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AFGHANISTAN, , , , , , AND

at the beginning of the

German Federal Foreign Office

Berlin, May 2002 - 2 -

Asia at the beginning of the 21st century

It was often predicted in the closing years of the 20th century that the 21st would be Asia's century. That premise proved wrong, however, because no one could foresee the shockwaves precipitated by the Asian crisis of 1997/98 and the political turmoil in the wake of 11 September 2001, and also the resultant attempts by important in the to find their strategic bearings in the new situation. That vision of an "" has given way to another certainty - that our main concern in the foreseeable future will be the globalization of political and economic opportunities and risks rather than the alternating hegemony of individual .

Nevertheless, the Asia-Pacific region, as the sum of its nations, its economies and cultures, its scientific and technological achievements and its market potential, has in recent years become a more prominent feature of our policy – though also as a rival and source of critical developments with possible worldwide consequences:

Regional and security policy developments in Asia are now having a greater impact on European foreign and security policy. Many of Asia's crises are significant factors in terms of supraregional security. During the long period of East - West bipolarity, Asia as a whole and its large did not identify themselves unequivocally and permanently with either of the two politico-military blocs. At the most, some individual countries could be said to have done so. Consequently, it was not possible at the beginning of the nineties to predict that the ending of the East-West confrontation would have repercussions in Asia as intensive as those in , or that in Asia, too, uncertainty would arise about the existing system. But that is precisely what has happened. The United States and Russia are in the process of re-assessing their positions, their political, geo-strategic and economic opportunities and risks in Asia, and fitting them into the perception of their global roles.

At the same time, Asia’s key countries are gauging the changed parameters and adjusting their own positions as well as their regional and sometimes global interests in the light of new options and requirements. The region quickly, though perhaps only briefly, reacted to 11 September 2001 by reorienting themselves in the direction of Washington because it appeared to offer greater scope for the attainment of external goals, especially to , Russia, Japan, India and Pakistan, than any attempt to sustain old strategic positions. Such processes do not follow a simple, straightforward course, nor can they be rushed. New alliances emerge, old ones become less significant or redefine their substance. At the same - 3 -

time there is an increasing disparity of economic performance, growth in many countries in the region having expanded rapidly. This, coupled with sometimes abrupt, sometimes slow, political upheavals has many consequences.

Corruption, other forms of white-collar crime as well as legal uncertainty, have become widespread throughout Asia. They are deterring investors and dividing the population more and more into small, increasingly rich, and huge, increasingly poor, sections (the Gini Coefficient, which indicates the disparity of incomes, is already greater in some parts of Asia than in the United States). Drug trafficking, migration problems and the involvement of socially disadvantaged people in extremist, some of them terrorist, movements like those emanating from Islamic fundamentalism, are likewise part of the picture.

Asia's demographic growth remains, with a few exceptions in , critical. (In less than a decade the Asian population has increased by roughly the size of that of the United States and Canada together). This counteracts anti- programmes, further depletes the region’s resources and triggers refugee movements within Asia which push migration as far as Europe and America and thus become a global burden. Moreover, in those countries where is keeping pace with demographic trends, the demand for energy is increasing enormously. The repercussions on the market, the environment and the climate can hardly be overestimated. In some Asian countries with energy-intensive industries greenhouse gas emissions will in the next few decades exceed those of western industrial countries. The Asia-Pacific region will also be most affected by the climatic consequences. The rising sea level, floods, storms and drought will impair economic development and result in migration. Continuing , too, is accelerating climate change. Access to drinking water differs considerably, even within individual countries such as China. Time and again, flood disasters occur in some parts of Asia, devastating droughts in others.

Where developments in Asia generate a global impact, that is to say directly affect our own interests, we must exercise our influence – nationally, within the EU framework, interregionally as in the Asia-Europe Meeting (ASEM), multilaterally through our participation in the G7/G8, and in the various international organizations, especially the . In to do so the German Government has to watch developments in Asia, grasp and assess regional, historic, ethnic, economic and social characteristics, and thus be able to represent our regional and bilateral interests effectively.

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This outline of recent developments shows that the Asia-Pacific region still holds many opportunities for us, but also considerable tasks. This huge , which is home to well over half of the world’s population, does not present those opportunities and tasks as a homogeneous whole but in the sum of very diverse countries, peoples, economies, political systems and cultures, natural wealth or the lack of it, and, determined by these factors, different levels of development. German foreign policy therefore needs a specific profile1 for East Asia, South East Asia/Pacific, and South Asia which describes our interests in the region.

The region of South Asia

South Asia has continental dimensions and is home to nearly 1.4 billion of the world’s six billion or so inhabitants. This alone tells us that the big global issues cannot be settled without the involvement of this region, and especially India. However, the natural features, the internal and external situation of individual South Asian countries, their economies and cultures, are so unalike that in defining and pursuing our interests in the region we have to differentiate accordingly. True, the nations of the have a multilateral institution with scope for development in the form of SAARC (South Asian Association for Regional Cooperation), but the prospect of forging a common political will is still very remote. It is nevertheless apparent that they are interwoven to such an extent, not only geographically and historically but also in terms of contemporary tensions and interactions, that we have to develop our relations with them within the framework of the overall situation.

India, with a population of about one billion, is the second largest on earth and the largest . It has a secular structure and while most of the population are Hindu it has the second largest Muslim community in the world (150 million). It is the country with the greatest ethnic, linguistic and religious diversity, and extreme social disparities. In the North West () and the North East (especially Assam), the country is having to quell armed secessionist groups. After decades of modest development India now appears to be developing into another Asian superpower, not on account of its nuclear weapons or the size of its population but because of the gradually visible results of economic reforms and an

1 Federal Ministries, acting within their remit and developing their own concepts and priorities and using the instruments and budget funds available to them, are together defining and giving substance to this programme, which is broken down into countries and subject areas. - 5 -

outward-looking policy initiated many years ago. GNP is currently about $442.2 billion, per- 2 capita GNP $450 , and its trade with Germany is running at about ¼ELOOLRQ

Pakistan has a population of approximately 139 million. It is a secularized Muslim but Islamization has been increasing since the mid-eighties. The aim of a deeply rooted established democracy has not yet been achieved, partly on account of mismanagement, partly due to the erosion of administrative structures. Many times, most recently in 1999, elected governments have been ousted by military regimes. In 2001 President Musharraf presented a “Roadmap for Democracy". Despite the many common historical, cultural and linguistic roots with India, Pakistan's relations with its larger neighbour have been marred by a bitter rivalry ever since the country's foundation. Hostilities have repeatedly broken out over Kashmir. Pakistan, too, has declared itself a nuclear power. GNP stood recently at approx. $64 billion, per-capita GNP at $470, while trade with Germany is worth roughly ¼ELOOLRQ

With a population of 128 million, Bangladesh is the country with the greatest and at the same time one of the poorest countries in the world. Democracy is not yet firmly rooted. Domestic friction often leads to violence which paralyzes public life. GNP last stood at approximately $47 billion, per-capita GNP at $370, and trade with Germany at about

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Afghanistan – 23 million inhabitants (plus 3.5 million still living as refugees in neighbouring and Pakistan) – has always served as a bridge between Central and South Asia. Since the Soviet invasion of 1979 and the subsequent civil war, the institutions of government had gradually disintegrated. Until the Anti-Terror Alliance began its operations in October 2001, the , a fanatic religious group, had kept up to 95% of the country under strict military control. The rest of northern Afghanistan was in the hands of the Northern Alliance of mostly Tajik tribes. The Taliban would not allow the people to exercise even the most fundamental human rights and they offered refuge and training to Islamic terrorists. Following the country's liberation from the Taliban by the international alliance seeking to destroy the Al Quaida network, Afghanistan was given an opportunity for political, economic and social reconstruction. Germany has been actively involved in this process, both as host to the Petersberg Conference in November/December 2001 and in other respects.

2 All GNP/per-capita GNP figures date from 1999 and are in US dollars (World Development Report, 2000/2001) - 6 -

The Afghan Interim Government is striving to restore the institutions of state authority in a country torn by civil war and inter-ethnic conflict.

Sri Lanka (population approximately 18.6 million), seen in terms of per-capita GNP ($820), is, relatively speaking, the wealthiest country on the subcontinent. It has a democratic constitution but the country’s development and cohesion are jeopardized by the ferocious ethnic and religious conflict with the Tamil secessionist movement LTTE (Liberation of Tamil ), which has been going on for 15 years. GNP currently stands at approximately ¼ELOOLRQWUDGHZLWK*HUPDQ\DWDERXW¼PLOOLRQ

The Himalayan kingdom of Nepal has some 24 million inhabitants and is one of the poorest countries in the world. Occupying a sensitive geographical position between India and China, it maintains an impartial course. The threat to domestic peace is increasing again as a result of violent clashes with "Maoist" rebels. GNP is approximately ¼ ELOOLRQ SHU-capita GNP

$220, and trade with Germany in the region of ¼ million.

The second Himalayan kingdom, Bhutan, has a population of about 640,000. This country, and the island state Maldives (approximately 245,000 inhabitants), are among the tiniest countries in the world. In the year 2000 we established for the first time consular relations with Bhutan.

Our main objective against this background is to use the tremendous opportunities for this region’s cooperative development and global integration, notwithstanding the strife, conflict and underdevelopment in many areas. We must act accordingly: through dialogue and partnership, we must encourage the nations on the subcontinent to develop systems to settle their disputes peacefully and to appreciate the value of cooperative security structures. The propensity to settle conflicts by force is currently a dominant factor on the subcontinent. We must clearly understand, however, that the ongoing conflicts can only be terminated by those concerned, without intervention from the outside. But where we can lend support, whether in fostering political dialogue between India and Pakistan, participating in Afghanistan’s recovery, or helping overcome the consequences of warfare in North-Eastern Sri Lanka, we will continue to do so. Particularly in multi-ethnic and multi-religious South Asia, our aim must be to encourage and mobilize democratic thinking based on secular tolerance serving to bolster stability. This is also the key to the permanent establishment and protection of human rights in the region. - 7 -

The introduction of nuclear weapons and long-range delivery systems has further undermined stability in South Asia and is a threat to the non-proliferation regime. Germany therefore seeks to induce India and Pakistan to accede to the Comprehensive Test Ban Treaty (CTBT) and draw them closer to the international non-proliferation regime. We want to achieve this through dialogue, not sanctions. We must encourage the nations concerned to carry out the complex social and economic transformations necessary on the subcontinent and, if they wish, give them our advice. Important as it is for the people that we respect their identity and traditions, we for our part must make unequivocally clear that radical change in some areas is a vital necessity. South Asia will be drawn into a maelstrom of impoverishment if it cannot adopt speedy and resolute measures to reduce and modernize national economies through a consistent policy of privatization and decentralization. India leads the way in activating the region’s globalization potential: the success of its software industry shows how new, mutually profitable partnerships can emerge at the global level. A more outward-looking approach would create fresh development opportunities for South Asia also.

Our policy in this region must also take account of the new situation in (Kazakhstan, Kyrgyzstan, , Turkmenistan, ). Since the disintegration of the this region has clearly been developing closer relations with Asian neighbours in the south.

The gradual improvement in relations between South and Central Asia after 1991 would have been very welcome if the main focus had been on trade, freedom of movement, cooperative exploitation of national resources, and cultural exchange. In fact, once Central Asia's borders to the south had opened the region became the target for militant originating mainly in Afghanistan (and Pakistan) and succumbed to international terrorism as well as trafficking in weapons and drugs. The assistance being provided by the international community and Germany to rebuild Afghanistan creates a framework for renewed efforts to combat this evil.

Although the EU and Germany are very anxious to minimize the risk for Europe inherent in the situation in Central Asia, they have practically no means of influencing the conduct of non-governmental players in that region. This makes it all the more important to place their fragile political and economic systems on sound democratic and legal foundations and thus enable the countries concerned to exercise effective national control of events and developments in their territory and along their borders. - 8 -

FOCAL POINTS OF GERMAN POLICY IN SOUTH ASIA

The sum of the nations of South Asia as well as their relations with one another and the outside world present a many-faceted overall picture from which ensue certain tasks and opportunities for our South Asia policy, as described in the following.

DEMOCRACY, RULE OF LAW, HUMAN RIGHTS

Especially in multi-ethnic and multi-religious South Asia, it is crucial to find ways and means of promoting democracy and secular tolerance as a source of stability. This is also the key to the permanent establishment and protection of human rights in the region.

India shows that these regulatory principles can be established and implemented even in an environment increasingly traumatized by fundamentalism and ethno-religious conflicts. Countries beset by internal strife resulting from autocratic rule, civil war and anarchy should see India as an alternative model: a multi-ethnic, multi-religious democracy which remains for the most part a tolerant society despite the pressure of poverty and destitution.

Yet even this picture of India is showing cracks which the country must take care of. They take the form of intolerance on the part of Hindu nationalists which has led to sometimes violent conflicts claiming thousands of victims (e.g. most recently in Gujarat in 2002), the brutal conduct of security forces in clashes with rebels in the Kashmir , as well as the mistreatment of prisoners elsewhere. Furthermore, countless people cannot, through their own efforts, free themselves from ignorance and misery and thus cannot really exercise the human and civil right guaranteed by the constitution.

We believe that democracy and the rule of law can be strengthened in India through political dialogue, the instruments of development cooperation, and the work of our political foundations. The committed efforts of non-governmental organizations also play a major role.

In Pakistan democracy has not yet been able to develop strong roots. Germany therefore supports the "Roadmap for Democracy" proclaimed by President Musharraf in 2001, which is intended to pave the way for parliamentary elections, even before the end of 2002. Corrupt government and the administration's lack of clear development-oriented policies have - 9 -

discredited democracy in the eyes of large sections of the population. In more than half of the time since its foundation, Pakistan has been governed by military regimes. They, too, have been unable to deliver in terms of good governance.

The Musharraf government (since October 1999) has undertaken to carry out economic reforms, to reduce sectarian violence, and to establish democratic institutions (local councils, parliamentary elections in October 2002). At the same time, the military leadership has consolidated its power (Musharraf's appointment as President, his confirmation by referendum, strong position of the National Security Council). To the present government’s credit, however, it has identified serious shortcomings in the field of human rights, especially where criminal prosecution is concerned, and supports initiatives to improve human rights education. At the same time, however, the influence of religious radicals continues to undermine the fragile rights of religious minorities and women.

As in the past, therefore, the German-Pakistan dialogue will focus on

Πthe human rights programmes and democratic education initiatives of our political foundations;

Πcontacts with the Pakistan military and security authorities to raise awareness for human rights and democracy issues;

Πactive support for Pakistan on its way back to democratic rule.

In Bangladesh we will support those groups who seek to remove the confrontational nature of domestic politics and replace it with constructive political work concentrated on the task in hand. Diplomatic efforts to influence this process require committed support from local and German NGOs.

We can help further the peace process and enhance efforts to end hostilities in Sri Lanka by supporting relief and rehabilitation measures for groups who are willing to implement self- help and cooperative programmes or can be mobilized for this purpose. We underscore the violation of human rights in the civil war and demand their protection.

In Nepal, domestic stability is jeopardized not only by disputes and quarrels among members of the governing party but, in recent times, also by the increasing revolutionary activities of radical communist "Maoists". Moreover, efforts to consolidate the young democracy are thwarted by widespread corruption. The massacre of members of the on 1 June - 10 -

2001 exacerbated the situation. Together with our EU partners, we urge the government to secure internal stability, to resort only to democratic and legal means in dealing with the rebel "Maoists", and to respect human rights as required by the constitution. We are encouraging the government to improve the general legal framework for social and economic development and to reverse the spread of corruption.

Under Taliban rule in Afghanistan, all democratic institutions broke down and the extensive violation of human rights – especially in the case of women – was appalling. Our task now is to try, with patience and good judgement, to rebuild the country’s democratic and legal institutions from scratch. A major objective of all in this context is to improve the situation of women and . Where and health programmes are concerned, Germany has strongly urged the participation of women and girls (female counsellors in the Ministry of Women's Affairs, provision of PC equipment in the Ministry, building and rehabilitation of schools for girls, events to celebrate International Women's Day and -related seminars). With regard to the police forces, we wish to ensure that their institutions are based on the principles of the rule of law. We are cooperating with the UN High Commissioner for Human Rights in this respect.

PEACE AND STABILITY

South Asia's unresolved conflicts are a huge security burden, not only on the region itself but also further afield. Up to now the parties to the various conflicts have been unable to either settle their differences themselves or launch sustainable initiatives for a peace process. The international community is increasingly anxious to see these conflicts ended. After all, the risk of nuclear escalation, international terrorism, massive violations of human rights, refugee flows across borders, and the possibility of widespread drug cultivation not only justify but indeed demand international intervention.

Proceeding on the basis of their broad understanding of security, Germany and India are engaged in a strategic dialogue which also embraces security and military aspects. Germany's aim is to establish cooperative security structures in South Asia. But in this case, too, the solutions will have to come ultimately from the parties involved. At least our input can extrapolate their political thinking and induce them gradually to abandon their, for the most part confrontational, approach. We want to give them the benefit of our European experience: settling conflicts by force is not a zero sum game. On the contrary, both sides suffer. But - 11 -

where peaceful means are applied all can benefit. In the relationship between India and Pakistan, the (proposed by India and held in mid-July 2001) again pointed in this direction, even though no joint final statement was issued.

The German Government will therefore encourage the two parties, through the channels available for discussion, to exercise restraint, to abandon rigid positions, to enter into substantive and constructive negotiations, to appreciate that compromise, even if it means concessions, can also further one's own interests, and to agree on a set of confidence and security-building measures. Where international mediation is possible, we will offer our services, preferably within the framework of the EU, and, where appropriate, drawing on the experience of the OSCE.

These efforts will be augmented by contacts among parliamentarians as well as suitable activities at non-governmental level. To this end, we will continue to draw on our means of furthering crisis prevention, the peacekeeping, and conflict management. The German Government will seek even closer cooperation with the political foundations in this respect.

It will consider where and how it can create incentives for peaceful solutions, for instance by offering concrete opportunities for enhanced economic cooperation. As we know from experience, trying to do the reverse, i.e. imposing sanctions to induce good conduct, often leads nowhere.

The introduction of nuclear weapons and long-range delivery systems has further undermined stability in South Asia and poses a threat to the international non-proliferation regime. On the nuclear issue it will be crucial to dispel the perception of political rivalry which prompted both sides to go for the nuclear option (although in India's case the bilateral relationship with Pakistan was certainly not the only consideration).

In the process of developing our relations with South Asia, India has priority. This explains why Foreign Minister Fischer and his Indian colleague Singh, at their meeting in May 2000, adopted an "Agenda for the Indo-German Partnership in the 21st Century". It covers all areas of our relations (regular meetings at high political level, a comprehensive list of measures, especially concerning security/disarmament, economic cooperation, science, research and technology).

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Our Government also welcomes and promotes contacts within the framework of the German- Indian Parliamentary Friendship Group, as well as cooperation at the non-governmental level. A valuable and proven instrument for promoting such contacts is the "Indo-German Consultative Group" (distinguished persons from various areas of public life), which is independent and meets once a year. We are actively promoting the development of relations between India and the EU. The first summit meeting in 2000 launched several initiatives for making better use of trade and investment potential, establishing a network of Indian and European think tanks, and for promoting dialogue between the civil societies (EU-India Round Table). The German Government will be backing these initiatives.

Our relations with Pakistan have been re-assessed since 11 September 2001. We are taking a closer interest in the Islamic in order to make good use of the new opportunities to enhance stability. Domestic aberrations in the past (repeated failure to establish democracy, military regimes) as well as imprudent action externally (nuclear tests in 1998 in response to those carried out by India, the Kargil crisis of 1999, support for the Taliban in Afghanistan) had overshadowed the traditionally good German-Pakistan relationship. What is now required is a determined effort to convince Pakistan to make a sober assessment of its interests and a cooperative approach an integral part of its foreign and security policy, and to reverse uncompromising military-religious trends. On the home front this also implies determined efforts to stop sectarian violence and strengthen civilian institutions. We aim to extend our contacts with the civil society for this purpose. We also aim to take advantage of and maintain the good relations with the relevant (including moderate) military forces, which we have built up over decades in the context of military training programmes.

In order to enhance stability in Afghanistan, Germany is not only providing humanitarian relief but making a substantial contribution to the reconstruction of the country's political, social, technical and cultural infrastructure in agreement with the UN agencies, the International Financial Institutions, and the EU. As during the negotiations on the Petersberg near Bonn, Germany will continue its strong support for this process, which includes the convening of the Loya Jirga in June, the appointment of a new Interim Government, and the preparations for elections, all crucial steps. As security is absolutely essential for Afghanistan's further development, Germany is participating in the ISAF (International Security Assistance Force). It has assumed the task of coordinating international efforts to build up the police force, and it is largely involved in the provision of training and equipment.

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In Sri Lanka there is a faint ray of hope that the long and brutal civil war can be settled peacefully. Along with our EU partners, we are supporting the intermediary activities of the Norwegians, despite the frequent setbacks.

We support the foreign policy of Bangladesh, Sri Lanka and Nepal, each of whom wishes to strengthen SAARC's institutions and de-escalate the antagonism between Pakistan and India.

OUR ECONOMIC INTERESTS

The success of India's software and pharmaceutical companies shows how the nations of South Asia, like those of other regions, are able, by gradually opening up their economies, to generate industrial potential. Their contribution to the region's development is considerable. We must therefore support all reform and opening-up policies, as well as urgently needed infrastructure improvements. Only then will it be possible to direct more international capital towards South Asia, and for the countries concerned to earn themselves the foreign exchange they require for trade expansion.

India's external trade potential is by no means exhausted. It ranks 40th among importers of German products. Only 0.32% of Germany's overseas investment goes to India. This is partly because market reform there is sluggish. Consequently, one of our foremost objectives in our trade policy towards India must be to help give India's business community greater scope for development. We must n urge India to remove the remaining barriers to trade and investment and push ahead with the reform and privatization programmes that have been underway since 1991. Here we can offer our expertise in the field of privatization; n try to eliminate Germany's own red tape in order to facilitate exchange. This applies especially to the issuing of visas; n seek easier access for Indian products to EU markets; n encourage German business to constantly explore opportunities in India and assist German firms considering a participation in industrial fairs in India; n redouble our efforts in the joint commission for industrial and economic cooperation to promote exchange between the two countries, especially in the fields of information technology, bio-technology, telecommunications, environmental technology, engineering, chemical and pharmaceutical products, and up-market services; - 14 -

n encourage potential investors to use the services of existing institutions (our missions and chambers abroad, the Federal Office of Foreign Trade Information, or the Indo-German Export Promotion Project); n help increase exchanges of business delegations and encourage more intensive dialogue among business institutions and associations n promote, through our missions abroad, the German Governments' IT (“ Card”) programme.

Pakistan is still not very attractive for foreign direct investment and trade. The government, however, in cooperation with international financial institutions, has launched an ambitious economic reform programme. Unfortunately, it has not yet produced much visible benefit for ordinary people. Political imponderables (religious violence) will hardly appeal to international investors.

Nonetheless, the Pakistan market does offer opportunities for German business, especially in the field of telecommunications infrastructure, information technology and industrial plant, but it requires more active cultivation and development. Following the Indian example, the Pakistani Government has announced its intention to invest more in IT training and infrastructure.

The risks attaching to trade with Pakistan suggest that all private and public players should get together at an early stage to help companies improve their performance in what is the second largest market in South Asia. The German business community have formed a working group to pursue the development of economic links with Pakistan.

The lack of infrastructure, corruption, and negligible public purchasing power in Bangladesh, Nepal and Sri Lanka still deter German companies from engaging in trade there. Germany and the EU, on the other hand, are major targets for their exports, and it is vital for these less developed countries that we should open up our markets to their products, even though, despite the low volume of commercial exchanges, they already have considerable trade surpluses. We can help in this respect through our development cooperation and our assistance for democratization, but also by encouraging German enterprises, where reasonably possible, to step up their business activity in these countries and boost these countries' economic strength through investment.

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THE ENVIRONMENT

Environmental problems in South Asia are directly linked to dramatic population growth, but also to the rapid increase in energy consumption and the use of obsolete industrial technology. The initial step in the context of the Framework Convention on Climate Change (Kyoto Protocol, 1997) is to encourage the region's nations to adopt existing energy-saving processes and technologies. This includes the Clean Development Mechanism under the Kyoto Protocol, which can already be used to develop climate protection projects among industrial and developing countries.

International cooperation on such crucial global issues as climate protection must ensure the active involvement of India, which accounts for one sixth of the world’s population. Without such cooperation energy consumption and climate change in India will in the medium term become a global and almost insoluble problem. When considering environmental cooperation in the narrow sense, the Memorandum of Understanding on environmental matters adopted Germany and India in 1998 can be regarded as a pioneering step.

Problem awareness is still at a low ebb in Pakistan. Like India, the country has massive ecological problems, primarily caused by urbanization (, ), deforestation, steppization and desertification. Environment-orientated development projects have not always proved successful. We must continue our efforts to convince Pakistan that it too has a part to play in meeting global environmental challenges. Bangladesh and Nepal, always threatened by floods, will require continuous assistance in their efforts to protect the fragile environment. Already foreseeable climate changes could trigger uncontrollable flows of refugees and thus create security risks in the overpopulated lowlands of Bangladesh and East India. Eco-friendliness is a criterion for practically all our activities within the framework of development cooperation with these countries.

DEVELOPMENT COOPERATION

Development cooperation continues to be one of the main instruments of our South Asia policy3.

3 Cf. the Concept for Development Cooperation with Asia adopted by the Federal Ministry for Economic Cooperation and Development in 2001 - 16 -

India is a focal country of our development cooperation which used to be broad-based until the German Government suspended financial commitments and reduced cooperation in general because of India's resumed testing of nuclear devices. In the meantime the situation has gradually returned to normal and the government plans to concentrate on regional and sectoral assistance and will suggest new cooperative projects in the following areas: n health, family planning, HIV/AIDS, n environment, protection and sustainable exploitation of natural resources, n securing water supply, n economic reform and development of a market economy, training and environment. Apart from this focus, the German Government will nonetheless continue to promote ongoing or pledged projects.

As in the case of India, cooperation with Pakistan, another focal country of German development cooperation, was resumed in 2000. Apart from improving health infrastructure in the northern part of the country, we are also supporting basic education and renewable energy projects. The German Government also intends to become more involved in the promotion of democracy.

In the year 2002 we made available ¼  PLOOLRQ IRU DVVLVWDQFH WR Afghanistan under the Stability Pact. A large part of these funds are being used for development cooperation projects. Similar contributions have been promised for the next two years. GTZ, KfW and DED have opened a German Development Cooperation Office in . The first education, health and infrastructure projects have already been launched. The Federal Ministry for Economic Cooperation and Development (BMZ) has made Afghanistan one of its priorities in this field.

Bangladesh and Nepal are among the world's poorest nations. A large percentage of the population lives below the poverty line. We will continue to provide assistance and both countries remain focal countries of our development cooperation. Projects will be concentrated on anti-poverty measures, promotion of local self-government and civil society, water and energy supply, health care, development of a market economy, training and environment.

The people of Sri Lanka, too, depend very much on our assistance. We are helping the civilian population, particularly in the northern and eastern regions, where they are suffering in the aftermath of civil war. We are involved in the development of other parts of the country - 17 -

(promoting the private sector, vocational qualifications, financial development, energy supply, and reform of basic education). We want to ensure that this country, following the civil war, does not have to face economic and social disaster in the form of high unemployment and destroyed infrastructure but will quickly be able to undertake specific reconstruction projects with our assistance.

SCIENCE AND CULTURE

Our relations with India have their oldest traditions in culture and the arts. German Indologists deserve much credit for their extensive research, which has helped to preserve India's culture and heritage. Nor has India forgotten this.

The six branches of the Goethe Institute Inter Nationes in India are broadening this traditional picture of Germany, seeking especially to present it as an innovative, modern cultural nation.

German universities and research institutes enjoy an excellent reputation in India, but they face considerable competition from English-speaking countries where choice of location for studies or research is concerned. In order to improve our chances in this respect, we are n speeding up the internationalization of our universities, n making greater use of our promotional instruments, n introducing exchange programmes which suit the requirements of academics and students, n developing our network of university partnerships, and n seeking additional fellowship/scholarship funds from the private sector.

Germany and India have been cooperating in the fields of science and technology for more than a quarter of a century, but in recent years this activity has received a considerable boost. It began with the German-Indian technology week (India 1999), which led to an initiative for the further development of cooperation. This is being implemented on several levels. The Federal Ministry of Education and Research is only one of many players since most of Germany's business organizations have their own cooperative agreements with partner organizations in India.

The high standards of India's academics and scientists are well known. The number of them who have received fellowships of the Alexander von Humboldt Foundation in recent years has been exceeded only by those who have gone to the United States and Japan. Another - 18 -

purpose of the aforementioned initiative, which is in the coordinating hands of the German Academic Exchange Service, is to highlight the advantages of Germany as a centre of excellence in the field of education and research. Already in 1999/2000, several German polytechnics and universities gave presentations in India, extolling the benefits of pursuing a course of study or gaining additional qualifications in Germany. This work will also be supported by the German student hostel to be built in (Madras).

Our cultural activities in Pakistan are concentrated on academic exchanges between German and Pakistan universities, as well as the programme and linguistic work of the Goethe Institute Inter Nationes in Karachi and the cultural societies in Lahore and . Pakistani academics and students are still very keen to participate in courses and programmes in Germany. Through the establishment of an Alumni Forum (1999) it is now possible to establish even closer links between Pakistani and German academics. And the announcement that Pakistan universities plan to focus on the IT sector could open up new opportunities for cooperation.

Our exchanges with Afghanistan are only just picking up again. The long-standing partnership between Kabul's Alma Mater and the Universities of Bonn, Cologne and Bochum, as well as the South Asia Institute in Heidelberg, has now been revived. The Federal Foreign Office is financing activities to save and preserve the Afghan cultural heritage. The Goethe Institute Inter Nationes in Kabul is to be reopened, and the Amani high school, which Germany has been supporting since 1924, is now teaching again and will be fully rehabilitated.

The very active and highly appreciated branches of Goethe Institute Inter Nationes in Bangladesh and Sri Lanka deserve our continued assistance. We aim to stimulate the still unsatisfactory exchange of students and academics in spite of their preference for English- speaking countries.

THE EU AND SOUTH ASIA

Our policy on South Asia contributes to shaping the way the EU conducts its relations with the region. The EU links the promotion of trade and investment with enhanced political dialogue and projects in the fields of cultural and social affairs. At the same time, its goal in so doing is always to strengthen cooperation among the partners themselves. The EU's - 19 -

relations with South-East and East Asia played an important role in overcoming the economic and financial crisis in the late nineties.

In relation to South Asia there is not as yet any comparable framework for dialogue. None of the nations of this are represented at the Asia-Europe Meeting (ASEM, since 1996) because the Asian members are not yet willing to include them.

Considering South Asia's instability, the lack of a multilateral political forum in the region is particularly regrettable. This is why we time and again urge the governments to stimulate SAARC and add to the economic a political dimension. With this in mind, we are continuing our efforts to bring about a dialogue between the EU and SAARC.

The first summit meeting between the EU and India took place in June 2000. Closer cooperation was agreed in the fields of trade and investment, communications and information technology, as well as education and science. The dialogue on security issues might also prove meaningful in the near future. Intensified relations resulting from such regular summits are a reflection of that country's vigorous development.

CONSULAR SERVICES

Providing services is an important element of German foreign policy benefiting both our own and foreign citizens. In spite of budget and staff cuts, the Federal Foreign Office will always try to provide the best possible help for German tourists and business people in South Asia. It will also ensure that people in South Asia wishing to travel legally to Germany receive the necessary visas as quickly as possible. Unfortunately, delays still occur, especially in India. This is because our missions abroad do not always have the capacity to keep up with the growing number of applications.

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SUMMARY: A PROFILE OF GERMANY'S POLICY TOWARDS SOUTH ASIA

In view of the diversity of local circumstances and of our interests in Asia, our policy must be based on a specific programme of work for this region. Poverty and underdevelopment as well as clear evidence of tremendous development potential are equally significant factors. Whereas on the one hand about half of the population of South Asia live in abject poverty or without education, there exist flourishing branches of industry as well as centres of scientific and technological training quite comparable with those of industrial societies. Furthermore, there are in several countries encouraging trends towards an increasingly active civil society.

The diversity of peoples, and in South Asia, and also within national boundaries, coupled with extreme social disparities, is a potential and complex source of tension almost everywhere in the region. India's example is therefore all the more remarkable in that it proves a secular democracy can become firmly established even in difficult conditions. In spite of its many problems and the decision to develop a nuclear capacity, India today serves as an anchor of stability on the subcontinent.

There are three sources of tension in the region for which answers have not yet been found: Afghanistan, which is in the throes of transition, Kashmir, and the Tamil part of North- Eastern Sri Lanka. The first two are also having a growing impact beyond the region. Drug trafficking extending as far as Europe, terrorist centres and training camps for religious fanatics, as well as the risk of nuclear escalation and grave violations of human rights, concern us as well.

In terms of security, South Asia is unstable. The nuclear arms policies openly pursued by India and Pakistan since 1998 are the most alarming symptom of the general instability, which breeds not cooperative action but threatening behaviour. There exists no multilateral mechanism for restoring stability in the various international and domestic conflict situations.

Of strategic importance is the fact that the subcontinent is not an appendix, as is were, to the Asian landmass but interacts in many ways with Central Asia, China and South-East Asia. In the longer term these connections could prove to be a rich vein of cooperation, despite the current lack of economic interaction, the rivalries, and the propensity for nations to regard each other as a threat to security and stability.

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The dramatic population growth rate on the subcontinent undermines all endeavours in the field of development. The experience elsewhere that slower population growth comes more or less automatically with increased prosperity and better education means nothing to large parts of South Asia. In most of these countries mass affluence and are extremely remote (although one should not underestimate the considerable success achieved in several states of the Indian Union – lower birth rates through investment in education and the promotion of women).

The still alarming population growth rate in itself exacerbates the risks to the environment and ecological stability. Pressure on the few remaining nature reservations continues to increase, the energy requirements of growing national economies must be satisfied, Himalayan forests are disappearing, erosion gathers pace with the resultant and growing threat of flooding and water shortage; farming, which in some cases is extremely intensive, will in the long term leave the land barren; and there exist at the most only rudimentary signs of water management and drainage systems.

South Asia is still not sufficiently integrated into the world economy. This region accounts for a mere 1.1 % of world trade and 0.36 % of global direct investment. Trade within the region, too, is only marginal. Administrative corruption and patronage, present in varying degrees, are hardly conducive to integrative progress.