The Cable

State Department and Pentagon creating joint office for funding emergency response

Former Defense Secretary Robert Gates championed a rebalancing of foreign policy funding away from the military, arguing that the United States should pool soldiers' and diplomats' shared resources to better manage projects in warzones. Now, after his departure, the first true test of that idea is going into effect.

Gates, who famously warned in 2008 of the "creeping militarization" of U.S. foreign policy, was talking about his idea for a new $2 billion pooled fund that State and Defense would share for security capacity building, stabilization, and conflict prevention in dangerous areas of the world, where both the military and the diplomatic core operate, until his departure this year.

The Obama administration acted on that idea this year by proposing a $50 million starter fund in its fiscal 2012 budget request which it called the Global Security Contingency Fund (GSCF), meant for responding to "urgent and emergent challenges." The idea is that approval to spend the money would require the approval of both secretaries, but the State Department would be more or less in charge.

"Secretary Gates called for pooled funding and this is the direct result of that and the first test of whether State and DOD can really work together on this kind of thing," a senior State Department official said in an interview with The Cable. "This is really an example of how State and DOD, rather than engage in bureaucratic gamesmanship, have decided to work together to solve these problems."

"For us, GSCF is the new model," the official said. "This is the model we think makes the most sense, particularly in budget-constrained times."

The new GSCF office will have a State Department official as a director, a Pentagon official as a deputy director, and will be located at the State Department, the official said. Nobody has been selected for the positions yet. The rough model for the office is the interagency "Pakistan cell," which manages various aspects of Pakistan funding now.

There's only one hitch: Congress. In the fiscal 2012 budget bill passed by Congress last week and signed by President Barack Obama, the $50 million to start GCSF was omitted. But Congress did give the administration the authority to start the project using funding from other accounts, including money earmarked for the Pakistani military.

Accordingly, GSCF will be funded this year by money appropriated to Foreign Military Financing (FMF) and what's called the Pakistani Counterinsurgency Capability Fund (PCCF), a pool of cash that is used to reimburse the Pakistani military for money it spends helping the United States fight Islamic extremists.

The PCCF program, meanwhile, is another ongoing saga in the jostling between State and DOD for control over money and power in countries where they both operate.

Originally housed at the Pentagon as the Pakistani Counterinsurgency Fund (PCF), the program was originally supposed to be transferred over to State in 2009. But at that time, State didn't have the capacity to manage it, so the transfer was delayed. In 2010, State finally took over the program, only to lose it again in 2011 during the last-minute budget slashing that accompanied the April 2011 deal to raise the debt ceiling. Now for 2012, the program is back at State again.

State will receive $850 million for PCCF in fiscal 2012, and this year State put the funding in its Overseas Contingency Operations (OCO) account. By placing the program in the OCO account, the money is not counted as part of State's regular budget and therefore is more protected from the budget-cutting knives on Capitol Hill. The Pentagon is still heavily involved: In order to get the money to the Pakistani military, State actually passes the funds through the Pentagon, which implements the program on the ground by doling out the cash to the Pakistani army.

Passing the PCCF funds though the Pentagon this year will subject them to new policy restrictions in the fiscal 2012 defense authorization bill that require the administration to certify that Pakistan is using the money to fight extremists, rather than to build up conventional forces opposite India.

"The administration did have concerns that [these new restrictions] would hinder the flexibility of the program, but the Congress, obviously concerned about the nature of our relationship with Pakistan, insisted on these requirements," the State Department official said.

But how do you certify the Pakistanis are spending the money as intended? "That's going to be the issue," the official said.

The Cable

Inside the first ever U.S.-Japan-India trilateral meeting

While Washington grappled with the consequences of Kim Jong Il's death, the United States, Japan, and India held the first meeting of what is shaping up to be a robust trilateral dialogue -- but all sides have been quick to say that it's not aimed at isolating China.

The four-hour meeting was held at the State Department on Dec. 19, and the U.S. delegation was led by Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell and Assistant Secretary for South and Central Asian Affairs Bob Blake. Other U.S. officials in attendance included State Department Policy Planning Director Jake Sullivan, Acting Assistant Secretary of Defense for Asia and Pacific Affairs Peter Lavoy, and NSC Senior Director for Strategic Planning Derek Chollet.

The Japanese contingent was led by Koji Tsuruoka, deputy vice minister for foreign policy, who was visiting Washington with Foreign Minister Koichiro Gemba. The Indians flew in two officials, Joint Secretary for the Americas Jawed Ashraf and Joint Secretary for East Asia Gautam Bambawale.

Two State Department officials described the meeting for The Cable. "What I really loved about it was that it just seemed like a very natural conversation among friends," one of the officials said. "The amazing thing about our governments is that we really have shared values. That's the foundation of it all. That's the glue that binds us together."

The officials defined those shared values as democracy, human rights, rule of law, transparency, open markets, freedom of navigation, and an interest in international development work. "There wasn't a moment of dissonance in the whole thing," the official said. "The challenge now is to figure out what specifically we can focus on."

This was the first trilateral meeting between the three countries; the main objective of which was to set the foundation for future talks, discuss what issues would be on the agenda going forward, and set the goal of meeting again in Tokyo next year.

Topics that were discussed inside the meeting included Afghanistan, where Japan and India are large donors, the recent East Asia Summit, Central Asia, and Burma.

"We talked about how we can work together within all these Asian organizations to advance our shared values ... and what can do to help improve the workings of all these various fora," the State Department official said. "We agreed that we need to focus our collective efforts in Afghanistan to make sure all the values we share in Afghanistan are upheld and observed."

The U.S.-Japan-India trilateral dialogue is just the latest of the "mini-laterals" that the United States has undertaken recently. These groupings, which are smaller than often cumbersome multilateral groups, are becoming a preferred way for the United States to build consensus around policies with friends and allies.

There is another trilateral strategic dialogue between the United States, Japan, and Australia that has been ongoing for five years, and now has half a dozen working groups. The United States and India have had a bilateral dialogue about East Asia for over two years now, led by Campbell and Blake. That dialogue has held four official meetings.

The State Department official said the United States is interested in setting up some "mini-lateral" structures that include China. U.S. policymakers also want to start a U.S.-India-China trilateral dialogue, the official said, but the Chinese won't sign on.

"Our Indian friends are happy to do it, we're willing to do it, but our Chinese friends are a little wary," the official said. The Japanese have also put forth the idea of a U.S.-Japan-China trilateral dialogue.

The State Department wants to be clear that this week's meetings were not about China. In fact, they said that the rise of China and how to deal with it wasn't discussed at the Dec. 19 trilateral meetings.

"We did talk about China, but it was in the context of other things," the official said. "We were actually looking for things we could do jointly with China."

Experts said that even if the trilateral dialogue wasn't about China, the fact that all three countries are cooperating in the effort to deal with China's rise looms over the discussions.

"The growing cooperation with India and Japan is driven by China's rise, there's no doubt about that. That doesn't mean it's directly aimed at China," said Patrick Cronin, senior director of the Asia-Pacific Security Program at the Center for a New American Security (CNAS). "They are all trying to respond to China's rise but not antagonizing China. From China's perspective, any cooperation is encirclement."

The initial Chinese reaction to the meeting was cautious. "U.S., Japan and India are countries with great influence in the Asia-Pacific region. We hope the trilateral meeting will be conducive to regional peace and stability," Chinese Foreign Ministry spokesman Liu Weimin told reporters.

Countries like India are interested in deepening their ties with China as well as the United States, but joining U.S.-brokered diplomatic architectures allows India to approach its engagement with China from a position of greater strength, said Cronin.

He also said that the effort was part of the U.S. goal of increased burden sharing with India, to offset the financial cost of maintaining the U.S. presence in East Asia.

"The U.S. is not looking to spend a fortune, it's looking to be a facilitator," he said. "It brings India into East Asia and Japan into the Indian Ocean and it does that at a very low cost to the United States."

The State Department officials acknowledged that part of the driving force behind encouraging India to take on more responsibility was to shift some of the financial responsibility to countries whose economies are on the rise.

 "The Indian government, for the first time in a long time, has money. It's a country that can greatly complement U.S. efforts in the region.... This theme of them being a net provider of security takes on more significance when all of a sudden they finally have the resources to expand their role," the official said.

"The whole world has been a free-rider on the United States for so long, if the Indians can help with that in an era when we face budgetary constraints, the more the better," the official said. "The U.S. has had the luxury in the past of going it alone, but it certainly makes sense to do it with your friends."