the size of that; not that Pakistan is 
not important to us, but I think that we as a nation have 
leaned the wrong way, have gone in the wrong direction.
    I think the events of the last couple of weeks underscore 
that better than any of us could say, and I would just like to 
again thank Secretary Inderfurth for his work in strengthening 
ties with India and encourage him and the State Department to 
do better. Thank you, Mr. Chairman.
    Mr. Bereuter. Thank you, Mr. Brown.
    Mr. Secretary, we look forward to your statement. Thank you 
for appearing today and for being willing to respond to our 
questions after your opening statement. We will hear from Dr. 
Butcher next, but your entire statement will be made part of 
the record. You may proceed as you wish.

   STATEMENTS OF THE HONORABLE KARL F. INDERFURTH, ASSISTANT 
  SECRETARY FOR SOUTH ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. Inderfurth. Mr. Chairman, Congressman Lantos, and 
Members of the Committee, there is the biblical injunction of 
the last shall be the first. If you look at my testimony, I had 
Afghanistan at the last of my testimony. I think that given 
what we have heard, I would like to make just a very brief 
remark on what Congressman Rohrabacher has had to say.
    First, I take issue with virtually every point made by 
Congressman Rohrabacher except for his evident concern for the 
Afghan people, which I think he knows we both share. Now, in 
terms of the oversight responsibility----
    Mr. Bereuter. Mr. Secretary, would you pull that mike a 
little closer, please?
    Mr. Inderfurth. Certainly. In terms of your reference to 
the oversight responsibilities of the Committee, I would like 
to say something about that, because I am sure it would be of 
concern to every Member of the Committee whether or not you are 
receiving the information that you have requested.
    We are complying with the request made by Chairman Gilman 
which was made formally on May 21st. Now, this was following 
procedures established between the Committee and the State 
Department for making requests of this nature. We immediately 
contacted our embassies, we notified relevant bureaus in the 
Department and began what is indeed a time-consuming and labor-
intensive process of collecting these documents and preparing 
them for transmittal to the Department.
    On July 20th, the first set of documents was sent to 
Congressman Rohrabacher. This set included, as he pointed out, 
a number of pages of unclassified material, true, but also 
included 17 classified documents, which were made available by 
staff of the State Department in his office.
    Now, the second set of documents was delivered September 
2nd, and this set contained more than 40 classified documents.
    A third tranche is being prepared and will be delivered to 
the Congressman shortly, and at least one more tranche will 
follow that.
    Now, we trust that this effort which we are making, very 
much in compliance with our responsibilities, we hope that this 
effort we are making will fulfill Congressman Rohrabacher's 
request and that it will prove worthwhile. But I do want to say 
that, having reviewed these documents myself, that they offer 
absolutely no support for his contention that the U.S. 
Government has now or in the past had a covert policy of 
support for the Taliban; and I think as you will hear in my 
statement in a moment, the sanctions that we have recently 
placed on the Taliban for its continued support for Osama Bin 
Laden, as well as for the U.N. Resolution which was passed last 
Friday by the entire U.N. Security Council, which places 
sanctions on the Taliban, would suggest there is not a policy 
of support but indeed opposition to the Taliban for its support 
for international terrorism.
    Mr. Chairman, a brief glimmer of hope, if I could just 
start before I get to my prepared statement, because you 
mentioned the Lahore process. Unfortunately I am much more 
informed about Lahore than I am about Indonesia. I apologize 
about that, but we too, the last time I testified here, we 
hoped that the Lahore process of Prime Minister Vajpayee and 
Prime Minister Sharif would set a new stage for relations on 
the subcontinent. That took place in February. Unfortunately, 
since then, we have seen a Kashmir crisis in Kargil, and last 
week we saw the military overthrow of the government in 
Pakistan. So there have been significant setbacks for the 
Lahore process.
    But I do want to note the one glimmer of light and that is, 
that the Lahore-Delhi bus service, which was inaugurated by the 
two Prime Ministers in February, continues to run 
uninterrupted. Even though we had these major disruptions to 
what we had hoped was a new stage in their effort at 
reconciliation, at least the bus service itself continues to 
operate. We hope that maybe at some point the Lahore process 
itself could get back on track.
    Mr. Chairman, I do appreciate this opportunity to appear 
before the Subcommittee today for a number of very obvious 
reasons already alluded to and referred to by Members of the 
Committee. I believe that this is an auspicious time to meet 
with you. We have a number of immediate challenges facing 
United States policy in South Asia, and this afternoon I will 
address three in particular and try to do those as quickly as 
possible. My full statement I appreciate being placed in the 
record.
    The three issues would be the political crisis in Pakistan 
where the Army has taken the reigns of power, the recent 
elections in India and the formation of a new government, and 
the situation in Afghanistan and our steps to combat 
international terrorists who take shelter there.
    At the top of our agenda today is the political crisis 
which erupted a week ago in Pakistan. As I said, Mr. Chairman, 
my full statement will summarize more of my remarks, including 
developments since October 12th. I would, however, like to 
focus on our policy at present toward Pakistan.
    We listened closely to General Musharraf's nationwide 
address last Sunday night. We heard his pledge for a return to 
a true democracy in Pakistan and that the Armed Forces have no 
intention of remaining in power any longer than necessary, but 
we are disappointed with what we did not hear. Specifically, we 
did not hear an announcement of a clear timetable for the early 
restoration of constitutional, civilian and democratic 
government. As Congressman Lantos pointed out, you will 
remember that an earlier Army Chief, General Zia, anticipated a 
brief period of military control when he took power. He ended 
up ruling for 11 years.
    The press in Pakistan and here has focused in recent days 
on the rationale for the general's actions. Much of the 
coverage has seemed to support General Musharraf's statement 
that Pakistan had hit rock bottom.
    For our part, we are not justifying or condoning the 
general's actions. As a matter of principle, one that we 
believe applies throughout the world, the remedy for flawed 
democracy is not a military coup or suspension of a 
democratically elected legislature or the detention of the 
elected government. In our view, Pakistan's long-term stability 
lies in developing civilian political institutions which are 
self-correcting through political processes, not through the 
expedient of military intervention.
    President Clinton, Secretary Albright and other U.S. 
officials have expressed our deep regret at this setback to 
democracy and our hope that Pakistan's authorities will 
acknowledge and fulfill their duty to restore Pakistan to 
civilian, democratic, constitutional government as soon as 
possible.
    Mr. Chairman, until we see a restoration of democracy in 
Pakistan, we have made it clear we would not be in a position 
to carry on business as usual with Pakistani authorities. As 
you know, Section 508 of the Foreign Operations Appropriations 
Act contains a prohibition against a broad range of assistance 
for a country whose democratically elected head of government 
is deposed by military coup or decree. We have applied those 
sanctions with regard to Pakistan. As a practical matter, most 
forms of assistance are already prohibited for Pakistan under 
the Glenn Amendment and other statutory requirements.
    Now, as General Musharraf told his Nation, actions speak 
louder than words. The United States will watch closely as the 
General acts to fulfill his pledge to return his country to 
democracy and to address the other serious problems he 
identified, including the economy and corruption. We call on 
General Musharraf to respect civil liberties, freedom of the 
press, judicial independence, and human rights while this 
process proceeds. Our own actions toward Pakistan in the days 
ahead will be guided in large part by the steps the new 
authorities take.
    Mr. Chairman, one final word on Pakistan, if I may. Despite 
our deep disappointments with this latest setback to democracy 
in Pakistan, we have no choice but to stay engaged. We cannot 
walk away. Pakistan is important. It is important because 
stability, or the lack thereof, in Pakistan will have an impact 
on Pakistan's neighbors, the region and beyond. Pakistan is 
important because it can serve and we hope one day will serve 
as an example of a progressive Islamic democracy. Pakistan is 
important because it is a link, both economic and political, 
between the Indian Ocean and Central Asia, because it has 
significant human and economic resources and because it has 
historically been a friend of the United States. It is 
important, therefore, for the United States and other longtime 
friends of Pakistan to express their concern, exert their 
influence and take those steps necessary and appropriate so 
that Pakistan can see a prompt return to civilian rule and 
restoration of the democratic process as called for by 
President Clinton.
    Mr. Chairman, Members of the Committee, turning to India, 
we are also facing a challenge, but in this case a more 
positive one. India has just completed the largest exercise of 
democratic voting the world has ever witnessed. More than 360 
million voters cast ballots. The final results of India's 
month-long election gave the 17-party coalition of Prime 
Minister Vajpayee 303 seats in the lower House of Parliament, 
31 more than needed to form a simple majority. Atal Bihari 
Vajpayee was sworn in for the third time as India's Prime 
Minister on October 13. It was also, as Foreign Minister 
Jaswant Singh pointed out, and Congressman Lantos, the first 
time in 27 years in India that an incumbent Prime Minister has 
been returned to office. President Clinton called Prime 
Minister Vajpayee to offer his congratulations.
    Mr. Chairman, there are substantial elements of continuity 
between the previous and the new governments; in particular, in 
the key positions of Prime Minister, Foreign Minister, Home 
Minister, Finance Minister and Defense Minister. Prime Minister 
Vajpayee's ability to maintain continuity of leadership in the 
key ministries and his successful effort to accommodate his 
coalition partners should mean that his government will be 
quick off the mark in implementing policy priorities, including 
economic reform, rural development and national security.
    This new government also appears to have a larger and 
therefore potentially stronger coalition, a fact that we hope 
will enable India's leaders to adopt a longer-term perspective 
rather than one overshadowed by the prospect of a brief tenure.
    Mr. Chairman, the new government's initial messages to the 
world are positive. Both Foreign Minister Singh and Principal 
Secretary to the Prime Minister and National Security Advisor 
Brajesh Mishra, who will be in Washington tomorrow, have 
reiterated their intention to seek a national consensus for 
signing the Comprehensive Test Ban Treaty. This Administration 
remains committed to the CTBT and believes it is an important 
measure to restrain the prospect of a nuclear arms race in 
South Asia.
    Now, as everyone here knows, we have faced our own 
challenges recently with ratification and understand the 
importance of forging a solid domestic consensus which we will 
continue to try to do. The United States will also continue to 
urge both India and Pakistan to sign and ratify the CTBT 
because we believe it is in their national security interest to 
do so.
    There are a number of other steps in the nonproliferation 
area that we are encouraging India and Pakistan to take to 
address our concerns and those of the international community. 
These steps, which we believe are consistent with Indian and 
Pakistani security interests, include constructive engagement 
on fissile material, restraint in missile developments, 
including nondeployment and strengthened export controls. 
Deputy Secretary Talbot will resume his dialogue with Foreign 
Minister Jaswant Singh on these issues.
    Mr. Chairman, we also see signs of promise on the economic 
front. There are reports that the new government will put in 
place a new economic package by mid-November. The package would 
cover a wide range, a wide spectrum, including reforms of the 
financial, industrial and infrastructure sectors. In Finance 
Minister Sinha's own words: ``we want to undertake the second 
generation of economic reform.''
    Prime Minister Vajpayee has also acknowledged the need for 
India's greater integration into the world economy, and several 
bills that would help open India to greater investment are 
awaiting the new Parliament's approval. These include proposals 
to open up the insurance sector to private domestic and foreign 
companies and a telecommunications plan that would accelerate 
investment in private telephone networks. With the new 
government in place, we are hopeful that India will return to a 
firm course toward liberalization.
    Economic opportunities in the energy sector will be one of 
many subjects that Energy Secretary Bill Richardson will 
discuss with his Indian counterparts next week when he becomes 
the first U.S. Cabinet officer to visit India since the 
formation of the new government.
    Mr. Chairman, with the new government in place in Delhi, we 
will focus intensely on the future of the Indo-American 
relationship. President Clinton is acutely aware that as the 
first American President elected since the end of the cold war, 
he has an unprecedented opportunity to put our relations with 
India on a substantially different footing. No longer do New 
Delhi and Washington find themselves at cross purposes because 
of cold war constraints. In the words of Prime Minister 
Vajpayee, ``we are natural allies''.
    To define that new relationship and to invest it with the 
broadest and deepest possible meaning, we have to address the 
complex set of issues that surfaced with the Indian nuclear 
tests in May last year, addressing them from our perspective 
and from India's perspective. Our ability to move forward and 
the extent of our future cooperation will be influenced by the 
progress we make, particularly in the nonproliferation area.
    In this connection, Mr. Chairman, the Administration 
appreciates Congress' recent action granting the President 
permanent comprehensive waiver authority for the Glenn, 
Symington and Pressler sanctions. I want to emphasize that we 
sought enhanced waiver authority because this would give us 
more flexibility as we pursue our agenda in South Asia. The 
unfolding situation in Pakistan is a reminder of how quickly 
things can change in South Asia and therefore of the importance 
of ensuring that we have a range of tools at our disposal. Once 
the legislation is enacted, we will use the authority 
effectively and prudently and, I want to emphasize, in 
consultation with Congress.
    Mr. Chairman, let me turn now for a brief moment to 
Afghanistan and an update on our concerns about Osama Bin 
Laden. As you know over the past year we have repeatedly 
contacted the Taliban and encouraged them to expel Bin Laden 
without delay and avoid further confrontation on this issue 
with the U.S. and others in the international community. 
Unfortunately, the Taliban has not been responsive.
    In July, President Clinton issued an Executive Order 
blocking the Taliban's property and banning commercial 
transactions with the Taliban. In August, Ariana Airlines was 
placed under sanctions. To date we have frozen more than $34 
million in Taliban assets.
    Most recently and through U.S. diplomatic efforts, the rest 
of the world has now joined us in expressing its resolve to end 
terrorist operations in Afghanistan. A U.S.-initiated 
resolution passed unanimously by the U.N. Security Council last 
week demands that the Taliban stop sheltering Bin Laden and 
assure that he be expelled and brought to justice. If the 
Taliban fail to do so by November 15, their assets will be 
frozen worldwide, and Taliban-owned, -leased, or -operated 
aircraft will be denied permission to take off or land anywhere 
in the world.
    This resolution is the result of intense U.S. effort, and 
represents a significant step forward in our campaign to end 
Bin Laden's terrorist activities.
    Mr. Chairman, let me just add, we are prepared to work with 
the Taliban to rid Afghanistan of terrorist networks. As 
President Clinton said following passage of the U.N. sanctions 
resolution last week, the international community has sent a 
clear message. The choice between cooperation and isolation 
lies with the Taliban.
    Mr. Chairman, may I conclude by noting that our ability to 
pursue our agenda in Washington and indeed throughout the world 
depends in large part on adequate funding for our foreign 
affairs budget, a point that Secretary Albright makes 
repeatedly.
    As you know, earlier this week, President Clinton vetoed 
the foreign operations appropriations bill because it was 
funded at approximately $2.2 billion below his request. The 
Administration believes these cuts are dangerously 
shortsighted. The bill's low funding level, in the President's 
words, ``puts at risk America's 50 year-old tradition of 
leadership for a safer, more prosperous and democratic world.''
    Obviously, the across-the-board cuts in foreign affairs 
spending will harm what we are trying to do in South Asia. 
Indeed, if the proposed cuts are enacted, the Administration 
will be forced to reduce our efforts to counter terrorism, 
prevent and reduce conflict, and support regional democracy, 
stem the spread of deadly diseases like HIV-AIDS, address 
trafficking in women and children, and fight drugs, all of 
which are clearly in the interests of the American people and 
key to our agenda in Washington.
    Mr. Chairman, we face a number of immediate and long-term 
challenges, as well as opportunities in Washington, where our 
national interests are engaged. We need your support and the 
necessary resources to do our job.
    Thank you very much.
    [The prepared statement of Mr. Inderfurth appears in the 
appendix.]
    Mr. Bereuter. Thank you, Secretary Inderfurth. Next we will 
hear from Dr. Arona M. Butcher, the Chief of Country and 
Regional Analysis Division, Office of Economics, United States 
International Trade Commission.
    You may proceed as you wish, Dr. Butcher.

 STATEMENT OF DR. ARONA BUTCHER, CHIEF OF COUNTRY AND REGIONAL 
     ANALYSIS DIVISION, OFFICE OF ECONOMICS, UNITED STATES 
                 INTERNATIONAL TRADE COMMISSION

    Dr. Butcher. Mr. Chairman and Members of the Subcommittee, 
I want to thank you for the opportunity to present the findings 
of a study conducted by the International Trade Commission on 
the U.S. economic sanctions imposed on India and Pakistan after 
these countries detonated nuclear explosive devices in May 
1998.
    As you know, on March 16, 1999, the Committee on Ways and 
Means asked the Commission to examine the economic sanctions 
imposed on India on May 13, 1998, and Pakistan on May 30, 1998, 
pursuant to section 102 of the Arms Export Control Act, also 
known as the Glenn Amendment.
    The Committee asked the Commission to analyze the effects 
of the sanctions on the U.S. Economy and to assess the likely 
economic impact on the United States, India, and Pakistan if 
the sanctions are reimposed, summarize the instances when the 
sanctions have affected humanitarian activities and the 
activities of multinational institutions in India and Pakistan.
    The major finding of the Commission's report is that the 
quantifiable impact of the Glenn Amendment's economic sanctions 
and the likely impact of the reimposition of these sanctions on 
the United States, India, and Pakistan are relatively small. 
However, according to U.S. Industry, the main impact of these 
sanctions is increasing the perception that U.S. Companies 
could be unreliable suppliers.
    The Glenn Amendment sanctions on India and Pakistan that 
were triggered in May 1998 and analyzed in the Commission study 
are as follows:
    Deny export credits and guarantees by any U.S. Government 
department or agency, such as the USDA, the U.S. Export-Import 
Bank, the Overseas Private Investment Corporation, and the U.S. 
Trade and Development Agency. These sanctions were waived until 
October 21, 1999.
    Second, prohibit U.S. banks from making any loan to the 
government of the detonating country, except for purposes of 
purchasing food or other agricultural commodities. This was 
also waived until October 21, 1999.
    Third, oppose the extension of any loan for financial or 
technical assistance by international financial institutions 
such as the Asian Development Bank, the International Monetary 
Fund (IMF), and the World Bank, except for humanitarian 
purposes. This was waived for Pakistan until October 21, 1999, 
but is in force for India.
    Fourth, terminate U.S. foreign aid programs, except for 
humanitarian assistance and food or other agricultural 
commodities. This is in force.
    The short duration of the sanctions precluded an empirical 
analysis on the effects of sanctions on the United States prior 
to the waiver. For example, restrictions on the provision of 
USDA export credits and guarantees were lifted on July 15, 
1998, and many of the remaining components of the Glenn 
Amendment sanctions were waived by the President on December 1, 
1998.
    Therefore, in order to assess the impact of the Glenn 
Amendment sanctions on the U.S. economy, the Commission 
obtained information from U.S. industry and reviewed relevant 
literature, reviewing information from conducting a telephone 
survey of over 200 U.S. companies and associations, by holding 
a public hearing, and from written submissions, and from other 
government agencies involved in monitoring and enforcing 
actions.
    In the case of India and Pakistan, macroeconomic data and 
trade data were examined for the 1995-1999 period. In order to 
assess the likely impact on the United States, India, and 
Pakistan of the reimposition of sanctions, a global economic 
model was employed with 1995 as a base year, the most recent 
year for which data on trade flows for India and Pakistan and 
their major trading partners were available.
    According to U.S. industry sources, the industries most 
affected by the Glenn Amendment sanctions were those related to 
the sale of certain agricultural products, industrial 
machinery, transportation, construction, and mining equipment, 
electronics products, and infrastructure development services. 
Another result of the sanctions was and continues to be the 
increasing perception of U.S. companies as unreliable 
suppliers.
    In addition, according to U.S. industry, the sanctions 
continue to have a negative impact on U.S. business in India as 
U.S. companies are reluctant to pursue business opportunities 
because of uncertainty over sanctions.
    The likely impact of the reimposition of the Glenn 
Amendment sanctions on the United States, according to the 
model results, would be an estimated cost, measured in terms of 
loss of purchasing power, of about $161 million, or less than 
one-tenth of 1 percent of U.S. GDP in 1995. The decline in 
overall U.S. employment would be less than two-tenths of 2 
percent and would be primarily in the U.S. grain sector. U.S. 
wages and the return to capital would decline by less than one-
tenth of 1 percent.
    However, the reimposition of the sanctions prohibiting USDA 
export credits and guarantees would likely result in an 
estimated net benefit for the United States, similar to the 
benefit from removing an export subsidy, of about $27 million; 
that is, denying export credits to the Indian and Pakistan 
importers results in savings for the U.S. economy.
    The reimposition of these sanctions, however, is likely to 
adversely affect U.S. wheat exports to Pakistan, primarily 
because Pakistan is a significant user of USDA export credits. 
U.S. wheat producers in the Pacific Northwest, Idaho, Oregon, 
and Washington would be affected most if Pakistan were to shift 
to alternate suppliers such as Australia and Canada.
    According to U.S. Industry, the reimposition of 
restrictions on company or customer access to project financing 
or loan guarantees from Eximbank and OPIC most likely will 
hinder efforts of U.S. companies seeking to do business in 
India and Pakistan. This in turn might harm U.S. international 
competitiveness and diminish the perception of U.S. companies 
as reliable suppliers. Financial services firms in particular 
reported that their operations would be affected. These 
sanctions would make it more difficult for U.S. companies to 
participate in major infrastructure projects.
    In the case of India, the Glenn Amendment sanctions appear 
to have had a minimal overall impact on its economy. This is 
most likely due to the fact that India's economy is not 
dependent upon foreign bilateral and multilateral assistance, 
and thus appeared not to have been adversely affected by the 
postponement of several World Bank loans.
    According to the Government of India, the overall cost of 
the Glenn Amendment sanctions to the Indian economy was about 
$1.5 billion in 1998, about .4 percent of India's gross 
domestic product. India experienced an initial downturn in its 
financial sector after the U.S. sanctions were imposed. But its 
economy recovered by late 1998 to post a 5.6 percent growth 
rate for that year.
    The likely impact of reimposition of sanctions would be 
estimated to a total cost of $320 million, equivalent to less 
than one-tenth of 1 percent of India's current GDP. The 
estimated effects on wages and the return to capital in India 
and Pakistan also would be small, declining by less than one-
tenth of 1 percent. The reimposition of sanctions prohibiting 
USDA export credits and guarantees was estimated to have no 
cost for India, since India imports relatively little grain 
from the United States. Grain is the primary commodity affected 
by USDA export credits and guarantees that is exported to 
India.
    The major alternative suppliers benefiting from reduced 
U.S. exports to India and Pakistan under the Glenn Amendment 
sanctions would be the other major trading partners of the 
sanctioned countries. These include Japan, Europe, the rest of 
Asia, Australia, New Zealand, and the South Pacific trading 
partners.
    In the case of Pakistan, the Glenn Amendment sanctions most 
likely have had a small impact on its economy. The United 
States was a relatively small provider of aid, trade, and 
investment for Pakistan before the sanctions were activated. 
Moreover, most U.S. economic assistance to Pakistan was 
terminated in 1990 by other sanctions. Pakistan did experience 
an economic downturn immediately after the Glenn Amendment 
sanctions were triggered, but there may be other factors, for 
example, the IMF reform package, that may have influenced this 
downturn. Despite these economic difficulties, Pakistan's 
economy grew by 5.4 percent in 1998.
    The likely impact of the reimposition of sanctions on 
Pakistan would be estimated to cost about $57 million, less 
than 1 percent of Pakistan's current GDP. The net welfare loss 
to Pakistan from the imposition of the sanctions could be as 
large as $6 million.
    The cost to Pakistan of reimposition of sanctions 
prohibiting USDA export credits and guarantees was estimated to 
be approximately $20 million, used primarily to purchase wheat 
from the United States. However, Pakistan would most likely 
shift to alternative suppliers in Australia and Canada if the 
Glenn Amendment sanctions prohibiting USDA export credits are 
reimposed. In the case of humanitarian activities, the effects 
of the Glenn Amendment sanctions on India and Pakistan also 
appear to be minimal, as the sanctions did not apply to the 
provision of humanitarian aid or to the provision of medicines 
and medical equipment. India does not appear to have been 
adversely affected by the postponement of several non-
humanitarian World Bank loans. Pakistan could, however, be 
adversely affected if the United States and the other major 
countries oppose future IMF loans for Pakistan.
    Finally, some of the factors influencing the analysis in 
this report are that India and Pakistan are relatively small 
trading partners of the United States.
    Mr. Bereuter. Dr. Butcher, excuse me. We have those factors 
right in front of us here in your statement. I wonder if you 
could summarize and tell us what you think the economic effects 
are in your own words, in summary.
    Dr. Butcher. The economic effects are, basically, 
relatively small, as I have indicated, because of some of the 
factors here, since they are small trading partners of the 
U.S.A. Also, the short duration of the sanctions did not 
influence the activity in India and Pakistan. Also, the other 
factors, for example, in Pakistan, where Japan is a major donor 
of aid, and also the IMF reform package was already implemented 
in Pakistan. Also, the east Asian financial crisis affected 
activities in these countries.
    Mr. Bereuter. Thank you very much.
    [The prepared statement of Dr. Butcher appears in the 
appendix.]
    Mr. Bereuter. We will now proceed under the five minute 
rule under regular order.
    I would begin the questioning by mentioning, Secretary 
Inderfurth, that there has been some discussion among 
commentators about what has happened in Pakistan, of the fact 
that in the 51 years of its independence, Pakistan has now had 
military rule for 25 or 26 years. As I understand it, there has 
not been a substantial outcry or demonstrations in the streets 
against the coup that has taken place.
    Perhaps that is because of the popularity or lack thereof 
of the recent government, and perhaps it is because of the 
desperate or declining economic conditions that were serious--I 
will not use the word ``desperate''--that existed.
    But what are we to make of the fact that Pakistan has 
chosen a military course, or at least has found itself with 
military leadership for half of its existence and of how we see 
at the moment no clear outcry against a coup which has taken 
the elected government from power?
    Mr. Inderfurth. Mr. Chairman, I think your observations 
about the reaction to the military takeover are accurate. It is 
very clear--and we have been seeing this for many weeks as it 
unfolded, a great deal of concern in Pakistan itself about the 
direction the country was heading. The economic situation was 
clearly at the top of that agenda or near the top--and was 
widespread corruption, a feeling that the relations between the 
civilian government and other segments of society, the Sharif 
government, were reaching a certain crisis proportion.
    A backdrop to this is the history of civilian-military 
relations in that country. In half the 52 year history of 
Pakistan there has been a military government. Prime Minister 
Sharif, his relations with the military were filled with a 
great deal of tension. A year ago he had dismissed the chief of 
the army staff, General Karamat, and had replaced him with 
General Musharraf. There was tension there which was 
exacerbated by the Kargil crisis in Kashmir. We believe that 
Prime Minister Sharif made the right decision after his meeting 
with President Clinton to see the Line of Control restored in 
Kashmir and to see that crisis ended, but the way in which that 
crisis took place and the ill feelings that resulted from that 
certainly made relations between Prime Minister Sharif and the 
military more difficult.
    That came to a head just two weeks ago when Prime Minister 
Sharif attempted to dismiss, or--I'm sorry, two weeks ago they 
expected to have this repaired, and then last week he tried to 
dismiss General Musharraf and the army reacted.
    Mr. Bereuter. If I could interject, there is a part here of 
your possible response--there are press reports indicating that 
the Prime Minister in effect warned of the difficulty he would 
place himself and his government in if in fact he made the 
decisions we were supporting, in the case of Kargil; and 
second, that General Musharraf was in fact the leader of the 
incursion that took place.
    Would you care to factor that into your response?
    Mr. Inderfurth. I will, because that has gotten some 
attention. There is no question that the Kargil crisis did 
factor into the unraveling of the situation in Pakistan.
    It is our very strong view that the mistake with Kargil was 
made when a decision was taken by the Pakistani Government, we 
believe, and approved by Prime Minister Sharif, but also led by 
General Musharraf as head of the army, to try to back forces 
going across the Line of Control and seizing certain territory 
in Indian-held Kashmir. That precipitated what was indeed the 
most dangerous conflict between the two countries since 1971.
    The decision by Prime Minister Sharif to see these forces 
returned, that decision combined with very effective military 
action brought that crisis to an end. It could have gotten 
worse. It could have escalated--either by calculation or 
miscalculation. Bringing that crisis to an end when you are 
dealing with two nuclear capable states was very important.
    The consequences of Kargil for what was an ongoing crisis 
within Pakistan, included the government's increasing crackdown 
on legitimate forms of dissent, the freedom of the press. All 
of this led to what I think we have seen in the last several 
days.
    Mr. Bereuter. Thank you. My time has expired.
    I would call on the gentleman from New York, Mr. Ackerman, 
in accordance with Committee procedures. The gentleman is 
recognized for five minutes.
    Mr. Ackerman. Thank you, Mr. Chairman.
    Mr. Secretary, am I correct in my understanding that the 
Administration does not intend to use the Pressler and Glenn 
Amendment waivers to restart an arms supply relationship with 
Pakistan?
    Mr. Inderfurth. That is correct; we have no plans or 
intentions.
    Mr. Ackerman. Thank you very much.
    In your summary of your statement just a moment ago, you 
said that the Administration believed that the Sharif 
government approved of the Kargil incursion. Does that mean to 
imply that they approved of it afterwards, or they knew about 
it before? Were they complicitous in the formulation of that 
policy, or just went along for the ride afterwards?
    Mr. Inderfurth. The ride got very bumpy. I think they were 
in on the take-off, if you want to use that metaphor. We 
believe there was civilian approval for this. This was not, to 
our knowledge, to our information--and again, we are not inside 
the Pakistani government; we cannot say with absolute 
certainty, but the information that we have leads us to the 
conclusion that it was a military-proposed operation and a 
civilian-approved operation.
    Mr. Ackerman. I think the interest here is whether or not, 
during the famous bus trip by the Prime Minister to Lahore, if 
indeed Mr. Sharif was duplicitous during that meeting and knew 
about the fact that Kargil was or was about to take place?
    Mr. Inderfurth. We don't have an answer to that. We believe 
that operation had been on the shelf for some time. Whether or 
not it had been pulled off the shelf and presented in February, 
when Prime Minister Sharif and Prime Minister Vajpayee were 
meeting, we don't know the answer to that. We would hope that 
was not the case.
    Mr. Ackerman. Thank you.
    Your statement notes that you will use the authority in the 
defense appropriation bill ``effectively and prudently and in 
consultation with the Congress.'' certainly that is exactly 
what we would expect.
    Do you have a sense at this point of what would be a 
prudent and effective use of the waiver authority?
    Mr. Inderfurth. Well, let me say that assuming the DOD bill 
is signed, we would plan to renew the waivers that are 
currently in effect for India immediately. We would then assess 
what further steps should be taken with that authority in light 
of our renewed engagements with the new Indian government.
    No decisions have been taken here. We have a number of 
issues which we are working on where we want to see progress, 
and we would hope that authority would contribute to that. I 
should mention, by the way, that we are currently reviewing the 
so-called ``entities list.''
    Mr. Ackerman. That was going to be my next question. 
Basically, have you begun the process which calls for the 
paring down of the list, and how far along are you? Can we 
expect a shorter list, or no list?
    Mr. Inderfurth. Well, we are in that process of looking 
carefully at the entities list. I think that we have been 
engaged in that now for a few weeks. The DOD appropriations 
bill language does ask for--I think it is a 60 day period to 
report to Congress, so we will certainly have that within that 
timeframe and perhaps sooner.
    Mr. Ackerman. Thank you.
    In the light of the fact that General Musharraf was the 
architect of the Kargil invasion, what are the chances to 
restart a meaningful dialogue between both India and Pakistan? 
Should the Indian government trust him, and if so, why?
    Mr. Inderfurth. As I mentioned in my brief opening remark, 
the Lahore process does not look well these days, even though 
the bus service continues.
    I think, as we are, the Indian government will wait to see 
what actions General Musharraf takes in the days ahead. We have 
said, and I said in my statement, that we are going to move 
forward based on actions, not on words. I think the Indian 
government will take the same approach.
    I think there is concern in New Delhi about the military 
takeover. They have had experience with military governments in 
the past. They have approached this so far in a low-key, 
cautious way. The new government has not been formed. We have 
no timetable for a return to democracy.
    There is, I think, a great deal to be learned about how 
General Musharraf intends to proceed before we or the Indian 
government or I think the international community can make 
decisions on any of these issues, including a resumption of the 
Lahore process.
    We would hope, however, that process could be resumed, 
because it has appeared to be the only promising avenue for 
some reconciliation between the two countries in a very long 
time.
    Mr. Ackerman. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman, for the generous allocation of the 
time.
    Mr. Bereuter. Thank you, Mr. Ackerman. I wish we had more.
    The gentleman from California is recognized under the five 
minute rule. Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you for reminding me, Mr. Chairman. 
Just a couple of housekeeping matters.
    Mr. Inderfurth, does the State Department have its cables 
and electronic communications computerized?
    Mr. Inderfurth. You may be talking to the wrong person, 
Congressman. I am not a computer whiz. We can certainly provide 
you the information on that, on our data system. I am sure it 
is computerized and I am sure that the search would include 
that, as well as files and e-mails and cables and everything 
that you have asked for.
    Mr. Rohrabacher.  To your knowledge, does the State 
Department computer system have the capability to search out 
subject matter areas?
    Mr. Inderfurth. I don't know how it searches.
    Mr. Rohrabacher. We will leave it at that. Thank you very 
much. You don't know.
    You are personally aware that Chairman Gilman verbally 
requested at a closed hearing from Secretary Albright in 
November of last year for the documents that we were talking 
about?
    Mr. Inderfurth. Congressman, the formal request was made on 
May 21. I am sorry we cannot----
    Mr. Rohrabacher. Mr. Inderfurth, if you can, answer my 
question, please. Were you aware of Chairman Gilman's----
    Mr. Ackerman. I am sorry, Mr. Chairman, there is no reason 
any of us have to shout at the witnesses.
    Mr. Rohrabacher. When someone is trying to eat up my time, 
I have five minutes, which the Chairman talked to me about.
    Could you please answer the question, were you aware of 
Chairman Gilman's verbal request for the documents that I had 
requested earlier in November?
    Mr. Inderfurth. In an open or closed session? Did you say 
closed session?
    Mr. Rohrabacher. It was a closed session.
    Mr. Inderfurth. I am not aware of it.
    Mr. Rohrabacher. You were not aware of it? How many times 
did I tell you of Mr. Gilman's request?
    Mr. Inderfurth. I think you said in open session.
    Mr. Rohrabacher. How many times did I remind you of Mr. 
Gilman's verbal request at that hearing?
    Mr. Inderfurth. Well----
    Mr. Rohrabacher. I can tell you, it was over five times.
    Mr. Inderfurth. We need it in writing, I am sorry.
    Mr. Rohrabacher. It was over five times.
    How many times did this Member have to remind you of the 
verbal commitment of Secretary Albright in that November 
hearing to provide the documents forthwith?
    Mr. Inderfurth. That commitment was made and it is being 
pursued now in light of the formal written request. The 
commitment was a good one.
    Mr. Rohrabacher. Thank you, Mr. Inderfurth.
    Mr. Inderfurth, let me just note that in your own statement 
today you state, ``Mr. Chairman, we are prepared to work with 
the Taliban to rid Afghanistan of terrorist networks,'' and it 
goes on, talking about how the Clinton Administration has made 
that choice of cooperation or isolation, and that choice lies 
with the Taliban.
    Let me note, Mr. Inderfurth, that to me that is 
reconfirming everything that I have been saying. Plus, Mr. 
Inderfurth, let me note that this is very similar to saying to 
Al Capone, ``Whether or not you are going to help us rid 
Chicago of bootleggers is up to you.'' the Taliban are up to 
here with terrorism, they are up to here in the opium trade, 
and for you to make these kinds of statements about cooperating 
with the Taliban underscores exactly the point that I have been 
trying to make, does it not?
    Mr. Inderfurth. It does not.
    Mr. Rohrabacher. All right.
    Mr. Inderfurth. The work with the Taliban--in this 
instance, we have an indictment of Osama Bin Laden. If they 
would like to turn him over, we will work with them. We will go 
to their border and take Bin Laden and bring him back to New 
York and put him on trial. That is what we are referring to. If 
they need some way to get him out of the country, we are 
prepared to work with them for that. That is exactly and only 
what we were referring to.
    Mr. Rohrabacher. Mr. Inderfurth, did your assistant talk to 
you about a document S-175? It is a State Department cable 
dated 8/07/98.
    Mr. Inderfurth. No, I don't have the whole list of 
documents.
    Mr. Rohrabacher.  Did your assistant who came to me and 
went over those documents relate that document to you?
    Mr. Inderfurth. If you are referring to Mr. Morrison, he 
did report on his discussions with you; but not specific 
documents and dates, if you want to provide that to me, if it 
is unclassified, I would be glad to talk about it in this 
session.
    Mr. Rohrabacher. Is it your position, and you are stating, 
can I say, under oath today----
    Mr. Bereuter. No.
    Mr. Rohrabacher.  I guess we cannot say that, can we? But 
you are reaffirming that there is nothing in State Department 
cables that you have read or know about that indicates any past 
support or present support for the Taliban?
    Mr. Inderfurth. I have seen nothing to that effect.
    Mr. Rohrabacher.  That is a great answer. That is an 
answer. You know, you were a newsman, Mr. Inderfurth. You know 
what kind of answer that is. That is an answer that is so full 
of weasel words it means nothing. Nothing that you have seen? I 
used to be a newsman, too. I recognize when people sometimes do 
not want to see things, they don't see it. Is it possible that 
there are documents in the State Department that you have not 
seen that indicate this?
    Mr. Inderfurth. We have provided you the full documentation 
that we have available. As I said, of those documents that I 
have seen, nothing supports your allegations. Again, I would be 
pleased, as I have said from the outset, to discuss these with 
you in open or closed session, in your office, my office, any 
fashion you would like to do it.
    Again, this has been a charge that you have made for some 
time. In the review that has been done in compliance with 
Chairman Gilman's formal request, I have seen nothing to 
support what you have--the charges that you have made. But 
again, if you have something that perhaps I overlooked in 
reviewing these, please let me know.
    Mr. Rohrabacher.  Thank you very much.
    Mr. Chairman, I would just close by saying that I renew my 
statement that the documents that I have seen do indicate past 
support for the Taliban. I cannot go into detail; they are 
secret documents.
    Number two, just from Mr. Inderfurth's testimony today and 
the other investigations that I have carried on, I certainly 
renew this charge. There is nothing that can be done on the 
other side of this aisle to try to laugh off this charge. This 
is a very serious charge. It goes to the heart of our oversight 
powers.
    I appreciate Mr. Ackerman's support for our requests for 
these documents.
    Mr. Ackerman. Mr. Chairman, I ask unanimous consent that 
the gentleman be given one extra minute.
    Mr. Bereuter. Is there objection?
    Hearing none.
    Mr. Ackerman. Will the gentleman yield to me?
    Mr. Rohrabacher.  I certainly will.
    Mr. Ackerman. Mr. Secretary, have you either seen, heard, 
or known of any document in existence, or even heard any rumors 
of such documents being in existence, other than from the 
allegations made by my distinguished colleague from California?
    Mr. Inderfurth. No, I have not.
    Mr. Ackerman. Did I get around to all the obfuscations?
    Mr. Rohrabacher.  Yes. I would thank the gentleman very 
much for his taking this issue very seriously, and although we 
come at things from different sides of the aisle, we know this 
is a very serious responsibility. We have these document 
requests. I am looking forward to the rest of the documents. I 
will be very happy to talk to you in private or public about 
that.
    Mr. Ackerman. Thank you, Mr. Chairman. I would appreciate 
the continued cooperation of your Department with the gentleman 
from California in continuing to provide documents, with the 
full understanding that sometimes you can't prove a negative, 
and maybe such documentation does not exist, and if so, perhaps 
at least with that background, the gentleman at one point will 
be satisfied that he has seen everything that there is that 
might be seen. Thank you.
    Mr. Bereuter. Thank you, Mr. Ackerman. I would move on to 
the next person; but just saying that, I would just say that if 
the gentleman from California would like the assistance of 
Chairman Gilman and myself, Mr. Lantos, Mr. Gejdenson, in 
trying to make sure that we have this discussion. I think it 
would be salutary because it is getting in the way of good 
relationships between the Executive Branch and this Committee 
and this Subcommittee. We need to solve the problem if we can.
    I now turn to the gentleman from Florida, Mr. Hastings, 
under the five minute rule.
    Mr. Hastings. Thank you, Mr. Chairman. In deference to Mr. 
Ackerman, he asked that I yield to him briefly.
    Mr. Ackerman. Thank you. I make that request just to ask 
unanimous consent that the remarks and questions by the 
gentleman from Ohio, Mr. Brown, be made a part of the record.
    Mr. Bereuter. Without objection, that will be the order.
    [The Question referred to appears in the appendix.]
    Mr. Bereuter. The gentleman reclaims his time and may 
proceed.
    Mr. Hastings. Thank you, Mr. Chairman.
    Mr. Chairman, my colleague, the gentleman from California, 
has persisted in his line of inquiry, which he is perfectly 
entitled to. I would urge, however, in all fairness, that his 
remarks not be taken at all to suggest that the Administration 
in any way is condoning actions of the Taliban.
    As a matter of fact, Secretary Inderfurth's testimony 
reflects very accurately a number of circumstances. In July, 
President Clinton issued an Executive Order blocking the 
Taliban's property. The Administration has castigated the 
Taliban on numerous occasions regarding its human rights 
policies and especially its treatment of women.
    The expelling of Bin Laden is something that, through 
diplomatic efforts, the United States has been able to achieve 
the kinds of results that the rest of the world have now joined 
us in expressing their resolve to end terrorism. So it is a bit 
unfair, although not at all without the purview of the member's 
prerogatives, but it is a bit unfair to characterize the 
efforts or testimony of Secretary Inderfurth as not being 
productive.
    I find, among other things, it to be most productive, 
particularly in light of the prolific statements that he makes, 
suggesting among other things the strength of this 
Administration's views with reference to the eradication of 
terrorism in Afghanistan.
    That said, Mr. Chairman, I had not meant to use my time for 
that purpose, but I could not allow that kind of thing to go 
poisoning into the record without understanding with clarity 
this Administration's position as stated by Secretary 
Inderfurth in the very fine comments that he has offered us 
here today.
    In addition, I would like to ask you, Secretary Inderfurth, 
two things; and then Dr. Butcher, not to leave you over there 
without a question.
    My question to you, Dr. Butcher, would be if the sanctions 
affected the economies of India and Pakistan, and did their 
economies suffer a drop in productivity because of the 
sanctions? I gather the question would be to what extent have 
they found alternative sources, and how successful has the 
United States industry been in recapturing their previous 
market share?
    If I could, I would go to Secretary Inderfurth first and 
ask him whether or not the military regime that is in force now 
in Pakistan might be more supportive of, in your view, or 
sympathetic toward Islamic fundamentalism.
    Second, Secretary Inderfurth, from the year that I arrived 
in Congress I have advocated that President Clinton should 
visit India. I know such a visit has been planned and scheduled 
and rescheduled, and then put off the schedule because of the 
nuclear testing of India and Pakistan. I would urge that you 
urge that the President understand that I think, for one, as 
one member, that he ought to go to India now more than ever, 
notwithstanding what has happened in the coup in Pakistan, 
notwithstanding the nuclear testing.
    I will leave it at that and ask you a question. Do you 
know, of your own knowledge, whether President Clinton intends 
to visit India in the near future? Those are my questions, Mr. 
Chairman.
    Mr. Inderfurth. Mr. Chairman, the last question first: The 
President still intends to visit South Asia next year. That is 
the case. Now, the exact nature of that visit is still under 
consideration at the White House, but his intention to visit 
South Asia in the Year 2000, hopefully early in the Year 2000, 
is still there.
    On the question of Islamic fundamentalism, I made reference 
in my testimony to General Musharraf's speech to the Nation, 
and through CNN, to the international community on October 17. 
He said in that speech, and I think it is apropos of your 
question, he said in his speech that ``Islam teaches tolerance, 
not hatred; universal brotherhood, and not enmity; peace, and 
not violence.''
    He also said, ``I would like to reassure our minorities 
that they will enjoy full rights and protections.''
    Now, it is our view that these are not the words of an 
extremist. But again, as I said, in earlier remarks, we will be 
very much watching General Musharraf in terms of his actions, 
as well as his words. So we hope that direction that he 
outlined is one that he will pursue in Pakistan.
    Mr. Hastings. Mr. Chairman, I ask unanimous consent for 30 
seconds for Dr. Butcher to respond.
    Mr. Bereuter. She will have that under regular order. Thank 
you.
    Dr. Butcher.
    Dr. Butcher. Regarding regaining market share, that will 
depend on the funding from the Export-Import Bank and OPIC. For 
example, Boeing lost contracts with India and Pakistan on 
aircraft, but once the waiver was in effect, they regained 
market share--they were able to get the funding to sell 
aircraft and parts to India.
    Similarly, with export credits from USDA, wheat exports 
rely on that as well. If those are reimposed, the alternative 
suppliers for Pakistan are Canada and Australia, offering 
competitive terms. So again in case of Pakistan's wheat 
imports, 78 percent of its imports come from the U.S. in 1997-
1998, the rest comes from Australia. If they are unable to get 
export credits, they would most likely go to Australia or 
Canada. It is basically a function of funding available to our 
U.S. exporters to sell to Pakistan and India.
    Mr. Hastings. Thank you both.
    Mr. Bereuter. Congressman Hastings, I appreciate you 
pursuing that matter.
    Dr. Cooksey, you are recognized.
    Mr. Cooksey. Thank you, Mr. Chairman. We do appreciate the 
witnesses being here today and giving their testimony. It is 
good to hear it.
    I want to ask a question, and I would hope that you can--
and I know the answer, but I feel that it needs to be stated in 
the record.
    The appropriations bill for the Department of Defense is in 
the process of being considered by Clinton, and you are 
familiar with the Glenn Amendment that you referred to, Dr. 
Butcher. There is new waiver authority in that Department of 
Defense bill that would waive these sanctions against Pakistan 
and India.
    Now, am I not correct in that if Clinton chooses to veto 
this Department of Defense conference or the bill, that then 
the waiver expires tomorrow, according to the Glenn Amendment 
as outlined in your testimony--and tomorrow is October 21, 
1999--so then the sanctions will be reimposed on India and 
Pakistan; and would this Democrat President move us back to an 
isolationist position with some of these sanctions? Is he aware 
of that? Is he willing to move back to sanctions?
    Mr. Inderfurth. Congressman, I----
    Mr. Cooksey. Is the State Department aware of that?
    Mr. Inderfurth. Of course we are, and I actually have a 
response for you on this. But I don't think that the issues at 
stake with respect to the DOD appropriations bill are riding on 
this issue of the waiver authority for India and Pakistan. I 
think there are larger issues involved there.
    Mr. Cooksey. In terms of vetoing?
    Mr. Inderfurth. In terms of vetoing. I think that he and 
the Administration is well aware that embedded within the DOD 
appropriations bill is the waiver authority for India and 
Pakistan, which we greatly appreciate because it is 
comprehensive and permanent, and we have worked very hard with 
Members of Congress, and we greatly support or appreciate the 
support that we have had there.
    But I don't think that a veto of a DOD appropriations bill 
would relate to moving us back to an isolationist point of view 
or anything, quite frankly, related to his view on India and 
Pakistan. It would simply be a part of the legislative process.
    Now----
    Mr. Cooksey. But there would be a reimposition of the 
sanctions?
    Mr. Inderfurth. There would be; but let me go through that 
just very briefly. It is timely because today is October 20 and 
tomorrow this may or may not take place. We are well aware that 
we have until the 21st.
    Clearly, we would like to see this authority approved and 
signed into law. We are looking, however, if that does not take 
place by tomorrow, for ways to find a bridge between tomorrow's 
expiration and the issuance of a new waiver under the 
authorities contained in the DOD bill.
    Our lawyers are working to see if it is feasible to 
interpret the one year Brownback authority that is currently 
law as allowing the President to extend the waiver for an 
interim period. Now--and this is in consultation, obviously, 
with Congress----
    Mr. Cooksey. Please be brief. I am running out of time.
    Mr. Inderfurth. I am sorry. If we are unable to create such 
a bridge, the waiver will lapse and the restrictions would be 
reimposed, but that would be done for reasons associated with 
the legislative process, not a policy decision or 
determination.
    Moreover, we judge that there would be minimum impact if 
this does occur, if this interim period lasts only for a short 
period of time, which we would expect. Sorry. It is not a 
surgical answer but it is the best I can do.
    Mr. Ackerman. It is not surgical, but he hopes it is a 
suture.
    Mr. Cooksey. And it would be a patch, a steri-strip, maybe.
    This is my closing comment. I personally am really offended 
by people like Bin Laden. I used to spend a lot of time in 
Kenya, Dr. Butcher, and I assume you are from Kenya, since your 
undergraduate degree is there. I was working up north of 
Nairobi in the Meru area, about 30 miles there, off and on for 
6 years.
    A lot of the people that were injured and blinded in the 
bombing because they had two bombs. There was one bomb that 
caused everybody to go look to see what the noise was, and 
there was a second bomb which blew out the windows. There were 
a lot of people that had glass in their eyes. I know some of 
the surgeons that took care of them there.
    Guys like Bin Laden are bad guys. Guys like Bin Laden and 
the Taliban are terrorists and they are responsible for killing 
Americans and killing Pakistanis and Afghans and everybody 
else. Those people need to be taken out.
    Unfortunately, they hide behind a religion, and I don't 
think that religion is what they claim it is. I think there are 
some real fine Muslims that do adhere to the teachings of 
Mohammed. But the one thing that those people do understand is 
that they understand focus, they understand firmness, and they 
understand force.
    When those people continue to produce opium and they 
continue to shelter terrorists and they continue to cause 
bedlam around the world, I think we have one alternative: I 
think we need to play hardball with them. They understand force 
and firmness. They understand putting a bomb on top of their 
head. But it needs to be done in a very effective manner. It 
needs to be done so that people in Kenya and people around the 
world can go to their embassy, go to their work, go to their 
homes and survive.
    I am concerned that the top person in the Executive Branch 
tends not to be focused, tends not to be firm. He was passive 
when I was in the military 30 years ago, but that is another 
issue. It just sends the wrong message to these people. They 
think they can get by with murder, and they have done it.
    Unless you can get everybody on board and present this 
message, this image, this message that there are some tough 
Americans that would be tough on bad guys, I think we would 
continue to suffer because of this lack of firmness and focus 
and leadership at the top of the Executive Branch.
    There are some good people in the State Department, there 
are some very professional people that I think are indeed very 
firm and very professional.
    Mr. Bereuter. Thank you, Mr. Cooksey.
    We turn now to the Vice Chairman, Mr. Royce, for his 
questions under the five minute rule.
    Mr. Royce. Thank you, Mr. Chairman.
    We have talked at length about this issue of Afghanistan. I 
just want to raise the point again that if there had been no 
Taliban, there would not be a Bin Laden, in my view. There 
would not have been these opportunities. There would not be 
this safe harbor.
    I guess the frustration that some of my colleagues are 
expressing here today is the feeling that perhaps there has 
been a laissez-faire attitude, you might say, in terms of how 
we approach the problem of Afghanistan. Maybe it is because it 
seemed insoluble. But the point is that I think for my 
colleague from California, he feels a little like a Cassandra 
who has warned again and again of what is coming, and now sees 
exactly what he warned about coming before us here. Yet there 
still is not the focus nor the understanding.
    For those who have gone to Afghanistan and seen the 
orphans, seen the devastation, and seen the commitment for 
violence that is coming out of that cauldron, as my colleague 
the gentleman from California has done, there is this feeling 
that no one really understands just what is in store for that 
region and for the world.
    So perhaps at times we get a little frustrated. I have had 
many meetings with the Administration where I tried to 
encourage broadcasts, a Radio Free Afghanistan concept, where 
people could get the information, so that the inevitable would 
not happen, so the Taliban would not overtake Afghanistan. 
Well, we did not do that.
    There have been international summits where leaders around 
the world have tried to get together the various combatants in 
a way in which maybe they could contain the Taliban, but we 
have let nature take its course, you might say, in the view of 
many. So here we are today with exactly what some of us feared 
facing us.
    I guess I would just say that there is still the 
opportunity for concepts like Radio Free Afghanistan. There is 
still the opportunity to try to figure out a scenario in which 
we reverse what has happened there. But if we just kick the can 
down the road and wait for it to be someone else's problem, we 
may find it one of the great challenges of our time, 
ultimately.
    I wanted to ask you a question about General Musharraf and 
about the commitments he is making.
    One would be, will he make a commitment to not now condone 
or indirectly support cross-border terrorism across the Line of 
Control of the type that was previously authorized in the 
Kargil mission? It is clear that given our past experience with 
his judgment, that I think we now need to hear that he will 
follow the previous government's policy to at least try to 
discourage international terrorism.
    I would just like to understand if he has given some 
assurances along that line.
    Mr. Inderfurth. Congressman, on your point about 
Afghanistan, I am in total agreement with the fact that our 
inattention or inability to address Afghanistan since the end 
of the Soviet occupation and the warfare that has continued 
since then is having increasingly serious consequences for the 
international community and for us.
    Whether it be in the harboring of terrorists, whether it be 
in the fact that Afghanistan is now the leading producer in the 
world of illicit opium, whether it be in human rights abuses 
and the treatment of women and girls, the spillover effects of 
Afghanistan are ones that we have been calling attention to, 
but we have been able to do very little about for a very long 
time.
    What Congressman Rohrabacher has been saying on that 
subject, pay attention to Afghanistan, we are totally in 
agreement. We just think he is barking up the wrong tree, 
thinking that we had a policy of covert support for the 
Taliban. What we did have initially was a lack of understanding 
about what this Taliban movement was. It came virtually, 
literally out of nowhere, and given the fighting, the chaos in 
Afghanistan, the question arose: Might this be, you know, an 
answer for stability?
    As soon as it was apparent that the Taliban was not that 
answer, our statements and policy responded accordingly, and it 
has ratcheted up to the point to where we are now putting 
sanctions and taking the steps I mentioned here.
    Again, we need to do something about this, and if we don't, 
we will pay an even heavier price in the days ahead.
    On the question of General Musharraf, in his speech and 
indeed in a meeting that he had with Ambassador Milam who 
returned to Islamabad immediately after the takeover and met 
with him at President Clinton's direction, certain assurances 
were provided, including in his speech on a return to democracy 
and the rest, but no timetable; dialogue with India but not 
specifics. He did announce a unilateral military de-escalation, 
of pulling Pakistani forces back from their international 
border, not the Line of Control but their international border.
    We will be pursuing in the days ahead firmer commitments 
from General Musharraf on that issue, including cross-border 
terrorism. The Indians have said they cannot resume the Lahore 
process until cross-border terrorism ceases. We believe steps 
like that should and must be taken, and we will press very hard 
for that.
    Mr. Royce. In closing, I would just suggest that King Zahir 
Shah has put forward a plan that is pretty well received by 
rank and file Afghans to move toward a general assembly, and a 
way in which to do that--and I just in closing would like to 
again encourage you to do all you can do to attempt to raise 
that plan, because I think with the rank and file and even with 
many of the Mujahedeen, it has promise, if we could just get 
the international community behind it and try to move the 
concept.
    Mr. Inderfurth. We are aware of the former king's plan, and 
we stay in touch with him and his people in Rome.
    Mr. Royce. Thank you again.
    Mr. Bereuter. Thank you, Mr. Royce.
    Mr. Secretary, I thought your exchange you had here with 
Mr. Royce earlier on the Taliban and the Administration was 
very important. I am going to try to make sure that the Full 
Committee has that available to them. I want to thank both of 
the witnesses for your patience.
    Dr. Butcher, we haven't asked many questions for you, but 
the information you provided has been helpful to us, and I very 
much appreciate it as we all do.
    Mr. Secretary, I confess to some frustration, not with you 
but with the fact that we scratched the surface only of a few 
geographic sectors, and there are times when hearings are good 
methods of conducting oversight. They ought to be supplemented, 
it seems to me, with informal briefings. If you would 
participate with that in a Members' briefing, we will start 
that process periodically from next year.
    Mr. Inderfurth. I would be more than pleased to do that.
    Mr. Bereuter. Thank you.
    Mr. Bereuter. I would like now to call the second panel. We 
have two distinguished witnesses, and we will hear from them in 
order. First, Ambassador Teresita Schaffer, Director of South 
Asia Center for Strategic and International Studies, CSIS; and 
Mr. Selig S. Harrison, Senior Scholar, Woodrow Wilson Institute 
Fellow, the Century Foundation.
    I have provided more detailed biographical material on 
these two people at the beginning of the hearing. I want to 
thank both of them for their patience and for being with us 
today. As with the first panel, your entire statements will be 
made a part of the record, and you may proceed as you wish. 
Ambassador Schaffer, please proceed. Thank you very much.

  STATEMENTS OF THE HONORABLE TERESITA SCHAFFER, DIRECTOR FOR 
  SOUTH ASIA, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES 
                             (CSIS)

    Ms. Schaffer. Thank you, Mr. Chairman. I am delighted to 
have this opportunity to testify before your Subcommittee. In 
years past when I was in the State Department and testified 
before your predecessor, I always wondered what happened when 
the government witnesses finished, breathed their sighs of 
relief and sped out the door, and I finally have a chance to 
find out.
    Mr. Bereuter. Well, generally it is not quite so late in 
the day. I apologize for that fact.
    Ms. Schaffer. I would like to make some brief observations 
on the dramatic developments in Pakistan over the past week and 
then to share my recommendations about U.S. policy priorities 
for the region.
    First, Pakistan and a disappointing end to a disappointing 
government. Pakistan has lived under a stressed and seriously 
flawed democracy for the past 11 years. Each of the four 
changes of government since 1988 involve serious charges of 
corruption and abuse of power. Assistant Secretary Inderfurth 
touched on the country systemic problems: corroded national 
institutions, pervasive corruption, sectarian strife and urban 
violence, and a crisis in the government's finances. He might 
also have mentioned that long-term social problems like high 
population growth and widespread illiteracy have gone untended, 
victims of bad priorities and of the government's cash crunch.
    The one that worries me most is the disaffection in 
Pakistan's smaller provinces at what they consider to be 
domination by the larger Punjab. As much as a year ago, many 
Pakistanis were ruefully concluding that the democratic 
government couldn't deliver the goods, or at least this 
democratic government couldn't deliver the goods. This explains 
why the Pakistanis in the main greeted last week's coup with 
relief rather than outrage, and that in many ways is the 
saddest commentary on last week's events.
    Pakistan's prior experience with army regimes suggests that 
beyond a brief honeymoon period, they have a bad effect on both 
the army and the country. We are right to call for a 
restoration of democratic government in Pakistan. In the final 
analysis, that is the only way that a government can acquire 
the legitimacy the country craves.
    Furthermore, all the problems that we have been talking 
about need to have their solutions enshrined in representative 
institutions. In particular, the dangerously frayed relations 
among the provinces cannot be put right without a genuine 
political process, real elections and an accountable Parliament 
in which people of all four provinces find their voice.
    But if democracy is an absolutely vital goal, I would argue 
it is not the only one. Ultimately, Pakistan needs not just an 
elected government--we have had four examples of how they 
didn't succeed--they need one that can deliver the goods.
    How should the United States respond to this situation? I 
believe that our basic principle should be to judge the regime 
in Pakistan by its actions. The burden of proof is now on 
General Musharraf to show that he is actually fulfilling the 
agenda he has sketched out.
    We should watch in particular two areas. First, re-
establishing decent and accountable governance, as he promised 
in his speech last Sunday; and this is something which an 
appointed government in fact can do or can make a big beginning 
toward doing.
    The second thing we should watch is management of relations 
with India. The Army high command, as Mr. Inderfurth told you, 
did initiate the dangerous Kargil adventure, and therefore, 
they bear a large measure of responsibilities for the current 
downward spiral in relations. They are also in a unique 
position to reverse it if they choose to do so.
    The announcement of the thin-out of forces along the 
international border is a useful olive branch. Stopping 
infiltration across the Line of Control in Kashmir would be a 
good next step, and in this respect, Mr. Inderfurth talked 
about getting a commitment to that effect. I am not 
particularly interested in the commitment. I am interested in 
seeing what happens. Commitments are cheap. It is the action 
that is important.
    If the current leadership meets these high standards and if 
it then moves swiftly back to the barracks, America's 
democratic values and its strategic interest could both come 
out ahead. History does not leave one very optimistic, but we 
should watch what actually happens. For the duration of this 
military government, current law rules out most aid and 
military sales and a high-profile political embrace would seem 
to be quite out of place. That is a fitting response to the 
overthrow of an elected government. But I agree with Mr. 
Inderfurth that we need to remain in close touch, including a 
serious military-to-military policy dialogue.
    If the new government is able to meet IMF conditions, as 
their predecessors did not, I also see no reason for us to 
prevent international institutions from funding financial 
stabilization and related programs.
    I would also like to leave you five brief thoughts about 
American policy in the rest of the region. First, the U.S. 
should encourage India and Pakistan to find a real settlement 
to their differences, but recognize that the work of settling 
has to be done by those countries. I oppose naming a special 
envoy on Kashmir. The Administration is right to conclude that 
a third-party role can only be effective if both countries 
accept it.
    While it is up to India and Pakistan to work out the terms 
of the settlement, both need to come to terms with some 
unpleasant realities. For Pakistan, this means recognizing that 
they are not going to get Kashmir and that they may need to 
build a political consensus around a solution that doesn't 
significantly change today's map. For India, the difficult 
reality is that they really have to allow self-rule for the 
valley of Kashmir, a much larger measure of autonomy and hands-
off for what passes for a political process there which has 
been badly distorted for the last 50 years. Otherwise they face 
the nasty cycle of insurgency and repression.
    My second point is that the U.S. should reexamine its 
nonproliferation priorities. I fully support the goal of CTBT 
signature by India and Pakistan, and indeed, I hope that the 
Senate will in time reconsider its action rejecting U.S. 
ratification of the CTBT.
    But to me, there are two issues that are more important to 
the nuclear safety of the world. The first is avoiding nuclear 
conflict, and the second is preventing export of nuclear 
materials or know-how from India and Pakistan.
    To me, the Kargil episode demonstrated two things: one, 
that India and Pakistan really don't want a nuclear 
confrontation; and two, that it would be easy to slip into one 
by accident. This makes a compelling case for increasing the 
margin of safety through risk reduction measures between those 
two.
    As for exports, both India and Pakistan have declared that 
they will not export the products from their programs, and as 
far as anyone knows, they have not done so. Strengthening this 
resolve, formalizing it and sharing information on its 
implementation are critical to ensuring that unintended leakage 
doesn't occur. These are the things that are important if you 
are worried about the nuclear ``wannabes.''
    Third point, I think we should delink India and Pakistan 
policy wherever possible. Clearly, the military regime in 
Pakistan will inhibit major U.S. policy initiatives there. 
There is no need to subject relations with India to the same 
inhibitions. Waiving sanctions on India makes sense even if 
Pakistan is now going to be under new sanctions.
    Developments in Pakistan should not lead the President to 
cancel his plans to visit South Asia. A visit to India and 
Bangladesh could still serve the U.S.'s interests.
    Fourth point, in much of the region the greatest potential 
lies in economics. This is especially true in India where the 
economic reforms launched in 1991 are beginning to bear fruit. 
The existing level of economic reform has been accepted across 
the political spectrum, and I think we can expect more action 
now that there is a government in place with a somewhat longer 
time perspective. One can also point to similar trends in 
Bangladesh and in Sri Lanka.
    We should nurture the economic relationships both by 
encouraging trade and investment and by continuing our aid 
programs. The one in Sri Lanka in particular has taken a 
beating during the last few years of cuts in the aid budget.
    My final suggestion is don't lash the rest of the region to 
India and Pakistan. Both the Administration and Congress 
rightly devote most of their South Asia energy to India and 
Pakistan. However, I would urge both this Committee and the 
Administration to reserve a little air time for the rest of the 
region. Their political and economic health is not determined 
by India's and Pakistan's troubles. They offer smaller but 
still attractive markets for American business. It doesn't take 
a huge effort and it doesn't take a huge amount of time to 
tender relations with these countries, and this can contribute 
to healthier regional relationships which in turn can even 
provide a better context for India and Pakistan to manage their 
problems.
    In closing, I would like to reinforce the plea I know you 
have received from Mr. Inderfurth and others for more generous 
funding of the nation's diplomatic business. Taken all 
together, the U.S. Government's international affairs budget is 
less than 1 percent of the total budget, but look at what you 
get for that 1 percent. I look on it as a vaccination against 
the international scourges of chaos and war. When diplomacy is 
working properly, you don't see it in action and everyone 
wonders what the fuss is about; but when it breaks down or when 
America's diplomats do not have the tools to do the job 
properly, the world and the U.S. taxpayer pay the price.
    In South Asia, we are coasting on the accumulated political 
capital of half a century of patient work, but funding has been 
drastically cut for the tools that helped build relationships 
in the past: economic aid, public diplomacy, international 
visitor grants, military education and training, and, indeed, 
diplomatic establishments. The size of the diplomatic 
establishments has shrunk, and they don't have the state-of-
the-art communications they need to mitigate that loss. I think 
that a properly staffed and equipped diplomatic presence in the 
region is an inexpensive way to ensure that we are providing 
the attention it needs.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Teresita Schaffer appears 
in the appendix.]
    Mr. Bereuter. Ambassador Schaffer, thank you for your 
excellent statement. I think it is straight forward. It 
actually, I think, helps to not be part of the Administration 
to make such a statement. They certainly do not have state-of-
the-art communications, you are absolutely right about that. 
They know it, too. It is a matter of finding the funds.
    Mr. Bereuter. Mr. Harrison, we look forward to hearing your 
testimony. You may proceed as you wish.

STATEMENT OF SELIG S. HARRISON, SENIOR SCHOLAR, WOODROW WILSON 
          INSTITUTE AND FELLOW, THE CENTURY FOUNDATION

    Mr. Harrison. Thank you very much, Mr. Chairman. I will be 
brief. It is late.
    I think that it is clear that the advent of General 
Musharraf's government in Pakistan has exacerbated the tensions 
between Pakistan and India. Therefore, the point that I would 
like to stress today is that all grants and sales of military 
spare parts, components and weapons systems to Pakistan should 
remain suspended indefinitely.
    Now, Secretary Inderfurth reassured us, he said there are 
no plans or intentions to resume such grants and sales, but I 
can foresee the bargaining that is going to go on and 
discussions that will go on between the United States and the 
new government in Pakistan. There is a great danger of slippage 
on this issue because General Musharraf, who is trying to 
project an image of moderation in an effort to grease the way 
for both economic and military aid, is going to talk about 
deals--with moves toward what Secretary Inderfurth called 
``civilian, constitutional, and democratic'' government to be 
made in exchange for modifications of restrictions on 
particularly the sale of military spare parts. And I think we 
should be very alert to the need to avoid that.
    General Musharraf and his deputy, Lieutenant General 
Mohammed Aziz were personally responsible for initiating the 
Kargil invasion last May that led to a serious military 
conflict between India and Pakistan. Now, it is welcome that he 
has unilaterally withdrawn some Pakistani forces from the 
India-Pakistan international boundary, but as has been noted 
before today, that does not extend to Kashmir, which is what 
would really count.
    Indeed, General Musharraf has made clear that Pakistan will 
continue to sponsor and support insurgent activity in the 
Indian-administered areas of Kashmir. This policy poses a 
continued threat to peace and stability in South Asia, and the 
United States should in no way condone or support it.
    I think the United States should seek to promote a 
settlement of the Kashmir issue. I agree with Secretary 
Schaffer that the way not to do it is to become directly 
involved in attempting to mediate, but what the United States 
can do to promote a settlement of the issue is to declare its 
support for the Line of Control as the permanent international 
boundary.
    In the absence of such a clear American position, Pakistan 
will feel emboldened to continue its present policy of seeking 
to bleed India in Kashmir through support of insurgent 
activity. A settlement based on the Line of Control, at present 
the de facto boundary, of course, as the de jure boundary, 
should be accompanied by American efforts first to induce both 
Indian and Pakistan to increase substantially the degree of 
autonomy accorded to the areas of Kashmir under their control, 
and second, to move toward the reduction of military 
deployments in both Indian and Pakistani areas of Kashmir when 
cross-border insurgent activity by Pakistan has ceased.
    Now, turning to the issue of economic aid policy toward 
both India and Pakistan. Whether and when to resume U.S.-
supported multilateral economic assistance to Pakistan should 
be decided on the basis of economic criteria alone, and in that 
I agree with what Secretary Schaffer has just said. The IMF has 
withheld disbursement of the latest pending installment of its 
bailout package because the previous government failed to meet 
key economic performance criteria, especially with respect to 
tax collections. If the new government is able to meet IMF 
performance criteria and move credibly toward economic 
stability, aid disbursements should be resumed. The people of 
Pakistan should not be the victims of political events beyond 
their control, and this principle should also be applied to 
India where we have imposed sanctions. At the present time, 
World Bank loans for power and roads which directly affect the 
lives of people in the rural areas are prohibited by our 
policy.
    I do hope that President Clinton will go to India and 
Bangladesh early next year as is being discussed. I doubt very 
much that the political conditions in Pakistan will permit him 
to go there. If he does go to South Asia I hope at that time he 
is able to announce an end to the sanctions that have been 
imposed over the nuclear issue.
    Now, for some general comments. We should be clear about 
what American interests are in South Asia. Our most important 
interest is to have friendly relations with India, which is 
eight times bigger than Pakistan and is emerging as a major 
military and economic power. India will have a big navy that 
will affect our access to the Indian Ocean and to the South 
China Sea. India is going to be a nuclear power. The balance of 
power in Asia will be based on both a nuclear India and a 
nuclear China. Technologically, India could make an ICBM in not 
too many years. So, it is clearly in the American interest to 
be on friendly terms, just as it is with China. We lost sight 
of that, as one of the Members pointed out, during the cold 
war, and we gave Pakistan $4 billion in military hardware and 
tilted toward Pakistan on Kashmir.
    Now we have a chance to get our policy right, and that 
requires lifting economic sanctions on both India and Pakistan 
while keeping the lid tight on military transfers.
    I regret that Brownback 2 lumped economic and military aid 
together, because there is a basic difference in how we should 
be handling these two types of relationships.
    In conclusion, the contrast really is very striking between 
a stable democratic India that has just completed another 
impressive election and is doing well economically, and an 
unstable Pakistan with a military dictatorship once again. We 
should be clear that it is at this point a dictatorship, 
especially when we look at the fact that the courts are not 
allowed to operate in any way. There is a totally arbitrary 
government at the present time, and so we shouldn't--I was very 
distressed that Ambassador Milam started talking about how 
moderate General Musharraf is. This is a situation that is 
very, very capable of leading to all kinds of arbitrary 
repression of human rights within a very short period of time.
    American interests and American values both dictate that we 
improve our relations with India while continuing to cooperate 
with Pakistan in economic development if it is able to get its 
act together.
    I think I will conclude at that point.
    [The prepared statement of Mr. Harrison appears in the 
appendix.]
    Mr. Bereuter. Thank you very much, both of you. I would 
like to now proceed under the five minute rule, and Mr. 
Hastings and I will have a chance hopefully to followup on a 
couple of questions.
    Both of you have indicated, I believe, that if economic 
criteria are met, then multilateral aid should continue through 
the IFI, including the IMF, World Bank, and Asian Development 
Bank.
    Ambassador, why is it important, and also Mr. Harrison, to 
distinguish that a new Brownback provision combined lifting 
military sanctions with economic sanctions? I think it implies 
that you are supporting economic sanctions being lifted as 
well. Is that correct?
    Mr. Harrison. Not as well. Economic sanctions but not 
military sanctions.
    Mr. Bereuter. I mean as well as Ambassador Schaffer.
    Mr. Harrison. Yes.
    Mr. Bereuter. Why?
    Ms. Schaffer. Why should economic aid continue from the 
multilateral institutions?
    Mr. Bereuter. Yes.
    Ms. Schaffer. Pakistan is close to economic meltdown, at 
least in those parts of the economies that touch the 
government. The crops get better or worse with the weather, but 
the rest of the economy is in very serious trouble. Industrial 
production is down. Investment is in the tank. The balance of 
the payments is in desperate shape if the debt rescheduling 
runs out, which it will without an IMF program, and where 
government revenues have fallen very seriously short of goals 
because agriculture is untaxed, and most of the wealthy managed 
to evade taxes.
    The IMF program is intended to address this problem. It is 
in no one's interests that the problem gets worse, but it is 
also very important that the IMF's conditions be met, and that 
is what Nawaz Sharif's government was never able to do. They 
had trouble with each negotiation. They hadn't concluded the 
negotiations for the most recent tranche, and the reason they 
hadn't concluded it was the IMF didn't believe they were going 
to do it.
    Mr. Bereuter. I follow business affairs there involving 
some business in my own state involved in a major way in 
Pakistan. One of the difficulties that continues is the 
corruption in the government and the impact that had on 
Americans' attitude about investment, about construction, and 
about joint development projects has become very negative. Is 
there anything you can say and suggest to do about that?
    Ms. Schaffer. Yeah, I would like to say two things about 
that. First of all, General Musharraf has, not surprisingly, 
targeted corruption on his short list of things to do. This has 
been very difficult in other countries because anticorruption 
drives so very easily turn into witch hunts. I think it is 
desperately important that they do try to weed out corruption, 
but in order to do that, I am afraid they are going to catch 
some of their own people. Human nature alone would dictate that 
there is at least one general who has strayed from the straight 
and narrow, and if they do that, they will have credibility. 
Otherwise they won't.
    My second point has to do with the question of military 
sales. I would argue that military sales should not take place. 
I differ with my colleague in that I don't think this needs to 
be enshrined in law. I think it can be done by policy, and that 
makes it easier to modify the policy when conditions dictate, 
which they aren't going to under a military government.
    Mr. Bereuter. Well, if the President would sign the DOD 
bill, he would have that flexibility.
    Ms. Schaffer. I am not in government anymore, so I don't 
have to deal with that.
    Mr. Bereuter. Mr. Harrison, you pointed out that Pakistan 
is one-eighth the size, some would say one-seventh the size of 
India, but, of course, it is a very large country in population 
already, despite the comparison with its neighbor. It will be 
in the seven or eight largest countries in the world in 
population in 2010, I am sure, if not already.
    Pakistan has--as I mentioned when the Secretary was here 
taking questions--had now military rule for almost half of 
their existence, and we have American commentators questioning 
whether democracy is really going to work there and is really 
going to be supported by the people. What are your reactions to 
the record in Pakistan and what we should expect in the way of 
an end to military rule?
    Mr. Harrison. Neither the civilian nor the military 
governments in Pakistan have been very successful. Pakistan 
started out without a mobilization of its people on a 
democratic basis in the period before it was created. India had 
a freedom movement in which all sections of the population were 
involved, so it had a base for democracy. Pakistan has been run 
by the upper crust in the country ever since it was 
independent, and so therefore I don't think prospects for 
democracy are as hopeful in Pakistan as they are in India. But 
I do think that military rule is no answer. We have seen that 
in all the military dictatorships Pakistan has had. They have 
proved to encourage big-time corruption, big-time drug running, 
to an even greater extent I would argue, than the civilian 
authority. Absolute power does corrupt absolutely.
    I think that we shouldn't expect Pakistani democracy to 
move in rapid sequence toward anything we would like, but I 
think arbitrary rule of the kind that is now being exercised in 
Islamabad is going to lead to all kinds of polarization of 
forces in Pakistan that will make it less stable than ever. 
This we could go into in great length.
    On your previous question I would like to say that in 
distinguishing between military and economic sanctions, I had 
in mind the fact that I would like to see the United States 
able to have bilateral aid to both India and Pakistan that 
would help deal with their economic and social problems, and I 
want to see multilateral aid to India resumed. I think that the 
sanctions we imposed after the nuclear tests really made no 
sense because it was clear they weren't going to be effective, 
and so that was simply a misassessment of the situation and 
what the consequences would be.
    The consequences were naturally to force both governments 
to show that they weren't going to bow to this kind of foreign 
pressure. They haven't been effective. They are not going to be 
effective. All they are doing is preventing the World Bank from 
making power loans, road construction loans and other loans 
that are very important to the economic development and the 
stability of India. And there are comparable cases in Pakistan 
of economic aid that if the economic standards and criteria are 
met could be profitably extended.
    The time for punishment for the nuclear test is over, and 
it has been proven to be ineffective. It isn't even just. The 
United States has 10,000 nuclear weapons. The United States 
isn't doing anything at the global nuclear arms control level 
to bring China into a whole global process of nuclear arms 
reduction that would make it less necessary for India to have 
nuclear weapons. So it doesn't make sense at any level, and I 
hope that we are reaching an understanding of that and that the 
Congress will cooperate with the Administration in moving on to 
a new phase in which we put that behind us, get back to 
positive economic relations with both India and Pakistan.
    Pakistan is a big country. That is why I favor an approach 
toward economic assistance which is separate from our desire to 
punish the generals who have just taken over.
    Mr. Bereuter. Mr. Harrison, thank you very much. I need to 
move on to my colleague, but I want to say I agree with the 
gentleman on the imposition of sanctions after the nuclear 
tests, and I do think--and that is a very common view that you 
and I share on Capitol Hill--the Administration made a mistake 
in not recognizing the fact that while those sanctions may have 
worked to delay nuclear development. Ultimately, however, once 
both sides had tested, the sanctions were no longer productive.
    I yield to the gentleman from Florida at this time.
    Mr. Hastings. I thank the Chairman, and I certainly thank 
both the witnesses for extraordinarily, refreshingly clear 
testimony, and I echo the Chairman's sentiments. I think he 
will agree that I was one of those that thinks that the 
Administration made a mistake with reference to the sanctions. 
What he said I reiterate, but we are now, though, in need of 
your expertise more than ever. We are.
    It seems to me that when coups take place, that the 
emphasis is on the person that leads the coup, and all of the 
media attention--and Mr. Harrison, you were in the media--
focusing on this individual and his or her actions; and there 
have been more his-es than hers out there in the world.
    Who else in Pakistan, for example, not clandestinely or 
with any lack of visibility, who else can we talk to? It seems 
that Benazir Bhutto would be the only person that might have 
some kind of a national following. Are there others?
    Ms. Schaffer. Is that your question, sir?
    Mr. Hastings. Yes.
    Ms. Schaffer. I think Benazir Bhutto, it is going to be a 
long time before she has a chance to revive her political 
career. She is out of the country and under indictment for 
serious and reasonably credible corruption charges.
    Mr. Hastings. That I understand. But you do agree that she 
has a national following?
    Ms. Schaffer. Her party has a national following which she 
embodies. The Muslim League, Nawaz Sharif's party, is a serious 
party, although they have got their factions and their internal 
disputes. Other actors on the political scene tend not to have 
a national following. There are quite a number of other 
parties. Indeed, there was a parade of Pakistani opposition 
politicians who came through Washington in the last couple of 
months, none of whose parties have done very well at the polls.
    One force to watch is the Islamic party called Jamaat-i-
Islami. They have not done very well in elections, but they 
have been talked about in more recent months as among the 
moderate elements of the Islamic right. And what was 
particularly interesting was that they started talking more 
about clean government than about Islamic government.
    But I think the reason people focus on the personality of 
the coup leaders, is that the coups tend to install single-
person governments, a dictatorship. I think he would aspire to 
a term more like ``enlightened despotism,'' but you still 
basically have the same punch line.
    I do know from people I have spoken to that they are 
approaching people I look on as serious players for some of the 
civilian leadership jobs. We will see whom they are able to 
recruit. We know at this point very little about who will be 
the personalities who run this government below the level of 
General Musharraf. He has only been in charge for eight days. 
So we know very little about how light or heavy-handed his rule 
is going to be, and I think most of those are still questions 
at this point.
    Mr. Hastings. I see. Mr. Harrison.
    Mr. Harrison. I would just say that I think what we should 
be focusing on is supporting a return to political processes. I 
am not going to nominate the next leaders of Pakistan. I think 
that has to happen internally through divisions that may occur 
within both the PPP and the Muslim League. There are also 
smaller parties on the moderate left that in the past the 
United States wouldn't think of touching, which we should 
consider part of that political process. And I think that the 
regional political elements in Pakistan who don't have a 
national platform do represent something at the local level, 
represent some of the democratic impulses in Pakistan that have 
to be given play.
    You know, it is a cliche to say that there is no shortcut 
to democracy. I think we simply have to press for not just what 
the Assistant Secretary referred to as a decent and accountable 
government, but a government that really allows democratic 
processes to occur and involves a free press and involves a 
free judiciary--of course, none of which is the case at the 
moment in Pakistan.
    This talk about a ``true'' democracy makes me very nervous 
because I have been talking to Pakistani leaders since the 
early 1950's, including all the military leaders who have taken 
over political power, and the military has always wanted what 
is now being put in place: a government with a National 
Security Council that would be over and above the civilian 
ministers, who would not have a democratic base from which they 
emerge, but rather would be creatures of the military 
government.
    General Zia outlined his plan for a National Security 
Council to me in 1985 or 1986. General Karamat was dismissed by 
Nawaz Sharif because he advocated that same thing. This is an 
old struggle in Pakistan. It is a struggle between civilian and 
military authority and the United States should, in the final 
analysis be on the side of civilian authority. Nawaz Sharif's 
failure to give effective economic leadership is very tragic 
because he was very brave in standing up to the military and in 
trying to preserve civilian authority. People have said that he 
wasn't a democrat, he did this and he did that and so forth. 
The fact is he didn't allow the military to press its campaign 
for a National Security Council. He did stand for peace with 
India, and he took risks politically to do that.
    So it is very tragic that he was a failure on other fronts 
and that he exposed himself to this action; and of course we 
don't yet know what happened with that airplane, which is a 
fascinating episode and also casts doubt on whether there is 
any way for him to return to power.
    But anyway, the answer to your question is we can't pick 
the democrats of Pakistan, but we can insist, we can use 
whatever influence we have to work for the return of a 
democratic process in Pakistan.
    Mr. Hastings. Mr. Chairman, are we going to have a second 
round?
    Mr. Bereuter. I have more questions. Why don't you proceed 
with another five minutes.
    Mr. Hastings. I will try to do it in less. I am 
interested--thank you, Mr. Chairman--that, Ambassador Schaffer, 
your statement reflects that there should be no ``high-profile 
embrace''. Now, Mr. Harrison said that you hope that President 
Clinton goes to Bangladesh and India.
    My question, I have advocated, I think there were missed 
opportunities in India and Pakistan by virtue of this 
Administration early on not having visited there with high-
profile summitry and everything else in the region, and I 
suggested that. I have documented it repeatedly. That is 
irrelevant at this point.
    If the President were to go to only India and Bangladesh, 
would that not exacerbate problems in the general area, and 
would it not lead some, no doubt, to advise him that he 
shouldn't go at all for fear of exacerbating problems? The 
tradition has seemingly been that you go to India, you go to 
Pakistan, you go to Pakistan you go to India, like you go to 
Israel, you go to Jordan. You understand what I am saying? And 
so where are we on that?
    I advocate, contrary to you, Ambassador, that he should 
still go, and doubtless along the lines of what Mr. Harrison is 
saying, at least to Bangladesh and India.
    Ms. Schaffer. I would argue that a trip to Bangladesh and 
India is very much appropriate. Given the rarity of U.S. 
Presidential visits in the region, I really can't recommend a 
visit to Pakistan under current circumstances. The last time a 
U.S. President visited South Asia, it was Jimmy Carter, and he 
only went to India. Certainly this idea that if you go to one 
you have to go to the other is of relatively recent vintage, 
and that is something I think we ought to be getting away from.
    Now, there have been legions of high-level, mostly military 
visitors, under the democratic government to Pakistan, who went 
to Pakistan and didn't necessarily go to India. And I think 
this is a good time to cultivate different strokes for 
different folks, but I think we have to be a little 
sophisticated about it.
    The Pakistanis will understand, particularly coming so soon 
after the military coup, that this is not the kind of thing 
they can expect from the United States, but they can expect a 
serious dialogue. They can expect us to listen seriously, and 
they can expect us to tell them what is on our minds.
    Mr. Harrison. You have raised a very important point, and I 
want to make very clear what I think about this. It seems to me 
that the essence of our problem in South Asia has been we 
always felt we had to treat India and Pakistan as if they were 
two equal countries. They are not. And I think that is the root 
of the problem. Pakistan was given to believe that we wanted to 
balance things in the subcontinent by giving a lot of military 
aid so that it could stand up to India and act as if it is an 
equal. That has been the root of the whole problem. Right now, 
they think that we are going to help them to get Kashmir--or at 
least to get India out of Kashmir. And we have got to bring all 
of that to an end.
    If we had a constitutional government in Pakistan, of 
course the President should go there also; but under present 
circumstances, I think there is absolutely no reason why we 
should equate India and Pakistan. And India is what really 
counts for the United States in that part of the world. 
Pakistan is important mainly to make sure that we don't have a 
lot of trouble that undermines the stability of the region as a 
whole, not because of its intrinsic importance, except that 
there are 130 million people there whose economic and social 
welfare is important. And that is why I favor economic aid 
being made available on economic criteria.
    Mr. Hastings. Thank you, Mr. Chairman.
    Mr. Bereuter. I am happy to yield to you the time. I have a 
few questions. If you can respond briefly, I would appreciate 
it, but I know they are complicated.
    Both of you have commented, I believe, about stopping 
military sales to Pakistan, and I have no argument with that 
concept. Would you, however, favor continued military-to-
military contact, including IMET? I would ask both of you.
    Ms. Schaffer. I would.
    Mr. Bereuter. Mr. Harrison?
    Mr. Harrison. I don't have any problem with IMET, no.
    Mr. Bereuter. All right.
    Mr. Harrison. I would like to see that in lots of countries 
where we don't approve of the system, so we could extend this 
to a rather broad----
    Mr. Bereuter. We have run into situations, of course, where 
we have lost contact with a whole generation of military 
officers in a country, and I am not sure it has been very 
positive in its impact.
    Mr. Harrison, you said one thing that is quite interesting 
and controversial; and that is, that you would favor America 
declaring its support for the Line of Control in Kashmir as the 
permanent international boundary. And you say that eliminates 
the ambiguity which could embolden Pakistan to continue its 
present policy of seeking to affect that situation in Kashmir. 
Now, your position would seem to be supported by the Indians, 
but tell me a bit more about why that would be favorable.
    Mr. Harrison. I think that would have to be accompanied by 
India and Pakistan undertaking to give greater autonomy to the 
Kashmiris in their parts of Kashmir. The reason I favor this is 
that I think this is a cancer, and it is an opportunity--it is 
a place where Pakistan can keep bleeding India and making 
trouble indefinitely, as it has now for many, many years.
    Inside Kashmir, my assessment of the forces inside Kashmir 
is that the forces prepared to accommodate to an India that 
gives them autonomy are as strong, if not stronger, than the 
forces favoring independence for Kashmir. Independence for 
Kashmir would be very disruptive of the stability of the 
subcontinent because of the fact that you have so many Muslims 
in India, and this would call into question the loyalty of 
those Muslims. You would have Hindu-Muslim conflict in India. 
That would feed into a Pakistan conflict. Our interest in that 
part of the world is stable development and economic progress. 
All of this would be disrupted if the Kashmir issue was allowed 
to fester.
    Ambassador Schaffer wrote a good op-ed piece with her 
husband in the Washington Post a while back that talked about 
why the Line of Control is probably the only realistic way to 
settle this issue. So that I think that the basic point is that 
Pakistan thinks that if they keep the fire burning, they can 
drag us into supporting their position because we supported it 
for so many years, that they think they can get us back to tilt 
again to their side on Kashmir. And I think that is what we 
have got to disabuse them of, and the only way to disabuse them 
of that expectation, that hope, to get them to face the facts 
of life, to get them to agree to a settlement, is to make the 
Line of Control the basis for the settlement. It is the only 
realistic way to end this problem.
    Mr. Bereuter. Thank you.
    Ms. Schaffer. Could I make one comment on that?
    Mr. Bereuter. Certainly.
    Ms. Schaffer. The only way in which I differ with my 
colleague is that I think it would be useless and probably 
counterproductive for the U.S. Government to publicly assert 
its support for the Line of Control as the basis for a 
settlement. The challenge of the Indians and the Pakistanis, if 
they are ever to deal seriously with Kashmir, is going to be 
building the political consensus behind the unpleasant things 
they have to do. That means that I think the task for the U.S. 
Government in the near term is, quietly and behind the scenes, 
making it very clear to Pakistan that they will not support 
their effort to get Kashmir away from India and that they don't 
see any possibility of a settlement that significantly changes 
the map.
    But you have got to allow them a little bit of private 
space to build a political consensus, and if you put all of 
your positions in public, I think you destroy that chance.
    Mr. Bereuter. Thank you. I have two more final questions 
for both of you. One, do you have any sense that there is an 
Islaminization of the Pakistani military, a move toward 
fundamental Islamic orientation? Second, what impact does the 
coup with this military government for Pakistan have in the way 
of an effect on Sino-Pakistani relations, if any?
    Mr. Harrison. I have very definite views on this question, 
and I think that there has been a struggle within the Pakistan 
military higher levels, going back to the Afghan war, between 
many officers who have an affinity, let us say, for Islamic 
fundamentalist thinking and connections, informal connections 
with some of the Islamic fundamentalist groups, and others who 
are what you might call strictly professional soldiers with 
none of that in their minds. Of course, we knew General Hameed 
Gul during the Afghan war was a very good example of an ISI 
director who was very outspoken in his views on this subject.
    So that goes back quite a way, and it has continued, and 
the Islamic fundamentalist forces have been growing in 
Pakistan. They have made a prime target of trying to win 
friends in high places in the military and at the middle-level 
of the military, and they have definitely gained ground.
    General Musharraf is, of course, a soldier's soldier and a 
professional military man, and all of his colleagues are; but 
some of them are also people who have been a part of the ISI 
group and the group friendly to it in the high levels who share 
a lot of the Islamic fundamentalist thinking. That doesn't mean 
they are not also professional military men. Of course they 
are.
    So I think what is new about this new situation is that you 
do have at the high levels a stronger influence, Islamic 
fundamentalist influence in the Pakistan military, than ever 
before. It is not as if they want to take Pakistan down the 
road of Islamization advocated by some of these fundamentalist 
parties. Basically they have a hard-line approach toward India, 
a confrontational approach toward India, an agenda which is to 
bleed India, and an animus, a get-even for Bangladesh 
attitudes, and they see these fundamentalist parties for which 
they have an affinity as allies, because these parties can 
provide them the for manpower to send people up to Kargil or 
wherever and to carry out operations, without the need for 
people with Pakistani Army uniforms.
    So there is a natural partnership, and therefore that is 
why I consider this a very dangerous period and why India is so 
suspicious of this new leadership and why General Musharraf and 
General Aziz happen to be the ones who cooked up this Kargil 
adventure. And so your question, in short, is very well taken, 
and I think that we should be very cautious in appraising the 
moderate professions of General Musharraf. We should look to 
see what he does on the Kashmir cease-fire line, which is more 
important than moving back forces that had been moved forward 
anyway.
    He moved forward forces at the time of Kargil on the 
international border. They added to their deployment. All he 
has done now is pull them back. So he has gone back to the 
status quoante and this is fine. This is a welcome gesture, and 
it is a cheap gesture.
    So I think your question gets to the main point before us 
today, and why we have to be very cautious. I don't think it 
necessarily means they want to Talibanize Pakistan, but they do 
want to--when they have a chance, they will try to rekindle 
trouble with India.
    Ms. Schaffer. I would suggest that besides watching what 
happens in Kashmir, you want to watch what happens in 
Afghanistan. The other interesting byplay, of course, is that 
the general who Nawaz Sharif wanted to name to replace 
Musharraf when he fired Musharraf was the head of the 
Interservices Intelligence, which is of course the principal 
sponsor of the Taliban. He was also a personal friend, and he 
has also had a reputation for being very close to the Islamic 
right. So there may be some wheels within wheels at work.
    You also asked about the impact on relations with China. 
The short answer is not much.
    Mr. Bereuter. All right. That is good news.
    Gentleman from Florida have any last thoughts or questions?
    Mr. Hastings. No, Mr. Chairman, thank you.
    Mr. Bereuter. Thank you. Thank you very much for sticking 
with us. Your testimony was very important to us. I benefited 
from it. I know that all of our colleagues would have if they 
had been here. Thank you for spending the time. We appreciate 
it. The Subcommittee is adjourned.
    [Whereupon, at 4:55 p.m., the Subcommittee was adjourned.]
      
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                            A P P E N D I X

                            October 20, 1999

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