Thank you very much, ladies and gentlemen:  Mrs. Raana Rahim, Mr. Mack, Mr. Ash, ladies and gentlemen, it's indeed my unique privilege that I am talking to such a distinguished, and also a very large gathering.  You all do me an honor by your presence.  I thank you all. 

Tonight, ladies and gentlemen, I intend to talk to you very frankly and I look forward to a very frank interaction with you during the question and answer session.  The time is limited and there's much to be said because Pakistan, my country, is involved directly or indirectly, in all that is happening around the world today.  Over the centuries the social path of the people of Pakistan has actually evolved into an amalgam of culture, experiences, traditions and various influences.  The mystics of Central Asia, the visionaries of Arabia, the [influence] of Persia, the political reformers of the west, have all, in their own time, left very firm imprints on the soil that constitutes Pakistan today.  Therefore, the subject [of my address] is most appropriate: Pakistan, U.S. Ally at the Crossroads of Central, South and Southwest Asia.  I would like to talk of Pakistan first of all and quickly run through the experience of Pakistan in the last 52 years, from 1947 to 1999, when I came into government.

Ladies and gentlemen, these 52 years saw a dysfunctional democracy in Pakistan, a democracy that never functioned in the country.  The period from 1947 to 1988 saw three [periods of] martial law.  It should not have happened.  It also saw three wars with India.  I fought in two of them.  Other than these wars there were innumerable skirmishes between the two countries.  In the 11 years from 1988 to 1999, the so-called democracy saw four prime minister changes, saw three interim ministers come and go, saw two presidents and a chief justice removed unceremoniously, saw a physical assault on the Supreme Court of Pakistan, saw one Army chief, my predecessor, removed unceremoniously.  The second was to have been myself.  Fortunately that didn't happen.  The army didn't allow that. 

Now we need to see during this dysfunctional democracy where the country went to.  May I say very briefly what we inherited was a modern system rendered dysfunctional by rampant corruption, cronyism and bad administration.  We inherited a decaying and a shattered economy, rising poverty, corrupted politics of personalized interests and hatreds.  All this combined led to a state where Pakistan faced the looming threat of being called a terrorist state.  The people were in gloom, despair, despondency and hopelessness because they saw darkness all around.  There was no light at the end of the tunnel.  This was what we inherited. 

I would like to very briefly run through what we have managed in the three years of my governance.  Let me say that [we were confident] that we could work through all the negatives into positives.  We selected four areas of top focus to raise the country out of its malaise.  First, economic revival of Pakistan followed by the alleviation of Pakistan, bringing good governance into Pakistan and political restructuring of Pakistan. 

We revived the economy of Pakistan.  All market economic indicators today are positive and the nation is at a takeoff point, I'm proud to say that.  Our GDP is at 5.1 percent, which is very good; it's the fourth in Asia.  Our foreign exchange reserves, which [dwindled to the equivalent of] two weeks of imports, now stand at almost one year of import capacity.  Our fiscal deficit is well under control; our exports are at a record high, our revenue collection is at record high.  As a result of these macro economic indicators our credit rating has gone very high.  Our Stock Exchange, you may be surprised, is the best performing stock exchange of the world today.  That is the state of the economy.  I could go on talking about the economy but I'll switch to another subject. 

Poverty has been checked.  For the first time in the history of Pakistan, after checking poverty, we have lowered it.  We hope to continue this process and keep lowering the poverty level. 

We have introduced corruption free governance.  We introduced an organization known as the National Accountability Bureau and we moved against all corruption, and let me tell you, ladies and gentlemen, that we put the fear of God into the hearts and minds of the rich and powerful. 

We carried out political restructuring; we carried constitutional amendments for the purpose of ensuring a functional democracy in Pakistan.  This was important because the 55 years of dysfunctional democracy could not be allowed to continue.  Change had to be brought about, and constitutional amendments, in accordance with the ethos of the people, and in accordance with the realities and the environment of Pakistan.  We had to do political restructuring to ensure that democracy does not get derailed in Pakistan.  We introduced a local government system at the grass roots level and we empowered the people of Pakistan at grass roots level.  We have elected government at all levels, from the local level up to the provinces in the center and the senate. 

We have empowered the women of Pakistan.  You'd be surprised to know that today in Pakistan there are 41,000 women wielding political authority at various tiers of government.  Because we believe that in order to emancipate women, the root, the basic, the first step ought to be to empower them so that they can themselves gain the authority to emancipate themselves.  That is what we've done.  We have also empowered the poor of the country, the peasants and the workers of the country, and we have introduced a joint elective system for the minorities of the country so that they have a voice in the national issues of Pakistan. 

In short, we have broken the status quo, but let me say there is certain opposition to what we've done.  I call them, these vested interests, forces of inertia, and forces of status quo.  We have all the conviction and the resolve not to allow them to succeed. 

So much for Pakistan's internal domestic environment.  I will now, in accordance with the subject, like to examine the geo-strategic location of Pakistan and its regional dynamics.  As you know, Pakistan is located at the crossroads of South Asia in the east, the Gulf in the west, and the Central Asian republics in the north.  In South Asia the seven countries of South Asia are joined together by the South Asia Association for Regional Cooperation (SAARC).  May I say that this is the region with the poorest and the most deprived [people] of the world.  This is the only region that is not cooperating within itself for economic benefits, for poverty alleviation, for the good of the people of the region.  The SAARC is almost powerless because bilateral issues and disputes cannot be raised in this forum and the only reason for this lack of harmony, lack of cooperation within the region, is the India-Pakistan dispute—the conflict between two of the major countries of this region. 

Let me say, ladies and gentlemen, that Pakistan desires peace, desires harmony, desires resolution of all disputes through a process of dialogue in a peaceful manner.  We want to have a competent dialogue with India on all issues, but it cannot be forgotten that the wars that we spoke of, that the two wars that I said I have fought, were because of the core issue of Kashmir.  Therefore, a stubborn denial of the existence of the Kashmir dispute to be resolved between the two countries cannot lead to peace.  It's not that I do not wish it to lead to peace; it is because it is not possible that two countries will not come, will not resolve, or cannot live in harmony.  This basic dispute has bedeviled the relationship and has forced the two countries to war thrice, with a fourth [confrontation] in the last year when we confronted each year and stood eyeball-to-eyeball contact for ten long months.  I say that the stubborn denial of the existence of Kashmir dispute has to change.  Let me say that the recent overtures by the Indian leadership and the response by the Prime Minister and the government of Pakistan, are extremely welcome and one only hopes that they lead to a dialogue between the two countries and a move towards resolution of all disputes including Jammu and Kashmir. 

There are a number of solutions to this dispute, but Pakistan has suggested a four-step process [that] ought to be acceptable to any logical mind.  First, start the process of dialogue.  In the second step, accept the reality of Kashmir to be resolved to improve relations between India and Pakistan.  Third, through a process of elimination, remove those solutions that are unacceptable to India, to Pakistan and the people of Kashmir and finally, step four, select one of the solutions which is a win-win situation for India, for Pakistan and for the people of Kashmir. 

I don't think that there can be any more flexibility that a leader, a nation, can ensure towards a resolution of disputes in a peaceful manner, and that is exactly what we are trying to do.  In fact, I would go to the extent of saying that we must live in peace and harmony in the region for the sake of the poor of the region.  I would go to the extent of saying we must banish war from the vocabulary of South Asia.

India is a very big country, there's no doubt about it.  Nobody can deny this fact, but Pakistan is also not a small country.  We are a nation of 140 million people.  Therefore, I would like to say that Pakistan cannot be coerced.  Every nation has a right to protect its honor and its dignity and, therefore, all that Pakistan desires, as any country in the world would desire, is a relationship of sovereign equality with India.  Now, within this bottom line if India takes one step we are prepared to take three steps to meet them to resolve our disputes.  

In this, I would like to express my special gratitude to the United States of America for their involvement in trying to initiate the process of dialogue and trying to bring the two countries to the negotiating table.  I only hope that this involvement and commitment to the process of peace, like the initiation of the peace process in the Middle East between the Palestinians and the Israelis, will remain as far as South Asia and India and Pakistan are concerned. 

I would like to give my comments on the Central Asian republics that lay to the north of Pakistan.  This is in the area of a number of republics, all of them Muslim, landlocked, energy rich.  For these countries the best and most natural route to the sea and to the outside world is through Afghanistan and Pakistan in the south.  This is the best and the most natural route.  I call it the most natural route because the nations of this area, Central Asian republics, Afghanistan and Pakistan, have cultural, historical and religious affinities.  I call it the best route because of its geography and the distances involved to the open sea.  But if this is to be realized for the economic and commercial trade benefits of this region, I would say Afghanistan has to be stabilized and peace has to be brought to Afghanistan.  Pakistan is contributing whatever it can towards bringing peace and harmony into Afghanistan. 

I would like to go into the details of the dynamics within Afghanistan.  There are two major problems in Afghanistan that have to be addressed.  They are core problems.  If you want peace, harmony, and stability the first problem is a problem of a void, of a vacuum in the countryside of Afghanistan where the government needs to be spread.  The other problem is the degree of ethnic imbalance in Afghanistan that needs to be addressed.  The majority of the community is feeling alienated and a minority community seems to be dominating the government. 

If we want peace and harmony in Afghanistan, there's no doubt in my mind that the International Security Assistance Force (IASF) and U.S. forces must remain in the region until it stabilizes the country.  When people talk of time limits I keep saying that instead of time limits the issue has to be effect-related.  We have to clear certain defects before we leave and if those defects take six months then the troops will leave in six months; if it takes six years, they must stay for six years.   So, therefore, we have to stabilize Afghanistan and until such time, the ISAF and U.S. forces must remain committed in Afghanistan. 

Let me say that having stabilized Afghanistan: the communications infrastructure, the oil and gas routes, the pipelines, ought to flow southwards from Central Asian republics through Afghanistan, through Pakistan, to the sea.  I feel and I've said that this is the natural and the best routes; I see this as the future for trade and commercial activity for Central Asian republics with the whole world.  The integration of this region, for the benefit of the people, I see as a win-win situation for all—for the central Asian republics, for Afghanistan, for Pakistan and for the world which is interested in trade and commerce activities with this region. 

 Pakistan's communications infrastructure and development projects take this reality into account.  Therefore, we are constructing all our roads southward leading to the sea.  We already have a port on the eastern bank of our country—the port of Karachi—but we are developing a new port to the west of our country.  We are improving our railway system and linking Karachi through a coast highway.  Pakistan is developing a free economic zone. We intend having an open-air policy where there won't be any taxes or duties.  We think that this will be an ideal place for investment, a collection point for oil and gas for the Central Asian republics and the Gulf.  We also see this as a trade port to and from central Asian republics to the world.

Talking of the Gulf and the Middle East, which is the third flank of ours to the west, we have historic religious bonds.  Pakistan has historic religious bonds with this region.  The region is in turmoil and we only hope that peace and stability returns to Iraq.  Pakistan's stand is that we must control the territorial integrity of Iraq because any laxness on this will unleash forces that would destabilize the whole region.  Therefore, the territorial integrity of Iraq is essential.  We feel governance in Iraq must be returned to the people of Iraq as soon as possible. 

I would like to come to bilateral relations between Pakistan and the United States.  Let me say, ladies and gentlemen, this relationship has seen its ups and downs—and the ups have been much longer than the downs.  From 1947 to 1990, Pakistan and the United States were strategic partners.  We fought the Cold War together and we have fought the liberation struggle together.  The decade of the ‘90s saw an end to the relationship [but] we are fully satisfied that after 9/11 we are trying to reestablish this strategic partnership between the two countries and there's a new hope and a fresh relationship emerging. 

May I say that in the initial periods up to the year 1990 the strategic focus, quite rightly maybe, of the world and of the United States, was Europe-oriented.  It had to do with NATO and the Warsaw Pact, it had to do with the Berlin Wall, it had to do with the Cold War, and therefore the focus was to the West.  But this strategic focus over time had a shift.  The shift is now to the Middle East, to the Gulf, the Central Asian republics, Afghanistan, South Asia and U.S.-Pakistan relations.  Pakistan, in this context of changed U.S.-strategic realities, which have shifted to our region, desires a broad base and a long-term relationship with the United States.  May I say that I am extremely glad about the outcome of my visit here and my interaction with President Bush at Camp David.  Let me also give my personal opinion of the president, for whatever it costs.  I sincerely feel, that he's a man who's extremely sincere, who's very frank, who's very forthright, who's upfront, and therefore I think he's a person who is very easy to get along with.  This is my impression.  Let me say that I got along very well with him.  I'm fully satisfied with the excellent interaction we had.  I look forward to a very broad-based and long-term relationship between the two countries emerging.

Pakistan is together with the United States as a coalition partner against terrorism.  We have been together since 9/11.  Pakistan is addressing terrorism in all its facets and when we talk of terrorism in our part of the country it has three facets.  First, dealing with Al Qaeda; second dealing with Taliban functionaries and Taliban government supporters and sympathizers; and third dealing with sectarian and religious extremism in the country.  We are dealing with all these facets with confidence and let me say that we are certainly winning the war against each one of them in our part of the world. 

I would like to close my talk by giving my personal vision for the future of this world.  I personally feel that this world has become an extremely dangerous place to live in.  All political disputes confronting the world today unfortunately involve Muslims, whether you talk of Bosnia or Kosovo or Chechnya or Palestine or Iran or Afghanistan or Kashmir or Iraq.  This has had two negative fallouts. Number one, that the Muslims of the world have started thinking that their religion, Islam, is being targeted and the other fallout is that the non-Muslim world, or the West, perceives Islam to be a religion of extremism, fundamentalism, terrorism, intolerance or whatever else.  Both of these are untrue.  Frankly, I'm not one of those who contributes to the idea of "clash of civilizations" propounded by Samuel Huntington.  The question is what do we have to do to make this world a better place for our future generations to live in.  I think the only way forward is for all countries or leaders of this world today to execute a two-pronged strategy; one to be executed by the Muslim world itself.  The Muslim world needs to evaluate what is the way forward for itself.  Is the way forward a course of confrontation, militancy, and extremism? Or is the way forward a way of self-emancipation from the depth of deprivation and poverty?  I would certainly like to talk of this when I go to the Organization of Islamic Countries summit in Kuala Lumpur in October.  We must accept that it is not only in the interest of the whole world, it is in the interest of Islam itself, for we, the Muslims of this world, to emancipate ourselves through this strategy of enlightened moderation, of self-emancipation. 

The other prong of the strategy is to be delivered by the developed world and the United States especially, and that is to resolve, with sincerity and with justice, all the political disputes that are facing the Muslim world today.  In the military whenever you execute this kind of strategy it's called a double pincer movement and anyone who's from the military would understand that if any one of the pincers is weak and cannot function the operation can never succeed—it cannot go along with one pincer.  Therefore, it is incumbent on us that both these [strategies] must succeed.  We owe it to this world.

Lastly, I must say that the United States has a key role to play.  It's a uni-polar world today and the United States has a key role to play in stabilizing and bringing peace and harmony to the world.  We hope and pray that the United States succeeds in contributing to this peace and harmony in the world.  As far as Pakistan is concerned, we shall be with you in this noble endeavor.

 Thank you.