He may have been in New York and the expectant audience in Delhi listening to him via satellite on a giant screen, but the Honourable William Jefferson Clinton, 42nd President of the US, has clearly lost none of his charisma and his formidable grasp of international affairs, or, for that matter, his enduring interest in India and its future. The star speaker at the India Today Conclave, the former President's speech coincided with the pulsating end to the World Cup cricket match between India and Pakistan, a fact that Clinton was keenly aware of. "Yes, I know you won the cricket match, I watched it too. When I realised that you had won, I knew I would have a happy audience," he quipped. His scintillating speech and the provocative question and answer session that followed was the highlight of the Golden Dinner Gala where the satellite link had been set up.

BILL CLINTON: Editor-in Chief Aroon Purie welcomes the former President via satellite

Clinton's speech focused largely on the core topic of the Conclave: India Tomorrow, Global Giant or Pygmy? The former President set the tone for his discourse by stating, up front: "The world cannot afford for India to be a pygmy. You have to be a giant and the right kind of giant." He then went on to lay down his vision for India with a wide-ranging analysis on its key challenges, from Kashmir to aids, sectarian violence to the threat of nuclear weapons in the subcontinent.

However, underpinning his analysis was his assertion that today's world was more interdependent than ever before and it remained "the central fact of the 21st century". Global interdependence, in his view, simply meant that "our fates are tied together and that we cannot escape each other". As an example of negative interdependence, he referred to September 11 where Al-Qaida used open borders, easy travel and immigration and access to information and technology to carry out their attack on New York. Describing India and Pakistan as interdependent and Indian Muslims and Hindus as interdependent, his view was that the central job of 21st century leaders was to make sure that it was a positive thing.

"Interdependence is the central fact of the 21st century. It simply means that our fates are tied together and that we cannot escape each other."

"For a variety of reasons, India is the battleground for every single conflict the world has to win if we are going to have a 21st century of peace, prosperity and progress."

While his speech dwelt on political issues throughout, he asserted that if India could keep economic growth in the 7 per cent range, "you will, by definition, not be a pygmy". He went on to outline the political challenges facing India in the context of the topic chosen for the Conclave. "The question is, if you become a giant, will you be the kind of a giant that empowers all the citizens to live up to the fullest of their abilities? Will you be the kind of giant that brings the region and the world together? Will you be a positive force for creating a world in which there are fewer wars and less terror and more hope? Or will you simply try, because of your size and power, to dominate a world full of conflict and division?"

In short, said Clinton, India's aspirations to become a global giant depended on whether its leadership created an India "rooted in shared benefits, shared responsibilities and shared values. If you do, your science, your brilliance, your historically important role, all of these will guarantee gigantic status in a very positive way."

One of the more enlightening aspects of his speech was his analysis that the conflicts India faced in the subcontinent and within its borders were, in essence, modern manifestations of the oldest problem of humankind, rooted in the desire to always define value for lives and the greatness of a nation by negative reference to someone else, what he described as the "us versus them" syndrome.

He gladdened the hearts of the assembled galaxy of ministers, politicians and industrial barons with his belief that "if India continues to grow economically and get beyond some of its own difficult issues, there is no question that you will be a giant among all nations in the 21st century". He did, however, add a sobering rider when he stated that "India is a perplexing, but an instructive case that every citizen of the world could well study".

His reasoning was that though India gave birth to Hinduism, Buddhism, Jainism and Sikhism, it was itself born out of religious conflict. It gave the world the philosophy of non-violence, yet Indo-Pakistan tensions held out the prospect of the only conflict today between two nuclear powers. India, he added, gave the world 30 per cent of its software engineers, but 25 per cent of the children were still hungry. India had taken the lead in offering the world life-saving anti-retroviral drugs that can turn aids from a death sentence to a chronic illness. "Yet the problem of aids has still not been adequately addressed within your own country."

"Four main challenges that India faces are Kashmir, AIDS, the nuclear issue and sectarian violence."

For all these reasons, he concluded, India remained a battleground for every single conflict the world had to win if there is to be a 21st century of unprecedented peace, prosperity and progress. "Winning these battles is not a choice but a necessity," was his contention. Returning to his pet theme of an interdependent world, he stated that greatness should be defined in different ways; in the ability to continue to be stronger economically and socially, in the ability to build the world with more partners and fewer terrorists; in the ability to conquer the forces of disintegration, terrorism, organised crime, weapons of mass destruction and religious, ethnic and tribal hatred, and, finally, in the ability to build international institutions of cooperation rooted in common values.

As far as India was concerned, President Clinton saw specific challenges ahead but chose to mention only four: Kashmir, the issue of nuclear weapons, aids and the curse of sectarian violence. "I believe that if you can reduce the dangers in these areas, and if you continue to grow economically, and if you use the strengths you have for this hi-tech age, you will definitely be the right sort of 21st century superpower," he said.

For the first time in public, he admitted he had been somewhat careless when he described Kashmir as the most dangerous place on earth, but went on to state the reasoning behind his statement: nowhere else in the world, besides Kashmir, were there two neighbours with nuclear power, a long common border, a history of conflict, deep religious tensions, three wars and an ongoing and apparently intractable dispute used by religious extremists to inflame passions.

He then laid out his view on Kashmir by repeating the statement he made as President that "only India and Pakistan can work this problem out. Outsiders cannot resolve it". While pushing for direct talks, Clinton spelled out the crux of the issue when he said, "The problem with any intractable situation is that politicians on both sides of the divide may often have more to gain in the short term by keeping it going than by making it go away. And there are always sacrifices that have to be made and risks that have to be taken."

He suggested Kashmir could be resolved along the lines of the Irish problem, referring to Northern Ireland with a majority of Protestants and a minority of Catholics, tied to the Irish Republic by geography and to Great Britain by law. Clinton's parallel was that the two sides had established some basic rules-majority rules, minority rights, shared decision-making, shared economic benefits and self-government with special relations, not only with Britain, but also with the Republic of Ireland. "If they could figure out how to do it," Clinton added, "so can you."

On the Indo-Pakistan nuclear weapons issue, Clinton pointed out that the outcome of any decision taken by either side could affect the whole world and cautioned against the dangers of an accidental launch. This was more important, he added, for Pakistan because it was on the border of Al-Qaida's most active elements. He was concerned that some of Pakistan's stockpile could become vulnerable through them. Referring to the nuclear threat emanating from North Korea, he asked, "Is that the way we are going to define our greatness in the 21st century? Or is there another way?"

He also expressed grave concern about the threat to India from the curse of aids. Pointing out that there were over four million Indians affected by HIV-aids, with the country's vast population, densely packed urban centres, a high number of poor people and social taboos, India was extremely vulnerable. This, he added, could undermine everything that India could do in the early 21st century in the economic field. His suggestions were to ensure aggressive prevention, education and treatment programmes and, above all, an environment where everybody was comfortable talking about it.

Clinton's harshest criticism was reserved for sectarian violence. Elaborating on his theme that the world still rewarded people who sought political power by trading on religious, racial, ethnic and tribal differences, he said that the saddest thing to happen to him since leaving office was the exhilaration he felt when he visited Gujarat in the aftermath of the earthquake and saw Hindus and Muslims working together to the "sickening feeling" he experienced when Hindus were burnt on the train and then 20 times that many Muslims were killed in the violence that followed. He quoted a report on how new history books in India carried a message of Hindu pride and Muslim cruelty. "When I read that," he stated, "it sent chills up and down my spine." His message was that identifying and categorising people in this manner would keep India from becoming the right kind of a giant in the 21st century.

Admitting that he realised how hard it was to give up all hatred, Clinton pointed out the irony of Gandhi's teaching, adopted by Martin Luther King, doing more to heal the racial divisions in the US than across religious divides in India. The whole of history, he added, had been one long struggle to explain the definition of "us" and shrink the definition of "them".

These, Clinton avowed, were the decisions people all over the world had to make. As a politician he knew how popular it was in every election to find someone to demonise. These questions arose everywhere but, he pointed out, they had no greater historical importance than in India because of its size, its potential to affect the future of the world and its nuclear capability. Saying he was India's friend and someone who hoped to be its partner for the rest of his life, he reiterated: "The question is what kind of giant are you going to be? I hope and pray you make the right decision."

That was not the end of the Clinton mantra or his magic. The audience then asked him specific questions to which he answered with his characteristic candour. In response to India Today Editor-in-Chief Aroon Purie's question on America pursuing a policy of unilateralism and whether countries like India should feel threatened by this, President Clinton said he did not think India should feel threatened but added, "You should not hesitate to say when you think we are doing the wrong thing". He said that while President George Bush did the right thing to go to the UN and ask for a resolution on inspections in Iraq, what should be happening now is letting the UN inspectors give an honest report on the inspections process in Iraq. That, he felt, would lead to an international consensus. He agreed that it was a bad thing when America looked too unilateral.

Then there was a question from industrialist Anand Mahindra, who asked about India's compatibility with the US and the elements that made it attractive or unattractive to America as a partner. President Clinton pointed out two specific areas of compatibility, one the phenomenal success of the hi-tech centres in India and their partners in the US which could only go forward. The second thing that was important, he felt, was the prospect of the new political cooperation between the two countries.

The next question came from Jay Panda, MP, who asked what lessons the former President had learnt about leadership during his presidentship. Clinton's response was that "being president was a job like any other job. Like being the prime minister of India is a job. And you have to decide what is the job." The key lesson was about being able to take hard decisions about the country, where it was, where you wanted it to go and what the strategy for taking it there was. The second lesson he learnt was to ascertain what the facts were and not engage in denial. He remarked his daughter's generation had this wonderful saying about "denial" being not just a river in Egypt. But, he added, "because we want to avoid uncomfortable choices, we engage in systematic denial".

The final question, asked by Purie again, was the trickiest since it asked President Clinton what would be the most important thing he would focus on if he were the Indian prime minister. Admitting it was "a no-end question", the former President stated that his primary domestic priority would be to develop a comprehensive economic policy that would bring growth, opportunity and education beyond hi-tech centres. On the foreign policy front, Clinton felt the priority was to resolve the difficulties with Pakistan or at least reach an accommodation "where you know that the worst cannot occur". His overarching priority, Clinton said, would be to make India a place where people of different faiths and backgrounds actually wish to live together and understand why that is consistent with and not in conflict with India's deepest religious traditions.