For Immediate Release
Office of the Press Secretary
April 5, 2006

Remarks by National Security Advisor Steve Hadley to the National Bureau of Asian Research Strategic Asia Forum
Ritz Carlton Hotel
Washington, D.C.

MR. HADLEY: Thank you, Chairman Russell. I would also like to acknowledge Dr. Richard Ellings, the president of NBR, and, of course, General and Mrs. Shalikashvili.

General, it is a particular joy for us to join together to honor your service to our nation and to thank you for your friendship. And we're also all delighted that NBR is establishing an endowed chair in your honor.

There are a lot of other good friends and colleagues, present and past, and I won't try and introduce them all. It's good to see you. It's a little bit intimidating because there is an awful lot of Asia expertise out here and I'm supposed to talk about Asia. So I hope you will be charitable in your comments.

By geography and history, America is an Asia-Pacific power, and our interests are mightily affected by what happens in Asia. What we've seen in the last 50 years is Asia's emergence into global prominence. That is generally a good thing for the United States, a good thing for Asia and a good thing for the world. The emergence of Asia reflects the growth of political and economic freedom among its peoples.

Fifty years ago, there were only a handful of democracies in Asia. Today, 1.7 billion people in Asia choose their own leaders, and Asia boasts two of the world's largest democracies in India and Indonesia. Fifty years ago, most of Asia was mired in hopeless poverty. Today, over a third of global GDP is contributed by Asian countries and three out of the four of the world's largest economies are in Asia.

We still face many challenges in Asia, because freedom's progress there is incomplete. Many Asian nations have created effective democracies that guarantee the human rights of their people and that embrace the promise of free markets and free trade to secure their prosperity. Special attention should be paid, of course, to Australia, Japan and South Korea, which in many ways have led the way for the region. And a few nations, including North Korea and Burma, have not even begun the journey along freedom's path.

The future of Asia will depend in large measure how the rest of Asia progresses toward political and economic freedom. The challenge for the United States is to pursue a policy that encourages this progress. And today I would like to discuss the administration's approach to two critical regions, South Asia and East Asia.

Let me start with South Asia first, and let me describe a little bit the situation as it existed in 2000. In Pakistan we saw the U.S. isolation from Pakistan was not working. Isolation from the United States had not prevented Pakistan's acquisition of nuclear weapons. Isolation, in fact, facilitated the A.Q. Khan network, which was proliferating nuclear technology to several countries around the globe. Isolation had cut off a whole generation of Pakistanis, both civilian and military, from contact with the United States. And this had helped to radicalize Pakistani society. And that is why President Bush said in the 2000 campaign that in his view, America's relationship with Pakistan was crucial to the peace of the region.

In India, we saw in 2000 a nation transforming itself into a global player. India was and is the world's largest democracy. While we share common values, we share few common policies. India had begun to open up its economy to world markets and was exploring ways to expand economic freedom. India clearly was growing from a regional to a global player. And as the President said in his 2000 campaign, "this coming century will see democratic India's arrival as a force in the world."

Our strategy for the region starts with the premise that we can and must improve relations with both of these countries simultaneously. We must de-hyphenate our relations with India and Pakistan. The relations with one country should not be the mirror image of our relations with the other. We also must reject zero-sum mentality in the region. Good U.S.-Indian relations are in the best interest of Pakistan, and good U.S.-Pakistan relations are in the best interest of India.

We must use our increasing influence with each country to encourage them to work out their differences, especially on such matters as Kashmir.

Our strategy with Pakistan is to encourage President Musharraf to take steps that will integrate Pakistan into the international community and to offer greater economic and political freedom to his people. Our strategy with India is to build a strategic partnership and work together to solve global problems of common interest.

In late 2001 and in the spring of 2002, we were in crisis management mode with respect to these two countries, seeking a diplomatic alternative to military confrontation. And then came 9/11, and we presented Pakistan with a clear choice. And President Musharraf made the right choice. He chose to break with the terrorists and the Taliban. He chose to act against the A.Q. Khan network. He chose to become a strong ally in the war on terror. So we deepened and broadened our engagement with Pakistan's government and with the Pakistani people.

We entered into a multi-year assistance program, both economic assistance, military assistance. For example, U.S. assistance to Pakistan has included over $250 million for education, more than half of that for basic education. It has created the largest Fulbright program in the world. It has helped vaccinate 98 percent of Pakistani children under five for polio. And it has extended more than 15,000 loans to small businesses outside of major cities in the country.

We have constructed a more strategic relationship with India. Our effort began in December 2003, with what we call the NSSP, or "next steps" in strategic partnership. I can't explain how we came up with that name, but that's what we came up with. It was designed to increase U.S.-Indian cooperation in civil nuclear, civil space and high technology trade. But this cooperation was matched with a commitment by India to adopt nonproliferation measures based on international norms and conventions.

Last July, President Bush held a summit here in Washington with Prime Minister Singh to launch our strategic partnership with India. Our two nations agreed to work together in fighting terrorism, promoting democracy, expanding free and fair trade, improving human health and the environment, and meeting energy demands through new technologies.

Our cooperation included a civil nuclear cooperation initiative. This is a real strategic achievement for both our nations. When completed, this initiative will enhance not only India's energy security, but also our own. Expanding civilian nuclear power can help India meet its growing energy needs without relying so heavily on fossil fuels, which would only increase competition for resources that are already in high demand.

It will enhance America's security, because the initiative will expand the reach of the international nonproliferation regime by placing India's civilian nuclear program under international safeguards, and by further harmonizing India's export control laws with international norms.

President Bush completed an important trip to South Asia last month that demonstrated the progress we are making with both Pakistan and India. In Pakistan, the President underscored that our commitment to Pakistan is broad-based, strategic and long-term, and that we support the development of a modern, democratic and prosperous state. It outlined several areas of cooperation for the two countries, setting an agenda going forward.

For his part, President Musharraf spoke publicly about the need for democratic reform in his country. In India, Prime Minister Singh agreed to a concrete plan for separating India's civilian and military nuclear programs, and putting current programs and then future civil nuclear power and breeder reactors under the safeguards of the International Atomic Energy Agency.

Challenges remain in South Asia. Kashmir is a point of conflict. We will encourage Pakistan to finally end all support for Kashmiri militants. And we will encourage India to respond in good faith to Pakistani ideas on Kashmir. We will use our increasing influence in South Asia to prevent a nuclear arms race in that region.

In Pakistan, we will encourage greater democratic reform and political freedom. We will work with President Musharraf to ensure that the 2007 elections are free and fair. With India, we will implement the civil nuclear agreement. We will also partner effectively with India on issues of global concern, such as Iran, proliferation, avian flu, energy, environment and the advance of democracy.

In East Asia, the situation in the year 2000 was, of course, quite different. China was continuing its dramatic emergence on the international scene and was increasing -- exercising increasing weight in the region. Some long-standing issues with our traditional allies in the region remained unresolved and were a continuing source of frustration. Our forward defense posture in the region did not reflect new realities, particularly after the events of 9/11. And North Korea was already violating the 1994 framework agreement.

Our regional strategy in East Asia is based on three basic insights. First, our most important relations in the region are with our traditional allies, nations that share the values of democracy and freedom. These nations are the cornerstone of our approach to the region. You might call this approach "working East Asia from the outside in."

We needed to resolve some long-standing irritants in our relations with Japan and South Korea. So we are relocating our military forces out of some urban and other sensitive areas, while at the same time reconfiguring these forces to enhance their deterrent capability. We addressed long-standing Japanese concerns that had prevented home porting a nuclear powered aircraft carrier in Japan. We strengthened ties with key allies and friends -- Mongolia in Northeast Asia, and Indonesia, Malaysia, Philippines, Singapore and Thailand in Southeast Asia.

Second, we are working with our partners in East Asia to develop cooperative and creative approaches to regional and global challenges. Let me give you a few examples. We have extensive cooperation with many Asian nations in the global war on terrorism. We developed a response to the 2004 tsunami that allowed us and our partners to respond to the needs of the most devastated countries more quickly than international relief agencies. We established the Asia Pacific Partnership on Clean Development and Climate that is focusing on practical ways to make best practices and the latest energy technologies available to all of the countries.

Third, we welcomed the rise of a China that is a responsible stakeholder in the international system; a China that cooperates with us to address common challenges and mutual interests. To this end, we are pursuing a policy that reflects the complexity of our relationship with China. We have supported China's membership in the World Trade Organization. We've encouraged China to use its influence through the six party talks to help denuclearize the Korean Peninsula. We have included China in our efforts to expand our sources of secure and environmental responsible energies, such as clean coal technologies, nuclear power and hydrogen fuel cells.

We have made clear to Chinese leaders, however, that they must change policies that exacerbate tensions in East Asia and the world, such as their non-transparent military expansion; their quest to lock up energy supplies, rather than participate in energy markets; and their support of resource-rich countries with poor records of democracy and human rights.

This month's visit from President Hu will reveal more about China's commitment to being a responsible stakeholder in the international system. If China wishes to become a more responsible stakeholder, it should move from a half-reformed economy to a more fully marketized system, by opening China's markets to U.S. goods, and respecting intellectual property rights, and by moving toward a flexible, market-based currency.

If China wishes to become a more responsible stakeholder, China should also match its expansion of economic freedom with an expansion of political freedom for the Chinese people. Chinese leaders need to see that they cannot let their population increasingly experience the freedom to buy, sell and produce, while denying them the right to assemble, speak and worship.

China would do well to implement policies to correct its global trade imbalances, through expanding domestic demand, increasing market access for foreign goods and services, and adopting a flexible, market-based exchange rate for its currency.

There are other long-term challenges in East Asia. As an Asia Pacific nation, we must support regional economic integration through expanded trade and investment, and the promotion of democracy and human rights. Regional exchanges, such as the APEC forum, the ASEAN regional forum, the U.S.-ASEAN Enhanced Partnership and the six-party talks will all play a vital role.

We must encourage China and our six-party partners to press North Korea to implement the September 19, 2005 joint statement on Korean denuclearization, a document produced in the six-party talks so that the people of the Korean peninsula have a future that is free of nuclear weapons. And we must broaden discussion of Northeast Asia's security issues beyond just North Korea.

We believe we are making progress in both South Asia and East Asia, and increasingly we need to move away from thinking of these as two separate regions, but as part of an increasingly integrated Asian whole. Our approach to this emerging Asia is to promote political and economic freedom in all nations. We have resisted the temptation of crude balance-of-power politics, seeking to play India off against China, for example. Both these nations need to be constructive players in the international system, and the United States can and should have constructive relations with each.

Some people have said the 21st century will be the Asian century. The President believes the 21st century will be freedom's century. And together, free Asians and free Americans will seize the opportunities this new century offers, and lays the foundations for future peace and prosperity in Asia.

Thank you. I'd be very happy to answer some questions and hear some comments from some of the collective expertise in this room. (Applause.)

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