Assessing U.S. Foreign Policy Priorities and Needs Amidst Economic Challenges in South Asia

Dan Feldman
Deputy Special Representative for Afghanistan and Pakistan 
The House Foreign Affairs Committee, Subcommittee on the Middle East and South Asia
Washington, DC
May 16, 2012

Chairman Chabot, Ranking Member Ackerman, Members of the Committee: thank you for inviting me here today. As you know, I have the privilege of serving as Deputy to U.S. Special Representative for Afghanistan and Pakistan Ambassador Marc Grossman. We work closely with our State and USAID colleagues to advance our diplomacy and development objectives in the region.

Today, I will discuss our FY13 requests for Afghanistan and Pakistan. These requests reflect the arduous processes we have gone through to make smart spending choices for critical years in our engagements with these two countries. We thought long and hard about how to best maintain robust engagement and to fulfill the obligations that we have made alongside our international partners, while still doing our part to keep federal spending in check. I assure you that we are not simply “budgeting by inertia” – rather, we have continually and carefully evaluated our efforts, along with our interagency partners, to ensure their effectiveness and to act as responsible stewards of the tax payers’ funds.

We have learned the lessons of history and are committed to avoiding the kind of precipitous pullout that can fuel instability, as was the case in the early 1990s when the Taliban took advantage of a post-Soviet power vacuum, gained control, and provided al-Qaida with a safe haven. This Administration has implemented three mutually reinforcing surges in Afghanistan – military, civilian, and diplomatic – to fulfill the national security imperative of ensuring that Afghanistan never again serves as a safe haven for al-Qaida. The military surge has succeeded in blunting the Taliban’s momentum and helping the Afghan National Security Forces (ANSF) prepare to take the lead for Afghanistan’s security. The civilian surge tripled the numbers of diplomats and development experts deployed to Afghanistan, helping to increase the Afghan government’s capacity and resulting in improved livelihoods for the Afghan people. And the diplomatic surge has allowed us to engage in conversations with Afghans, regional actors, and the international community in support of a political solution to end the conflict. In each surge, we have carefully increased personnel and resource allocations as needed to match our priorities and objectives, another example of calculated planning.

I bring up the three surges to say that we are in the execution phase of the strategic trajectory that the Administration has outlined for you. And though we expect challenges along the way, we are doing what we said we would, and we’re achieving the goals we set.

The three surges have paved the way for a security transition process, enabling U.S. and Coalition troops to gradually hand responsibility for maintaining security over to the Afghan army and police, thereby allowing U.S. servicemen and women to come home. Since last year, the ANSF has begun to take over lead responsibility for providing security lead for half of the Afghan population. And we welcome President Karzai’s May 13 announcement of the third tranche of transition, after which nearly 75 percent of the population of Afghanistan will be living in provinces, districts and villages where Afghan forces are leading. By the end of 2014, the Afghans will be fully responsible for security throughout the country.

But as President Obama said to the Afghan people on May 1: “As you stand up, you will not stand alone.” On that day, President Obama and President Karzai signed a Strategic Partnership Agreement (SPA) that provides a comprehensive framework for continued cooperation between the United States and a sovereign Afghanistan in achieving long-term security, supporting social and economic development, encouraging regional cooperation, and promoting democratic progress, including Afghanistan’s 2014 elections. President Karzai has repeatedly affirmed his commitment to a peaceful, Constitutional transition of power at the conclusion of his second term. We are committed to helping uphold the Afghans’ right to participate in free, fair, and inclusive elections. As the SPA does not commit funding levels to our efforts in Afghanistan, we look forward to working with Congress to fund and ensure oversight of the commitments outlined by the SPA.

The United States stands together with our international allies and partners in making a long-term commitment to Afghanistan. At the November 2010 Lisbon Conference, NATO and Afghanistan announced an Enduring Partnership agreement. Just this week, Germany is joining India, the UK, Italy, and France in concluding their own bilateral agreements. The European Union also recently began negotiations for a long-term cooperation agreement. Together, this web of agreements and others like them will serve as a clear source of confidence for the Afghan people in the international community’s sustained commitment.

This weekend, President Obama will be joined in Chicago by 49 NATO-ISAF allies and partners to begin defining the implementation of our long-term commitment. We also will agree to support a post-2014 ANSF that is both sufficient to meet Afghanistan’s threats and sustainable with international funding, including ISAF’s role in training, advising, and assisting the ANSF.

The ANSF has already demonstrated its capacity to defend the Afghan people with minimal assistance from Coalition forces, as recently demonstrated on April 15, when the ANSF defended the Afghan people and international embassies against a complex series of attacks by the Taliban. We must ensure the ANSF’s continued growing capacity and skills through sustained support.

As the President has said, we also support Afghan peace and reconciliation efforts. The necessary outcomes of any reconciliation process are well known. Insurgents must renounce violence, break with al-Qaida, and abide by the Afghan constitution, including the rights afforded to women and minorities. Those who refuse to accept this path to peace will continue to face unrelenting military pressure.

At the Bonn conference in December, Afghan leaders presented to the international community the outlines of a strategy to ensure Afghanistan’s stability beyond the troop drawdown. In turn, the international community committed to supporting Afghanistan throughout a “transformation decade” from 2015-2024. This commitment of development support to Afghanistan after the war effort will help ensure the security, economic, and democratic gains made thus far are irreversible.

The international community will gather once again on July 8 in Tokyo to gauge Afghanistan’s progress. The Afghans will present there a framework for organizing international donor assistance, including reform measures to promote democracy and economic growth. As part of the reform effort, we will continue working with our Afghan and civil society partners to fight corruption, as well as the production and consumption of illicit narcotics, both of which hinder licit economic development and international. This meeting will also encourage the Afghans to make needed governance reforms at the national and sub-national levels. Part of our Tokyo discussions will center on ways to promote regional trade and private investment and support Afghanistan’s growing civil society.

Our bilateral civilian assistance to Afghanistan can be regarded as a foundational investment in national and regional stability. We are focused on increasing governance capacity and foundational investments in economic growth, commercial development, counternarcotics and rule of law, with women’s empowerment as a cross-cutting theme.

Our cooperation with the Afghans over the past decade has helped produce dramatic progress in the economic sector and improved services delivery. Today, over eight million Afghan children are enrolled in school, a third of them girls, compared to just a million in school, none of them girls, in 2001. Sixty percent of Afghans now have access to basic healthcare facilities – a six-fold increase as compared to 2002 – and a recent public health survey showed average life expectancy has increased from 42 to 62. Nearly two-thirds of Afghans have phones, and expanded radio and TV access is facilitating information flow. Approximately 100,000 Afghan women have benefited from micro-finance opportunities, and our funding supports 17 protective service facilities for women and children. And since 2006, our rule of law programs have trained over 20,000 professionals working in the Afghan criminal justice system including prosecutors, defense attorneys, judges, investigators, corrections personnel, and social workers.

Afghanistan is also making progress on key transparency reforms to facilitate economic growth, including significant progress toward Extractive Industry Transparency Initiative (EITI) compliance and World Trade Organization accession. And while it took some time, the Afghans have taken steps to resolve the Kabul Bank crisis, permitting the IMF to re-start its relationship with Afghanistan. The Government has also improved the transparency of border custom and tax collection, which reached over $2 billion in total revenue last year. Furthermore, the Afghan utility, DABS, has significantly increased its collection of electricity payments from literally zero in 2002 to more than $170 million last year.

The United States is also assisting in disrupting the opium trade as a funding source for Taliban and insurgent actors. In 2011 alone, more than 500 operations by Afghan forces, ISAF, and law enforcement partners resulted in the seizure of over 82 metric tons of opium, 16 tons of morphine, 10 tons of pure heroin, and 178 tons of hashish according to U.S. Department of Defense figures. Since 2002, we have worked at the request of the Afghan government to help develop a national drug treatment system for Afghanistan, and since 2007, U.S. assistance has established and supported 29 such centers across the country, serving over 8,000 adults, adolescents, and children each year.

Ultimately, the gains of the last decade must be sustained by the Afghan people themselves. The processes of transition and continued economic, political and social development must be Afghan-led. We are cognizant that Afghanistan will continue to face significant challenges. At the same time, we also recognize the very hard choices that Congress must make given the fiscal challenges we all face. Therefore, our FY13 request reflects a concerted effort to focus development programming on sustainable solutions for Afghanistan given limited resources.

Private sector growth in Afghanistan will be key to building Afghanistan’s economic self-reliance throughout the “transformation decade.” We believe that our vision for a “New Silk Road” will gradually transform South and Central Asia through a network of transit, trade, energy, and increased people-to-people ties. New Silk Road linkages and resulting economic prosperity will also help ensure the mutual security of regional players, all of whom are negatively impacted by insurgent activity in Afghanistan and its border regions.

Pakistan stands to benefit greatly from a secure and stable Afghanistan, and from increased regional trade ties with Afghanistan, India, and other partners along the New Silk Road. And as President Obama said after signing the SPA, Pakistan can and should be an equal partner in Afghanistan’s reconciliation and transition processes while still maintaining its sovereignty and protecting its interests. Our engagement with Pakistan has meaning well beyond its proximity to Afghanistan, however. With a population of 190 million people, pockets of extremism, and nuclear capability, a stable and prosperous Pakistan is of critical importance to both our regional strategy and our direct national security interests.

The events of the last year have posed significant challenges to our bilateral relationship. Our current discussions with the Pakistanis on how best to pursue our common interests will take time to resolve, and it’s not easy right now to provide satisfying answers to some questions. But we must not lose sight of the fact that both the United States and Pakistan have both expressed and demonstrated a genuine commitment to getting this relationship on firmer footing, and to working constructively on military, intelligence, and economic cooperation. I traveled to Pakistan twice in the last month, once with Deputy Secretary Nides and once with Ambassador Grossman. On both occasions, our two sides re-committed to the relationship; we both know that a constructive, continued bilateral relationship is deeply important, and critical to our respective national interests.

A chief mutual interest ispeace and stability in Afghanistan, and we hope that Pakistan will renew its contribution to the U.S. and international efforts in Afghanistan by opening the ground line of communications (GLOCs) as soon as possible. We also hope to resolve outstanding Coalition Support Fund (CSF) reimbursements to reduce friction in the relationship and help us build a more constructive, predictable partnership. Indeed, since my last trip to Pakistan almost three weeks ago, a joint State-Defense Department negotiating team has remained, meeting daily with their Pakistani counterparts to seek to resolve these issues.

As Ambassador Grossman said during his April trip to Pakistan, we have a common enemy in the extremists that plague us both. We have a strong, mutual interest in seeing an end to the safe havens on the Afghanistan-Pakistan border that allow violent extremists to threaten both Americans and Pakistanis.

Pakistan’s cooperation on our key counterterrorism concerns has continued despite the turbulence of the past year. A September 2011 joint operation led to the capture by Pakistani forces of Younis al-Mauritani, a senior al-Qaida (AQ) operative. Pakistani security forces also arrested a number of other AQ operatives, including Muhammad Ali Qasim Yaqub, Umar Pattek and Abu Suhayb al-Makki. In addition, three senior AQ operatives were killed in 2011 in Pakistan, including Atiyah Abd al-Rahman, AQ’s second in command after bin Laden’s death, Abu Hafs al-Shahri, AQ’s chief of Pakistan operations, and Ilyas Kashmiri, a senior AQ leader.

Pakistan has continued operations in the Federally Administered Tribal Areas (FATA) and Khyber Pakhtunkhwa (KP), including ongoing counterinsurgency and counterterrorism missions in North and South Waziristan, Mohmand, and Orakzai. Pakistan military liaisons continue to staff border coordination centers in Afghanistan and work with their U.S. and Afghan counterparts to improve the effectiveness of border operations against militants. The Pakistan Navy also participates regularly in multinational maritime security operations.

As Secretary Clinton has said repeatedly, Pakistan needs to restrict the capability of groups such as the Haqqani Network, Lashkar-e-Taiba, and the Quetta Shura, which pose a serious threat to American, Afghan and ISAF forces – and to the Pakistani people. We welcome increased cooperation on countering the threat of improvised explosive devices (IEDs), which affect not only NATO-ISAF troops, but also many Pakistani civilians and the troops whose efforts are important to regional stability. In 2011 alone, Pakistan experienced 1,966 terrorist attacks resulting in 2,391 deaths – the vast majority of which were due to improvised explosive devices (IEDs). These statistics underscore how finding a solution to the IED problem is as much in Pakistan’s interest as it is in ours.

U.S. security assistance is focused on strengthening the counterterrorism and counterinsurgency capabilities of Pakistan’s security forces, and promoting closer security ties and interoperability with the United States. We are more precisely targeting our security assistance to shoring up and improving Pakistan’s counterinsurgency and counterterrorism, cross-border, and counter-IED capabilities, all of which are central to promoting stability in the region post-transition, and critical to U.S. national interests.

As a matter of policy, we have slowed the delivery of certain security assistance to ensure any deliveries are in line with our shared objectives. We are trying to chart a course that enables us to responsibly deliver security assistance to Pakistan that promotes our national security interests and our shared interests with Pakistan, while recognizing that our reduced U.S. military presence on the ground will impact our ability to implement programs. Our request does not reflect the current state of play, but rather long-term thinking on Pakistan’s important role in regional security and stability.

Our relationship with Pakistan extends beyond military engagement. Pakistan’s civilian leadership has cooperated with us and the Afghans on matters of mutual importance, such as participation in the Core Group with the Afghans on reconciliation and in taking steps to expand regional trade.

Pakistan’s government and civil society are working hard to achieve a smooth democratic transition through upcoming national elections, expected sometime before March 2013. These elections will likely be the first in which a civilian government has served its full term and handed over the reins to another civilian government -- a sign, along with the recent visible role the Parliament played in shaping Pakistan’s future engagement with the United States, that Pakistan’s civilian institutions are gaining strength and prominence. At the same time, we must be aware that election year politics will play a role in Pakistan’s posture towards the bilateral relationship. If we take the long view, however, the past year has been an important one for emboldening Pakistani civilian, democratic institutions.

The Administration and Congress expressed the long-term U.S. commitment to bolstering Pakistan’s civilian institutions in October 2009 through the Enhanced Partnership with Pakistan Act. We have consistently acted to support the Pakistani people and their elected civilian representatives to further develop their economy and their democracy despite the turbulence in our relationship. We know that a strong, stable, democratic and prosperous Pakistan with accountable institutions is in the interest of both the United States and Pakistan.

Our assistance program is focused on five priority sectors, carefully worked out with the Pakistanis: energy; economic growth, including agriculture; stabilization in the border areas; education; and health. Notably, our work in the energy sector will contribute 900 megawatts of power, half the installed capacity of the Hoover Dam, to Pakistan’s grid by the end of this year, enabling the private sector to grow. Our work to construct over 400 kilometers of roads in the FATA and KP will help Pakistan bring economic opportunities to an underdeveloped, chaotic region on the Afghan border which is also very much in U.S. national security interests. Further, our support to police, prosecutors, and other elements of the criminal justice system are improving law and order and enhancing the rule of law. Many of our programs are implemented through Pakistani institutions, including government agencies, to build local capacity – of course, with rigorous oversight mechanisms to ensure funds are used as intended. And all programs incorporate the cross-cutting issues of strengthening gender equality and democracy and governance. Alex Thier of USAID will elaborate during his remarks.

Our assistance is part of a broader effort to evolve the bilateral economic relationship to one based on “trade, not just aid,” –which not only the Pakistanis favor, but which is also in the interest of the American taxpayer. Even as we continue assistance, we are actively exploring opportunities for increased private sector investment, economic linkages, and regional and international trade, which will ultimately help Pakistan stabilize and move beyond dependence. We welcome collaboration with Congress on how we can move toward greater trade and investment with Pakistan.

Pakistan’s desire for “trade, not aid” is also increasingly driving its behavior regionally. Over the past year, the Pakistanis and the Indians have together made unprecedented progress in normalizing relations and expanding trade ties. Similarly, the Afghans and the Pakistanis have continued to work together to implement the transit trade agreement that they signed in 2010. Businessmen and women and civil society from each country is at the vanguard of this effort, driving their respective governments forward. These increased economic ties will serve as the natural foundation for stronger bilateral and regional relationships, based around the idea of expanded cooperation. Now the challenge will be ensuring that people on both sides see benefits from improved relations. But these type of efforts are at the very heart of our economic statecraft agenda, and drives the “New Silk Road” for supported expanded regional connections between South and Central Asia.

Our assistance goals also include encouraging respect for democratic processes, rule of law and human rights, both by the government and by ordinary Pakistani citizens. We continue to engage the Government of Pakistan on issues related to promoting religious freedom, reforming discriminatory laws, and seeking an end to impunity for security forces accused of human rights violations. This is not only in line with American laws and policy, but it also ensures that our relationship is based on shared values of respect for peace and tolerance.

To conclude, let me add that FY 13 and, looking ahead, FY 14, are both critical milestones in our engagement with Afghanistan and Pakistan. In Afghanistan, we are approaching the end of the transition in 2014 and the commencement of the “transformation decade” in 2015. In Pakistan, we are engaging and seeking to help shape a crucial partner during a formative moment. Our requests for Afghanistan and Pakistan in FY 2013 will provide the core resources we will need to accomplish and sustain our missions successfully in the coming fiscal years and beyond, and to continue along a path of increased regional stability and prosperity.

Thank you for your time. I look forward to your questions and to my colleagues’ testimonies.