Date: Tue, 4 Aug 1998 08:45:04 -0600 (MDT)
From: S Rahman <srahman-AT-gpu.srv.ualberta.ca>
Subject: Sanctions Contagion (fwd)


just thought the list members might be interested...

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Date: Sun, 02 Aug 1998 08:19:55 PDT
From: Shahid Mustafa <smustafa73-AT-hotmail.com>
To: RCPL-CAL_AHASS-AT-cal.reid-crowther.com, Arif-AT-form-net.com, farrah-AT-hwcn.org,
    jafar-AT-Synopsys.com, namuft-AT-yahoo.com, naeem-AT-fis.utoronto.ca,
    mrashid-AT-MNSi.Net, khan-AT-lcbo.com, srahman-AT-gpu1.srv.ualberta.ca,
    tahirzamankhn-AT-ica.net, ychowdhary-AT-wyrex.com
Subject: Sanctions Contagion

Far Eastern Economic Review

               Will It? Won't It?

Talbott's talks on South Asia's nuclear future were veiled in secrecy, 
but indications are that India is on the verge of making a deal, while 
Pakistan is playing hard to get

    By Ahmed Rashid in Islamabad and Sadanand Dhume in New Delhi

    August 2, 1998

Considering the animated debate it provoked in coffee-shops and living 
rooms in India and Pakistan, the July 20-22 visit of U.S. Deputy 
Secretary of State Strobe Talbott to the two nuclear-testing countries 
produced very little meat for the media. Participants in New Delhi and 
Islamabad were uncommonly tight-lipped about the content of the separate 
talks with Talbott on the countries' nuclear future. The silence 
encouraged the arm-chair analysts to ponder: Were India and Pakistan now 
going to sign the Comprehensive Test-Ban Treaty?

Certainly, nudging the rivals towards the CTBT, which prescribes an end 
to nuclear tests, was a key item of Talbott's 13-point agenda, set down 
on a laminated card which he carried in his breast pocket throughout the 
discussions. Among the other items on which he wants immediate action: 
restraints on fissile-material production, curbs on weaponization and 
missile deployment near the Indo-Pakistani border, and a public 
commitment not to export nuclear technology. Talbott's mission has had 
mixed success.

Notwithstanding the shroud of secrecy, the indications from India are 
that the Bharatiya Janata Party-led government, despite public posturing 
to the contrary, is looking for a face-saving way to sign--without any 
modifications--the very treaty that India bitterly opposed only two 
years ago. Shortly after its second round of nuclear explosions on May 
13, New Delhi announced a unilateral moratorium on further tests. It is 
now talking of turning that moratorium into a de jure commitment, which 
some analysts interpret as another term for the CTBT.

The signals from Pakistan are less clear. While the Nawaz Sharif 
government seemingly has indicated its willingness to initial the CTBT, 
it has set down certain conditions that sources say are totally 
unacceptable to Washington, although they declined to elaborate. Others 
include U.S. mediation with India on Pakistan's dispute over Kashmir and 
a financial bailout for Pakistan, which is faring worse than its 
neighbour from U.S. sanctions imposed on the two nations after their 
nuclear explosions in May. The U.S. has said it will mediate on Kashmir 
only if both sides agree, but India opposes involving a third party.

It is entirely possible that Islamabad intends eventually to withdraw 
the conditions--indeed, it has already dropped its stance that it will 
sign the CTBT only if arch-enemy India does as well. But the Sharif 
government knows it must be seen as being tough with Washington in order 
to allay domestic concern that it is giving up too much, too fast. By 
seeming to stand firm, Islamabad can present as a victory some U.S. 
concessions that are already in the works. That will prepare public 
opinion for its signing of the treaty. The concessions include a July 21 
reversal of sanctions-related opposition to International Monetary Fund 
loans to Pakistan, and a possible revocation of the Pressler Amendment, 
which Washington in any event has been trying to remove for some time. 
The amendment, in place since 1990, bars U.S. military and economic aid 
to Islamabad because of its nuclear programme.

Senior Pakistani officials and Western diplomats told the REVIEW that 
both Sharif and Pakistan's army chief, Gen. Jehangir Karamat, sent 
messages to Talbott in early July that Islamabad had no objections to 
signing the CTBT in exchange for a bailout and other security 
guarantees.  It is these unspecified "security guarantees" that are the 
stumbling blocks. Finance Ministry boffins favour a speedy signing of 
the CTBT--preferably by end-August--if it will mean getting money that 
will stave off a foreign-debt default. The Finance Ministry has asked 
for about $6 billion-7 billion, including $3 billion in fresh money, 
with the rest being loans held up by sanctions. But the Foreign Ministry 
and the army want to prolong negotiations until, as Foreign Secretary 
Shamshad Ahmed put it, "we are absolutely sure that our vital security 
concerns have been fully safeguarded."

India's argument for putting its moniker on the CTBT runs along similar 
lines. Foreign-policy hawks, once among the pact's fiercest critics, say 
India now has completed all necessary nuclear testing and thus can sign 
without harming its security interests. Independent analysts say New 
Delhi has also abandoned its earlier insistence on global nuclear 
disarmament.  Its position on that issue is now "realistically moral," 
foreign-policy guru Jaswant Singh told the REVIEW.

In return for signing the CTBT, defence-policy pundits say India wants 
the U.S. to lift the sanctions, which are damaging its 
less-than-favourable investment climate. They add that New Delhi also 
wants access to rocket and supercomputer technology, and acceptance of 
its missile programme.  Another demand: U.S. President Bill Clinton 
should visit India in November, as scheduled. Talbott apparently hopes 
to get the CTBT signing wrapped up by September, so that the Clinton 
visit can get the go-ahead.

New Delhi's softening stand on the CTBT is matched by Washington's 
apparent willingness to address some of India's concerns. Aware of 
China's involvement in creating Pakistan's bomb, the U.S. seems 
reconciled, if unhappily, to India giving up neither its nuclear weapons 
nor its missiles. But Indian and American sources indicate that a way 
could be found to contain missiles and weapons deployment to reduce the 
risk of a nuclear war. New Delhi also has found unexpected support from 
U.S. Secretary of State Madeleine Albright, who dismissed mandatory 
sanctions as "a blunt instrument." In a heartening development for both 
India and Pakistan, the U.S. Congress has granted Clinton the authority 
to waive the sanctions for up to a year.

Yet roadblocks remain. Some Indians are wary of the CTBT clause that 
allows on-site inspections of nuclear facilities, particularly those 
associated with its weapons programmes. India's earlier denunciation of 
CTBT, too, has made backtracking that much more difficult for the BJP.  
"We had a consensus on not signing the CTBT across the political 
spectrum," says Arundhati Ghose, a former ambassador to the Geneva 
Conference on Disarmament who led India's battle against the CTBT two 
years ago. "I don't see the BJP government being able to sell it." 
Indeed, Talbott seemed aware of that difficulty. Before leaving for 
Islamabad, he met with opposition leaders Inder Kumar Gujral, a former 
prime minister, and Sonia Gandhi, president of the Congress Party, which 
is against a deal on the CTBT.

Convincing the U.S. Congress to make concessions won't be easy, either.  
Washington doesn't want to be seen to be rewarding India for its nuclear 
tests by handing out goodies such as high technology. Unfortunately for 
it, the BJP government will only be able to sign the CTBT if it finds 
some way to package this at home as a triumph rather than a 
capitulation.

The same problem is vexing Nawaz Sharif in Pakistan. If he agrees to 
sign on the dotted line--even in exchange for a welcome bailout for the 
crippled economy--he will anger the opposition and Islamic extremists at 
home, who believe the U.S. will soon demand a complete roll-back of the 
country's nuclear programme. Yet, from the American perspective, 
Pakistan's signing of the CTBT will not resolve its economic problems, 
which are the result of years of gross financial mismanagement. 
Washington believes its sanctions only hastened Pakistan's crisis.

At the same time, it is loath to let Pakistan slide into an economic 
chaos that could destabilize the region. More likely than not, that was 
the thinking behind the July 21 decision not to oppose IMF loans to 
Pakistan.  But as if to highlight its international importance, the U.S. 
declared on July 22 that a hitherto-delayed IMF loan to Pakistan was now 
"nonoperational, suspended and outdated" and needed to be renegotiated. 
For Pakistan, that is bad news. A new package could take weeks to 
finalize as talks are held with donor countries and multilateral 
agencies, including the IMF. In the meantime, foreign-exchange reserves 
have dwindled to $500 million, enough for just two weeks of imports.

Even when it is negotiated, a bailout package will be front-loaded. The 
U.S. has made it clear that Sharif will have to commit to immediate 
reforms such as devaluation of the rupee and a revamp of the banking 
sector. The danger is that any such programme will almost certainly lead 
to violent unrest, some of it triggered by the feudal landlords and 
traders who make up the prime minister's own political constituency. It 
is a dilemma that Sharif might not be able to resolve.
----------------------------------------------------------------------The 
Far Eastern Economic Review


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