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America's Strategic Opportunity With India

Speaker: R. Nicholas Burns, Undersecretary of State for Political Affairs
Presider: Seymour Sternberg, Chairman and CEO, New York Life Insurance Company
October 23, 2007
Council on Foreign Relations

SEYMOUR STERNBERG:  I'd like to welcome everyone to today's Council on Foreign Relations meeting.  I'm Cy Sternberg. 

Our subject today is America's Strategic Opportunity in India.  I have some housekeeping.  You'll have to remember to turn off your cell phones.  I just did.  And that includes Blackberries and everything else.  Also, I'd like to remind you that this particular meeting is on the record.

I'm delighted to introduce our guest this morning, Ambassador Nicholas Burns, undersecretary of State for public affairs, he oversees U.S. policy in each region of the world.  And if you've seen the recent foreign relations essay he's authored in the November/December 2007 Foreign Affairs, an essay under the same title:  America's Strategic Opportunity with India.

As you'll note from Ambassador Burns' impressive biography, he has had an illustrious career of public service.  Prior to serving as undersecretary of State, he was ambassador to NATO, U.S. ambassador to Greece, spokesman for the State Department, on the National Security Council staff, special assistant to President Clinton for Russia, Ukraine and Eurasia, and director for Soviet Affairs in Bush 41's administration.

He has degrees from the Sorbonne, Boston College and Johns Hopkins.  I recently saw the ambassador when he represented State at a regular meeting of the U.S.-India CEO Forum which brings together -- it's a very unique forum.  It brings together government leaders and business leaders of our two countries.

I've heard Ambassador Burns speak many times.  He's truly an insightful, a dedicated and an articulate representative of the United States of America.

Please welcome Ambassador Burns.  The podium is yours. (Applause.)

R. NICHOLAS BURNS:  Good morning.  Cy, thank you very much for that very kind introduction.  Good morning, everyone.  It's a pleasure to be here in New York.  I am originally from Boston, Massachusetts, so I'm not going to gloat about the Red Sox -- (laughter) -- for all of you who may be Yankee fans.  But it's a pleasure to be here. 

I always find that sessions like this, and you've all been nice enough to come out early in the morning to listen to me, that it's much better if I don't speak too much at the beginning, so we have a chance to have a conversation.  And in my times at the Council that is always the best part of these sessions.  So I'm going to be mercifully brief and just try to give you a sense of how we in Washington, and perhaps how you in New York, ought to view our strategic opportunities with India.

And I say that advisedly because if you look around at the world, it's a multi-polar world, and it's a world where the United States needs friends, and it needs allies.  And despite our enormous power -- and we are still by any metric the strongest country militarily, politically, economically in the world -- we can't resolve any of the major challenges facing us, I believe, as a country without good friends and good allies.

We can't resolve any of the leading global challenges unless we think not unilaterally, but think about how to expand our universe of partners and friends around the world.

Think of the coming agenda in the world.  What is going to be ahead of our generation and the next generation?  Global climate change, first and foremost; trafficking of women and children; international crime cartels; international drug cartels; the rise of global terrorist groups, at least groups that have the ability to operate globally, and their nexus or juxtaposition with weapons of mass destruction, which is truly the most significant threat facing our country.

If you agree that that's the agenda for the future -- it's our agenda and the world's agenda -- we cannot resolve a single one of those challenges acting alone in the world.

So the job that we have in the government, and I would say more broadly the job that we have as Americans, is to expand the universe of our friends and allies.  And so you go around looking for those partners on a global basis, and there are very few countries or institutions that are truly global and that can work with a country like us on the global stage.  The European Union can do that.  Japan certainly does.  China is rising to power but perhaps hasn't met all of the tests of -- of a responsible world power yet. 

India meets that definition.  Now it's a country that is emerging from a foreign policy over the last 60 years that has prized nonalignment.  We would say as Americans at the end of the Cold War, we were famously aligned during the Cold War, but with the end of the Cold War, that that way of looking at global politics has also passed, and that India is clearly now thinking of itself not just as a nonaligned country, but as a country that wants to be a global leader, in terms of its private sector orientation, business and trade, in terms of its own foreign policy and how it looks at its own global interests.

And so with the rise of India we have an opportunity, because India is democratic as we are, because India has a global view that is remarkably similar to ours, with the rise of India we have an opportunity to make a strategic partnership with India of a type that we have not had before.

It's been 60 years this year since the creation of modern India.  There were a lot of expectations 60 years ago, and following Franklin Roosevelt's advocation of Indian independence during the Second World War, a lot of expectations in our two countries in the '40s, '50s and '60s we'd be natural global allies.  It didn't happen.

It didn't happen because the Indian leadership had a different view of its country.  We had our own preoccupations with the Cold War.

But I think 60 years later, after India's independence, there is now this opportunity for our two countries to work together, and to define a global strategic partnership of the type that we have with very few countries in the world.  And I think this opportunity is real enough, it has enough promise, that 20 or 30 years from now many Americans might say, India is one of our two or three most important global partners, the way that Britain and Japan and the European Union are today.  So I think that's the promise of this relationship.

How can we build it?  First of all we have an enormous advantage to start: we have bipartisanship.  It's a rare commodity in Washington, D.C., particularly these days.  But President Clinton began the opening, the great political opening, to India, to say to the Indian government and people, we ought to have a closer relationship, 10 years ago. 

President Bush, when he came into office, essentially doubled the strategic bet.  He said as early as the 2000 campaign, and certainly after he took office, that one of his major priorities should be to define a new economic, political, military relationship with this country.  And it's happening.

I think we've seen the greatest positive growth of any relationship we have in the world with India, over the last 10 years, and particularly over the last five or six years.  It is grounded in the fact that the private sector has led the way.  This is one of those unusual relationships where it has grown organically.  You in the private sector I think saw the promise of India perhaps many of us -- more so than many of us in government did.  If you look at the trade levels, the investment levels, the number of Indian-inspired joint ventures, Duke University -- in the United States -- Duke University says that one of every seven startups in Silicon Valley is an Indian or an Indian-American startup.  That's an amazing statistic.

And so we in government understand that we have to now replicate what you in the private sector have done.  Secretary Paulson is leaving Friday for Calcutta, Mumbai and Delhi.  And he wants to establish the same type of strategic economic and commercial engagement, government to government, that he's done -- with India that he's done with China and Brazil.  And I sat with him last week and talked about these opportunities.  And we have a CEO Forum where I met some of you a couple of weeks ago here in New York.  And I think the business community is very much responding to this.

Now we in government have to do our part.  And I'd just name -- I would like to name a couple of priorities.  I'll list them very quickly and simplistically so we can get on to a conversation.

First and foremost, there has to be a connection point where we overcome the anemic relations of the last 60 years and establish a vision for this relationship that will try to unite two governments and two countries.  And I think that issue has become civil nuclear power. 

I wouldn't have predicted that five or six years ago, but it is the one place where India has been isolated from the world for 35 years, because of the choices India made in the 1970s in testing a nuclear device, in become a nuclear weapons power, we and the rest of the world effectively isolated India and quarantined it if you will in a place where it could not trade in civil nuclear fuel or nuclear technology.

Now that made a lot of sense in the '70s and '80s and even the '90s, but President Bush took a look at it a couple of years ago and said:  We have a choice.  We can keep India in isolation, and we can maintain our ideological purity in doing so, but it won't bring us any closer to the Indian government.  It won't undo the fact that India has chosen to be a nuclear weapons power outside the Non-Proliferation Treaty.

But if we choose to relieve India from its isolation, if we negotiate agreement to bring it into at least conformance with the NPT, if most of its civil nuclear reactors will come under IEA safeguards, and if we then make a commitment that American industry can trade in nuclear fuel and technology, that will allow us to bring India closer to the United States, and to the other countries, in this agreement; but it will also allow the Indians to submit themselves in a way to a much greater level of international inspection that they have been -- that they have been willing to adopt for a very long time, for three decades.

That was the bet in the civil nuclear deal.  The president made it.  We negotiated it over the last two-and-a-half years.  It has become the symbolic centerpiece of the relationship.  It has become the issue on which India is assuming a global leadership position.  It has united Russia and the United States and the European powers in common cause.

We have had a major vote in the U.S. Congress in support of it.  And we hope very much that India will now complete the rest of the deal.  The Indians of course have a rather large coalition in  their government in Delhi.  The left parties have very recently over the last four or five weeks objected to the nuclear deal, and I've said it shouldn't go forward.  The Indian government now needs to make a decision.

We don't want to intrude on the internal politics of India, but we do believe the Indians need to make a decision at some point.  We hope the decision will be positive to go ahead with it because this agreement has enormous benefits for us -- environmental benefits.  India right now derives 3 percent of its energy from nuclear power.  It's also one of the largest and growing carbon emitters in the world.  If we're to -- if we are to have any chance to take on the challenge of global climate change, India and China need to be part of a post-Kyoto regime.  Nuclear power, civil nuclear power, is the principal way that India over the long term can address its energy needs in a clean way.  That's the first advantage of this agreement.

The second is we modernize the non-proliferation regime.  The single greatest problem with it over the last few decades has been that India has been outside, playing by the rules, but not allowed to join.  Other countries -- Iran, North Korea -- at various times have been inside the non-proliferation regime, and have violated the stipulations of that regime.  And so we hope to normalize and strengthen the non-proliferation regime by bringing India in.

This deal is good for us; it is good for India; it is good we think for the global community.  It's now up to the Indian government to make a decision as to whether or not it's going to go forward.  And I'd be very happy to discuss, for those of you who are interested, any aspect of this.  But I think our cooperation can be much more broad and ambitious with the Indian government.

In foreign policy, in India's region itself, South Asia, the United States now is vitally engaged.  We have vital interests.  We wouldn't have said that before 9/11.  Before 9/11 we would have countered America's vital interests in Europe, in the Middle East, perhaps in the Far East in our strategic alliances with Japan and Australia and South Korea and our relationship with China.

But since 9/11, given the fact that we are fundamentally engaged in Afghanistan with 27,000 American troops; given the fact that Pakistan is arguably the most important partner of the United States in our struggle against global terrorist groups; and given the fact that India now represents this enormous positive opportunity to expand our global alliances, South Asia now is for the first time in our nation's history, South Asia is a place of vital American engagement.

And I think in -- in -- if I look at our national security decision making over the last two or three decades this is the single greatest change that I've seen in the way that official America looks out at the world.  India is the key to progress in all of these areas.  India can be a partner of ours in Afghanistan, in the long term, in trying to rebuild the infrastructure of the country, to take on the counternarcotics challenge, and to help to strengthen the Karzai government to take on the Taliban and al-Qaeda.

India and Pakistan of course have a unique relationship, and as we wish to work with Pakistan on the counter-terrorism issue, we also wish to see India and Pakistan resolve the Kashmir problem, and to engage in the composite dialogue that their two foreign secretaries have been involved in to diminish tensions between the two.

You remember back in 1998 and 2002 the single greatest fear we had in both years that India and Pakistan, two nuclear powers, might go to war with each other.  If they can reduce the level of tension and work out a partnership of their own, it will be an enormous advantage for our country.

And so in foreign policy, in strict foreign policy terms, our ability to work with the Indian government to fashion a new relationship in South Asia is also an added advantage for our country.

There are in South Asia a number of regional conflicts that we don't hear about very much in the New York Times or on the evening news, but which are vitally important for the future of that part of the world.  In Sri Lanka there is a civil war where the Tamil Tigers continue to attack the government forces.  We are attempting to create a ceasefire, and the enormous suffering of the people of Sri Lanka.

In Bangladesh, a country of 140 million people, there's a struggle underway for the life of that country and the future of that country.  The two major political parties have essentially now been overthrown and the two leaders of those parties are no longer in national politics.  There's an interim government with a heavy military influence.  We'd like to see Bangladesh find its way back toward stability and democracy.  India is key -- is the key country in helping us work both in Bangladesh and in Sri Lanka.

In Nepal, we want to see democracy continue at a period of great evolution and change, but at a time when the Maoists are challenging those who believe in democracy, challenging them for national power.  And so in South Asia, India is the key actor, and will be the key partner of the United States.

In East Asia, India of course over the long term, with Japan, with Australia, with South Korea, can be a democratic ally of the United States.  Think of the possibilities.  Politically, India, the United States, Japan, Australia and South Korea, all democracies, all believe that the future of East Asia should be peaceful and stable and built on democratic development, built on free market trade of the type that India wishes to practice.

In East Asia, we also have an opportunity to do things in terms of military cooperation that are necessary to preserve stability.  You all remember the tsunami that hit South Asia and Southeast Asia on December 26th, 2004.  United Nations was able to get itself together over the course of a week or 10 days to provide large scale relief to the afflicted populations.  But in the immediate days following, on December 27th, -'8th, '9th and 30th of 2004, it was the Indian navy and air force, the United States military, the Japanese and the Australian militaries who banded together in a coalition of the willing until the United Nations could rouse itself to action.  And we delivered the immediate assistance that helped the people of Sri Lanka and of Indonesia and of the other countries that were hit by that enormous tragedy.

And so the possibilities for us with this Indian government, I think, are quite significant.

Now as we look towards the future over the horizon, having made the decision that we want to establish this relationship; having had the bipartisan support to do so; having the advantage of taking on the single most difficult issue, the civil nuclear treaty, and brought it to the edge of agreement, what are some of the challenges for the future?

First and foremost, defense cooperation.  India and the United States are not going to be allies in the conventional -- in a conventional way.  But we have a common interest in training together, exercising together, and deploying together when necessary.  That's a big change from the possibilities that we didn't have in Southeast Asia over the last five or six decades.  And we intend to -- we intend to move forward with the Indians.

There are great opportunities for American business as India retools and modernizes its military force.  For 60 years it has been a Soviet and Russian supplied -- largely -- military.  It is now turning towards the United States and Europe for advanced military technology, and that's an opportunity that our defense firms are very much focused on.

In terms of counterterrorism cooperation, India is a victim, unfortunately and tragically, and too often during the past year, of terrorist attacks from within its own region.  And we of course are a victim of global terrorism.  And so we wish to have with India both regionally and globally a partnership to prevent terrorism and to counter it when it does occur within India.

In terms of agriculture, India of course is a country as most of you know where nearly 700 million  still live on the land.  It's the greatest collection of poor people in the world, many of them living at under  2 (dollars) to $3 a day. 

The prime minister of India has launched a challenge to his own country and to the United States.  Can he unleash a second green revolution in India to emulate the great strides that were made in the 1950s and '60s by Indian scientists and agronomists in concert with America's land grant universities at the time.

Can we effect a second green revolution where this time it's not just our academic institutions but the American private sector that can make a difference with Indian agriculture in terms of production and in terms of delivery systems so that that sector, that huge sector of the Indian economy, can be modernized.

Prime Minister Singh said to President Bush in July of 2005, it's my highest ambition.  I'd like the United States to be involved in this.  And we very much want to respond.  I know Secretary Paulson will be talking about this on his trip to India next week.

And finally, in education, if you're looking for long term change in a relationship between two countries that most often are built by people, not just by forces, but by people.  And India we have now nearly 80,000 Indian students in this country.  It's the greatest number of foreign students in the United States, exceeding the level of Chinese, introduction into our universities.

This is an enormous connection point between our countries.  We see it in business.  And I think a lot of you do.  We see it in Silicon Valley.  We see it in the high tech trade that units Silicon Valley with Bangalore and Hyderabad.  I stood -- I was in Hyderabad last December.  I went to the Indian business school, which is a state of the art school, it's the equal of anything we have in terms of graduate business education in the United States, and I sat in the lobby and looked out.  And there was this enormous complex of buildings, walled compound.  I said, what's that?  And my Indian friend said, that's Microsoft's second biggest headquarters outside of Redmond, Washington.

The connections are real in the high tech industry between India and the United States.  It's been built on education, and on the educational connections we have with American students in India, and principal Indian students in the United States of America.

So that's a snapshot of some of the political, strategic, military, intelligence, counterterrorism and economic possibilities that we have with the Indian government. 

There are definitely problems in this relationship, as there are problems in any relationship that we have with any country in the world.  There are challenges that need to be overcome.  I think first and foremost among them is the need for us to work more effectively together to support the United Nations.

It's a curious irony that as we've had this great leap ahead in the U.S.-India relationship, we've learned to work with each other in a different way than we ever have before, bilaterally.  We haven't translated that into -- into the United Nations, into  multilateral actions. 

It's a curious place for the United Nations.  We -- Secretary Rice and I go up two  weeks a year during the UN general assembly.  We do so because we know we're the host country; we're the founding member; and we are the largest contributor. 

We have people like Bill Luers of the UN Association who of course argue for a strong American commitment to the UN.  And we believe, and I certainly believe, that we have to be dedicated to strengthening the United Nations.  But the politics of the United Nations tend to reflect the politics of a different era, where you still have the nonaligned forces and the developed forces.  And there is often a sterile debate between those two groups at the UN.

What we need are countries who can climb out of each camp and take a step towards each other.  And I believe that India can be that country that will of course honor its nonaligned past, but also think of itself as Indians increasing are doing as their country is sitting on the global, the unofficial governing board of the world.  It exists, along with China and the European Union and the United States and Japan and Nigeria and South Africa and Brazil, and to take on global responsibility for our most important global challenges.

That is what the United Nations needs to do, and I hope under Ban Ki Moon's leadership he can all upon India and the United States and China to take much greater responsibility to resolve the most pressing problems in the world.

So putting some teeth on the Burmese government for instance to open a channel to Aung Sang Su Chi.  That's what India and China should be doing under the mantle of UN leadership.

Making sure that the Iranians know that there won't be a normal relationship between India and China and the other countries as long as Iran is trying to build a nuclear weapons capability that will destabilize the balance of power in the Middle East.  Getting the peacekeeping forces into Darfur, the UN peacekeeping force, by December of this year.

These are -- those are three global challenges that we can't meet alone, that the UN can't meet alone, without the leadership of these rising powers in South Asia and East Asia. 

I do believe that India is taking on that responsibility, and I hope that China can as well.

So are just some thoughts to give you a glimpse into the possibilities that we have, and into some of the initiatives that we have undertaken.

On behalf of our government I'd be very happy to have a conversation about any of these issues.  And I'm happy to be here, and thanks for coming out so early in the morning.

Thank you.

(Applause)

STERNBERG:  Well, Ambassador, again thank you for your remarks.  I'd like to just follow up with a couple of questions, and then we'll open it up for questions from the members.

On the nuclear agreement, what specifically are the next steps that the Indian government has to take?  And do we have any indication from the Indian government that they will be taking those steps?

BURNS:  Thank you.  This has been a marathon of a negotiation.  The idea if a decade in the making.  The reality is 2-1/2 years of very tough negotiations at which I participated.  I made eight trips to India over the last two years.  And we're at the, let's say, mile 24 mark.  India has to do just one thing: it has to establish an IAEA safeguards agreement with Mohamed ElBaradei.  So in other words, an agreement where the IAEA will come into India and monitor its civil nuclear plants.  Because India is coming back into the international nuclear mainstream. 

If it does that then two other things will happen.  The United States will go to the nuclear suppliers -- this is the group of 45 countries that have nuclear power in the world -- and we'll ask the nuclear suppliers group to say -- to agree by consensus that the entire world is going to accept India, and now begin civil nuclear trade with India in a way they haven't been able to do for 35 years.

And then the final step would be the administration would go back to the United States Congress hopefully at the turn of this year, not too deep into our election year, which is always perilous, and say to Congress, okay, we've jumped through all the hoops you've asked us to.  We've done everything for the last 2-1/2 years that you, Congress, said we should do.  Please vote by a majority to approve a new era of civil nuclear cooperation with India.

I think Congress will do that, because I think we do have bipartisan support.

Now here's the key thing:  Will the Indian government take that first step with the IAEA?  Because the -- it wants to, but the four left parties in this large coalition have said, no, we don't want to go forward, because we don't want to have India have a strategic relationship with the United States.

That's up to the Indian government.  And the last thing I should do is enter into Indian politics.  So I won't enter into Indian politics except to say that we hope India will stick by this agreement and make the right choice and move it ahead because we do think this is in the national interest of India as well as  the rest of the world.

STERNBERG:  Let me just change the subject a little.  About a year ago Secretary Paulson, when he spoke to the CEO Forum in the U.S. CEO Forum, at that point he raised the issue of DOHA and the specific important role that India could play in advancing the DOHA agenda.

Clearly DOHA seems to be stuck.  Are we pleased with India's position on the -- in the trade negotiations?  Could they be doing anything more?

BURNS:  I wouldn't say we're pleased by it.  I think, you know, we've had with India and Brazil a very difficult conversation about some of the agricultural issues in the DOHA round.

Secretary Paulson is going to be giving a speech at the council in Washington tomorrow, and since he's our -- he's the chief economic official of the government, I think I should leave to him to characterize this in a specific way.  But I know that Sue Schwab, our U.S. Trade Representative, has been working very hard with Kamel Naf (ph), her Indian counterpart; with Chelso Amarine (ph), her Brazilian counterpart, to try to break this knot.

We want to have a success in DOHA.  It is actually imperative to have a success  in DOHA for the future.  But we're going to have to see -- we're going to have to see some movement from some of the other principal actors, and India is certainly among them.

STERNBERG:  The -- we -- we've watched as China has developed a stronger economy, almost a China-centric economy now, in Asia.  And you see a high degree of dependency of many of the countries that are around  China, on the Chinese economy.

Do we see India as playing a role as a counter-balance in Asia to the Chinese economy, not from a negative standpoint, but from a positive standpoint to ensure that the Indian power appropriately balances the Chinese power?

BURNS:  Well, I think maybe a lot of people in this room could answer that question better than I can, because they are in the global marketplace, and they see the impact that India is having.

I think, you know, I think these two countries are going to develop in a very -- a very different way.  And you know for a journalist, and for people who write about this, they also twin the rise of India and China as if they are -- it's a combined phenomenon, which in fact it's very different.

India I think is going to manifest its power in a different way than  China.  India is the world's largest democracy, first and foremost, and they are very eager to support the United Nations and the global democracy fund, to try to inspire democratic development in the world.  And that's a very different role than China is going to play, first.

Secondly, I think the military cooperation that is possible with India and the United States far exceeds what we could ever hope to do with China.

Third, there's a -- there's a power in Indian foreign policy because of the way that India has risen as a state over 60 years, the way it has acquitted itself.  It clearly is seen to be a -- a virtuous power by some of the other Third World countries, a country that can be helpful in resolving internal difficulties.  I mentioned Sri Lanka, Nepal, Bangladesh.  I think there is a power and an opportunity for the Indians to play a global political leadership role that is unique.

And so think we'll see India's emergence as a global power.  It will be different, and it will be perhaps more global in a political sense than that of  China. 

There is no question if you look at the trade and investment figures, and we sat together at the U.S.-India CEO forum a couple of weeks ago with the Indian and American business leadership.  It's surprising how small the bilateral balance of trade is right now, the levels of foreign direct investment.

Everyone sees the promise of India.  But we haven't seen the realization of it the way we have in the U.S.-China economic relationship.  So that's probably the area of the relationship where we need to see the greatest long term growth.

STERNBERG:  One last question before we open it up.  You talked again with respect to China, what impresses us about China is China has made significant investments in their infrastructure over the past five to 10 years, and that has certainly helped bringing the interior of China in closer at least from an economic standpoint to the cultural cities.  Is the coalition government issue, the democracy of India, getting in the way of that kind of investment in India?

BURNS:  I think they're focused on it.  If you look at India's rapid rise to influence in the world, it's been built on the ingenuity and the talent of the Indian people, the extraordinary number of engineers being graduated every year, their impact both in India and the global business community.

India's rise has been built on the -- on the talents of its own people.  It needs now the superstructure in order for that economic growth and political growth to continue.  So if you look at the airports in the country and the rail system and the port system, the Indian government understands there has to be a vast long term project to rebuild the infrastructure of that extraordinary country.

And the fact that it is a democracy I think is probably over the long term an advantage.  You might not see the single minded focus that an authoritarian political government like the Chinese government can give to a project like building the infrastructure for the 2008 Olympics, but it is going to happen.  And I think there are opportunities for American business in that huge growth that we ought to see in infrastructure in the future.

STERNBERG:  Right.  Okay, well, at this time I would like to invite the members to join our conversation with their questions.  I want you to wait for the microphone.  Try to speak into it.  Please stand, state your name and your affiliation, and if possible, please limit yourself to one question, and keep it concise so that we can have enough time for everyone.

Yes, right here.  Right here.  Oh, okay.

QWilliam Hazeltine (sp).  It seems to me the biggest strategic question, and the uncertainty with India, is the Pakistan issue, and the relationship to the U.S. with that issue, the relationship to China with that issue.  Should there be an unfortunate series of events in Pakistan, what will U.S.-India and Chinese reactions likely be?

BURNS:  Well, thank you very much.  I was State Department's spokesman 10 years ago.  I learned an important lesson, bitter lesson:  never answer a hypothetical question.  So I'll be true to your question by trying to answering the core of it, which I -- which was quite apparent.

I think this relationship -- first of all let me just repeat a point that I made in my remarks.  There are a lot of countries that are important to the United States in the world, but Pakistan is uniquely important.  Because that's where al-Qaeda is, and that's where the Taliban is as an organization.  And from Pakistan they attack across the border our 27,000 American troops that are sitting on very difficult terrain along the mountainous border between those two countries.

And those terrorists groups and the other indigenous Pakistani groups in Waziristan and Baluchistan are enormous factor contributing to the instability.  What happens in that country has a profound and direct impact on our country.  And that's why we have to be very focused on Pakistan, and why we contributed so much thought about how to make the country more stable.  We want to see an evolution toward democracy, the return of Benazir Bhutto last week, incredibly tragic bombings of her cortege as it came in through Karachi we hope will not be repeated in the next few months.  We hope there's a degree of stability so that President Musharraf and the other political leaders can keep Pakistan focused on its continued evolution towards greater democracy.

Second, Pakistan is our number one ally in the war against these terrorist groups.  So we have to be -- have a very tight knit and effective relationship with them. This does have implications for the question you asked.  Is there an American interest in seeing Pakistan and India arrive at a more stable relationship, and take on the greatest divisive challenges that they face in that relationship?  And the answer is obvious: yes.

Now they are two proud countries, very independent.  They don't need the United States to be a mediator, so we're not.  But we're a friend of both, and of course we're encouraging in the Kashmir conversation, we're encouraging positive forward movement we hope towards a breakthrough in the future.

In terms of Indo-Pak differences, and there are many, and specifically centered around their ability to combine forces to counterterrorist groups, we have a direct interest, and we help where we can.

So I don't think it's a relationship where the United States can see itself or fashion a role for ourselves the way we are for instance between Israel and the Palestinians as the direct umpire or mediator, but we're friends with both, and we should -- we should and are using that friendship to urge them to make progress in that relationship.

And I think the progress has been pretty good over the last few years.  Again, it's little noticed.  It's amazing what we don't read about in our press.  I'm not trying to complain about the press, just note that.  You know we tend to be focused on one or two or three big issues out there.  But this Indo-Pak relationship has shown progress.  Prime Minister Singh and President Musharraf have met several times.  They have found an ability to work together.  Their two foreign secretaries, my counterparts, engaged in a bimonthly dialogue.  And they are making progress.

So I think we can be reasonably assured that they are focused on this, and we should be helpful where we can be.

STERNBERG:  Yes.

QThanks, Dan Rosen, China strategic advisory at the Peterson Institute for International Economics.  Both China and India are rising great powers, are sort of a tipping point in terms of their posture in the world in the years ahead.  By focusing so much on the military side, the potential sale of U.S. defense systems, encouraging India to think of itself as the country with the most to offer in terms of, quote, ensuring China's rise will be peaceful, aren't we giving hawks in Beijing precisely the justification that they need to propound a more aggressive, robust Chinese military posture in the region?

BURNS:  I don't think so.  I don't think that China needs to be concerned about India's rise to power.  India has never been a country in its 60 years that has been a threat militarily to anyone in the Far East, much less China.  They did fight a border war in 1962.  And China has to understand, and I think does understand, that India's rise can be and should be peaceful, without threats or challenges to China.

But India has its own interests in the world.  India is a power in South Asia.  And the capacity of the Indian military to play a positive constructive role in maintaining peace and stability in Asia is quite important.  And so if there is, if there is an expansion in American defense sales to India -- I don't know if there will be, I hope there will be -- in the next several years, China should not take that as an aggressive sign.

I think China's challenge is different.  Neither India nor the United States wants to try to contain China.  We want to engage China, and very decidedly so.  And what's the challenge for China?  It's to become a responsible global power.  It's to rise to the challenge and to use its influence in Sudan to convince the Sudanese government to allow a fully fledged and powerful UN peacekeeping force to go into Darfur in just the next six weeks.  It's to use more influence than it's using, to counter Iran's -- and persuade Iran not to become a nuclear weapons power.

As European and Asian companies diminish their trade and investment with Iran, that is happening.  And as international banks and financial institutions begin to shut down lending to Iran -- and that's happening -- China tends to fill the gap.  Chinese-Iranian trade is shooting through the roof.  That's not responsible.  China needs to use its influence in the world for positive -- it is part of the leadership in the world.  It must take responsibility whether it's in the UN or on any number of these regional, difficult regional problems, and step up to the challenge of leadership.

So I don't think the Chinese need to be focused on India.  I think they continue to be focused on that global leadership role.  And it's on that basis that we are engaging China, and urging them to be a more active and responsible global power.

STERNBERG:  Yes.

QBill Drew with the  American Council on Germany.  Ambassador, you mentioned India is on the unofficial governing board of world politics.  Why not make it official?  Why not push harder to have India become part of the G8, and even for that matter the UN Security Council?

BURNS:  Well, that's a -- Bill, thank you for that question.  That's a really interesting challenge that we're all going to have over the next 10 years.  A lot of the major international institutions that we think of as providing the framework for international order, the United Nations principally, the G8 is another,  were -- were born in a very different era, the United Nations of course famously in the wake of the Second World War.

President Bush came to the UN three weeks ago, four weeks ago now, and he said, in the second, in the penultimate paragraph of the speech that we ought to modernize the United Nations, that we ought to expand the Security Council in terms of its membership.  This is the clearest call by an American president to expand the Security Council, and that we ought to think about who should come on.

Now the United States is officially supporting Japan, and we have not lent our support to any other country.  But in this article that I have written for Foreign Affairs on our strategic opportunity for India, I do say that all of us need to think about India's growing role in the world.  And international institutions will need to accommodate those -- (inaudible "values"?) -- to a leadership role for India.  There is no question about this.

Now modernizing the Security Council is an enormously complicated process.  You need 128 votes in the UN General  Assembly to amend the charter.  A mass of 128 is extraordinarily difficult, because you have over 50 votes in Africa; you've got over 45 votes in Europe; and putting together a reasonable combination is quite -- is quite challenging.

We have said, the United States, that we believe that any expansion should be relatively modest, say by five or six members, because we don't want to have such a large expansion you couldn't predict the impact, possibly negative, it could have on the functioning of the Security Council.

We support Japan.  But in terms of regional leadership, right now there is no representation on the Security  Council from the well more than a billion, billion and a half people who live in South Asia; no representation in Africa; and no representation in the Americas outside of the United States of America, but no representation in Central, in South America.

It's hard to think that the Security Council can remain an effective, credible, body of the United Nations if there is not a broadening of the global leadership on that council.  And India is going to be right up there arguing for a place in that council along with Brazil and South Africa and Nigeria and Indonesia and some other countries. 

We think the Council has a very heavy  European focus right now, if you look at three of the five permanent members.  And we ought to be looking more broadly around the world to see how it could be democratized and made more credible.

In the G-8, as you know, for the last several years the G-8 leaders have invited five countries, five so-called developing countries, but they're modernizing countries, to engage in a dialogue with, and India is one of those countries.

So I think it's a matter of time before we see soon to be the largest country in the world by population -- India will overtake China in about a decade in population -- it's a matter of time before we see India, I think, at the center of these global institutions.  And that will make it much more possible for us, I think, to make these institutions more relevant and more credible to the great number of people who currently don't feel any stake in it because they're not represented on these leadership bodies.

STERNBERG:  Back table over there, yes.

QUESTIONER:  Sir, my name is Imran Riffat, and I'm from the Synergos Institute.

Referring to the nuclear agreement between India and the United States, it seems quite likely that the Indians will not be able to deliver what is needed to bring it to closure.  Should that be the case, what is plan B?  Will this thing be wrapped up and put away in the cold storage, or will something other than this be put on the table for consideration?

BURNS:  Thank you very much.  I'm not as pessimistic, but you may be better informed than me.  I mean, it's a very dramatic situation in India, and I assume you don't want a comment on the internal politics, because that would be -- (inaudible) -- internal politics of India.

I'd say this.  The Indian government made an announcement yesteday.  There was an announcement by the foreign minister, Foreign Minister Mukherjee.  He's been meeting with the coalition partners.  Of course, that announcement did not say that the deal was dead.  It said that the consultations will continue within this enormous coalition.

I would say this.  This agreement is important for the United States and India.  It's important for the global community, which has been very largely supportive of it.  There are enormous benefits to be gained -- economic, environmental and strategic -- should it go forward.  And I think, consequently, there will be damage if it doesn't.

And so we hope very much that the Indian government will be able to go forward.  It's going to have to find its way forward on its own and make some tough decisions domestically.  We don't want to interfere in those decisions, but we are certainly saying this is a time for reflection, and we hope eventually a time for action to push it forward.

We don't have an unlimited amount of time, I'm sorry to say.  We in our country, as you know, will be entering an election year.  And if you're thinking about significant pieces of legislation to put onto Capitol Hill, it's never a good idea to do that in the spring or summer or autumn of an election year.  So we'd like to get this agreement to the United States Congress by the turn of the year.

STERNBERG:  Yes, back there.

QUESTIONER:  My name is Ravi Okuri (ph) and I'm the chairman of -- (inaudible) -- and part of the executive management committee of New York Life.

My question relates to the 700 million people that you talked about that live below the poverty level in India.  I think sometimes it's difficult to understand that India, being a democracy, this is a very important constituency. They elect people.  They throw governments out.  And they are very important in the coalition that exists in India as to how the coalition is managed.

And I commend you for actually referring to it, because most people don't talk about it.  And in my opinion, and what I'd like to hear from you, sir, is that what specifically is being done to address that population?  I know you mentioned agriculture, education, health.  I mean, these are the important issues that this group of people understand well.

They do not understand the CEO meetings.  They don't understand the nuclear pact that you talked about.  They do not understand a lot of the other things that have been talked about.  But they do understand health, education and agriculture.  And it's a significant effect, and I'm not sure that specifically enough is being done in that area.

STERNBERG:  Reaction, Mr. Ambassador?

BURNS:  Thank you very much.  I think you're absolutely right to point to that community as a very powerful community in India itself.  And we were really struck -- back in July 2005, Prime Minister Singh came for a state visit to Washington.  We've had very few state visits in this administration, and so the president wanted to signal how important this relationship is, in addition to civil nuclear power and education and the foreign policy issues I talked about.

The prime minister made a very strong plea that the United States would try to help in modernizing India's agricultural system.  Now, the Indian government is going to be responsible, in responding to all the needs that you mentioned, health and infrastructure.  But on agriculture, we do have a track record.

Norman Borlog and other American scientists and agronomists were instrumental in working with our Indian colleagues 40 years ago in the famous Green Revolution that lifted India out of -- the Indian agricultural sector out of where it had been and brought it into a modern structure and relieved the starvation that some Indians had suffered, unfortunately, through many, many decades.

Now the Indian government understands it needs to take another leap forward.  We formed a joint committee of our governments.  And as so often happens, when we took stock of this a couple of weeks ago, it turns out that we have a lot of people from our government talking to a lot of people from their government.  I don't think we've really reached the level of ambition that is there.

And at the CEO forum, we made the suggestion that we really need to see the private sector of the United States and the private sector of India become the core of this.  And I hope that when we have talks next week during Secretary Paulson's visit and Ambassador Mulford, when he engages the Indian government, we can get a buy-in from the private sector.  And I think the private sector is going to be willing.

It's the government allowing the private sector to come in to be the heart of this, because it is an enormous group of people, 700 million.  And the problems that they are facing are very complex.  And we can only be a small part of the puzzle that has to be put together to fix this problem, but we do take on the challenge that the prime minister has given us.  We want to make more of this.

And I think we should not have a statist approach, but we really look to our own comparative advantage, which is the American private sector, to see this kind of generational change.  It'll be an extraordinary accomplishment if India can meet this challenge, and we hope it can.

STERNBERG:  Right here at this table.

QUESTIONER:  (Inaudible.)

Secretary, you talked about the instability in the region around India, all the countries that have issues within them.  You could have added Burma and issues in Tibet.

And my question is, how effective do you think the coordination of foreign policy can be between the United States and India?  If our goal is to stabilize all these countries, then arguably the Indian goal is to maximize its hegemonic role.  And the British rajas' policy in the region for several hundred years was to keep all the neighbors off-guard, divisive and weak, and India arguably follows the same policy successfully and takes leadership in the world.  And therefore can we really push our policy of stability in the region?

BURNS:  Thank you.  Matt, thank you.

This gives me an opportunity to say -- I don't know if anyone knows, but Matt, for the better part of the last decade, has been the intermediary between Greece and Macedonia in trying to resolve the infinitely complex issue of the name of Macedonia.  And so we thank him for his efforts.  And I know he's just about to embark on another round of negotiations, and we wish him well and wish both countries well.

Having said those nice things about you -- (laughter) -- Matt, may I respectfully disagree with the way that you've characterized the basis of Indian foreign policy.  (Laughter.)

QUESTIONER:  I meant to be provocative.

BURNS:  I know you did, and you got a rise out of me.  See that?  You succeeded.

We see the Indian role to be very different.  Now, you know, we have our share of differences with the Indians.  But in large measure, the Indians are trying to use their political and diplomatic power for good ends in South Asia.  South Asia is a very unstable part of the world.

In Sri Lanka, Nepal and Bangladesh, we have effectively worked very closely together with India for the first time in 60 years.  There was never this degree of coordination in foreign policy between the United States and India -- never -- in the '90s, the '80s, '70s, all the way back to the birth of India 60 years ago.

This is an advantage for our country.  It allows both of us to use our political power in the world to try to resolve a civil war in Bangladesh -- excuse me -- in Sri Lanka; to try to help defeat the rise of a violent movement in Bangladesh and to keep that country -- help it be stable and united and oriented towards democracy; and in Nepal, to see a drift away from one political system dominated by the king towards a more truly democratic system without the intrusion of the Maoists as the dominant factor.  That's what we're trying to do.

On Burma, the challenge is different.  India and China have influence.  What we are asking, what I think the secretary general of the United Nations is asking, is please use that influence.  Mr. Gambari has been traveling around Southeast Asia; the U.N. secretary general's representative.  He's not been allowed to go into Burma yet.

The government of Burma has pledged to set up a channel with the Nobel Prize laureate, Aung San Suu Kyi, who is the leader of the democracy movement.  Only the U.N., we think, can create this channel, and India and China have the kind of influence that they should be bringing to bear on the Burmese authorities.

So we don't always agree with the Indian government on foreign policy issues, but there has been a dramatic change in our ability to work with them.  And that's in our country's interest.  So I would be more kind towards the Indians, Matt, in terms of their motivations than you have been.  But I do think we'll agree on the opportunity for both of our countries.

STERNBERG:  Yes, over there.

QUESTIONER:  Mr. Secretary, my name is Roland Paul.  I'm a lawyer (from ?) the government a couple of times.

You've several times said Pakistan is an important -- a major ally of the United States, which is obvious in the war against terror.  So I hope you'll take another question about Pakistan, and that is simply, what is it about the return of Benazir Bhutto that's going to help us deal with the North-West territories and Waziristan with regard to fighting al Qaeda and the Taliban up there?

BURNS:  Well, thank you very much.

I think it's important that we Americans, particularly we Americans in government, resist the temptation to try to micromanage other people's politics.  And so I'm going to resist that temptation, because the sensitivities, obviously, in the evolution of Pakistani politics with the return of Benazir are so large that I think we need to let the Pakistani leaders, Musharraf and Benazir Bhutto and others, work out their own relations and work out a way for them to hopefully contribute together to the strengthening of Pakistan.

Where we have to be vocal and active is in trying to help Pakistan resolve problems that affect our vital interests.  Al Qaeda is the major adversary that we Americans have in the world.  It struck this city on 9/11.  It has the potential to inflict great damage on our country and our people.  We must defeat al Qaeda.  And Pakistan is the central partner of the United States in that venture.

Afghanistan is a place where we've made a long-term commitment to President Karzai and the Afghan people.  We have 27,000 American troops there.  That's nearly double the troops that we had when NATO entered when I was ambassador to NATO back in 2003.

And so to be successful in Afghanistan, we have to have a successful policy in Pakistan.  And that has to do with our counterterrorist cooperation and our military cooperation on the border and the responsibility the Pakistani authorities have in Balujistan and in North and South Waziristan to be effective in countering the influence of those terrorist groups.

So, you know, we have to -- we are a government that has to be concerned with all issues -- with human rights, with narcotics production, with trafficking issues.  But in Pakistan, the number one issue has to be the counterterrorist struggle.

And I think, on that basis, we've had a productive relationship, an effective relationship with President Musharraf.  We do not doubt his good will.  We know that he has put his life on the line, and he's been challenged several times by the terrorists to assert a partnership with the United States, and we are very grateful for that.

But we also hope, over the long term, that the Pakistani leaders will be able to work out an evolution towards a greater democracy.  And in that sense, the arrival of Benazir Bhutto, for many years in exile, in Karachi is a very significant development.  But it's for Pakistanis to work out that road back to a more perfect democracy.

STERNBERG:  Mr. Ambassador, we have national members participating via teleconference, and we did get one question via the teleconference that is directed toward Iran.  It's from Charles Cogan from Harvard University.

"Is it correct that right after 9/11 the Iranians came to us with an offer of rapprochement?  If so, what were the terms they offered, and what happened to this initiative?"

BURNS:  And the answer is, to that very good question, I don't know.  (Laughter.)  I was, after 9/11 -- I was in Brussels with NATO for four years after 9/11.  You know, there's an interesting side.  So many people want to focus on what offer did the Iranians make us in 2002?  What offer did they make us in 2003, and did we accept it or not, and why didn't we?

I care about what's happening right now.  Here's what's happening right now.  Javier Solana is in Rome today, the European Union foreign policy chief, and he's representing the United States, China, Russia, Britain, France and Germany, the P-5 countries, with Iran.  And unfortunately it looks like Mr. Larijani has resigned and there's a new man, Mohammad Jalili, who's taken his place.  And they're meeting, as we speak, in Rome.

So the really pertinent question is, is Iran going to accept the offer of the P-5 countries, including the United States, to sit down and negotiate?  Here's what we've offered.  We've said to the Iranians, "We will build you a civil nuclear power system in Iran."

This is President Putin's idea, which the United States has embraced.  "All of us will form a consortium to do that.  If you want electricity production, if that's what you really want, you can have electricity production through civil nuclear power.  But we're not going to give you access to the more sensitive aspects of the fuel cycle, including enrichment and reprocessing, because, frankly, you misled the IAEA for 18 and a half years about your secret research in that field.  That will be done offshore."

This is a Russian idea.  That offer was made on June 1st, 2006, turned down by the Iranians.  We said, "Please come to the negotiating table."  Condoleezza Rice said, "I will be at that negotiating table," the first time an American secretary of State would have met the Iranians on that basis since 1978-'79, a long time.  They turned us down.

We sent Solana out in June of 2007, this year, and said, "Please put that offer back on the table."  He did; turned us down -- us meaning Russia, China, Europe, the United States.  He's back today in Rome to make a similar offer, and we hope they'll accept it.  And when Secretary Rice was in Moscow 12 days ago, she said publicly, with Sergey Lavrov beside her, she said, "If they accept the offer, I will be there, and any issue can be discussed."

So I think, rather than go back into the archives of 2001 and '02 and '03 and who said what, who responded to whom about offers that may or may not have been made, I think it's much more relevant what's happening today in the world.  And the fact is that we need to have and want to have a diplomatic solution to this problem that the Iranians have presented that will destabilize the balance of power in the Middle East, an Iranian nuclear weapons capability.  We are looking for a peaceful way to resolve it.  We have offered diplomacy.  They keep rejecting diplomacy.  And so I really think the ball is in their court.  And that's how I would answer that very good question.

STERNBERG:  Let me take one last question, and hopefully we can come back to India since that's the subject of today's meeting.  Back there, yes.

QUESTIONER:  Hi.  Ken Silverman with Fuji TV.

This isn't about India, but it does relate to -- (laughter) -- the universe of partnerships in the world.

Yesterday there was a high-level meeting between the United States and North Korea here in New York --

BURNS:  I think you asked -- I walked by the U.S. mission yesterday and you asked me this question, and I said no.

QUESTIONER:  Well, to follow up, I was just wondering -- (laughter) --

STERNBERG:  Could we -- no, really, I do want to get -- I'm sorry; I would like -- does anyone have a question on India?

BURNS:  I really don't know the answer to your question.

QUESTIONER:  Well, my question -- forgive me, sir -- is what do you see as the proper timing to remove North Korea from the list of state sponsors of terrorism?

STERNBERG:  Thank you.

Yes.  We've got someone -- yes.

QUESTIONER:  Thank you.  Bal Das from InsCap Partners.

Ambassador, I'd like your views on a matter that is not touched upon too frequently.  At some levels, the United States globally is engaged -- this is domestically -- trying to understand Islam.  And I understand -- when you look at India and you look between 150 (million) and 200 million followers of the Islamic faith making it outside of Indonesia, possibly Pakistan, the largest concentration, who, by and large, outside of Turkey, seem to be engaged in a democratic way of life, living fairly decently, doing things other people do, what lessons does India provide to the United States from that standpoint in trying to understand Islam and how you are going to handle it in the context of your otherwise global engagement?

Thank you; interested in your comments.

BURNS:  I think that's a terrific question, and thank you for asking.  I'll try to do justice to the good question you've asked.

I think that, you know, the United States is a country that has successfully, in many ways, integrated our own Muslim community into our society.  And it's been those people, because they've been such good citizens.  They're integrated into every facet of American life.

So I think we have an appreciation of Islam from our own country, from the 6 (million) or 7 million Muslim Americans, and from Keith Ellison.  I met him the other night for the first time, our first Muslim-American member of Congress.  He took the oath of office on the Koran.  It was a signal moment in our society, profoundly powerful to see him take office.

I don't think the United States needs to go searching overseas in lessons, because I think we have a very viable Muslim community in our own country.  But I would say this.  I went to Hyderabad last year principally to talk to the Muslim community of Indians.  It's an extraordinary community, as you know very well.  It's contributed so much to India's history and its growth and its future -- (inaudible) -- its future.

And I think one lesson that we can all learn in looking at the Indian experience is the value of tolerance and the value of integration and the value of creating a society where everybody has a chance.  I mean, we all believe that about our own societies, and I think it's true of India.  And that's, I think, principally, in part, why that community feels so Indian and committed to India.

You don't find that in Brussels, Belgium, where my family and I spent four years, where my kids viewed the separation of the Muslim community from Belgian society.  You see the same thing in the Netherlands, with the story of Ian Persi Ali (ph), who's come to our country to seek refuge and to seek freedom as a Muslim.

And so I think India is a beacon, is an example for the rest of the world.

I would also say this, and I'll just say this maybe as a way of concluding this discussion.  The United States has shown by deed that we're interested in positive relations with Muslims around the world.  We intervened in Bosnia in October-November 1995 to save a Muslim population from the Serb army.  We intervened in Kosovo in 1999 to save a Muslim population against the Serbs.  We intervened in Afghanistan, with the support of the Afghan people, to rid them of the Taliban.

And so we have proven, I think, that we don't have territorial ambitions in the world, but we're quite willing to defend Muslims who are at risk.  And I think we can be proud of that.  And you just mentioned Turkey.  You refer to Turkey.  That's a country that's so much in the news today, you could devote an entire session of the Council to Turkey, and we should.

But I hope we make the right decisions here.  Horrible things happened 90 years ago to the Armenians in the waning years of the Ottoman empire, but it was 90 years ago.  And our major ally in the Middle East, Turkey, now feels profound sensitivities about a country like the United States pronouncing itself on an infinitely complex matter.

And I certainly hope that the United States Congress will not pass that resolution concerning Armenian genocide.  And I hope that we will be able to show the Turks that on this very difficult situation along their southeast border, where 50 Turks have been killed in the last three weeks by PKK cross-border attacks, we will help, using our influence with the Iraqi Kurdish leadership, with Mr. Barzani and Mr. Talabani and the Iraqi government in Baghdad, that we will help to put together a negotiation that will bring the PKK back from the border.  It's a vicious terrorist group.  And we ought to support the Turks, and that's what our president and secretary of State are trying to do.

So I got a lot into one answer through a very good question.  But I wanted to say that, because Turkey is our most important ally in the Middle East.  It's a NATO ally of the United States, and it's an example of a successful Muslim democratic society.  We have to be very careful in the way we talk about issues concerning Turkey, and we have to remember to be a good friend to the Turks.

STERNBERG:  Well, Mr. Ambassador, your plate is obviously full.

The ambassador has to get back to Washington for a meeting.  He has to make a shuttle flight.  I've been informed of that.

So we're going to -- I want to thank you again.  I think this was just an outstanding session.  (Applause.)

We're adjourned.

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