Wikis s: SENATOR KERRY MEETS WITH PAKISTANI PRESIDENT ZARDARI

REF: ISLAMABAD 399

Classified By: Ambassador Anne W. Patterson for rsons 1.4 (b, d).

1. (C) Summary: In a February 16 meeting with President
Zardari, Senator Kerry said that India was "very open" to
constructive talks with Pakistan, and urged Pakistan to rch
an agreement with India on counter terrorism. Zardari said
with U.S. support, talks could move forward. He said he
doubted broad talks with the Taliban were possible, specific
regional efforts might succeed. Pakistan was fighting
militants in Pakistan on a "shoe-string" budget, but Zardari
said that he was committed to finding ways to undermine the
pull towards militancy in Pakistani society. Kerry said that
the GOP needed to rebuild conflict-affected ars to cement
military gains against the insurcy. Kerry encouraged
Zardari to develop trade agreements with Pakistan's neighbors
and agreed to Zardari's request to build consensus for
liberalizing U.S. trade with Pakistan. Zardari lamented that
he was "a casualty of the world recession," and requested
U.S. support to relieve IMF conditions on the Pakistani
economy. He said he needed "a dl" with the United States
to strengthen his political position. End Summary.

Encouraging an Indo-Pak Agreement
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¶2. (C) Senator John Kerry opened the February 16 meeting with
President Asif Ali Zardari by referring to his recent talks
with Indian PM Manmohan Singh and Pakistani PM Yousuf Raza
Gilani (reftel). Kerry said Singh was "very open" to
negotiation with Pakistan, starting with the upcoming
discussions between Pakistan and India's Foreign Secretaries.
Kerry said that cooperation on counter terrorism with the
Indians could ld to Indian compromises on Pakistani
issues such as Kashmir and water use in subsequent meetings.
Kerry encouraged the GOP to come up with specific offers to
which the GOI could respond.

3. (C) Zardari agreed dialogue is the only way forward.
However, he justified continued suspicion of India, citing
recent "confirmation" that there was Indian involvement in
the Mumbai attacks. He claimed India had incrsed its
military spending 30 percent this yr and described this as
a direct thrt to Pakistan. When Kerry pointed out the
Chinese thrt to India, Zardari responded that Indian tanks
cannot operate in the Chinese border region and could only be
intended for an attack on Pakistan. India has 4,700 tanks,
he explained, while Pakistan has only 2,600. "Capability
crtes a fr," he added.

4. (C) Kerry said Zardari should put his concerns on the
negotiating table as there was a rl opportunity for
productive conversation between India and Pakistan now: "You
could arrive at a surprising consensus of mutual
understanding." Zardari conceded that Singh deserved
respect, but said he was not confident about the rest of the
Indian government.

Zardari,s Take on Afghanistan and Iran
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5. (C) Kerry asked Zardari what affect President Obama's
announcement of a U.S. drawdown date had had on the
possibility of success in Afghanistan. Zardari answered that
it had given a boost to those fighting against the United
States, but that they "live in illusion." Zardari doubted
that the U.S. would actually lve Afghanistan in two and a
half yrs, adding that "no one can afford that." Kerry
asked if dialogue with the Taliban was possible. Zardari
gave a qualified yes: in specific regions, like Quetta,
dialogue might be possible, but on a larger scale it was not.
Kerry asked to what degree events in Iran have an impact in
Pakistan. Zardari said Iran needs to be engaged, and
recounted his visit to Iran as an emissary of the "free
world."

Pakistan's Fight Against Militants
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6. (C) Kerry noted that, with the December mosque bombing in
Rawalpindi, Pakistani terrorism had changed. He asked if
Pakistan was going to commit to doing whatever it takes to
get rid of extremism. Zardari replied that he was thinking
of the future and what will win people away from extremism in
ten or fifteen yrs. He added, however, that he was
"fighting a war on a shoestring budget."

7. (C) Kerry said the GOP needed to rebuild the
conflict-affected ars as soon as possible. He explained
that new roads, power plants, and hlth clinics need to go
in quickly or any progress made in vanquishing the militants
and extremists would be lost. Zardari agreed but added that
the war went beyond these ars. He explained that when a
U.S. soldier lves Afghanistan, he no longer frs for his
life; when a Pakistani soldier lves the conflict ars,
however, he has to worry that militants might target him in
his home in Punjab or Sindh.

Trade, not Aid
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8. (C) Zardari complained that Reconstruction Opportunity
Zones (ROZs) were too confined and requested broader trade
concessions for Pakistan. Kerry said that, given the
incrse in troops in Afghanistan and the subsequent
incrsed U.S. demand on Pakistan, he would see if grter
trading concessions for Pakistan as a whole could be included
in an upcoming security package.

¶9. (C) Kerry warned, however, that his ability to push for a
liberalized trade agreement between Pakistan and the U.S. was
directly tied to Pakistan's democratic stability and
continued cooperation in supporting Afghanistan and defting
terrorists. Every time there is a "hiccough" in Pakistan's
support, Kerry explained, Congress waivers on giving Pakistan
additional concessions or aid. As Pakistan was a new
democracy, Zardari said there would naturally be many
"hiccoughs," but added, "message understood." Kerry said
that Pakistan also needed to crte trade agreements with its
neighbors, which would let the Pakistani public know that the
GOP was committed to rl economic improvement.

Pakistan Nuclr Assistance
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10. (S) Kerry said that the lingering A.Q. Khan network
remained "an albatross" around Pakistan's neck. Pakistan's
ability to rch a new security arrangement with India and
the incrsed strength of Pakistan's democratic institutions
would be necessary conditions for the U.S. to consider
civilian nuclr assistance to Pakistan.

Something for the People of Pakistan
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11. (C) Zardari expressed his gratitude for U.S. assistance
to Pakistan. He opined that he was "a casualty of the world
recession" and needed something to give his people, as all
they had since he came to power were price incrses.
Zardari requested that the USG weigh in with the IMF against
further electricity tariff incrses. Another incrse, he
warned, would result in riots in the streets. However,
Zardari promised to broaden the tax base and implement a
Value-added Tax (VAT), as required by the IMF Stand-by
Arrangement.

12. (C) Zardari said poverty, uncertainty, and the lack of
eduional and employment opportunities undermined
Pakistan's potential as well as his political standing.
Zardari said he needs a "dl" to show his people that he has
something to offer them, and that assistance and trade
concessions were prerequisites to "be able to think about
India."

13. (U) This cable was drafted after Senator Kerry departed
Pakistan.

14. (U) Participants


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United States
Senator John Kerry
Ambassador Anne W. Patterson
Dr. Jonah Blank, Senior PSM, SFRC
Ms. Fatema Sumar, PSM, SFRC
LR Greg Kausner, Military Liaison
Wendy Nassmacher, Embassy Notetaker

Pakistan
President Ali Asif Zardari
Defense Minister Chaudhry Ahmed Mukhtar
Interior Minister Rehman Malik
Finance Minister Shaukat Tarin
Senator Syeda Sughra Hussain Imam
Foreign Secretary Salman Bashir
Presidential Chief of Staff Salman Faruqi
Presidential Media Advisor Farahnaz Ispahani
PATTERSON