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47–327 CC








OCTOBER 22, 1997

Printed for the use of the Committee on International Relations

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BENJAMIN A. GILMAN, New York, Chairman
HENRY J. HYDE, Illinois
CASS BALLENGER, North Carolina
EDWARD R. ROYCE, California
JAY KIM, California
TOM CAMPBELL, California
JON FOX, Pennsylvania
LINDSEY O. GRAHAM, South Carolina
ROY BLUNT, Missouri
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SAM GEJDENSON, Connecticut
TOM LANTOS, California
PAT DANNER, Missouri
WALTER CAPPS, California
BRAD SHERMAN, California
BOB CLEMENT, Tennessee
BILL LUTHER, Minnesota
JIM DAVIS, Florida
RICHARD J. GARON, Chief of Staff
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MICHAEL H. VAN DUSEN, Democratic Chief of Staff

Subcommittee on Asia and the Pacific
DOUG BEREUTER, Nebraska, Chairman
JAY KIM, California
JON FOX, Pennsylvania
JOHN M. McHUGH, New York
EDWARD R. ROYCE, California
HOWARD L. BERMAN, California
WALTER H. CAPPS, California
MIKE ENNIS, Subcommittee Staff Director
RICHARD KESSLER, Democratic Professional Staff Member
DAN MARTZ, Counsel
HEIDI L. HENNIG, Staff Associate
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    The Honorable Karl F. Inderfurth, Assistant Secretary of State, Bureau of South Asian Affairs
Prepared statements:
The Honorable Karl F. Inderfurth
The Honorable Howard Berman, a Representative in Congress from California
The Honorable Robert Menendez, a Representative in Congress from New Jersey
Additional material submitted for the record:
Questions submitted to the record by The Honorable Karl F. Inderfurth
Letter submitted to the record by The Honorable Dana Rohrabacher
Copy of Council of Afghanistan resolution submitted to the record by The Honorable Dana Rohrabacher

House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on International Relations,
Washington, DC.
         The Subcommittee met, pursuant to notice, at 2:25 p.m., in room 2200, Rayburn House Office Building, Hon. Doug Bereuter (chairman of the Subcommittee) presiding.
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    Mr. BEREUTER. [presiding] The Asia Pacific Subcommittee will come to order—if people could take seats, please. I'm sorry to start the hearing late.
    We meet in open session today to receive testimony on the Clinton Administration's policy toward South Asia from the Administration's recently appointed Assistant Secretary of State for South Asia, the Honorable Karl Inderfurth. Before coming to his current position, Ambassador Inderfurth served as the U.S. Representative for Special Political Affairs to the United States, where his portfolio included U.N. peacekeeping, disarmament, and security affairs. Ambassador Inderfurth has also served as Deputy U.S. Representative on the U.N. Security Council.
    When examining the region of South Asia, one finds a complex and fascinating region geographically, culturally, as well as politically. This is a region where the world's largest democracies exist next door to a country consumed by tribal warfare, where a country about the size of Arkansas contains eight of the world's ten highest peaks, and where within the borders of one country dwell over 50 different ethnic groups.
    The United States has long had an active diplomatic and aid presence in South Asia. In Nepal and Bangladesh, American assistance has been a major element in our relationship and improvements are particularly evident in health and environment. In India, investment opportunities are expanding to attract U.S. business. Sri Lanka, a more developed, small island nation, with which we've had historically cordial relations, held democratic elections resulting in the first change in government in 17 years, despite years of bitter conflict between the government and Talmal separatists and a violent ideological struggle among the Sendagalese majority. And, finally, Pakistan, where our relations have been strained in recent years, continues to be an important partner in the region.
    I should also note that the recent political changes in South Asia have made India, Pakistan, and the rest of South Asia much more receptive to U.S. business investment. In particular, India seems to have moved past the phase where Pepsi and Kentucky Fried Chicken were vilified as evil, foreign influences. The new privatization laws are ensuring that U.S. trade investment will continue to rise in India. Similarly, in Pakistan, the anti-corruption campaign of Nawaz Sharif has made it much more likely that U.S. investment will resume. These are very positive trends.
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    Over the past year there have been a number of dramatic diplomatic breakthroughs by the governments of South Asia in the area of regional cooperation. I would point to the water-sharing agreement between India, Bangladesh, and Nepal as a prime example of this new, exciting trend. India and Nepal have also come to an agreement regarding the sharing of energy resources. By combining the resources and the ingenuity of the peoples of these three nations, the livelihood of over 400 million desperately poor people living in the Ganges and Brahmaputra River Basin may greatly improve. This, I should note, was the subject of H. Con. Res. 16, a resolution that Mr. Berman and I moved earlier this year with the help of the Subcommittee.
    Moving to the other side of South Asia, Pakistan and India have pursued accommodation on a wide range of issues, including the problematic matter of Kashmir. Regrettably, progress on these bilateral negotiations has been quite difficult, particularly with regard to Kashmir. The two sides seem as intractable as ever. This is quite disappointing for all parties recognize that a resolution to Kashmir would finally stop the drain and attraction of further capital and resources that is so desperately needed by these two nations. If India and Pakistan continue on the current path, I fear that one day some minor incident might spiral out of control and a terribly devastating war could result.
    There are other longstanding systemic problems which face the countries of South Asia: poverty, low literacy rates, human rights abuses, narcotics, terrorism, nuclear proliferation, ethnic and religious tension, armed insurgency, and territorial disputes. While most of these issues can only be resolved between and among the governments and peoples of South Asia, the United States does have an important, perhaps crucial, role in promoting stability and deterring conflict in the region.
    Mr. Secretary, we welcome you specifically to the Subcommittee and to your new job. We wish you the very best in pursuing your responsibilities for the Administration and the American people, and we look forward to an opportunity to hear the Administration's views and policies for this critical region.
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    Normally, we limit witness testimony to 10 minutes or so, but I want to ignore that normal practice today because you're the Subcommittee's sole witness, by intention, and because this is your inaugural testimony before the House of Representatives. I welcome you to take as long as you feel is necessary to address the issues that are within your jurisdiction.
    I would ordinarily turn to the Ranking Member now, but before I do that, I want to make one final comment—which I also made to Secretary Roth—that the personnel system is completely broken when it takes a better part of a year to confirm an Assistant Secretary. I have no doubt that you were even more frustrated at the length of time than we were. After all, you came from a senior diplomatic position in New York; the vetting process should have been relatively easy. And it does seem to me that the Senate acted on your nomination with relative speed once your name was sent forward.
    I would appreciate it if you would be so kind as to convey my message that the unfilled ambassadorial post such as the current vacancy in India and other senior positions left vacant are hurting U.S. foreign policy.
    Now I turn to my colleagues for any comments they might like to make before we hear from the Secretary. The gentleman from California, Mr. Rohrabacher.
    Mr. ROHRABACHER. With the indulgence of the Chairman and our guest today, I'm anxious to hear testimony today about Afghanistan, which I believe is key to the peace and prosperity of South Asia. The extremist Taliban movement today that controls most of Afghanistan is not only responsible for the ongoing suffering of the Afghan people, but they pose a grave threat to violence and undermining the neighboring countries, especially Pakistan, and we expect that their role in the region will become more detrimental as time goes on. So it would be important for us to deal with this question. Taliban is already providing a haven for terrorists who are making themselves felt throughout the region.
    Under the Taliban, Afghanistan is becoming the heroin capital of the world, producing opium by the ton. In fact the opium production in Afghanistan increased 25 percent last year. The Taliban is, from my sources, taxing this opium, which gives them $100 million in drug money every year, Mr. Chairman, to deal with as they see fit, and that type of evil money can do nothing but bring evil upon that region.
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    The only resolution to the Afghan situation that I see—and I believe we've said this on several occasions—is that the king of Afghanistan, now in exile in Rome, return and form an interim government representing all ethnic groups—would be a government of reconciliation that would be responsible to prepare that country for democratic elections.
    I would like to submit for the record, as we prepare for this hearing today, Mr. Chairman, a letter that I have received from King Zahir Shah, dated October 14. It's from his home in exile in Italy, in which he states that he is ready to return to Afghanistan to lead a government of reconciliation.
    I'd also like to submit for the record a copy of a resolution of reconciliation and national unity by a Council of Afghanistan that represents notables from all ethnic groups in Afghanistan, which is dated October 19, 1997, which has a close look and calls for the king of Afghanistan to return and form an interim government.
    Mr. BEREUTER. Without objection, those two matters will be made a part of our record.
    [The information referred to appears in the appendix.]
    Mr. ROHRABACHER. Mr. Chairman, why I'm bringing this up, because I urge my fellow colleagues—and I would urge this Administration—to pay closer attention to what is going on in Afghanistan. Afghanistan is the linchpin for all of Central Asia. If it continues to go down the road of massive drug production and terrorism, there will be no peace in Central Asia, and the people of Afghanistan will continue to suffer. We have far too long ignored Afghanistan after we helped create the situation in the first place of their ongoing violence and their ongoing crisis that they've been suffering.
    So today I would urge our Committee and our government to pay attention to Afghanistan, and also to pay attention to the alternative, which has again been ignored over and over again. The king of Afghanistan could return peace to his country. The people want him to return; they're looking only for a nod from the United States and the western people for him to return and restore some semblance of order out of that chaos.
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    And so I appreciate you giving me this opportunity to express that.
    Mr. BEREUTER. Thank you, Mr. Rohrabacher.
    Mr. FALEOMAVAEGA. Would the gentleman yield?
    Mr. ROHRABACHER. I would certainly yield, yes, sir.
    Mr. FALEOMAVAEGA. I just wanted to say that it was a privilege to travel with the gentleman from California and personally visit with the king of Afghanistan, and I think the gentleman's points are well taken. Hopefully, the State Department and the Administration will look to that closely, and hopefully it will be helpful in resolving the crisis that we have faced between Afghanistan and Pakistan.
    Thank you.
    Mr. BEREUTER. I thank the gentleman.
    Now I'd like to call on the distinguished Ranking Member, who, I understand, came to the Subcommittee looking for it and found it not in session. So you're recognized.
    Mr. BERMAN. That's all right; I'll be marked as early on the attendance sheet, yes.
    Thank you, Mr. Chairman, and I'm going to ask for unanimous consent to put my opening statement in the record. I just want to welcome our new Assistant Secretary to his first hearing with the Committee. He's had a great deal of experience with the problems in this region from his years in the U.N. mission there, and I think it's also interesting to note that both the Secretary of State and I guess the President also have announced their intention to go to South Asia during—I don't know exactly what period of time, but in the near future, and I think that's very useful and very important, because I think it's an opportune time for us to take a greater interest in South Asian developments. There have been some hopeful signs recently in preliminary talks between Prime Minister Gujral and Prime Minister Sharif, and I think some activity at the top of our Administration would be very useful right now.
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    Let me insert the statement in the record.
    Mr. BEREUTER. Without objection, it will be in the record.
    [The prepared statement of Mr. Berman appears in the appendix.]
    Mr. BERMAN. There are a few points I wanted to make, but they'll be in the record and I can come back to them during questions.
    Mr. BEREUTER. Thank you, Mr. Berman.
    Are there other Members who wish—Mr. Brown.
    Mr. BROWN. Thank you, Mr. Chairman. I would like to first welcome Assistant Secretary Inderfurth, and thank him for his assistance during the Mother Teresa funeral, especially the informative briefings which he provided.
    The current emphasis on deeper relations with South Asia is a welcome change from past policy. The region continues to grow in political and economic significance, and demands a more active and thoughtful U.S. policy. This is particularly true in the case of today's India.
    An India that is the world's largest democracy; an India that has embarked upon a far-reaching and energetic set of reforms to unleash its economic potential; an India whose diplomatic and commercial ties with the U.S increase daily; and an India whose support of free and fair elections and minority rights is a leading light in that area of the world.
    Time and again, various analysts have predicted that Asia's future will be dominated by China, but this outlook seems narrow-minded and simplistic. A strong U.S.-India relationship should be encouraged, for a democratic and open India is a much more natural partner for the United States than an authoritarian China.
    Under the leadership of Prime Minister Gujral, India has also sought to be a force for peace and growth in South Asia. The Gujral Doctrine represents the policy of a now-confident nation which recognizes that short-term concessions which further regional development and stability in the long run are in the best interests of both India and South Asia as a whole.
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    In responding to these overtures, Mr. Inderfurth has struck all the right notes thus far. The Assistant Secretary has a reputation for even-handed and thorough analysis, and I'm sure he will continue this approach in working with all interested parties to address the challenges facing the region.
    One situation I'd like to highlight before my closing remarks is the ongoing plight of the Kashmiri Pandits.
    Since 1989, foreign-trained terrorists have attempted to establish an Islamic regime in the Indian State of Jammu and Kashmir by ridding the area of its non-Muslim minorities, especially Pandits who are long-time inhabitants of the Srinigar Valley. The Pandit community has subsequently been forced to live in bleak, makeshift camps across India and has received little help from the State or central governments in its efforts to return home with dignity and full security.
    In a recent letter, I have urged Secretary Albright to raise this matter during her November trip to India. I'll provide you with a copy of this letter today, Mr. Inderfurth, and ask that you work with the Secretary to improve our efforts on behalf of the Kashmiri Pandits.
    Mr. Chairman, I thank you and yield back the balance of my time.
    Mr. BEREUTER. Thank you, Mr. Brown.
    The gentleman from California is recognized.
    Mr. ROYCE. Thank you, Mr. Chairman. I want to thank you for this hearing today, and I also want to thank our guest, Mr. Inderfurth. I understand that you have already testified before the Senate today. So this is double duty for you, and we appreciate that.
    Our relations with the nations of South Asia are vital, as you have pointed out, Assistant Secretary Inderfurth, and India is the world's largest democracy. Our relations there are on a good track right now. Other countries in the region have not enjoyed the fortunate developments that we've had with India. We also hope that you will focus on countries like Afghanistan—countries which, frankly, we have too often ignored. It is my hope that, as we see the successes with Radio-Free Asia, those successes could be extended to Afghanistan, and that is something that I would like to talk with you later about.
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    We need to be involved in searching for peace in that part of the world and trying to solve the tragic humanitarian suffering that we are seeing today in Afghanistan. And I, again, will look forward to working with you on this and other issues.
    And, again, thank you, Mr. Chairman.
    Mr. BEREUTER. Secretary Inderfurth, thank you very much for coming. We appreciate the fact that your prepared statement was provided to us in a timely fashion. Your entire statement will be made a part of the record. You may proceed as you wish.
    Mr. INDERFURTH. Mr. Chairman, thank you very much. Thank you very much for your welcoming comments, those of Congressman Berman, and all Members of the Committee. I'm delighted to see you all here. Quite frankly, the very full attendance for this hearing is great encouragement to me as a new Assistant Secretary of the interest that the Subcommittee has in this subject, and this is something that I'll be able to report back to my Bureau at the Department.
    We are the smallest Bureau, the newest Bureau, and any sign of encouragement, of interest on Capitol Hill, is greatly appreciated. So I want to express that at the outset.
    I also want to say that I appreciate your very generous offer to waive the time limit for my opening remarks. However, I will not abuse that by asking that you sit through my entire statement. I will abbreviate it, but I do appreciate the full record being incorporated.
    It is certainly the case that this is my inaugural statement, if you wish, on U.S. policy toward South Asia in either House, and therefore, we have worked hard to prepare a comprehensive statement and I'm delighted to have the chance to share that with you today.
    I would like to respond very quickly before I go into the prepared remarks to a few comments that were made. Mr. Chairman, you mentioned the past vilification of some business concerns in India. I do think that is certainly a small measure of the change that has taken place in our relationship. There isn't that vilification. McDonald's is there, and I think instead of Big Macs, they have Maharajah Macs, and they're doing a good business.
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    I think all of you reading The Washington Post this week saw that bowling has now become one of the pastimes in New Delhi. That has become a very popular sport, an American export of sorts. So I think that those are small—I have larger examples—but small indications of change.
    I also appreciate your comments about the length of time it has taken for many of us to arrive at your doorstep as confirmed Administration officials. We're going to work on this. It is an Executive branch problem to a very large degree. And I am pleased to tell you that, with respect to our nominee-to-be, the next Ambassador to India, Governor Celeste, that we expect action to be taken soon in the Senate. A hearing date has been scheduled for Governor Celeste, and we hope to have him in place very soon. This is a very important post. It's one that is doubly important because the Secretary of State will be there next month, and the President will be there early next year. So for all these reasons, we're working with the Foreign Relations Committee to see that nomination move as quickly as possible.
    I also want to mention something that is very important and very timely, which is Afghanistan. I did testify this morning before the Foreign Relations Committee on Afghanistan. We would like—I hope that the protocol is appropriate—to distribute that statement before the Foreign Relations Committee to the Members of the Committee, so you have that. I'm hopeful that that protocol is appropriate. As we discussed yesterday, I have had experience working on the Senate side on the Foreign Relations Committee. My wife, as I mentioned to you, has worked on the House side. It's said that she has much better judgment than me, so perhaps this is another indication of that.
    Mr. BEREUTER. On your wife's behalf, we're very broad-minded here——
    Mr. INDERFURTH. Good.
    Mr. BEREUTER. ——and we will distribute the statement. Thank you very much for bringing it.
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    Mr. INDERFURTH. Thank you very much. But it is a full statement on our policy toward Afghanistan. And what we see—we don't want to be optimistic, given the history of Afghanistan and the 18 years of conflict, but we see some faint hope there that there may be some diplomatic initiatives that can be taken. And I want to assure you and Members of the Committee that this is going to be one of my highest priorities as the Assistant Secretary for South Asian Affairs.
    If I may turn to the prepared statement—and I will try—I know that you're all very busy, to make this a briefer version than the one that you have before you.
    Mr. Chairman and Members of the Committee, again, thank you very much for the invitation to address you in my first appearance before the International Relations Committee. Quite frankly, this is an exciting time for those of us involved in U.S. relations with the countries of this increasingly important region.
    As Under Secretary of State Tom Pickering has put it, ''For many years, South Asia has been on the back side of every American diplomatic globe.'' No longer. At the direction of the President and the Secretary of State, the Clinton Administration has adopted a policy of greater engagement with South Asia. Its purpose is to take advantage of the opportunities we see to advance U.S. interests in the region—political, commercial, security, and global.
    Mr. Chairman, our change in approach reflects new realities in the region. I mentioned a few examples a moment ago. Let me mention a few now.
    South Asia has entered the global mainstream, both economically and politically, as never before. For instance, U.S.-India two-way trade approached $10 billion in 1996, nearly double 1992 levels, and the future offers enormous possibilities. U.S. Foreign Commercial Service operations in India will soon be the largest in the world. Secretary Daley calls his upcoming trip to India ''the most important of the year.'' We are Pakistan's biggest investor—No. 1 export market and second-largest source of imports.
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    In Sri Lanka last year, we had a $3-million aid program and a two-way trade with over $1.5 billion. Trade, not aid, is the wave of the future.
    Another example: There are more people living under democracy in South Asia than in any other region of the world. India, of course, is the world's largest democracy and one of its most successful. Democratic institutions in some South Asian countries, however, are fragile and subject to many social and political stresses.
    Another example: Nowhere else in the world do two nuclear-capable States have such a long history of war and border conflict. The logjam of Indo-Pakistani conflict may be starting to loosen, and we have a strong interest in keeping their new dialog on track.
    Another example: The sense of regional cooperation is growing, enhanced by India's new, more accommodating posture toward its smaller neighbors, known as the Gujral Doctrine. The formerly moribund regional organization, the South Asian Association for Regional Cooperation known as SAARC, is showing promising signs of life.
    And finally, South Asia's massive energy shortages make it a major market for the U.S. power industry. In India we are considering a special partnership to build state-of-the-art, environmentally-friendly power plants. American companies are looking at Nepal's enormous hydropower resources, and possible exports of thousands of megawatts to India and other countries. Other sizable projects are being considered in Bangladesh and Pakistan.
    Mr. Chairman, as I mentioned earlier, the Clinton Administration has been taking a fresh, comprehensive look at South Asia. The region's growing importance calls for more high-level attention and efforts to expand our relations across the board. We have always maintained warm and close relations with South Asian States, but we believe that the region today offers a new frontier for American diplomacy, one we intend to explore energetically.
    That process started last month with my trip to India, Pakistan, Sri Lanka, Nepal, and Bangladesh. I found that our desire for greater engagement was reciprocated. Later in September, President Clinton met with the Pakistani and Indian Prime Ministers in New York. Those two meetings, two of only three encounters between the President and foreign leaders during the General Assembly, were a clear demonstration of greater U.S. involvement with South Asia. This message was warmly received by both Prime Ministers, and I believe the President established a solid rapport with Mr. Gujral and Mr. Sharif.
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    Furthering our commitment to greater involvement, the United States is sending a series of senior visitors to South Asia over the next several months. Secretary Albright will be traveling next month, the first Secretary of State to visit South Asia since George Schultz in 1983. Before the end of the year, Health and Human Services Secretary Shalala and Commerce Secretary Daley will also visit the region. And next year, President Clinton will travel to India, Pakistan, and, hopefully, one other country in the region. The last President to visit South Asia was Jimmy Carter in 1978.
    Mr. Chairman, the purpose of these visits will be, first, to engage South Asians in a broader, deeper dialog on a range of issues that go beyond the region; and, second, to establish the foundations of a long, strong relationship that both sides can depend on.
    Under Secretary of State Tom Pickering has just completed a trip to India and Pakistan designed to advance the visits of Secretary Albright and the President. In India, Ambassador Pickering launched what we have been describing as a strategic dialog to ensure regular, high-level, comprehensive, and forward-looking exchanges on a range of issues. Also working to deepen our engagement in Pakistan, we are seeking passage of legislation to resume OPIC, IMET, and Democracy Building programs in that country.
    Mr. Chairman and Members of the Committee, I have been discussing with you the opportunities that have opened up for us in South Asia. Let me now address some of our concerns. The South Asia region has a troubled history and continues to face problems of tension and conflict. Most of the countries in the region confront varying degrees of internal unrest. These range from agitation by ethnic and religious groups in India and Pakistan to the ongoing conflict between the government and the Liberation Tigers of Tamil Eelam, the LTTE, in Sri Lanka, to the seemingly never-ending tragedy of Afghanistan. There is a history of strained relations among the States of the region, including India and Pakistan, and the longstanding problem of Kashmir. We want to see conflicts resolved and tensions reduced. However, our new engagement in the region does not mean we intend to be interventionists. South Asia's problems must be solved by South Asia's people. We will lend our assistance when and where we can, at the request of the parties involved.
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    Mr. Chairman, a major challenge faced by South Asians is the insecurity generated by the nuclear weapon and ballistic missile programs that India and Pakistan have chosen to pursue. This particularly difficult issue goes to the heart of the national security concerns of both countries, which include potential threats from outside the region. Real progress in resolving it depends on increasing confidence about security in both countries. Our broader dialog with the Indian and Pakistani Governments will build on our previous discussions of proliferation issues with them. Prime Minister Gujral acknowledged during his meeting with President Clinton that nonproliferation and disarmament are important issues for continuing discussion, and they will continue to be a top priority for us.
    May I now turn for a moment to other concerns in the region, starting first with the fighting for the past 18 years in Afghanistan. That fighting has not only devastated the country, but now is exacerbating differences among ethnic and sectarian groups inside and outside its borders. The fighting is currently stalemated, and we do not believe in any case that there can be a genuine end to the conflict through a military victory. That is a very fundamental point.
    Further, we believe that the United Nations is central to bringing peace to Afghanistan. We fully support the efforts of the Secretary General's Special Envoy, Ambassador Brahimi, and the U.N. mission to Afghanistan to bring support for a process that will lead to a negotiated settlement. In this regard, I was in New York last week meeting with Ambassador Brahimi, where he has convened a group of neighboring States, plus the United States and Russia, to see whether or not together we can find a common approach to solve this problem.
    We believe the time has arrived for those countries with influence on the internal parties to use that influence to bring the fighting to an end. With neighboring States and the Russian Federation, we hope to see a process along these lines move forward, and soon.
    In Sri Lanka, where heavy fighting between government and LTTE forces continues, the United States supports a negotiated political settlement to the conflict. Last week's massive bomb attack in Colombo only underlines the importance of ending the fighting. We believe the Sri Lankan Government's wide-ranging proposals for constitutional reform are a solid basis for a peaceful solution to this tragic conflict. Earlier this month we designated the LTTE as a terrorist organization for the purposes of the Antiterrorism and Effective Death Penalty Act. We call upon the LTTE to stop its indiscriminate attacks and support a negotiated settlement of the conflict in Sri Lanka.
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    In Bangladesh, the domestic political atmosphere remains contentious. Strained relations between the two major parties could undermine the stability of important democratic institutions like Parliament. We are counseling the government and the opposition to act in ways that support the country's hard-won democracy, not undermine it. We are also following closely the contracting process for over $1 billion worth of projects in energy development to ensure that U.S. companies share a level playing field with their competitors.
    And in Nepal, while government parliamentary majorities have been unstable, change is within a constitutional framework, to which all parties are dedicated. Nepal's recent agreements with India on water-sharing and hydropower generation and sales are an encouraging sign that the regional development so desperately needed in South Asia is finally moving ahead. And I might add there that, when I visited Nepal, my first stop the morning of my trip was to a hydropower project to see what this potential actually is.
    Mr. Chairman and Members of the Committee, let me conclude by saying our new initiative to boost U.S. engagement, perhaps even to boast about U.S. engagement, in South Asia comes at an opportune time. The countries there, we believe, have embarked upon serious efforts to expand their relationships with each other and with the international community. The United States is responding by seeking an improved and long-term relationship with the region which will benefit everyone. Our history of good relations with the South Asian States positions us well for success, and we will actively and energetically pursue this goal. It is very much in our political, economic, and strategic interests to develop further our relationships with each of the countries in South Asia.
    As the new Assistant Secretary of State for South Asian Affairs, I look forward to working with the House International Relations Committee on these matters, and now I look forward to your questions and thank you for your patience as I laid out this first document to the Subcommittee. Thank you very much.
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    [The prepared statement of Mr. Inderfurth appears in the appendix.]
    Mr. BEREUTER. Thank you, Mr. Secretary, for your patience, and we look forward to working with you.
    We have a number of Members here, fortunately, and we will try to move to the 5-minute rule.
    Just a few minutes ago, you mentioned the designation of the LTTE as a terrorist organization. I think all of us in Congress were pleased to see the Administration release that list of terrorist organizations. Our expectation would be that this will place a cramp on their fundraising opportunities in this country. I would certainly hope that's the case, and I would hope that the Administration might do whatever it can to assure not only that Americans and people who are resident aliens of this country are not contributing, but that other countries around the world would bring a similar kind of halt to the fundraising on their shores as well.
    How do we now plan to react to past Sri Lankan Government's request for assistance, and how specifically will our domestic law enforcement agencies attempt to implement the requirements of the act, of the list that has been promulgated under the act which lists the LTTE as a terrorist organization?
    Mr. INDERFURTH. Mr. Chairman, with respect to the terrorist designation, this is a domestic matter. This relates to what we will do within our country with respect to fundraising by LTTE organizations or sympathizers. It will relate to visas. It will relate to assets that can be dealt with here.
    The FBI and other law enforcement agencies will be pursuing this—indeed, already are. So the terrorist designation does not speak to any further cooperation we may have with the Government of Sri Lanka. It very much relates to what we will do in this country.
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    Now with respect to the Sri Lankan Government, we do have a normal, strong, bilateral relationship with them. We have made it clear to them that we do not have any view that we should become engaged directly in their insurgency and in terms of any provision of military assistance. On the other hand, we have a normal bilateral relationship where we do have training programs with their military. We do have supply relationships, and we will continue those.
    But in terms of their insurgency and their war in the north dealing with the LTTE, this is something that is very much a Sri Lankan matter, but we will do what we can within the confines of our law to assist.
    Mr. BEREUTER. Thank you, Mr. Secretary. I understand.
    I'd like to move to Pakistan—I'm sure you're aware of the fact that there is a so-called Harkin-Warner amendment to the foreign operations appropriations bill that would re-establish IMET, OPIC, and Democracy Building programs for Pakistan. What's the Administration's view on that pending legislative initiative?
    Mr. INDERFURTH. Mr. Chairman, we support the so-called Harkin-Warner amendment that is now in conference. As I said in my statement, we wish to strengthen our relations with all the countries in the region across the board. We fully understand and appreciate the legislative restrictions that we have in certain areas, including with Pakistan and the Pressler amendment, but we believe that there are certain steps that we could take, operating within the confines of that legislation, that would allow us to strengthen our relations with Pakistan, a country that I do want to mention, as I did in my confirmation hearing statement, that we've had a very longstanding relationship, and we have turned to Pakistan on several occasions in our Nation's modern history for assistance. During the cold war, during the war being waged in Afghanistan under Soviet occupation, we turned to Pakistan and they were very responsive to our interests. We believe that it is important to try to strengthen our relations with Pakistan. We believe that the election of Prime Minister Nawaz Sharif is a very positive sign. He has a strong majority in the Parliament. He was elected on a campaign to deal with the economy and accountability. We think all of these are very positive things, and we want to do what we can there.
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    Now with respect to OPIC and IMET and Democracy Building, we believe, quite frankly, that all of these are in U.S. interests. OPIC will give our American businessmen a level playing field for investment. IMET is something that our military leaders believe is important. We had an IMET program in the past, and it was broken off. Our military believe it's important to have a relationship with Pakistan's military to know who they are and to know what they're thinking, and to work with them. Democracy Building is self-evident. So we strongly support that, and we think it would be a step forward.
    Mr. BEREUTER. Thank you, Mr. Secretary. I'm glad to hear that. There is one well-known and influential Democrat Member of the Appropriations Subcommittee in the House who has very different views, but I hope that you'll continue with your support, and we'll do what we can to try to override that opposition.
    Mr. Brown.
    Mr. BROWN. Thank you, Mr. Chairman.
    I would like to pursue in a bit more detail, Mr. Assistant Secretary, the Chairman's question about India-Pakistan. Clearly, that region of the world has suffered a great deal as a result of the 50 years of differences which those two major countries in South Asia have had with each other.
    Lay out specific ways that you think the United States can work helpfully with the Gujral Doctrine, especially in the broad area of India-Pakistan relations and, more narrowly, in terms of Kashmir and the problems of the Srinagar Valley.
    Mr. INDERFURTH. Congressman, I think that the short answer would be not to get in their way. We are encouraged by the fact that both Prime Minister Gujral and Prime Minister Nawaz Sharif are committed to looking to the future in their relationship and not being held up by the past.
    As I mentioned, President Clinton met with both leaders in New York. Those of us in the South Asia Bureau were delighted that two-thirds of his time was spent dealing with leaders in our region. I reminded my colleagues in the Department that we were doing so well.
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    The fact, though, that they have, starting at the Male Summit in May of this year, met, shaken hands, and said they wanted to engage in a dialog, has been very encouraging to the United States. We think that it is best not to interfere or to in any fashion become an issue in that dialog.
    It will not be easy. They are already having problems to translate the communique that they agreed to—to establish working groups and to address issues. They're already having some procedural problems. We would like to think that this is basically, what we call, shape-of-the-table problems; that these are procedural; that they will work through them, and if there is a demonstration of political will on the part of both sides—and we believe that does exist with the Prime Ministers—that they'll be able to work past these.
    We do hope that our strong support for moving forward and the high-level attention that we will be giving to our relations in South Asia will be a beneficial contribution to their dialog. Again, we do not see ourselves as a mediator. We would be willing to offer direct assistance, if asked by both parties, but we have not received that request from both parties. We're going to watch and see where our influence or support could be useful. We're going to watch it very, very closely.
    Mr. BROWN. Does the new Indian Prime Minister's age, the fragile nature of his government, and the strength of the BJP lead you to believe that his initiatives are eventually doomed to failure, or not?
    Mr. INDERFURTH. We certainly don't believe that this initiative is doomed to failure by any stretch of the imagination, and I think we have had in our recent history Presidents that were about the age of Prime Minister Gujral, and they did just fine leading the country.
    The coalition nature of Indian politics today is a factor that we have to take into account, because governments that are coalitions can fall. We don't have any way of determining when that might happen or if it will happen or whether the government will serve its full term, but certainly coalition governments are more fragile than those that have very large majorities. I mentioned that Prime Minister Nawaz Sharif has a two-thirds majority in the Pakistani Parliament. In fact, President Clinton, when he met him, made a comment that that was a rather envious position to be in; that he didn't have it. So we'll watch that, but the age of Prime Minister Gujral—I was extremely impressed by him when I have been in two meetings, one with the First Lady when we were in Calcutta, and then with the President in New York. He is, as they say, at the top of his game.
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    Mr. BROWN. Mr. Pallone and I were equally impressed with him in those meetings.
    Last, since the Government of India, as well as the Muslims in Srinagar, seem little interested in helping the Kashmiri Pandits, what role should the U.S. Government play in trying to help these people?
    Mr. INDERFURTH. The delegation of Kashmiri Pandits recently came to see me at my office, and I talked with them about their concerns. You're absolutely right that the Secretary is going out to the region. Wherever we see humanitarian cases, these are ones that we will look at very seriously, and I'd like to further review this with you and discuss it with you. But, again, I recently had a delegation at my office. We discussed their concerns. And as you said, we have a series, beginning with the Secretary in November, of visits where issues can be raised.
    Mr. BROWN. OK, thank you. Thank you, Mr. Chairman.
    Mr. BEREUTER. Mr. Rohrabacher, you're recognized for 5 minutes.
    Mr. ROHRABACHER. Thank you very much.
    We're trying to improve our relations with Pakistan. I got that from your statement, that you recognize that Pakistan has been a linchpin of American foreign policy in that part of the world, our friendship with Pakistan during the cold war, et cetera. How could we be friends with a country that we are holding hundreds of millions of dollars of their cash and not willing to pay it back? It's an absolute insult to the people of Pakistan that they're a poor country, and we're holding $600 million. Shouldn't we return that money or give them the airplanes, one of the two? I think this has been agreed upon by every President since this atrocity happened, and it still hasn't occurred, has it?
    Mr. INDERFURTH. Well, the F–16 issue is one that we believe very strongly needs to be resolved, and is overdue for being resolved.
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    Mr. ROHRABACHER. Well, we will not have good relations with Pakistan until we start treating them in a fair and honest way when it comes to this airplane deal, and any American can tell you, if you take somebody's money for a product and you don't give them the product, you're a thief, and the United States is not treating Pakistan as a friend or even in any other way except as a thief would treat someone who has given them their money. And I would hope that we'd clear that up so we can have an honorable relationship. Now I have my disagreements with Pakistan——
    Mr. INDERFURTH. Yes, I know.
    Mr. ROHRABACHER. ——but let's get that over with, so we can go on and help bring peace in the region. And I would hope that, as a fresh face and someone with a lot of energy, that you would focus on that and help move American policy toward solving that.
    Mr. INDERFURTH. Congressman, high-level visits, as I've told you, will be taking place, have a powerful incentive for resolving outstanding issues. We're hoping that that issue can be resolved, but, quite frankly, we may need congressional help on this. We can't do this one ourselves.
    Mr. ROHRABACHER. We voted for it. I remember voting on this issue, and we voted to either give them the money back or give them their planes.
    Mr. INDERFURTH. We've also been looking for third parties to purchase the aircraft. We have not been able to do that.
    There was a Pakistani delegation here recently in Washington for meetings. These were defense and military officials. They raised the F–16 issue. We told them that we're working on that, as the President has said to both Prime Minister Bhutto and Nawaz Sharif, but, Congressman, you'll appreciate this, if you feel strongly about that: Imagine how they felt when they were presented with a $10-million bill to pay storage charges on the planes we refused to release.
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    Mr. ROHRABACHER. Oh, my gosh.
    Mr. INDERFURTH. So, I mean, this is something that I think all of us feel uncomfortable with, but we need to work together to get this resolved.
    Mr. ROHRABACHER. I would hope that we can use our good offices to help end the ongoing conflict between India and Pakistan, and both of those countries are countries that don't need to be in a conflict situation and we should be—I think that we have, for far too long, been leaving it to other countries—and, frankly, your statement doesn't assure me that this policy is changing—that we're leaving it to other countries to use their influence to accomplish good things, rather than for us to go down and try to accomplish some good things using our abundant influence, and we do have abundant influence in South Asia. We could help solve the problem up in the Kashmir, and, frankly, had we pushed more forcefully for a ballot solution to this instead of a bullet solution, I think maybe we might have had some progress. As long as all minorities are protected—I heard somebody talking about that today, one of our colleagues, who was expressing a concern over a minority who's being persecuted there and prosecuted as well, I imagine, and we want to see that all minorities are protected, but we can use influence to try to solve the basic conflict. I haven't seen that.
    And, frankly, your statement talking about, in Afghanistan, talking about trying to get others to use their influence was just more of the same. It's more of a ''We're going to let others use their influence to do it.'' Why don't we get involved in this? Why don't we decide to use our influence to try to put an end to the situation in Afghanistan, for example? After all, we helped create that situation, because it was a cold war conflict between Russia and the United States.
    Mr. BEREUTER. Secretary, if you want to respond——
    Mr. INDERFURTH. Mr. Chairman, the short response to that is that we're not supplying any of the warring factions in Afghanistan with arms, with money, with fuel, with ammunition. We are not providing them wherewithal to continue the fighting that's taken place for so long.
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    We think we have a good feel for what other countries are doing to provide weapons and other forms of assistance. And when they talk about an arms embargo, that's not going to solve, in my view, the issue of the continuing warfare, because it's not just arms, but it's ammunition; it's fuel; it's jet fuel; it's all those things that lubricate, if you will, a war machine.
    We think that those who are supplying those forms of assistance need to adopt a common approach and use the leverage that that assistance provides them. We have other forms of assistance, including on some of those who are providing assistance to the internal parties. But, again, we're not supplying either side any assistance. It is that kind of direct leverage that I'm referring to, but we also need to work closely——
    Mr. ROHRABACHER. I look forward to working with you——
    Mr. INDERFURTH. Yes, me, too.
    Mr. ROHRABACHER. ——in trying to find a solution in Afghanistan. You know the solution that I've outlined——
    Mr. INDERFURTH. I do.
    Mr. ROHRABACHER. ——and I'm not saying that people have to agree with it, but at least it is an alternative that people should take a look at.
    Mr. INDERFURTH. In my longer statement to the Foreign Relations Committee, there's a reference to part of those things we discussed, and I think that's been passed out to the Committee. I sent you a fax, too.
    Mr. BEREUTER. Thank you. Just building briefly on the gentleman's comments, I would welcome a request for appropriations with respect to the F–16 money supplemental to the 150 account next year from the Administration. Let us try to have a hand at getting that money paid and returned to the Pakistani Government. I gave you a tip about where to sell those outside the region.
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    Mr. INDERFURTH. Yes, yes.
    Mr. BEREUTER. The gentleman from Florida, Mr. Hastings.
    Mr. HASTINGS. I thank you, Mr. Chairman, and thank you for holding the meeting. And, Mr. Secretary, thank you for all that you've offered us today.
    There's no greater student of this area of the world than the chairman of this Committee, and being here now 5 years and having an opportunity to observe Congressman Bereuter's work, as well as other colleagues of ours, I'm continuously impressed with the sincerity that he brings to issues and the knowledge that he brings to the issues. I equally am impressed with your demeanor and manner of approaching the subjects of Southeast Asia the way that you have today without rattling cages in what amounts to an extremely complex and difficult area of the world, as are other areas.
    I have no real question, but I want to direct my statement to Members who are here and to the chairman of the Committee, as well as to you, Mr. Secretary. You commented—and correctly and diplomatically—that ''I look forward to working with the House International Relations Committee.'' The Chairman's quote was, ''We look forward to working with you.'' My good friend from California, Mr. Rohrabacher, just said, ''Look forward to working with you.'' We say that all the time. What the hell does that mean?
    I mean, do you know what I mean? It just doesn't work out like that. So mine is really just a process statement. I'm mindful of the separate responsibilities of the Executive branch and the Legislative branch; all of us are. However, in the establishment of the foreign policy of this great country of ours, I think we miss a lot of opportunities to really work together. Most of the Members of this Committee have visited some of the areas in Southeast Asia; several of them have visited all that are the subject matter today. Almost all of us have at least visited India or some one of the countries.
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    Now to try to get through without taking all of the 5 minutes, let me just give you two ''for examples.'' I had dinner, along with the former chairperson of the International Relations Committee, Dante Fascell, and Sheik Hassina, the Prime Minister of Bangladesh. In Miami for 3 hours she was my dinner mate, seated right next to her. Now, obviously, we talked about a lot of things in the world. She was there at the instance of a grandchild of hers just having been born.
    Fast forward: I've had two meetings, one privately as dinner mates before he was the Prime Minister, with Prime Minister Gujral, and since he is the Prime Minister I've been there, and next month, at the same time that Secretary Albright will be in India, the chairman of the Rules Committee, Gerald Solomon, and other Members and myself will be in India as well. There will be no communication at all during that period of time between the Secretary of State and Chairman Solomon. Yet, we want to work together.
    And somehow or another, it seems to me, when we are going into these same territories, aside from the perfunctory and real necessary function that we serve by meeting with our consuls and our ambassadors, we very occasionally miss opportunities to share information to the extent that we can with our respective undertakings and our separate responsibilities in our Government, to share information that could be useful to advance American policy.
    And unless we come to that kind of understanding, we will continue to have this fora where you sit over there and we sit over here, and we ask the questions either from a parochial point of view or political point of view, or whatever point of view we want, and American policy generally will not be being advanced collectively, and the information that we have will not be being shared appropriately in every instance. And I think we can do better, and I just want to say that to you, Mr. Chairman, and to the Committee.
    And I yield back the balance of my time.
    Mr. ROHRABACHER. Will the gentleman yield?
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    Mr. HASTINGS. Yes, of course.
    Mr. ROHRABACHER. Just a note: the Secretary and I have had a meeting on Afghanistan even prior to this and so we have actually gone out of our way to establish that type of relationship that you were outlining, and I think your criticism was totally justified, and I personally am trying to make sure that there isn't just hyperbole or a cliche.
    Mr. HASTINGS. Yes, but, you see, reclaiming my time, Mr. Chairman, just briefly, Dana, I understand that; the Chairman I know, you, and each of us in our own way can make input, but just as a ''for example,'' nobody from the South Asia Bureau has ever spoken to me at all as them initiating it, as to, ''What did you learn when you were over there, Congressman? What did you see?'' Now I know I can call the Secretary and talk to him. You understand what I'm saying? And I know that I can call function areas, and that's how we tend to do business. But it's a two-way street here. And I'll cite to you some other examples.
    Thank you, Mr. Chairman.
    Mr. BEREUTER. I thank the gentleman for his comments. They are, in general, well-taken. Just before this hearing, for example, we held a closed briefing on the problems in Sri Lanka—so that we could be better informed about the subject before we began this hearing—there was a very recent, big terrorist event there. I know it's my practice to get briefings and to request from the Administration points that they would like to have me pursue, if I wish to pursue them, when I make a foreign trip. I assume other Members do something similar. But you're right, we could do a better job in that respect on our side of the avenue, and perhaps so could the Executive branch. So we'll take that as an admonition. That's a worthy one.
    The gentleman from New Jersey, Mr. Pallone, is here. He's not a Member of the Committee, but we would extend to him the courtesy of 5 minutes, if he'd like to take it.
    Mr. INDERFURTH. May I have a brief comment, however, on what I consider to be, very, very constructive comments that you made? I suffer from the same frustration because we are not well-connected. With Congressman Rohrabacher, we've probably had more conversations on Afghanistan by phone and then coming to see you. I found that enormously helpful. Mr. Chairman, I've had a chance to see you. Congressman Pallone, we've actually seen each other on trips, and I came to see the India Caucus.
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    I would very much like to do precisely what you've said. Clearly, the easiest thing is whenever any of you need any information or want to make a point, just call me, and I'll be on the phone; there's no question about that. And I won't take 2 days to get back to you; I can assure you of that.
    At the same time, there are things that we can do such as for the travel, both in advance of and after the case. I mean, we ought to get together to share what we're doing. I mean, we've got a case to make. I've made it today in terms of where we're going, and I hope that some of the outlines of that were already known. I think they are to many of you.
    But we need to let you know where we're going and what our specific issues are. I need to give you a briefing on what we hope to accomplish with the Secretary's visit and with the President's visit. There are things we want to accomplish, not just in terms of a better rapport, but also concrete things. Whether they be on dealing with this F–16 issue or whether it be on PL–480 debt with respect to Bangladesh, we want to make progress on these issues, and we can't do them without clear Executive/congressional cooperation. So that message came through loud and clear, and I hope we'll do exactly that—and I look forward to working with you in the truest sense of the word.
    Mr. BEREUTER. Thank you, Mr. Secretary, for your offer, and we'll accept it.
    Mr. Pallone.
    Mr. PALLONE. Thank you, Mr. Chairman. I thank you for allowing me to participate here today.
    And I want to follow up on the F–16s, the Harkin amendment, and also the China nuclear proliferation as it relates to Pakistan. But before I do that, because I'm going to sound somewhat negative, I wanted to thank you. I really want to say I think you've been doing an excellent job. I think that relations in general between the United States and India have really improved significantly, and you know, the outreach, the visits by the President that's coming up, by the different Cabinet members, Mr. Pickering's—I mentioned to you before that the coverage of Pickering's recent trip, this was in a New Jersey paper, interestingly enough, about—I mean, look at the headline: ''United States and India Cite Progress in Improving Relations.'' And, obviously, what's happening is all very positive.
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    But I'm just still concerned about the way the State Department views Pakistan and some of the actions that the State Department is taking. I think I mentioned to you before that when some of us were in India and had an opportunity to visit with the Prime Minister after Mother Teresa's funeral, one of the things that Prime Minister Gujral stressed was the fact that—and he viewed it as such, and I do, too—the United States continually placates, if you will, the Pakistani military, and I see that still happening. And you sort of referenced it today by saying how important it was to have relations with them, with IMET, et cetera.
    But that actually is counterproductive to the Gujral Doctrine because he feels very strongly that we need to kind of shore up the civilian power under the Prime Minister in Pakistan and that we should take any measures on our part to placate or influence or try to give importance to the military element in Pakistan, because they're not in favor of better relations with India. It's really a civilian element with the Prime Minister that's in favor of better relations.
    So let me just ask this question: With regard to F–16s, every once in a while in the press I get the impression that they say that the President would like to sell the F–16s to Pakistan again. I want you to comment on our policy on that.
    Second, the Harkin amendment—when Robin Rafael was here before—I don't know if it was this Committee or the Appropriations Committee a few years ago—she specifically said that there weren't going to be any more waivers, if you will, to the Pressler amendment; that the Brown amendment was going to be the last one; that was it; there weren't going to be any more. And I see the Harkin amendment, and what's happening with IMET and OPIC, et cetera, as another whittling away, if you will, of the Pressler amendment. I guess my second thing is if you'd comment on that.
    And then, last, what's happening with this Sino-U.S. Summit, and the nuclear proliferation issue, I am very much opposed, and I've told you, and I know many of us are, to the certification that China is no longer transferring nuclear weapons, nuclear technology, that can be used for arms purposes, and as a result, our U.S. companies will now be able to sell so-called civilian nuclear technology to China. I know The New York Times came out with a very good editorial the other day saying it was too soon, and I guess my comment is, what makes you believe that they're going to stop selling things to Pakistan, like the ring magnets, or whatever? I don't see any real guarantee that this is the case, and therefore, why are we moving in that direction?
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    Now that's three questions, but they're kind of related, if you don't mind.
    Mr. INDERFURTH. Three related tough questions to respond to. Let me start with the last question about China. Of course, that is not in my purview. I would have to have Mr. Roth here to discuss the policies that we are pursuing with respect to that other very large nation on the Asian continent. However, clearly, the role of China with respect to nuclear proliferation is very important, and those concerns we've had in the past about their activities, including those with respect to Pakistan.
    All I can say here is two things: First, with respect to providing assistance to their civilian nuclear program, China is a party to the NPT. China is a party to the CTBT. China is a party to that international nonproliferation regime which we strongly support, which allows us to do certain things with China that we're not able to do with countries that are not parties to those agreements.
    Second, China has provided assurances to us about not making provision of assistance to unsafeguarded nuclear facilities, and we believe since those assurances were provided China has followed that. So we do believe that progress has been made with China on these issues which relate to the other countries, and that will be a purpose of the upcoming summit, to further engage the Chinese on these issues, share our concerns, and, hopefully, strengthen that nonproliferation regime which we want to see.
    Now with respect to the Harkin-Warner amendment and the Brown and the Pressler legislation, and the rest, we don't believe that allowing OPIC and IMET is breaking new ground. We believe that this is further implementing the Brown amendment. These are steps, again, that we believe are in our interest. We've got a very fundamental issue here, though. It's our view that a stable, prosperous, democratic Pakistan is in everyone's interest, including India, including all the countries in the region. And if we can take certain steps to provide greater stability, prosperity, or democracy for Pakistan, it's a very important step forward.
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    Again, the Harkin-Warner amendment provides for that type of assistance: Democracy Building, OPIC for businessmen to get involved, just as we want to see them involved throughout the region, and IMET, again, it's not to establish a new military supply relationship. Those days are past. We don't have the cold war. We don't have Afghanistan. But we do want our leaders, our military leaders, to have a professional relationship with each other.
    General Karamat, the head of the Pakistani military is a Leavenworth graduate, and that is helpful in knowing what they are thinking and how they intend to proceed, and we hope that some of the professional training that we provide, will influence them in the directions they take. And we respect the Pakistani military. I've had a very good relationship with them in terms of peacekeeping at the United Nations. They, along with India, along with Bangladesh, along with Nepal, have been very important professional contributors to U.N. peacekeeping around the world. So I've had a very good appreciation for their skills, and we would like to enhance that.
    So we don't want to see a continuation of the zero-sum thinking in the region. We want to try to break out of it. And, quite frankly, we hope the two principal countries in the region that have had this conflict for 50 years can also break out of some of that zero-sum thinking.
    Mr. PALLONE. On the F–16s—I know the time is up, Mr. Chairman, but I just wanted you to reiterate again—I mean, there is no intention to sell the F–16s to Pakistan, and what is the Administration trying to——
    Mr. INDERFURTH. They won't buy them a second time.
    Mr. PALLONE. Well, what are they trying to—I mean, to transfer them. And what is the Administration doing? We understand that now, for example, there's a possibility of transferring them to Taiwan. Is that something that's out there?
    Mr. INDERFURTH. Not that I've heard. Not that I've heard.
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    Mr. PALLONE. You're still looking for a buyer?
    Mr. INDERFURTH. There was a possibility of Indonesia, but that is not going forward. Some other countries have looked at or expressed some interest as replacement aircraft. These are F–16, A and B models, which are getting older. A lot of countries want the newer versions.
    There are a range of options, and we're trying to sort through these, again, because the President has said to, first, Prime Minister Bhutto and then to Prime Minister Nawaz Sharif, that we recognize that we have a responsibility here, and we're working hard to meet it.
    So we will talk with you more about those options if they become real options. In the meantime, it's the view that we either owe them the aircraft or owe them money. It's pretty simple.
    Mr. BEREUTER. I'm going to start a second round for the Members of the Committee.
    Mr. Secretary, I was very pleased to hear you say that we're going to get out of the zero-sum game when it comes to India/Pakistan. When I make comments about improving our relationships with Pakistan, it has no negative consequences or implications for India. I want to improve relationships with both countries.
    I'd say the gentleman from New Jersey is almost as enthused as I am about the improvements potential for Indian/American relations. I know he's the chairman of the India Caucus, but we do not want to fall into the practice of adversarial relationships here in this Subcommittee or, I think, in this Congress.
    Mr. Secretary, I have a couple of additional comments and questions—one relates to Bangladesh. I briefly brought this subject up with you yesterday, but I want to make a specific request for you to consider. As you know, we have a situation where Bangladesh has a very large PL–480 debt with the United States—about $514 million—and while debt forgiveness was extended to a number of countries several years ago, Bangladesh, almost by accident and perhaps totally without intent, I think, was not included in that program. And now, under the House budget procedures, debt forgiveness has a consequence for the 150 account so it's very difficult for us to reach back and try to provide some assistance as we provided to Jordan and a number of other countries.
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    I would welcome a request from the Administration for some degree of debt relief in the next budget submission, the next appropriation request from the Administration. I don't suggest to you what it ought to be or how it ought to be handled, but it ought to be considered in a supplement, again, to the 150 account request as a very separate kind of item.
    Next, I wanted to mention a problem that affects a business interest that is also involved in business in my State. It would appear that the Government of Pakistan is attempting to renegotiate power purchase agreements with U.S. investors in something called the UCH, U-C-H, Power Project, among others, perhaps. It's my understanding that they've been using rather heavy-handed tactics to force U.S. investors to renegotiate a 1995 contract to operate as an independent power producer in that country.
    While I don't expect you to be familiar with those kinds of contracts involving a range of American companies, I would hope that you would look at that and see if, in fact, you think the Pakistan Government is being reasonable in what it's doing with respect to a major company in the United States.
    Mr. INDERFURTH. Should I respond?
    Mr. BEREUTER. If you'd like to, yes.
    Mr. INDERFURTH. On both of those, I'd like to make a brief remark. First of all, we are very aware of the PL–480 debt with respect to Bangladesh, and we have been wringing our hands within the Executive branch on what can be done about this, because we, too, see it as something that needs to be resolved.
    Mr. BEREUTER. Parenthetically, I would just mention that it's $30 million a year, interest alone, on that debt.
    Mr. INDERFURTH. And I think that we have visitors here from the Bangladesh embassy that could also probably tell us the full amounts in all those respects. This was raised with me by Bangladesh officials when I was in Dhaka. We told them at that time that we'd like to see what we could do about this, but we'd need to work with Congress. So, in that respect, I'm delighted that you have come forward and said, ''Let's try to figure out what we can do there.'' So we'll work with you on that and see if there is a way.
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    On the issue of the renegotiation of power contracts, I can't say that I'm aware of all the contracts that are under negotiation, but I do know that, on the general point of renegotiation, we have spoken to, and I have spoken directly to, the chairman of the Pakistan Investment Board about what we are concerned about, a negative investment climate in Pakistan, because of the renegotiation of some of these power contracts. And we have said that we want to encourage American investment there. This is another reason why we want to see OPIC go through—but if there is going to be renegotiation of contracts that are already arrived at, that is going to have a chilling effect on American businessmen and others that want to engage in that. So we're making the point that they need to resolve these issues, these specific issues, quickly and more broadly, to have a more transparent system for investment in Pakistan that will not scare away investors, because they need that kind of flowing-in of direct foreign investment.
    Mr. BEREUTER. Thank you, Mr. Secretary. I think your points are very well taken. I'm glad you're extending that kind of advice to them.
    Mr. Rohrabacher.
    Mr. ROHRABACHER. Mr. Secretary, first of all, the Philippines could sure use those F–16s, and the Philippines finds itself in a precarious situation in terms of the standing China and not much of a military strength on their own part to offer any type of returns for China stepping on their toes. I would hope that the Philippines, being a democratic country—and Filipinos have taken such great strides and worked so hard to create a democracy there—that's another place that I would hope that we would spend a little bit more time and effort focusing on, because they, indeed, are a democracy. And we should be helping them. And they would like the F–16s.
    I do not believe that necessarily we should give the F–16s to Pakistan, but if we don't give the F–16s to Pakistan, we should give their money back, and we're right in that assessment.
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    And I'd like to ask you a little bit about Afghanistan now that we've gotten these other issues out of the way. And is the U.S. Government—I mean, I'm sorry for putting you on the spot here in front of the world, but can you state for the record that the U.S. Government will not be opposed to the return of Zahir Shah to head an interim government that would lead to democratic elections?
    Mr. INDERFURTH. Well, we have taken the view—and this is why I want to be careful as I respond to you, Congressman—we have taken the view that the United States is neutral among the factions. And that is why we recently suspended operations of the Afghan embassy here in Washington, because there were only two Afghans left standing in the embassy, and the chargé, who was aligned with the Northern Alliance, had indicated that he was leaving. That would have left the embassy in the hands of the Taliban, and because we are not accrediting new diplomats, we didn't want our policy of neutrality to be misinterpreted.
    Mr. ROHRABACHER. Because you're neutral among factions——that means you wouldn't oppose the king returning in order to get a government——
    Mr. INDERFURTH. We would not oppose any agreement reached by the Afghans themselves about how they wish to go through a negotiation for a final settlement or a transitional period or a Loya Virgha, or what would be the constituted government which we hope will take place.
    Mr. ROHRABACHER. Even if it included the return of Zahir Shah as the king of Afghanistan?
    Mr. INDERFURTH. What the Afghans wish to do, the United States will support, if it's moving toward a peaceful settlement.
    Mr. ROHRABACHER. Even if it includes the return of Zahir Shah from Italy and into the government?
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    Mr. INDERFURTH. As you said, the world is watching or listening—we don't want to give the impression in any fashion that we are tipping our hand to who we would or would not support. So I'd rather leave it as I have, that we will support any settlement reached by the Afghan people, taking into account all the interests, and that is a problem right now with the Taliban.
    Mr. ROHRABACHER. Then let's test your theory that you represented you don't care which faction it is. Have we not condemned in strong terms the human rights business of the Taliban?
    Mr. INDERFURTH. We have condemned, and in my statement this morning we condemned all human rights abuses by all parties. And there have been others. The Taliban are the most egregious, especially with respect to women and girls——
    Mr. ROHRABACHER. Right.
    Mr. INDERFURTH. ——that we are calling attention to, but this is not a human rights-free environment.
    Mr. ROHRABACHER. So you're pointing out that the most egregious of the human rights abuses that have been condemned are those of the Taliban. So it really isn't totally equal. We don't have an equal analysis of these people. We believe the Taliban actually has the most egregious human rights abuse record of any of the factions?
    Mr. INDERFURTH. But the Taliban represent, in large part, the Pushtun ethnic group which will have to be taken into account, if there is to be what we want, a broad-based government representative of all the people.
    Mr. ROHRABACHER. That's correct.
    Mr. INDERFURTH. And their interests will have to be taken into account.
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    Mr. ROHRABACHER. You're aware that Zahir Shah is a Pushtun, and in fact a member of the prominent Pushtun tribe?
    Mr. INDERFURTH. I understand that.
    Mr. ROHRABACHER. I don't believe that a nebulous attitude by the United States or a totally neutral position by the United States, in the face of a situation that does not call for total neutrality—and when you have a group of egregious human rights abusers who are totally contrary to what our position is on human rights, meaning the Taliban are violating the human rights of half the population in their country in a way that is totally unacceptable to people in the United States and most people around the world—in fact, most Muslims around the world don't accept what the Taliban are doing to the women of Afghanistan. So we aren't neutral, are we? We really don't like what they're doing, do we?
    Mr. INDERFURTH. We're certainly never neutral to violations of human rights, and it is something that we have condemned, and in my longer statement, which I trust is now with you, there is a very strong statement by then-U.N. Ambassador Madeleine Albright, and now the Secretary of State, on what she had to say about those abuses. So, no, we're not neutral as to abuses of human rights, but in terms of the formation of a government, we are not choosing sides or indicating preferences for the factions as they try to work through how such a government would be created. And I can assure, as we go through this U.N. process, those internal parties that are willing to enter into a serious negotiation, not just a verbal commitment but through deeds, that that will be made clear in our statements.
    Mr. ROHRABACHER. I would just say I'm sorry—I'll close with just this: Good does not prevail by the United States remaining neutral among the factions. I mean, in Germany in the 1930's it was not right for us to remain neutral among the factions. There was an egregious human rights abuser in the form of Nazis and Communists, and, no, we should not have been neutral in that situation.
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    Our neutrality in Afghanistan in this last decade has been part of the reason that people are still dying over there and there's such chaos over there at this time. If the Taliban continues their control of Afghanistan, they will be in the league with the worst terrorists in the world, as they already are establishing ties among the terrorists of the world. We will pay for our neutrality, and I call upon you and the Administration and my colleagues to start paying attention to Afghanistan, and I would hope that people realize that Zahir Shah, the king of Afghanistan, offers an alternative that can at least lead his way, get people out of this chaos, to a democratic alternative from which then he can retire from the scene. But I hope that we take that seriously and don't remain neutral in the face of human rights abuses and evil.
    Mr. INDERFURTH. Understood. Understood.
    Mr. BEREUTER. I thank the gentleman for his comments. I know how strongly he feels about the subject, as many of us do.
    I enjoyed the skill of your rhetorical fencing, the two of you.
    And if the gentleman from New Jersey has one remaining question, I'd be happy to recognize him.
    Mr. PALLONE. Just very briefly, you know, I agree with you that, basically, with regard to Kashmir, we have to leave India and Pakistan alone. They have to do their own thing. But I would like to see—maybe you could just comment—I would like to see us involved on two issues. One was already mentioned, and that's with regard to the Kashmiri Pandits.
    I don't know if there's any precedent, but when Sherrod and I and others met with them in India, they stressed that they had brought their case before the Human Rights Commission, which we've talked about quite a bit, and they might have judicial proceedings. I would hope that at some point in these various visits that are occurring in India that the State Department or our Cabinet level, the President, would bring up the issue with the Indian officials and see what could be done. I don't know if we can intervene or we can help with their case before the Human Rights Commission, but it's something to look into.
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    And the other thing is last week some of us met with Jane Shelley, Donald Hutching's wife, and I was just wondering if there was any news or what the U.S. State Department was doing with regard to his whereabouts. You know, dead or alive, we don't know at this point—or the others.
    Mr. INDERFURTH. I'll pursue the Kashmiri Pandit issue. As I mentioned to Congressman Brown, we'll see what is possible there.
    On Jane Shelley and her very tragic situation, I had the opportunity, I think 10 days ago now, to meet her for the first time in my new position. She came to the Department for a round of briefings and met with Under Secretary Pickering in advance of his going out to the region and she met with me and others in the Department. We continued to offer her our very strong and full support. She's a remarkable woman who is continuing to pursue this. She was there during the summer. She has had, at her own expense, printed leaflets with her own fax number, so that if there's any information they don't want to go through any official channels, they can fax her directly with information. She clearly wants to find out if there is any further information, whether or not there has been a thorough investigation, and there's some question whether or not all leads have been followed.
    And so we are going to have this issue on, I can assure you, both the Secretary's agenda in both countries and the President's agenda. There have been no recent reports concerning the hostages. There had been some remains that were recently found, and to our knowledge, those were not of hostages. And we hope that, of course, the finest outcome would be for the hostages to be found and returned, but we need at least to find some closure to what happened to them. We're going to continue working with her in every way we can.
    Mr. PALLONE. Thank you. Thank you, Mr. Chairman.
    Mr. BEREUTER. You're welcome.
    Mr. Secretary, I may submit one question to you in writing related to the murder of the two CIA personnel and some cooperation and assistance we've received from Pakistan, and share that with the Members of the Subcommittee. You can provide it in any kind of form that you wish, classified or unclassified, but we'd like to know more about that and any kind of consequences that has for our relationships.
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    Mr. BEREUTER. Are there any final statements or comments that you'd like to make?
    Mr. INDERFURTH. Well, that's a dangerous thing to ask of a new Assistant Secretary.
    Mr. BEREUTER. Given the fact that we have 5 more minutes to go vote.
    Mr. INDERFURTH. Only one bit of information that I'll mention just in terms of South Asia. In The New York Times this weekend, in the outlook section, there was an article about the 21st century belongs to—it was referring to Tomorrow's Tigers. And if you looked at the bar graph here, you would see that Tomorrow's Tigers have East Asian Pacific sort of at the highest peak, but following right behind that is South Asia, including India and Pakistan, and after that the G–7 countries, Latin America, East Europe, Middle East, sub-Sahara and Africa. Again, this is an indication that there are new opportunities for the region, and, indeed, for U.S. engagement.
    And I'm delighted with the reception that I received today, the attendance. This is extremely encouraging, and I hope that you'll invite me back.
    Mr. BEREUTER. Mr. Secretary, we will, and thank you very much for your testimony and for your responses to our questions. We very much appreciate it. Thank you.
    Mr. INDERFURTH. Thank you.
    Mr. BEREUTER. This hearing is adjourned.
    [Whereupon, at 3:55 p.m., the Subcommittee adjourned subject to the call of the Chair.]

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