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welcome President Pervez Musharraf. Pakistan and the world. Please a clearer picture of his view of security, and he would like to give on various interests as well as which will include some agreements interest, particularly in Australia, to spearhead this expansement of expressed his pleasure at being able expressed his pleasure at being place. President Musharraf has in which most of that has taken and the general upheaval in the area and the general upheaval in the to combat terrorism around the world to combat terrorism around the upon it by the rise and the efforts that have been more or less forced considerably as a result of events its image in the world quite It is broadening its interests and its image in the world It is broadening its interests and period of diplomacy for Pakistan. Australia. It marks a very active the first head of state to visit just heard, President Musharraf is Minister in the '80s, but, as you've Minister in the '80s, but, as Hawke went to Pakistan as Prime visits has been so infrequent. Bob exchange of top-level political visits has exchange of top-level political a long period of time, that the and in the sporting arena over such engagement between the two nations surprising, given the extent of our our forum today. It's rather particularly General Musharraf to first time a President of Pakistan, great pleasure to welcome for the Australia Bank Address. It is a welcome to today's National gongs) Ladies and gentlemen, welcome to today's nab welcome to gongs) Ladies and gentlemen, General Pervez Musharraf. (Bell guest at the National Press Club, a nuclear confrontation. Today's India over Kashmir amid fears of of recently he has held talks with parliamentary government. More power in 1989 before restoring President and army chief, he seized terror and combatting al-Qaeda. supporter of the US-led war on Pakistan to visit Australia, a supporter of the U s. supporter of the U Pakistan to visit Australia, a He's the first head of state from

play located, and we are committed to have very Telstra teenagecly independence, unfortunately. We population growth, right from our done consistently very well is large done consistently very well is population. One area where we have pivotal state of 150 million and gentlemen, Pakistan indeed is a security and development. Ladies on Pakistan as a link for world It has been suggested that I speak on Pakistan as a link for It has been suggested that I speak respective regions and in the world. of peace and development in our common commitment to the promotion forward to it, because we have a and commercial ties, so I look political relationship and economic catching up to do, in all fields of been the losers. We have a lot of and may I also add, I think we have been the losers. We have a and may I also add, I think we have leader from Pakistan to Australia, this being the first visit of a international issues. May I say Howard, to discuss bilateral and Prime Minister, Prime Minister John forward to my interaction with the time we have come here. I'm looking time we have come here. I'm wife and my delegation since the courtesies being extended to me, my the cordial at this and many courtesies being extended to me, the cordial at this and many for all the warmth, the hospitality, people and government of Australia to express my gratitude to the before I say anything, I would like august gathering. First of all, an opportunity to address such an to the Press Club for providing me gentlemen. I am extremely grateful distinguished guests, ladies and distinguished guests, ladies and members of the National Press Club, National Press Club, honourable Mr Ken Randall, President of the Thank you. Thank you very much. Thank you. APPLAUSE

portrayed Pakistan as a breeding ladies and gentlemen, has sometimes better place. The Western media, ladies and gentlemen, has better place. The Western media, region and the world a safer and a contribution in trying to make our acknowledge and appreciate our that today most world leaders policies, notwithstanding the fact associated with Pakistan and its been cast and false notions that are been cast and false notions that mention that aspersions that have world. - world security. I will mention that aspersions that have world. - world security. I will and in helping to strengthen the actions are helping to address them, challenges, and how our policy and happens to be at the centre of these happens to be at the centre of context, I will explain why Pakistan context, I will explain why destruction proliferation. In this context, destruction proliferation. In this over nuclear and weapons of mass rising extremism, and the concerns Islamic societies, the fear of polarisation between Western and terrorism, the danger of of all talk about the new threat of development. I would like to first crucial role for world security and have obliged Pakistan to play a very have obliged Pakistan to play a present when global circumstances have obliged Pakistan to play a present when global circumstances the future. I will focus on the concentrate on is the present and China to the world. But what I will China to the world. But what I consequently led tot opening out of consequently led tot opening out more than three decades ago, which between United States and China link in providing the linkage between United States link in providing the linkage or when we became a very crucial important securitial lines systems when Pakistan was part of very I'm not going to go into the past playing a - Telstra teenageally. located, and we are committed to playing a - Telstra teenageal

and Pakistan was used in the lead role for this jihad against the Soviet Union. Who fought this jihad. , other than the foreign people themselves? About 2 About people themselves? About 2 About 20 to 30,000 people from all over the Western world, especially the Arab world, were Western world, especially the Arab world, were brought in, equipped, financed and sent into Afghanistan. Secondly, there were Taliban from role and Pakistan was used in the lead done by the West, the United States, to the Soviet occupation. This was initiated in Afghanistan in response initiated in Afghanistan in jihad, or a religious war, was Soviet invasion, as I said. A started in Afghanistan with the is 1979 when the real upheaval Soviet invasion of Afghanistan. It the happenings since 1979 with the Soviet invasion of Afghanistan. the happenings since 1979 with the all, and I would like to start with happening in Afghanistan, first of like to speak on what has been responses to each of them. I would is important then to understand our the past 2.5 decades, because that we have gone through, especially in the past 2.5 we have gone through, especially in important that we need to know what Therefore, I consider it very their proper perspective. these aspersions, placing facts in these aspersion would like to first of all clear up weapons of mass destruction. I a potential pro live rater of agencies. Pakistan is suspected as agencies. Pakistan is suspected as accusations against our intelligent extremist policies. There are supporting the Taliban and their extremist. We were long blamed for as troubled, intolerant and ground for terrorism and a society

Secondly, there were Taliban from Afghanistan, equipped, trained, financed, weapons given, sent in to Afghanistan, and there were a Afghanistan, and there were a number of other independent groups from Afghanistan, and there were a number of other independent groups from Pakistan, many religiously motivated, again equipped and sent into Afghanistan. This was the jihad which was raged for 10 long years from 1979 to '89 against the Soviets. Ladies and gentlemen, Afghanistan and Pakistan paid a Afghanistan and Pakistan paid a very heavy price for this Afghanistan and Pakistan paid a very heavy price for this jihad against Soviet Union, but may I say that Soviet Union, but may I say that the West benefitted, because it was West benefitted, because it was this jihad, or this war against the Soviet Union which acted as a catalyst to freedom movements in eastern Europe and also, may I say, facilitated the break-up or the collapse and the unravelling facilitated the break-up or the collapse and the unravelling of the Soviet Union. So it was the war in Afghanistan, fought by all these groups, which led to the collapse groups, which led to the collapse of the Soviet Union and victory in the Cold War, but however, our region suffered. Unfortunately, after these 10 long years in 1989, everyone left us in and Pakistan everyone left us in and Pakistan was left high everyone left us in and Pakistan was left high and dry to fend for itself, and it led to warfare by tribal war Lords in Afghanistan. About a dozen tribal war Lords fighting among themselves, ravaging the nation, destroying the nation the nation, destroying the nation of Afghanistan. But the fallout on Pakistan was 4 million refugees Pakistan was 4 million refugees coming into Pakistan. And together with these refugees, of course, and its impact on Pakistan in the whole decade of the '90s, all the Mujahadeen who were held up in Pakistan, Mujahadeen who were held up in Pakistan, the 20 po 30 who came Pakistan, the 20 po 30 who came from all over the world, they started co-lessing into al-Qaeda during the decade of the '90s. The phenomenon of the Taliban emerged in the of the Taliban emerged in the middle of the '90s. I have always been advocating then when I came on the scene in 1999, that we advocating then when I came on the scene in 1999, that we ought to recognise, we ought to interaction with the Taliban, with the Taliban, so that the world joins hands in moderating them and changing them from within. But, however, unfortunately, this was however, unfortunately, this was not agreed by anyone. I did thought about it to everyone in the world. But whatever happened in the decade But whatever happened in the decade of the '90s, the situation in Afghanistan started going from bad to worse, and al-Qaeda was created, so much so that with all the financing from the Middle East, al-Qaeda started exercising dominance and influence on the Afghan Government and the Taliban, while we were Afghan Government and the Taliban, while we were there only to have recognised Taliban, we were alone. I often wonder now, with hindsight, if my pleas to recognise the if my pleas to recognise the Taliban and try to change them from within had been accepted, maybe the bombings could have been saved and maybe even the 9/11 bombings could have been saved and maybe even the 9/11 do have been averted. However, the world did averted. However, the world did not agree and we with woke up to the reality of the situation with the

catastrophe attack on 9/11 - terrorist attack of 9/11. With that, Pakistan was catapulted again as a front line state, and the centre stage after 12 years of front line state, and the centre stage after 12 years of stag nation since 1989, but, however, this time the world was opposite. International fight, we were again in the front row to fight against terrorism, but this time we were supposed to undo what we together did in the '80s. That is what Pakistan faced. So this is all Pakistan faced. So this is all that happened in Afghanistan and Pakistan faced. So this is all that happened in Afghanistan and it followed on Pakistan. Then let's look at the eastern border. The Kashmir freedom struggle started in 1989. I won't go into the details, but 16 years on, today, 17 years on, it's still continues unabated. All this turmoil on our eastern border and the this turmoil on our eastern border and the west had a tremendous and the west had a tremendous impact on the society in Pakistan. Ladies and gentlemen, having given this overall picture of what has been happening in our region and its fallout on Pakistan, let me say fallout on Pakistan, let me say that Pakistan rejects terrorism. We Pakistan rejects terrorism. We have suffered on its count. Terrorism anti- suffered on its count. Terrorism is anti-progress, reaggressive and a threat to modern societies, there threat to modern societies, there is no doubt in our minds. Society could not have escaped the negative fallout of hosting millions of refugees. I know your response refugees. I know your response when there were about 150 or 200 there were about 150 or 200 refugees coming to Australia. We had 4 million of them coming to Australia. We had 4 million of them in Pakistan. We have found conflict and the Kashmir freedom struggle had its impact on us. Over the years extremist organisations sprang up in Pakistan,

with elements susceptible to go with elements susceptible to go into terrorism. We are fighting terrorism in Pakistan. We have terrorism in Pakistan. We have used force. We have deployed 70, terrorism in Pakistan. We have used force. We have deployed 70,000 troops on our western border. We have paid a price. We have have paid a price. We have suffered about 250 casualties, but we are winning. Why do I say we are winning? Because we first operated against the al-Qaeda in our city against the al-Qaeda in our cities. These are the people, the same mu These are the people, the same mu ja ha These are the people, the same mu ja ha Dean who were holed up in Afghanistan during the '90s when it was shifting place into Pakistan, into our cities. So we operated against them and very successfully, using all intelligence means. We apprehended, eliminated, deported over 700 al-Qaeda members. Many of them have been the over 700 al-Qaeda members. Many of them have been the top leaders of al-Qaeda. The latest catch was Abu Furraj Libby, who was the man who mast mind the suicide attack on me. He was the latest attack. He was the third in the the third in the seniority of al-Qaeda. We have several the third in the seniority of al-Qaeda. We have several of millions of money that has been our contribution to fighting al-Qaeda. No other country in the world has done what Pakistan has done. Other than that, we then went into the mountains because we got mountains because we got information and intelligence that they are in the mountains, and in the mountains, when we talk of the mountains on when we talk of the mountains on our western border with Afghanistan, these are inaccessible areas of western border with Afghanistan, these are inaccessible areas of seven tribal agencies of Pakistan where even the British did not go in. For the first time in history, Pakistan army penetrated into these tribal agencies, all of them, all seven of them, and then we had to

establish an intelligence network, operating against terrorists, the important thing is to have operating against terrorists, the important thing is to have intelligence more than operations. Operation is easier, but getting intelligence on the enemy is the difficult part. So we went in and established intelligence in three tiers - human intelligence, technical intelligence, aerial surveillance. This took time. surveillance. This took time. When we realised that there is quied quood by the hundreds, maybe, in quood by the hundreds, maybe, in the valleys of one of quood by the hundreds, maybe, in the valleys of one of the agencies valleys of one of the agencies which is one of the agencies. We sent in, as I said, 70,000 troops and I'm very glad to say that we occupied about five valleys in south Pakistan. These valleys were used by al-Qaeda as their command and control bases. Their communication base. They are tunnels where they had exchanges. base. They are tunnels where they had exchanges. They had prop gand da base. In one place, we got two truck loads of electronic goods - televisions, computers, CDs, diskets. Also, may I say, this was their logistic basis. So we occupied their sanctuaries and they are now on the run in the mountains in small pockets. In are now on the run in the mountains in small pockets. In military terms, we I believe in opposing force. In you can break the force. In you can break the lateral and the vertical communication and the vertical communication lings of opposing force, it ceases to exist as an entity. So I believe exist as an entity. So I believe in Pakistan, al-Qaeda ceases to ex-ist as a Pakistan, al-Qaeda ceases to ex-ist as a homo jenus entity with good command and control because we have broken their horizonal and vertical linkages. This is the success, ladies and gentlemen, that we have met against al-Qaeda. However, may I say all this success

notwithstanding, this is the immediate context of the war immediate context of the war against terrorism - war against al-Qaeda. That is using force. But this cannot and will not lead to cannot and will not lead to ultimate success or victory. Ultimate success lies in the long-term strategy, a long-term strategy strategy, a long-term strategy based - basically has two ingredients. First, resolution - basically has two ingredients. First, resolution of all political disputes. We have to address root causes of terrorism and extreme im in the long-term strategy. And the root cause is the political dispute root cause is the political disputes which causal yen nation, a sense of deprivation, a sense of homelessness, sense of deprivation, a sense of homelessness, hopeless nnce. Resolution of all political disputes. Unfortunately almost all of them are in Muslims. To erase all of these spus with justice is the first core of the long-term strategy. The second is literacy. This also is the main reason for this active This also is the main reason for this active breeding grounds of extreme im and terrorism. Socio quiks development is the second long-term strategy. I believe, unless we have the true facts, immediate strategy with the long-term strategy implemented, we will not succeed against terrorism. So therefore my appeal to all in So therefore my appeal to all in the world, we must execute the world, we must execute the long-term strategy as soon as possible. I will not talk of the danger of the clash of civilisations. I think this is - this will lead to a lot this is - this will lead to a lot of turbulence, additional turbulence turbulence, additional turbulence in the world. It is not fact. There is no dispute between Islam and any the world. It is not fact. There is no dispute between Islam and any other religion. Moses and Jesus other religion. Moses and Jesus are recognised as prophets in the Koran. We respect that Muslims give to Moses and Jesus. Every Muslim gives that much respect. They are recognised prophet recognised prophets in Islam. So recognised prophets in Islam. So it is only misled individuals who are involved is only misled individuals who are involved in extreme im and terrorism. Their perception should not be taken as what Islam stands for. So, therefore, I am totally against any clash of civilisations. However, in view of all that is happening, the turmoil in the happening, the turmoil in the Muslim world especially, I believe interfaith and intercivilisation harmony is interfaith and intercivilisation harmony is in need and that is what has prompted me to come out has prompted me to come out with has prompted me to come out with the strategy of enlightened moderation. I believe in enlightened moderation has three tiers. On top, on the first tier is global reproach. It is a two-prong strategy to be implemented, one is a two-prong strategy to be implemented, one prong to be implemented by the Muslim. Reject extreme im and terrorism and go on the part of socio-economic development because on all indicators, the Muslims are the worse off in the world. The other prong to be delivered by the West, and it is extremely important that the second prong be delivered, otherwise this other prong will never succeed, and that is resolve all political dispute never succeed, and that is resolve all political disputes involving all political disputes involving the Muslims, with justice. So this is Muslims, with justice. So this is a two-pronged strategy at the global level. The second tier down is to be I plemented by the Muslim world. And we are doing that already, by the way. And that is reorganisation, restructure the OIC, the only foreign which represents the world, all the the only foreign which represents the world, all the Muslim world.

Restructure is to do two things: No. 1, facilitate the socio-economic development of the Muslim world. That is especially literacy which That is especially literacy which is the core of terrorism and extreme im, and second extremism. And secondly, understand the real secondly, understand the real values of Islam which have been hijacked of Islam which have been hijacked by the extremists and terrorists and the world think is that that is the world think is that that is what is Islam. Understand the core values of Islam, the essence of Islam within ourselves and project it to the outside world. This is the job of the OIC. And steps have been taken in that direction in the last OIC summit in Kuala Lumpur. This strategy was accepted and we are moving forward This strategy was accepted and we are moving forward in implementing that. The third tier, may I say, that. The third tier, may I say, at the lowest level, is to be the lowest level, is to be delivered by individual countries in accordance with their own environment in the Muslim world. I talk only of Pakistan. Pakistan is addressing the dual problem of religious extremism and terrorism, as I said, by al-Qaeda or Taliban, and also sec and also as I said, by al-Qaeda or Taliban, and also sectarian extremism and terrorism within our own society. We have taken strat teenage jik measures. We are implementing a very holistic strategy to meet this. Other than the military confrontation against terrorists, we have banned all extremist organisations in Pakistan. Other than that, organisations in Pakistan. Other than that, we are trying to modify - we are modify - we are modifying our syllabus to teach real values of Islam in order to harm mon nice our society and bring peace and stability. We are checking all publication and distribution of material in Pakistan. We are checking the mosques which are using loud speakers to spread hatred mosques which are using loud speakers to spread hatred against each other, sectarian and religious. We are trying to mainstream the students mainstream the students into the life and society of Pakistan by telling them to adopt the syllabus as taught in the various borders of Pakistan. Other than that, another very important thing we are doing, Pakistan. Other than that, another very important thing we are doing, we are encouraging a national discourse to emphasise the real values of moderation, tolerance and progress which are central to our fate and to our national ee thos. In this way, ladies and gentlemen, In this way, ladies and gentlemen, I see a role for Pakistan as a moderate, progressive Islamic country, true to the vision of its founding father, that can also be country, true to the vision of its founding father, that can also be a bridge of understanding between Islamic societies and the West. This is yet other link that binds Pakistan to global security and harmony. Ladies and gentlemen, we are looking to build a peaceful and security environment in our region that has remained disturbed because of Afghanistan and unresolved Kashmir dispute between India and Pakistan. Kashmir dispute between India and Pakistan. On Afghanistan, ladies and gentlemen, we support the bond process and we support the pt activity which is going on there. One is the political activity, and within the political activity, the Pakistan has supported the presidential elections and we will also support the parliamentary elections to take place in September. On elections to take place in September. On the military side, the military operations on our side of the border with Afghanistan has of the border with Afghanistan has a direct effect on anti-terrorism campaign on operations in Afghanistan, so there also we are contributing. The third level of activity - the reconstruction in Pakistan. In spite of our limited resources we are contributing substantially to the resources we are contributing substantially to the recondition scruks in Afghanistan. So, therefore, our effort Pakistan

individual effort to bring harmony, peace, stability in Afghanistan. The other side is Pakistan conflict and our relations with India. Ladies and gentlemen, we and our relations with India. Ladies and gentlemen, we are trying to bring peace and harmony in our relations with India. There is a reproachment going on. We have fought three wars with them and a number of skirmishes. I have the dubious honour of fieging in two of the wars- in fighting two of the wars and directly or indirectly in all of the other skirmishes, but I understand this because I all of the other skirmishes, but I understand this because I understand this because I understand the ravages of war. I understand the ravages of war. I understand it more than anyone who has not fought wars. Therefore I am for peace and harmony between India and Pakistan today. The latest confrontation which you may have heard of in 2002 where Indian troops, 1 million troops, were troops, were mobilised against where Indian troops, 1 million troops, were mobilised against our borders, we responded in kind. But I am very glad although the - although the world saw this then, got alarmed and saw it as a flashpoint, nuclear flashpoint of the world, but the positive aspect of this confrontation, when finally after 10 months of this confrontation, when finally after 10 months we deescalated, was the real liesation that course of diplomacy is no longer and option diplomacy is no longer and option so we have to go for peace. So therefore, ladies and gentlemen, a process of reproachment. We are moving on two parallel axis, one is confidence moving on two parallel axis, one is confidence building measures and confidence building measures and the other is conflict resolution and we believe that they have to move in tandem. We cannot brush the disputes unthe carpet as we have

been doing in the past. This time can cannot be conflict management. We have tried in the past and We have tried in the past and failed always. One war which led to a peace declaration, but another war, and peace declaration, but another war, and another peace declaration and another skirmish because we used to brush the conflict under the carpet. This time it's very clear in my discussion with Prime Minister discussion with Prime Minister that this is the time for conflict resolution and not conflict management and if we fail to do that, we repeat the history of the past. But may I say here with optimism that we both agree past. But may I say here with optimism that we both agree that we have to resolve the dispute, and therefore my optimism that since therefore my optimism that since the leadership and the people of both India and Pakistan want peace, I am optimistic that we will resolve our disputes, hopefully, in the future. We are trying our best. We will give it the best shot. Our stand give it the best shot. Our stand on this issue is very clear. We have to Roach a resolution of this issue is very clear. We have to Roach a resolution of the to Roach a resolution of the Kashmir dispute which is acceptable to India, Pakistan and the people of Kashmir. I think there is an agreement on this also. Therefore, we are moving forward and I am optimistic. I would ask the world community and Australia, you can play a role in urging both the parties to reach a resolution play a role in urging both the parties to reach a resolution of parties to reach a resolution of the dispute while we are in the bilateral mode of resolving the dispute, because I believe that resolution of Indo-Pakistan dispute will lead to tremendous settlement in south Asia, because it is this conflict which has kept us apart from conflict which has kept us apart from the with Asia. As somebody from the with Asia. As somebody put it very wisely, they said that when two elephants fight, the grass underneath gets trampled, so we

underneath gets trampled, so we have stopped fighting. We are trying to resolve our disputes, and trying to go for reproach, but I modified the statement also to bring some consciousness statement also to bring some consciousness that when two elephants start making love, grass will be more trampled. ... will be more trampled. ... LAUGHTER APPLAUSE ..so we need to be very careful on that. Ladies and gentlemen, this that. Ladies and gentlemen, this is where we stand on Afghanistan and that. Ladies and gentlemen, this is where we stand on Afghanistan and Indo-Pakistan coming very shortly Indo-Pakistan coming very shortly to the nuclear issues. Pakistan nuclear nuclear capability as a response to India test India testing his device in 1974 India testing his device in 1974 and 1988. Ladies and gentlemen, Pakistan follows a strategy of minimum defensive and this strategy we have quantified in terms of army, Navy, Air Force we have quantified in terms of army, Navy, Air Force in the conventional sense. When India went unconventional we quantified the same strategy in terms of missiles and nuclear devices. That is the reality of the situation in Pakistan. However, we are opposed to an arms race. As I said, arms race gets enhanced only to an arms race. As I said, arms race gets enhanced only when threat rises, and since our strategy is minimum defensive deterrence, we have to maintain that deterrence. So arms race will be reduced if the threat is reduced to Pakistan. threat is reduced to Pakistan. That is the bottom line. So we are opposed to the arms race, conventional or unconventional. We are also opposed to conventional or unconventional. We are also opposed to nuclear proliferation and regret the wrongdoing of a misled scientist. Pakistan has now developed very strong custodial control, command and control system. There is a lot of apprehension of what we have and our ability it handle them. Let me

assure you, ladies and gentlemen, assure you, ladies and gentlemen, we have very strong custodial controls. We have developed a national command authority on top. We We have developed a national command authority on top. We have Telstra teenage jik plan Telstra teenage jik planning division, a sec tear yacht controlling the plan controlling the planning division and control controlling the development of all the asset and we have army, Navy, Air Force have army, Navy, Air Force stratejic commands. Falling into the hands have army, Navy, Air Force stratejic commands. Falling into the hands commands. Falling into the hands of extremists and terrorists does not arise. Let me assure this house. Lastly talking of regional development. I've spoken of security. As far as development is concerned, I would like to say that Pakistan, the main challenge that Pakistan, the main challenge that we faced when I came on the scene in 1999, I would like to correct. I was 1999, I would like to correct. I was introduced as I seized power. was introduced as I seized power. I did not seize power. It was a counter coup. I was in the air counter coup. I was in the air when everything happened on ground. everything happened on ground. When I landed, I had Pakistan and I was the leader of Pakistan. Now, the leader of Pakistan. Now, having said that, in light of that, said that, in light of that, seizing or whatever, I am in charge there. In or whatever, I am in charge there. In 1999, when I analysed Pakistan, we were being declared a failed state, a defaulted state, a terrorist state. When we analysed what were the problems, we saw that socio-economic development was a problem, number one, economic survival of Pakistan, and also introduce introducing sustainable democracy survival of Pakistan, and also introducing sustainable democracy introducing sustainable democracy in Pakistan. It is an ire none that a man in uniform in talking of democracy, but let me assure this house, what haes happened? So we house, what haes happened? So we did that, and on the economy side, let

me say that we have revived the economy of Pakistan. This economy of Pakistan. This defaulted and failed state is doing very well on economy. All the macro and failed state is doing very well on economy. All the macro economic indicators of Pakistan are positive. Our dut at this is one of the best in Asia. 8.6% this year. Our foreign exchanges reserves are healthy H our froern trading is reasonably high. It was at the bottom of the rung. Now it is bottom of the rung. Now it is much better. The exchange rate is better. The exchange rate is stable. Our fiscal deficit is well under control. Inflation is well under control. The external under control. The external balance of payment which was in deficit is now in surplus. Also our exports have shown a rise of almost 90% in the last five years. Our revenue collection has risen by almost 100% in the last five years. collection has risen by almost 100% in the last five years. Our recommend from Pakistanis abroad recommend from Pakistanis abroad has risen by 100%. Therefore our economy is now on a very strong footing and macro economic indicators are positive and I'm indicators are positive and I'm very sure that this will be sustained in the future. We are also diverting much more funds to the social sector, education, health and poverty now. On education, sector, education, health and poverty now. On education, we are diverting increased funds by thousands of%. To Skoien isk technology we have increased by 3, technology we have increased by 3,000%. You would be surprised to know that, because no emphasis was being given to this sector in the past, and we are doing that now. past, and we are doing that now. So on the last is the political restructuring. It has fallen, unfortunately, on the shoulders of unfortunately, on the shoulders of a man in uniform to bring sustainable democracy in man in uniform to bring sustainable democracy in Pakistan, and that is what I am doing, and how I am doing it, when we analysed, we had to bring grass root democracy into panistan. We have done that, through a local government system. We have empowered the people of Pakistan. We have changed the colonial system of the past where a deputy commissioner and

superintendent of police were superintendent of police were ruling the district. superintendent of police were ruling the district. They now cop under the people, elected representative of the people. And that elected representative has financial, political and administrative authority in his hand. So we will introduce local government. We introduce local government. We have empowered the women of Pakistan. Today there are 40,000 women Today there are 40,000 women sitting in political authority. These two ladies, the cameras you recognise. Please stand up and ladies, the cameras you recognise. Please stand up and be recognised - these are members of the parliament in Pakistan. We have 40,000 women in the various piers of political authority in Pakistan today. We have empowered the minorities in Pakistan. So this is what we have done at the local government level and we have also introduced checks and balances on the top. Therefore, I am sure that we will have introduced I am sure that we will have introduced sustainable democracy in Pakistan and I hope that it will Pakistan and I hope that it will not deteriorate in the future. So much for political re-structuring, I would like to end here by saying that on the economic front, wants to concentrate that on the economic front, Pakistan wants to concentrate totally on the economy in this century of economics. Pakistan should be seen as a economics. Pakistan should be seen as a hub, ladies and gentlemen, not as a stand-alone country, and if as a stand-alone country, and if you see the geographic location of Pakistan, we stand at the cross roads of the Gulf and Middle East, the land locked of Afghanistan and south Asia, and also western region of China is developing very fast. The only access to the world by The only access to the world by West China is through The only access to the world by West China is through Pakistan. It is one-fourthth the distance overland China. So, therefore if all these regions, central Asia, Afghanistan, West China, wants to interact with the India ocean rim countries and South-East Asia, it is through Pakistan. It they want to interact within themselves, it has to be through Pakistan.

within themselves, it has to be through Pakistan. If China and India have an approach they can India have an approach they can only interact through Pakistan, interact through Pakistan, otherwise the sea route is about 10 times longer. If India wants to interact with central Asia, it has to be through Pakistan. If India wants oil, it has to go through Pakistan. So Pakistan is a hub of all this region. So Pakistan is a hub of all this region. We also have an economic cooperation organisation with Afghanistan, central Asian Republics, Iran and Turkey. That Republics, Iran and Turkey. That is our link also with Europe. So all this, if you join together, this, if you join together, Pakistan is a hub of economic activity in is a hub of economic activity in the region, and we believe that we need to promote inter-regional cooperation and to promote inter-regional cooperation and then- we need to promote intra regional cooperation and then go for inter-regional cooperation and extend that to East Asia, therefore we have developed a vision for East Asia and that has a part. Our visit to Australia and New Zealand really is a part of vision of East Asia that we are trying to follow. So, therefore, our trying to follow. So, therefore, our importance for whatever we are doing coming here. Ladies and doing coming here. Ladies and gentlemen, there are vast opportunities in Pakistan. There are a lot of mutual commonalities are a lot of mutual commonalities of interest between Australia and Pakistan on the economic front. We have assistance in agriculture, in livestock. We have the fifth largest milk producer of the world, but we don't produce largest milk producer of the world, but we don't produce know other dairy item. We want assistance dairy item. We want assistance with dairy products. We have excellent fruit and vegetable, but we have no truth and vegetable production industry. We want assistance in that. We have tremendous natural resources. We have not explored that. We look forward to that. We look forward to Australian assistance in mining. When you assist us in our industry, you are indirectly assisting us assist us in our industry, you are indirectly assisting us in fighting terrorism because I believe when we

are talking of povertial leavation, it means job creation. Job it means job creation. Job creation is only through investment in Pakistan where people get jobs, poverty will be alleviated and therefore you will help me and Pakistan in fighting terrorism. That is all that I have to say, ladies and gentlemen. Thank you very much more the patient hearing. I am available for questions now. APPLAUSE. Thank you very much, Mr President. The first of those questions today is from Cynthia President. The first of those questions today is from Cynthia questions today is from Cynthia ban ham. President, from the 'Sydney Morning Herald', I would like to Morning Herald', I would like to ask you please about Guantanamo Bay and whether you think it's time for it to be closed and particularly I would like to ask you about the claims that were made about the desecration of the Koran at Guantanamo Bay, what sort of reaction that had in your country and how you think that impacted on perceptions of the West, particularly the Americans in your country, but primarily should Guantanamo Bay be closed? I think as far as the future of Guantanamo Bay is concerned, I think you need to ask this question from the Americans. I would not like to comment on that. Yes, there are certainly very negative perceptions in the Islamic world and in in the Islamic world and in Pakistan of the treatment of prisoners there. There issen extremely negative perception of fallout of the desecration of the Koran because one can't imagine in a civilised society individuals who are not sensitive or conscious of other's sensitivities. It had a terrible fallout and I only hope that the perpetrators of this are un-I shalled and such kind of shalled and such kind of intolerance where we call the Muslim society

intolerant, this is an extremely intolerant act. One can't imagine intolerant act. One can't imagine a Muslim desecrating a Bible. So obviously anyone desecrating the Koran had very, very serious outbursts in the whole Muslim world. We suffered so many casualties. Thank you. Next question is from Ian McFed ren. From News Limited, General. Just on the question of Osama bin Laden, do you believe he is still alive and, if so, why haven't you or the Americans been able to get him? And secondly, Britain has announced that it's going to divert a large number of troops from Iraq to Afghanistan to continue the fight against continue the fight against terrorism there. Should other countries such as Australia be doing more in Afghanistan? Yes, first on the issue of Osama bin Laden: As I explained when I spoke, this area explained when I spoke, this area on the western border of Pakistan the western border of Pakistan awith Afghanistan and also the area Afghanistan and also the area across is very high mountains, inaccessible, no communication infrastructure. We are now making roads and tracks. There was no access to this for centuries. So it's very easy for a person to hide and not be seen, and also may I say, if he has some people who are abetting and sympathisers it would be far more easier. So, I presume be far more easier. So, I presume - I know that he is alive. That was your question. Should I say most likely he is alive, yes, because of our information and interrogation our information and interrogation of various al-Qaeda operatives that we have apprehended - he is alive, and maybe hen is in the border region, shifting sides, wherever he sees a vacuum. It is not easy to get a person there in spite of all the operations. There are many areas where we are not operating because of the kind of terrain and because of the dilution of forces in space.

The space is too much, forces are less. The next question of yours less. The next question of yours of whether more troops in Afghanistan. I think we have come to a stage where initially I knew that more troops were required because there were 13 power centres in Pakistan. Afghanistan where war Lord Afghanistan where war Lords reign supreme. To reduce the stay tour supreme. To reduce the stay tour of the war Lord and enhance the status of the centre. However that was of the centre. However that was not done and we had lesser force. But now as the situation goes, we are raising an Afghanistan national army. There are about 70,000 army. There are about 70,000 troops already raised. More should be raised. I think instead of raised. I think instead of bringing more forces from abroad , the process of raise process of raising Afghanistan forces should be enhanced. They forces should be enhanced. They are the ones that should be sent out in the country side and outpost. Wiel the other forces remain in key locations to combine in a combined manner, dominate the Afghanistan territory. That's what my belief it. Any amount of Adler digsal force, I think we should be looking at another strategy rather than getting involved more. I feel getting involved more. I feel that we are on the winning side in Afghanistan as well as in Pakistan. So Ilett us continue and raise So Ilett us continue and raise more Afghan forces. Laura tingle. From the 'Australian Financial Review', President. Two questions. You've talked about the establishment of grassroots democracy in Pakistan. I was wondering what is your timetable now for the restoration of full democracy in your country? And democracy in your country? And also are there any plans yet to are there any plans yet to prosecute Dr Khan for facilitating the transfer of nuclear technology to Iran, Libya and North Korea? You have spoken about democracy. I could speak for an hour on what we've done for democracy. Unfortunately, there are people in the West take democracy in Pakistan

to be meaning only one issue, and that is my uniform. I being the army chief. But even on that issue, may I say, ladies and gentlemen, may I say, ladies and gentlemen, the two assemblies of Pakistan, the National Assembly and the Senate, both have paths to build with two-thirds mar jort that I should retain both offices. Isn't that democracy? That two-thirds people democracy? That two-thirds people of Pakistan want me to be in uniform and be the President of Pakistan. However, leave that aside. As far as democracy is concerned, we have to see the essence of democracy. Essence of democracy is freedom of speech and expression. Today the media in Pakistan, both electronic and print is totally independent, maybe more independent than most of the developed countries, and I mean every word of what I am saying. every word of what I am saying. You should come there and see how independent they are. They keep talking against me. On the television they are there every day. The opposition is being projected on the television. Previously whenever I spoke or anyone came to Pakistan, they had one mike only, that was Pakistan television, the government-owned television. We opened out the channels. It is opened out the channels. It is this man in uniform who did that. There are over a dozen channels today and another dozen waiting to be licensed. This is freedom of speech. Empowerment is the next issue of democracy. I have said already we have empowered the people. We have already introduced grass root democracy in Pakistan. We have empowered the women an the minorities. Isn't that democracy? What are we talking on d*m? As far as I am concerned we have really introduced democracy now, sustainable democracy now, which never existed in Pakistan. However, if you are just meaning the uniform, yes, indeed, that is an issue I yes, indeed, that is an issue I have been authorised to wear this been authorised to wear this uniform until 2007 to the constitution of Pakistan. I cross the bridge when we come to it, and the second part of your question watt Dr Khan. Yes,

it's unfortunate that here is a personality who is a hero in Pakistan, frankly, let me tell you. He is the hero to the man in the street because he enhanced our security from the tact that was posed to us, as I have already said. But, however, it is most But, however, it is most unfortunate that he is the proliferatoy. Now, whether he will be prosecuted, this is a very sensitive is a very sensitive thing in Pakistan. He does not move at all. He is not in communication with anyone. I guarantee that he cannot prol live rate any more rp Sandra O'Malley from Australian associated press. On the question of India, Prime Minister John Howard is due Prime Minister John Howard is due to visit there later this year. When you meet him tomorrow are you going to ask him to make any represent presentations on behalf of Pakistan and what kind of role can Australia play in the easing of tensions between the two countries? Yes, I think there is a sensitivity there of dealing with all issues bilaterally. This issue of bilateral was between India and Pakistan relations. We have tried bilateralism in the past but we bilateralism in the past but we have been failing, but we are now again on a bilateral course of dispute resolution. This time we seem to resolution. This time we seem to be succeeding. So we would like to give it the last try, bilateralism. However, within this, certainly as However, within this, certainly as I said, leaders like your Prime Minister can certainly play a role in urging, as I said, both sides to call for the resolution of the dispute. We must resolve the dispute and that is what I expect from all world leaders to do, to

contribute towards that, to coax both sides to resolve the dispute, and I hope, yes, indeed, I would like your Prime Minister to do that, and I would certainly be inviting him to Pakistan.Cy The next question is from James Grubolt From route ters. I just note that overnight there was a bomb blast overnight there was a bomb blast in Kashmir that killed 14 people. I'm just wondering how you think this development will affect the developments towards resolving this issue? Secondly, do you agree with some of your supporters that a resolution to Kashmir could be reached within a year or two? Whatever actions, whatever incidence take place in Kashmir, may I say there is a greedom struggle going on in Kashmir. struggle going on in Kashmir. Over the 16 years, several independent organisations, groups, have come up, have sprung up , fighting for independence. There is nobody who can exercise control on everyone can exercise control on everyone and everything that is happening in Kashmir. I certainly don't hold a whistle which I can blow and every bullet stops being fired. So, therefore while we are on a bilateral track, both sides do understand that to expect total peace and harmony in Kashmir will not be possible. Therefore, while we are committed to the peace process and stop process and stopping all violence, at the same time Pakistan has been saying and the car myrrhans demand stopping of all human rights violation by Indian army. That is another issue. So we are in a chicken and egg situation - which one to stop first? Should the human rights violations stop, and if all that stops and we reach a

resolution, the terrorist activity or the militancy, militancy will or the militancy, militancy will all stop? Or should the militancy stop and then we can accord - I think this is what needs to be resolved. I personally feel that we cannot expect total peace and harmony even after we have reached a resolution of the dispute. It will gradually die down. It has gone on for 17 years. The second part of your question - I'm sorry, what was the second part? Timetable. Timetable, yes. There is no timetable, but there is also a - there ought to be some timetable in the minds, and I have told the Indian Prime Minister the best timetable is that it must take place within our 10 years, take place within our 10 years, both of us, because we have developed a kind of an understanding between ourselves, so there won't be a guarantee that future leaders will have the same understanding. The feature leaders will have the same focus, so therefore we need to resolve the dispute within our time. Now, I leave it to you to guess what is my time shed and what is the India Prime Minister's time shed. scheduled. Captions by Captioning and Subtitling International