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The conference commenced with the Inaugural Session, with the Director General of the Institute of Strategic Studies, Islamabad, Dr. Shireen Mazari, extending a warm welcome to the participants and calling on the Chairman of the Institute, Mr. Inam-ul- Haq to give his welcome address. The latter and the main part of the session comprised remarks by the Resident Representative, Hanns Seidal Foundation, Dr. Andreas Rieck and a speech by Prime Minister, Mr. Shaukat Aziz.

Mr. Inam-ul-Haque

In his welcome address Mr. Inam-ul-Haque while addressing Prime Minister Shaukat Aziz stated that his presence was a proud moment for the institute. He stated that the Prime Minister's acceptance of the institute's invitation was a reflection of the importance that he and his government attach to making the 21st century the century of Asia, and the vital role that China and Pakistan are determined to play in its realisation. He extended a warm welcome to the professors, scholars, experts, researchers and practitioners of international relations coming from a diverse group of countries like Bangladesh, China, France, Germany, India Indonesia, Japan, Malaysia, Myanmar, Russia, Singapore and South Korea.

Dr. Andreas Rieck

In his remarks, Dr. Andreas Reick, stated that the Asian century was already in progress and the main question regarding this was how the rest of the world, Europe, USA would respond to this development. He hoped that the inevitable tensions likely to arise by the ascent of a new world power, China and by the relative decline of the current superpower America, would not extend into another Cold War. He stated that owing to the advanced stage of civilisation the world was living in now, principles of peaceful co-existence and also mutual accommodation were fundamental. China, he surmised had gone long way in accommodating its Asian neighbours. Owing to this he stated that the prospect of another Cold war seemed unlikely. Carrying on with the argument he stated that there was no major ideological rivalry between the two. He pointed to a quote by Henry Kissinger in which he stated that China had controlled for about 2000 years the territory it controls now and there were no indications that china would embark on a territorial expansionist policy. He further went on to state however that China's economic expansion would pose a challenge to even close allies like Pakistan. He concluded his remarks on how China's peaceful rise could prove a good example to the rest of the world and influence international relations in the time to come.

Prime Minister Mr. Shaukat Aziz

In his address, Prime Minister Shaukat Aziz outlined the potential of the Asian region and the challenges confronting it in assessing the subject of "China and the Emerging 21st century". His analysis of China as an "anchor for the Asian miracle" flowed out from this wider picture of Asia. Declaring that the 21st Century belonged to Asia, the Prime Minister pointed to the transformation that Asia had undergone on account of the economic changes experienced by China, South East Asia and South Asia. Increasing regional cooperation among the countries of these sub-regions, he stated, had developed as a "trend" generating "regional trade and better living standards of people."

Defining Asia as a region engulfing the sub-region of not only East Asia but also, South Asia, Central Asia and West Asia, he stressed that an "expansive view of Asia" was essential to the discussion of the "Asian miracle." He pointed to the regional and sub-regional formations that the Asian states had become party to, stressing on their potential in effecting economic and political change in Asia.

The Prime Minister's assessment of the potential inherent in the Asian region which has been further enhanced by the positive transformations experienced by it was not without underlining the challenges facing it. He stated that problems of "unresolved disputes, deprivation, injustices and poverty" had fomented "the phenomenon of terrorism" which he categorised as a "threat" to the attainment of development and prosperity. The impact of globalisation on Asian countries was another challenge that was pointed to.

China's contribution to the rise of Asia, in synonymy with the subject of the conference formed a major part of the Prime Minister's speech. Highlighting the distinctive rise of China, he pointed out that the latter's ascent had been a "peaceful" one. He pointed to seven examples of China's political and economic strength which place it in a position of playing a role regionally and globally. He stated that "integration of China's economy with those of the Asian sub-regions" would be a source of "opportunity" for Asia. China's devotion to the five principles of peaceful co-existence was a source of stability in Asia, he pointed out. He also pointed to the possible role that China could play through its economically advantageous position in promoting a "more equitable economic order."

China's security perceptions in "Asia and beyond" also formed an important part of the Prime Minister's speech. He outlined the concepts of comprehensive security, development security, cooperative security and common security as underpinning the Chinese vision of peace and stability. The Prime Minister also alluded to Pakistan's role in an Asia marked by rise. He stated that Pakistan's policy had been to promote peace and stability among its neighbours. Owing to its strategic significance he pointed out that Pakistan could serve as a "bridge to facilitate the natural economic complementarities of Central, West and South Asia."

Prime Minister Shaukat Aziz concluded on the note that realisation of Asia's economic potential would be incomplete if the less developed countries of Asia are not included in the progress and prosperity attained by the more developed countries in Asia.

Question / Answer / Comments

Q: How can sub-regional organisations like SAARC, ASEAN, etc. work together?

A: When it comes to regions and sub regions, relations between countries and regions are multifaceted and divided in three layers - one is bilateral, second is regional, and third is global. The question at the back of your mind was how may ASEAN and SAARC interact with each other. SAARC still has a long way to go. If you look back at ASEAN, they also had a steady start and now it has picked up. Initially, there were a lot of teething issues in ASEAN. The good thing about ASEAN was that there were no major conflicts between its members. SAARC in fact is hostage to certain issues in this region. So let me spend a minute on SAARC first. SAARC has been hostage largely to issues between India and Pakistan. So if India and Pakistan do not have good atmospherics, SAARC does not function. If you do an honest analysis of SAARC, frankly not much has been done, if you compare it with other entities like ASEAN. Why? Because they do not have the conflicts that exist here. How do we tackle this? We tackle this by addressing the core issues that exist in the region. SAARC will progress if all countries have dialogues to address the issues and make progress. There is also a lot of unevenness in SAARC in size aspirations etc., which did not exist in ASEAN. That makes SAARC more complex. And as chairman of SAARC, I would say that we have made progress on SAFTA, which was signed in Islamabad and we are trying to take that forward. But political and diplomatic disputes will have to be solved in order to make SAARC effective. SAARC has difficulty getting the regions organised. You can see that the challenges are very pronounced. But we are heading towards a summit in November and I am very keen to hand in my chairmanship to the Prime Minister of Bangladesh. We are hoping that if we meet we will be able to talk seriously about SAARC. My views on SAARC are very well known. I think it has been a disappointing performance. I think its potential is really high and we need to really work with a spirit to make this organisation more effective. South Asia as a region has a lot of potential. Certainly, India and Pakistan's economies are growing very rapidly - Pakistan at 8.4% and India at 6.5%. So the potential is there, but we must address the issues and they have to be done in a way which meet the requirements of both the stake holders. So that is what we are trying to do.

Because the SAARC is an ineffective body, and has not interacted with other regions, bilateral relations have not developed. Pakistan is seeking higher status with ASEAN. We are moving in that direction and will progress this year. In the short run, rather than regional bloc to bloc cooperation, you will see single countries engaging with ASEAN. Another interesting dimension is ASEAN's relations with the rest of Asia - with Japan, Korea, China.

Q: What are your views on China-India relations?

A: Pakistan believes in engagement with everybody, and everybody to have engagement with all the relevant players. It is upto China and India to build their relations, we welcome that. In the world of today, we need to engage with each other and understand each other, build relationships to our mutual benefit. If China and India have better relations, I think that is good for the world. If they have conflicts that does not help anybody. They are both large countries. As the situation evolves, the faultlines are moving and there is clearly in the whole equation of how China is growing, developing and expanding. And other countries around China will be encouraged to come up with a role which may balance or counterbalance this equation. I think the sands are shifting.

There are other factors that are also emerging - China is emerging and has emerged as a major power in the world. Who is trying to counter that and who are the allies in countering that, I leave that to your imagination. So that has to be kept in mind, but otherwise engagement is good. If you look at China-India trade, it has grown tremendously because it helps both the countries. It is a win-win for both.

Q: Can Pakistan play an important role between China and the Islamic world?

A: Pakistan's role is over-amplified by many. China has strength, wisdom, it has very apt policy of engaging with all the major countries. But Pakistan is a major player of the Muslim Umma. We have a position in terms of this region and the whole Muslim World. And most people will agree that Pakistan is and will be an actor of peace and stability in this region. We have a lot of conflicts and challenges in the region and Pakistan has played a moderating role. And China, being a friend of Pakistan, can and does benefit from this. More importantly, China itself is engaging with major powers of the world, including the Muslim World. Pakistan will always be standing by China on any issue. Because Pakistan is an important player in this region and growing more so with time in terms of diplomacy and geopolitics in the Muslim World and the OIC. And being a friend of China can have a positive influence for China as well.

Q: On a question relating to the emergence of China as a major power?

A: The shifting sands should not be a cause of concern. Because at the end of the day, all the countries in the region want to live in peace. Let us look at it positively too, while there might be new alliances and new understanding between various countries in the region and outside. But look at the positive side. Take China and India - their trade has gone up. Even if others are trying to influence the region, which is the way the world works today, It may not lead to any tension or conflict. It is possible to have complementary relationship. The paradigm may shift a little bit in the region to provide a counterbalance to the emergence of China. The changes are something one should be conscious of, but I would not say it is something that would be having a destabilising influence in the region or create unnecessary tensions. When power centres emerge, counter-power centres also emerge. And through adequate diplomacy, through engagement, you can create an atmosphere where you learn to live with it. History is full of these examples - Cold War is an example. Economic diplomacy plays a part, and that creates a positive impact on relations between countries. Yes, there are closer relations between countries in the region and outside the region between major powers. But that is to be expected. That should not give anybody cause for concern. As the world evolves, we also need to change and adapt to changing circumstances without compromising the anchors like Pakistan-China relationship.

Q: On the question of China-Pakistan-US relations?

A: Times have changed quite a lot. China and the US are very much engaged. The world has changed too. In the 1970s, when Pakistan played a logistic role, a diplomatic role to get the two countries together, in the US, in those in the administration it was a taboo to talk about China. It was an isolationist strategy pursued in those days. Today, the world has changed. Everybody is talking to everybody whether it is publicly or privately. So the role of intermediation unless it is for a conflict for general opening of doors now is certainly there, but less so than before. But however, because we value our relationship with China so much, if China ever wanted Pakistan to do something in this connection we would be more than happy. I do not see any major need for that today. With those days now gone isolationist approach paradigm was totally irrelevant. So we could play that role, but in the meantime, as you know the relationship between China-Pakistan, today on all the major issues we consult. We exchange notes and if China and Pakistan can help each other , (by the way China can help us more in engaging rather the other way around). We are very humble people, we know our limitations, but if there is ever a need it goes without saying that Pakistan will be standing near China's side. But China has in many areas, when situations have arisen, has played a very good role, a calming influence in the region and otherwise in Pakistan's interest. So we welcome China and Pakistan friendship. In conclusion, ladies and gentlemen, let me say it is a source of strength for Pakistan certainly. We have a lot to learn. And the new dimension of China's, economic growth, the economic prosperity, the change taking place in China, the process of osmosis, is working. China-Paksitan are land neighbours, we also are benefiting. And the increase in trade and the increase in investment, now the big change is Chinese investment. It is unbelievable and now they are going to export from here, Chinese goods are all over the place, all over the world, and also in Pakistan. China is becoming more and more an exporter of capital, not just goods. So if you see that dimension of China's economy which has happened already, they will be major investors. And I see in the future the Foreign Direct Investment (FDI) going out of China into many countries in the world as a major factor in defining the overall economic situation in the world. That is the change taking place. Today, China is still watching the inflow of FDI, but increasingly they are becoming and will become a major exporter. So, that is the evolution taking place in China. We did not have time today to go through each area in detail. But I want to leave you with these thought; you have been a gracious audience and I wish this seminar great success. Thank you.