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U.S Pakistan Business Council
Remarks as Delivered by Deputy Secretary of Defense Paul Wolfowitz, Washington, DC, Monday, September 30, 2002

Thank you. I guess I don't need to say I'm from the Department of Defense. And as my boss would say, we're in the business of capturing and killing terrorists. So you might say, what is he doing here spoiling our nice lunch? The answer, in some part, is because of [Pakistani Finance Minister] Shaukat Aziz.

I had the pleasure of first meeting Shaukat when he was in Singapore in charge of East Asian Operations for CitiBank and I watched him as he was still a rising star nearly at the top of that great organization. When he was announced as Finance Minister, I thought, this is remarkable. This, to me, said two amazing things. First of all, the vision that [Pakistani] President Musharraf must have had to pick somebody of Shaukat's enormous caliber who clearly wasn't going to give him easy answers or easy solutions, but, secondly, Shaukat's dedication and patriotism and willingness to take on what has got to be one of the world's most difficult challenges and assignments.

So, for that reason alone, it's a pleasure to be able to be here to address you and to make a few remarks. But, in fact, there is a larger connection to that war on terrorism. Part of the connection, but only part of the connection, comes from the fact—and it's a well-known fact but it bears repeating—that we have scored some extraordinary successes in the last 12 months in that war. We have killed and captured extraordinary numbers of terrorists and we have been able to do it with speed and with military effectiveness that I think have astonished the world.

We would not conceivably have been able to accomplish what we accomplished in Afghanistan without the support of Pakistan, support that was made possible through the brave and bold leadership of President Musharraf. We are deeply grateful for that. We appreciate that it was not an easy decision for him to make. We do believe that, in the long run, it's good for him and his country as well as for us and our country, but we could not remotely have accomplished what we accomplished without that support.

And, of course, that support continues to this day, not only in the military field, but in the intelligence and law enforcement field. It was, I think, barely a week ago that the whole world read about the arrest of Ramzi bin al-Shibh—who was one of the September 11th plotters who, thanks to efforts of the Pakistani government, is not only off the streets now, but, in fact, providing us with valuable information. So, again, I feel I'm here in part, Shaukat, to say thank you to your President and to your country for that support.

But I'm also here to say that even in the Department of Defense we understand that this war on terrorism is about more than just killing and capturing terrorists. As the President of the United States said when he addressed the joint session of Congress for the State of the Union message back in January—in a part of the speech that may have gotten a little bit obscured because that was the "axis of evil" speech—he also spoke very clearly and articulately about the need to build a better world—these were his words—"to build a better world beyond the war on terrorism." It addresses the fact that to eliminate the sources of recruitment for terrorists, to eliminate the schools for terrorists and for religious extremists where terrorists are bred, we need to think beyond simply military and law enforcement activities. We need to think about the kind of fundamental development that Shaukat Aziz and his colleagues are undertaking in Pakistan.

Clearly Pakistan is one of the major fronts in this battle. It is no secret and doesn't bear a lot of elaboration here that, to this day, some of the worst schools for religious extremism, unfortunately, are in Pakistan, that the conditions in which large parts of the population live are the sorts of conditions that terrorists like to go out recruiting in. Therefore, the efforts that Shaukat Aziz and President Musharraf have undertaken to put Pakistan on a path toward economic development and the recognition that success in that path is going to require more than just government assistance or large international aid projects, it will require the efforts of the private sector in Pakistan and the private sector internationally, which is where all of you folks come in. That that is an essential part of building a better Pakistan in the future and building a better Pakistan is critical for the security of the United States and the whole world.

We in the Defense Department have tried to make some contribution to that task as well. I believe we've been one of the larger foreign currency earners for Pakistan over the last year. I know we pay our bills slowly, but we do pay them. [Laughter] We have so far reimbursed Pakistan $617 million for support received for Operation Enduring Freedom. We recognize that's money for value received, but it is hard currency and I'm sure the Finance Minister appreciates the value of that.

The United States as a government has provided, I'm assured by the State Department—you can correct me if I'm wrong—some $2 billion in economic support funds and security assistance. And we have played a significant role in helping the Finance Minister, through the Paris Club, to reschedule Pakistan's external debt.

But I think the greatest credit goes to the government of Pakistan and particularly to Finance Minister Shaukat Aziz for an economic performance that has won kudos from the IMF, which predicts a growth of 4.6 percent this coming year and five percent the year after. And maybe we should ask you to come and advise us how to do that here. [Laughter] We know you're starting from a lower base and that is something we don't aspire to emulate, but you're doing well on that base and foreign investment I think is now at some 30 percent, and we think that the relaxation of some of the restrictions that we had imposed four years ago is a contribution to that.

Shaukat, we will continue as a government and as a defense department to do what we can to assist you in this enormous task. We recognize how important it is.

We also recognize that there are two prongs to development. There's economic development and political development. And there are endless academic articles and theoretical debates about which should come first. My view is they both come first. That political progress is enormously supported when there is economic progress, but economic progress benefits enormously from political stability and political progress.

Indeed, political stability is not achieved by standing still. It is achieved by creating hope, creating progress. That is why we believe that the vision President Musharraf has articulated of returning Pakistan to civilian rule is so important, and why it is so important to continue to make progress toward that goal despite the enormous difficulties and despite the huge list of other problems that Pakistan faces. No one who for a minute thinks about the agenda of issues that must confront President Musharraf each morning could possibly wish to take over his job. It is formidable. But I believe that it is important to continue on all these fronts in fighting terrorists, in promoting economic development, in promoting private sector and civil society institutions and promoting a return to civilian rule.

In all of these, Shaukat, I hope you will find that we are a strong and good partner. We are engaged in, I believe, a truly historic task, a truly historic challenge. I believe that the last year shows that we can rise to those challenges, but it also shows that we still have a great deal more work to do and we will do it together.

I thank all of you for being here and for the interest you're obviously showing in taking good advantage of the kinds of opportunities that economic development in Pakistan can offer to the private sector. I think that is the key to really sustainable economic progress, and I cannot find words adequately to wish you the greatest success. And I hope when, if we come back at a similar occasion a year from now, we'll find that foreign investment in Pakistan is not up 30 percent, but 130 percent.

Thank you very much.