"Till The End We Didn't Know Pakistan Would Accept Non-NATO Ally Status"

V. Sudarshan:  Would you agree with the assessment that relations between India and U.S. especially wherePakistan is concerned is a tricky minefield to negotiate at the best of times?

Ambassador Mulford: Well, Ithink there are certain, many sensitive issues.  Your question is… can you read the question again because it seems to me you’ve asked about the broadrelationship.

V. Sudarshan:  Would you agree with the assessment that relations between India and U.S. especially where Pakistan isinvolved is a tricky minefield even at the best of times?

Ambassador Mulford: I would saythat the relationship between the India and U.S. is in general a relatively straightforward relationship wherediscussion and negotiation of issues is orderly, it is polite, for the most part it is constructive. There are areas of sensitivities where Pakistan is concerned.

V. Sudarshan:  Doyou believe that granting the major non-NATO military ally status to Pakistan when Delhi is in an electionmode could have any consequences at all on Indo-U.S. relations?

Ambassador Mulford: On Indo-U.S.relations?  I do not see why it should.

V. Sudarshan:  Because the Spokesman just the other day, I think, the Government of India said through the Spokesman"It will have significant implications."  Do you have any ideawhat was meant by this?

Ambassador Mulford: Significantimplications?

V. Sudarshan:  On Indo-U.S. relations.  He specifically said so.

Ambassador Mulford: I have nodetail on that.

V. Sudarshan:  But you certainly do not subscribe to that assessment?

Ambassador Mulford: I don't seethat as being justified by the decision that we made and announced.

V. Sudarshan:  Didthe question of granting Pakistan any special favors or dispensation come up in Secretary Powell’s, in anyof his, meetings in New Delhi?

Ambassador Mulford: It did not.

V. Sudarshan:  How come New Delhi was not informed of it.  Could it bethat Secretary Powell assumed that the Mission here had done the necessary spade work?

Ambassador Mulford: No, I thinkthe reason it wasn’t discussed is that Secretary Powell was visiting here for the purpose of discussingU.S.-India relations.  And U.S.-India relationship is a bilateralrelationship, it’s a free-standing relationship which has many, many elements to it that are significant toboth parties, such as the Next Steps in the Strategic Relationship.  Andthen the focus was on that issue and then very heavily on economic issues, where there is enthusiasm to beginto prepare to resuscitate and revive the Economic Dialogue and so that we can move forward on that at a moresenior level. And those were the main focal points.  

V. Sudarshan:  Exactly.  But you know the relations between India and theU.S. is always had the Pakistan factor in it.  So even thoughIndia -U.S. relations stands on its own, Pakistan is always a factor that cannot be separated from this entirething.  So do you think in retrospect this entire issue of MNNAcould have been handled any better?

Ambassador Mulford: Well, youmade the question and so I guess I don't have to answer it.  Youhaven’t asked a question.

Questions: No, I asked you whether it could have been handled any other way.

Ambassador Mulford: No, it washandled the way it was because that's the way it was appropriate to handle. By that I mean the India-U.S. relationship, as I said before, is a relationship which stands on itsown.  Just as the U.S. relationship with Pakistan stands on itsown.  So that I don't think it is reasonable to think that everysingle issue has to be viewed through the prism of the other aspects of the other relationship. There is clearly a fundamental containment to each of these relationships that are in and of themselvesto do with those countries.  That is the basis on which theSecretary came and conducted his discussions.

V. Sudarshan:  Reading from State Department website whatever we see from the press, there seem to be apparentcontradictions in explanations provided by various people in the Bush Administration as to why India was nottold about the MNNA.  Powell himself was on the record saying thatthis has been in the works for months and months and months and months.  Hementioned the word months four times, whereas Adam Erelli said that this was something Washington did not careto advertise about. And yet Powell has been reported in the Hindustan Times as telling Yashwant Sinha that thedecision was not taken even while he was in India. It got taken only when he reached Islamabad.  What'sthe real story?

Ambassador Mulford: Well I thinkthe real story is, this is an issue that had been discussed, and, my understanding is that there was noconclusion to this discussion.  And part of it because it wasunclear whether Pakistan was really interested in the issue.  Becausewe are talking about something here that isn’t absolutely a huge strategic issue. It is a relatively small item.   You can look at theweb site and see the things that are laid out there confirm that it is not in the same league with thestrategic alliance, the Next Steps, that we have been discussing with India. But I think that until they got to Pakistan, they didn’t think that it was an issue thatwould come to a head, and then I think all of a sudden it did in the context of the situation out there atthat time, and not only did it come to a head, Pakistan apparently said they wanted to go ahead with thisbecause it was thought to be a good idea at that time because of what was going on up there, to decide, yes,Pakistan would go ahead.  And so they did go ahead.

V. Sudarshan:  Can I draw your attention to Boucher’s statement on March 22nd. He mentions the trinity issues as examples of increased enhanced cooperation between India and theUnited States, but he mentions, but he fails to mention expanded dialogue on the missile defense about whichover here there has been a lot of emphasis on.  Is this aninadvertent omission or?

Ambassador Mulford: I suppose,it must be.  If you look back at all the exchanges that have takenplace on the "so-called" trinity issues have been mentioned and usually followed with this idea in mind,as I did in my speech the other day which indicated that, in due course, missile defense is also an issue tobe discussed.

V. Sudarshan:  Itis simply a case of oversight?

Ambassador Mulford: I think so.

V. Sudarshan:  Iwant to move away from this MNNA thing and come to the other thing that agitates our mind a lot, which is theproliferation question in the region.  So far, people, audiencesover here which are keenly following this have not got one single convincing explanation that whateverhappened in terms of proliferation was largely, entirely the handy work of Qadir Khan. No government agency, no security agency, none of the Pakistani government was involved. Can you offer our audiences here one convincing argument that this was indeed the case and that nobodyelse was involved except Qadir Khan?

Ambassador Mulford: Well, Ithink that the Secretary when he was here cleared the US position, which was, namely, we haven’t got to thebottom of this. We don’t know the answers.  And I think he alsoexplained that the United States is focused on getting to bottom of the network, rolling it up, and pursuingthe various elements of it to try and contain the situation and make sure they got the whole thing undercontrol, and when the question was raised about exactly who knew what when, the whole process, his answer waswe don't the answers to those things yet and it will be some time before we do. Ultimately, we will know mostof those answers.

V. Sudarshan:  Did this issue come up for discussion when Secretary of Powell was here?

Ambassador Mulford: It did comeup. Yes. It was framed just the way I explained it to you.  Hevolunteered that information to our friends here, explanation, just as he did in his public statements here,in the press conference.

V. Sudarshan:  So is there is any justification to the view over here, which is a very dominant view, that here is aninstance where United States is plainly rewarding somebody who has been the worst proliferator in history?

Ambassador Mulford:  No, I don't think so because the United States has a relationship with Pakistan which is based oncertain objectives that have to do, as you know, with catching terrorists, al Qaeda, and so on. And these are very high priorities in the relationship that's been successful on those fronts. AndPakistan has been an important ally to the United States.  TheUnited States is keen to continue working with Pakistan to build that relationship and make further progresson those things.  

So the A. Q. Khan thing has come up and is beinglooked at in the context of what I just described, namely, the aim is to try to understand exactly whathappened, how widespread it was, who was doing what, roll the thing up, dismantle it so that it isineffective, cannot be reconstructed and maximize the ability we have, as you’ve seen from Libya, to sort ofderive advantages from the process of rolling it up.  It is asignificant step. And it is impossible for us to know at the stage exactly the full details of who knew whatwithin that structure And that hasn’t the important thing for the timebeing. The important thing is rolling it up.

V. Sudarshan:  But you will get to the bottom of ....

Ambassador Mulford: Well, theSecretary said that, ultimately, we will, but there may be things that are, you know, never fully established. But he seemed to think we would make progress on it over time.

V. Sudarshan:  Coming to the entities list. There is a revised entities list still active and ISRO is still on it. Is there is any chance of getting the ban on these entities removed?

Ambassador Mulford: Well, Imean, what has happened as you probably know, the Next Steps initiative which was announced in January, hasbeen under discussion.  It is a complex process and what has tohappen is that both sides have certain things to fulfill in the various phases as we move forward and certainthings will happen, among them the certain thing that you mentioned. 

But certain things haven’t yet happenedand the framework for getting these steps done isn't fully in place yet. Until that is in place, I think we are very close, I think the Secretary’s visit was extremelyhelpful in this regard, to sort of get this in position, so that we can get that framework involved. Until that’s involved, there will be the types of actions that you mentioned, but when the frame workis involved, it is established, then I think we will see those steps and we will see an expansion of thecommercial aspects of those relationships because liberalization of export licensing is a very importantobjective here. 

But, of course, that has to be linked to a very careful, convincing and credible system ofmaking sure that there are no onward leakages and those sort of things. So these are largely technical issuesat this point, but they are complicated. And they need patience, they need time to get into place. But I think we are making progress. 

V. Sudarshan:  Isaw Powell saying on the way that there are lot of things that India has yet to do on these issues and hasthere been any movement among those things?

Ambassador Mulford: Well therehas been. And I think there was some important movement during this visit, and now we have a good chance ofseeing that movement arrive at the point where the significant aspects of the framework are put in place.

V. Sudarshan:  I want to ask you what are the priorities of your Ambassadorship?

Ambassador Mulford: Did you seethe speech I did the other day?

V. Sudarshan:  Isaw it, but I would like you to tell the Outlook readers.

Ambassador Mulford: Thepriorities, first of all, are to build on the strategic relationship that has been so clearly laid out byPresident Bush and Prime Minister Vajpayee and to complete the work on that which we have just been talkingabout. To make absolutely sure that the vision that they have captured is in fact successfully implemented andwe begin to see that become a reality because as that becomes a reality the strategic relationship is going tobe very, very important alliance basically for the United States and India.  

And then beyond that there is the vision of building on that a more comprehensive relationship withIndia because, as I explained, for reasons that I think essentially of history, this relationship today isvery heavily a bilateral government-to-government relationship and the private elements of the relationshipfor  a whole variety of reasons are relatively more modest.  

When you compare this relationship with other major relationships around the world the United Stateshas, where perhaps the bilateral aspects are 20 per cent of the relationship and the balance is private. Hereit might be roughly reversed.  So there is clearly a major job tobe done to build a balance in that relationship and that involves doing things in virtually every field youcan think of. Obviously, business, trade, commerce, finance.  

Butalso the programs that underlie our common interests: HIV, for example, health issues, polio, AID projects ofvarious kinds and in some cases helping improve certain things such as fiscal disciplines at state level inthis country. And these things, universities, strong relations, the virtual movement of people, foundations,cultural events, media.  All these things can and should and will,in my opinion, be important. So the vision is to sort of begin the process of building our relationship, whichif we do, in my opinion, the U.S.- India relationship at the end of a few years will be one of the mostimportant relationships in the world.

V. Sudarshan:  You have an enormous background in business, economics [inaudible]. How hopeful are you that we’llhave much greater market access at the end of your tenure?

Ambassador Mulford: Well, Ithink, very hopeful, very, very confident that there will be significant further changes in India which aredriven from within India, not by the United States, and obviously we are interested in seeing those succeed. Even if they do succeed the task of getting better access, for example, on trade, better arrangementsfor foreign direct investment and a variety of different things, will improve. Because we think this government, and really all parties today seem to have embraced growth and reformas the priority to keep India moving in a significant direction of strong, sustained growth. 

And I think, inmy view,  if India continues to grow somewhere between 8 and 10percent a year on a consistent basis with low inflation and reasonable fiscal discipline and so on, theprogress is going to be really eye-popping.  And this issignificant because, not only there will be growth, there will be rapid expansion of the middle class which isone of the things driving the process.  But there will be areduction in poverty.  

With that will come other changes,consumption, education and so on.  And that will also, there isgoing to be a very significant emphasis here on, it seems to me, on infrastructure and on reforming theeconomy.  Because you can’t really grow an economy consistentlyat 8 to 10 per cent unless you open your economy, you make reforms, you open to the outside world, takeadvantage of opportunities for cross border operations.  

Indiancompanies will began to think multinationally themselves and I think you will see major transformation in thefinancial markets and beyond from what there is today, and well beyond. Because there has to be sources offinance made available for long-term capital investment in infrastructure. And these things are going tohappen.  So, in a way, when you talk about access, I think some ofthe issues that will be discussed between the two countries will be issues where you will be pushing on anopen door. I think there is willingness and interest.