Connectivity Conference Day 2 – Ambassador Segment

2016-12-15

Introductory Speaker: Good morning, ladies and gentlemen. May I request you to please take your seats? We’re going to start the proceedings of the day. This morning, opening morning *unclear due to accent* there’s a panel of US Ambassadors on regional connectivity. Yesterday, we have discussed various dimensions of regional connectivity in the context of *unclear due to accent* connectivity, energy connectivity, trade and investment, and related issues. So this morning, we are fortunate to listen to 3 US Ambassadors from the region. This panel will be moderated by Mr. Manpreet Anand, Deputy Assistant Secretary for South and Central Asian Affairs, US Department of State. May I request Mr. Anand to please come to the dais? Welcome, Mr. Anand. In this panel, we have 3 Ambassadors. Mr. Richard Verma. May I request Mr. Verma, Ambassador Verma, US Ambassador to India, to please come to the podium? Mrs. Marcia Bernicat, US Ambassador to Bangladesh. May I request Ambassador Bernicat to please come to the podium? And Mrs. Alaina Teplitz, US Ambassador to Nepal. May I request Ambassador Teplitz to please come to the podium for this morning’s panel on regional connectivity?

May I now hand over the proceedings of this panel to Mr. Anand? Over to you, sir. (1:59)

Manpreet Anand: Well, good morning, everybody. It’s a real pleasure to be here on the second day of this important conference and I’m really happy that we’re able to kind of kick off today with this panel here. I feel so privileged to be up here on this dais with my friends and colleagues, the Ambassadors from around the region so thank you so much for making time to talk about this really important topic.

Before we get started, I thought maybe we could spend just a couple of minutes really talking about why we’ve put on this conference, why do we in the United States think that this is an important set of issues to cover, and really make the case for connectivity. What is the case for connectivity? Why is that in the United States’ interest? Why is that in the interests of the countries of the region here? And what is it that the United States can do to help facilitate connectivity? And I think that will be kind of the main thrust of the discussion this morning, and so we’ll kick it off with a bit of a discussion there. I’ll ask a few questions of our Ambassadors and then I do definitely want to spend a good amount of time hearing from all of you, because we want this to be a conversation.

But perhaps the best place to start is to remind ourselves of something that Secretary Kerry often says, which is that foreign policy is economic policy and economic policy is foreign policy. And, if you think about that notion, and you think about that notion through the context of the forces of globalization that we’re undergoing right now, those policies that promote connectivity, whether it’s trade policy or economic policy or social policy or strategic policy, what those policies do, what that does, is, it not just reinforces the United States’ economic interests in this part of the world, but it also comes with an underpinning of our strategic interests in this world, and so – in this part of the world.

And so, as we talk about connectivity, it is a much broader conversation, and it’s not just because of the old adage that if goods don’t cross borders, soldiers will, it’s much more than that. It’s because we know that by being able to build these ties, it will enable us to do a number of things. We’ll be able to promote essential reforms. We’ll be able to build on international norms that are really at the core of our own democratic values that we have in the United States, but that we know are present throughout the region as well. And, it’ll be, it’ll enable us to also just foster cooperation amongst all of the nations throughout this region, to really focus in on some of the key challenges that this conference has also brought to light.

Now, that’s on the US side. On the Asia side, we know that in the coming decades, Asia is going to be the growth engine for the world. I think there are some who predict that by 2050, 50% of the world’s GDP will be driven by Asia. That is – that is something that we need to all keep in mind as we think about the power of connectivity. If you bring it home – closer to South Asia – we know that South Asia is the fastest-growing region in the world, but it also has tremendous challenges. It’s been repeated often throughout this conference that it’s one of the least-integrated regions in the world. We know, unfortunately, that 40% of the world’s poor live in South Asia. And so, as we think about the case for connectivity, and why we are promoting this, it’s to address those challenges as well. It’s to look at how you can alleviate energy shortages, for example, or create employment opportunities, or improve resilience to climate change, or reduce the cost of goods and services. All of these challenges can be further addressed by improving connectivity.

So, turning to what the US can do, and this is where I really want to engage our Ambassadors in a very rich conversation. At its core, the United States can play a critical role as a convener, as a facilitator, as a broker, but perhaps, most importantly, as a partner. And, it is through this idea of partnership that we think we can really support some of the region’s goals, and when we talk about partnership, it’s not just at a government-to-government level. It is engaging at a people-to-people level, it is supporting international institutions, and it is, very much, trying to harness the might of the US private sector. So, I hope as we continue this conversation during this first session, we keep all of these things in mind.

Now, what I’d like to do, and Ambassador Verma I hope you don’t mind, we’ll start with ladies first, but I’d like to maybe delve a little bit into some of the key areas of opportunity and challenge in some of the countries in the region, and maybe start with Nepal, and ask Ambassador Teplitz to really detail for us one key area, one area where I think there’s a lot of potential, and that is on the energy side. We know that there’s 40 gigawatts of potential hydropower in Nepal. Being able to bring that type of power online can mean huge development gains in Nepal, but also providing so much power to the rest of the region, and I would be interested – and I’m sure everybody else would – to understand more what the US is doing, and what more we can be doing to help address this critical issue. (9:17)

Ambassador Teplitz: Thanks, Manpreet. This is a great opportunity to talk with all of you – oops, not working, there we go – to talk with all of you, and share a little bit of some of the panel discussion we had yesterday as well. I think we’ve all talked about the need for energy, and that as an important foundation element of growing and thriving economies. Energy poverty is really more than an inconvenience. It’s something that limits growth on an economic level, on a social level, just all across the development spectrum.

One of the reasons that the United States Government has focused with such attention on hydropower development in Nepal is that in studying the economy there, it is one of two major constraints that we can have an impact on. The other constraints are some of the physical infrastructure, transportation and other things, and one of the big challenges, of course, political will and stability, which we also work on, but thought on a project basis, we would probably have more luck dealing with hydropower. The resources in Nepal have been known for some time, as you noted, 40 gigawatts. Current demand in Nepal is maybe 1400-1600 megawatts, but there’s only 800 megawatts of installed hydropower, currently, so why hasn’t the sector evolved over the last 20-25 years, since this is such an obvious resource.

I would offer up a couple explanations and then just say a little bit about what we’re doing about them, and working with our Nepali partners on. One is the investment climate. It just hasn’t been very welcoming. Of course, there have been some challenges over the last 20-25 years in terms of Nepal’s emergence from a period of conflict, but challenges with political stability – again, the government is in a period of transition, we very much are hopeful and positive about the outlook there – but having political stability is important to attracting investors. The other important component of that, of course, is legal and regulatory reform, that will ensure investors that they can get the most out of their investment, that they won’t have a problem making their investment, and that the necessary series of approvals and assessments can happen smoothly in a predictable and transparent way. The other element, of course, to making hydropower effective is to be able to actually evacuate the electricity from the point of generation and move that to consumers. So, transmission is another critical component of that, which is why we have a multifold approach with a number of US government agencies starting with AID. We’ve had the hydropower development project, which is trying to expand access to hydropower services, working with elements within the government of Nepal to review the regulatory environment, look at how the Nepal Electricity Authority manages electricity, and then also looking at the cross-border issues, partnering with the SARI Initiative – the South Asia Regional Energy Initiative – that’s been in place for some time.

We also, through investment of the State Department and Department of Commerce, have been looking at that legal and regulatory component, looking at commercial law development. Some of you have met Dawn Hewitt, who’s here. Her team has worked with us to help provide technical advice on the commercial law piece. How do you make that power viable in a commercial setting? And then we have, through the Millennium Challenge Corporation, the most significant portion of our potential investment in this area, looked at that transmission component, as well as some of the regulatory pieces.

Nepal’s terrain is amazing, beautiful landscapes, but those mountains are very high, and the big power plants are way up in them, and that power has to get to the people, which means many, many miles of power lines, many communities that are affected, and there has to be a way to manage that viably, to manage it responsibly in terms of the environment, and then in terms of the impact on local communities so that they’re partners in this process and not victims of it. So, we’re looking at it from all facets. We’ve had, I think, very good conversations with our colleagues, but we see this as part of a larger opportunity, not only for Nepal, but – as you noted – for the United States. Certainly, we have American companies who are interested with technical advice, their services, their equipment, or potentially, in the future, as investors, so that’s another key piece of this.

But our approach has been to look at – to look at the big constraints in the economy, energy being an enormous one, and then try and tackle the challenges that have made it difficult to develop that hydropower sector over the last decade or so. (14:25)

MA: Thank you. I mean, that’s a great summary of not just the challenges, but all the different facets of the US Government and others, which are being brought to bear to try to tackle this challenge and really partner with the Nepalis on this. This really – in my mind – can be a real game-changer for Nepal and for the region. Maybe turning to Bangladesh, if I may, and getting Ambassador Bernicat’s thoughts on geography in a different way. Ambassador Teplitz mentioned the geography, the hard geography and topography of being able to bring these big projects online. The geography of Bangladesh has always struck many as being such a critical link – and in some ways, maybe even a linchpin – of how two different sub-regions – South Asia and Southeast Asia – could get better connected, and Bangladesh can certainly play a huge role in that, though we know some of the challenges on both the hard infrastructure and soft infrastructure side. It would be very interesting to get your take, Ambassador Bernicat, on what are the different ways in which those challenges are being addressed? What role can the United States play, and how do you see this moving forward? (15:46)

Ambassador Bernicat: Thank you. Thank you, Manpreet. Now, “linchpin” is a great way to describe it. Whether you’re looking at trade within South Asia, trade with South Asia’s neighbors, including Burma and Thailand, or even beyond, you know, to that ethereal goal of a trade route that stretches from Istanbul all the way to Bangkok, Bangladesh is blessed with being right in the middle of it all. In fact, India can better communicate and trade with itself through better infrastructure and soft infrastructure supporting trade that passes through Bangladesh, and so it’s a real blessing.

I have to say that people tend to not think of some pretty extraordinary that have been happening in Bangladesh during the course of its very short history, namely, the fact that the country has had a sustained 6% growth rate of GDP for the last 20 years, and in the last – in the first couple of months of this fiscal year – it’s actually topped 7%, enormous potential. It has a large, young, and hard-working workforce, the RMG sector is known for its quality, and quick turnover of production. There’s a 165 million-large market – emerging market – that is demanding more and more goods and services, and I should also add that Bangladesh reached lower-middle-income status, and is – has a goal of reaching middle-income status in the short years to come.

Even greater, for all of this success, Bangladesh would have achieved even more economic growth had it been better interconnected through the transportation system, and to get its goods out to market faster and those raw materials into the country faster, as well as – even more importantly – an interconnected energy grid. When I talk to businesses in Bangladesh, whether it’s physical manufacturing or the emerging IT sector, if I – when I ask businesspeople, what’s the one thing? If you could only change one thing about a challenging investment climate and a business – doing business climate – that would increase your productivity? They all say the same thing, and that’s energy, speaking to Alaina’s point.

The lack of – and again, Bangladesh has made great strides in providing more energy to the country, but it still limits the growth in many industrial and service sectors. On the political front, and I think this is really important to note, India, Bangladesh and Burma have actually shown great leadership in helping to eliminate a major roadblock to both energy and to working together as well, and that’s through the resolution – the peaceful resolution – of 2 maritime disputes. Bangladesh and Burma settled its dispute in 2012, and Bangladesh and India in July of 2014 – in both cases, using international arbitration that all the countries participating agreed to abide by. That is now opening up such great potential, most notably, oil and gas exploration in the shared Bay of Bengal. But resolving these disputes has also given, if you will, the promise of a stronger political and security set of relationships, as well as opening up more regional development

I would say, in terms of – and, of course, the Prime Minister herself has been a real champion of providing more infrastructure. I’ll only mention 3 projects because they have the greatest impact, potentially, on regional trade. 3 fast-track infrastructure projects include developing a deep sea port at Payra, a rail link that would connect the Chittagong port to Myanmar, and a multi-purpose road/rail bridge across the Padma River, which would increase connectivity between this city and Dhaka itself. I hasten to remind you that Bangladesh is the delta of South Asia, and so it has over 24,000 km of rivers, streams, and canals. These, like Nepal’s mountains, can be seen as obstacles, but much more than that, they represent ancient and to-be-rediscovered means of transporting goods that is cheaper, and is greener, and so the Prime Minister is committed to dredging 20- almost 20- 12,000 km of waterways to help open those up.

You asked what the US has done, and I would just quickly mention a couple of things. Through USAID, we have several projects, including an ongoing one to improve trade facilitation and transparency, and that’s a huge element, as well as the efficiency of customs procedures. This includes a new website and a new national inquiry point that would provide a frequently-asked-questions interactive site to get information quickly to investors and traders. Another USAID project is looking at addressing the non-tariff barriers to trade, especially for agricultural commodities. And a third project, A2I, Access To Information, largely at this point focuses on providing a whole host of domestic services online, which has not only – is not only increasing people’s ability to get basic information they need from their governments, but is also very nicely cut out the middleman, if you will, or “middlewoman,” making those services inexpensive or free, as they should be, and providing a level of transparency that is increasing people’s confidence in their government.

I would only add to that – excuse me – that there – that soft infrastructure development has a real need, and I would just cite the Asian Development Bank Institute, which noted and – not meaning to pick on any country, but this was the most striking example – they found that the number of documents required to export or import goods between Nepal and Bhutan ranged from 22 to 36, and that the number of required copies of these documents ranged between 44 and 115. So we’re looking to find more ways to provide that kind of sort of hard data, so that we can help the government of Bangladesh focus on reducing those barriers – those non-tariff barriers – that can sometimes be the greatest irritants to trade. (23:24)

MA: Thank you, Ambassador Bernicat. I think that last point about streamlining processes and just reducing NT- – non-tariff barriers – can just be so critical to improving trade and investment across borders. Speaking of trade and investment, Ambassador Verma, you talked a lot about the kind of burgeoning relationship that the United States and India has had over the last few years, and how trade has been such a big part of that.

It occurs to a lot of us that with that increased trade and investment creates opportunities, not just for the United States and India, but perhaps for the entire region. If you’re able to create value chains and linkages across public and private sector lines, that could actually have multiplier effects across the region. Could you talk a little bit more about what might be some of the opportunities that are emanating from that kind of burgeoning trade relationship? (24:26)

Ambassador Verma: Yes. Thank you. So, maybe just helpful to set the baseline on what US-India trade actually is, and how far it’s come. So last year’s numbers hovered right around $110 billion in 2-way trade. That’s 3 times higher than it was just 10 years ago so we’ve tripled our 2-way trade numbers between the US and India in a fairly short period of time. Now, our President and Prime Minister have set a very ambitious goal in that 2-way trade number of $500 billion, which seems like a lot, but when you look at the size of our respective economies, we both think we can get there.

A lot of people ask, “How did you get there and what has been the route?” I will say, there’s been a lot of different reasons. One, the barriers between our two countries have started to come down and we talk a lot about the ease of doing business between the US and India, but the ease of doing business generally, and those ease-of-doing-business factors have really improved in India. Now, they’re not where – I think – the Prime Minister wants them, and, according to World Bank rankings, they’re still somewhere around 130, and I know his goal is to get into the top 50, but the kind of factors that we hear from our companies and that we hear from Indian companies – and I suspect, if we were to ask both Ambassador Bernicat and Ambassador Teplitz – it’s the same sort of obstacles in the region, and that’s – so, when we talk about how to increase regional linkages and we talk about improving the ease of doing business, I don’t think we can just think about doing it on a bilateral basis. It really does have to be regional.

So, what are some of those things we hear about? We hear about tax certainty. I don’t hear about tax rate so much. I think people are willing to pay the tax. They do want tax fairness and they don’t want to be saddled with retroactive tax years down the road, so I would say number one, we hear a lot about tax. Number two, we hear about legal certainty, and not being stuck in domestic court systems for years and years, and so that’s why there’s been this push for international arbitration through bilateral investment treaties or through other investor state dispute settlement procedures, so legal certainty is a big one. Third, it’s been the subject of the conference, which is infrastructure. What is the infrastructure, not only within the country, but between the countries? And that’s what yesterday focused on and we’ll talk more about today, but are there roads, bridges, rail, access to ports, access to airports, access to energy, in order to get your product maybe from India to Nepal or across Bangladesh.

I think I may have told some of you the story that trying to get a product from Tripura to Calcutta is a very challenging exercise for an exporter to try to go through Bangladesh and trucks have to be unloaded and loaded back again, and it’s a long and complicated journey. If you choose to go the India route, you have to go up around the northeast so building that inter-connective tissue and infrastructure – I think – is really important. The fourth thing we hear is regulatory burden, and I do think there’s been progress on this front, and we hear a lot about the kind of single-window licensing and single-window clearance. I never ask what happens behind that single window. I think we’re just happy that there’s one window for the interface. I imagine there’s still 90 permits that are required, but that’s not visible to us, but that sort of change has been helpful.

Obviously, another factor, corruption and transparency, kind of across the region that’s been mentioned already, but – and this has been a big priority, I know, of the Prime Minister to ensure government decisions are transparent, are fair to the company or investor that’s interfacing with the government, and made totally above board and based on objective guidelines. We hear a lot about land and labor reform. How difficult is it to get a parcel of land to start a business? That’s, I think, a common problem across South Asia. How difficult is it to hire and fire people – which is a challenge in the United States as much as it is across this region.

Let’s see, I’ll mention two more. One, intellectual property, big issue. If I put my product, my company, my investments here, will they be protected? I hear that not just about – from US companies – but I hear that from Indian companies as well. I suspect my colleagues face the same thing. I’ll just mention one final factor, which people may say is in left field, but I would say, in a business context, a smart investor, a smart company, also looks at the strength of civil society, and people may be surprised to hear that, but – because they say, “Well, business is in this bucket and civil society is in this bucket,” but I think anyone who does a correlation of strong business climate and investment climate will find a correspondingly strong civil society as well, one that can help make government stronger, hold governments and businesses accountable, help be a vehicle for avenues of corporate social responsibility and philanthropic activities. I just – I think it’s hard to have an inequity in that civil society and the business climate. I think those two go hand-in-hand. So, I mentioned all those in my experience from the India context only to say I think those are all regional issues that we confront together, and to the extent that we can tackle those regionally, that would be important. (31:19)

MA: Thank you, Ambassador Verma. I think your last point also speaks to underscore what you had mentioned yesterday about the connectivity of value systems and how that can contribute.

I’d like to now open it up to the audience for questions and comments. I would like to request that your question or comment be very brief. Please note, we only have a short amount of time here, and we want to be able to have as much interaction from the Ambassadors as possible. Please state your name and affiliation before asking. There’s a mic over there if people want to line up, and as people are formulating their questions, I’m going to ask something of our Ambassadors to think about, and they may be cross with me afterwards for not giving them a heads-up about this, but I just – I think about all of you listed a number of challenges, and many on the policy front. If you had your druthers, and you could flip one switch, just one, one policy switch, in the countries, in which you work, that you think could have a dramatic impact on any of these areas of connectivity, what would that be? And I’ll give you a few minutes to think about it *laughs* and maybe circle back so that I’m not putting you completely on the spot, but that can help because in all of the things that each of you talked about, it’s also important to kind of focus on the here-and-now and the priority areas where we think we can make a critical difference. Sounds like Ambassador Teplitz already has one in mind as we’re waiting for somebody to line up. (33:09)

AT: Yeah. I don’t need to think too hard about this one, and I’m going to maybe exceed your boundaries a little bit and bunch a bunch of things together, but I think that legal and regulatory process reform that have been raised so often in these panels is absolutely critical. It’s not necessarily a challenge that is unique to this region. We certainly have these challenges in the United States as well, but being able to streamline and have a firm legal foundation, have regulations that are encouraging, supportive, and yet responsible, this framework is essential to build on, and without it, it’s very difficult to attract the people we’re talking about. It’s difficult for businesses to thrive and, frankly, it’s difficult for people who are excluded from – sort of – the economy for a whole host of reasons to really enter that space if they don’t even have the legal playing field, which I think then speaks to the transparency, corruption, sort of fairness aspects of this. So, I’d add legal, regulatory, and process reform to my wish list and flip that switch. (34:18)

MA: Thank you. I think we have a question. (34:23)

Unnamed speaker: Yes, we do. And I just also want to note that we’re going to keep the current questions for non-members of the press. So please, everyone, we look forward to hearing your questions. (34:33)

Questioner #1: I am Sajan *unclear surname*. This is a question for Ambassador Verma. Apart from being a part of WBREDA, West Bengal Renewable Energy Development Agency, I am also a secretary of a civil society organization and which is completely non-*unclear due to microphone cutting out* work in the *unclear due to accent*. I would – you had mentioned some very interesting comments about civil society and organization and its importance. How would you – how would you recommend that civil society organizations be strengthened in India? And what ways would be best for their development? (35:19)

AV: Great question. That’s a great question. India has an incredibly robust civil society, and I don’t know what the exact number is. I’ve heard incredible numbers of kind of what exists here, far number – far greater number of NGOs exist here than in the United States, obviously, and they are working in all kinds of areas, from education to healthcare, early-grade reading, nutrition, so many different areas, clean energy, and I know in the United States, our government couldn’t do what it does without our civil society, and I think the same is true here. They play such a vital and valuable role, and I think people appreciate the role that civil society plays. Now, obviously, we’ve had our – some of our government-to-government discussions on making sure that the regulations governing civil society were fair and transparent, and that we don’t try to go through and pick good NGOs from bad NGOs, and we want, obviously, the NGOs to be compliant with the law. But I’ve been remarkably impressed by the strength of civil society. I don’t know that I could give you any recommendations about how to already – what I see, as I traveled around the country, is just this incredible diversity of civil society, and a strength to it, and I think a respect for what’s happening. I think demonstrating the work that you do, the progress that you make, and how you contribute to it, and I think giving government the confidence that you’re there as a – potentially a check, sometimes a complementary actor, sometimes a totally independent actor – and that’s exactly how civil society is supposed to operate. In the end, you make governments better, you make governments more accountable, and so – and you make businesses better, and businesses more accountable, and that’s why I mentioned it, and ultimately, you help transform ordinary people’s lives, and that’s the most important thing. (37:39)

Q1: Thank you very much. (37:42)

MA: Thank you. I think we have another question. (37:47)

Questioner #2: Good morning. I’m Luna Shamsuddoha from Bangladesh, in the technology sector. I have a question for one of you. How should the region tackle cyber-security? And, Ambassador Verma, you spoke about digital connectivity. And, how should we spur confidence in ICT services? (38:12)

*overlapping conversation*

MA: Great. Maybe we could start with Ambassador Bernicat. (38:16)

AB: Thank you, Luna. That’s a really good question. And, in fact, I was talking with a journalist yesterday. Something that hasn’t come up at all during this conference is the issue of security itself, and do open borders make countries more vulnerable to security threats, and I would say, in this day and age, the ability to keep out anything in our – from our countries – is not based on physical security so much as cyber-security. We’ve seen even terrorists have learned to outsource their activities, and they’re doing it through the Internet. So, one, no, open borders don’t create more insecurity. I think if you have good money laundering laws and good regulatory regimes, then we, sovereign nations, working together can stop all forms of transnational crime, but the most challenging in this day and age is cyber-security, and I know in Bangladesh – I’m not sure if this is true elsewhere in the region – but in Bangladesh, when people talk about cyber-security, they’re often talking about how to prevent things from getting onto the web, and every cyber-security expert I’ve talked to in the United States says that is a Sisyphean task. We will never be able to prevent things from being on the Internet, as much as we don’t like Internet bullying, as much as we – you know, cybercrime is challenging. Keeping people off the web will create major – and I would argue, unacceptable – challenges to freedom of speech and freedom of commerce. We are becoming increasingly dependent on e-commerce.

But what cyber-security really means is – and Luna, I know this is what you were getting at – is how to infuse better cyber-security, be it in our own workforce – I can tell you, as US State Department employees, before we can gain access to our computers every day, we have to click on a little button that reminds us that we do not have privacy, that our employer has the ability to look at any- and everything, every keystroke that we make on our system, but more importantly, once a year, if we do not refresh our training on cyber-security, good practices that help protect our systems from intrusions, then we’re locked out of our Internet access. The idea is that the State Department realized that we need to understand that you don’t download executable files, that you don’t – that you don’t open attachments from people you don’t know, to look for signs of cyber-intrusion, and I think it is incumbent upon every country in the world – and certainly those here in the region – to find a way to develop and instill a culture of cyber-security that comes down to every individual, and if you don’t work for a corporation, you don’t work for an institution or an organization, what are we teaching our children about what sites they’re accessing and clicking on, because they’re vulnerable to a whole different kind of – or series of – threats. (41:41)

MA: Ambassador Teplitz? (41:42)

AT: And you mentioned issues of freedom of expression, too, and I think this is the fine line and the balance to be looking for, is how to enable the good parts of the Internet and the ability for citizens to communicate, access services, and obtain information, and importantly, for the media to be able to present information and to engage in dialogue. And looking very carefully at the regulatory efforts that are applied to the Internet or online services or digital services, to evaluate for unintended consequences – I think that’s the hard part, right? – trying to prevent what you’re not really sure might occur, but then, that’s a really important challenge to making – I think – the Internet secure and being able to deliver those services that you’re talking about, is really being very thoughtful in efforts to regulate that environment as well as then how to apply and where to apply those security measures, so, another important piece. (42:46)

AV: Yeah. I would just say cyber-security cooperation between the US and India is one of these areas that has really taken off and, in fact, we signed a very far-reaching cyber-security agreement between the US and India. One of the really important hallmarks of it was standing up for certain “rules of the road,” international norms on what’s acceptable in the cyber domain. The threats that we’re facing in the cyber domain come from individuals who are maybe trying to steal our information for their personal gain, they’re coming from criminal networks that are exploiting people, they are coming from states that are looking to steal corporate secrets, or steal other states’ secrets, and so we really have to have adequate defenses on that, but also ensure that people are using what is supposed to be a free and open Internet platform for peaceful and good purposes, and when they’re not, we need to ensure we have the measures in place to protect against it.

So, it’s exactly the right question to raise when we’re talking about regional – and I would say, frankly, across Asia, we need a common vision of what’s appropriate in the cyber domain. It’s a huge issue and I think, again, you’re right to raise it because it’s really hard to have true connectivity in the digital area, which I talked about yesterday, without adequate cyber-security as well. (44:30)

MA: Absolutely. (44:30)

Q2: Thank you very much. (44:31)

MA: And those gains, obviously, can always be called into question when there are infringements on privacy and freedom and everything else. I’m going to ask Ambassador Bernicat and Ambassador Verma if they have any policy switch they would like to flip while we’re waiting for the next question? (44:50)

Unnamed speaker: Can we have time for one more question? So, you’ll be the last one. (44:54)

*overlapping conversation*

AB: Just very quickly, I would like to go back to that issue of accountability and the ability to limit rent seeking. I think if, you know, if you look at corruption and all of the built-in fees and different kinds of things that grow up around legitimate services and processes, they provide or, if you will, take out of our economies, enormous amounts of value that can be put to such better use, and to be able to have a government say, “In everything that we do, we are going to look to make those processes as clean as possible, as un-corruptible as possible, because we know that people have good, creative energy, and they’ll use them for good or for ill, and wherever there’s an ability to do so.”

The other thing I think about having a good, transparent system, is that they help minimize the gaps of inefficiencies and, even more importantly, inequalities. All of our societies, the US included, are facing a growing gap between the haves and the have-nots, and I think this is one of the greatest threats to all of our ways of living, and so having a good, strong policy – government policy – that says, “We’re going to be thoroughly accountable to our citizens, to our foreign tender bidders, to all of our operators in the country, and that there will be consequences when people don’t follow those rules,” would be my wish-switch. (46:38)

MA: Very important point. We have time for one final question and then we’ll wrap it up. (46:43)

Questioner #3: Thank you very much. I am *name and beginning of title unclear due to accent* Secretary. I feel an investment in energy, it is quite critical for development of the sectors, particularly industrialization in the agricultural sector. I feel people are talking about cross-border trading, *unclear* energy, *unclear* about trading. What I see that – energy has to be exploited. It is, of course, associated with an investment. When you make an investment in energy, it is really, rather than going for *unclear* cross-border trade of energy, it is better to utilize the energy for industrialization purpose. So, for Nepal, countries like Nepal and Bhutan, they can bank upon energy-intensive industries, like the smelting industries. So, industries need to be used for the valuative services, for investment. Of course, it is an enabler for investment in the country, that is very much important, and it has to be linked with the trade and investment as well. So, rather than going for the cross-border trade of energy, it is very much pertinent to develop the industrialization process in the country with the availability of the energy. So, what is your take on this? Particularly, I think *unclear due to accent and overlapping conversation* So, I’m done, too. (48:21)

MA: Yes. Absolutely. Ambassador Teplitz, I think this is a really critical point of how do you bring in folks who have vested interests in getting access to more power and industry is obviously a big stakeholder in that. (48:35)

AT: It is a huge component. I mean, the two things aren’t mutually exclusive. I’m not sure you have to do one before the other, and definitely in Nepal, people, companies have found ways to generate their own power, just not efficiently, and quite expensively for them, so you don’t have to do one for the other, so I’m not sure there’s a trade-off. In the sense that in Nepal’s case there is ample supply. There are already projects on the books that would probably identify enough to cover the needs of industry, and I don’t think you’re developing the power sector necessarily to the exclusion. So, you can have both a supply of a needed commodity, and you can still focus on developing industry along the way. I would suggest that some of the regulations and the laws that I keep coming back to apply equally in both sectors, and a constraint – frankly – for industry is not having energy, so you really need to be working on both at the same time, and

– frankly – by their nature they’re going to be cross-border. Nepal loses an enormous opportunity if it doesn’t think, in the very beginning, about selling energy across the border. And they’re going to need energy at times, too, so it’s – I don’t see it as a trade-off and I don’t see it as something that you can do in serial nature, either. You have to work on these issues simultaneously and try and grow out the base as both sectors evolve. (49:58)

MA: Thank you, Ambassador Teplitz. I’m going to now turn to Ambassador Verma for the final word on what’s the key policy switch that could be game-changing. Ambassador Teplitz talked about legal and regulatory changes. Ambassador Bernicat talked about transparency and the power of accountability. What would be yours? (50:16)

AV: Yeah, I think mine would be a bilateral agreement between the United States and India, a high-standard bilateral investment treaty. I think that would help set the foundation for greater growth and investment in both countries, and it gives investors the kind of confidence they need to resolve disputes. They know what would happen if there’s a – an issue that occurs – and we have that kind of agreement with dozens of other countries. It’s time, I think, to put those kinds of foundational agreements in place to help reach that $500 billion number. (50:54)

MA: Fantastic. Sounds like a call to action for the government here in India as well as the next team in the United States. I think this has been a really rich conversation about some of the issues – regional connectivity issues – facing South Asia. Please join me in thanking our Ambassadors for being up here. (51:15)

*applause*

MA: Thanks again, and I’ll turn the program over – back over – to the organizers. (51:34)