Excellencies,
Distinguished Guests,
Ladies and Gentlemen!

It is a matter of great pleasure for me to address the East-West Institute. The Institute is a constructive and positive voice on global security issues. Its mission of bridging perspectives and promoting understanding is indeed commendable.

I appreciate the opportunity afforded to me to share my views on issues of great salience for the region and the world. Issues and circumstances that are often perhaps not clearly understood. That often become the source of misperception. Pakistan is at the centre of geo-political changes of far reaching import. That will determine the shape of things to come in our region and our world.

Ladies and Gentlemen,
Allow me to give you a bird-eye view of our security situation. Three decades of turmoil in Afghanistan on our North-Western frontiers; Stalemate over Iran’s nuclear issue on our Western borders, and: Three wars over unresolved issues on our eastern borders. The Afghan war left lasting imprints on our State and society. Influx of millions of Afghan refugees in these years whose repatriation process has yet to be completed.

Jihad in Afghanistan led to radicalization of a segment of our society.
Ladies and Gentlemen,
When the democratic order was restored two years ago in Pakistan, Taliban were holding sway over areas of our tribal region and Swat. Terrorists and suicide attacks on our civilian population had disrupted normal life and our society was fragmented under years of dictatorial rule.

And this was not all!

The global financial and economic meltdown hit Pakistan at a time when the economy was reeling from severe macroeconomic imbalances resulting from unprecedented hike in oil price and other commodities. Crippling power crisis, double digit inflation, dwindling foreign exchange reserves and dried up foreign capital inflows completes the picture of Pakistan as it was two years ago. Since the return of democratic order, our foremost priority was to give political ownership to the fight against extremism. We forged consensus among political parties and completely turned public opinion against the Taliban. As a result, our government now enjoys solid public support for uprooting terrorism in our midst.We believe this was the key element in successful military operations against Taliban in Swat, Malakand and North Waziristan

Ladies and Gentlemen,
The war against terror and extremism has entailed enormous costs to Pakistan - both human and material. More than two thousand officers and soldiers have laid down their lives. Civilian casualties are many times more. Last year, suicide attacks have claimed thirteen hundred lives and another 3,633 injured. The cost to our economy has exceeded thirty five billion dollars. Yet our resolve has not wavered. As a nation we understand that this is our fight and our national interests are at stake. Therefore, we will not relent till terrorist and extremist threats are eliminated from our society.

At the same time, it is also true that Pakistan is at the forefront of the struggle to confront international extremism and terrorism. These non-state actors respect no boundaries. We seek from the west support in strengthening our hands to combat this menace. An expanding economy, poverty alleviation, rising incomes, and investments in our social sectors are the best guarantees against extremist mindsets and ideologies. The fight against extremism becomes more effective when the State has stable economic underpinnings. This can be achieved provided we have access to western markets. Pakistan should be allowed to trade freely with the EU.

This single measure would provide better returns than the billions of Euros being spent by member countries and the EU on counter-terrorism at home and billions more being spent on ISAF and NATO in Afghanistan. On our part, we have taken painful and unpopular decisions to achieve macroeconomic stability. Our foreign exchange reserves are stable, inflation is at single digit and we have narrowed the gap between spending and revenue generation. Our economic growth this fiscal year may be modest at 3.4%, but we are confident that the turnaround in our security situation would further boost our economy.Increased trade with the EU and regional stability and peace would provide another strong stimulus needed for sustainable growth.

Ladies and Gentlemen
The recently held London Conference on Afghanistan, we hope, would lay the foundation for a lasting political solution to the Afghan conflict. Pakistan all along has strongly advocated political reconciliation in Afghanistan. Pursued with earnestness and sincerity, reconciliation and reintegration of all factions and ethnicities within Afghanistan provide a unique opportunity to bring peace to this war ravaged land. We have assured our full support to the Afghan government and the international community in this regard. All Afghans should have a stake in the stability and development of Afghanistan. The Taliban leadership should understand that their military victory, without reconciliation and sustained international assistance had not brought peace and development in Afghanistan.

Therefore, an Afghan led grand reconciliation with the full support of the international community is the only way forward. A stable peaceful and prosperous Afghanistan also guarantees peace, stability and prosperity in our tribal regions and beyond.

Ladies and Gentlemen,
After more than a year of wasted opportunities, India has come round to resumption of dialogue with Pakistan. We have repeatedly impressed upon India that terrorism and extremism respect no boundaries and the only way to confront this menace is a more sustained and broad based cooperation between our two countries. Suspension of dialogue strengthens the very forces that the international community is committed to defeat. We consider resumption of dialogue a positive development and hope that the process starts in all earnestness as we have a lot of grounds to cover to make up for lost time. Unresolved disputes, lack of trust and cooperation are major factors that have kept this region mired in hunger, deprivation, squalor and poverty. Peace and stability can have a transforming effect on South Asia or as some call this region- the Greater Central Asia.

Ladies and Gentlemen,
Peace and security in the region opens up the possibility of continental trade spanning the whole Eurasian landmass. Western Europe, China, the Middle East can establish direct links with one another by means of direct roads, railroads, and technologies for transporting oil, gas and hydroelectric power. These East-West and North-South trade and energy corridors can increase international trade many times the current levels. In the process, the Indus valley can return to its ancient status as an entrepot for continental trade. Disintegration of the Soviet Union had revived hopes of resumption of the East-West continental trade, but instability in Afghanistan and unresolved disputes between India and Pakistan remained main stumbling blocks. Now that the reconciliation and reintegration process is about to be initiated in Afghanistan, and dialogue between India and Pakistan is to be resumed shortly, we have cause for optimism.

Pakistan on its part would like to seize the moment and move forward in a sincere and purposeful manner. This sincerity and sense of purpose, we hope, will be reciprocated by our interlocutors.

It will serve the greater cause of peace and stability, progress and prosperity within and across our shared borders.

I thank you.