SOUTH ASIA: Trade Promises to be an Engine to Regional Peace

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Dec 13 2003 (IPS) - Ahead of next month’s South Asian summit in Islamabad, India is pushing the idea of increased trade as the engine of regional peace that has, for more than half a century, been held hostage by the intense rivalry between India and Pakistan.

On Friday, Indian Prime Minister Atal Bihari Vajpayee set a positive tone for the summit of the South Asia Association for Regional Cooperation (SAARC) by saying that even a common currency for the members that also include Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka is a possibility.

South Asia is one of the world’s few regions that does not have a free trade agreement and there is hope that this situation can change if the long-awaited South Asia Preferential Trade Agreement (SAFTA) is signed at the January summit.

‘’Our people, business and organisations are waiting to interact more closely with each other, This includes producers and consumers, investors and markets, doctors and patients, artists and audiences, students and universities,” Vajpayee told a two-day seminar called ‘Peace Dividend: Progress for India and South Asia,’ which ended Saturday.

Last year’s SAARC summit had to be was cancelled after India refused to attend, but a new mood for dialogue centred around trade has been building up ever since Vajpayee offered a ‘hand of peace’ to Pakistan in April.

By Nov. 26, the two countries declared a ceasefire along the Line of Control (LoC) that runs through the disputed territory of Kashmir.

Pakistan is yet to reciprocate India’s offer of according Most Favoured Nation (MFN) status to its neighbour, but recent months have seen a flurry of exchanges by trade delegations and chambers of commerce of both countries.

Satyabrata Rai Choudhuri, former professor of international studies at Oxford University, blames this on Pakistani security services. which prefer a settlement of the Kashmir issue before signing up on a policy of liberalised trade.

‘’Probably the Pakistani military regime believes that once Indo-Pakistani trade takes shape, the Kashmir issue could recede from public memory and cease to be an issue,” Choudhuri said.

But many believe that a new generation of young people is growing in both countries that have no memories of the traumatic 1947 partition. This created Pakistan as a homeland for the sub-continent’s Muslims, resulting in major population movements and bloody ethnic cleansing.

The partition did not cover Kashmir, a Muslim-majority territory and in 1971 East Pakistan broke away to form what is now Bangladesh. Since 1947 India and Pakistan have fought four wars over territorial issues, the last of them at Kargil on the Line of Control in 1998.

But the captains of industry and trade in the two countries have different ideas far different from their army generals.

In September they launched the India-Pakistan Chief Executive Officers Business Forum, which has begun to build cooperation on such items as textiles, automobiles, chemicals and pharmaceuticals.

Said Anand Mahindra, president of the Confederation of Indian Industries, which is playing a lead role in the new forum: ‘’The fact that the leaders in the two countries are coming together is a major achievement and we plan to follow it through a sustained and committed process of increasing trade.”

India and Pakistan have an official trade of around 200 million U.S. dollars but exports through third countries such as the United Arab Emirates and Singapore exceed a billion dollars, resulting in wastage.

Direct dealing is expected to quickly raise bilateral trade to four billion dollars. After an attack on India’s Parliament in December 2001, the two countries downgraded diplomatic missions in each other’s countries to the level of deputy high commissions, suspended air links and civilian overflights and prepared to go to war by amassing close to a million troops along their common border and the Line of Control.

The latest initiative, in a roller-coaster ride of peace moves and armed hostilities, came from Pakistan Prime Minister Zafarullah Khan Jamali. He announced a ceasefire on the border that was to extend from the marshes of Kutch on the Arabian Sea to the northern glaciers as of Nov 26, the day on which the Muslim festival of Eid fell.

Since then the two countries have agreed to restore air links from Jan. 1, 2004, and have plans to reopen long-dormant overland and coastal links. These include a ferry service between the port cities of Mumbai and Karachi and railway tracks between the Pakistan province of Sindh and the India’s western Rajasthan state.

There is enormous international pressure to get the two nuclear-armed countries to return to the negotiating table and for Pakistani, especially, to give up support for militant groups. India says Islamabad is continuing to cross over the LoC and carrying out attacks on its side of Kashmir.

In late November, Musharraf told a group of Pakistani newspaper editors that Pakistan risked being bombed and sanctioned by unless it reigned in the militant groups that were first allowed to mushroom in Pakistan during the 1980s as part of U.S.-backed efforts to repel the invasion of Afghanistan by the former Soviet Union.

Assessing the current peace moves, U.S. Deputy Secretary of State Richard Armitage told the ‘Financial Times’ on Thursday that they are the best ever in the last three years. Both sides, he said, ‘’have greatly modulated the rhetoric and, at least for the three years that this administration has been around, it’s the best place that India and Pakistan have been in”.

Armitage played a key role in defusing the 2002 military standoff between the neighbours. ‘’Right now they are enormously in a better place than they were just two months ago with both the ceasefires at the Kashmir Line of Control and the Siachen glacier and with high-level visits and exchanges,” Armitage was quoted as saying.

On Friday, Vajpayee urged Pakistan and India, as well as the other countries of the region, to develop greater economic stakes in each other and reach a stage where ‘‘we would not be far from mutual security cooperation, open borders and even a single currency.” (END/IPS/AP/IF/IP/RDR/JS/03)