THE SECRETARY'S MEETINGS WITH THE PUNJABI GOVERNOR, BUSINESS

C O N F I D E N T I A L SECTION 01 OF 04 LAHORE 000216

SIPDIS

E.O. 12958: DECL: 11/20/2019
TAGS: OVIP CLINTON HILARY PK
SUBJECT: THE SECRETARY'S MEETINGS WITH THE PUNJABI GOVERNOR, BUSINESS
LEADERS

CLASSIFIED BY: Carmela A. Conroy, Consul General, US Consulate
General Lahore, US Department of State.
REASON: 1.4 (d)

1. (U) October 29; 17:15; Lahore, Pakistan




2. (U) Participants:



U.S.

The Secretary

Ambassador Anne W. Patterson

SRAP Ambassador Richard Holbrooke

CG Carmela Conroy



Pakistan

(Both events)

Punjab Governor Salman Taseer

Foreign Minister Shah Mahmood Qureshi

The Governor's Principal Secretary Ahmed Nawaz Sukhera

(Business Roundtable Only)

Ahmed Iqbal Saeed, Sweetwater International

Asif Jooma Abbott Laboratories Pakistan

Assad Umar, CEO Engro

Bashir Tahir, CEO Bank Al-Falah

Farooq Shahid, FMC United Pakistan

Fawad Anwar, Al-Karam Textiles

Gohar Ijaz, All Pakistan textile Mills Association

Ibrahim Qureshi, Raffles Systems Ltd; President,American
Business Council

Imran Butt, Levi Strauss Pakistan

Javed Saifullah Khan, CEO Saif Group

Muhammad Latif, Chanab Fabrics

Muhammad Mansha, Nishat Chunian Textlies/Muslim Commercial Bank

Naseem Saigol, CEO Kohinoor

Rizwan Ullah Khan, Country Manager Coca-Cola

Shah Faisal Afridi, Haier Pakistan

Shahbaz Malik, Hilton, Pharma Pvt

Tariq Hassan, Emirate Bank

Vaseem Anwar, CEO Echo West International

Waqar Malik, ICI Pakistan




3. (SBU) SUMMARY. On October 29th, the Secretary heard from
Punjab Governor Salman Taseer and from Punjabi business leaders
about their deep interest in sustained assistance from the
United States, especially to help Pakistan fight and recover
from the insurgency it finally accepts as a domestic issue. The

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Governor said that Punjabi public opinion had shifted, from
slight sympathy for Islamists who resorted to violence, to
hatred. He described insurgents as criminals marketing
themselves as religious or ethnic leaders. Businessmen asked
that the United States expand the products list for
Reconstruction Opportunity Zones (ROZs),for greater access to
U.S. markets, assistance in improving textile and agricultural
outputs, revisions to the Department's travel advisory, and
greater U.S. investment in Pakistan. END SUMMARY.



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PUNJAB PUBLIC OPINION HAS TURNED AGAINST INSURGENTS

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4. (C) Punjabi public opinion towards "the terrorists" had
shifted 180 degrees, from slight sympathy and indifference to
hatred, Punjab's Governor, Salmaan Taseer, told the Secretary
during a small meeting in his office. While there had been
tepid support for the offensive in Swat, the military effort to
root out insurgents from South Waziristan had overwhelming
public support. Taseer characterized the insurgents as a motley
crew of sectarian groups, the mentally ill, and criminals taking
advantage of lawlessness. While adept at portraying their
causes along religious or cultural lines, "they are mostly just
criminals using the name of Islam." He downplayed the role of
Punjabis in violent extremist organizations, claiming that
people of the northern tribal cultures were more susceptible to
membership in such groups.



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PREFERENCE FOR HI-VIS, STRING-LESS ASSISTANCE

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5. (C) Taseer stressed the importance of "enduring" development
projects in Pakistan. He encouraged the USG to follow the
Chinese and Russian patter of investing in tangible,
highly-visible infrastructure projects. Taseer urged USG
support for a cancer hospital and for women's housing at
universities. He favorably compared Chinese assistance to
American assistance. Even though they brought in Chinese labor,
instead of hiring locally, Pakistanis appreciated that the
Chinese delivered without nagging Pakistan about human rights or
other political issues. Note: Women's enrollment at good
universities has surpassed men's enrollment, at least in the
Punjab, so lack of housing is not proving an unequal barrier to
entry.



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PAKISTAN NEEDS MARKET ACCESS AND INFRASTRUCTURE INVESTMENT

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6. (SBU) Following the small meeting, Taseer led the Secretary
to a ball room where he chaired a roundtable of business men
gathered to meet her. The business leaders focused on enhancing
Pakistan's access to U.S. and European markets. They claimed
that Pakistan had been a better friend to the United States than
any other nation with whom the United States had free trade
agreements (FTAs),but these countries had more advantageous
access to U.S. markets. They acknowledged that concluding an
FTA with Pakistan would take time, but said that even beginning

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negotiations would benefit Pakistan's economy.




7. (SBU) Businessmen stressed the positive impact that an FTA
with the United States could have on reducing unemployment.
Ijaz said that with market access and business partnerships with
American companies, Pakistan's textile industry could easily add
an additional five million employees to the 20 million currently
employed. Waqar Malik, Chief Executive of ICI, said that while
Pakistan is currently the fourth-largest producer of dairy and
cotton, firms lack sufficient capital to enhance yields and grow
their businesses; access to the American market and direct
foreign investment would change that.




8. (SBU) They also asked that the USG offer Pakistan a
Generalized System of Preference - Plus (GSP Plus),and help
Pakistan secure the same from the European Union. Gohar Ijaz,
Chairman of the All Pakistan Textile Mills Association (APTMA),
said Pakistan could compete in the U.S. market if granted
beneficial trade and tariff agreements. Some asked that the
Reconstruction Opportunity Zones (ROZs) product lists be
expanded, especially for textiles and apparel.




9. (SBU) The business leaders recognized that Pakistan had an
image problem abroad, and asked the Secretary's help in
burnishing its image. That, they said, would attract foreign
direct investment. The Secretary's visit had helped hit the
"reset button" in relations between the two nations, and what
Pakistan needed next from the United States was consistent,
long-term economic assistance.



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UNEMPLOYMENT, HOPELESSNESS DRIVE TERRORISM

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10. (SBU) Business leaders stressed that unemployment was the
driving force behind domestic terrorism. Javed Saifullah Khan,
Chairman of Saif Holdings Limited, echoed the governor's earlier
point that Pakistan's Northern areas were a breeding ground for
domestic terrorists, with high unemployment and economic
isolation. Just 1.7 percent of all credit granted in Pakistan
went to the NWFP, according to the APTMA chairman.



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SEEKING AMERICAN INVESTMENT IN THE ENERGY SECTOR

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11. (SBU) Asad Umar, CEO of Engro Group, said development of
Pakistan's significant coal reserves could both solve the
country's energy crisis and drive economic growth. The coal
reserves in the Thar area of Sindh Province alone were estimated
to be equivalent to 380 billion barrels of oil; enough potential
energy to meet Pakistan's needs for 800 years. While
acknowledging that the environmental impact of coal-fired power
plants would have to be mitigated since over 40 percent of
global power comes from coal, the United States should partner
with Pakistan to exploit this resource.



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THE SECRETARY RESPONDS: IT'S A TWO-WAY STREET

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12. (SBU) The Secretary agreed that the United States could
help strengthen Pakistan economically. She cited initiatives
already underway, including plans to enhance Pakistan's energy
infrastructure, the promotion of ROZs in the U.S. Congress, and
assistance in encouraging an Afghanistan-Pakistan Transit-Trade
Agreement that would open Central Asian markets to Pakistan.
She encouraged them to open trade with India, in pursuit of an
enormous Hindi/Urdu speaking market, and pointed out the
possibility of economic cooperation paving the way for a
political solution in disputed territory. She noted that
Pakistan's tax-to-GDP ratio was among the lowest in the world at
9 percent, while the U.S tax-to-GDP ratio ranged from 16 to 20
percent; this meant that Pakistan needed to make a greater
effort to collect taxes from on its own citizens. She
encouraged the businessmen to take the lead in developing
Pakistan, while assuring them that the United States would be a
long-term partner contributing to their efforts.
CONROY