'Credible Action Against Terrorism'

Question: Sir, you have just spoken about the meeting with Mr. Obama on the sidelines and with Mr. Brown on the sidelines of the Summit. What is going to be the crux of discussion withObama? Is it only protectionism which will be discussed or will it discuss things beyond that? Secondly, the Opposition Leader Mr. Advani yesterday raised the matter of the money stashed in Swiss banks and asked the Prime Minister to take up this matter saying that because of the recession all over this money could be used for different purposes and maybe for the infrastructure and all those things. Is the Prime Minister going to take up this matter as has been demanded?

Shivshankar Menon: On the meeting between the Prime Minister and PresidentObama, I think it is our expectation that they will naturally discuss some of the issues that come up in the Summit - the question of world economic crisis and how we are both dealing with it. But certainly, as this is their first meeting, this will also be an opportunity to discuss our bilateral relationship - what this Administration has already called a true strategic stand-alone global partnership. So, they will discuss the bilateral relationship and how we take that forward. I am sure there will be other regional, global issues that will come up. …(interruption)…That is among the regional issues that will come up I am sure.

On the question of money in Swiss banks and in various countries which have nondisclosure policies in place, this is an issue which has been discussed at considerable detail in the preparatory process. It is not only the question of money in Swiss banks. There are other countries, other banking systems which also were very careful about revealing where the money is from and so on. There is general agreement both in the institutions concerned – for instance in theFSF, Basel Committee - and in the G-20 preparatory process that there is a need for much more open disclosure and that there will be much easier access to this information for certain purposes, especially if there is any question of this money being linked to either illegal functions or anything like that. So, we will work for greater transparency in the system because frankly we think it is also an economic good quite apart from any other advantages that one might see in that. We have urged much greater transparency, and we think that at the end of this process there will be much greater transparency in these cases.

Question: Sir, in the wake of the attack that has happened in Pakistan today, the Interior Minister has said that the same Jihadi groups could be behind the attack. What is India’s assessment of the situation right now?

Shivshankar Menon: I think it is too early for us to comment on who did it how and so on. It is till under way. Let the Pakistan authorities investigate and look into it. We will tell you when we are in a position to come to conclusions. But now it is too early.

Question: All the recommendations, or what India seeks seem to be medium-term to long-term issues. Aren’t there any discussions to resolve the immediate crisis at hand, for instance easing credit and so on?

Shivshankar Menon: I think you need to draw a distinction between what the function of G-20 is and what the function of national governments is. As national government certainly we will take immediate steps to deal with what we face. Easing of credit for instance is something that might be discussed at a policy level but the ultimate decisions will be taken by individual national governments. So, the discussion will be at a policy level rather than saying, "Okay, this is a level at which you will peg." I think it is quite clear. We all feel that there is a need to increase aggregate demand in the global economy. I think that is agreed.

Question: But the other discussion which is more short-term is getting stimulus packages….

Shivshankar Menon: Exactly what I am saying. There is a need to increase aggregate demand which is what a stimulus package is meant for. How do you choose to do that? Some economies might have exhausted fiscal, monetary measures; some might not. Some might already be at very low rates of interest. Some, like us, might be in a position to cut some rates of interest. We still have space for fiscal manoeuvre and monetary manoeuvre. So, as I said, the actual measures will be a matter of national decision. But there is certainly consensus across the board that you do need to boost aggregate global demand. That is something that I am sure they will discuss and they will also see how they can encourage each other to do that.

Question: Mr. Menon, this is about the Prime Minister’s scheduled meeting with Mr.Obama. Is India rethinking on the question of signing the CTBT? Is that likely to figure in the talks between the Prime Minister and Mr.Obama?

Shivshankar Menon: Our position on CTBT has been repeated several times, most recently in Washington by Special Envoy Shyam Saran. Position remains the same. We would not stand in the way. What we want is a CTBT which actually contributes to disarmament. That linkage is very important for us right from the beginning when we started advocating a CTBT long before anybody else did. We are not sure that this treaty does so, at least in its present form. But let us see where this goes. Other countries have changed their positions on theCTBT. We are still watching the process. Our position is clear. It remains the same. Hasn’t changed. But clearly other countries’ views are evolving. We will see where that goes. On whether it will come up or not, nothing prevents it from coming up. But I have no reason to say, "Yes, it will" or "No, it won’t". I cannot tell you that yet.

Question: Sir, what is our response to the AfPak policy unveiled by President Obama a few days ago, specifically with regard to the regional cooperation which he talks about in terms of setting up a contact group where India will be one of the players, and also giving large amount of aid to Pakistan – some 7.5 billion dollars over the years and more is on the way? Is our Prime Minister going to take up the issue with PresidentObama?

Shivshankar Menon: I think the situation in the region including what happens in Afghanistan and what is happening in Pakistan will certainly come up during discussions. As far as this comprehensive strategic review of US’s policy which is in the process of being rolled out and being discussed also at variousfora, we welcome the very clear expression of will to carry through the struggle against extremism in Afghanistan and its roots in Pakistan, which is contained in the new comprehensive US strategy. India has a direct interest in the success of this international effort. And India is ready to play a constructive role as a responsible power in defeating extremism of all kinds.

Question: President Asif Zardari has recently expressed Pakistan’s desire to restart the Composite Dialogue with India. What is India’s reaction?

Shivshankar Menon: I think it is quite clear that in the present situation what we are looking at is bringing the perpetrators of the terrorist attacks in Mumbai to justice, and credible action to dismantle the infrastructure of terrorism in Pakistan, from which Mumbai and various other attacks on India have taken place in the past. We are waiting.

Question: My first question is a follow-up of the Swiss bank question that was asked sometime back. The US has filed a lawsuit asking for details of American citizens who have accounts in Swiss banks. Is India looking at doing something on the similar lines? My second question, there is a problem with the Western banks lending out to developing countries like India. Is this issue likely to come up in G-20?

Shivshankar Menon: On the first question I cannot give you a categorical answer yet. I think we are looking at it. I do not think we have come to a final decision yet on how we do it, which is the best way to approach it. But as I tried to say to you earlier, it is more than just a question of Swiss banks. I think it is a broader issue of transparency and access to information.

On the question on Western banks, the problem is a broader problem. It is not just straight finance but it is various other kinds of liquidity in the banking system. Both at Washington and in the subsequent meetings we have been pressing - frankly we have all been pressing, it is not only India or other developing countries or emerging economies, we have all been pressing including the developed countries – for bank lending to start flowing again as it used to. If you look at the figures now, contraction has been really quite drastic. So, one of the steps and one of the big working groups actually on restoring confidence in the financial system, one of their big tasks is really to make sure that the conditions exist for that flow to start again. This is very important for us. We think it is very important to get the world economy going, equally to get trade going again in the world which for the first time in many many years is shrinking this year. As I said, it is essential for development as well. So, this is one of the outcomes that we would be looking for.

Question: Will the issue of terrorism form part of the Prime Minister’s address to G-20?

Shivshankar Menon: It is not strictly speaking part of the agenda of the G-20. In these two G-20 meetings, leaders have actually been meeting in order to address specifically the financial crisis and the world economic crisis. I think that pretty much fills their plate. In the other broader conversations on the sidelines of the Summit, I am sure terrorism is one of the issues that will figure.

Question: Obama spoke of constructive diplomacy to bring down tensions between India and Pakistan. How do you see that? And, is there any meeting slated with the Chinese?

Shivshankar Menon: The two bilateral meetings that we have slated are these two right now because there really is not much time. So, these are the two that we have scheduled. There will be other conversations, what we call pull-asides, because they will all be there together for a considerable length of time. But, that I cannot predict at this stage. On the issue of constructive diplomacy our views have been quite clear. On how the India-Pakistan process has been most successful when it has been bilateral. It is very hard for any external influence to substitute or to replace an absence of political will intrinsic to the process itself. It takes two hands to clap, and you know getting hands from elsewhere really does not help. We have actually been most productive and we have made the most progress - if you look at the period between the middle of 2003 and until about the end of 2006 – actually when we did it ourselves. I think that is an important lesson to learn for the future.

Question: Already there are subgroups that are forming within the G-20 with UK and USA on one side, continental Europe on the other, China standing singularly, and developing nations on one side. There are already barriers. Lula is saying that it is a white and blue-eyed people who have caused this crisis. Do you really see a common solution emerging out of this?

Shivshankar Menon: As I said, this represents about 85 per cent to 90 per cent of world GDP, depending on whose figures you use. Unless we act together, we are not going to solve a crisis of global proportions and of such depths. It is something quite unprecedented since the Second World War. I do not see us being able to solve it unless we act together. So, I would assume that while we might have differences in tactics, in approach - each one might stress different portions of what we would like to see done – but ultimately our common interest will override these differences. There will be differences. That is what the whole point of sitting around the table is. It is to sort out of these differences because we each come from our own situations. Each of us naturally will see parts of the solutions much more important for themselves. But ultimately I would assume that our common interest in getting the world economy going again, and fixing the financial system would override these differences because none of us can do it alone, none of us. And certainly, if we each chase individual solutions of our own preference, nothing will happen. The problem would not be solved. So, in that sense I am more of an optimist.

Question: Just a follow up on that, Sir. In …(inaudible)… of meeting you cannot do that. There are already things going on right now.

Shivshankar Menon: But this is why the whole preparatory process is important. If we can get a lot of the detail out of the way in the preparatory process - which is what the Working Groups have done, Finance Ministers have done – then really at the Summit level you can concentrate on the big issues, and on, in a sense, unifying thinking so that at the end of it you emerge with a much clearer idea of what is possible, what can be done, what is likely to be done.

Question: I would like you to take you back to Pakistan, Mr. Menon. Since 26/11 India has had a consistent position. I know the investigations into today’s attack in Lahore and the operations there are not yet over. But India has had a consistent position that there are elements in the Pakistan State that believe in using terror as an instrument of state policy. Would you continue to say that that is the Indian stand today also because will that wash on the world stage today when attacks in Pakistan are mounting at such a pace?

Shivshankar Menon: We have an attack today, which is clearly a terrorist attack, which is now what seven hours old? I do not think anybody should jump to conclusions about who did it, how it is done, why; or should, therefore, then go to even bigger conclusions about describing the nature of the relationship between terrorist elements in Pakistan and parts of the Pakistan establishment. I mean those are huge conclusions to draw on an absolute absence of information. So, I will be very careful before jumping to all the conclusions that you have mentioned on the basis of what happened today. Our basic judgment and assessment is based on our experience over several years, in fact over decades, and over what we have seen. So, it is not going to waver from day to day. This is not something that changes with the weather or with one event or the other. We will have to see. And let us see. Before we jump to conclusions about what happened in Lahore today and how it affects our assessment, let it play itself out and let us see who actually did it and how it was done and why it was done as well.

Question: Mr. Menon, on G-20 a lot of what we have heard from the Indian side in the public domain has been rather defensive, that we are looking to fight against protectionism. I am just wondering what our views are on certain ideas that have come up. For example, the People’s Bank of China Chairman had spoken about the need to move away from the dollar standard and have greater reliance onSDRs. Does India have a position on these kinds of changes?

Shivshankar Menon: If you look at what Prime Minister said at the first meeting in Washington, we had spoken about the use ofSDRs, about the need to greatly increase the numbers of SDRs and to allocate SDRs so that in effect I think we are all addressing the same problem. We see not just a liquidity problem, a temporary and a shortage of credit as somebody said there. But we also see the problem of what the kinds of stimulus packages that we are talking about, the effects that that will have on currencies, on exchange rates and on reserves ultimately. So, I think there are larger issues here which we are all grappling with. I think many of us have ideas, some of which have been expressed in the public domain, some in the course in the course of the preparatory process since we were very involved in the preparatory process at all levels. I think most of our work has been done there. Maybe that is why you have this impression. But yes, I think we need to look at several imaginative, innovative ideas and ways of dealing with these problems. There are issues here which are I think unprecedented. I do not think we have had some of these issues in global economic discourse for a very long time. So, the more ideas, the better. I am not sure that the Summit is the place to actually deal with big new ideas. I think the way to do it is exactly as is happening now. Many new ideas out in the public, in the open; a lot of detailed discussion in preparatory meetings; and then to see levels of comfort, what is feasible what can actually be implemented, because I think people have to get used to these ideas and their implications. I do not these are the kinds of ideas that this Summit, and certainly not this meeting, will take decisions about.

Question: On Pakistan, what is the metric that we are looking at following which you could conceive of a resumption of dialogue? Are we looking at a trial beginning, extradition? When you say ‘shut down the infrastructure’, can you be more concrete?

Shivshankar Menon: We have always avoided setting down timeframes.

Question: I am asking for a metric.

Shivshankar Menon: I am not setting down concrete markers. Whichever word you use, ultimately it is the same thing you are asking for. Metric is a fine word. But basically you are saying, "What is your marker, at what stage do you think?" We have made it quite clear. What we expect is credible action against terrorism. Now you will say that it is subjective. Yes, but it has to be credible in our view. Unless we think it is credible, it is not going to be worth it. We want to see credible action against the infrastructure of terrorism in Pakistan. We want to see the perpetrators brought to justice. At that level of generality, I think everybody knows what we mean. Rather than quibbling about whether that involves filing a charge-sheet, or taking them to court, or finishing the prosecution, or sentencing, or judgment, I would rather not get into that.

Question: On CTBT, Sir, you have half-used a phrase that we have not heard from the GoI since 1998, that ‘India will not stand in the way’. Could you complete that sentence? Not stand in the way of what?

Shivshankar Menon: That is it. We would not stand in the way.

Question: Does it mean India has an open mind?

Shivshankar Menon: That is not what I said. No, we cannot because we have a position and it has been consistent.