You are here: Parliament home page > Parliamentary business > Publications and Records > Committee Publications > All Select Committee Publications > Commons Select Committees > Foreign Affairs > Foreign Affairs

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 55-iv

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

Foreign Affairs Committee

 

 

South Asia

 

 

Wednesday 31 January 2007

MICHAEL GRIFFIN, DR. MATTHEW NELSON, DR. GARETH PRICE

Evidence heard in Public Questions 168 - 216

 

 

USE OF THE TRANSCRIPT

1.

This is an uncorrected and unpublished transcript of evidence taken in public and reported to the House

 

2.

The transcript is not yet an approved formal record of these proceedings. Any public use of, or reference to the contents should make clear that neither Members nor witnesses have had the opportunity to correct the record. If in doubt as to the propriety of using the transcript, please contact the Clerk to the Committee.

 

3.

Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

 

4.

Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

 


 

Oral Evidence

Taken before the Foreign Affairs Committee

on Wednesday 31 January 2007

Members present:

Mike Gapes, in the Chair

Mr. John Horam

Mr. Malcolm Moss

Mr. Ken Purchase

Sandra Osborne

Rt hon. Sir John Stanley

Ms Gisela Stuart

________________

Memorandum submitted by Dr. Matthew Nelson, lecturer in the politics of Asia and Africa, SOAS

 

Examination of Witnesses

Witnesses: Michael Griffin, journalist and author of Reaping the Whirlwind: The Taliban Movement in Afghanistan, Dr. Matthew Nelson, lecturer in the politics of Asia and Africa, SOAS, and Dr. Gareth Price, Head of Asia programme, Chatham House.

 

Q168 <Chairman:> To begin this afternoon's sitting, I apologise to our witnesses for keeping them waiting outside for a few minutes, and I welcome them to the Committee. Will hon. Members and members of the public switch off their mobile phones?

As you know, we are carrying out a big inquiry into south Asia. Members of the Committee were in India, Pakistan and Afghanistan at the end of November and have heard evidence from several people since then. Will the three witnesses please introduce themselves?

<Gareth Price:> I run the Asia programme at Chatham House and focus primarily on south Asia.

<Matthew Nelson:> I teach at the politics department of the School of Oriental and African Studies. I focus primarily on Pakistan.

<Michael Griffin:> I am a writer and commentator on affairs in Afghanistan since the rise of the Taliban.

Q169 <Chairman:> Thank you. We begin with some questions about relationships between India and Pakistan and the dispute over Kashmir. We have already taken some evidence on this and held some long discussions. When we met President Musharraf, this was one of the issues that we talked about.

Professor Bose, who gave evidence to us a few weeks ago, suggested that the substantive positions on what a solution to the Kashmir dispute would look like are very far apart. Have any proposals on Kashmir been put forward that might eventually prove acceptable to both India and Pakistan and to the people of Kashmir?

<Matthew Nelson:> There are many proposals floating around, but I do not think that the magic proposal is there quite yet. There is not one that India and Pakistan are jumping to approve right away. Certainly, some have discussed making the line of control a permanent border, but that suggestion is not yet as attractive perhaps to Pakistan as to India. In the last year or so, General Musharraf has made a number of proposals that are quite innovative. For example, he has suggested the possibility of forms of joint administration and so on. I think that these are an effort on the part of Pakistan to open up the discussion.

However, the discussion is still-certainly from India's perspective-bilateral. Pakistan has always suggested that a multilateral discussion would be more desirable, but so far the Kashmiris have not necessarily been included as an equal voice with the Pakistanis and the Indians. That has happened for a number of reasons. The first question is who would the Kashmiri spokesperson be? Looking inside Kashmir is an important exercise, because there are a number of different Kashmiri voices. Looking for a proposal acceptable to all parties would probably include a discussion with Kashmiris.

<Gareth Price:> Yes, there are lots of proposals, but the danger of focusing on proposals is in thinking that there is a magic solution out there. A large part of the issue with Kashmir is the process, and there is a positive process going on. The process might be slow, but it is there-there is a ceasefire on the line of control, and confidence-building measures are happening slowly but surely. The proposals will come out of that process of building confidence, however slow. There is no magic solution on which to focus.

Q170 <Chairman:> Is the personality of President Musharraf particularly important to this process? There is supposed to be an election this year, although there are questions about when it will be and so on. Is it possible that a different leadership in Pakistan would mean that we would go back to where we were a few years ago in terms of tensions and no ceasefire?

<Gareth Price:> Thus far, the confidence-building measures introduced are slow and, yes, they could all be reversed. Do not have the idea that we are on a steady path to peace-it is far from unfeasible that the situation on Kashmir could deteriorate.

Having said that, your question was on Musharraf. People in India said the same thing about Vajpayee. They said that Vajpayee of the BJP was leading the peace process in India-like Nixon going to China-and that maybe the BJP was the pre-eminent party to resolve the Kashmir dispute. Now, Manmohan Singh has come to power, but the process has continued in a similar vein. Both sides are pretty much committed to peace, but that is not to say that a set of instances, such as the bombings in Mumbai, could not lead to a temporary reversal of the process.

Q171 <Chairman:> Are there any back channels operating at the moment?

<Matthew Nelson:> Again, my sense is that there might be back channels involving either interlocutors in Washington, or in various other places, but they might produce an agreement that is difficult to make public and bring forward. Certainly, when it comes to Musharraf's role in the process, my sense is that he is quite influential, but he is not the only possible spokesperson from Pakistan. I think that even a civilian regime in Pakistan could have many exciting things to say about Kashmir. Musharraf's relationship with civilian voices should be constantly watched and looked for.

Q172 <Chairman:> Is it possible that an agreement could be reached over part of the dispute, such as the Siachen glacier, before a total agreement over other areas?

<Matthew Nelson:> My personal feeling is that the Siachen glacier is not necessarily the linchpin to a larger agreement. So even if there is a reduction of hostilities on the glacier, that would not necessarily lead us on to a slippery slope towards a permanent solution of the problem, as it were-no pun intended!

Q173 <Mr. Moss:> To what extent is the army in Pakistan an obstacle to peace?

<Matthew Nelson:> I do not necessarily see the army in Pakistan as an obstacle to peace. It has clear interests in Pakistan and in the region generally, one of which is peace, although not at the cost of the army's status in Pakistan. Preserving the army's regional and domestic influence is a very important priority for it. It wants to find ways of moving towards peace without sacrificing itself-not necessarily preserving itself in power, but certainly preserving its influence in some way.

<Gareth Price:> Part of the logic of that question has been implied in the past-the military needs an ongoing dispute with India to justify its own position in Pakistani society. As Matthew says, I am not particularly convinced by that. Certainly at the moment, the military is playing a huge role in Pakistan-not in Kashmir, but in Baluchistan and the tribal areas. On the argument that the army needs the legitimacy of a conflict, at the moment, with the other disputes in Pakistan, the army is more supportive of a generic peace process over Kashmir.

Q174 <Chairman:> What is the UK role in assisting a solution?

<Matthew Nelson:> The UK, of course, has a relationship with the region. I think that a proactive role in putting forward proposals might not be the most appropriate approach at this juncture. The UK can certainly facilitate and encourage dialogue and the parties to continue the peace process, but inserting its own proposals might not be desirable.

Q175 <Chairman:> Is that view shared by both sides, or more by the Indians than the Pakistanis?

<Matthew Nelson:> I shall venture a guess: both parties might feel that proposals that are too clearly defined coming from the UK might not be helpful. Certainly, Pakistan would be more interested than India in UK involvement in multilateral negotiations. However, the UK might put forward a proposal that is regarded as too favourable to India, even in the context of multilateral conversations, at which point, Pakistan, naturally, would not be as excited about such proposals, as it might be about others.

Q176 <Mr. Purchase:> On a slightly tangential point, I can understand why there would be resentment at the former colonial power having anything to do with trying to find a solution to a problem that it had helped to create. Is there any other country that could assist in this vexed problem of Kashmir?

<Gareth Price:> In the past, you would probably have said no, given India's contention that this is a bilateral dispute and its hostility towards multilateral intervention. That has changed over the past five to 10 years, as India has grown more self-confident. One of the biggest things that we have seen recently is India's acceptance of the UN involvement in Nepal. So India is growing more accommodating towards multilateral intervention. At the moment, I do not think that that growing accommodation would extend towards Kashmir, whether it was intervention by the UN or another country. That is something that is changing on India's side, but we are not quite there yet, I think.

Q177 <Ms Stuart:> Before I ask you about the insurgents in Kashmir, following on from the conversations that you have had with my two colleagues, to what extent does the expatriate population living in the UK play a role in opinion forming for those who are prepared to reach compromises on the ground back in Kashmir?

<Gareth Price:> Obviously, a large part of the Pakistani community in the UK is from Mirpur, which is part of Kashmir. As often happens with people who have come from another country, quite a lot of them are, to some extent, almost more nationalistic than people within Kashmir.

Q178 <Ms Stuart:> That is what I am getting at. Does that have an influence on the ground, or is it just peripheral?

<Gareth Price:> At the moment, it is just a fact that exists. There are links, obviously, in terms of remittances. Among the Mirpuri community, there are attempts to redefine themselves as Kashmiri rather than Pakistani, partly for linguistic reasons, and that process is going on. There has also been talk of having an additional option in censuses, between British Indian, Pakistani and Kashmiri. Obviously that all relates to the question of Kashmir itself. As for the connection between those people in the UK and the people in Kashmir, clearly there are familial links, but I would not like to comment on the difference that those links make on the ground. At the moment, I think that it is just a question of stories happening in an isolated manner.

<Matthew Nelson:> It is also useful to keep in mind the relationship between different Kashmiris within the UK. For example, Kashmiris in the UK-say, those from Mirpur, or from the valley-may have different ideas about what the solution could be. So, even talking about a Kashmiri identity in the UK becomes complicated and difficult. Keeping some of those differences in mind is always helpful.

Q179 <Ms Stuart:> Turning to the insurgents within Kashmir, some of the evidence that we have heard suggested that the nature of the insurgency has changed over the years. What is your assessment of the number of insurgents who would go for outright Kashmiri independence?

<Matthew Nelson:> Certainly, the situation would differ again between, say, Azad Kashmir in Pakistan and Kashmir in India. In Pakistan, one gets the general sense that calls for outright independence are relatively few and far between, but that could simply be because those who would call for outright independence in Azad Kashmir feel threatened or concerned about doing so. In that sense, one could say that there are those interested in the ideal of independence in both Pakistani Kashmir and Indian Kashmir, but matters become much more complicated when questions are posed about what that might mean. For example, people in Azad Kashmir who appear to favour independence have been asked what they might mean by that. At that point, the notion of a separate Kashmir raises questions about, for example, crossing a border between Muzaffarabad and Islamabad and they will say, "Oh, I do not mean independence in that sense, because how would I go to work in Rawalpindi, or how would I visit my sister in Islamabad? Would I need a visa for that?" So, in that sense, the relationship between the ideal of independence, as a rhetorical and political story, and the practicalities of a movement for independence and what that would mean in negotiations in Kashmir are somewhat different things.

Q180 <Ms Stuart:> So they are not clear what they actually want?

<Matthew Nelson:> There is a variety of different views, even within Azad Kashmir.

<Gareth Price:> That is right. People sometimes talk about the plebiscite, which raises the question of who votes. Lots of Pandits-the Hindus from Kashmir-have left; do they vote? It all becomes very complicated, and it is so far down the line.

Last time I was in Srinagar, what came across was the phrase, "We want them to leave us alone." That referred to the militants as much as anyone else. There is tiredness of the conflict, which might not always be reflected by people abiding in the UK or the militants themselves. Among the general public in Kashmir, however, there is a hope that it goes away. The way in which that is expressed will vary. Does "leave us alone" mean "independence", or does it mean "stop the fighting"? It might mean a wide range of things, but it is hard to find a support base for the militants.

Q181 <Ms Stuart:> To what extent are those who want separatism involved in the peace process? Are they sidelined?

<Matthew Nelson:> My sense is that they are largely sidelined.

Q182 <Sandra Osborne:> Are you aware of the jihadist Islamist terrorists in Kashmir having any links with UK-based extremists?

<Matthew Nelson:> This lies well beyond my area of expertise. I think that it is possible to imagine that among those in Britain who have concerns about politics in Kashmir and hold a range of different views about it, there may be some who feel that militant forms of jihad are the only way to go in Kashmir. In that sense, the range of opinion among Muslims in Britain could include some who find that approach attractive for whatever reason. At that point, linkages through families, visits and all kinds of other exchanges could emerge to create militant links. I do not think, however, that there is a systematic pattern of politics in Britain that ties in with a pattern of politics in Kashmir to exacerbate the link to militancy.

<Michael Griffin:> May I add something to that? I do not have anything more expert to say, except that the kind of terrorist training camps that existed in the mid-1990s, which might have trained British Kashmiris who were then inflamed to go either to Kashmir or, two or three years earlier, to Chechnya or Bosnia, were all located on the Afghan border. In the same way that younger Pakistanis ended up in eastern Afghanistan training for the jihad, the previous generation might have ended up in Kashmir.

Q183 <Sandra Osborne:> In response to some of the terrorist attacks, the two Prime Ministers have issued statements and set up a joint control commission to tackle terrorism. Some of the statements have been quite controversial. Can you comment on that situation?

<Gareth Price:> At first, the proposal was opposed by some members of the BJP, who were asking why we were sharing intelligence with the Pakistanis when we were accusing them of complicity. It is worth asking about the extent to which that was political point scoring.

The joint co-operation is one of many confidence-building measures. It makes sense if India and Pakistan are to move forward. After the Mumbai bombs, India accused Pakistan of involvement and complicity, to which Pakistan said, "Let's see the evidence". That is the sort of process that is happening. I do not think that it was part of a wider, deeply thought-through confidence-building measure; it was a reactive attempt to make something good come out of the bomb blast, to build on it and move forward. It was controversial, but I think that it was a positive step.

Q184 <Sandra Osborne:> In his evidence to us, Professor Bose told the Committee that the high calibre of training and logistics support that had been available at certain times to their terrorists in Kashmir would point to the fact that they had had at certain stages support from the intelligence service in Pakistan. Do you think that that is the case? That would be one of the impediments to the Prime Ministers taking the initiative on a joint basis. Is that a fair comment?

<Gareth Price:> That was the allegation last week or the week before when the firing started over the border. India's claim was that there was firing to distract the army and to allow militants to pass through. It is very hard to say whether that is still going on. A recent Human Rights Watch report claimed that militants were still receiving arms from some elements within Pakistan, but it is very hard to assess how deep-seated that is. There has certainly been a big change from five or 10 years ago, when links were much stronger.

<Michael Griffin:> If you look at reporting from the war in Afghanistan and the role of Pakistan or the ISI in supporting the Taliban, al-Qaeda or other insurgent forces in their actions against either allied NATO or Afghan troops, you will see that there seems always-and this is done through the rather obscure intelligence provided by US military advisers, witnesses and generals on the ground-to be a situation where, on the one hand, Pakistan is rooting out and shooting at incursionists and terrorists in Afghanistan, while another element of the Pakistani military-industrial base is encouraging, financing and training them. These two policies, rather than cancelling each other out, appear to run hand in hand, so to a certain extent, you have a dual foreign policy. Possibly one is above ground and the other one is underground, but they then change from being underground and overground, and they get rather confused at the same time. So you have the new Defence Secretary of the United States accusing Pakistan of being helpful in trebling the number of cross-border attacks by Taliban against NATO and US forces since signing a treaty with Waziri Taliban back in September, but Pakistan is helping. Once you have found a very useful trick in dealing with your adventurous foreign policies, I assume that the same thing will probably happen in terms of the on-off active war in Kashmir.

<Chairman:> Now that we are on to Afghanistan, that is rather convenient. I bring in John Stanley.

Q185 <Sir John Stanley:> Mr. Griffin, with all your expertise on the Taliban, do you think that the Taliban that is confronting us in Helmand province and the Kandahar area now is basically the same Taliban, with the same motivation and determination as the Taliban that took over the country before we threw them out of government? Or do you think that they have changed?

<Michael Griffin:> I think that they have radically changed since they were defeated in 2001, not just because they have had to learn a lot of very valuable lessons about how to survive against the world's largest military power, but because a large number of Soviet jihad-era fighters either have been killed or have been replaced or retired, and new generations are coming in with new experiences, and definitely better sources of training. They have turned into a much more professional fighting force than they were at the time that they came to power in 1996, or at any time since then until their fall from power in 2001. If you read between the lines of British military reports from Helmand province, or any American reports from Kunar province on the east, you will find time and time again that non-commissioned officers upward will talk about the courage, the accuracy and the good training of the Taliban that they encounter, as well as their ability to move very nimbly over the ground, and to have timed, careful attacks from three or four different directions with good covering fire. The only thing that seems to throw them is air support and all that that entails, particularly fixed-wing bombing.

It strikes me that one of the things that came out of Helmand province was the notion that if the Taliban had enough wit to figure out how many British and allied forces aircraft could be in the air at any one time-say, five to 10-and if they were to set off 20 attacks at the same time, they would totally overtax that. That was already happening in Operation Medusa: they were taxing British helicopter support to the limit. This requires a much greater sophistication of military planning than the Taliban had before.

Everybody assumed that the original Taliban were a mixture of mullahs and a few fanatics-although the Afghans were never that fanatical-and out-of-work members of the former Soviet-trained army; people with experience in how to use rockets and various other pieces of modern technology grafted on to this Lashkar type of formation. They have changed a lot since then and, as you will have heard, have imported a lot of techniques and technology from the Iraqi experience.

Q186 <Sir John Stanley:> So you are saying that in military terms they are considerably more sophisticated than they were and therefore present a more severe threat?

<Michael Griffin:> I think that they are. One of the things that we have not seen during the baptism of fire and the baptism of NATO abroad, both of which have happened in Afghanistan-it is the one thing that is stimulating the United States not to circulate out 3,500 troops as intended, but to maintain troop levels in Afghanistan-is the idea among Taliban that they were so successful in both Helmand and Kandahar in the second half of last year, before the snow cut them off, that they should think next about co-ordinating with attacks from eastern mountain ranges against the United States. Once that starts happening, and there are two fronts fighting hand in hand, Afghanistan will begin to look like a totally different war game.

Q187 <Sir John Stanley:> Turning to co-operation between Afghanistan and Pakistan, there seems to have been material progress since our Committee's last visit. The trilateral commission has been in operation and there have been further developments beyond that. There is no doubt that there is an incredibly difficult physical problem in terms of the length and topography of the border and the number of people who cross it. We are told that some 200,000 people cross the border every day, 30,000 of them at one crossing point alone. It is an almost impossible situation. The border does not admit of a physical barrier. It might be possible to do something with sensors, but that would require vast investment. Mining is unthinkable and would anyway be contrary to the anti-personnel land mines treaty and so on. There is an enormous problem there.

Do you see in your contacts with the Governments of Pakistan and Afghanistan more realism on the part of both Governments and a greater readiness to recognise that, instead of sitting back and blaming each other for the security difficulties that both countries face, they would do much better to start seriously co-operating at intelligence, military and political levels?

<Matthew Nelson:> Yes, the landscape is changing quite a lot. Pakistan and Afghanistan could find a great deal to co-operate about, but it is also important to understand the domestic politics within each country with respect to the Taliban. Both Governments have found that Pashtuns are an important constituency, and among the Pashtuns one aspect of Pashtun politics involves the Taliban. Both in Pakistan and in Afghanistan there has been pressure to engage at some political level even moderate Taliban. That type of thinking is evident in the agreements that have come forward in Waziristan on the border between the two countries and in Musa Kala in Afghanistan and so on.

Interestingly, some of the disagreements between Musharraf and Karzai, with each accusing the other of failing to tackle the Taliban, grow out of the pressure that each faces from outside-say from the UK and the US-to tackle the Taliban, when the fact of the matter is that both feel political pressures to find some way to work with aspects of the Taliban, and when they are accused for doing so, they then blame the other leader for keeping the Taliban alive. Some realism here would be helpful. The Taliban is not representative of Pashtuns, but it is one part of the Pashtun political landscape. I think that recognising the politics of the Taliban as opposed to simply its militancy, and separating the politics of the Taliban from the politics of al-Qaeda, can be fruitful in our thinking about the different configurations.

When, for example, Karzai says, "When I am in Kandahar I find that I have to talk about and occasionally with members of the Taliban," that should not necessarily be read immediately as supporting insurgency. That should be read as politics within Afghanistan. It is helpful to differentiate the military and the political when it comes to the Taliban.

Q188 <Sir John Stanley:> Thank you. While we were in Afghanistan and in Pakistan we had a number of discussions about the possibility of building on the tripartite commission, which is military to military, and whether some form of reasonably structured dialogue might be created at the political or civil level. There is a great deal of mutual suspicion in both countries but it appeared that at the highest level there was a degree of sympathy and support for that to happen. I wonder whether you are getting any feedback in that area from where you sit. We had a considerable debate as to whether it should be called a jirga, but we will leave the terminology aside-a meeting.

<Michael Griffin:> I have not heard about the idea of a joint jirga. I realise that it was proposed in Washington DC and initially came from the two presidents' visit over there. It was considered to be the next step forward, following the de facto decision by Musharraf to have his own private jirga/peace agreement/standing down of his own army in Waziristan to which my colleague referred a little earlier. I have suggested that, militarily, that did not have the same impact in Afghanistan as Musharraf was promising in Washington that it would, although it has probably reduced the stress on the Pakistani military, which I believe had as many as 70,000 forces in north and south Waziristan at one point, so there have not been quite as many attacks on Pakistan.

Moving on to your more immediate question of a bilateral jirga with bilateral Pashtun, I had not heard that that idea had been moved forward at all. This is again one of those coded words: can we truly have one without resolving the Durand line issue and could we possibly have a jirga around that first, since that tends to underpin?

<Matthew Nelson:> On the final point of whether a joint jirga could resolve the Durand line question, my sense is that a joint jirga would not be the place to look for a fixed boundary. There are many ways in which a joint jirga could have interesting things to say, but that issue might not be the first one on the agenda.

<Michael Griffin:> I only mentioned that point because you started a line of questioning in terms of whether building a more stable border fence between Pakistan and Afghanistan was on the agenda, and I suspected that it could be on the agenda only in a joint jirga, in which case neither of the Pashtun delegations will agree either way, so it is off the agenda. But whether the jirga concept is off the agenda as a result, I could not possibly say.

<Matthew Nelson:> I do not think that the jirga concept is off the agenda yet. A number of groups are suggesting this type of forum, both within local party politics in Pakistan-say the Awami National party looking to traditional forms of negotiation in a jirga-and in Afghanistan resurrecting the idea of the jirga. The concept is alive.

Q189 <Mr. Horam:> Let us return to the Taliban and their strength. Mr. Griffin, you were talking about military strength and you, Dr. Nelson, were talking about the political aspects of it. Dr. Nelson, you were almost saying that, if the Taliban cannot be defeated militarily, they would have to be accommodated in some way on both sides of the border. How do you see that unfolding, if it does unfold?

<Matthew Nelson:> Instead of focusing on the Taliban as a religious movement, I focus on Pashtuns as a political factor. The initial dispensation of the Government in Kabul after 2001 and so on was not necessarily regarded as favourable for Pashtuns. Some of the concern about that Government fuelled initial concern among the Pashtun majority in southern Afghanistan and some political resentments grew from that. My focus is not so much on the Taliban as on Pashtuns and their quite different objectives in Afghanistan compared with some of the other groups.

Q190 <Mr. Horam:> How can you deal with the concerns of the Pashtuns in a way that contributes towards a more stable situation in Afghanistan?

<Matthew Nelson:> Rather than put forward a solution about exactly how the Pashtun voice will be heard, some of the concerns that Gareth raised earlier about the importance of process are important. The tripartite agenda or suggestion that has come up at the meeting might be one way, making sure that Pashtuns are acknowledged in that process. Making sure that there are regular meetings between different types of Pashtun leaders-Taliban and otherwise-in Kabul, Islamabad and Peshawar could be very useful.

Q191 <Mr. Horam:> Mr. Griffin, you were talking about the military strength of the Taliban. What you said was rather frightening in a way because you put forward the idea that two fronts might develop from the east and so on. What are the implications of that for the British and American effort there? Will the situation get worse?

<Michael Griffin:> It all tends towards the notion that it is going to get worse before it gets better. Not a single cited senior officer in either NATO or the United States forces has suggested any other difference. The incoming Defence Secretary in the United States has said the same thing, hence the boosting of forces. In January or February, Britain will take possession of some up-armoured personnel carriers, which should improve the security of British forces on the ground in Helmand province, and it will take over joint command of all NATO forces in January, which gives it an opportunity to co-ordinate its operations in the east and south in a better way. The United States has also given it control over a 3,500 rapid deployment force to be used wherever it wants, whether in Helmand, Kunar or Khost, which could change the shape of the conflict.

One of the areas that is always interesting in Afghanistan and other countries-in the terror network, if you like-is where the money comes from. An awful lot of money is going into the Taliban campaign, whether in the form of new training or new recruitment. You might have read The New York Times journalist in Kabul who gets to interview Taliban from time to time, because they have become quite outspoken and good manipulators of the media and video. That is unusual for the Taliban because they have always eschewed all of that. They are on very good salaries compared with the Afghan soldier who is scratching $80 a month and anything else that he can steal compared with the Taliban who is on $160 and, for example, a motorbike and fuel per month for 10 days' work. Those are the figures that I have seen, so there is a good and solid flow of funding coming. To a large extent, armies march on their bellies; they do not march and fight on belief alone, if at all.

<Matthew Nelson:> I want to add some specificity, so it will be a bit easier to understand what I was trying to suggest when I said to bring in the Pashtuns. It is important to recognise why that is a difficult idea, as well as an interesting idea. In Pakistan, Musharraf has some domestic political concerns when it comes to regional governments. For instance, Musharraf is sitting in Islamabad and wondering what will happen in Sindh or in North West Frontier. When it comes to bringing Pashtun voices into the conversation, that creates some anxieties about regional politics within Pakistan. In Afghanistan, bringing in Pashtun voices and perhaps the religious voice of the Taliban among Pashtun voices creates anxieties about the future of the Afghan Government from the perspective of coalition forces, and the religious dispensation of that Government. In both senses, there will be concerns about what bringing Pashtuns into the conversation might mean.

Comparison with the Kashmir situation could be helpful. There is a group-the Kashmiris-that crosses the border between India and Pakistan. In the west, of course, the Pashtuns cross the border between Pakistan and Afghanistan. Bringing the group that crosses the border into the conversation has been difficult in both cases, but many observers feel that bringing these cross-border groups into a conversation about future political solutions is really important.

Q192 <Mr. Horam:> Given the strength and sophistication of the Taliban that Mr. Griffin described and the difficulty of dealing with them militarily, do you think that that political solution is ultimately going to happen?

<Michael Griffin:> In the few months before Christmas, I became very interested in the Senlis council-have you come across the Senlis council? Its proposal, which is several years old now but has gained greater attraction, is to try and separate the issues of security and the elimination of the opium poppy on the ground, in the southern provinces chiefly. Also realise that the NHS is crying out for some relief of the pain deficit through the provision of licit and controlled supplies of painkillers from Afghanistan, composed of heroin and opium subsidiaries.

That would be an interesting idea to explore in the south: imposing a 10-year hiatus on destroying the opium crop, which sustains the Pashtun population there and-if you believe the World Bank-keeps the entire Afghan economy bubbling over healthily. If you could create a 10-year gap before eradicating opium and, at the same time, insert British and NATO forces whose job was to create security but not to destroy the economy, you would do a great deal for Afghanistan. However, judging by the conversations I have had with people about this, the time for this idea has never come and will never come, because Britain, which is leading the fight against opium in the south, and the United States, which does not believe in any other relationship with drugs apart from war, will not accept that solution in Afghanistan. However, I would argue that that would be one way of separating the Taliban from the very large population-perhaps 1 million families strong in the south-who depend upon the illegal drug.

Q193 <Mr. Horam:> May I finally ask you about links between the Taliban and al-Qaeda now? What is the state of affairs between them?

<Michael Griffin:> It is difficult to say. Five years of fighting, propaganda and media coverage have tended to cover over the tracks that might now link the fates of these two different movements. I think that there are still links of some kind in the two Waziristans-not necessarily cross-fertilisation, but the drinking of tea between like-minded veterans. They might be from Uzbekistan, Chechnya or Iran or they might be volunteers from Arab countries who have got stranded or married there. They could be recruited to some kind of a rent-a-jihad situation, whether with the Taliban, or for a war in Tajikistan or even an operation in Kashmir.

I think that there is some overlap between these organisations. There seems to be strong evidence that the al-Qaeda of the Two Rivers-that is, in Iraq-transported Taliban commanders to Iraq, in late 2005, for training in how to produce more efficient road-side bombs-improvised explosive devices-such as shaped IEDs, which create a bigger blast. Certainly, there has been training, possibly from Iraq again, but certainly being sponsored from the Gulf, in how to convince Afghanis of the value of being a suicide bomber. There have been an awful lot of suicide bombs in the south and the capital of Afghanistan in the past two years. However, the extent to which al-Qaeda gives the Taliban instructions, rather than renegade elements-as they call them-of the Pakistani security forces, is anybody's guess at this point.

There is no evidence of anything systematic, but there might be a kind of old boy's network. For example, Jallaluddin Haqqani was considered to be commander-in-chief in the eastern frontier area-so it is an American area-of Khost, on the Pakistani border with North Waziristan. Back in the mid-1990s, he was the grand old man in the training of Harakat fighters in Kashmir and an old friend of Osama bin Laden. He controlled the camps and gave bin Laden access to them.

That gentleman continues to fight and has connections with al-Qaeda. The Americans keep trying to assassinate him using Predators, but they keep failing. He has those connections, but they are no different from those that he has with Inter-Services Intelligence, generals, former colleagues in the various Taliban Governments or those before the Taliban, or with old colleagues-he is in his 50s or 60s-who fought against the Soviets. They are all one great generation of astonishingly interrelated people with businesses from Korea to the UAE, and in America as well. But I do not think that there is anything systematic.

<Gareth Price:> On defeating the Taliban, there is an issue of Afghan disillusionment with the Government, largely because expectations were so high a couple of years ago. A lot of international aid and assistance has been given to Afghanistan, but the benefits have been rarely seen by the average Afghan. We hear that some $4 billion is coming into Afghanistan but quite evidently much of that will go out in profits to contractors and be spent on security. Corruption is an issue as well. And the actual thing that happens clearly does not cost $4 billion. So there is the assumption of widespread corruption within the Afghan Government, which is creating disillusionment, and a much more profitable arena for the opposition-primarily the Taliban-to operate in. That, as well as a military solution, is an essential part of the problem.

Q194 <Ms Stuart:> I want to come back to something that Mr. Griffin said about opium and how it could be used by the NHS. You seemed to imply that the UK is taking a lead and that the US does not want it to happen. However, our impression was that the Afghans also do not want that. At the moment they cannot even lock up any of their drug barons let alone have controlled growing. They do not support that idea. Or are you saying that the UK and US have told them not to?

<Michael Griffin:> I agree with everything that Gareth said about the corruption. If it is not aid-related, it will be drugs-related-and it goes to the very top. Anybody who objects, as I believe Ali Jalali, a former Interior Minister, did, is forced to resign and go away. Everybody knows that this is a corrupt society. This is harvest time for them, and I guess that a lot of people fear that it will dry up pretty soon and that they had better get their piece while they can.

In the same way that the United States is in charge in Iraq and, to some extent, of a Government whose interior ministry is involved in death squads, in Afghanistan, the US or the coalition, which is in charge of money for the redevelopment and reconstruction of Afghanistan, feels that it owes it to the sovereignty of its new creation not to get involved in prosecuting the most blatantly corrupt people involved in the illicit trade, which we are also interested in eradicating. I am not quite sure how that operates at all.

Having said that, I think that if Karzai was looking to create a highway of conversation between his Government-which is not at all popular, despite the fact that it does have quite strong roots in the clans and tribes of the Pashtun people-and others, and if he were able to offer in the south some kind of initiative that was carefully coded and embedded within traditional structures of self-control, which are strong in Afghanistan, whereby village A, which produces 250 kg of pure opium paste per year against the law, was able to produce 250 kg legally and have it purchased at a basic minimum price for 10 years-and they were able to regulate themselves and make sure that their neighbours were not growing more than that 250 kg-I think that local people would find this a very creative way of ending that practice and introducing opium substitution crops over a longer period, while at the same time allowing them to carry on doing a bad thing for a little bit longer while they got transferred into different ways of making a living.

Q195 Chairman: No doubt we can come back to that issue another time. That is something we have raised with Ministers, who have given us a rather different view. Can I ask you about India's view of the situation in Afghanistan? How important is what is going on there for India?

<Michael Griffin:> India has always had quite a good relationship with Afghan Governments, both before and after the Taliban, but never during the Taliban's five-year rule, when Afghanistan became associated very much with the 1999 hijacking of Indian Airlines jets flying into Kandahar and its association and support from the ISI made it look like simply another manifestation of Pakistan's unofficial policy of running proxy terrorist operational wars against India, whether in Kashmir or in the south, or against urban targets. From 1993 onwards, India has been the target of terrorism, much of which could be said to have originated in Afghan training camps with the assistance of Pakistan and the ISI.

To a large extent, I guess that India sees in Afghanistan a resolution to part of its security problem with Pakistan. I get the impression that India is quite eager to make itself a generous big brother to a new kind of democracy in southern Asia, and to that extent, it has become the largest regional donor to Afghanistan. At the same time, it has steered fairly clear of any involvement in the development of the Afghans' military capability for fear of creating any further rift with Pakistan, which views Afghanistan very much as its own backyard in the continuing rivalry with India.

Q196 Chairman: Afghanistan has just joined the South Asian Association for Regional Co-operation. I had the experience of standing at the Wagah crossing and seeing the lorries of onions being unloaded and carried by bearers by the sackful from the Indian side across, and the bearers from the Pakistan side carrying Afghan dried fruit the other way. The goods were then swapped over from one head to the other. That was an absurd and interesting experience, but is there a real potential for a trade in Afghan products between Afghanistan and Pakistan and between Afghanistan and India other than that border crossing, or is that the main trade route?

<Michael Griffin:> At the moment, India has a preferential trade agreement for any Afghan produce that comes into India, although not very much goes there. Obviously, fruit, dried raisins and some spices could go there, but to a large extent the markets of Afghan producers have pretty much been wiped out since the Soviet invasion and replaced by much cheaper producers such as California.

I think that Afghanistan's legitimate exports apart from opium are in the region of $100 million a year, so we are talking about a pittance. Plus, Afghanistan's trade is jealously guarded by Pakistan, which manipulates the transit trade agreement so that goods delivered in Karachi travel north into Afghanistan via Pakistan, which then controls the access of imports and exports across that border. India is attempting to loosen that control by building an alternative route through an Iranian port known as Chabahar and a new road from that port to Nimroz in south-west Afghanistan, which will provide an alternative source and also satisfies both of those countries' primary interest in Afghanistan as a stepping stone towards central Asia and its oil and gas.

Chairman: Let us turn to Bangladesh.

Q197 <Mr. Horam:> There has been huge political turmoil in Bangladesh with the elections and so on. Has this had any wider impact in the south Asian region or is it still mainly a Bangladeshi issue?

<Gareth Price:> For now it is primarily a Bangladeshi issue. India has concerns that it could spill over. In the past, refugees from Bangladesh have been a continuous issue, but the threat of a wider influx of refugees is the main concern on India's side. There is also the opportunity cost. The complete lack of empathy between the two main parties, and in particular the leaders of the two main parties in Bangladesh, in large part relating to the relationship with India is a big factor that holds back Bangladesh and the export of its gas. It particularly affects north-east India, which is cut off apart from a small chicken neck, so it cannot trade with other parts of India so well. But the short answer is that for now the impact is confined to Bangladesh. India certainly has concerns about what could happen if democracy is not able to entrench itself within Bangladesh, which to most observers seems likely while the current two leaders, Khaleda Zia and Sheikh Hasina, remain in power.

Q198 <Mr. Horam:> Sorry to interrupt, but do independent observers think that democracy is likely to be entrenched and that it will resolve these problems?

<Gareth Price:> Bangladesh has democracy in the sense that it has elections, but in terms of accepting the results of elections, each party that has lost has taken to protesting in the streets from the mid-1990s onwards. It has democracy in terms of people voting, but in terms of the wider issue of rights and so forth democracy has a long way to go to be entrenched in Bangladesh.

Q199 <Mr. Horam:> So you are not hopeful that there will be an easy or quick resolution of the problems?

<Gareth Price:> It might be a while before we see an election. Many issues are being discussed in Bangladesh at the moment. One report was talking about the Pakistani model, which would be to put the two leaders into exile. I do not know how developed that thinking is.

The big issue is to wait for the next generation-that is not my personal view. Bangladesh will muddle along while the two leaders loathe each other. It is also a question of a first-past-the-post electoral system where generally the Awami League gains a couple of percentage points more than the Bangladeshi National party, and the BNP in alliance with Jamaat-e-Islami gets a couple of percentage points more. Whoever wins the most seats then obtains an additional 30 women's seats, so we end up with a country that is divided 47 per cent. on one side and 43 per cent. on the other side, yet the side that has 47 per cent. has a massive majority for five years.

If the situation is to change, another point is that Bangladesh's economy has done well lately despite the politics, but is now coming to a position where the political situation is starting to impact on Bangladesh. A small example is the power projects that take more than five years. The parties alternate each time there is an election, so as soon as the new Government come in, they scrap previous power projects because it is assumed that they must have been corrupt, so they start their own ones. Now it is getting to the point where power shortages are becoming more and more of an issue. That is a direct way in which the political situation is starting to impact on the economy. That is why there are calls for a third force, or some restructuring of power-that will be the main pressure.

Q200 <Chairman:> I would like to move on to Sri Lanka, where the situation seems to be deteriorating all the time. Clearly there are quite a few people living in this country who are of Sri Lankan origin; over the years, many of them have come here as refugees. Is there a role that the UK Government can play in helping to resolve that conflict?

<Gareth Price:> The short answer is that the situation is very much like Kashmir. The UK could be asked to play particular roles, such as in policing-Northern Ireland issues potentially have relevance to Sri Lanka.

The main issue that will determine what happens in Sri Lanka is the political will on both sides for a peaceful settlement, which at the moment does not seem to be there. The Norwegians are the main mediators, or interlocutors-whichever-in the process. I do not know what the term would be, but clearly they are in league with India, or acting with India's behind-the-scenes backing. However, if the two sides in Sri Lanka are not particularly interested in sitting down round a table and discussing matters, then certainly with the current situation it is very hard to see what anyone can do.

Q201 <Chairman:> There is the list of terrorist organisations, which includes the Liberation Tigers of Tamil Eelam, which is also now on the EU list, I understand. Is its inclusion a factor in blocking any role that we might have? On the other hand, Paul Murphy, the former Northern Ireland Secretary, recently went to Sri Lanka to try to inject some ideas based on what had happened in Northern Ireland, and to ask whether those ideas might be helpful to the process in Sri Lanka.

<Gareth Price:> It is an issue that is debated. On the one side, people say that we should not proscribe organisations, as it stops channels of communication, and so forth. To be honest, I think that most of these things can be got around. If people want to talk to the LTTE, it is do-able, despite the fact that it is proscribed. Proscribing the LTTE makes it harder for its members to travel. There was a report that the wife of Anton Balasingham, formerly the LTTE's chief negotiator based in London and who died a short while ago, would replace him as its main mediator; I think that she is Australian. I do not know; it is one of those things-six of one and half a dozen of another. It depends on how you want to look at it. Negotiation can take place whether organisations are proscribed or not, but it certainly makes negotiation harder. Does it make the Tamil Tigers feel that they are more oppressed, or that their backs are to the wall? Possibly.

Q202 <Chairman:> There are also allegations that the Sri Lankan armed forces have been using ex-Tamil Tigers who broke away to abduct children and train them as guerrillas against the Tamil Tigers. Can you enlighten us on that?

<Gareth Price:> I only know of the Human Rights Watch report that the Karuna faction had split from the LTTE. There are lots of allegations that that faction is being supported by the Sri Lankan Government. The Human Rights Watch report said that the Karuna faction is now recruiting children in Government-controlled areas, with Government complicity.

On a wider point, the issue of child recruitment in Sri Lanka has been a major one. I think that it was one of the reasons that led the EU to proscribe the LTTE.

Q203 <Chairman:> Is there any prospect that, although there is the history of the assassination of an Indian Prime Minister by the Tamil Tigers, India might want to try to facilitate a peaceful agreement in Sri Lanka, given India's Tamil population in the south and its historic and geographic links with Sri Lanka?

<Gareth Price:> India would certainly like peace in Sri Lanka-that is undoubted. Its own experience of direct involvement, with its peacekeeping mission in 1989, was unsuccessful, or not as successful as it could have been, so that has left a bad taste within India. For the moment, India is happy to let Norway lead, which again is quite unusual in terms of India's attitude towards outside involvement in south Asia. However, India has discussions with Norway on where things are going, which at the moment is obviously not very far. I think that Velipullai Prabhakaran faces a death sentence in India-

Q204 <Chairman:> Because of the assassination of Rajiv Gandhi?

<Gareth Price:> Indeed. He either has a death sentence or a very long jail sentence outstanding, so that is an issue. People claim that it is more of an issue with Congress being in power, given that Rajiv Gandhi was Sonia Gandhi's husband.

My opinion is that the links between Tamils in southern India and Tamils in Sri Lanka is a justification for not getting involved rather than something real. There are a couple of Tamil parties that make speeches about the LTTE, or Tamils in general, but they are not particularly mainstream. As in Bangladesh, refugees are a big issue. They had almost all made it back from India and now they are starting to come over from Sri Lanka again because of the trouble.

Q205 <Mr. Purchase:> I have a tangential question about Sri Lanka. A number of Members of Parliament have in their constituencies Sri Lankans who are here temporarily as refugees and asylum seekers. Do you see any prospect of people going back to Sri Lanka from Britain in the immediate future? Is the situation such that you think that lives would be endangered?

<Gareth Price:> At the moment, I think so, whether the trajectory of the conflict stays at this level-people are stopping just short of saying that it is a civil war-or escalates. The level of violence seems to suit both sides. They do not want it to increase, but peace is not on the table at the moment. While the current situation continues, refugees will leave Sri Lanka rather than go back. It is very hard to see how that situation will change if it suits both sides.

Q206 <Mr. Purchase:> I think that we are still deporting, are we not?

<Chairman:> No, the Government have stopped the removals.

Q207 <Mr. Purchase:> Your opinion is that it would be a little dangerous at present?

<Gareth Price:> Yes. From the past few months, the escalation in violence seems likely to worsen.

<Chairman:> Yes, the Government stopped the removal programme a few months ago for precisely that reason.

Q208 <Sir John Stanley:> At long last, the civil war in Nepal seems to be coming to a halt. The Maoists have agreed with the other democratic political parties a basis on which they can enter the Nepalese Parliament. It seems likely that there will be elections to the constituent assembly-I hope that they are to a good standard-perhaps as early as June this year. As for the repercussions in India if the peace process in Nepal is not derailed and we emerge on the far side of that terrible civil war with a proper, peaceful, multi-party democracy, do you think that that will choke off the Naxalite movement in India? Or do you think that that movement has energy, dynamism, militancy and terrorism of its own and will continue unchanged?

<Gareth Price:> Where to start? It was thought that there were connections between Naxalites in India and Maoists in Nepal. The rhetoric from the Maoists was at first very anti-Indian. They are still talking about renegotiating some of the treaties and so on. In practice, however, people recognise that when they come to power in Nepal, they have to live with India. India is the country that Nepal trades with and it is where its economic opportunities will come from through hydroelectricity and such like. The big unknown about Nepal is the extent to which the Maoists will temper their aims once they are in power. Maoist economic policy includes not allowing Nepalese to work overseas, which seems completely unfeasible given that Nepal is very dependent on remittances from Nepalese working abroad, mainly in India but also in the Gulf. We do not yet know, but the assumption is that as they come into power, they will temper their policies. With regard to the Naxalites, the Maoists have already said that they will not give any support, and certainly not any military support, to Naxalites working in India, but they might give some kind of moral support for the cause.

That leads on to whether something can be done in Nepal to resolve the core grievances that led to the Maoist uprising-things such as unfair land ownership and so forth. Land redistribution was talked about, but there is not that much land to redistribute. The whole thing needs to be thought through a lot. What does land redistribution mean, if you have a few goats grazing on a mountain? There is a long way to go in this thinking. But if something comes from that, does that then present some kind of model for India? India's case is that as India is a functioning democracy, Naxalites in India are a different kettle of fish from Maoists in Nepal. But some ideas that come from Nepal could be used in some format in some of the more backward districts in India where the Naxalites are most active to try to drain the swamp, or whatever the phraseology should be.

Q209 <Mr. Horam:> There are at least two proposals for pipelines to India, one from Iran through Pakistan to India and the other from Tajikistan through Afghanistan to India. Obviously, India is very energy deficient. Are these pipe dreams-sorry about the pun-or are they serious proposals that might go ahead? It is not exactly like Russia and Germany having an agreement to put a pipeline through the Baltic sea, which is already being built. There are serious political problems associated with these proposals. Do you think they will come to fruition?

<Matthew Nelson:> Not any time soon, for a couple of different reasons. The pipeline from Iran to India would pass through Pakistan and particularly through Baluchistan, where there is a great deal of ongoing unrest right now, and the pipeline is not likely to emerge any time soon for that reason. There is also further concern that such a pipeline involving a relationship between India and Iran would complicate India's changing and improving relationship with the US. There is the possibility that the United States and Iran and their own ongoing tussle, will be used, or at least considered, within India as a factor in their own improving relations with Iran. Whether that could cause India itself to slow down the process, even apart from Pakistan and concerns about Baluchistan, is an interesting question. For both reasons, I do not see that pipeline happening quickly.

Q210 <Mr. Horam:> It is the same with the one from Tajikistan, which is even more remote, is it not?

<Matthew Nelson:> There is a different set of factors. In the case of Tajikistan and Afghanistan, the relationship with the Government of Afghanistan will very much relate to the US involvement in that Government. Perhaps a relationship between India, Afghanistan and the US with such an arrangement could be much better, but this is pure speculation on my part.

Q211 <Mr. Horam:> How is India going to make up its energy deficiency? Renewables? More coal?

<Gareth Price:> Yes, India could do with more energy now, but the key issue about all these things is that India plots what it needs if it is going to sustain 7 per cent. growth. It is more an issue in 10 years' time, and even more an issue in 20 years' time, by which point one can well see the other pipeline that is talked about being planned from Myanmar through Bangladesh. If peace broke out in Nepal and it was running smoothly, there would be another focus on hydroelectricity, which is incredibly successful in Bhutan as a source of power for that part of India. Nuclear is another option, and that would come on-stream in five or 10 years' time. I think that although the time frames are so long because there is long-term planning in India, it has not become the main priority. People talk about it and know that it is there as an issue, but given the current choice, Iran has issues with the United States. Whether those can be got around, perhaps by the confidence-building measures of pipelines running through Pakistan into India, and whether that can be sorted out, could be seen as outweighing any of the negative impacts. If India and Pakistan can manage to agree on a pipeline, the benefits of that might outweigh the issue of US concerns about Iran. The Iran-Pakistan-India gas pipeline was first talked about in, I think, 1994 or 1995, and it is now 2007. Yes, lots of studies have happened.

Q212 <Mr. Horam:> A lot of political decisions will have to be made. One point that was made to us very strongly in India was that, in a way, the present prosperity and growth were acting as a deterrent to these political decisions. People were saying, "Well, it's not too bad. Let's put things off a bit. We can afford to put things off." However, that is precisely what they cannot afford to do, if they are going to sustain this in 10 years' time.

<Gareth Price:> This is why it has moved up the agenda in India, but India's economic growth has been predicated on high-value service sectors, such as IT and pharmaceuticals. There is now a recognition within India that they need to create more jobs, and that needs a manufacturing sector. A manufacturing sector needs more power, so the issue is going up the table. At the same time, things are happening-for example, the huge Reliance refinery that was recently built is the largest in the world. One of the big issues within India is that it does not enjoy being reliant on world pricing. So if the price of oil goes up, India's current account looks bad. With these longer-term accounts, as with Qatar and other places, for longer-term supply of natural gas-this is the whole point about the Iran pipeline, or hydroelectricity, for that matter-you do the initial investment, but then you know what the price is, and you are not going to be subject to sudden current account problems.

<Chairman:> We turn now to the issue of water.

Q213 <Mr. Moss:> India, as we all know, has huge water needs related to its large population and its historic dependence on agriculture in the economy, and now, as we have just been discussing, the rapid increase in its economic activity. India has water disputes with three of its neighbours-Pakistan, Bangladesh and Nepal. What do you see as the main areas for concern in that respect, and how important do you think water sharing will be to the future of this region?

<Gareth Price:> I think that water disputes are potentially a major problem. The Indus water treaty is the most successful treaty between India and Pakistan-I think that it was signed in 1960 or 1962. Until last year, they never used international arbitration, so the treaty lasted through various wars that took place during that time. If the right agreements can be sorted out, that is potentially a confidence-building measure, whether it is with Pakistan, Bangladesh or Nepal.

The problem is that water-sharing really is a zero-sum game-water tables are shrinking and populations are growing. It is a major issue of concern, and is going to continue to be an issue of concern, and not just between India and Pakistan or India and Bangladesh. There are also water disputes within Pakistan about the dam that they are talking about building between the North West Frontier province, Punjab and Sindh province. Sindh thinks that it will get less water, and Punjab wants to stand because it thinks that it will get more water, and the North West Frontier province does not want it because the reservoir is going to flood a large area of it. Even within Pakistan, and within India, you have the Cauvery river dispute between Karnataka and Tamil Nadu. So it is going to be at a range of different levels. Recently a storage reservoir was opened up for Delhi in Uttar Pradesh, and that led to a dispute between Delhi and Uttar Pradesh about who should get that water. If some good model on water sharing could be put together, it would be very beneficial, but as it is, it is going to be a major source of contention for the region.

Q214 <Chairman:> Thank you. We come to the final question, you will be pleased to hear. The South Asian Association for Regional Co-operation has recently expanded and some people see it as a model, which would move from an economic free-trade model to a kind of political, co-operative model. How important is SAARC for the countries of the region? Is it very important for the smaller countries and not at all important for India, or is it the other way round?

<Gareth Price:> The big problem with SAARC is that the political disputes between India and Pakistan get in the way of substantial progress. SAARC has introduced a free trade area recently, but it is only for India and Pakistan, which have not agreed to it, and the smaller countries do not have to do anything until, I think, 2011.

More important than SAARC, at the moment anyway, are the bilateral agreements between different countries, particularly between India and Sri Lanka. There is now talk of a free trade area or bilateral trade agreement between India and Bangladesh. Essentially, while the relationship between India and Pakistan remains poor, although improving, SAARC is not going to go anywhere fast. I think that is why India is focusing on bilateral agreements, not just within the region but also with other countries, such as Thailand and Singapore.

Q215 <Mr. Purchase:> Are any of the national economies strong enough to withstand a greater degree of free trade than is presently operated? Do they not all need some protection, from each other and certainly from the rest of the world?

<Gareth Price:> That is not quite how it looks. India's tariffs are still among the highest in the world, but they have come down dramatically. The big issue throughout south Asia is not protection but tax. Income tax collection in Pakistan, India and Bangladesh is incredibly low. You end up with a very small industrial sector, which is the main source of tax, plus taxes on trade. If you suddenly say, "Let's have complete free trade and not collect any money", then suddenly India's 9 per cent. deficit turns into a 14 per cent. deficit. There is the same issue in Pakistan. Yes, there is a protectionist issue, but never forget that the Governments are relying on this money and need to widen their tax bases.

Q216 <Mr. Purchase:> It sounds like they need to make them more effective in terms of collecting what is due. Is it possible to widen the tax base in India with so many people in India without incomes worth talking about? Should not the rich people pay more tax?

<Gareth Price:> I think that in India 30 million or 40 million people pay income tax out of 1.2 billion. In Pakistan it is something like 1.3 million-they tried to raise it to 2 million and gave up. The number of people who pay income tax is very small. Obviously, that is largely because people are poor. They are trying to introduce value added taxes in south Asia, but, off the top of my head, taxes on trade make up about half the taxes.

The big thing that is not taxed throughout south Asia is agriculture, so 60 to 70 per cent. of the population depend on agriculture and are not paying any tax. A few plantations in India pay tax-if you are defined as a plantation, you pay tax-but 60 per cent. of the population are out of the tax net by definition, at least in Bangladesh, India and Pakistan. Sri Lanka is a bit different.

<Chairman:> That raise issues that we do not have time to get into now, but are certainly food for thought. May I thank you all for coming today, Dr. Price, Dr. Nelson and Mr. Griffin? I think we have found this a very useful session, which has given us a number of areas to think about. It also gives us public evidence on many of the things that we have picked up on our visits, which we did not actually have public evidence on. It is always helpful when people tell us in public what we have been told by others in private. That helps us in writing our report. I thank you all very much and conclude the session.