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Destruction of the World Trade Center on September 11th changed the lives of most Americans. It seems destined also to change the lives of most Pakistanis and Afghanis. Pakistan now finds itself in the middle, being squeezed on the one side by the United States and on the other by the Taliban faction in Afghanistan. No nation would choose to have either the U. S. or the Taliban as its enemy. Unless Pakistan is extremely lucky, it will have both.

I worked in Pakistan as an agricultural advisor during much of the 1960s, trying to help improve the productivity of the immense Indus River irrigation system. My travels took me into the catchment areas in the northernmost reaches of the country and into contact with the tribal groups and clans who are residents of that region. Although I no longer focus on Pakistan, I was not totally surprised to be contacted by a local television producer who was doing a feature story on that country. During the filming I was asked the question: "What is it that Americans just don't 'get' about the situation in Pakistan and Afghanistan?" What follows is what I wish I had said in reply.

Most Americans do not know of, much less understand, the 2500 years of (unsuccessful!) invasions that have taken place in that part of the world. They cannot fathom the roughness of the terrain in the undefined border areas between Pakistan and Afghanistan or the incredible fearlessness and toughness of the people of the region. Very few Americans understand the traditions, rights, and obligations within and among the local clans, many of whom migrate back and forth with the seasons across an invisible border. Nor can they really imagine the extent of poverty, especially in Afghanistan, where life expectancy is still only about 45 years.

At the regional level, most Americans do not understand the depth of the tensions that still exist between India and Pakistan, the continuing problem of Kashmir in that key south-Asia relationship, and the presumed military alliance between Pakistan and the Taliban in continuing scrimmages against India in Kashmir. They further do not understand the problems of governing Pakistan, a country with incredibly divisive regional tendencies, within the aegis of an Islamic Republic.

Finally, American do not grasp how the "on again-off again" nature of U.S.-Pakistan-Afghanistan relationships appears to many people on the other side--people who are literally born with inherited friends and sworn enemies. Within my professional lifetime, U.S. relationships have ranged from genuinely close cooperation, which prevailed during the time of Presidents J. F. Kennedy and Ayub Khan; to more distant cold-war relationships that generally pitted the U.S. and Pakistan against the U.S.S.R. and India; to the widespread American military and economic support given both Afghanistan and Pakistan during the U.S.S.R. invasion of Afghanistan in the late 1970s; to a post Cold War move away from Pakistan and toward India; to the virtual stoppage of all support following the recent atomic tests by both countries. In short, many Americans are ignorant about the culture and history of the region, and many Pakistanis and Afghanis are totally confused about America's loyalty.

I do not know whether the U.S. and its allies will "invade" this region in search of Osama bin Laden, or if that happens, whether the "war" will be massive or surgical. I hope, however, that the U.S. has distilled several lessons from the region's ancient and modern history.

First, the Afghani people will not be frightened into doing anything. They would not even understand the concept. The tribal customs and obligations with respect to enemies are unbending. The tribesmen are both fearless and patient--ask the British, who were defeated three times over the last two centuries, or the Russians who most recently met a similar fate within the past 20 years. No one should underestimate the Afghani's skills as fighters, especially on their home turf--which is mainly rocks and caves and hills and mountains. The dozens of foreign monuments honoring the dead along the Khyber Pass Road from Peshawar, Pakistan to Kabul, Afghanistan are a grim reminder of just how ferocious the frontier people have been to those whom they regarded as outsiders.

Second, the extreme fundamentalist groups within Islam are a minority that challenge moderate Muslims in the region even more than they challenge outsiders. Nevertheless, the U.S. and its allies will have only the narrowest range of military options against the extremists lest these actions put moderate Muslims into the camp of the fundamentalists.

Third, U.S.-Pakistan relations have never been more delicate than at this moment. By virtue of location, information, and capacity to infiltrate, Pakistan's potential contribution to a "bin Laden solution" cannot be overemphasized. How the U.S. gets Pakistan's cooperation without at the same time pushing the moderates into the welcoming arms of the extremists is a diplomatic, economic, and military problem of unbelievable proportions. Unfortunately, history provides no ready-made answer to this dilemma, and that is what truly worries me - not only for the U.S., but also for moderate Muslims throughout the world.

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Starting his career with India Today in 1992, Bahal moved to the science and environment magazine Down To Earth, followed by the Financial Express. He was part of the original team that launched Outlook magazine in 1995 and has reported on a range of subjects from environment to travel, sports and defence. He is best-known, though, for his groundbreaking investigation on match-fixing which rocked international cricket. Please RSVP to Rafael Ulate by June 6, 2001.

Philippines Conference Room, Encina Hall, Third Floor, Central Wing

Aniruddha Bahal CEO and Editor Speaker Investigations Tehlka
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Originally published in the International Journal of Finance, volume 12, number 4, 2000. Reprinted with permission. Prior written permission is required for further use of this material. Hard copies of this reprint are available from Shorenstein APARC.

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Shorenstein APARC and the International Journal of Finance
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Rafiq Dossani
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In the last decade, one of the most admired institutions among industrialists and economic policymakers around the world has been the U.S. venture capital industry. A recent OECD (2000) report identified venture capital as a critical component for the success of entrepreneurial high-technology firms and recommended that all nations consider strategies for encouraging the availability of venture capital. With such admiration and encouragement from prestigious international organizations has come various attempts to create an indigenous venture capital industry. This article examines the efforts to create a venture capital industry in India.

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Shorenstein APARC and the Berkeley Roundtable on the International Economy
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Rafiq Dossani
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The Kingdom of Bhutan, an independent country in the Himalayas, has designed its own theory and practice of socioeconomic development, which it calls "Gross National Happiness." Bhutan entered into relations with the outside world only in the early 1960s; since then it has pursued development in a way that is consonant with its own Buddhist values. An intrinsically interesting experiment in itself, Bhutan's experience now assumes broader relevancy as its pursuit of development must take account of the problems small nations and cultures confront in the face of the powerful impact of globalization. The Ambassador will discuss these problems and answer questions. His Excellency Om Pradhan, the Ambassador and Permanent Representative of the Kingdom of Bhutan to the United Nations, was born in 1946 and was educated in India, England, and Hawaii. As Minister for Trade, Industry, Power, and Tourism in the Royal Government of Bhutan, he has been a central figure in Bhutan's economic and social development. He has also served as Bhutan's Ambassador to India, Nepal, and the Maldives, has led the Bhutanese delegation in several rounds of boundary talks with the People's Republic of China, has been a member of the National Assembly of Bhutan, and has participated in innumerable international and regional conferences.

Daniel and Nancy Okimoto Conference Room

Lyonpo Om Pradhan Ambassador and Permanent Representative of the Kingdom of Bhutan Speaker United Nations
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Mr. Bhatnagar will focus on the considerations that guide and motivate large companies to seek markets in developing economies and the risks that they face in being early pioneers. He will speak from his experiences in developing projects and working in Asian economies, with special reference to Enron's experience in India in developing and financing the Dabhol Power Project, the largest independent power plant and LNG terminal in India.

The Dabhol Project is a $3 billion investment in an LNG-fired power plant and port infrastructure in India and typifies the challenges large investments face in developing economies such as India. Projects such as Dabhol can help kickstart infrastructure investments in developing economies; investments that these countries sorely need and the talk will focus on the the hurdles the project has faced over the years and overcome and the efforts of a country to balance the vested interests in the economy with the need for new investment.

Sanjay Bhatnagar is currently working on developing and investing in several energy and telecommunication projects in India and the U.S. as a free agent based out of New York. Until recently, Mr. Bhatnagar was the CEO of Enron Broadband Services in the Middle East and Asia in Singapore responsible for developing Enron's telecommunication business in the region. Mr. Bhatnagar received his MBA from Harvard University in 1993, a Master's in Engineering from Stanford University in 1989 and a Bachelor's in Mechanical Engineering with distinction from the Indian Institute of Technology in 1983.

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Sanjay Bhatnagar Free Agent, Former chairman and CEO, Enron Broadband Services
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In the first of Shorenstein APARC's three sessions of 2000-2001 Visiting Fellows research paper presentations, Mr. Kim will discuss "Hyndai Patent Quotations", and Mr. Bodapati will speak about "A Study of Emerging Opportunities in Bioinformatics."

Okimoto Conference Room, Encina Hall, Third Floor, East Wing

Sea-Chung Kim Visiting Fellow, A/PARC Speaker Hyundai, South Korea
Srinivasan Bodapati Visiting Fellow, A/PARC Speaker Reliance Industries, Ltd., India
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