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Friday, April 12, 2024

US-Pakistan ties vital for regional peace & prosperity: Ambassador Ali Jehangir

At a time when Pakistan is on the cusp of a financial crisis, Pakistan’s Ambassador to Washington discusses the potential of enhancing trade as crucial both for the country and as a catalyst for the normalization of Pakistan and US relations.

Pakistan’s Ambassador to Washington is known for his business acumen, philanthropy and his work to promote the arts & culture of Pakistan. He was Special Assistant to Prime Minister Shahid Khaqan Abbasi at the Minister of State level. Siddiqui is accredited for establishing JS Bank, in 2006 by acquiring the American Express bank. He was also the Chief Investment Officer and Managing Partner at JS Private Equity and JS Private Equity Fund. In 2014, he was honored by the World Economic Forum as a Young Global Leader. He studied Economics at Cornell University.

GVS: Given your particular strengths, you have studied at Cornell, you have set up businesses, worked in the Private Sector, Advisory Board of the Planning Commission, Privatisation Commission, and your last posting was with the Prime Minister as his Special Assistant, where will your focus be as the Ambassador to the US?

Ali Jehangir Siddiqui: I think there are two distinct areas that are going to take the bulk of my time; security and economic relations between the two countries and then other focal points will be education collaboration and then a variety of matters that are important from a US policy standpoint – which the US is interested in improving across the world, such as people trafficking, religious and minority freedoms and so on.

GVS: Since you mentioned security, what is the immediate challenge that you are looking at in terms of the relationship with the US, is it Afghanistan, India or the militants.

Ali Jehangir Siddiqui: The security relationship has two major elements that require immediate attention, one is the counter-terrorism synergy between the two countries and the other is achieving peace and stability in Afghanistan.

On the counterterrorism front, there is a significant amount of cooperation and I think it is recognized that Pakistan has made huge strides in that area, in particular in defeating Al-Qaeda and IS. While, we cannot say that they have been totally eliminated; as you know the most recent attacks during the election were claimed by IS, but they have been largely defeated.

GVS: Does the US recognize that within its borders, Pakistan has done a lot to remove militancy?

Ali Jehangir Siddiqui: Yes, the US and the rest of the world recognize that it is not just about defeating militants, it is about resettling the affected population reconstructing cities and creating an environment where such groups cannot grow again. Pakistan has delivered in a very short time frame, very large scale reconstruction, which in many cases has been superior to what had been there before.

As a consequence, this is a case study for the rest of the world, on how to do a major counter-terrorism offensive and also return the population to stability through reconstruction. So on the counterterrorism front, we have been recognized as a country that has accomplished our objectives and delivered through persistent effort and sacrifice.

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GVS: In the context of Afghanistan and you’ve mentioned that peace in Afghanistan is a big agenda item, what kind of talks are you having with the US on this?

Ali Jehangir Siddiqui: I think the US is recognizing Pakistan’s bilateral effort begun under the Afghanistan-Pakistan Action Plan for Peace Solidarity (APAPPS). If we look at APAPPS in the past 8 months, both our former Prime Minister and our Chief of Army Staff traveled twice to Afghanistan.

Afghanistan’s National Security Adviser has travelled to Pakistan twice and in one of those trips, the Afghanistan Defense and Interior Ministers accompanied him. There has been a very recent meeting as well. So, there have been seven major high-level trips in eight months. The objective of APAPPS is to achieve peace and a path, principles and working groups have been agreed on and now we are in the process of implementation.

Ali Jahangir with US President Donald Trump.
GVS: Has the US signalled what they would like from Pakistan further; apparently there is another review going on the South Asia strategy?

Ali Jehangir Siddiqui: The review is expected to start sometime in August or soon after and is an evaluation of the strategy President Trump outlined in August last year. We are obviously engaged with the US administration on that. It is too early to say where that is heading but of course, we are staying on top of it.

GVS: There is some discussion in the media that the Trump administration will start talking to the Taliban again and that this is part of the review?  

Ali Jehangir Siddiqui: The US position has been consistent which is they are happy to engage the Taliban on peace talks but that the Taliban should have the Afghan government on the table also.

The Taliban position is different which is that they are happy to talk to the US but not with the Afghan government. Recently the US has shown some flexibility to have direct talks with the Taliban and it appears that there is some progress in this regard.

Pakistan’s position has always been that there should be a dialogue with the Taliban. Does the US expect Pakistan to deliver the Taliban to the table, can we do that?

Ali Jehangir Siddiqui: Pakistan exercises some level of influence over the Taliban but they have an independent and experienced foreign policy view as they have been dealing with foreign policy for many decades.

Since they are skilled at dealing with these matters, the expectation that, Pakistan will snap its fingers and they will come to the table is not a reasonable expectation at all. But we have consistently tried to create the conditions for talks.

I will refer back to APAPPS, and additionally Pakistan’s participation in all multilateral peace efforts so we are pushing quite hard.

GVS: Pakistan in the USA tends to be seen through the lens of Afghanistan or India. Do you see that changing in the near future? Do we need to stand up and be counted in ourselves as a country?

Ali Jehangir Siddiqui: I have thought about it quite a bit and your observation is very accurate. While in many areas perhaps it is better to fly under the radar but in this case, we need to stand up and be counted – we need to have a voice of our own.

With the sensitivity of the issues involved such as peace in Afghanistan, relationship with India and also the fact that the narrative is seen through filters that hinder a positive relationship with Pakistan, not having a voice means others set the policy which is pursued Pakistan. This needs to change and it is part of my set of goals to change the conversation on the political, security and the economic side.

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GVS: Are you seeing a lot of interest on CPEC in your interactions in the USA?

Ali Jehangir Siddiqui: This is a topic for those interested in Pakistan that’s on everyone’s mind. So, I am getting a significant number of questions around CPEC, both on the data, and whether it is simply an economic project or whether there are other elements to it? The more interesting questions revolve around the size of CPEC, and what implications it will create for Pakistan with regards to ownership of infrastructure.

There is a narrative here coming out as to the intentions behind CPEC and another prevailing narrative is that CPEC will result in a situation similar to that of Sri Lanka. I feel that Chinese investment in Sri Lanka is widely misunderstood.

Pakistan exercises some level of influence over the Taliban but they have an independent and experienced foreign policy view as they have been dealing with foreign policy for many decades.

CPEC is a bilateral economic deal and we, by and large, have been transparent in bits and pieces as needed. If I can give one example, 60% of CPEC funding is for electricity plants, which aggregate to a little over 10,000MW. However, in the same time period, the Government of Pakistan and the private sector have added another 8,000MW of power to the grids, about the same size as the CPEC power plants.

Further private power plants are also planned, and once completed they will amount to the same size as the electricity that CPEC power plants will add to the national grid. However, the focus of the narrative is that the infrastructure in Pakistan now belongs to China, but that’s not true.

In parallel, we are building enormous amounts of infrastructure that is not China-related. But the fact that there are so many questions around it, is clouding the conversation on CPEC itself and on Pak-China relationship, means we must find a way to address the narrative gap.

GVS: Given Trump’s protectionist tariff measures against Chinese imports and Pakistan’s increasing reliance of Chinese investment  – Do you think Pak-US ties risk being collateral damage?

Ali Jehangir Siddiqui: I think great powers have a goal to exercise their sphere of influence and if any country is in a different sphere of influence or partial sphere of influence then that is an issue for the great power. If Pakistan is in a new sphere of influence or seen to be getting closer to China, the US may be apprehensive.

But I would say that the US being a sophisticated foreign policy player fully understands that it is our right to maintain multiple partnerships and these partnerships can co-exist. We have had the longest of relations both with China and the USA and indeed as you are aware, played a part in bridging the two countries together at one point.

The narrative is seen through filters that hinder a positive relationship with Pakistan, not having a voice means others set the policy which is pursued Pakistan.

CPEC is a big economic deal, in the absence of significant other investments getting similar coverage, the narrative of Pak-China strategic alignment has garnered attention. But I don’t think CPEC should be considered as a foundation for new relations between Pakistan and China.

I think the onus is on us to propel the true narrative that development in Pakistan is not anchored to China. With regard to the questions around the debt interest rates and whether the CPEC is quid pro quo for some other political goal. Well, the reality is that if that were the case, we would have lower rates of debt.

We would get better rates of financing. The IPP debt for CPEC is all-commercial and infrastructure debt such as the roads are at the same rate at which World Bank and others would lend to us – so it’s actually just like any other commercial investment package without any advantage, so we can explain that is doesn’t make sense that there would be a quid pro quo.

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GVS: Given your background of economics and business, have you set any goals for securing investment from US industry for Pakistan’s economy?

Ali Jehangir Siddiqui: So there are some very big goals that we have and I am actually taking a cue from President Trump’s thesis on trade. While I am in favor of freer trade, the question that the President has asked is that if the US is importing large quantities of goods from certain countries then what is it getting in exchange.

I think that’s a good question to ask from Pakistan’s standpoint as well. We are giving trade surpluses to other countries and we ought to consider potential opportunities in exchange. If we can somehow give a trade surplus to the US, it would mean that we could get an enormous amount of market access for our exports to the US.

If Pakistan is in a new sphere of influence or seen to be getting closer to China, the US may be apprehensive. But I would say that the US being a sophisticated foreign policy player fully understands that it is our right to maintain multiple partnerships.

I think there is a great opportunity to create a trade surplus in the US.  For example, we could consider importing US energy. Pakistan is importing large quantities of LNG and that is about to increase dramatically because of our development needs and the fact is that we are now replacing furnace oil with LNG, which is cheaper and produces more electricity.

The US is becoming the largest LNG exporter.  So there is a great opportunity to buy US LNG for Pakistan’s needs and in exchange to negotiate market access for Pakistan’s exports to the US.

GVS: Pakistan has been put back on the FATF grey list how will this impact your plans to raise more investment from the USA to come to Pakistan.

Ali Jehangir Siddiqui: We should be concerned about FATF because being on the grey list is a serious matter and we have to comply with the conditions. Some of those conditions in my view are quite strict but we have to find a way to comply with them.

As of yet, I have not had any questions from the investment community, from companies that are doing business in Pakistan or the ones starting or considering setting up shop in Pakistan, but of course, if we were not able to comply, this could become a serious challenge.

An action plan has been agreed upon with the FATF and we have to go ahead and execute it. We do have a huge amount of focus on attracting both large US companies and mid-sized US companies into Pakistan. One of the bigger challenges we face right now is the travel advisory on Pakistan, where if they can’t travel or secure insurance, then coming to Pakistan becomes difficult.

The slightly better news is that the advisory is multi-layered which means that big cities in Pakistan are rated better to travel to than the rest of the country. But we are still ranked quite poorly. We are advising and giving information to the State Department to improve our travel advisory.

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GVS: Are you engaging the Pakistani diaspora in the US to bring in more investment?

Ali Jehangir Siddiqui: Diaspora are extremely important and in more ways than one. When the embassy talks to an American company about going to Pakistan, the first thing they do is call up someone in the diaspora that they know.

They ask them about investing in Pakistan, and if that answer is resoundingly positive, that’s a plus but if the answer is, “I had trouble with my own investment” or “Pakistan is too risky” or “I had a bad personal experience in the country”, then that is a problem for attracting investment from the American company.

This is why the diaspora are so vital because whether they invest or not, we must attract them so that their view on Pakistan is positive. Engaging the diaspora is essential for attracting the US private investment.

And so, we are engaged in using a lot of data tools around the diaspora. We are in the process of mapping them accurately; their socio-economics, their businesses, and figuring out how to engage them in a much more intense and meaningful way than has ever been done in the past, both for investment and otherwise.

GVS: Have you put any numbers on the amount of wealth that you can get from the diaspora?

Ali Jehangir Siddiqui: Not yet, I mean the stats are that the diaspora has 20% higher earning levels, as an average than the US average i.e. $50,000 per capita is the US average while the diaspora is around $60,000, though these figures are from a couple of years ago.

The diaspora population is estimated at, between 700,000 and 800,000 people and including first and second-generation migrants. Some people in the diaspora have of course invested in Pakistan, but they are very few. We need to build a positive narrative to attract them.

However, It is not just about business, we need to engage the diaspora on a variety of issues about Pakistan because their level of awareness and engagement is limited. We have asked them to engage in Pakistan but we haven’t given them the tools for that engagement, for example, we haven’t given them our policy position on a variety of matters such as CPEC.

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GVS: How will you go about engaging them? Recently, a Pakistani-American citizen, Dr. Nisar Chaudhry was arrested under the foreign agent registration act for working on behalf of the Pakistani Embassy in the US and going through the documents, it seems that all he was doing was going and attending conferences and meetings and talking about Pakistan in those meetings, so won’t it create fears among the diaspora community about engaging with the embassy.

Ali Jehangir Siddiqui: I am familiar with that case, it is very unfortunate that it happened. But I think the way we are approaching it is very different. One, we are aware of the requirements of the Foreign Agent Registration Act, and I think the diaspora is largely aware of those requirements also and we take great care that the diaspora are not engaging in lobbying for us.

Our involvement with the diaspora is in several layers; the first layer is that the diaspora understands the Pakistani policy positions on a variety of matters. The second layer is that the diaspora is engaged in that conversation with decision-makers if the diaspora believes this engagement is in their and US interests. The third layer is to have them invest in Pakistan.

When the embassy talks to an American company about going to Pakistan, the first thing they do is call up someone in the diaspora that they know. They ask them about investing in Pakistan, and if that answer is resoundingly positive, that’s a plus.

The fourth is they engage in spreading a positive narrative about Pakistan. We get regular feedback from them since they may not always agree with our policy positions. I have only been here for a couple of months, but I can give you some examples of the things that we have been doing.

I went and spoke at the Association of Physicians of Pakistani descent in North America (APPNA) convention in Dallas. I was asked how would the Embassy of Pakistan like the diaspora to be involved in advocacy to help the government of Pakistan.

And my answer to that was the Government of Pakistan does not have a stake in the future of the citizens of America; therefore we are not involved in your political advocacy. You have to engage in political advocacy if it serves the interests of Pakistani Americans. Having a united voice will support your point of view.

We will automatically benefit if there is a positive view of Pakistani Americans, including Pakistani Americans in politics because you will carry some level of balance in your perspectives on Pakistan.

US-Pakistan ties

GVS: However, the Indian lobby is extremely important and active in supporting the India-US relations?

Ali Jehangir Siddiqui: The Indian advantage is an economic advantage. The Indian economy is many times greater than ours and their economy is growing faster than ours. It will continue to be much larger. It is already the sixth-largest economy in the world. Large American corporations want to export to India, they want to manufacture there and they want to access the Indian domestic market.

That’s the advantage on which they are playing. On the political side, they do have a large number of people of Indian ethnicity involved in US politics. It is the numbers again. Where Pakistanis have been involved, they have been reasonably influential but our diaspora is smaller and disproportionally smaller numbers are involved in politics. That’s where the Indian advantage is.

Our goal is to not necessarily compete with India or their lobby. Of course, we are aware that on some matters such as Kashmir we have competing interests. But we must chart the course of our own relationship with the United States based on interests where Pakistan and the US have convergence.

Our goal is to build the Pakistan-US relationship without influence from external parties. Like in India’s case, a larger economy will help in this cause tremendously.

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GVS: How can Pakistan attract investment from Diaspora in US for productive use in Pakistan, in contrast to just receiving remittances for local consumption?

Ali Jehangir Siddiqui: Well, first of all money going back home for consumption is not a bad thing. That still drives our economy in the same way. If people build a house, they buy steel and cement and that helps to drive the economy and create jobs and so on and so forth.

Our trade missions have a plan on how to engage the diaspora especially in the area of investment. Now the onus is on us to showcase investment opportunities. A large proportion of our diaspora are doctors and there is a huge opportunity in health care. Some Pakistani American doctors are already participating in different diagnostic centers and hospitals.

Large American corporations want to export to India, they want to manufacture there and they want to access the Indian domestic market. That’s the advantage on which they are playing.

The easy part is to take existing initiatives and support them. As far as their fundraising efforts and reducing the red tape for them is concerned, we are trying to actively help them.

There are a number of Pakistani hospitals starting such initiatives, we are actually supporting their fundraising efforts quite significantly and we just agreed to help on a very big one. We have to check the legal side of it because when raising money you have to be a little bit careful. But I think we can do it as long as we follow certain guidelines.

GVS: How are you raising funding for them?

Ali Jehangir Siddiqui: They will raise funds from the Pakistani American community through a transparent process. It’s a Pakistani American initiative with core funding from Pakistani businessmen from Lahore and they will need the balance of the funds.

They have already raised $20 million from Pakistani businesspeople in Lahore. We are getting involved since it adds credibility to the project – when people give the money they often want to see that there is some institutional support behind it.

GVS: What would you consider an achievement for yourself in the next 6 months? Have you set a target for yourself?

Ali Jehangir Siddiqui: There are specifics but overall a general improvement to the relationship, which leads to more economic engagement.