Toward a New Foreign Policy.

Key Recommendations

* The Bush administration can curb and reverse nuclear proliferation in South Asia only if it pursues a coherent nonproliferation policy and effective influence strategies.

* India and Pakistan must be prevented from further advancing their nuclear and ballistic missile capabilities through a targeted and sustained carrot-and-stick strategy.

* The U.S. must strengthen international nonproliferation regimes and collaborate with important external actors to contain and eventually reverse nuclear proliferation in South Asia.

Although America must retain the ultimate goal of eliminating nuclear weapons in South Asia, the interim goal of U.S. policy should be a cap on both India's and Pakistan's nuclear capabilities below the deployment threshold. Washington can and should promote a nuclear cap in South Asia through a strategy of sustained and targeted sanctions and conditional incentives, serving a coherent nonproliferation policy and consistent nonproliferation goals.

Technological and financial constraints prevent India and Pakistan from deploying fully operational and survivable nuclear weapons systems in the near future. Heavily indebted Pakistan cannot sustain the financial burden of full-scale weaponization and deployment on its own. Since India would have to take both Pakistani and Chinese nuclear capabilities into account, the costs of full-scale weaponization through indigenous sources would also strain India's resources. And both states need external technology and hardware to fully deploy their nuclear and ballistic missiles.

India and Pakistan are therefore seeking the resumption of unrestricted U.S. economic and technological collaboration. Hoping to obtain U.S. dual-use technology, India is pressuring the Bush administration to remove all remaining sanctions. Indian official spokespersons pointedly refer to the "mismatch between sanctions and the new direction of Indo-U.S. relations." Meanwhile, deeply interested in U.S. high technology, conventional hardware, and a resumption of economic loans and grants, Pakistan is attempting to exploit U.S. fears about Islamic extremism. During his visit to the U.S. in June 2001, Pakistani Foreign Minister Abdul Sattar stressed that U.S. sanctions foster "extremism that needs to be opposed."

The U.S. must use sanctions and denial mechanisms to prevent India and Pakistan from acquiring the fiscal and technological means for nuclear weapons deployment. U.S. sanctions on dual-use exports that can be used for weapons and delivery systems should be retained indefinitely. The U.S. should also persuade Russia and China to end all transfers of destabilizing conventional and nuclear weapons technologies to South Asia. With international support, the U.S. should also ensure that credits and loans from the IFIs are not diverted to military spending in India and Pakistan. While these smart sanctions would not harm innocent civilians by destabilizing the Indian or Pakistani economies, they could undermine India's and Pakistan's abilities to expand or even sustain their nuclear and ballistic missile programs at current levels.

To change South Asia's cost-benefit analysis regarding weaponization, the U.S. should warn both states that nuclear weapons deployment will result in stringent multilateral diplomatic and fiscal sanctions. At the same time, the U.S. should offer substantial economic and diplomatic incentives conditional on nonproliferation progress in South Asia. Pakistan's failing economy makes it a suitable candidate for targeted, nonproliferation-specific sanctions and inducements. And the U.S. could counter India's perceived linkage between nuclear weapons and prestige by making India's inclusion in a reformed UN Security Council conditional on Indian nuclear disarmament.

Domestically in both India and Pakistan, the issue of nuclear weapons ranks far below other societal concerns, including the perceived need for economic development and poverty alleviation. A carefully targeted incentives strategy based on a "debt for disarmament" plan could help to build domestic pressure in both India and Pakistan against the possession of nuclear weapons. Targeted incentives could include an incremental forgiveness of both India's and Pakistan's external debts by the advanced industrialized states and the IFIs, conditional on nonproliferation progress and stipulating that reduced-debt service payments be reallocated to address basic human needs.

The cost-benefit analysis of Indian and Pakistani decisionmakers is strongly influenced by their perceptions of U.S. behavior, their eagerness to gain benefits from Washington, and the effects of U.S. pressures. If the political will is there, the Bush administration could persuade India and Pakistan to curb their nuclear ambitions. Conversely, should U.S. policymakers succumb to domestic pressures, downgrading nonproliferation objectives for short-term political and economic goals, nuclear proliferation will proceed apace in South Asia, undermining U.S. regional and global interests.

Samina Ahmed <[e-mail]> is a Research Fellow at the Belfer Center for Science and International Affairs, Kennedy School of Government, Harvard University.