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THE REBALANCE TO ASIA:

WHY SOUTH ASIA MATTERS (PART II)

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

MARCH 13, 2013

Serial No. 113–7

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

TREY RADEL, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON ASIA AND THE PACIFIC

STEVE CHABOT, Ohio, Chairman 

DANA ROHRABACHER, California 

MATT SALMON, Arizona 

MO BROOKS, Alabama 

GEORGE HOLDING, North Carolina 

SCOTT PERRY, Pennsylvania 

DOUG COLLINS, Georgia 

LUKE MESSER, Indiana 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

AMI BERA, California 

TULSI GABBARD, Hawaii 

BRAD SHERMAN, California 

GERALD E. CONNOLLY, Virginia 

WILLIAM KEATING, Massachusetts 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Walter Lohman, director, Asian Studies Center, The Heritage Foundation ........................................................................................................................ 9

Mr. Vikram Nehru, senior associate, Asia Program, Bakrie Chair in Southeast Asian Studies, Carnegie Endowment for International Peace ................. 21

Mr. Sadanand Dhume, resident fellow, American Enterprise Institute ............. 32

Mr. Sanjay Puri, founder and chief executive officer, Alliance for U.S. India 

Business ................................................................................................................ 41

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Steve Chabot, a Representative in Congress from the State 

of Ohio, and chairman, Subcommittee on Asia and the Pacific: Prepared 

statement .............................................................................................................. 4

Mr. Walter Lohman: Prepared statement ............................................................. 12

Mr. Vikram Nehru: Prepared statement ............................................................... 23

Mr. Sadanand Dhume: Prepared statement .......................................................... 34

Mr. Sanjay Puri: Prepared statement .................................................................... 43

APPENDIX 

Hearing notice .......................................................................................................... 60

Hearing minutes ...................................................................................................... 61

The Honorable Eni F.H. Faleomavaega, a Representative in Congress from 

American Samoathe Honorable Eni F.H. Faleomavaega, a Representative 

in Congress from American Samoa: Prepared statement ................................. 62

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 64

(1)

THE REBALANCE TO ASIA:

WHY SOUTH ASIA MATTERS (PART II) 

WEDNESDAY, MARCH 13, 2013

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ASIA AND THE PACIFIC,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 11 o’clock a.m., in 

room 2172 Rayburn House Office Building, Hon. Steve Chabot 

(chairman of the subcommittee) presiding. 

Mr. CHABOT. The committee will come to order. 

Good morning. I want to welcome all of my colleagues to this 

hearing of the Subcommittee on Asia and the Pacific and I’d like 

to extend a special thanks to our ranking member, Mr. 

Faleomavaega, who cannot be with us this morning as he is en 

route to Washington. 

We originally intended to have this hearing later this afternoon 

but moved it to this morning to accommodate President Obama’s 

visit to the Capitol this afternoon. 

Mr. Faleomavaega graciously insisted we move forward without 

him, so I want to thank him and his staff for their flexibility. In 

his stead, I would like to welcome Mr. Ami Bera, who will sit in 

for the ranking member this morning during the course of this 

hearing and act as the ranking member of this subcommittee. 

I’d also like to thank our witnesses for being here today and for 

their flexibility as well. Mr. Bera and I will make opening statements now and other members will be recognized for a minute to 

make a statement if they would wish to do so. We try to keep ours 

to 5 minutes if at all possible. 

Today’s hearing is a continuation of the hearing we held 2 weeks 

ago with Assistant Secretary Robert Blake and Acting Assistant 

Secretary Joseph Yun, which gave the administration the opportunity to address how it plans to increase South Asia’s role as part 

of the strategic rebalance toward Asia. I think it’s fair to say that 

there was bipartisan support in this room regarding the critical 

strategic importance of South Asia, particularly with India, to U.S. 

interests in the broader Indo-Pacific region. I want to emphasize 

today that I do not believe the administration’s rebalance will succeed unless the U.S. does more to build a stronger relationship in 

that part of the world. 

That said, 2 weeks ago we did not hear from our witnesses how 

the administration specifically plans to tackle the myriad of challenges the U.S. confronts in enhancing its engagement in that reVerDate 0ct 09 2002 10:41 Apr 16, 2013 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\WORK\_AP\031313\79892 HFA PsN: SHIRL
2

gion, or tangible actions the administration intends to pursue to 

emphasize South Asia’s critical importance and better integrate 

India into the regional architecture. Today, I hope that we can explore these challenges and examine actions the United States can 

take to further U.S. interests and foster stronger relations throughout the Indo-Pacific region. 

The interconnection of U.S. economic, political and security objectives can be found in and along the Indian Ocean Rim. Economically, the region is a lifeline of international trade, carrying half 

the world’s container ships, one-third of the bulk cargo traffic, and 

two-thirds of the world’s oil shipments. Woven together by trade 

routes, it is a geographic area upon which the world greatly depends, and containing nearly a third of the world’s population, the 

significant human resources and technological capabilities within 

the Rim-land is extraordinary. 

It is certainly no surprise that China and India regard this region as critical, where economic interests meet security interests. 

Consequentially, actions and decisions made in this region will undoubtedly have a direct impact on the economy of the United 

States and on creation of American jobs. Since these actions will 

also help to shape the political landscape, it is now more important 

than ever that the U.S. focus on enhancing economic openness, political freedom and democratic governance in this region where so 

many nations are in the midst of political transition. 

The opportunities we see in South Asia are at the same time 

challenges, and one of the biggest challenges we face is building a 

more dynamic relationship with India. It is vitally important for 

the U.S. that India takes a more active role in developing the Indian Ocean region and increases its engagement in the Asia Pacific; however, the real question is, how can we help India do this? 

India is still excluded from various security and economic groups, 

particularly U.S.-led global nonproliferation and arms control 

groups and a range of economic associations. 

Now, India wants the U.S. to play an active role in maintaining 

regional security and promoting economic cooperation to balance 

what it calls ‘‘China’s irredentist encroachment on the Global Commons.’’ At the same time, India has been both unwilling and ostensibly unable to assume a leadership role as an international actor 

commensurate with its size and power. Indian leadership has been 

hampered by corruption, endemic poverty, and its acute dependence on unreliable regional allies. U.S.-India cooperation will likely 

remain incremental and measured as long as India strives to maintain its strategic autonomy. 

While we could fault India on the sluggish bilateral relationship, 

for being overly focussed on maintaining its strategic independence 

and acting more reactionary than proactive and engaged, that 

would not bring about the change we want to see. We need to build 

on the strengths of the relationship, find ways to foster trust with 

India, and help India integrate into the international system. I believe there are steps the Obama administration can take to do this 

that it is not presently pursuing. 

Assistant Secretary Robert Blake stated at our first hearing that, 

‘‘While it may not get the same attention as our relationships with 

countries of East Asia, U.S. engagement in South Asia remains 

3

central to our reinvigorated outreach to the entire continent.’’ Well, 

frankly, South Asia has never been considered central to the rebalance in the first place. To that end, while South Asia is unlikely 

to play the central role, I am hopeful that it can increase its presence on the world stage. 

An increased engagement strategy with South Asia will help the 

United States secure its long-term goals in Asia in a number of 

ways: Maintaining freedom of navigation, preventing the spread of 

radical Islam and terrorism, upholding human rights and helping 

to prevent the proliferation of nuclear weapons. 

For the strategic rebalance toward Asia to be successful, not only 

does South Asia need to play a more active role, our policies need 

to have clear objectives and precise markers of success. The U.S. 

also needs to remain committed. Unfortunately, 2 weeks ago we did 

not hear specific steps the administration is taking or planning to 

take to address these many challenges. I look forward to hearing 

from our witnesses today and examining policy options the U.S. 

can take to strengthen America’s engagement strategy in Asia. 

I would now like to recognize Mr. Bera who, again, is sitting in 

as ranking member for Mr. Faleomavaega today. We welcome him 

and we welcome his opening statement at this time. 

[The prepared statement of Mr. Chabot follows:]

4


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March 13,2013 

The Rebalance to Asia: Why South Asia Matters (Part II) 

Chainnan Steve Chabot (R-OH) 

Opening Statement 

Today's hearing is a continuation of the hearing we held two weeks ago with Assistant Secretary 

Robert Blake and Acting Assistant Secretary Joseph Yun, which gave the Administration the 

opportunity to address how it plans to increase South Asia's role as part of the strategic rebalance 

toward Asia. I think it's fair to say that there was bipartisan support in this room regarding the 

critical strategic importance of South Asia, particularly with Tndia, to U.S. interests in the 

broader Indo-Pacific region. I want to emphasize today that I do not believe the 

Administration's rebalance will succeed unless the U.S. does more to build stronger relationships 

in that part of the world. Unfortunately, two weeks ago we did not hear from our witnesses how 

the Administration specifically plans to tackle the myriad of challenges the U.S. confronts in 

enhancing its engagement in the region, or tangible actions the Administration intends to pursue 

to emphasize South Asia's critical importance and better integrate Tndia into the regional 

architecture. Today, I hope that we can explore these challenges and examine actions the United 

States can take to further U.S. interests and foster stronger relations throughout the Tndo-Pacific 

region. 

The interconnection of U.S. economic, political, and security objectives can be found in and 

along the Indian Ocean Rim. Economically, the region is a lifeline of international trade, 

carrying half the world's container ships, one third of the bulk cargo traffic, and two-thirds of the 

world's oil shipments. Woven together by trade routes, it is a geographic area that the world 

greatly depends on, and containing nearly a third of the world's population, the significant 

human resources and technological capabilities within this rim-land is extraordinary. It is 

certainly no surprise that China and India regard this region as critical, where economic interests 

meet security interests. Consequentially, actions and decisions made in this region will 

undoubtedly have a direct impact on the economy of the United States and on the creation of 

American jobs. Since these actions will also help to shape the political landscape, it is now more 

important than ever that the U.S. focus on enhancing economic openness, political freedoms and 

democratic governance in this region where so many nations are in the midst of political 

transition. 
5


79892e-2.eps

The opportunities we see in South Asia are at the same time challenges, and one of the biggest 

challenges we face is building a more dynamic relationship with India. It is vitally important for 

the U.S. that India takes a more active role in developing the Indian Ocean region and increases 

its engagement in the Asia-Pacific; however, the real question is how can we help India do this? 

India is still excluded from various security and economic groups, particularly U.S.-led global 

nonproliferation and arms control groups and a range of economic associations; but, India, like 

China, wants a greater role in the global order. It also wants the U.S. to playa constructive role 

in helping to maintain regional security and promoting economic cooperation-to balance what 

it calls "China's irredentist encroachment on the global commons." 

At the same time, India has been both unwilling and ostensibly unable to assume a leadership 

role as an international actor commensurate with its size and power. Indian leadership has been 

hampered by corruption, endemic poverty, and its acute dependence on unreliable regional 

allies. U.S.-India cooperation will likely remain incremental and measured as long as India 

strives to maintain its strategic autonomy. While we could fault India on the sluggish bilateral 

relationship, for being overly focused on maintaining its strategic independence and acting more 

reactionary than proactive and engaged, that will not bring the change we want to see. We need 

to build on the strengths of the relationship, find ways to foster trust with India, and help India 

integrate into the international system. I believe there are steps the Obama Administration can 

take to do this that it is not presently pursuing. 

Assistant Secretary Robert Blake stated at our first hearing that, "While it may not get the same 

attention as our relationships with countries of East Asia, US. engagement in South Asia 

remains central to our reinvigorated outreach to the entire continent.·' This statement is a little 

misleading because South Asia has never been considered central to the rebalance in the first 

place. To that end, while South Asia is unlikely to play the central role, I am hopeful that it can 

increase its presence on the world stage. 

An increased engagement strategy with South Asia will help the United States secure its longtenn goals in Asia in a number of ways: maintaining freedom of navigation, preventing the 

spread of radical Islam and terrorism, upholding human rights, and helping to prevent the 

proliferation of nuclear weapons. For the strategic rebalance toward Asia to be successful, not 

only does South Asia need to playa more active role, our policies need to have clear objectives 

and precise markers of success. The US. also needs to remain committed. Unfortunately, two 

weeks ago we did not hear specific steps the Administration is taking or planning to take to 

address these many challenges. I look forward to hearing from our witnesses today and 

examining policy options the US. can take to strengthen America's engagement strategy in Asia. 
6

Mr. BERA. Thank you, Mr. Chairman, and thank you for calling 

this series of hearings in the—on the importance of South Asia. 

America’s pivot to Asia is critical at this juncture and is really 

a much needed evolution in our foreign policy. Far too often when 

we think about American diplomacy in Asia we have historically 

thought of this in terms of our long-standing allies in Japan, in 

South Korea and, more recently, in the shift toward China. 

However, Mr. Chairman, as you’ve pointed out, as we look at our 

future, South Asia become increasingly important and critical to 

our relationship with South Asia is the U.S. relationship with 

India. 

It’s a strategic relationship both economically and strategically to 

stabilize this region. Late last year, President Obama remarked 

that the U.S.-India relationship is one of the most important partnerships of the 21st century. 

Economically, we clearly see the opportunities and a robust trading relationship with India is vital as we start to accelerate our 

economic recovery and start to create jobs here at home. In fact, 

in my home state of California, exports to India are worth over $3.7 

billion annually. It is a vital relationship. 

Agricultural exports are especially important. According to the 

Department of Agriculture, exports to this sector in 2012 topped 

$440 million. Exports in tree nuts alone were worth $324 million. 

So opening up India’s markets to our goods and services certainly 

are very strategic for us. We must continue to expand our economic 

relationship. 

India is also emerging as a key strategic partner of the United 

States. You know, we’re establishing deeper relationships with 

other nations throughout Asia using India as a strategic partner. 

Our own interest in promoting regional stability make it imperative that the U.S. participate along with India in these regional organizations as well. In fact, as we talked about a few weeks ago 

at the hearing, as we begin drawing down our troops from Afghanistan, India and the U.S. share a common interest in promoting regional peace and international security. 

India also has a critical role in holding and maintaining some of 

the gains we’ve made in helping anchor the stability in Southeast 

Asia. The United States is depending on India to serve as a regional economic anchor and a provider of security in the broader 

Indian Ocean region. 

Three weeks ago, I had the opportunity to question Assistant 

Secretary of State Blake as he returned from a trilateral meeting 

with leaders of India and Afghanistan. Testifying before this committee, he restated our common vision for a strong, peaceful and 

prosperous region. 

He also spoke about working together on common challenges and 

opportunities including combatting violent extremism and increasing regional trade and economic integration. As the only IndianAmerican in Congress, I’m curious to hear from our witnesses how 

this important relationship continue to grow. 

I’m also curious to hear from our witnesses as to the challenges 

of growing this relationship and what we can do in this body, working with the administration, to overcome some of those challenges. 

7

Again, Mr. Chairman, I’ll yield back the rest of my time. Thank 

you. 

Mr. CHABOT. Thank you very much, and we’ll now yield 1 minute 

to members if they’d like to make an opening statement, and we 

will do it in the order in which they arrived. 

The gentleman from North Carolina, Mr. Holding, is recognized, 

if you’d like to make a statement. 

Mr. HOLDING. Thank you, Mr. Chairman, for hosting the second 

part of the subcommittee’s hearing as we continue to examine the 

importance of South Asia. 

As was demonstrated several weeks ago by Part I of the hearing, 

numerous questions still remain surrounding the implementation 

of this administration’s pivot to Asia and the Pacific. 

I thank our witnesses for their time and testimonies and I look 

forward to the answers you are going to give us and shed some 

light on the administration’s pivot. 

So thank you, Mr. Chairman, and I yield back. 

Mr. CHABOT. Thank you very much. 

The gentleman from California, Mr. Sherman, who is the ranking 

member of the Terrorism, Nonproliferation, and Trade Subcommittee, is recognized for 1 minute. 

Mr. SHERMAN. Thank you, Mr. Chairman. 

It’s time to stop punishing India for becoming a nuclear state. 

India did not sign the NPT and cannot be called a violator of an 

agreement it did not sign and it has a good record on preventing 

proliferation. 

Pakistan is the most problematic and least stable of the world’s 

current nuclear states excepting North Korea and is one of the 

great intractable problems in difficult situations that we face in our 

diplomacy. 

If we could create a peace between India and Pakistan, a lasting 

peace, then the Pakistani military could no longer claim its outside 

role. It would have to assume a role consistent with Pakistan’s 

economy and population rather than a role the size or as close as 

they can get to the size of the Indian military, and that would be 

very important to bringing Pakistan democracy and stability. 

I yield back. 

Mr. CHABOT. Thank you very much. I believe the gentleman from 

Pennsylvania, Mr. Perry, is recognized for 1 minute. 

Mr. PERRY. Thank you, Mr. Chairman, and I too want to applaud 

you for this second series of hearings. 

I’m interested in hearing the information as well. I’m also concerned about the administration’s rhetoric regarding the strategic 

importance of the region but it doesn’t seem to be balanced with 

appropriate actions and I’ll be interested to hear the testifiers’ 

viewpoint on what those actions should be so we can get beyond 

the rhetoric and put something in place that’s tangible that we can 

see and that is productive. 

So I appreciate your presence here today. I’m looking forward to 

it, and I yield back. 

Mr. CHABOT. Thank you very much. The gentleman from Georgia, Mr. Collins, is recognized. 

Mr. COLLINS. Thank you, Mr. Chairman. 

8

I appreciate it and, again, I appreciate you having these hearings 

and following because it’s just a strategic emphasis that seems to 

be overlooked only except in times in crisis. And we can talk about 

a pivot. We can talk about wanting to be there. 

But if you only look at it in terms of the importance of when it 

becomes an issue or when something happens, that’s a problem and 

that’s what I’ve seen in this area for too long. What I like about 

these hearings and the previous week’s hearing is its focusing on 

what can we do to strengthen not only the political relationships, 

the economic relationships but also the very strategic relationships. 

If you look at our commitment from a military perspective and 

others over the past few years they have been dominated a lot in 

this area or concerns about this area. 

So I appreciate, Mr. Chairman, you doing this and I’m looking 

forward to continuing the hearing. 

Mr. CHABOT. Thank you very much, Mr. Collins, and I believe 

Mr. Brooks from Alabama is next. 

Mr. BROOKS. Thank you, Mr. Chairman, for calling this hearing. 

Certainly, the southern part of Asia is extremely important in 

world affairs and I look forward to learning from the insight that 

will be shared by these witnesses. 

Mr. CHABOT. Thank you very much. 

And last but not least, Mr. Connolly, if you would like to make 

a 1-minute opening statement, you’re welcome to do so. 

Mr. CONNOLLY. Thank you so much, Mr. Chairman. 

I have three hearings at the same time this morning and I want 

to welcome my friend, Sanjay Puri, to the—to the witness table. 

Thank you so much for holding this hearing. 

I was just in India with a very large group under the auspices 

of the Aspen Institute—a large group of Members of Congress—

which I think demonstrates this repivoting to Asia in a very complex but very important region. And so I’m looking forward to the 

testimony today, especially about the logic behind the so-called repivoting to Asia and what it means to the United States long term. 

Thank you, Mr. Chairman. 

Mr. CHABOT. Thank you very much, Mr. Connolly, and we’ll now 

introduce our very distinguished panel here this morning. 

First, Mr. Walter Lohman is director of the Heritage Foundation’s Asian Studies Center. Before joining Heritage, Mr. Lohman 

served as senior vice president and executive director of the US–

ASEAN Business Council for 4 years. He oversaw the Council’s 

mission of building U.S. market share in Southeast Asia. 

In the late 1990s, Mr. Lohman was the Council’s senior country 

director representing American interests in Indonesia and Singapore. In 2002, he served under Senator Jesse Helms, advising him 

on issues affecting East Asia. From 1991 to 1996, he served as a 

policy aide to Senator John McCain on foreign policy, trade and defense issues. We welcome you here this morning. 

Next, we’ll hear from Vikram Nehru, who is a senior associate 

in the Asia Program and Bakrie Chair in Southeast Asian Studies 

at the Carnegie Endowment for International Peace. He is an expert on development economics, growth, poverty reduction, debt 

sustainability, governance and the performance and prospects of 

East Asia. 

9

From 1981 to 2011, Mr. Nehru served in the World Bank where 

he was chief economist and director for poverty reduction, economic 

management private and financial sector development for East 

Asia and the Pacific. In this capacity, he advised the governments 

of developing countries in Asia on economic and governance issues. 

We welcome you here, Mr. Nehru. 

Sadanand Dhume is a resident fellow at the American Enterprise 

Institute where he writes about South Asian political economy, foreign policy, business and society with a focus on India and Pakistan. He is also a South Asia columnist for the Wall Street Journal 

and has worked as a foreign correspondent for the Far Eastern 

Economic Review in India and Indonesia. We welcome you here, 

Mr. Dhume. 

Last but not least, Sanjay Puri is president and CEO of the Alliance for U.S. India Business. As an expert on U.S.-India relations, 

Mr. Puri regularly leads delegations of business and political leaders to India and is a frequent public speaker on U.S.-India relations and the political impact of the Indian-American community. 

Mr. Puri played an instrumental role in the passage of the U.S.-

India Civil Nuclear Cooperation Agreement. He’s also the founder 

and chairman of the board of Optimos Incorporated and Information Technology Company based in Reston, Virginia, and before 

founding Optimos he worked at the World Bank. 

Without objection, all of the witnesses’ prepared statements will 

be made part of the record. Each witness will have 5 minutes and 

there is actually a lighting system there that you’ll see. When the 

yellow light comes on that means you have 1 minute to wrap up. 

When the red light comes on, we ask that you please terminate 

your statement at that time, if possible, or very closely thereto. 

We will begin with you, Mr. Lohman. You’re recognized for 5 

minutes. 

Mr. LOHMAN. Great. Thank you, Mr. Chairman. 

Mr. CHABOT. If you would all, when you speak, pull the mic close 

to you and make sure it’s on. Thank you. 

STATEMENT OF MR. WALTER LOHMAN, DIRECTOR, ASIAN 

STUDIES CENTER, THE HERITAGE FOUNDATION 

Mr. LOHMAN. Thank you, Mr. Chairman, Mr. Bera, other members of the committee. It’s an honor to be here. I appreciate the invitation. It’s also an honor to be here with several of my friends 

that I work with on an everyday basis. You’ve lined up a good set 

of folks. 

I guess I’m going to start out with the challenges part and maybe 

my friends here can fill in more the opportunity. I’ve entitled my 

remarks, ‘‘The Importance of Reality in U.S-India Cooperation in 

East Asia.’’

I know it’s a little bit provocative but I do want to make it clear 

that I’m a big supporter of closer U.S.-India relations and strategic 

cooperation in East Asia if we can find ways to do it and we can 

find ways to improve on things that we’re currently involved in. It’s 

just that I think we need to be realistic about the prospects, for the 

sake of American interests. 

China is the big geopolitical challenge to the U.S. but if we’re of 

divided mind on how to deal with China, imagine how the Indians 

10

feel about the issue. India shares an armed and troubled border 

with China. For us, China is a geopolitical issue. For India, it’s a 

local issue. 

China is also a huge economic opportunity for India and they 

have a lot of common concerns in dealing with the problems of the 

developing world, which they both inhabit, and also as emerging 

very large economies. 

Furthermore, India has its own diplomatic history—a tradition of 

nonalignment that still infuses its rhetoric today. It wasn’t so nonaligned during the last 60 years but that’s okay. I mean, that’s the 

national myth, that they are nonaligned, strategic autonomy. 

That means India is kind of prickly to deal with. It means it’s 

prickly. It’s not petty. It’s not unserious. We may not agree with 

many of its positions, elements of its policy. But it’s a sincere one 

and something that we have to account for. 

It’s similar in Southeast Asia, and given that Southeast Asia is 

geographically what separates India from the rest of East Asia and 

given that India’s ‘‘Look East’’ policy has been in effect there for 

the longest time, my written testimony focuses a great deal on India’s involvement in Southeast Asia and the potential for U.S. cooperation with them there. 

But the world view in Southeast Asia is similar to India in that 

the Association of Southeast Asian Nations in the first place was 

created to give the region a little bit of space, a little bit of independent room for action. 

That mode has been questioned at times but, again, that’s the 

spirit of the region. That’s the myth that motivates their current 

diplomacy. 

Indonesia is the center of gravity in ASEAN. How does their foreign minister describe ASEAN? As ‘‘a new world paradigm where 

there is no longer need for competition,’’ particularly between the 

U.S. and China. And ‘‘where all countries can gain.’’

And there’s nothing new or unique about Minister Natalegawa—

that’s the Indonesian foreign minister—about his thinking on this. 

It reflects Indonesian foreign policy going back many decades to its 

founding, to independence and it infuses—that spirit infuses all of 

ASEAN’s diplomatic culture. 

So here we are, the United States, trying to make common cause 

with India, a country proud of its ‘‘strategic autonomy,’’ and a 

geostrategic competition with China in a region that has little concerted interest in that competition. 

With the regional organization, ASEAN, I must say that it’s failing in its effort to manage the single biggest security problem in 

the region right now, which is the competing influence and disputes in the South China Sea. 

Is Southeast Asia concerned about the down side of China’s rise? 

Depending on the country that you’re talking about, absolutely. 

But it’s also concerned about a too powerful United States. 

That’s something that we miss in the day-to-day headlines here 

in our concern about China. It just so happens at this moment in 

history the Chinese are making our diplomacy easier and actually 

pushing many of the ASEAN members in our direction. 

So where does this leave us in a conversation about why India 

matters in America’s East Asia policy? It matters because of India’s 

11

long-term potential. Assistant Secretary Blake last month put the 

time horizon on this endeavor at 50 years. 

For the sake of leaving American strategic options open over the 

coming decades, the U.S. should facilitate India’s active involvement in the regional diplomatic architecture, a formal dialogue, bilateral and multilateral and day-to-day coordination among officials 

should be welcomed—joint military exercises, too. 

My only constructive criticism is a warning that we proceed 

knowing that a U.S.-India strategic convergence is limited and, indeed, it’s a long-term exploratory endeavor. We need to focus on 

the things that count the most to America’s position in East Asia, 

which is our forward deployed military, our alliances and our support for free commerce throughout the region. Thank you. 

[The prepared statement of Mr. Lohman follows:]

12


79892a-1.eps

crfie II 214 Massa.::husetts A'"er1ue. N:: 

Hentage Foundation Washington, DC 20002-4999 

l'EADERSHJP FOR AMERICA 

CONGRESSIONAL TESTIMONY 

The Importance of Reality in US-India East Asia 

Cooperation 

Testimony before the 

Subcommittee on Asia and the Pacific 

Committee on Foreign Affairs 

United States House of Representatives 

March 13, 2013 

Walter Lohman 

Director, Asian Studies Center 

The Heritage Foundation 
13


79892a-2.eps

My name is Walter Lohman. I am Director of the Asian Studies Center at The Heritage 

Foundation. The views I express in this testimony are my own, and should not be 

construed as representing any official position of The Heritage Foundation. 

An evaluation of why South Asia matters to America's East Asia policy and how the 

region's dominant power, India, can be effectively incorporated into it must begin with a 

clear conception of U.S. policy goals in East Asia and the current tools at its disposal. 

Fundamentally, the objective of US policy in the Western Pacific should be - as it has 

been since the end of World War II - to backstop to peace, security, freedom, and 

prosperity. The main tools the US employs in this effort are its alliance network, 

forward deployed military presence, and support for free commerce. Secondary tools 

include bilateral and multilateral diplomatic engagement. U.S.-India relations fall into a 

subcategory of this diplomatic category. There are no hard and fast lines separating 

these classifications Singapore, for instance, is not a treaty ally of the U.S It does, 

however, offer military capability, cooperation, and access as valuable as some formal 

allies. The U.S. has fruitful military-to-military relations with many countries in the 

region, including India. Consigning India to a lower category of priority is only to 

recognize that America's principal official interaction with it is diplomatic. It is also 

recognition that there is a world of difference between the value the U.S. derives from 

its Japanese, Korean, Australian, and even Thai and Philippines alliances, than it 

derives from its relationship with India. 

With this as context, the questions then follow: What interests do the U.S. and India 

share in East Asia and what does each bring to the table to meet them? 

Common U.S.-India Interest in Balancing China 

The principal strategic challenge in East Asia is the task of peacefully incorporating a 

rising China into the region's political life to the benefit of the broadest cross section of 

interests, including American and Indian - and Chinese. Of course, from the U.S. 

perspective, we want the biggest possible share of that cross section, as do the Indians 

with regard to their interests. One area our interests correspond in managing China's 

rise is in balancing its growing power, and thereby creating the underpinnings of an 

effective regional diplomatic architecture. 

This said, US and Indian approaches to China diverge in ways that complicate this 

shared theoretical, geopolitical priority. Neither the U.S. nor India consistently pursues a 

"balancing" strategy vis-a-vis China; engagement is an equally prominent element of 

both nations' China policies. From the Indian perspective, China is first a neighbor - a 

relatively strong one that the Indian foreign policy and security establishments are loath 

to provoke. Secondly for India, China is economic opportunity. It is India's largest 

trading partner, and each has nascent, growing investment interests in the other. 

2 
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79892a-3.eps

For its part, the U.S. has fundamental conflicts of interest with China, among them, 

Taiwan's status, differences over maritime disputes, and security on the Korean 

Peninsula. The U.S, however, also has multiple open channels of communication and 

dialogue with the Chinese. The balance that America's forward-deployed military and 

alliance structure provides far outweighs any contribution that U.S.-India relations can 

make. On the economic front, China is a far more important partner to the U.S. than 

India. China is America's number two trading partner, while India is number 13 - the 

difference almost tenfold in dollar terms. In short, the US. has its own equities in U.SChina relations and ample means at its disposal to deal with China, with or without 

India. 

Because the U.S. and India each employ a mixture of balance and engagement, and 

because they are not mutually dependent, they are often out of cycle with one another. 

The India side in particular is sensitive to the domestic political charge of caving to 

American strategic interests, while the American relationship with China is so 

encompassing of its bureaucracies' energies that it has a dynamic all its own, often 

carried out without much regard for Indian equities. 

The success of India's "Look East" policy, to the extent that it supports a stable balance 

of power, is in America's interest. To the extent it complicates Chinese efforts to further 

their extensive maritime claims in the Western Pacific, it is also positive. India's 

measured naval engagement and commercial interests in the Western Pacific help put 

the disputes there in an international light. Its statements about freedom of navigation in 

the South China Sea serve as useful political statements limiting Chinese ambitions. On 

their face, they support America's free commerce objective, i.e., protecting the global 

commons. Observers must bear in mind, however, that in a strict legal sense, India's 

position on freedom of the seas is closer to the Chinese interpretation. This is true, in 

particular, regarding military operations in exclusive economic zones - a major 

American priority. This, in a microcosm, captures the nature of shared U.S.-India 

interests when it comes to China: Theoretically intuitive, in reality, not quite congruent. 

India in Southeast Asia 

It is wise for the Subcommittee to focus attention on regional organizations. The 

development of the ASEAN-centric architecture endorsed by the Obama Administration 

is coming to pass. The Administration's public diplomacy over the last four years speaks 

loudly to the competition for influence there between the U.S. and China. A focus on 

Southeast Asia is also relevant, by function of India's geography and shorter power 

3 
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projection horizon. It is also the sub-region that India has been applying "Look East" to 

for the longest time. 1 

Although the Obama Administration has done very well to regularize and increase the 

points of contact with ASEAN, the danger is that it will buy too deeply into its processes. 

ASEAN, in my view, is not so much "a fulcrum for the region's emerging regional 

architecture" as Secretary of State Hillary Clinton called it, but a meeting venue. It is a 

critically important one, but for U.S. purposes this engagement is simply one tool in our 

approach to the region. ASEAN's aspiration to be more than this to outside powers, 

including the US (it is already more than this to its own members) is today foundering 

on its efforts to manage escalating disputes in the South China Sea. 

As for India's profile in Southeast Asia, it is remarkable to consider what has occurred 

on the ground there since India launched its focus on East Asia in 1991. India's "Look 

East" policy predates China's own "charm offensive" in Southeast Asia by six years. 

Like China, India is now active in all the elements of the region's summitry, including the 

ASEAN Regional Forum, the East Asian Summit, the ASEAN Defense Ministers Plus, 

and ASEAN heads of state/government summits. It has also strengthened bilateral 

relations throughout Southeast Asia. 

The economics - which was a major factor motivating ASEAN's engagement of Indiatell a different story. By 2009, trade with China constituted 11.6% of ASEAN's total while 

India accounted for 2.5% of it. A year later, despite the entry into force of the IndiaASEAN FTA, these shares remained virtually the same. ASEAN exports three times as 

much to China as India, and imports six times as much from China. Total direct 

investment inflows from China to ASEAN in 2002-2009 were more than twice that from 

India. For 201 0, Indian investment jumped as a share of ASEAN's total inward 

investment to levels close to China - yet, not nearly enough to make up the 

accumulated difference 2 

It is worthwhile to break these investment figures down by country to get a more precise 

view of what is happening. Investments in some countries yield greater political benefit 

than others. Singapore - ASEAN's most regular business environment, i.e., the place 

investment will buy you the least political influence - is by far the greatest recipient of 

Indian investment into ASEAN. (Almost half of all global direct investment into ASEAN 

goes to Singapore.) Singapore records twice as much investment from India as China. 3 

1 David M. Malone, Does the Elephant Dance? Contemporary Indian Foreign Poficy, (New York: Oxford University 

Press, 2011), Location 4837, Kindle version of book. 

2 Association of Southeast Asian Nations, ASEAN Community in Figures, 20ll, at 

http://www.scribd.com!doc!111873404!ASEAN-Community-in-Figures-ACIF-2011 (accessed March 11, 2013). 

3 Department of Statistics Singapore, Foreign Equity Investment in Singapore, 2010, at 

http://www.singstat.gov.sg!pubn!business/fei2010.pdf (accessed March 11,2013). The vast bulk of investment is 

in equity. Figures do not include investments from Hong Kong. 

4 
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79892a-5.eps

All the other ASEAN countries which offer comparable figures - Vietnam, Malaysia, 

Thailand, Philippines, Indonesia - report Chinese investment levels that dwarf India's4 

Burma, ASEAN's 2104 Chair, for instance, a country at the heart of what is often 

portrayed as a field of fierce China-India competition, reports China's share of foreign 

direct investment at 33%, India's share at less than 1.0%.5 ASEAN's 2016 Chair, Laos, 

records $3.4 billion in approved Chinese investment projects through 2011, and roughly 

$149.7 million from India. 6 Vietnam is often held up as a regional leverage point in 

China's rise. Vietnam trades 10 times as much with China as with India? On the 

investment side, Vietnam reports $3.7 billion in FDI from China through the end of 2010; 

and $214 million from India. It is a similar story of Indonesia In fact, The Heritage 

Foundation's China Global Investment Tracker independently records a massive $25 

billion in total Chinese investments and contracts for IndonesiaB Different countries 

record numbers differently, but any way one looks at the numbers, they do not look 

particularly good for India. They show India trailing China considerably in its effort to 

forge the sort of economic integration that Assistant Secretary Robert Blake suggested 

in his testimony before this subcommittee could be "the key" to regional stability.9 

4 General Statistics Office of Vietnam, Foreign Direct Investment Projects Licensed By Main Counterparts, December 

31,2010, at http://www.gso.gov.vn/default en.aspx?tabid-471&idmid-3<emID-11390 (accessed March 11, 

2013). The Board of Investment: Thailand, Table 1: PRC Investment Projects Submitted to BOI, January 9, 2011, at 

http://www.boi.go.th!upload!content/T.PRC11 63028.pdf (accessed March 11,2013). The Board of Investment: 

Thailand, Table 1: Indian Investment Projects Submitted by BOI, January 13, 2012, at 

http://www.boi.go.th!upload!content/T.INDIA11 52541.pdf (accessed March 11,2013). Invest Philippines, Totol 

Approved Foreign Direct Investment by Country of Investor, 2010, at 

http://www.investphilippines.gov.ph/statistic2.html(accessed March 11,2013). Bank IndoneSia, Direct Investment 

Flows in Indonesia by Country oJ Origin, 2012, at http://www.bi.go.id!seki/tabeI/TABEL5 33.pdf (March 11, 2013). 

Central Bank of Malaysia, "International Investment Position (liP): Malaysia", December 31,2011, at 

http://www.bnm.gov.my/index.php?&lang::en (accessed March 11, 2013). Indian position confirmed via email 

exchange with Department of Statistics Malaysia. 

5 Ministry of National Planning and Economic Development, Foreign Investment of Permitted Enterprises, 

December 31, 2012, at http://www.dica.gov.mm/dicagraphl.htm (accessed March 11,2013). 

6 Ministry of Planning and Investment Laos, All Approved Investment Projects by Country, December 2011, at 

http://www.investlaos.gov.la!files/rpt Invest Summary CountrylA.pdf (accessed March 11,2013). 

7 General Statistics Office of Vietnam, Exports of Goods by Country Group, Country, and Territory, 2011, at 

http://www.gso.gov.vn!default en.aspx?tabid-472&idmid-3<emID-13214 (accessed March 11, 2013). 

8 Association of Southeast Asian Nations, ASEAN Community in Figures, 2011, at 

http://www.scribd.com/doc/111873404/ASEAN-Community-in-Figures-ACIF-2011 (accessed March 11, 2013). 

9 Robert O. Blake, Jr., "The Asia Rebalance: Why South Asia Matters", testimony before House Foreign Affairs 

Committee, Subcommittee on Asia and the Pacific, February 26, 2013, 

http://docs.house.gov/meetings!FA(FA05!20130226/100306!HHRG-113-FA05-Wstate-BlakeR-20130226.pdf 

(accessed March 11,2013). 

5 
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79892a-6.eps

The U.S. and China may be involved in a game of geopolitics in Southeast Asia. What 

is at play among the ASEAN countries themselves is tactical jockeying. Their objectives 

are narrowly focused on security, economy, and territory. There are also complicated 

internal divisions in each. Take a look at Vietnam's example. Vietnam is not the "billiard 

ball" of international relations theory. It has a complex government with competing 

priorities and factions. Vietnam shares a border with China, a very long history (not all of 

it bad), and party-to-party contacts with the potential for ameliorating conflict with China. 

Its foreign ministry is quite strategic-minded. When pressed by China on territorial 

issues in the South China Sea, it finds common cause with other ASEAN claimants and 

helps galvanize what little action ASEAN can muster. The high point in this regard was 

Vietnam's turn at the ASEAN Chair in 2010, when it very prominently featured its 

interests in the South China Sea - something the Chinese try very hard to prevent. At 

other times, however, Vietnam is more conciliatory toward China. The best example of 

this is the very high profile party-led visit to Beijing in the fall of 2011. During that visit, 

after a very difficult year at sea for China-Vietnam relations, the two sides reached 

agreement on a set of "basic principles on settlement of sea disputes" - the signing 

ceremony for which was formally witnessed by the secretary-general of each country's 

ruling communist party. 

For its part, India also has competing visions at play in its approach to Southeast Asia. 

India's commercial interests in the South China Sea make for an interesting case study. 

Over the objections of Chinese authorities, India's state-owned Oil and Natural Gas 

Corporation (OVL) is working with the Vietnamese to jointly explore and develop two 

blocks in Vietnam's exclusive economic zone (EEZ). OVL's objectives are commercial, 

not geopolitical. By authoritative accounts, the Indian government has little say in OVL's 

individual investment decisions. OVL may make a healthy return on investment by 

maintaining its investment. It may do better ultimately by relinquishing it. Consider that 

OVL signed when the blocks were unproven. Selling its rights at a profit and divesting 

itself of all the trouble would be a rational business decision. It will not represent a 

victory for China. 

The Indian navy is perhaps the most strategically minded part of the Indian 

establishment. It is custodian of India's greatest strategic asset, its geographic blessings 

along Indian Ocean sea-lanes, also a key priority for China. It has sought to parlay this 

valuable experience into the Pacific, where many of China's neighbors have concerns 

that mirror India's own in the Indian Ocean. The navy has been visible and vocal about 

OVL's interests in the South China Sea, and the navy's prerogatives in protecting 

them.1o Recent remarks by the Indian Chief of Naval Staff that the navy is prepared to 

W Rajat Pandit, "Ready to Tackle China Sea Threat: Navy Chief," The Times of India, December 4,2012, at 

http://articles. timesafind ia. i nd iati mes.ca m/20 12 -12 -04/ind ia 135594081 1 sauth-ch i n a-sea-accordance-withinternational-Iaws-vietnam-coast (accessed March 11,2013). 

6 
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79892a-7.eps

protect Indian interests there are noteworthy. 11 However, they represent only one part of 

India's foreign policy puzzle. It does not mean that this statement, every Indian port call 

in the Pacific, or incident such as occurred in July 2011 when an Indian naval vessel in 

international waters was apparently warned off by the Chinese, is a sign of China-India 

geostrategic rivalry. In fact, it is telling that each time something like this occurs, there is 

another part of the Indian government that downplays the development. 

If push ever comes to shove in the South China Sea, one must wonder whether the 

Prime Minister's Office and the Ministry of External Affairs (MEA) would accede to 

risking India-China economic relations and priorities much closer to home (border 

issues, for example) for an investment an ocean away. Resolved of its own interests, 

India would be even less inclined to risk the benefits of India-China relationship for a 

principle more in keeping with America's role and broader interests in the region. 

The U.S.-Vietnam relationship has moved at a glacial pace - restrained by strategic 

indecision on the part of the Vietnamese. 12 It is difficult to imagine Vietnamese 

authorities making up their minds and risking its relationship with China any quicker for 

India, a far less consequential player in its neighborhood than the US. This is especially 

the case as India does not seem to have made up its own mind. 

First and foremost, India's foreign policy priority is on its borders and immediate 

neighborhood. With regard to Southeast Asia, this means Burma. Twenty years ago, 

amidst shifting dynamics in Burma, India switched from support for democracy to 

courting the Burmese military regime. What does India have to show for it today? When 

the Burmese junta recently reached out - arguably to counter an increasingly out of 

balance Chinese presence - it reached out first to the West, not to India. It did so for 

good reason; India does not have the capacity to offset the Chinese advantage. The 

disparity between Indian and Chinese investment numbers has been discussed. China 

is also a much bigger trading partner of Burma than India (more as a source of imports 

than export destination). China-Burma government-to-government ties and military ties 

are also much stronger than India-Burma ties. Historian Thant Myint-U, who travelled 

extensively throughout Burma for his 2011 book, Where China Meets India: Burma and 

the New Crossroads of Asia, characterized "contemporary Indian influences" in Burma 

as "practically non-existent ,,13 

11 Ibid. 

12Colonel William Jordan, Lewis M. Stern, and Walter Lohman, "U.S.-Vietnam Defense Relations: Investing in 

Strategic Alignment," Heritage Foundation Backgrounder No. 2707, July 18, 2012, at 

http://www.heritage.orglresearch/reports/2012/07/u5-vietnam-defense-relations-investing-in-strategic-alignment 

(March 11,2013). 

13 Thant Myint-U, Where China Meets India: Burma and the New Crossroads of Asia, (New York: Farrar, Straus and 

Giroux, 2011) Location 1169, Kindle version of book, http://www.amazon.com(Where-China-Meets-lndiaCrossroads(dp(0374299072 (accessed March 11, 2013). 

7 
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79892a-8.eps

India's experience in Burma's oil and gas sector is a good example of its government 

underperforming in the service of its own interests. Burma's natural gas reserves - tenth 

largest in the world - and India's acute energy needs have focused a great deal of 

attention on India's interest in energy infrastructure. India has the capacity to help 

develop these resources. Transporting them back is more complicated. The headlinegrabbing story on this score was the offshore Shwe natural gas project, where despite 

the stakes of two state-owned Indian entities OVL and GAIL (Gas Authority of India 

Ltd.), China is to receive the actual resource. China is constructing a pipeline across 

Burma to take the gas to Yunnan province - a feat India was unable to accomplish for 

its own market in a competitive timeframe. 

The bottom line is that for all its deference to the Burmese regime on human rights 

issues and recently accelerated diplomatic and assistance activity, India is not 

effectively balancing China's influence in Burma, or Southeast Asia more broadly. It has 

gained cooperation from Burmese authorities in cracking down on insurgents operating 

in its volatile Northeast border region. This it would appear is India's principal objective, 

not geostrategy. Shorn of its geostrategic content, the U.S. does not necessarily share 

India's priorities in dealing with Southeast Asia (although it does share an interest in 

curtailing any Chinese involvement with insurgents on its border with Burma). 

Conclusion 

The U.S. should facilitate India's active involvement in the regional diplomatic 

architecture. Formal dialogues - bilateral and multilateral - and day-to-day coordination 

among officials should also be welcomed. Joint military exercises should be, too. As 

India refines its strategic interests, it is good for the U.S. to have all its options for 

cooperation with regional powers fully developed. In his testimony, Assistant Secretary 

Blake put the strategic time horizon at 50 years. U.S.-India strategic convergence is, 

indeed, a long-term, exploratory endeavor. 

American policymakers must be realistic about the operational role U.S.-India relations 

can play in achieving the number one strategic challenge currently facing East Asia -

successfully managing China's entry in the political life of the region. We have to be 

realistic about India's current power base in East Asia - as well as India's own strategiC 

priorities. India cares far more about its immediate neighborhood than the Western 

Pacific. And as any Indian MEA official will tell you, they have many "strategic 

partnerships," including with China and Russia. 

There is a role for India in America's effort to maintain its historical commitment to 

ensuring the peace, security, prosperity, and freedom in East Asia. That role, however, 

is relatively minor, and will grow, if at all, only according to India's timetable and very 

proud world view. India will not serve, except passively, as part of an American policy to 

8 
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79892a-9.eps

balance China. And anytime the foreign policy establishment there feels it is being 

pulled in that direction, it will recoil. 

Failing to recognizing India's limitations as a partner risks forging a relationship where 

the U.S trades tangible benefits for theoretical geopolitical discussion. More 

importantly, it risks obscuring the relationships and other factors that provide the real 

basis of American power in the Western Pacific: our alliances, a robust forward 

deployed military, and commitment to free commerce. 

The Heritage Foundation is a public policy, research, and educational organization 

recognized as exempt under section 501 (c)(3) of the Internal Revenue Code. It is 

privately supported and receives no funds from any government at any level, nor does it 

perform any government or other contract work. 

The Heritage Foundation is the most broadly supported think tank in the United States. 

During 2012, it had nearly 700,000 individual, foundation, and corporate supporters 

representing every state in the U.S. Its 2012 income came from the following sources: 

Individuals 

Foundations 

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5% 

The top five corporate givers provided The Heritage Foundation with 2% of its 2012 

income. The Heritage Foundation's books are audited annually by the national 

accounting firm of McGladrey & Pullen. A list of major donors is available from The 

Heritage Foundation upon request. 

Members of The Heritage Foundation staff testify as individuals discussing their own 

independent research. The views expressed are their own and do not reflect an 

institutional position for The Heritage Foundation or its board of trustees. 

9 
21

Mr. CHABOT. Thank you very much. 

Mr. Nehru, you’re recognized for 5 minutes. 

STATEMENT OF MR. VIKRAM NEHRU, SENIOR ASSOCIATE, 

ASIA PROGRAM, BAKRIE CHAIR IN SOUTHEAST ASIAN STUDIES, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE 

Mr. NEHRU. Thank you very much, Mr. Chairman, Congressman 

Bera, distinguished members of the subcommittee. 

Thank you very much for giving me the honor to testify before 

you today. Your invitation to this hearing asked us for policy options that would enhance the strategic rebalancing toward Asia 

and further U.S. interests in the Indo-Pacific. 

As an economist, I have viewed that question through an economic lens and wish to emphasize four points. First, in America’s 

rebalance toward Asia, central importance must be given to building a constructive relationship of mutual trust and respect with 

China. 

China’s economic integration with its neighbors, especially 

Southeast Asia, has been one of the most important factors behind 

its transformation into an economic powerhouse. 

Geographical proximity, declining transport and communication 

costs and a relatively free trade and investment environment have 

created East Asian production networks that have captured benefits of scale and specialization to become highly competitive in 

international markets. 

The forces of economic integration are unlikely to weaken in the 

foreseeable future and may even strengthen. 

Worryingly, however, Asia’s rapid economic integration is occurring at a time when many issues between the countries in the region such as competing claims on the South China Sea remain unsettled. China’s sheer size gives it a clear advantage relative to its 

neighbors and its assertiveness in the region appears to have increased in direct proportion to its rapidly growing military and economic strength. 

Extrapolate that forward and it gives cause for concern about the 

prospect for peaceful and cooperative solutions to disagreements 

between China and its neighbors. America’s strategic rebalance toward Asia, therefore, comes at a crucial time in restoring the balance of power in the region, maintaining the freedom of navigation, 

keeping open the sea lanes of communication and increasing the 

prospects for settling disputes through dialogue and negotiation—

all critical ingredients for continued prosperity in the region. 

At the same time, building a constructive relationship with 

China should be a central element of the rebalance toward Asia 

and in building that relationship the narrative should focus less on 

security dimensions and more on practical cooperation and issues 

that matter to both countries. 

Fortunately, as the economic gap between China and the United 

States shrinks, the areas of convergent interests expand. For immediate interests of both sides could be the mutual development of 

clear safety standards throughout the food chain from farm to retail, fashioning a multilateral investment treaty, improving the 

governance of international financial institutions to better reflect 

22

new economic realities in the global economy and even crafting a 

multilateral cybersecurity agreement. 

Over the last 2 days, National Security Advisor Tom Donilon 

called for such an agreement and the Chinese foreign ministry announced just yesterday it was ready for such talks. These are encouraging developments in a very difficult area. 

My second point is the importance of engaging India with the 

same intensity as China. India’s preeminent position in South Asia 

gives it a pivotal role in the region and a natural counterpoint to 

China’s emergence as Asia’s predominant economic and military 

power. 

Not only are India’s long-term strategic interests in the region 

broadly convergent with America’s, the U.S. has many options 

available to assist India in developing its national power and becoming a positive force for peace and prosperity in the region. 

These policy options could include assisting India’s energy security by allowing it to import shale gas from the United States, responding favorably to India’s defense modernization needs, supporting its membership in APEC and even using India’s competitive capabilities in launching American satellites for civil and scientific purposes. 

My third point is the importance of engaging Southeast Asia 

which needs to be given its due weight in the overall strategy. The 

U.S. needs to apply a comprehensive strategy toward the countries 

of the region, much as has been done in Indonesia, that addresses 

economic, social and security issues. 

Most countries in the region would benefit from such a comprehensive approach but none more so than Myanmar, where conditions are the most fragile and the forces for freedom, democracy, 

human rights and free markets deserve all the encouragement that 

they can get. 

There is also a need to boost the capability of ASEAN itself so 

it can set priorities and implement and monitor its collective decisions collectively—effectively. My last point is the importance of advancing trade and investment liberalization in Asia. 

Recognizing that the last stages of trade negotiations are the 

most difficult, it is important for the TPP negotiations to be completed successfully and the agreement given swift approval by Congress. 

Perhaps the dark horse in the trade area is the Trans Atlantic 

U.S.-EU FTA, the free trade agreement announced recently by 

President Obama. It could potentially form such a large market—

50 percent of global GDP, $4 trillion in cross border investment—

that it would attract other countries to join and perhaps over time 

could even include India and China. 

In conclusion, Mr. Chairman, the U.S. rebalancing strategy toward Asia is timely and a lot has been accomplished since it was 

announced 18 months ago. I think Congress and the administration 

can advance America’s core interests in this rapidly growing and 

strategically vital region. 

Thank you once again for giving me the opportunity to speak 

here. I look forward to taking your questions. 

[The prepared statement of Mr. Nehru follows:]

23


79892b-1.eps

~~~~~Illl ,E;m~!i'!~~EItN:ill, ~U •• IB5Si •• , POItl ?4;'!l\,/!!"J'IOdlli~ :'l:!i\',![ TBlli.URJ~;" 

THE REBALANCE TO ASIA: 

WHY SOUTH ASIA MATTERS 

Testimony by Mr. Vikram Nehru 

Senior Associate, Asia Program 

Carnegie Endowment for International Peace 

House Committee on Foreign Affairs 

Subcommittee on Asia and the Pacific 

March 13,2013 
24


79892b-2.eps

Mr. Chairman, 'vIr. Ranking Member, and Members of the Subcommittee, thank y()U very 

much for the opportunity to testify before you today on why South ;\sia matters to the C.S. 

rebalancing toward Asia. 

The rise of ;\sia in all its dimensions has profound implications for :\merica's future. 

President Obmna's strategic balancing strateb'Y recob'1lizes this mId seeks to deepen Americml 

engagement with the region at many levels. The ultimate objective of the rebalancing strategy 

should be to SUpP()rt the rise of a stable, peaceful, and prosperous Asia that drives global 

growth to the benefit of the region cmd the world and works in partnership with other 

members of the global community to resolve regional and global challenges. ;\ peacetlll and 

dynamic Asia, integrated with the rest of the gl()bal ec()n()my, mId actively participating in 

global instihltions, is central to :\merica's interests and will work to the long-term benetlt of 

American companies, American workers, American jobs, and ultimately the American 

economy. 

Extending America's rebalancing to include South Asia is not just important, it is essential. 

South Asia matters because a stable, peaceful, ,md outward looking South Asia that joins 

f"~ast ·\sia's production networks will offer a counterpoint to China's economIC 

predominance in the region and provide additional impetus ,uld resilience to Asia's rise. The 

Indo-Pacitlc region incorporating East :\sia and South ;\sia-driven by the unrelenting logic 

of markets and geogr;tphy-has the potential to hecome the world's economic powerhouse. 

Its peaceful rise should be a core objective of American foreign policy. 

To be successful, the rebalancing strategy needs to have clear objectives and well-deEned 

indicators of success, be comprehensive in reach, enl'pge China, South Asia, and Southeast 

Asia, ilnd he coordinated across its security, diplomatic, and economic dimensions in il 

whole-of-government approach. 

Congress and the administration face growing challenges in the Indo-l'acitlc-from rising 

tensions in the South China Sea to the withdrawal of American combat troops from 

Afghanistan. At the same time, Americil's interests in the region have never heen greater. 

The strategic rebaLmcing was a timely signal of America's long-term conunitment to the 

region ,md its willingness to work toward conunon objectives with its Asian allies and 

friends. 

China's Central Role in East Asia's Economic Integration 

In the past three decades, the rapid growth of developing 1\sia has tripled its share of global 

CDr. The driver of this Asian renaissance was China, where the growth rate averaged 10 

percent a year between 1980 and 2010. Indeed, if mainLmd China's 31 provinces were 

individual countries, then they would all be among the 32 fastest growing countries in the 

world. 

The interpLty between markets and geography played a central role in this transformation. A 

key ingredient was the rapid development of trade and investment links between China and 

its neighboring economies-Japan, South Korea, and most importantly, Southeast :\sia. 

Today, intra-East A.sian trade as a share of CDP is approaching the levels seen in the 

European Union. Geographical proximity, declining transport and communication costs, 
25


79892b-3.eps

and a reLltively free trade and investment environment helped cre"te East Asi,m production 

networks that have captured benettts of scale and specialization to become highly 

competitive in internation,,1 markets. 

Tn the next decade the forces of !\sian integration will likely accelerate, not weaken. Just as 

the liberalization of trade in goods was the engine of growth in East Asi" over the last three 

decades, the liberalization of trade in services will tllrther integrate the economies of the 

region and drive growth in the next three decIdes. Similarly, investment in transport 

infrastructure is pouring into Southeast Asia-from the Asian Development Bank, \vorld 

Bank, Japan, and China-strengthening the foundations of a highly integrated economy 

between Southeast Asia "nd southern Chin". 

~'jnally, Chinese outv13rd foreign investment within Asia is expected to increase sharply in 

coming years cmd, as Japcmese investment did in the 1970s, will act as another integrative 

force among the economies ot- the region. 

Why South Asia Matters 

Three recent developments arc spreading East Asia's economic integration further west to 

South !\sia. 

First is India's recognition that it must not only "look east" but also "engage east." Over the 

last decade, India's trade with China and Southeast Asia has grown at 40 percent and 20 

percent a year, respectively. These rates of growth in trade could be higher still if India 

addresses its infrastructure and regulatory constraints. Furthennore, an e"pected wave of 

liheralization in services trade, supported hy revisions to the lndia-ASLAN l!ree Trade 

Agreement, will play to India's strengths and boost its exports further. (Services already 

account for 35 percent of India's total exports.) 

Increasingly, Japanese and Southeast Asian investors consider India as a potential location 

for their export-oriented investments as a hedge against their perceived over-dependence on 

China. India offers a large domestic market, industrial depth, urban centers, and 

sophisticated financial services-comparable to what China offered in the 1990s. W-hile 

India's progress may initially not be as rapid as China's, and its policy process may 

occasionally be baft1ing and frustrating, it is only a question of time before it becomes ,m 

integral part of Asia's production networks and enjoys sustained rapid growth. 

Second is Myanmar's pivot toward the outside world ,md away from autarky and 

dependence on China. This development h"s created new opportunities for India, opening a 

potential land bridge to Southeast Asia and southern China, and putting in place the last 

piece in the jigsaw for further integration between South and Southeast !\sia. 

Third is the South Asian Free Trade Agreement signed in 2004, which is on track to create a 

South Asia [iree Trade Zone by 2016 (including Afgh,mistln, Bangladesh, Bhut,m, India, 

Maldives, Nepal, Pakistan, and Sri Lanka). Albeit still at low levels, intra-South Asian trade 

has grown at an average rate ot-16 percent a year over the last decade-faster than growth in 

intra-Southeast Asian tr"de (12 percent a ye"r). This is despite infrastructure weaknesses "nd 

lingering trade barriers. It is only a question of time before markets and geography in South 

2 
26


79892b-4.eps

Asia overcome the legacy of sus picions and hostility th"t have plagued the region for more 

than half a century and build the trade and investment links that will drive South :\sian 

growth in the future. 

Challenges to Asia's Peaceful Rise and America's Rebalancing 

\X'orry~ngly, ;\sia's rapid growth and integration is occurring among neighboring countries at 

a time when many issues-land borders, competing claims in the South C:hina Sea, 

distribution of trcUlsnational riparian rights-remain unsettled between them. The ability of 

;\sian countries to press their claims, however, is hardly symmetric. China's economic rise 

has been accompanied by an even faster rise in its military strength !Uld reach, and this is 

rapidly concentrating power in the region. :\s China's neighbors have discovered, its 

willingness to exert its territorial claims has strengthened in proportion to its relative military 

capabilities. If this trend continues into the future then it b>1ves cause for serious concern 

about the prospect for cooperative and peacetlll solutions. 

America's rebalance toward Asia, therefore, comes at a crucial time. It has been welcomed 

by most countries in the Indo-Pacific region-being seen as a useful contribution toward 

restoring the balance of power, maintaining the freedom of navigcltion, ensuring the safety 

and security of sea lanes of communication, and supporting peaceful resolution of 

disitgreements hetween countries through dialogue and negotiation. But the countries of the 

Indo-Pacific have also made it clear that they do not wish to choose between the Cnited 

States and China. They see the rehalancing as an opportunity to huild deeper bilateral 

rclations with the United States, but without sacrificing their rclations with other countries, 

including China. 

Policy Options to Strengthen America's Rebalancing Strategy 

The substanti,tl L.S. security, diplomatic, ,l11d economic investments underpinning the 

rebalancing can be justified on the grounds that a stable Asia is essential for regional and 

glohitl peace itnd prosperity-and hy implicittion criticitl to the long-term henetit of American 

companies, American workers, American jobs, and ultimately the American economy. C.S. 

interests will be served best by 1m Asia that promotes a nuclear-free Kore,Ul peninsula, drives 

glob:tl growth, and works in partnership with other members of the international community 

to resolve global challenges. 

Wl1ilc the rebalancing of U.S. security, diplomatic, and economic resources has been bro"dly 

welcomed in Asia, it hces several challenges: 

• First, whether the new U.S. security posture in the Asia-Pacific can be sustained over 

the long term given the country's tis cal challenges and tepid economic recovery and 

that tensions in other parts of the world could draw America's "ttention away from 

the region. 

• Second, how U.S. policy toward C:hinit can more effectively huild on convergent 

areas of interest that could then provide a platform for resolving more difticult 

regional and global challenges. 

• Third, how the L .S. can huild it strategic partnership with India, and through India 

draw South Asia into ,l11 Indo-Pacific arc of strengthened tr"de and investment links 

3 
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79892b-5.eps

and a regional institutional ,ucchitecture committed to cooperative solutions to 

common problems. 

• ["ourth, how America's myriad foreign policy initiatives in support of Southelst Asia 

can be made more effective. 

• And fifth, how best the U.S. can advance regional trade and investment liberalization 

that will benetit the region ,md the world. 

Restoring America's economy clearly ranks as the highest priority in ensuring the 

credibility of the rebaLmcing policy toward Asia. As Secretary of State John Kerry has noted, 

1\merica cannot be strong abroad if it is not strong at home. \\1hile this is not the focus of 

this helring, it will be centLl1 to the efticacy of future policy toward Asia. 

Engaging China on common concerns should be a priority. \\1orking together on issues 

such as food safety, a multilateGu investment treaty, improved govern,mce in international 

financial institutions, and even cybersecurity, could be an effective way to create the 

environment required to successfully extend the effort to bigger ,md more clullenging t"sks. 

The U.S.-China relationship holds the key to peace, stability, emd prosperity in Asia, and it 

must lie at the heart of ;\merica's rebalancing strategy. 

Tn building that relationship, the narrative underpinning the U.S. strategic rebalancing should 

focus less on its security and more on its economic and diplomatic dimensions that seek 

mutually beneficial outcomes. The change in China's leadership opens fresh opportunities 

for such a dialogue. Fncouragingly, U.S.-China engagement is broad and deep-through 

diplomatic exchanges, the U.S.-China Strategic and Economic Dialob'1.le, and the U.S.-China 

Joint Commission on Commerce and Trade, as well as in multilateral settings, including 

Asia-Pacific Fconomic Cooperation (APFC), the r:ast Asia Summit (f-<:AS), I MF, World 

Bank, emd the WI0. 

I'"ortunately, as the economic gap between China and the U.S. shrinks, the areas of 

convergent interests expand. They now include an open multilateral trading ,md investment 

system, international financial stability, open and secure sea lanes of communication, and 

protection of intellectual property rights. (China now spends more on reseeucch and 

development tlLm any country apart from the U.S.). China takes its international treaty 

obligations seriously and recognizes that if it expects other countries to observe global rules 

and norms, it must do so too. 

There are an increasing numher of areas of common interest to China and the L .S. Progress 

could be made on developing clear safety standards tllroughout tl1e food value chain from 

farm to market; fashioning a multiLtteral investment treaty tlut holds all foreign investors to 

the same standards; ensuring tl,e governance of international till<mcial institutions better 

ret1ects the economic strength of emerging markets; and crafting a multilateral cybersecurity 

agreement that applies rules of cyber conduct and enforcement for all signatories. Other 

possibilities for partnership include improving health care systems, developing clean energy 

technology, ensuring environmental protection, and estahlishing glohal research and 

development networks. Cooperation in these ,uceas confers shared bend its th"t can build 

trust and mutual respect, and could provide the foundations for resolving larger and more 

contenti()us issues. 
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79892b-6.eps

Engaging India with the same intensity as China is an equally important priority for 

(\merica's rebalancing. Tndia's preeminent position in South !\sia makes the C.S.-Tndia 

relationship central to maintaining a counterpoint to Chiml's emergence as Asia's 

predominant economic and military power. Furthermore, there is little doubt that the C.S. 

and Tndia share similar geostrategic interests based on common values, a commitment to 

democracy ;Uld human rights, a common front against radical Islam, and a shared desire for 

an institutional architecture in the Tndo-Pacitlc that promotes cooperation between 

countries. The two countries arc further drawn together by the shared bond of a Llrge 

Indi;Ul-American community, a common LUlb

'l!age, and both being multi-ethnic ;Uld multireligious societies. Finally, Tndia's good standing with /\(2,hanistan's govemment makes it a 

vital p;trtner in pursuing U.S. security interests in the reb

>1on after 2014. 

It is unfortunate, therefore, that their divergences have on occasion framed the narrative 

between the two countries rather than their expanding areas of cooperation and interaction. 

Tndia's leaders have emphasi7.ed that the country's si,e, location, complexity, resources, 

history, and development imperatives demand that its foreign policy retain stmtegic 

autonomy~cUld America should expect neither reciprocity nor alignment from India. 

Instead, the success of U.S. policy toward India should be measured by whether India 

succeeds in developing its national power and becoming a positive force in adveUlcing a 

peaceful and prosperous Indo-Pacific. 

\"Vith President Clinton's visit to India over a decade ago, the U.S. made a long-term bet that 

·'\sia and the world would be a better place with a stronger India. '\Jotwithstanding 

occasional disappointments since, that bet is still worth making today. It is true that India's 

foreign policy decisions may occasionally be pUL:L:ling, emd its ability to translate aspirations 

into reality questionahle, hut India's entrepreneurs and market system, its growing tnde and 

investment links with East Asia, a growing middle class, emd an electoral system that is 

beginning to reward economic performance all augur well for the country's future growth 

and development. U.S. policy toward India should be anchored in the belief that a stable, 

independent, democratic, outward-oriented, emd prosperous India is an essential comerstone 

of the emerging architecture of the Indo-Pacific region-the development of which will serve 

the long-tenn interests of the U.S. in the region. 

The policy options for future U.S. strategic support to India are many and ret1ect the multilayered connections between the two countries: 

• em energy-hungry India dependent on coal would benefit greatly from U.S. exports 

of shale gas, as well as tremsfers of energy-eftlcient and low-carbon technologies; 

• setting aside disappointments with the medium multi-role comhat airc[:tft deal, the 

U.S. should continue to respond positively to India's defense modemiL:ation needs. 

This includes equipment sales, training, joint exercises (U.S. naval exercises Witll 

India are alreldy greater in number than with any other country), colLlborative 

manuElcturing, and technology partnerships. India, after all, is the world's largest 

military importer and is among the largest foreign huyers of U.S. defense equipment; 

• the U.S. should use its leverage in the region to reduce the risk of hostilities between 

India and Pakistan; 

• the U.S. should also consider championing India's membership of APEe. India's 

presence would make APEC a stronger and more inclusive institution which would 

5 
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79892b-7.eps

be more likely to serve U.S. interests, and India could gain from p<lrticipating in 

cutting-edge approaches to international trade and ttnancial cooperation; 

• U.S. authorities could boost India's services sector by elsing ,111d simplifying visa 

requirements, r<lther than complicating and restricting them; 

• in a time of fiscal consolidation, KASA could benefit by using India's very 

competitive launch technologies for low-earth orbit satellites for civil <lnd scientitic 

purposes; and 

• U.S. ofticials and husinesses should increasingly reach out to the le;[ders of Indds 

states, some of whom arc displaying innovative leadership ,111d could prove to be 

receptive partners for public and private sector projects. This is true across a range 

of areas, including tnnsport and energy infrastructure, urb;[niz;[tion, educ;[tion, ;[nd 

he<llth. 

Engaging Southeast Asia should be no less a priority in America's rebalancing strategy. 

This is in part simply because of Southeast Asia's strategic location astride the Mabcca 

Straits. But it is also because ot- its strong links and historical relationship with the U.S., its 

active regional organizations, and the region's increasing security concerns vis-II-vis China. 

The C.S. is already an active participant in the F.;\S, the (\SFA'J Defense Ministers' 

Meetings, the ASEA'J Regional Pomm, 'l11d more recently the U.S.-ASIl/\'J Leaders 

Meeting, cl11d is involved in a range of initiatives through ASEAK, as well as bilaterally with 

each ot- its member countries. 

Late last year, the (\SF.,\'J F.minent Persons Group presented the C.S.-;\SF.;\K Leaders 

Meeting ","ith a comprehensive set of very sensible recommendations on measures needed to 

strengthen C.s.-ASEA __ '1 rclations, r;l11ging from supporting the development of a code of 

conduct in the South China Sea to creating an ;\SF.(\'J-C.S. center in \vashington. (\t the 

same meeting, President Ob<lma announced the Enh<lnced Economic Engagement (E3), 

which is designed to assist implementation of trade facilitation measures and identifies 

specific cooperative acti"ities to increase the efficiency of trade tlows. 

There are, therefore, more than enough recommendations and initiatives on the table for 

""-SEAt--- to implement. The challenge is not to introduce more initiatives, but to mal,e sure 

existing initiatives are effectively implemented and the whole is greater than the sum of its 

parts. 

Most important among ASEAN's priorities-and deserving of C.S. support-is the 

finalization of the Code of Conduct in the South China Sea that includes the other major 

Pacific powers, especially China and the U.S. At this point, ASEAK's focus should not be on 

resolving competing claims, but on lowering tensions by getting all sides to implement 

contidence-building measures t11<lt reduce the risk of hostilities. Only when cooler helds 

prevail can the countries of the region turn their attention to the more difttcult task of 

resolving the c;[uses underlying the tensions in the South China Sea ;[nd developing 

cooperative solutions toward exploiting the mineral riches that lie under the seabed. 

The L .S. also needs to offer Southeast Asia a comprehensive partnership that binds together 

its myriad components into one cohesive whole that presents a clear narrative, embodies 

principles of equality and mutual respect, and includes arrangements for joint monitoring of 

progress and mid-course corrections. 

6 
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79892b-8.eps

This is not a new concept. The United States already has a comprehensive partnership with a 

Southeast Asian country-Indonesia-that covers three bro"d dimensions: economy ,111d 

development; political and security; ,md socio-cultural (which includes education, science 

and technology, environmental protection, and democracy promotion, among others). 

These areas are being developed through six joint U.S.-Tndonesian working groups. The C.S. 

secretary of state and the Indonesi'l11 foreign minister review their progress every six months. 

By working together on a broad range of topics of mutual interest 'l11d import'l11ce, both 

sides are building cooperative stmcRlres that will deepen understanding and advance shared 

interests. 

Civen the diversity of countries in Southeast Asia, developing a comprehensive partnership 

with the entire Southeast Asian region will prove difficult. Instead, the approach adopted by 

the U.S.-Tndonesia comprehensive partnership is a model that could be advanced on a 

bilateral basis with other countries in the region. 

Certainly, Thailand, Ivlalaysia, Philippines, and Vietnam would be excellent candidates for 

deepening bilateral coopemtion. But perhaps the most import'Ult could be Myanmar, where 

conditions are the most fragile and the forces for refonn, human rights, democracy, and free 

markets deserve the greiltest encouragement. The areilS for partnership and joint 

development would need to be identitled separately for each country ,md will likely be 

different in each case. Over time, however, as these partnerships develop, they will 

undoubtedly display common features that have the potential of being brought together 

gradually across the entire Southeast Asian region. 

Finally, the U.S. could support a comprehensive review of the ASEAN Secretariat, which 

should emerge with recommendations on how the secretariat could be strengthened. 

ASEAl'\'s "spirations tend to outmn its implementation capacity. Its secretariat of fewer 

than 300 staff organizes around 1,300 meetings a year~,l11 average of between three and four 

every day-and is stretched thin across numerous initiatives, programs, and projects. 

Ironically, although countries like the C.S., Japan, and China have accorded ASEA"J 

considerable importance in their relationship with the region, ASE1\K members themselves 

have not been willing to strengthen the secretariat's Glpability to monitor, implement ,111d 

follow up decisions made at ASEAK's many meetings. 

These shortcomings we"ken ASEAK and consequently weaken the impact of America's 

rebalancing toward Southeast Asia. It is in ASEA"J's interest, as well as in l\merica's, that 

the grouping is served by " strong instiRltiOlul architecture cap"ble of identifying strategic 

issues, putting forward sensible solutions, and monitoring implementation. 

Advancing trade and investment liberalization in Asia has been complicated by two 

competing trade initiatives-the Trans-Pacific Partnership (TPP) supported by the U.S. and 

viewed as " critical element in the rebalancing strategy, ,111d the Regional Comprehensive 

Economic Partnership (ReEP) which was launched late last year by ASEAN's ten member 

countries and the six countries with which it has free trade agreements (Australia, China, 

India, Jap,l11, Korea, ,111d Kew ZeaLtnd). If negotiations for the RCEP arc successful, it will 

become the largest free trade agreement in the world. 

7 
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79892b-9.eps

/\t this point, negotiations for the TPP 3re more advanced, but they face signirlcant 

challenges before they can come to closure. Discussions on the RCEP have only just begun 

and also felee obstacles, but progress could accelerate if agreement on the basic parameters is 

reached soon. 

\X'hile both trade agreements can coexist, they not only include a different combination of 

countries (most signitlcantly, the TPP excludes China ,lld the RCEP excludes the United 

States), but also represent different philosophies on how economic inteb>Tation should be 

achieved. The philosophy behind the TPP is that trade agreements should include external 

commitments that promote domestic reform. That of the RCEP, on the other hand, is for 

domestic reforms to drive trade and for trade agreements to reelect market developments 

and prevent a retreat into protectionism. Although the ReFI' ,viII initially reelect the 

standards of the country least willing to liberalize its trade and investment, it is likely to be 

more adaptable-as the Tndia-/\SE!\K and the China-!\SE/\'\J free trade agreements have 

proved. 

One possibility is that as the RCEI' is gradually upgraded to address behind-the-border trade 

barriers, its differences with the TPP could narrow to the point that it would make sense for 

the two trade agreements to be merged. !\nother possibility is that the U.S.-r~U trade 

agreement announced by President Ohanu earlier this year would form such a large market 

(accounting for SO percent of global GDP and $~ trillion in cross-border investment) that 

the prospect of access would attract a number of other countries to join which, in the long 

term, could even include India and China. 

Conclusion 

'['he U.S. rebalancing strategy toward the Indo-l'aciEc is a timely recognition of the profound 

shifts taking place in the glohll economy. A lot has been <lccomplished in the 18 months 

since it was announced-the increased U.S. security footprint in the region, the progress in 

'1'PP negotiations, and the announcement of the Enhanced Economic Engagement (El) 

initiative. The challenge now is to deepen and sustain the effort and broaden it to include 

South Asia, in particular by strengthening ties with India, enhancing bilateral cooperation 

with the ASE~i\N nations, and advancing tLlde (lld investment libeLlliz<ltion across the entire 

Indo-Pacific. By doing so, Congress and the administration can advance core American 

political, economic, and security interests in the world's fastest-growing and strategically 

most vital region. 

8 
32

Mr. CHABOT. Thank you very much. 

Mr. Dhume is recognized for 5 minutes. 

STATEMENT OF MR. SADANAND DHUME, RESIDENT FELLOW, 

AMERICAN ENTERPRISE INSTITUTE 

Mr. DHUME. Thank you, Mr. Chairman. Thank you, Congressman Bera and all distinguished members of the subcommittee for 

this opportunity to testify today on the rebalance to Asia and why 

South Asia matters. 

I won’t go over what I’ve gone into in greater detail in my written testimony but what I want to leave you here with in my opening comments is four broad points about the rebalance and the role 

of India. 

The first is that the rebalance is only going to work if the U.S. 

continues to lead in Asia through strength, and over here it’s very 

important for us to remember the lessons of the past 60 years—

the lessons of the post World War II period where the U.S. as the 

dominant military power has presided over an unparalleled period 

of prosperity in Asia, including the rise of Japan, South Korea, Taiwan and then the eradication, to a large degree, of poverty in Indonesia, Thailand and Malaysia and, in more recent decades, the rise 

of China and India. All this has been underpinned by U.S. 

strength. 

What this means is that as we head to defense cuts and we head 

to potentially the lowest level of defense spending as a percentage 

of GDP since 1970, it’s very important that we keep that in mind 

as something that will be problematic because as we look to build 

the kinds of partnerships and alliances with friends in Asia it’s important for the U.S. to be seen—to be—not only to be leading but 

to be seen to be leading from a position of strength. 

The second big point is that we can’t really pivot away from the 

troubles of the Middle East and the broader Muslim world. I know 

that psychologically for many of us here in the United States Asia 

Pacific and the Middle East really occupy very different parts of 

our mind and different parts of our imagination. 

We think of the Asia Pacific more in terms of economic opportunity. We tend to think of the Middle East and the AfPak region 

more in terms of turmoil. 

However—and I think this is why it’s important to have India so 

central to this discussion today—India really symbolizes, in a way, 

how that distinction is a false distinction. Just last month, we had 

a terrorist attack in the southern Indian city of Hyderabad where 

17 people lost their lives. All of us still remember the Mumbai attacks of 2008. 

So, broadly speaking, the pivot—paying more attention to Asia 

makes sense but this cannot be at the cost of ignoring more traditional security challenges and it cannot be at the cost of ignoring 

what is happening particularly in Afghanistan and Pakistan with 

its problems of radicalization, terrorism, nonproliferation and so on. 

My third point, as also emphasized by my colleagues, is that a 

stronger Indian role in the Asia Pacific is, indeed, in U.S. interests 

for many reasons that have come up in the testimony and that are 

fleshed out in more detail in my written testimony as well. 

33

India is a democratic pluralistic nation of 1.2 billion people. It 

has one of the largest and most powerful navies in Asia. It’s an 

English-speaking country. 

Most countries in Southeast Asia view India as nonthreatening. 

It is seen as a much more benign presence than China, partly because it doesn’t have territorial disputes with the countries of 

Southeast Asia, partly because it is much smaller and partly because it doesn’t have the same kind of Chinese diaspora in many 

of the countries, which is seen as having a disproportionate economic weight in the domestic affairs of countries such as Malaysia 

and Indonesia. 

So for all these reasons, India is seen as benign and that makes 

it a natural partner for the United States. Also, there’s a cultural 

element to this. 

The big religions of Southeast Asia—Buddhism and—well, Hinduism as a cultural element even though it’s not there as a dominant religion anymore and to a certain degree even Islam—all 

came from India. So that—sort of the cultural links that bind 

India, especially to Southeast Asia, cannot be overemphasized. 

My final point is that India’s capacity and will to play a role in 

the region that we in the United States would like it to play hinges 

largely on its ability to sustain high economic growth, and over 

here we need to be a little worried. 

Over the past 6 years, growth in India has gone from about 10 

percent—nearly 10 percent to about 5 percent, and if this halving 

is not—if this is not—if this is just a blip there is nothing to worry 

about. 

But if India is in fact entering a period of sustained lower growth 

then its capacity and its will to play the larger role both as a role 

model and in terms of its diplomatic and military clout in the region will seriously come under question. 

So to sum up on that last point, it is in fact in the U.S.’ interesta 

in Asia to pay attention to the Indian economy and to ensure to 

the degree possible that India in fact fulfils its economic potential. 

Thank you. I look forward to taking your questions. 

[The prepared statement of Mr. Dhume follows:]

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79892c-1.eps

AMERICAN ENTERPRISE INSTITUTE FOR PUBLIC POLICY RESEARCH 

Testimony of Sad an and Dhume 

Resident Fellow 

American Enterprise Institute 

Before the House Committee on Foreign Affairs, Subcommittee on Asia and the Pacific 

"The Rebalance to Asia: Why South Asia Matters (Part II)" 

Wednesday, March 13, 2013 

The views expressed in this testimony are of the author alone and not necessarily of 

the American Enterprise Institute. 
35


79892c-2.eps

Mr. Chairman, Mr. Ranking Member, thank you for the opportunity to testify today 

before the Committee on "The Rebalance to Asia; Why South Asia Matters." I am 

Sadanand Dhume, a resident fellow at the American Enterprise Institute, a non-profit, 

non-partisan public policy research organization based in Washington, DC. My 

comments today are my own a nd do not necessarily reflect the views of AEI. 

At the outset, I'd like to commend the Committee for bringing South Asia back under 

the rubric of Asia and the Pacific. Arguably this is where it properly belongs, whether 

viewed through the prism of the region's dominant cultural moorings, economic future 

or strategic significance to the United States. This is certainly true of India, the region's 

principal power, as well as for most of South Asia's smaller countries, including Bhutan, 

Nepal, Sri Lanka and Bangladesh. 

At the same time, however, South Asia's countries are closer to the turmoil in the 

Middle East than their East Asian peers. Indeed, the problems roiling Afghanistan and 

Pakistan-terrorism, sectarian violence, nuclear proliferation and religious extremismunderscore the difficulty of drawing a sharp line between the western extremities of 

South Asia and the eastern edges of the Middle East. 

Against this backdrop, I would like to take this opportunity to present the outline of a 

strategy toward South Asia that advances broad US interests in the Asia-Pacific and 

fosters peace and prosperity in the region. In a nutshell, this involves continuing to 

encourage India's integration into Asian political and economic institutions, urging India 

to remain on the path of economic reform to fulfill its own potential, and maintaining 

influence in Pakistan and Afghanistan in order to prevent violence there from 

destabilizing the region. 

Key policy recommendations; 

*Continue to encourage Indian integration into Asian political and economic structures. 

Develop the East Asia Summit as Asia's premier forum for discussion of political and 

strategic issues. 

*Encourage closer strategic and economic ties between Japan and India, Asia's second 

and third largest economies. 

*Recognize the importance of India's economic growth for the strategic balance in Asia, 

and encourage India to deepen much needed economic reforms. 

*Develop a strategy to engage more robustly with India's best performing states in 

order to encourage growth and boost trade ties between our two countries. 

*Ensure that events in Afghanistan and Pakistan don't destabilize South Asia and 

prevent India from playing a wider role in Asia. 

1 
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Background: 

1. US-India Relations 

Over the past lS years, the US-India relationship has arguably been transformed more 

fundamentally than the US relationship with any major Asian nation. 

In 1998, the US imposed sanctions on India after it tested nuclear weapons. Seven years 

later, the two countries embarked upon an historic civilian nuclear deal that effectively 

gave India access to nuclear technology it had been denied for over a quarter century 

since its first nuclear test in 1974. Since 2000, three successive American presidentsBill Clinton, George W. Bush and Barack Obama-have visited India. In November 2010, 

President Obama declared in India's Parliament that "India has emerged." 

Bilateral trade between the two countries has surged 40% over the past three years and 

may touch $100 billion this year. Defense sales, virtually unthinkable during the Cold 

War when India leaned toward the Soviet Union, total close to $9 billion as India 

modernizes its armed forces, partly in response to massive Chinese spending on its own 

defense capabilities. India conducts more joint exercises with the US than with any 

other country. In addition, the US and India consult more broadly across a range of 

issues-from counter-terrorism to education to agriculture-than ever before. 

2. Why India Matters: 

Since the fall of 2011, the Obama administration has spoken of pivoting to the AsiaPacific in order to influence the region's norms against the backdrop of China's rise as a 

global power. In simple terms, supporters ofthe pivot say it makes sense both politically 

and economically. It focuses US attention on a region that is home to China, the US's 

most obvious challenger, and a country whose peaceful integration into the global 

system is critical for Asian stability. The Asia-Pacific also houses some ofthe world's 

fastest growing major economies and biggest potential markets, including China, India 

and Indonesia. 

Against this backdrop, India has emerged as one of a handful of Asian countries that can 

influence broader outcomes in the region. Simply put, a fast-growing democratic and 

pluralistic nation of 1.2 billion people acts as an obvious counterweight to any 

hegemonic ambitions an authoritarian China may hold. It also offers an alternative 

model of economic development-without sacrificing democratic values such as free 

speech and freedom of religion-to China. That neither the US nor India explicitly seek 

to contain China does not fundamentally alter this calculus. 

In addition, India's ongoing naval expansion, civilizational imprint on Southeast Asia, and 

close diplomatic relations with Singapore, Thailand and Vietnam, make it an important 

partner in securing long term US goals in the region, including freedom of navigation, 

unfettered trade and the deepening of democracy in Southeast Asia. 

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3. Potential risks to US-India relations and its impact on the Asia-Pacific 

Over the past decade, US policy makers have developed a bipartisan consensus that the 

rise of India is good for the US. In Asia, this has been buttressed by the fact that the 

Asean countries generally welcome India as a benign presence that reduces the threat 

of a region overwhelmingly dominated by China. As India's economic growth 

approached double-digit rates last decade, the prospect of India as a potential economic 

counterweight to China also began to be taken seriously in Asean capitals. 

However, over the past two years the understanding that underpins this assessment has 

come under strain. 

To begin with, India's economic growth has slowed dramatically, from 9.8% in 2007 to 

4.5% this year. This sharp deceleration at what remains a low level of per capita income 

($1500 per annum)-one at which countries such as China and Malaysia had no trouble 

sustaining higher growth rates-has raised questions about India's model of 

development, its ability to project sustained influence in Asia, and the size of the 

potential economic opportunity it offers. While it's far too early to write off India's 

economy-a single year of slower than normal growth does not mark a trend-the 

slowdown does raise questions about a populist polity's ability to steward the economy 

keeping the country's long term interests in mind. 

Second, the ongoing US withdrawal from Afghanistan has raised concerns in Indian 

foreign policy and national security circles about the depth of US commitment to the 

region. India doesn't have the luxury of simply pivoting away from the badlands of the 

so-called AfPak region. If the US is seen as cutting and running by its Islamist foes, and 

this results in an upsurge of violence in both Afghanistan and India as in the 1990s, it will 

reduce trust between Washington and New Delhi and force the latter to focus more on 

interests closer to home than farther afield in East Asia. In this context, the importance 

of the US showing its continued willingness to lead, including by providing the military 

the resources it needs to project power, cannot be over-emphasized. 

Third, in some circles in Washington there's a danger of so-called India fatigue setting in. 

India's failure to pass a nuclear liability bill that allows US commercial firms to benefit 

from the pathbreaking nuclear deal has damaged its stock in Washington. Simply put, 

there's a sense-including among many of the US-India relationship's supporters-that 

India has failed to repay the US effort to push through the nuclear deal in the face of 

tough domestic and international opposition. 

In the foreseeable future, whether we like it or not, progress on nuclear contracts for US 

firms will remain a litmus test of sorts for the promise of the broader US-relationship. In 

the meantime, however, the US should not lose sight of the deal's non-commercial 

objectives, including building trust with India and integrating it into the international 

system. This means the US ought to continue to back India's attempt to attain 

membership of four key multilateral nuclear regimes: Nuclear Suppliers Group (NSG), 

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Missile Technology Control Regime (MTCR), Australia Group and Wassenaar 

Arrangement. 

Policy recommendations to achieve US goals in South Asia and East Asia: 

Despite these caveats, an Asia-Pacific in which democratic powers such as India, Japan, 

South Korea, Indonesia and Australia playa larger role remains a fundamental US 

interest. Given India's potential, and the size ofthe bet successive administrations have 

placed on it, it makes sense to continue to deepen engagement with India, as well as to 

encourage its own robust engagement with the region. Here are some ways to do this: 

* Encourage further Indian integration into Asian political and economic structures, and 

continue to develop the East Asia Summit as Asia's premier forum for discussion of 

political and strategic issues. 

India has been a member of the East Asia Summit since its inception in 2005, and the US 

joined the grouping in 2011. Unlike the older Asean Regional Forum (ARF), the EAS is 

less unwieldy (18 members) and brings together heads of government of all eight ASEAN 

nations as well as eight ASEAN dialogue partners. 

If the EAS evolves as the region's premier forum for political and strategic issues, it will 

create a venue where the US, India, Australia, Japan and other likeminded countries 

work with ASEAN to manage peace and security in the region. In addition, and based on 

the same principle of deepening South Asian integration with the broader Asia-Pacific, 

the US should back Indian membership in APEC. For now, the odds of India becoming 

part ofthe Trans-pacific Partnership (TPP) are slim. But the long-term goal forTPP ought 

to be its enlargement to include both India and Japan. 

*Encourage closer ties between Japan and India, Asia's second and third largest 

economies. 

From a US perspective, one of the most encouraging developments in Asia in recent 

years has been a new warmth and purpose in India-Japan ties. At one level, Washington 

is directly involved with New Delhi and Tokyo in the form of a trilateral dialogue which 

began in 2011. At the same time, Japan has dramatically stepped up its engagement 

with India. 

Loans from Japan's International Cooperation Agency cover 52% of the $7.7 billion cost 

of the Delhi-Mumbai dedicated freight corridor, which ought to be completed by 2018. 

Similarly the Japanese have provided soft loans totaling $4.5 billion toward the DelhiMumbai Industrial Corridor, an ambitious Indian project to kickstart manufacturing, in 

part by using foreign investment. 

On the security front, the return of Shinzo Abe to power has implications for India-Japan 

relations that the US ought to welcome. I n December last year Abe outlined his view of 

4 
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a "strategic diamond" spanning Australia, India, Japan and the US state of Hawaii that 

would "safeguard the maritime commons stretching from the Indian Ocean region to 

the western Pacific." This Japanese impetus to partner more closely with India echoes a 

2007 speech by Abe to India's parliament where he spoke of a "Strategic Global 

Partnership" between the two countries marked by shared strategic interests as well as 

a common belief in democracy and human rights. 

*Recognize the importance af India's economic growth far the strotegic balance in Asia, 

and encourage India ta deepen much needed economic reforms. 

One ofthe main drivers of India's growing prominence in the Asia-Pacific has been its 

rapid economic growth since the advent of economic reforms in 1991. The ongoing 

slowdown, should it continue, will damage India's stature in the region and affect its 

ability to playa larger diplomatic, economic and military role. For example, faced with a 

large fiscal and current account deficit, this year the Indian government slashed 

budgeted defense spending to 1.79% of GDP, its lowest level in three decades. 

While India's current economic woes are largely of its own making-it has embarked on 

populist programs such as loan waivers and rural employment guarantees while 

neglecting labor reform and infrastructure spending-the US can playa role in advising 

India to pursue more responsible policies. Meanwhile, as the engine of India's economic 

development shifts to fast-growing states, the US should consider a strategy to engage 

more robustly with India's best performing states in order to encourage growth and 

boost trade ties between the two countries. The most promising of these states include 

Gujarat, Odisha, Delhi, Tamil Nadu and Maharashtra. 

*Ensure that events in Afghanistan and Pakistan don't destabilize South Asia and 

prevent India from playing a wider role in Asia. 

In many ways, South Asia underscores that rebalancing to Asia cannot mean ignoring 

traditional security threats from the Muslim world that have preoccupied the US over 

much ofthe past decade. 

Even as the US draws down troops from Afghanistan, it cannot afford to abandon the 

country as it did after the Soviet withdrawal in 1989. A perceived victory for radical 

Islamist groups such as the Taliban and the Haqqani Network in Afghanistan will have 

consequences from Jordan to Jakarta. Simply put, it will send a message to Islamists 

everywhere that they have defeated not just one but two superpowers. 

India, which has faced numerous terrorist attacks over the past two decades-including 

most infamously the Mumbai attacks of 2008 carried out by 10 Pakistani terrorists from 

the group Lashkar-e-Taiba-is particularly vulnerable to a resurgence of jihadism. 

Keeping in mind broader US interests in the Asia-Pacific will mean paying continued 

attention to both Afghanistan and Pakistan. Afghanistan cannot be allowed to fall once 

5 
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more into Taliban hands. Pakistan's generals cannot be allowed to return to 

destabilizing India through the use of jihadist proxies. 

To sum up, the threats of the past decade-radical Islam and terrorism-cannot be 

ignored lest they undermine the very premise ofthe US pivot to Asia. This means 

continuing to engage with both Afghanistan and Pakistan using a mix of diplomacy, aid 

and, where required, military force against terrorist groups. Only a stable and secure 

India will be able to playa wider role in Asia that will be useful to both the region and 

US interests in it. This means ensuring that the rebalance to the Asia-Pacific does not 

come at the cost of ignoring or downplaying older challenges that remain unresolved. 

6 
41

Mr. CHABOT. Thank you very much. 

Mr. Puri, you’ll be recognized for 5 minutes. 

STATEMENT OF MR. SANJAY PURI, FOUNDER AND CHIEF 

EXECUTIVE OFFICER, ALLIANCE FOR U.S. INDIA BUSINESS 

Mr. PURI. Mr. Chairman, Ranking Member, and members of the 

subcommittee, thank you very much for the opportunity to testify 

before you today. 

From energy security to defense cooperation to bolstering our 

economic ties and increasing opportunities for high-skilled workers 

to come to the U.S. or go to India, there are serious obstacles facing 

the U.S. as we rebalance to Asia. 

However, I believe our mutual interests and shared values can 

get us where we need to be if the U.S. is committed to deepening 

the U.S.-India relationship, which is one of the most defining of the 

21st century. 

My esteemed colleagues have talked about a much more strategic 

level but I will try to address what Chairman Chabot and a lot of 

the people in the hearing have asked for—specific simple solutions. 

I don’t think we can boil the ocean in this relationship so I offer 

four potential opportunities for us: Enhanced education collaboration, which can change the dynamics of this relationship; STEM 

teacher exchange, which can be a game changer for the U.S.; the 

need to allow exports of natural gas to an energy-starved India; 

and starting to look beyond New Delhi to different states in India. 

I’ll just briefly elaborate on those four points. Enhancing education collaboration—a Hindu proverb states that you can change 

a nation through education and I’m a firm believer in this proverb 

because I think it holds the key for changing U.S.-India relations. 

For all the short-term fixes we might talk about today, I believe 

education is a long-term solution which is required for the U.S.-

India partnership to thrive. 

The Alliance for U.S. India Business, which is an organization 

which I lead, we have been at the forefront of enhancing dialogue 

in both countries to create opportunities for building higher-quality 

education because we believe that building global partnerships between U.S. and Indian universities will strengthen the bonds between our two nations. 

Some of the top CEOs and policy leaders in India today are educated from our universities. They take with them the knowledge, 

values and experiences of the United States. 

They take with them the generosity of the American people and 

it automatically creates economic and cultural bridges between the 

two countries. It is not a coincidence that Indian companies which 

are led by American-educated CEOs are much more active in the 

U.S.-India economic relationship. 

Students from India coming to the U.S. are the second largest 

group coming to this country. They contribute about $1 billion to 

us—to the United States. But demand for higher education in India 

is also increasing. 

India needs 500 universities and 33,000 more colleges in the next 

8 years, which is a $50 billion market. It also needs vocational and 

technical institutes, which is another $2 billion market opportunity. 

42

But where will this additional capacity come from? If it comes 

from Indian universities partnering with universities and colleges 

in the states that you represent, I believe we will be on our way 

to making the kind of difference that needs to be made. 

We are working and we have taken over a hundred university 

presidents, deans, provosts to India and they’re engaged with over 

1,000 of their counterparts in India. There are student exchanges, 

faculty exchanges and R&D going on. 

This is a win-win relationship that happens. No jobs are lost on 

either side. Jobs are created, strong cultural bonds are created and 

corporate—and the values are shared. So I think that’s a very important point that we should consider. 

The second point I would make is regarding STEM education. 

The United States has a tremendous shortage of STEM teachers at 

the K–12 level. It is especially very acute in rural, inner city and 

remote areas in especially some of your districts. How can we expect our kids to have strong science and math skills when they 

don’t have good teachers or have no teachers? 

India has a tremendous pool of science and math experts that 

also speak English. We should consider a specialized short-term 

program that qualifies these teachers and brings them over for a 

short duration so that we can create our own pool of STEM experts 

for the future. Currently, we are working with several states to create a pilot program. 

The third opportunity I see is for us to export gas to an energystarved India. Currently, India competes with China and Japan for 

buying LNG from Qatar and Australia. India is talking to Iran for 

a gas pipeline. 

Well, if we were able to export gas to India, if we can find economically viable and environmentally clear mechanism, it would do 

three things. It would create economic opportunity in the U.S. 

through exports, it would reduce India’s dependence on the Middle 

East for gas and also build a more strategic relationship based on 

their desire for energy independence. 

And the final point I would make is that we should start looking 

beyond New Delhi toward states. India has entered an era of coalition politics. The states are much more assertive and powerful. We 

need to start building ties with the states because sometimes policy 

paralysis gets to New Delhi. 

And there are several dynamic states in India like Maharashtra, 

Gujarat, Andhra Pradesh and Tamil Nadu that we should engage 

with. These states are leaders with national aspirations and are 

looking to produce results through good governance and we can 

have a collaboration with them in agriculture, energy, education, 

technology and homeland security. 

And our economic cultural interest would be much better fostered 

working with them. We recently took a delegation to the state of 

Punjab, which is the breadbasket of India, and their chief minister, 

who’s the equivalent of our governor, met with the agriculture secretary from Iowa, and he wants to do a farmer-to-farmer exchange. 

He wants to send farmers from his state to Iowa, and Iowa farmers 

there so that they can have best practices. 

And I can tell you that will do more than any other big strategic 

document that you could sign for the future. 

43

I thank you for your time and for holding this important hearing 

and I look forward to answering your questions. 

[The prepared statement of Mr. Puri follows:]


79892d-1.eps
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79892d-2.eps

Alliance for lJ.S.-India Business (AlJSlB) 

Testimony of Sanjay Pnri 

Founder and Chief Executive Officer 

Alliance for U.S.-India Business (AUSIB) 

Before the House Committee on Foreign Affairs 

Subcommittee on Asia and the Pacific 

"The Rebalance to Asia: Why South Asia Matters (Part II) 

Wednesday, March 13,2013 

Mr. Chairman, Ranking Member, and members of the Subcommittee: 

Thank you very much for the opportunity to testify before you today. 

From energy security to defense cooperation to bolstering our economic ties and increasing 

opportunities for high· skilled workers to come to the US. or go to India, there are serious 

obstacles facing the US. as we re·rebalance to Asia. However, I believe our mutual interests and 

shared values can get us where we need to be if the US. is committed to deepening the US.-

India partnership which is one of the most defining of the 21 st century 

For purposes of this hearing, I will leave it to others to delve into counterterrorism and 

intelligence cooperation, military·to·military exchanges and defense trade My obj ective is to 

focus on four broad issues which deserve our consideration. 

The four are 

1) Enhanced education collaboration which can change the dynamics of this relationship 

2) STEM teacher exchange which can be a game changer for the US. 

3) The need to all ow exports of natural gas to an energy starved India 

4) Why we should look beyond New Delhi to different states in India 

Enhance Education Collaboration: A Hindu proverb states that you can change a nation 

through education. I am a firm believer in this proverb and I think it holds a key for changing 

UK-India relations. For all the short-term fixes we might talk about today, I believe education 

is the long·term solution which is required for the US.-India partnership to thrive 

The Alliance for US·India Business (AUSIB) - a not-for-protit trade organization - has been at 

the forefront of enhancing dialogue between both countries to create opportunities for building 

higher quality education because we believe that building global partnerships between US and 

Indian universities will strengthen the bonds between our two nations. Some of the top CEO's 

and policy leaders in India today are educated from US Universities. They take with them the 

knowledge, values and experiences of the United States. They take back the generosity of the 
45


79892d-3.eps

American people. This automatically creates economic and cultural bridges between the two 

countries. It is not a coincidence that Indian companies, led by U.S. educated CEO's, are much 

more active in the U.S.-India economic relationship. 

Students from India form the second largest group coming to the U.S. for higher education. 

But demand for higher education in India is also increasing. The Indian Higher Education sector 

is rising to meet global benchmarks although further efforts are needed to enhance the 

accessibility, funding and the quality of higher education in the country. India needs at least 500 

Universities and 33,000 more colleges in the next 8 years. This alone is a $50 Billion market 

India also has a great need for vocational and technical institutes which is another $2 Billion 

market opportunity 

Where will this additional capacity come from? If it comes from Indian universities partnering 

with universities and colleges in the States you represent, I believe we will be on our way to 

making the kind of difference that needs to be made. Through AUSIB EduNext, a higher 

education initiative which mobilizes organizations and drives tangible results to empower and 

make educational institutes more capable and future ready for purposes of preserving and 

promoting the values that India and the U.S. share, we have created a platform for Indian 

CollegesiUniversities to interact and establish long term relationships with visiting U.S. 

universities. We focus our efforts in the fields of medicine, pharmacy, engineering, business, 

hotel management, energy, technology and agriculture. 

Our results have led to student and faculty exchanges, joint R&D and we have created an online 

platform that academics on both sides can use to exchange best practices. We have hosted two 

of the largest U.S.-India education conclaves in 2011 and 2013 which were attended by over 100 

education and policy leaders from the U.S. and over 1,000 from India. All three Provosts of 

Public Institutions in Iowa were represented at the highest level at this year's conclave besides 

other Universities. 

Governors, Members of Congress from India and the U.S., University Presidents, Provosts, 

Chancellors, Deans, Department Heads and senior faculty have participated in AUSTB- led 

delegations and we encourage universities in your district to collaborate with us or the Indian 

Higher Education sector so that together we can promote the highest standards of education, 

value systems and governance. All of our conclaves have had a strong corporate participation 

from the U.S. and India and I believe it is important for Universities to understand what kind of 

educational capability that companies need and also for companies to form a Public-Private 

partnership model with the Universities. 

Create a STEM teacher exchange program: The second point I would make is regarding 

STEM education. The United States has a tremendous shortage of STEM teachers at the K-12 

level. It is especially very acute in rural, inner city and remote areas. How can we expect our kids 

to have strong science, math skills when they do not have good teachers? India has a tremendous 

pool of science and math experts that also speak English. We should consider a specialized short 

term program that qualifies trains and brings these teachers over to the U.S. for a short duration 

so that we can create our own pool of STEM experts for the future. AUSTB is currently working 

with several states to establish a pilot program. 
46


79892d-4.eps

Allow exports of gas to an energy starved India: Currently India competes with China and 

Japan for buying LNG from Qatar and Australia. Generally it ends up on the short end of the 

stick as the growing appetite by China has made China much more aggressive. The U.S. only 

exports Gas to FTA countries and since India is not it needs approval. If the U.S. can find a way 

to have an economically viable and environmentally clear mechanism to export gas to India it 

would do three things: increase economic opportunity in the U.S. through exports, reduce India's 

energy dependence on the Middle East and thirdly build a more strategic relationship with India 

given the country's tremendous need for energy independence. 

Look beyond New Delhi outward to various dynamic states in India: 

As India has entered a period of coalition politics, the states are much more assertive and 

powerful. The U.S. should build strong economic and cultural ties with these states since they 

will get away from the policy paralysis that sometimes affects New Delhi. AUSIB just took a 

delegation to the state of Punjab where the Chief Minister wants to start a Farmer to Farmer 

exchange with the U.S. since his state is an agriculture state and he wants to learn best practices 

from U.S. farmers. 

There are several dynamic states in India like Maharashtra, Gujarat, Andhra Pradesh, Tamil 

Naidu that we should engage with. I would like to make a point about the U.S. relationship with 

the State of Gujarat and especially its democratically elected Chief Minister Narendra Modi. His 

state is one of the most economically dynamic and has attracted a lot of investments from U.S. 

companies like Ford and GM. I have participated with other delegates from around the world at 

one of the premier economic summits in India hosted by the State of Gujarat called Vibrant 

Gujarat. However, the U.S. Government has boycotted him. While all of us stand for human 

rights and deplore any violation, the fact remains that after ten years of investigation, India's 

Supreme Court has found no evidence against CM Modi regarding the 2002 Gujarat riots and he 

has been elected democratically thrice, representing more than 60 million constituents. 

Therefore, in my opinion, it is time for the U.S. to begin the process of engagement with CM 

Modi. 

I thank you for your time and for holding this important hearing, and I look forward to answering 

your questions 
47

Mr. CHABOT. Thank you very much, Mr. Puri, and I’d like to 

thank all the members of the panel for their testimony this morning. 

I think it was all very excellent, and we’ll now recognize members for 5 minutes to ask questions and I’ll recognize myself for 

that purpose. 

There have been recent reports that local territorial disputes 

with China in fact have sharpened since Secretary of State Clinton’s call for America’s Pacific Century. 

Is it just a coincidence that these conflicts between China and 

Vietnam and China and the Philippines and China and Japan, et 

cetera, have intensified since the so-called ‘‘pivot’’ to Asia? Could 

China be operating under the impression that their neighbors have 

become emboldened by the protection offered by increased military 

cooperation with the United States, for example? What other unstable dynamics, in addition to increasing tensions in the East and 

South China Seas, are likely to be generated in the near or distant 

future that could undermine our so-called Asia ‘‘pivot’’? 

I welcome any of the members of the panel to respond. Mr. 

Lohman? 

Mr. LOHMAN. I would actually say it’s just the opposite. That is, 

that the U.S. attention to the region and attention to the complaints of our allies—in some cases—in the case of the Philippines, 

a treaty ally—is a response to the pressure that the Chinese are 

putting on friends in the region and that impetus is coming from 

within China. 

It’s coming from a couple decades of patriotic education, things 

emphasizing their rights in those waters. There is also a media environment there that only gives people the outlet to criticize the 

United States or criticize the Philippines or criticize Japan, but allows them to sell newspapers. So how are they going to sell newspapers? They’re going to criticize in the harshest possible terms. 

So there’s a certain dynamic in China, I think, that is driving 

their claims and their aggressiveness in their ‘‘near seas’’ and the 

U.S. is responding to those largely because our friends and allies 

are coming to us asking us to help. 

Mr. CHABOT. Mr. Nehru? 

Mr. NEHRU. Let me add to Mr. Lohman’s point. Actually, China’s 

claims in the South China Sea have been in existence for a long 

time, certainly for several decades. But they have never really pursued these claims actively. 

But as their capabilities, especially naval capabilities, capabilities of the officials that regulate the law enforcement commission, 

the capabilities for—of local governments, which are the coastal regions, and their Coast Guard capabilities have increased, they have 

gradually extended their enforcement out into the South China Sea 

and that’s led to some of these interactions. 

So I would agree with Mr. Lohman. I don’t think it’s necessarily 

the U.S. pivot. I would just like to add one more point and that is 

the Vietnam issue really arose because of the passage of the Vietnam Maritime Law which included some of the islands in the 

Paracels as they were embodied in the law itself. 

48

And that, I think, created enormous concerns in China and created a reaction because until that point it had never been embodied 

in any Vietnam—Vietnamese law. 

Mr. CHABOT. Thank you. 

Let me get my second question in and then I’ll address that to 

Mr. Dhume and Mr. Puri. 

As a way to help India become more economically integrated 

within the region, should the U.S. support India’s participation in 

the Asia Pacific Economic Cooperation—APEC forum and if so, 

why? And why has India not yet been invited and how could APEC 

help India? Are there any risks that the U.S. faces by inviting 

India to join. If you wanted to comment at all on TPP—all of those 

things. 

I have 1 minute between the two of you to try to do it. So Mr. 

Dhume? 

Mr. DHUME. Well, I’ll comment very briefly. The short answer is 

yes, the U.S. should support India’s entry into APEC. 

I think the broader—the broader principle at work over here is 

that the U.S. should support greater Indian integration into political and economic institutions in Asia and APEC is one of them. 

The reason that it hasn’t been there is that India has not traditionally been seen as a Pacific power. It’s an Indian Ocean power. 

But I think that’s—you know, those are just details and the broader idea should be to include India in all these institutions. 

Similarly, the TPP—I think India is very far away from being in 

the TPP right now. But the principle behind the TPP, again, should 

be—should be expansive, inclusive and I believe that is the—that 

is the general idea behind it. 

Mr. CHABOT. Okay. Thank you. 

Any thoughts on those things, Mr. Puri? Anything you’d like to 

add? 

Mr. PURI. No. I think my colleagues have talked about it and I 

think the United States should support India in terms of joining 

the APEC. 

Mr. CHABOT. Okay. Thank you very much. My time has expired. 

The gentleman from California, the ranking member today, is 

recognized for 5 minutes. 

Mr. BERA. Thank you, Mr. Chairman, and thank you for the panelists. Your testimony was riveting. 

Mr. Puri, you touched on the importance of the educational partnership and I’m a direct product of that. My parents, you know, immigrated here as students from India in the 1950s, as have many 

immigrants. 

As we think about the Indian-American community, we’ve prospered and we’ve done very well here in the United States and have 

continued to give back to the United States economically, academically and so forth, and I’d ask any of the panelists to think about 

the role of the Indian-American community here domestically as we 

strengthen the partnership with India and, you know, what advice 

you would give to the community here to help accelerate this relationship and how to use that. 

Mr. PURI. Well, I think the community here is already engaged 

in the dialogue. I mean, you’re seeing some of us already here. So 

that’s in the process. 

49

But I think, to me, maybe I’m—I really believe education is very, 

very important because we look at those students who come from 

India as a big source of revenue because they pay full fare. But 

they also contribute a lot in terms of technology. 

But you got to understand that in India there is a huge education market. Every Indian parent will sell their land or other 

things to educate their children. 

It’s a $50 billion market but it also builds very, very strong 

bonds. Having done two major conclaves, I can just tell you that 

if we get engaged then there’s the benefits, especially we have 

started engaging corporates in there. So the last delegation we took 

Iowa—we took companies from Iowa with us, Principal Group and 

others, John Deere, et cetera. 

The benefits are to those companies. Benefits are to the United 

States. Benefits are to India and to the educational institutions. So 

I think that’s a win-win situation. 

And we should start looking at STEM teachers here too because 

there’s a crying need and, you know, Mr. Bera, some of the math 

and science experts that exist in India. It’s incredible. They are 

currently being taught from Skype. Students here are being taught 

from Skype in India so we could do a lot better in doing those 

things. 

Mr. BERA. Mr. Dhume? 

Mr. DHUME. Thank you. 

This is a question right after my heart. I spent a lot of time 

thinking about this. I would say that you could divide that question 

into two parts, really. There is a—there are the practical ways in 

which Indian—the Indian-American community, which is about 3 

million strong, can contribute. 

It’s a wealthy and educated community that can give back in 

terms of business ties, Indian-American-owned companies investing 

and so on. 

But I, in fact, think that the more important thing is the contribution of this community to India in terms of ideas. This is a 

community that has prospered in the United States precisely because the United States has got certain really big things right in 

terms of its ideas of pluralism, in terms of its ideas of tolerance, 

in terms of its ideas of economic freedom. 

And so I think that if I had so summarize this in a sentence I 

would say the key role for the Indian-American community in 

terms of giving back to India is to take the principles that have 

made the U.S. prosperous and strong and find ways to promote 

those ideas in an Indian context. 

Mr. BERA. Right. Thank you. 

Let me try to get my second question in here. We’ve talked a lot 

about the U.S. relationship with China versus the U.S. relationship 

with India. 

You know, is it possible during the rebalance—the Asian rebalance—for the U.S. to enhance both relationships or are they in conflict? And I’d direct that to Mr. Lohman or Mr. Nehru. 

Mr. LOHMAN. Briefly, yes, I do think you can enhance both relationships. That’s the difficulty because it makes for a very complex 

set of relationships. We’re trying to improve relations with China 

50

at the same time we’re balancing against it and we’re trying to 

come to the defense of our friends in the region. 

We’re trying to get the Indians involved in that effort and we’re 

not even clear on what the object of our effort is in East Asia. 

So I think it’s possible. I think it also very much complicates the 

situation. 

Mr. NEHRU. I would add that actually it’s essential because I 

think India would find it very difficult if it felt that there was a 

G–2 being created between the United States and China that it 

was excluded from any future developments in the Asia Pacific region that was solely the product of the relations between those two 

countries. 

Mr. BERA. Great. Thank you. 

I’ll yield back my time. 

Mr. CHABOT. Thank you very much. 

The gentlemen yields back. The gentleman from North Carolina, 

Mr. Holding, is recognized for 5 minutes. 

Mr. HOLDING. Thank you, Mr. Chairman. 

Mr. Lohman, a few weeks ago at Part I of our hearing on the rebalance to Asia and the importance of South Asia we heard from 

the administration officials that the pivot is going to require a balance of diplomatic, military and economic interests, and I’d ask you 

how you’d rate this balance thus far and which one of these three 

areas is going to present the greatest challenge moving forward? 

Mr. LOHMAN. I think the military presence is the one that’s going 

to be the biggest challenge because of what’s going on here in 

Washington with budgets. I think that’s the biggest problem. 

But in terms of ranking the various elements of it, I think you 

have to recognize that the diplomatic element of that is completely 

dependent on the other two. 

If you don’t have an economic footprint in the region, if it’s not 

big, if it’s not something that can compete with the other powers 

or if you don’t have the forward deployed military that we have 

had there for the last 70 years protecting the global commons, diplomats go to the table with a lot less behind them and they’re a 

lot less effective. 

Mr. HOLDING. Switching gears just a little bit, and I’m going to 

open this up to the whole panel but starting with Mr. Lohman, if 

you could elaborate on what role you believe Pakistan and the current relations between the U.S. and Pakistan will play in the administration as a pivot. 

Because, you know, certainly we provide Pakistan with enough 

aid that, I think, that we have seen that we’re not getting everything in return that we had hoped for with giving this aid. 

And with Pakistan being a nuclear weapon state and the instability that we’ve seen over the years, you know, the concerns that 

you might have as we look at relations between Pakistan and 

India. 

Mr. LOHMAN. I think for the most part Pakistan is irrelevant to 

East Asia. East Asia is a place of opportunity. It’s not a place of 

conflict. It’s not somewhere where Pakistan’s normal toolbox is 

going to be of much use to anyone. 

But I think if they could do something they could help facilitate 

a good outcome in Afghanistan—that is, they could stop making 

51

our life more difficult in Afghanistan because especially getting involved in East Asia, if India is not comfortable with what’s going 

on there—it’s not comfortable with what’s going on in Pakistan and 

Afghanistan—it’s not going to be able to get more involved in East 

Asia. 

So I think Pakistan could be a more constructive player in the 

AfPak theater. That would be the best thing it could do. Other 

than that, there’s really no role that it can play in East Asia. 

Mr. HOLDING. I’d like to open that up for some further comment 

from the panel. 

Mr. DHUME. I’d like to agree with Mr. Lohman. I mean, in a nutshell, the role of Pakistan in the pivot it could play a role of a spoiler, and the reason it could—the way it could play the role of a 

spoiler is by essentially destabilizing the two countries on its border—Afghanistan and Pakistan—by the use of jihadist proxies that 

it has done in the past. 

So I think the U.S. role, as I emphasized in my opening comments too, the U.S. role in South Asia, in Afghanistan and Pakistan, remains important mostly to ensure that Pakistan does not 

play that role of a spoiler, does not turn India westward looking at 

its core immediate domestic security concerns by—caused by things 

such as terrorism. 

So in that sense, Pakistan is a player in it but not in a broader 

sense, as Mr. Lohman emphasized to you. 

Mr. HOLDING. Well, if foreign aid to Pakistan isn’t gaining us the 

influence and control over the situation that we might hope, what 

is the solution? 

Mr. DHUME. I think it’s—we’re not going to get—we’re not going 

to get to a perfect situation where the problem is solved. But we 

can try and improve it. It should be a combination of carrots and 

sticks. 

I do believe that there needs to continue to be aid in order to influence Pakistan, to strengthen liberal voices within Pakistan society, to try and turn the discourse within the Pakistani military toward democratization. 

So I think to that extent there has to be continued aid. There 

also have to be carrots. There also have to be sticks—sorry. There 

has to be a capacity to target people within the Pakistan establishment who continue to foment terrorism. 

I think the drone program is essential and perhaps we may have 

to look at a time where the drone program is, depending on advances in technology, perhaps stepped up, even though it is unpopular in Pakistan. 

So I think this is going to be an ongoing thing. It’s not going to 

go away in the next year or 2 or even 5. But, broadly speaking, you 

have to remain engaged and you have to recognize that there is 

going to be an element that is played by—element that is played 

by aid but also an element of force that has to be on the table in 

that region. 

Mr. HOLDING. Thank you. Mr. Chairman, I yield back. 

Mr. CHABOT. The gentleman’s time has expired. 

The gentleman from the Commonwealth of Virginia, Mr. 

Connolly, is recognized for 5 minutes. 

52

Mr. CONNOLLY. Thank you so much, Mr. Chairman, and thank 

you for noting we are a commonwealth, one of four. 

Talking about Pakistan just a little bit, Mr. Nehru and Mr. 

Dhume in particular, as much as the United States is concerned 

about internal stability in Pakistan and the ability of the government to deliver on cooperation in the fight against terrorism and 

reestablishing control over unpoliced parts of the state, its relationship with its own military and so forth, surely India’s got to be concerned about growing instability. 

This is a huge country. It’s got nuclear weapons. What are India’s responsibilities and obligations to Pakistan in terms of trying 

to help with stability? Mr. Dhume, you listed some options for us. 

What about India? 

Mr. DHUME. I think India has broadly acted quite responsibly toward Pakistan. You saw that in the response of India after the horrific Mumbai attacks of 2008. There’s a broad consensus in India 

that Pakistan should not be allowed to fall apart and that means 

encouraging primarily a more robust economic relationship. 

India has granted most favored nation trading status to Pakistan 

about a decade and a half ago. Pakistan has yet to—is in the process of reciprocating that but that has not fully been—fully been 

done. 

But in a nutshell, the Indian policy toward Pakistan will continue to be more economic relations, more people-to-people contact, 

a robust engagement with liberal elements within Pakistani society 

the same way we do. 

And so it’s quite—in many ways, there’s a real confluence of interest between the U.S. and India in Pakistan because both countries view this similarly. Of course, the U.S. has more tools. The 

U.S. has military tools that are—such as the drone program, which 

India does not. 

But broadly speaking, both countries are trying to pull Pakistan 

or nudge Pakistan in the same direction where it’s a country that 

begins to focus more on the welfare of its own citizens and less on 

exporting terrorism and other problems to countries on its borders. 

Mr. CONNOLLY. Mr. Nehru? 

Mr. NEHRU. Well, I’m actually not an expert on Pakistan. I concede that to Mr. Dhume. But let me just add one point. 

I do believe that economic relations are going to be critical between those two countries, and if India is able to continue to grow 

rapidly, the incentives on the Pakistani side will increase over time 

to increase its trade with India simply from an economic perspective. 

And therefore, actually economic growth in India—continued economic growth in India will be a very important feature or factor in 

improving economic relations between the two countries and I believe that then will be the key to an enduring peace. 

Mr. Connolly. Speaking of that, Mr. Puri, and I see you want 

to—you want to come at this as well so feel free to do so. But can 

I just tack a question on, particularly to you? 

Speaking of the Indian economy, I mean, the Indian economy 

was growing at 7, 8 percent. It’s now down to about 5 percent. 

In my recent visit to India, one of the refrains I heard particularly from non-Indian nationals but also from some Indian nationVerDate 0ct 09 2002 10:41 Apr 16, 2013 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 F:\WORK\_AP\031313\79892 HFA PsN: SHIRL
53

als was the bureaucracy, the red tape of doing business in and with 

India is so oppressive that it’s actually contributing to some diminishment of robust economic growth and discouraging investment in 

the country, especially with American companies. I wonder if you’d 

comment. 

Mr. PURI. Well, I’ll just address the Pakistan issue that he raised 

and you raised. 

I think Pakistan is a perception problem also for the United 

States and India. Every time I go to India the people always ask 

me, why do you guys always side with Pakistan—why do you guys 

side with Pakistan? You give them so much money. 

So it is a perception issue and a perception problem for India. 

Mr. Dhume——

Mr. CONNOLLY. Which, by the way—excuse me—is ironic since 

the Pakistanis would—if you had a similar visit you’d hear why is 

American repivoting to India—why are you so favorable to India. 

Mr. PURI. I know. India is a democracy, has a strong media. The 

other issues, obviously, if—you know, Indian politics also dictates 

if there is a serious attack the public wants some action. 

When there was this Bombay attack, they were at the verge of 

responding because the public wanted some action just like any 

other democratic government would do. So that’s the thin line that 

India always walks in terms of Pakistan. 

Now, coming to the economic issue, which I agree—red tapeism, 

governance issues—and that’s why I addressed the issue that 

United States should start looking and companies should start 

looking at states where they can actually do business, where there 

is less red tape, whether it’s Maharashtra, Gujarat, Andhra 

Pradesh, Tamil Nadu because there are those core states where 

you can actually do business, do business fast and get things done 

and those states are growing at 15 percent, 14 percent. 

And yes, there are other states which are growing at much less. 

Mr. CONNOLLY. Yeah. Thank you very much. Thank—my time is 

up, Mr. Chairman. 

Mr. CHABOT. Thank you. The gentleman’s time has expired. 

The gentleman from Georgia, Mr. Collins, is recognized for 5 

minutes. 

Mr. COLLINS. Thank you, Mr. Chairman. I appreciate that. 

Mr. Dhume, I have just a quick—I don’t want to spend the time 

here but you had mentioned—you brought up the sticks and carrots with Pakistan. Especially in light of and from my background 

in military and others maybe is it—maybe it’s just a perception 

issue. 

Should we—in using your analogy of carrots and sticks it seems 

to me we need to be using more sticks here than carrots. I mean, 

it just—at this point, we’re not seemingly able to penetrate, I 

think, from my perspective. I’d like to hear your thoughts just 

briefly on that. 

Mr. DHUME. I think the real problem we’ve had since 9/11 in 

Pakistan is that we’ve been good at wielding a really big stick, 

which is what we did after 9/11 when we sort of went to the Pakistanis and said that listen, you need to change your behavior and 

if you don’t change your behavior you’re going to suffer extremely 

grave consequences. 

54

What we’ve been less good at is wielding smaller sticks and 

that’s what you need in the day to day, and just historically it’s not 

something—you know, it’s an awkward—Pakistan puts us in an 

awkward position because we know how to be friends and we know 

how to be adversaries. 

But this sort of in between stage where Pakistan is technically 

an ally of sorts but in fact has—its population is extremely hostile 

to the United States and its army and its intelligence agencies, in 

fact, have actively funded and trained elements that have attacked 

U.S. troops in Afghanistan, it’s problematic. 

I think drones are part of the solution but they’re not the whole 

solution. We have to be looking at things like targeted sanctions at 

top ISI officials. So more sticks, I agree with you, but they have 

to be—they have to be smaller sticks than the ones that we’ve had 

traditionally. 

Mr. COLLINS. Well, I tend to agree with you and that’s why I 

wanted to give you a chance to clarify that because I do believe 

there needs to be more, as you call, little sticks. But I think that’s 

something—a whole another hearing that we could do and especially if we’re discussing drones and other issues that’s coming 

apart here. 

But I want to turn to Mr. Nehru—a question of economics for 

you. The—there’s been a lot of discussion on China and especially 

currency manipulation and the issue there of what can we do to 

stop the currency manipulation. 

But there’s also another side of that as far as—and so the question would be is if China were to allow the RMB exchange rate to 

be adjustable based on market supply and demand, would the U.S. 

see a net increase in cheaper exports to China or what other aspects could we see there? 

I know it’s talked about a lot but I’d like to hear sort of—a balanced approach is the word thrown around in Washington these 

days. 

Mr. NEHRU. Well, this is a—this is a very technical question. But 

let me just make the following point. If China were ever to allow 

its exchange rate to completely respond to market forces it would 

mean that there would have to be no convertibility restrictions between the renminbi and other currencies. 

So there would have to be basically no capital controls. And for 

that to happen, you would have to have a financial sector that is 

very stable. Now, China saves 55 percent or close to 55 percent of 

its GDP. That’s a large amount of savings, which are chasing increasingly riskier and riskier investments within China. 

You bring down those capital controls and a lot of that—a lot of 

those savings will pour out of the country and actually seek higher 

rates of return in the rest of the world. In fact, already one estimate says that $250 billion leaves China illegally, illicit capital outflows seeking higher returns outside China. 

When you have a large capital outflow from a country, the 

renminbi will depreciate, not appreciate. So you might have, in 

fact, an effect which is counter to what you would expect. So I 

would just say that this is a complex issue and has to be dealt with 

carefully. 

55

Mr. COLLINS. Well, that’s why I wanted to bring it up because 

it’s an issue sometimes that’s spoke of as a fix-all, if you would. It’s 

brought up as well, if we just fix this manipulation then we have, 

you know, an open market or a lower cost, and there’s some things. 

But I wanted the—what you said there was, I think, something 

we all need to look at again in the bigger scheme of things is how 

we deal with not only the illegal outflow of capital that’s coming 

out of China but if we did bring those down where would it go and 

how would it be, you know, met. And so I appreciate the answer. 

Just sort of a broad question, very quickly, and we may not have 

a—finish—I just want to finish this way. We’re focused many times 

on the—on the big players there—India, you know, Pakistan, 

China, Afghanistan, of course, and others. 

I think at a certain point, Mr. Chairman, the other areas in that 

integral part of that Southeast Asia—the Nepals, the Bangladesh, 

the Sri Lankas—those are all an interesting part that, I think, play 

into a part of what we’re doing on the economic side. 

Mr. CHABOT. Don’t forget Bhutan. 

Mr. COLLINS. And Bhutan and the rest. As you go along—and I 

appreciate us bringing this because I believe it is something important for not only America but also taking the entire area to task. 

So, Mr. Chairman, I yield back. 

Mr. CHABOT. Thank you very much, Mr. Collins. We appreciate 

your questions. 

And our last questioner this this afternoon will be the now ranking member of this committee, the gentlelady from Hawaii, Ms. 

Gabbard. 

Ms. GABBARD. This is one of the few places where things happen 

fast, right, Mr. Chairman? 

Thank you, gentlemen, for your—for your insight and for being 

here today with this very important discussion. As we all have recognized, the countries of South Asia are vital strategic, economic 

and security partners for our country and we experience this as a 

day-to-day reality in my state of Hawaii, where our economic vitality and success is largely dependant on our working relationships 

with many countries in Asia and the Pacific and understand and 

welcome the region’s participation in particular with multilateral 

organizations such as APEC. 

My first question is, really, going to focus on the economic impact 

here, specifically with visas and how we can improve the system 

that we have so that there is mutual economic benefit. 

With H–1B high-skilled workers visas, Indian nationals currently 

receive about one-third. Of those overall visas, we’ve heard from 

our colleague from California how he has—he and his family have 

personally been recipients or part of that success story. 

What ways can we improve this current temporary visa program 

so that our economy here can benefit from these high-skilled worker programs? I open that to whoever. 

Mr. PURI. Well, I think there are a lot of solutions already that 

are floating around. But what happens is in Washington when you 

have a big comprehensive immigration debate some of these things 

get pushed aside. 

There are so many different models. You look at the Canada 

model, which is a point-based model based on skills. You look at 

56

Australia’s model, which is, you know, they have just come out 

with a bonded visa that you put—if you want to get some of your 

family members in you put $10,000 and if they don’t go back you 

lose that. 

But as far as skilled visas are concerned, I think we really lose 

out when people come here to go to school for graduate studies and 

Ph.D.s, et cetera. We should absolutely figure out a way to keeping 

them here and maybe put together a point-based system that is 

necessary. 

But what happens is today if somebody gets a green card but his 

or her spouse is in India, because of the waiting time that happens 

with India it takes them 10 years to bring their spouse here, which 

is not humanly right and also is a great motivator for that person 

to go back no matter what skills that person has. 

So we really have to take a look at not just skill but also familybased immigration policy that we are looking at. 

Ms. GABBARD. Thank you. 

The second follow-up question, similarly along the same vein, is 

talking about how we can increase the capacity to process visas 

from fast-growing countries like India, largely which would allow 

for increased tourism and other visitors to the U.S.—really seeing 

an opportunity there for a huge infusion into our economy with 

minimal outlay either in infrastructure or other ways. 

Wondering if you could talk about some opportunities that exist 

there as well as possibly some concerns with opening up the visa 

waiver program to countries like India, for example, or the global 

entry program and seeing how we can develop more bilateral 

Trusted Traveler arrangements. 

Mr. DHUME. I could be mistaken but my understanding of the 

visa—are you talking about the visa waiver or are you talking 

about a lottery? 

Ms. GABBARD. Visa waiver. 

Mr. DHUME. Yeah. I think that that would sort of not be realistic 

at this point simply because of the pressures of immigration that 

would—that would perhaps follow. 

But I do think that, to get back to Mr. Puri’s point, what is important essentially in terms of looking at visa issues with India is 

the focus on attracting and retaining highly-skilled immigrants, 

particularly people with math and engineering skills, and I think 

that ought to be the focus. 

In terms of processing times and so on, I don’t have the figures 

at the top of my fingertips but I can tell you anecdotally that 

things have improved quite dramatically if you were to go to the 

Embassy in New Delhi or any of the consulates. 

You know, there used to be a time where to get a visa to the 

U.S., you know, there were long lines and so on. I think of streamlining has taken place, especially in terms of management. And so 

things in that direction have—things have broadly gone in the 

right direction in terms of processing and handling and so on. 

I mean, I’m sure there’s always room for more improvement but 

that’s my sense of it. 

Ms. GABBARD. Thank you. Mr. Lohman? 

Mr. LOHMAN. I just wanted to quickly add I think Mr. Bera suggested earlier or asked whether there was something that the InVerDate 0ct 09 2002 10:41 Apr 16, 2013 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 F:\WORK\_AP\031313\79892 HFA PsN: SHIRL
57

dian community should be doing. This actually would be a good 

issue to rally around. 

I mean, on the U.S.-India nuclear agreement the Indian community got very involved and is really largely responsible for it happening. This would be the sort of thing you could also rally the 

community around and make happen. 

Ms. GABBARD. Thank you. Thank you, gentlemen. 

Mr. CHABOT. Thank you. The gentlelady’s time has expired. 

We would like to thank all the witnesses for their really excellent 

questions and answers this afternoon. Their testimony was really 

very good—I think very helpful to members. 

I would ask unanimous consent that members have 5 legislative 

days to revise and extend their remarks and submit written questions if they’d like to do that. If there’s no further business to come 

before the subcommittee, we’re adjourned. 

Thank you. 

[Whereupon, at 12:16 p.m., the subcommittee was adjourned.] 

(59)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

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79892n.eps

SUBCOMMITTEE HEARING NOTICE 

COMMITTEE ON FOREIGN AFFAIRS 

US. HOUSE OF REPRESENTATIVES 

WASHINGTON, DC 20515-6128 

Subcommittee on Asia and the Pacific 

Steve Chabot (R-OH), Chairman 

March 8, 2013 

TO: MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS 

You are respectfully requested to attend an OPEN hearing of the Subcommittee on Asia and 

the Pacific, to be held in Room 2172 of the Rayburn House Office Building (and available live on the 

Committee website at I'Y,vwforeienaffairs house. gOY): 

DATE: 

TIME: 

SUBJECT: 

WITNESSES: 

Wednesday, March 13,2013 

11:00 a.rn. 

The Rebalance to Asia: Why South Asia Matters (Part TT) 

Me Walter Lohman 

Director 

Asian Studies Center 

The Heritage Foundation 

Me Vikram Nehru 

Senior Associate, Asia Program 

Bakrie Chair in Southeast Asian Studies 

Carnegie Endowment for International Peace 

Mr. Sadanand Dhume 

Resident Fellow 

American Enterprise Institute 

Me Sanjay Puri 

Founder and Chief Executive Officer 

Alliance for US. India Business 

By Direction of the Chairman 

The Committee on ForeIgn Afjmrs seeks to make lts/aCilmes acceSinbie to persons 'fl-7th dIsabIlitieS. ~(1'OU are 111 neeJ oj specwl accommodations, please call 

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61

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79892m.eps

COMMITTEE ON FOREIGN AFFAIRS 

MINUTES OF SUBCOMMITTEE ON _________ A ___ '''-,h.:..., ,--& ___ I ___ h,--e =-P"-ac'-"ifi"-'_c ______ HEAlUNG 

Day Wednesday Date, ___ --'3"'.'-"3"'."'13'----__ Room ___ ",,2"-1"'72"--__ 

Starting Time n'02 4 M Ending Time 2:16 PM 

Recesses _: -I <-to __ ) <-to __ )( __ 10 __ ) <-to __ ) <-to __ ) <-to __ ) 

Presiding Member(s) 

Steve Chabot (R-O/l) 

Check all oftllefollmvillg that GPP()!: 

Open Session 0 Executive (closed) Session D Televised 0 

TITLE OF HEARING: 

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Stenographic Record [{] 

The Rebalance to Asia: Why SOlllh Asia Matters (Pa/'t 2) 

SUBCOMMITTEE MEMBERS PRESENT: 

Sieve Chabot (R-OH), Dana Rohrabacher (R-CA), Mo Brooks (R-AL), George Holding (R-NC), Scott Peny 

(R-PA), Ami Eera (D-CA), Tllisi Gabbard (D-Hl), Brad Sherman (D-CA), Gerald E. COl/l/olly (D-VA) 

NON-SUBCOMMITTEE :MEMBERS PRESENT: (Alark with an * tfthey are not members offi,ll committee.) 

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79892f-1.eps

Mr. Chairman: 

COMMITTEE ON FOREIGN AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

WASHINGTON, D.C. 20515 

SUBCOMMITTEE ON ASIA AND THE PACIFIC 

ENI F.R. F ALEOMA V AEGA (D-AS) 

RANKING MEMBER 

The Rebalance to Asia: Why South Asia Matters (Part Il) 

March 13, 2013 

I commend you for focusing our tirst two hearings on why South Asia matters For too long, I 

believe we have viewed India, in particular, only through the prism of our security interests, and 

this may be why India, for some time, was a part of the Subcommittee on the Middle East rather 

than the Subcommittee on Asia and the Pacific, where it rightfully belongs. 

India is an Asian superpower. Like it or not, India is a counterbalance to China, although I do 

not believe it serves U. S. interests for us to pit either against the other, especially when India and 

China just announced that they will conduct joint military exercises. 

I also do not believe we should ask India to be the answer to U. S. concerns in Afghanistan 

Traditionally, bilateral relations between India and Afghanistan have been strong and, frankly 

speaking, I question U.S. initiatives which pressure India to assume security-related postures and 

activities which are contrary to its history of non-alignment. Furthermore, Chinese and Indian 

companies are investing in Afghanistan, despite the risks 

To deepen the U.S.-India relationship - which must be deepened if it is to become a defining 

partnership of the 21 ,t century - I do believe it is to our benefit to focus on economic 

cooperation, energy security and education. This is why I am pleased that Mr. Sanjay Puri, 

Founder and CEO of the Alliance for U.S.-India Business (AUSIB), is testifying today. 

AUSIB has been at the forefront of pushing for greater energy cooperation, having hosted the 

first ever U. S Congressional India Renewable Energy Conference held on Capitol Hill. Mr. Puri 

was also instrumental in galvanizing the Indian American community in support of the 

successful passage of the U.S.-India Civil Nuclear Cooperation Agreement. By enhancing 

dialogue and building business and trade collaboration between the U.S. and India, AUSIB is 

opening new channels of communication between business and government leaders in both 

countries. So, I especially look forward to hearing from Mr. Puri as to why South Asia matters 

and what the U.S. can do to bolster relations. 
63

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79892f-2.eps

During Part I of our hearing on February 26,2013, I called upon the U.S. to open a dialogue with 

Chief Minister Narendra Modi who may be India's next Prime Minister. Since then, critics have 

tried to dismiss this call for serious engagement by questioning my motives. My motives are 

plain and public, and my message is the same message championed by leaders from the 

European Union, the UK, Thailand, Japan, Germany, Canada, Denmark, delegates from over 121 

countries who attended the Vibrant Gujarat 2013 Summit, Ford, General Motors, powerhouse 

companies like Reliance and Tata, and Britain which just ended its diplomatic boycott. 

I believe the basis of the message being put forward is that all of us stand against human rights 

violations and we recognize that, in democratic societies, the judicial system plays a major role 

in defining and preserving our human rights. In the case of the 2002 riots in Gujarat - after ten 

years of judicial proceedings and adjudications - India's Supreme Court has not found CM Modi 

culpable. Therefore, for critics and activists - and even the U.S. - to push this case beyond the 

scope of the law is not the way of democracy. In a free and democratic society, we do not hold 

men guilty based on allegations and speculation. Courts are also to guarantee individuals the 

right to a speedy, public trial -- a freedom CM Modi has been denied 

So I stand by my position regarding the need for U. S. engagement with CM Modi CM Modi is 

one ofTndia's most influential leaders and, considering that India is the lynchpin for our rebalance to Asia, the U. S. must engage now. I also believe we should encourage our Governors 

and State delegations to engage directly with other States in India which are committed to cutting 

through the bureaucracy and strengthening our economic relationship. 

Once more, Mr. Chairman, I thank you for your leadership and insights. I agree with you that 

the U.S. must be serious about its relationship with South Asia as South Asia is vital to our 

strategic, economic and political interests_ From WMDs to terrorism to trafficking to food and 

energy security, we face many challenges in the region. But we, like our partners, also share the 

same objectives for peace and stability and economic growth and opportunity 

So I welcome our witnesses and look forw-ard to their testimony about how we can press the 

reset button for purposes of moving u'S.-South Asia relations forward 
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The Honorable Gerald E. Connolly (VA-ll) 

The Rebalance to Asia: Why South Asia Matters (Part II) 

Wednesday, March 13, 2013 

llam 

South Asia has not had a reputation for tranquility since the 1947 Partition and the events of 

the past decade have exacerbated the volatility of the region. Territorial disputes, a nuclear 

rivalry, a slew of wars fought between India and Pakistan, and cross border terrorist attacks are 

some of the reasons why the subcontinent requires constant monitoring. U.S. involvement in 

Afghanistan has complicated the situation and demonstrated the existence of a hodgepodge of 

terrorist groups clamoring for influence in different parts of the region. 

The United States has repeatedly attempted to work with its allies on the subcontinent. India is 

the world's largest democracy and has presented unique business opportunities for American 

companies. And the militaries of Pakistan and the United States have worked together to 

pursue terrorists who use the porous border in the region to their advantage. The U.S. has 

certainly invested large sums of money in Pakistan in the hopes of gaining Pakistan as a useful 

ally. (This cooperation is nothing new, and goes back to the days of the Cold War when General 

Zia ul Haq ruled Pakistan). 

In recent years, Pakistan has seen a significant increase in financial commitments from the 

United States, including the $1.5 billion per year for five years in development aid passed in the 

111th Congress (through the Enhanced Partnership with Pakistan Act of 2009). Moreover, since 

2001, the US Government has appropriated about $24 billion in assistance and military 

reimbursements to Pakistan. The Abbottabad raid on Osama bin Laden's compound brought to 

the surface complications in the relationship. 

INDIA 

Discussions about the United States' security interests in South Asia often center on 

Afghanistan and Pakistan and neglect to mention the country that shares Pakistan's eastern 

border and has the fifth highest GOP in the world-India. As the world's largest democracy and 

South Asia's most populous country, India ought not to be hastily placed in an already 

established South Asian narrative. India's location on the subcontinent, its history with Pakistan 

(including three wars), and its access to the Arabian Sea and Bay of Bengal make it an important 

country with regard to U.S. security interests. 

Counterterrorism cooperation is a dimension of the bilateral relationship, as both the u.s. and 

India have experienced horrific terrorist attacks perpetrated by militant Isla mist groups. Just 

this summer, two major Indian cities were targeted in bomb attacks. The July 2011 triple 

bombing of public gathering places in Mumbai killed 20, and an August briefcase bomb killed 12 

near a New Delhi courthouse. And the infamous 2008 Mumbai attacks resulted in 155 

casualties, including six Americans. U.S. cooperation in the investigation of the 2008 attacks 

was significant, with Federal Bureau of Investigation agents assisting Indian officials. 

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The Honorable Gerald E. Connolly (VA-ll) 

This cooperation was not the first of its kind. State Department has organized 82 police courses 

for Indian law enforcement under the Antiterrorism Assistance program. For FY12, the 

Administration requested $4.5 million in Antiterrorism Assistance for India, and the State 

Department recently concluded a seminar for mid-level policy officials from across India in 

investigative analysis techniques. Moreover, State concluded a two week seminar for Indian law 

enforcement on forensics techniques. 

Our past dealings with India regarding counterterrorism show that there is a real space for 

bilateral counterterrorism cooperation. The threats that India faces from militant groups, 

coupled with its potential to be a counterterrorism anchor in the region, make it a natural 

partner for the U.S. 

HAOOANI NETWORK 

When the State Department announced the Haqqani Network's designation as a Foreign 

Terrorist Organization (FlO) in September, senior officials said that the designation 

"strengthen[s] our whole-of-government effort against the Haqqanis and demonstrates the 

seriousness with which we take the task of protecting our personnel in Afghanistan.'" The 

officials called Pakistan an "extremely valuable ally in countering extremism and terrorism,,2 

and repeatedly emphasized that an FTO designation is not the same as a state sponsor of terror 

designation. Despite these qualifiers, there is robust skepticism of Pakistan's denials about its 

support for the Haqqani Network. 

According to The New York Times: 

The Haqqanis are Afghan members of the Zadran tribe, but it is in the town of Miram 

Shah in Pakistan's tribal areas where they have set up a ministate with courts, tax offices 

and radical madrasa schools producing a ready supply of fighters. They secretly run a 

network of front companies throughout Pakistan selling cars and real estate, and have 

been tied to at least two factories churning out the ammonium nitrate used to build 

roadside bombs in Afghanistan.' 

If the Haqqanis can operate robustly and without abandon with a U.S. troop presence across 

the border, they are likely counting down the days to the U.S. troop withdrawal from 

Afghanistan. It is a question in need of an answer how the United States plans to leave 

Afghanistan with the Haqqani Network intact next door in Pakistan, given the initial objectives 

of Operation Enduring Freedom. Even more troubling are the widespread reports that the 

Haqqanis operate freely with the a pproval, tacit or otherwise, of the Inter-Services Intelligence 

directorate (lSI). The fact that the lSI sees the Haqqani Network as a hedge against any 

instability in Waziristan and Afghanistan is widely discussed in foreign policy circles. Pakistan 

1 Special briefing by Senior Administration Officials on the Terrorist Designation ofthe Haqqani network (via 

teleconference), September 7, 2012. 

, Ibid. 

3 Haqqani Network, Times Topics, New York Times. 

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The Honorable Gerald E. Connolly (VA-ll) 

watchers contend that the Haqqanis are seen as a tool to maintain influence in the region after 

2014. Such a notion is not far-fetched, as Pakistan's history with groups such as Lakshar-eTayibba(LeT) has shown us. 

The FTO designation is an important step in committing to the dismantling of the Haqqani 

network. Another key piece of the puzzle is the cooperation of Pakistan. As our purported ally 

in the fight against extremist violence in South Asia, it is reasonable to demand that Pakistan 

undertake definitive steps to confront the Haqqani Network threat. Pakistan also ought to be 

forthcoming about the true nature of the relationship between the Haqqanis and well placed 

individuals in Pakistan's state apparatus. As we have seen in the past [such as with A.Q. Khan], 

rogue individuals in Pakistan have the abilityto do great damage to the national security of 

multiple countries. Though the bilateral relationship has seen peaks and valleys, it behooves 

the United States and its allies to fully dismantle the Haqqani Network. 

LAKSHAR E-TAYIBBA 

In order for the United States and its allies to have credibility in the fight against extremist 

violence, any ties to known terrorist groups ought to be publicized and confronted. It is quite 

troubling, to say the least, that the terrorist group Lakshar e-Tayibba (LeT) was founded, 

financed, and continues to be supported by individuals in Pakistan's state apparatusspecifically some members of Pakistan's Intersevices Intelligence Agency (lSI) and its Army. 

Such ties may raise questions about the commitment to combat extremist violence and have 

the potential to harm the United States' relationship with India, the largest democracy in South 

Asia. 

Initially, LeT was supported by the Pakistani government to undermine Indian authorities in the 

disputed Kashmir region. Not only has LeT undertaken violent attacks there, but there is strong 

evidence that in 2008, the group went beyond the borders of Pakistan and Kashmir and 

attacked civilians in the Mumbai hotel attacks, where almost 200 people were killed. Given the 

severity of this attack and the investigation following it, LeT's threat cannot be overestimated. 

Analysts characterize the group as possessing a global worldview with the ultimate goal of 

creating a worldwide Islamic Caliphate-a goal also shared by al Qaeda. After reviewing the 

testimony of today's witnesses there also is much discussion that LeT has the potential to 

surpass al Qaeda in terms of its global reach. It is a mistake to think that LeT will continue to 

strike only within South Asia. As this Committee recently discovered with a hearing on Yemen, 

al Qaeda has expanded to the Arabian Peninsula. There is no reason to think that LeT has not 

attempted to expand as well. LeT also has adopted practices like providing social services in 

rural areas-a strategy that Hamas has used in the Palestinian territories. The security threat 

from LeT ought to be taken seriously. 

Through our relationship with Pakistan, the United States ought to pressure its leaders to fully 

dismantle LeT. As our ally in the fight against extremist violence in South Asia, it is reasonable 

to demand that Pakistan undertake definitive steps to confront the LeT threat. Pakistan also 

ought to be forthcoming about the true nature ofthe relationship between LeT and well placed 

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The Honorable Gerald E. Connolly (VA-ll) 

individuals in Pakistan's state apparatus. As we have seen in the past [such as with A.Q. Khan], 

rogue individuals in Pakistan have the ability to do great damage to the national security of 

multiple countries. 

South Asia has long held strategic interests for the United States. Having just returned from the 

subcontinent, I viewed firsthand how the region is changing in the face of globalization and a 

dynamic regional and international landscape. The U.S. may begin to draw down military forces 

in Afghanistan in 2014, but our interests and presence in the region will continue to endure. I 

look forward to hearing the panel's thoughts on how a cogent, long-term strategy for South 

Asia fits into our larger rebalancing toward Asia. 

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