USIS Washington 
File

18 June 1998

TEXT: INDERFURTH: U.S. CHAGRINED TO IMPLEMENT SANCTIONS ON INDIA, PAKISTAN

(Says U.S. stands ready to ease tensions on subcontinent) (2410)



Washington -- Karl Inderfurth, Assistant Secretary of State for South
Asian Affairs, says one outcome of the intense deliberations on how to
implement mandatory sanctions against India and Pakistan is the
realization that they were designed "primarily as a deterrent."


Testifying before a House panel June 18 on nuclear proliferation in
India and Pakistan, Inderfurth said the U.S. had hoped the economic
sanctions required under the Glenn amendment "would never have to be
implemented."


"We had to navigate our way through a wide array of issues and
decisions about how the sanctions apply to different programs and
activities, and are faced with the fact that the sanctions may result
in unintended, negative consequences, and that there is no termination
or sunset clause," Inderfurth said.


At the same time, however, Inderfurth said the purpose of the
sanctions is to influence the behavior of both India and Pakistan, not
"simply to punish (them) for punishment's sake."


Inderfurth said the U.S. intends to remain fully engaged with both
countries while the sanctions "exact a price" for their behavior, and
stands ready to help reduce tensions on the subcontinent. In the case
of India alone, the sanctions have already resulted in postponing more
than $1 billion worth of loans, "which is having a ripple effect in
the Indian economy" and affecting investor confidence, he said.


"We stand ready to share our expertise and capabilities to help India
and Pakistan monitor military activities and avoid miscalculation, and
above all, to assist the two in settling their differences."


Following is the text of Inderfurth's testimony:



(Begin text)



HOUSE INTERNATIONAL RELATIONS COMMITTEE

SUBCOMMITTEE ON NEAR EASTERN AND

SOUTH ASIAN AFFAIRS, June 18, 1998



Mr. Chairman, I last appeared before this Subcommittee eight months
ago, on October 22, 1997. The focus then was on our efforts to expand
and enhance our engagement in the South Asia region, emphasizing our
cooperative interaction with India and Pakistan on such matters as
trade and investment, science and technology, the environment and
health. Since that time, the landscape in South Asia has changed
dramatically -- for the worse. On May 11, 1998, events in region took
a decidedly dangerous turn when India tested a series of nuclear
devices, leading to a reciprocal series of tests by Pakistan and the
imposition of far-reaching sanctions against both countries by the
United States. The international community joined the United States in
condemning these actions, which present a serious challenge to the
global non-proliferation regime, heighten concerns about regional
stability, and raise considerably the stakes of Indo-Pakistani
tensions.


Implementation of Sanctions



In the six weeks that have passed since India tested, we have worked
assiduously to collect the necessary information, put in place the
needed mechanisms, and make the requisite decisions to establish the
sanctions regime against both India and Pakistan. We have endeavored
to ensure that the implementation of sanctions under the Glenn
amendment and other legislative authorities is firm and correct, and
that the sanctions are costly to the governments who took these steps
but do not undercut efforts to meet basic humanitarian needs or unduly
harm the interests of U.S. businesses. In doing so, we are sending a
strong message to any other state aspiring to a nuclear weapons
capability.


At the same time, we wish to underscore that the purpose of these
sanctions is to influence the behavior of both India and Pakistan, not
simply to punish for punishment's sake. We do not wish to isolate
either country, but rather encourage both to take steps to demonstrate
a firm commitment to global non-proliferation norms and to improve
their relationship with one another.


Deputy Secretary Talbott is conducting a meeting right now at the
State Department to announce officially the major guidelines for our
sanctions implementation regime. The gist of his announcement is
contained in a fact sheet describing the sanctions effort, which I am
pleased to provide you and which I ask be inserted into the record. In
addition, the relevant U.S. agencies and departments, including the
Departments of Treasury, Commerce, and Defense, to name just few, are
developing detailed papers on the technical aspects of the sanctions.
We will provide you these papers as soon as they are available. Within
the Department of State, Under Secretary for Economic, Agricultural
and Business Affairs Stuart Eizenstat and Acting Under Secretary for
Arms Control and, International Security Affairs John Holum will
continue to have the lead with respect to the economic and national
security aspects of our sanctions policy.


As an aside, Mr. Chairman, one outcome of our deliberations over the
implementation of sanctions was a clear recognition that these
mandatory sanctions were meant primarily as a deterrent; we had hoped
they would never have to be implemented. We had to navigate our way
through a wide array of issues and decisions about how the sanctions
apply to different programs and activities, and are faced with the
fact that the sanctions may result in unintended, negative
consequences, and that there is no termination or sunset clause. While
we have yet to see the kinds of concrete steps by either India or
Pakistan that will allow us to move forward, I would point out that we
are significantly constrained in our ability to respond to any future
progress or positive steps by either country. We also have little
flexibility to modify their application in the event that there is an
unintended, negative outcome to their implementation. Already, we are
aware that the sanctions require the termination of credits for
agricultural sales, which is clearly at odds with the humanitarian
provisions of the legislation.


Recent Developments in the Region



In the immediate aftermath of the tests by India and Pakistan, we
became quite concerned about the tense atmosphere in the region, and
by provocative statements and actions by officials of both countries
that appeared to be intended solely to stir the pot. In that kind of
environment, there is an increased capacity for one-upmanship or
miscalculation, with potentially devastating consequences. That being
the case, the United States -- with the President and the Secretary of
State in the lead -- pressed both governments and energized the
international community in an effort to lower tensions.


We have noticed in recent days a cooling of the rhetoric from both
Islamabad and New Delhi and have seen calls from both capitals to
resume direct dialogue. Both have declared a moratorium on further
nuclear testing and have taken a more cautious line on future
developments regarding their nuclear and missile programs. India has
made positive statements about a willingness to participate in
negotiations towards a fissile material cut-off treaty; we hope
Pakistan will follow suit. Though we recognize that reestablishing
direct, senior-level contact may take more time than we would prefer,
we believe it is very important that both sides strike a more
responsible tone in their public pronouncements and we are urging them
to do so.


U.S. Approach



In addition to our continuing efforts to deal with the crisis, stave
off further tests, and to encourage the cessation of provocative
statements and actions, we are also making a concerted effort to lay
the groundwork for halting a nuclear and missile arms race in the
region, and to address the underlying causes of tension between the
region's two antagonists. Again, we am working actively on this effort
with the international community, as it is critical that we involve a
wide array of governments, institutions, and organizations. Already,
two important international meetings have taken place in which the
Secretary of State participated and which I attended, one with the
Five Permanent Members of the U.N. Security Council in Geneva, the
other with her counterparts in the G-8 in London. Both meetings made
significant progress in identifying a common approach on how to
contain the crisis and prevent further tests and slippage into an
all-out arms race and, more fundamentally, how to reduce tensions
between the two parties and bring them into the fold of global
non-proliferation norms. In addition, the U.N. Security Council
approved a strong resolution which endorsed the P-5 communique and
sent a firm message in line with the P-5 and G-8 approach. I have
provided the Committee with copies of the communiques from both
meetings, and ask your permission that they be inserted into the
record of this hearing.


The Road Ahead



As I suggested earlier, Mr. Chairman, we cannot simply impose
sanctions, step away, and send the signal to India and to Pakistan
that our sole intent is to punish. We must remain engaged, and while
sanctions will indeed exact a price, we must also work with both
governments to chart a path for the future. That future ideally will
produce concrete actions by both governments to demonstrate a strong
commitment to nuclear and missile restraint and to reducing regional
tensions. These actions should include signing and ratifying the CTBT
without conditions, refraining from missile tests and agreeing not to
weaponize or deploy missile systems, halting the production of fissile
material and participating constructively in negotiations towards a
fissile material cut-off treaty, formalizing existing pledges not to
export or transfer nuclear and ballistic missile technology or
expertise, and for the sake of regional stability and prosperity,
resuming direct dialogue to address the root causes of tensions,
including Kashmir.


The United States has a strong interest in keeping open the lines of
communication with both India and Pakistan. Deputy Secretary Talbott
met last week at the State Department with Jaswant Singh, Deputy
Chairman of the Indian Planning Commission and a close advisor and
confidant to Indian Prime Minister Vajpayee. Their meeting was
described by the Department as "constructive," covering the "entire
range of issues of mutual concern." In plainer language, after a
hiatus of six weeks, the United States and India are talking again at
a high level to see where we can go. We arc now working to arrange a
similar meeting with a high-level Pakistani envoy.


Mr. Chairman, the United States must also work aggressively to keep
the international community focussed and working productively on these
matters. The P-5 and G-8 meetings were not a one-shot deal, and we
will continue to work within these institutions and to encourage other
nations and organizations to be involved. It will be important, for
instance, to work with countries that had the ability -- but forswore
it -- to acquire nuclear capabilities, such as Argentina, Brazil,
Ukraine and South Africa. These countries were invited to join the G-8
for a luncheon at the London meeting, along with China and the
Philippines. We also intend to work very closely with Germany and
Japan, two countries whom we arc actively supporting for permanent
membership in the U.N. Security Council and which did not acquire
their world power status by testing nuclear weapons. We will remain
focussed on regional and security institutions such as NATO, ASEAN,
the OAU, the OAS, and the membership of the NAM, to name just a few.
And we will continue to take advantage of our vast array of bilateral
exchanges, such as we have done with the visit by the French Prime
Minister to Washington, and as we will with President Clinton's
upcoming trip to China.


This type of engagement will be necessary to demonstrate continued
international resolve, to provide India and Pakistan with examples of
the rewards of alternative courses of action, and to ensure continuity
of message to both countries. By way of example, we have taken
advantage of the meetings held thus far to garner international
consensus behind an approach to both India and Pakistan within the
International Financial Institutions, which comports well with our own
approach under the sanctions regime. The G-8 will continue to work
collectively to support postponement of loans to both countries for
any purpose other than meeting basic human needs. In the case of India
alone, more than $1 billion worth of loans have been postponed thus
far, which is having a ripple effect in the Indian economy and is
resulting in decreased investor confidence. This is not something, I
hasten to add, that we envisioned in our interaction with India that I
referred to at the beginning of my testimony. Our hope had been to
build a strong economic relationship with both India and Pakistan,
based on increasing levels of trade and their requirements for
infrastructure and other investment. These hopes have been dealt a
severe blow.


Mr. Chairman, for our part and for the foreseeable future, we must
continue to implement firmly our sanctions policy. At the same time,
we must be prepared to help both India and Pakistan reduce tensions if
they are prepared to do so. The United States and our partners in the
P-5 and G-8 have pledged to fulfill our obligation to prevent
destabilizing transfers of arms and sensitive technologies to South
Asia. We stand ready to share our expertise and capabilities to help
India and Pakistan monitor military activities and avoid
miscalculation, and above all, to assist the two in settling their
differences. We look forward, for example, to the upcoming meeting of
the South Asian Association for Regional Cooperation, which will occur
in Colombo in July, and could provide an opportunity for Prime
Minister Vajpayee and Prime Minister Sharif to hold face-to-face
talks. We urge the two Prime Ministers to seize this opportunity and
to adopt and announce confidence building measures or other areas of
agreement between them. Finally, I would like to make a fundamental
point. While we do not accept the rationales given by India and
Pakistan for testing or possessing nuclear weapons and believe that
the tests have diminished their security, we must continue to
recognize that as sovereign nations, both India and Pakistan have
legitimate security concerns and interests, and we must bear that in
mind as we move forward. We have far too many national interests at
stake to do anything other than engage under these terms.


Thank you, Mr. Chairman. I am ready to take your questions, and I am
pleased to be joined by Deputy Assistant Secretary of State Robed
Einhorn, who has responsibility in the Department for
non-proliferation matters.


(end text)