Signing a Letter of Intent Regarding Cooperation in Construction of Priority Roads in Pakistan Ceremony

Jacob J. Lew
   Deputy Secretary for Management and Resources 
Richard Holbrooke
   Special Representative for Afghanistan and Pakistan 
Pakistan Finance Secretary Salman Siddique, and Pakistani Finance Advisor to the Prime Minister Abdul Hafeez (with participation of the Assistant Secretary for International Narcotics and Law Enforcement Affairs David Johnson)
Washington, DC
March 25, 2010


DEPUTY SECRETARY LEW: Well, I’d like to welcome our colleagues and friends here today and congratulate you and thank you for two very productive days. This Strategic Dialogue is the culmination of months of work by senior officials in our countries. Yesterday, U.S. and Pakistani representatives met and discussed concrete ways to deepen our cooperation in areas where the United States and Pakistan share mutual interests. The goal of this cooperation is to help the Pakistani people achieve their aspirations by addressing the pressing economic and social issues that most affect their lives.


During the Strategic Dialogue, we took concrete steps to advance our work in key areas, including addressing Pakistan’s urgent energy needs and helping rebuild communities damaged by violence. We also discussed our goals and vision for our partnership’s long-term future and established a schedule for intensive follow-up and discussions in Islamabad to occur as soon as possible.


Just now, we were pleased to sign and witness each other’s signature of a letter of intent regarding cooperation in construction of priority roads in Pakistan. This agreement will allow us to move forward with construction of roads in Pakistan that will help stimulate economic growth and enhance law enforcement access to remote areas, to improve public safety and security. The United States and Pakistan both recognize that infrastructure development produces immediate and visible results for the Pakistani people, whether its Pakistani farmers who need to get their crops to market or government officials who need to visit with their constituents.


To date, the United States and the Government of Pakistan have worked closely together to build nearly a thousand kilometers of roads in the Federally Administered Tribal Areas in the North-West Frontier Province. These road projects are accompanied by over a thousand focused agriculture, water, and electric projects which have a multiplying effect on development.


During Secretary Clinton’s October 2009 trip to Pakistan, she announced the U.S. commitment to fund an additional 87 kilometers of roads in the North-West Frontier Province, totaling $40 million. Today’s signing lays the groundwork for completion of this agreement, which we expect to occur shortly in Islamabad, and brings the Secretary’s commitment one step closer to implementation. It underscores Secretary Clinton’s comment yesterday that we are beginning a new chapter in our relations, one that is built on mutual respect and mutual interests. This is a tangible sign of the long-term partnership between our two nations. We are pleased to work with the Government of Pakistan to build roads and improve the security and livelihoods of the people of Pakistan.


And now I would like to turn the floor over to the Pakistani Finance Secretary Salman Siddique, who joined me in signing it, and Finance Advisor Shaikh, also with us today. We’ve had very productive meetings on a broad range of economic issues. And this agreement today is the culmination of just one piece of it.


Mr. Secretary.


MINISTER SIDDIQUE: Thank you, Deputy Secretary Lew. I think this day marks the (inaudible) in the sense that, although we were into a Strategic Dialogue and the Strategic Dialogue by itself entails more consultation, which is going to take place when we get back to Islamabad and will be a continuous process. But of course, this war on terror which we are all fighting in Pakistan and especially in the frontier provinces has had its toll on the lives of the people, in the sense that the economic livelihood of the people of Swat, in particular, Malakand, where the army operation has now given way to a process of reconstruction and needed assistance. So I think this – in a very tangible way, this construction of this road in the Malakand area in Swat and, of course, the construction of the railroad around Rashad*, which is the heartland to the entire frontier province, I think marks the intent, the real intent, of the Government of the United States that the Strategic Dialogue over a period of time would develop into tangibles. And this is perhaps a first sign off of its kind, where something tangible is being done for the people of the frontier.


I can also assure you that we in the Finance Division are been charged and tasked to look after the affairs of the frontier province far more directly than the other provinces because of the conditions, the (inaudible) conditions there. And the government of the frontier and the chief minister of the frontier actually meet very regularly on a structured program basis under the chairmanship of both the minister of the finance and the planning commission. The minister holds both portfolios. And I think that is a forum where the needs are assessed, and I think this is going to be great news to not simply the government and the chief minister but also the people of the frontier and the people of Malakand. Thank you, sir.




MODERATOR: The Deputy Secretary and the Finance Secretary will be happy to take any questions you have.


QUESTION: From Bloomberg News. I’m wondering, how many more miles of road do you think need to be built with this kind of assistance before Pakistan can start financing this construction on its own.


MINISTER SIDDIQUE: Well, to tell you the truth, this construction could be taken by the Pakistani authorities on its own, but of course it is then going to take very, very long. What is going to be the ideal road density which you would want to achieve? Well, the international best practice says that ratio has to be something like one-to-seven. What you have in this area is virtually one is to zero. So I think that is the kind of road construction network which is going to be envisaged. And if you look at the history of the area of the FATA, even the British did not dare make a road because a road was considered as an intrusion. And it is only now that the frame of mind of the tribals have been changed to an extent where they want development, and the development needs to now follow very, very quickly.


If we waste this time, then all the goodwill which you have created might be lost. So I think that movers – the need is to move in very urgently with development because, after doing the quick monetary operation, you need to now follow up with the developmental operation.


DEPUTY SECRETARY LEW: And I would just underscore that from our perspective, it’s so important that we be in these areas where so much progress has been made in recent months to try and deal with the threat of terrorism, to show the people of the area that we’re partners going forward in the kind of economic development that will improve their lives. Having driven on the roads through some of these towns, it’s quite clear what the importance of putting roads is. It can reduce dramatically the amount of time it takes to get from one place to another, to do marketing, to do your daily business. And it’s an incredibly important sign that we are responding and we’re helping the Government of Pakistan respond to the needs of the people.


AMBASSADOR HOLBROOKE: I just want to add that when I was in Swat about a month ago and met with the leaders, the two top issues were this road, which winds along the river bed, right? That’s the road.




AMBASSADOR HOLBROOKE: Yeah. And I flew over it. And the value of it, both economically, psychologically, and in reducing the opportunities for the militants to come back, are very substantial. And secondly, girls’ education, which we also have projects on, but those are not new projects. And so we’re very pleased about responding as quickly as we can to these things.


QUESTION: This is a question for the finance secretary. Are the payments of the coalition support funds helping you in terms of meeting your IMF – or there’s been a promise to speed that up and to hand the money over by the end of June – will that help with your IMF obligations and to meet your targets? And how are you doing on those IMF targets? Are you making it?


MINISTER SIDDIQUE: Well, we are absolutely on track with our IMF targets because we would never renege on our commitment to maintain the fiscal deficit, and we are going to honor that. But of course – and this has meant a huge cut in the public sector development program. And we have been assured of the coalition support funds to come in. Of course, this is only a question of timing. It’s not that army operations have been held up by the Q-block or the ministry of finance because of lack of funding frozen. These are monies which are already expended and are actually reimbursements which help to shore up the budget. So I think we don’t have any issue.


Yes, there was a visa issue. Well, that seems to have settled down and we are on track to get these monies in before the 30th of June.


QUESTION: Well, would it help you meet some of your budget shortfalls so that you can show the IMF that the agreements can roll over and it’s all hunky-dory?


MINISTER SIDDIQUE: Yes, absolutely. That is already what we have discussed with the IMF, and we have the assurance from the U.S. Administration on this. I don’t think it is an issue which is now currently being flagged by the IMF. I think that is a resolved issue. It’s now only a question of timing and the funds coming in – 345 -- $349 million have already come in into the Pakistani kitty already.


QUESTION: Minister Siddique, despite everything that was accomplished over the past couple of days, were you disappointed that the United States rebuffed Pakistan’s request to engage in civilian nuclear trade?


MINISTER SIDDIQUE: May I have the question again?


STAFF: I think that’s for different sectors of committee than this one.


QUESTION: (Inaudible) official of the Pakistani Government, such as you, sir, and were engaged in the conversations. One of the issues that was raised early on was that Pakistan was interested in civilian nuclear trade with the United States. Do you have any comment on that?


MINISTER SIDDIQUE: Well, that’s not an issue which was raised during one of our conversations.


DEPUTY SECRETARY LEW: We were having meetings on the economic issues just now and made great progress on a number of things that – some of which were announced in the communiqué, some of which we announced today. There’s another signing that’s going to be taking place at USAID on an important project. So we’ve broken into groups to discuss different issues and we really appreciate this opportunity to congratulate our partners from Pakistan on the important accomplishments here today.


AMBASSADOR HOLBROOKE: So the next signing is at AID in Rajiv Shah’s office at – I think it’s 3:45, if I’m not mistaken, and that will be the thermal power agreements. In case you’re wondering why some are here and some are there, it’s just the way the congressional appropriations worked. This is a State Department budget; that is an AID budget.


But, look, I want to make one other point. The agreements that Rajiv Shah are laying out this afternoon are the specific agreements that Secretary Clinton said we would do when she was there in October.


DEPUTY SECRETARY LEW: As were the letters we just signed here today.


STAFF: (Inaudible) last one.


QUESTION: Yes, to the minister, please. Deputy Secretary Lew said that these projects were important to show the people of the region that the United States was in partnership of the Pakistan – with the Pakistani Government and with the Pakistani people. How are you going to make clear to the Pakistani people U.S. participation in this project? Is this important to you to say to the people, as these projects begin, that this financing has come from the United States and it’s participating in it? And do you think that that will help to reduce the level of anti-Americanism in that region and in Pakistan in general?


MINISTER SIDDIQUE: I think it is a challenge for both governments, both the Government of the United States and the Government of Pakistan to make this new strategic dialogue a more popular one in which it leads into a popular acceptance of each other. And I think that is why projects like these, which directly affect the lives of the people and must be seen to have come in through U.S. support rather than through a multilateral support program in which there are no names, I think it is time that the image of the United States in the eyes of the people of Pakistan improved, and it can only do so through direct intervention. And I don’t think the people of Pakistan have any qualms on looking towards American help and American support in rebuilding their lives, which are affected by the war on terror, and going forward into a far more strategic relationship even in times of peace.


QUESTION: (Inaudible) if I could just briefly follow up. So will you go back and, as you announce these projects – make it clear that this is something that comes from the United States?


MINISTER SIDDIQUE: Could I have the minister respond?




MINISTER SHAIKH: Let me just start by thanking the Secretary Lew, Ambassador Holbrooke, and the U.S. Administration for the warm hospitality they have shown us. I think it’s important to recognize that we are a multidimensional relationship, and the idea now is to get this relationship converted into a more strategic partnership. And over the last two days, we’ve had meetings with the leadership of different segments of the U.S. Government, and I think a variety of groups, working groups, have been formed in the area of economy and finance, in the area of agriculture, area of energy, security and so on. And this whole thing should be seen as a process that’s unfolding. And the idea is to give context to it, to give substance to it, and some of the support has already been given, and I think this is one concrete example of that.


Later, we’ll be signing some of the projects in the USAID office. So this is an unfolding process, and we hope to build upon it and expand the relationship from government-to-government to include our people, our private sector and so on.


Thank you.