Know thy neighbour

Published: September 16, 2012
The writer is a former vice-president of the World Bank and a former caretaker finance minister of Pakistan

The writer is a former vice-president of the World Bank and a former caretaker finance minister of Pakistan

The recent visit by the Indian Foreign Minister, SM Krishna, to Islamabad and the indication that Pakistan may finally get a visit from the Indian Prime Minister, Manmohan Singh, are clear indications that the process of economic and trade normalisation is proceeding slowly but reasonably smoothly. There are three aspects of this process that need some consideration and will be the subject of the article today, and a couple that will follow thereafter. The first is that most of the advances have been made at the political level. The decision to move the process forward was taken at an informal meeting of the Indian prime minister and Pakistani President Asif Ali Zardari, a few months ago. Most of the work related to normalisation was done by the ministries of foreign affairs in the two countries. There was relatively little involvement of the technical people and institutions.

The second important aspect of this process is that the Indian states and the Pakistani provinces that would be affected as normalisation proceeds have not been directly involved in the discussions. When the bulk of the trade begins to flow over land-routes, the provinces on the Pakistani side of the border and the states on the Indian side will need to be included in the contemplated changes. Third, a framework will be needed to move the process forward. It is interesting that much of the work that has been done, to-date, was undertaken outside the Saarc and South Asian Free trade Area arrangements. However, if the process also brings in countries other than India and Pakistan, as it must, a multilateral framework would be required.

Now that India and Pakistan are inching towards closer economic relations, it would be useful if each country understood well how the policymaking process works across the border. The Indian system has been democratic virtually from the day the country started out as an independent state. Pakistan, on the other hand, has ridden a political roller coaster, trying and discarding many systems. It is only during the five-year period since the beginning of 2008 that a durable democratic political order has been shaped. Both countries are now democratic, India more so than Pakistan. Both are evolving rapidly but in doing so are moving in different directions. It is important to understand where they are going in order to appreciate the relationship that will develop over time in the area of economics.

As political scientists point out, calling a political system democratic means more than recognising that those who wield policymaking power do so as the elected representatives of the people. Holding periodic elections to choose those who will govern is only one part of the political process. A political order is also defined by the location of the policymakers. This is what distinguishes a highly centralised system from the one that is federal. At this point in time, both India and Pakistan are federal systems but that is where the similarity ends. Political power is much more disbursed in India than is the case in Pakistan. This difference will deeply impact the development of economic ties between the two countries as they evolve.

The states in India at this time are important economic actors. The economic choices they make are determined more by the local political establishment than by those who govern in New Delhi. This is one reason why there are vast differences in the economic performance of the states, as well as in the economic systems that have been adopted by them. Gujarat, for instance, has given the private sector much greater space within which it can operate. West Bengal, on the other hand, has a much more intrusive government. This reflects the very different histories of the two states. Gujarat has some well-established industrial and business houses that became prominent players, not only in the state, but in all of India. West Bengal was long governed by a coalition of Left parties led by the Communist Party of India (Marxist), which saw the government as the leading player in the economy.

In Pakistan, in spite of the passage of the Eighteenth Amendment to the Constitution that allowed the provinces much greater authority in economic matters, policymaking has remained highly centralised. Not only does Islamabad remain the most important policymaker, most important policies are taken by the presidency. If the Eighteenth Amendment were to be interpreted literally, it would have created a presidency akin to the one that exists across the border in India. The president would have become a figure head, with most of the power in the hands of the prime minister, answerable to parliament. That has not happened. In India, the constitution also sees the prime minister as the most important policymaker. That, however, is not the case at present. Much of the power resides in the hands of the leader of the Congress Party that governs as the leader of the ruling coalition in New Delhi. In both cases, these are departures from the Constitutions that clearly give governing authority to the head of the government — the prime minister — not the head of the state; which is the president. Why that has happened is an important answer to determine in order to understand which way the two systems may be proceeding. I will take up this question next week.

Published in The Express Tribune, September 17th, 2012.

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Reader Comments (32)

  • Raza Khan
    Sep 16, 2012 - 11:07PM

    Hope that the Khakis let this process continue!


  • Max
    Sep 16, 2012 - 11:31PM

    Well said. There is dire need for cooperation between the two neighbors. We, both, developed a culture of hate in last sixty years. Let us make the next sixty years the one to dismantle the hate and get over this war-mongering mentality.
    As a political scientist, may I suggest to move beyond “political order” as it has nothing to do with federalism. It was developed in a certain time period, for a certain reason, and by a certain person. I know Mr. Burki was his student, but the term has lost its validity. Having said that I am not putting down the importance of “political stability.” There is a difference between the two terms ( I teach epistemology). The order comes from the top and stability from within the society.


  • Lala Gee
    Sep 16, 2012 - 11:38PM

    “The recent visit by the Indian Foreign Minister, SM Krishna, to Islamabad and the indication that Pakistan may finally get a visit from the Indian Prime Minister, Manmoham Singh,”

    I totally fail to understand what kind of mentality is this. Do we have any self respect left? Who are these people who cannot live without patronage from Indian Prime Minister. Well, I am not against good relations with our neighbors, but how by behaving like beggars we can get respectful treatment, apart from some spare change. Even that is not a possibility with India as she is not a rich country nor she seems to have any fantasies to act like one. The only thing she may be interested in is the few coins we might have at our disposal.


  • Gladiator
    Sep 16, 2012 - 11:51PM

    I think Sindh had the potential like Gujarat. You can see Sindhis throughout the world who have become big shots.


  • G. Din
    Sep 17, 2012 - 12:05AM

    ” Pakistan may finally get a visit from the Indian Prime Minister, Manmoham Singh,”
    I hate to contradict you but it seems quite unlikely. Our foreign minister, Krishna, after his return from the recent visit has advised his prime minister not to travel to Pakistan as the latter has not shown much enthusiasm in prosecuting and bringing to justice the state and non-state actors involved in the 26/11 Mumbai massacre case.
    After that, Congress Party advised PM “Manmoham Singh” that he should not travel to Pakistan as it (Congress Party) cannot afford the huge political risk involved. Being a creature of his Party, MMS can ill-afford to make the visit. It should be some consolation to Pakistanis that he is otherwise dying to visit their country!


  • varuag
    Sep 17, 2012 - 4:37AM

    The author is spot on when it comes to the gradual devolution of the Indian political power from the center to the provinces. The eminent political scientist Yogendra Yadav refers to this as state-nations as opposed to the two century old notion of nation-state. Both the countries are state-nations and this devolution results in healthy competition among provinces when it comes to attracting private capital. In India this process is hastened due to the emergence of strong regional parties and coalition government. Pakistan also has a coalition government and emergence of PTI may ensure that coalitions are here to stay. But democracy has to take roots in Pakistan and people have to stop looking at GHQ for deliverance during tough times.

    The visit of MMS is inconsequential to the larger picture. What is needed is an uninterrupted dialogue along-with baby CBMs. But the governments are actually taking neo-natal baby steps, judging from the visa agreement.

    The non-state actors are inconsequential if there is peace between the two and therefore will try everything possible to disrupt the process. The million dollar question is whether the dialogue process can survive a terrorist attack ? We have already seen the futility of non-engagement post 26/11. But politically it may be very difficult to continue the process, if and ever such an event does take place.


  • John B
    Sep 17, 2012 - 4:51AM

    In a good democracy, all PMs are bound by the party decisions as the PM himself is one among the equals of the party MPs, chosen by his or her equals to present them as titular head on matters outside of party politics-spokes person of the party’s policy vision for the country.

    The PM holding authoritative party powers were long gone in India, in the two of the parties that dominate federal politics.

    Whereas, in PAK due to short experiments in democracy, the politics revolves around the aura of a person. So, policy decisions in PAK center around a singular person, whether it is PPP, MQM, PML(N) or PTI.

    Neither the US president, nor the PMs of Canada, UK, or Australia hold singular power in policies and policies are set by their respective parties and their elected chiefs bring their views into it and sell the policies to people for electoral votes and governance.

    Policy decisions by a single person is tantamount to dictatorship even if that person’s party is elected by the people. A good example of that in PAK history is ZAB and in India history is Indra gandhi’s tenure where she suspended the bill of rights of Indian constitution with presidential seal.

    In the international politics, dealing with single person government is good for an another country since things get done quickly; whereas, it complicates the matter, if the same single person government wants things in reciprocation from his partner country since the decisions in that country is made by the party executive committee and not their PMs or President.

    If the author assumes that the leader of the congress party holds total power in congress policies in India, then he is mistaken. The same goes in BJP.

    The author has to take this into consideration in his second part of the opinion.


  • Zalim Singh
    Sep 17, 2012 - 5:58AM

    hope things become normal. But lot to be done from Pakistan.


  • Gary
    Sep 17, 2012 - 7:12AM

    “Both the countries are state-nations.”
    Since when is Pakistan a state-nation? That’s news for even Pakistani’s, think. Wonder what my Pakistani friends see their country has… a state? a nation? a nation-state? state-nation? or something else…


  • Lala Gee
    Sep 17, 2012 - 10:26AM

    @G. Din:

    “I hate to contradict you but it seems quite unlikely.”

    Thank you India. Saved us a lot of money and hassle. Thank you once again


  • Polpot
    Sep 17, 2012 - 10:29AM

    @Lala Gee:”The only thing she may be interested in is the few coins we might have at our disposal.”
    The few coins have already been cornered by the Chinese…you are like a lemon with no juice.


  • Sinclair
    Sep 17, 2012 - 10:40AM

    @John B

    I think the first among equals applies to the Cabinet not the party. This idea gained importance mainly because of the fights over power between Nehru and Patel. Even though the link between the Government and the Party is undefined (regardless of which coalition is in power), with the Party dictating issues on some matters and the Cabinet on others – it would be best if the Cabinet is left alone to its devices until something really consequential like a war or tax increase or subsidy removal is concerned.


  • Indian Wisdom
    Sep 17, 2012 - 10:47AM

    “Most of the work related to normalisation was done by the ministries of foreign affairs in the two countries. There was relatively little involvement of the technical people and institutions.”
    I fail to understand how is this a bad thing??? As most of the hurdles in the normalization of relations has been caused by these same political classes.If they are now trying to normalize relations that should be welcomed.
    Yes, of course assuming that by the term “technical people and institutions” you don’t mean institution of army.


  • Polpot
    Sep 17, 2012 - 11:25AM

    In Pakistan the India Policy is decided by the Army, in India the Pak policy is decided on by the Civilian Govt.
    Whats the need for any further analysis?


  • varuag
    Sep 17, 2012 - 11:43AM

    state-nations as a concept is evolving. Its more a case of cultural heterogeneity among the units. So Canada is a state-nation but US is not. India is but Sweden or Japan is not. Technically Pakistan has to be since there are strong cultural identities and they are reflected in the political framework as well. But such clear compartmentalization is problematic. Among nations its always a question of degree not kind whenever a particular concept is applied. India is more a state-nation than Canada perhaps and so on and so forth…………


  • upkamath
    Sep 17, 2012 - 12:01PM

    @Gary: Since when is Pakistan a state-nation? That’s news for even Pakistani’s, think. Wonder what my Pakistani friends see their country has… a state? a nation? a nation-state? state-nation? or something else…

    Hey, you did not try non-state!

  • Sep 17, 2012 - 12:33PM

    At policy level attention should be paid to border trade, within the framework of GATT/WTO rules. It poses less problems and rules are pretty liberal as these have been taken from the European trade practices.Kasur/Ferozpur, Lahore/ Amritsar, Narowal/ Gurdaspur trade transactions would at least relieve the seasonal food shortages.


  • G. Din
    Sep 17, 2012 - 4:52PM

    @John B:
    “In a good democracy, all PMs are bound by the party decisions as the PM himself is one among the equals of the party MPs, chosen by his or her equals to present them as titular head on matters outside of party politics-spokes person of the party’s policy vision for the country. “
    This is as fallacious a statement as one can make. PM is not “one among the equals ” but “first among equals”. And, how does he/she become that “first”? By bringing along with him a constituency of his own which he/she has developed around him/her over a long time. All leaders are required to lead. But, you can lead only if there are those whom one can lead. There has to be some sort of moral imperative which convinces those led that he/she is fit to lead.
    If you are with me so far, then let us apply to MMS.
    He has no constituency of his own. All his life he has been a lowly babu, ready with his “jee janab”, to curry favour with his boss to ingratiate himself for a petty promotion to the next level. He cannot have any intellectual honesty because he has had to keep himself free, chameleon-like, to blend with his boss’ wishes and commands. He was a part of Congress government and managed quota-license raj . Then when his boss took the decision to dump the old economic order, he, without any hesitation, offered to work for the new order. His whole life story disqualifies him as a leader. That was confirmed when he was so thoroughly drubbed in the only election he stood in, that it left him traumatized for life. So, what right does he have to make decisions in the name of people, to be their PM?
    I have said this before. This man crawls through a loophole in the Indian Constitution into his office every morning to occupy a chair no one elected him for. He is an interloper PM who purloined that august office.


  • joy
    Sep 17, 2012 - 5:17PM

    @ varuag…..i read all your comments …they are well articulated, informative and very well written. I hope you take up blogging seriously….


  • Sep 17, 2012 - 6:03PM

    @Lala Gee:

    “I totally fail to understand what kind of mentality is this. Do we have any self respect left? “

    You have a surprisingly short memory. Remember, we talked about how India is the status quo power and a dominant one, which doesn’t need to do anything to appease anyone by definition?

    Why would our PM come to Pakistan? You have granted us what we want- access to Pakistan market by granting us the MFN status.

    Pakistan wants movement on various issues which are extracting a lot of the limited resources in Pakistan like Kashmir, Siachen,etc. India being a status quo is asking for a give and take, but the problem is Pakistan has nothing to give, hence, we see this show of pleasing India and taking in such tones.

    Like I said with respect to you once, when it comes to India, all good sense goes out of the window.


  • Dr V. C. Bhutani
    Sep 17, 2012 - 6:47PM

    It is two generations since Independence. Burki Saheb, if they have not learnt this in 65 years, are they likely to learn it now?


  • kumar
    Sep 17, 2012 - 7:18PM

    @ Pakistan —u see Obama , Angela merkel, saudis , putin not too mention even cameroon …all of these world dignatries are trying to make co-ordial relations with India they aren’t fool … The grave demand of this hour is that u must also have some pie of india’s vibrant economy … regarding our 600 million poor you wont worry. They also would come gradually in “respect living standard ” .. dunt get trap in …. move forward or find yourself(pakistan) always living a life style similar to stone age .. :)



  • gp65
    Sep 17, 2012 - 7:39PM

    @BruteForce: I agre with your assessment that Lala Gee’s posts when he speaks about Pakistan are insightful. Yet he does tend to drag India into issues where there is no relevance to the subject matter.

    In this particular case though I can see his point of view. HE is objecting the almost fawning need to have MMS visit Pakistan. As a Pakistani he is offended by that. If I were a Pakistani, I might feel the same way. Ofcourse his point about India wants a few coins from Pakistan was in poor taste – but then his heartburn gets the better of him anytime India is mentioned.


  • observer
    Sep 17, 2012 - 8:00PM

    So, Who made the decision to attack Mumbai?

    And, Who executed it.


  • SKChadha
    Sep 17, 2012 - 8:56PM

    A balanced view, expressed keeping the national interest in mind. I would like to add that Indian States are provided greater autonomy in the federal structure and Article 370 is proof of it which provides special autonomic features to J&K, Sikkim, North Eastern States, Andhra Pradesh, Maharashtra and Gujarat. The federalism flourishes with special status and Indian polity is required to understand it. At times there are demands to abrogate Article 370 to concentrate more powers in the hands of Central Government. Do we need it? To me answer is in negative. We have to learn more to live with differences. That is our democratic traditions.


  • JSM
    Sep 17, 2012 - 9:25PM


    and executed by non-state actors.


  • Sanjay
    Sep 17, 2012 - 9:44PM

    @G. Din – “All his life he has been a lowly babu”

    I take a strong exception to this statement & related sentiments further down in your comments. I also share the opinion that he may not have leadership qualities for a PM but to say that he has been a lowly babu in his life is completely wrong statement.

    Following is a brief of the “Lowly babu”:

    After obtaining his doctorate in economics from Oxford, Singh worked for the United Nations in 1966–69.
    He subsequently began his bureaucratic career when Lalit Narayan Mishra hired him as an advisor in the Ministry of Foreign Trade. Over the 70s and 80s, Singh held several key posts in the Government of India, such as Chief Economic Advisor (1972–76), Reserve Bank Governor (1982–85) and Planning Commission head (1985–87).

    In 2010, Newsweek magazine recognized him as a world leader who is respected by other heads of state, describing him as “the leader other leaders love.” The article quoted Mohamed ElBaradei, who remarked that Singh is “the model of what a political leader should be.”[44] Singh is number 18 on the 2010 Forbes list of the world’s most powerful people.[45] Forbes magazine described Singh as being “universally praised as India’s best prime minister since Nehru”.[46] Australian journalist Greg Sheridan praised Singh “as one of the greatest statesmen in Asian history.”[4

    I am not an agent of congress who has become a party synonymous with corruption & the reason for many problems of India. But we must give credit where it is due. We must respect an iota of good thing in someone even if despise of rest of things they have.


  • Enlightened
    Sep 17, 2012 - 10:21PM

    @Raza Khan:
    An appropriate comment. GOI is quite wary of interference by the military but still continuing normalizing process with a hope it would act as a spoil-sport for sake of Pakistan if not India.


  • gp65
    Sep 17, 2012 - 10:27PM

    @joy: ”
    @ varuag…..i read all your comments …they are well articulated, informative and very well written. I hope you take up blogging seriously….”

    I second that.


  • G. Din
    Sep 17, 2012 - 11:23PM

    “Lowly babu” in the present context does not mean that he has worked as a LDC (lower division clerk). It means that he has the mentality of a supine subordinate who considers himself responsible solely to carry out the mandate of a boss (mistress) regardless of how dazzling his resume may be. Einstein, for all his eminence and scholarship, could never be imagined as holding any executive office because such men have no leadership qualities. Einstein did not seek one but MMS is proving every single day that he is a misfit in his job. He has lost control (if he ever had any) of the governance of India beyond his PMO.
    Job requirements for a prime minister are not how many degrees one has or how many research papers one has written. A Prime Minister is elected to carry out the mandate of the people of India. India is a democracy, for crying out loud. He was never elected by the people. Nevertheless that doesn’t stop him in sitting on the prime ministerial chair. Is it too difficult to see how much intellectual dishonesty is explicit in that act?
    As regards the testimonials, have you seen some of the recent ones. Such “accolades” as “an underachiever” or “non-achiever” or “grossly overrated as an economist” or “Sonia’s poodle” or “ditherer” or such mortifying ones given from inside and outside the country. An honourable man would have taken the hint(s) and resigned but instead, he forces his PMO to contest such charges.
    He is the first man who has demeaned and diminished the office of the Prime Minister of India. Most Indians are embarrassed by him.
    You are welcome to your adoration but it would have been far better if you had proved facts quoted in my post wrong.


  • Gary
    Sep 18, 2012 - 1:17AM

    @Sanjay: Ha, can you tell us how and why any of your statements prove he is a leader, let alone statesmen?
    @varuag: I agree with you to an extent, but not sure how is canada a state-nation. It’s still a nation-state looking more closely at India model to deal with Quebec… The structure of India too is federal (with a strong central bias) in a general way (with an exception of J&K), yet there are certain aspects that are unique to federalism as practiced in India. Since mid 50’s states and territories in India are based on linguistic lines. I understand language and culture are intimately related but to what extent is still under debate, but i would not equate language with culture.


  • varuag
    Sep 18, 2012 - 12:49PM

    I think you take an offence to Canada being a state-nation from my perspective, too rigidly. These matters are subjective and we can’t draw a hard line in the sand. Its like debating if a system is unitary or federal. The US is federal but to an absent minded puritanical, the Swiss might be more so due to the fact that they are a confederation. The greater assertion of Quebec’s identity (especially after the September 4 elections that gave victory to secession oriented PQ party) as distinct from rest of Canada is what makes me think of it as a state-nation. It is not inimical to the notion of nation-state. I read somewhere that Canada has traversed through this issue of identity by forging the slogan of Unity in Diversity. This is the exact same slogan that India utilizes to encompass its mind-boggling diversity. Just as a nation can have aspects of federal as well as unitary system, so can the country have characteristics of nation-state as well as state-nation. In fact, the constitutions of Canada and India despite being federal have many unitary characteristics. We can agree to disagree :)

    Well in India, most states that were based on linguistics were created in the early 60’s and 70’s. The newly independent nation of India did not want multiple fault-lines to emerge and therefore steadily refused creation of more provinces especially creation of linguistic provinces. There was a feeling that it would aid centrifugal forces and fissiparous tendencies in a nascent republic. In 1953, a devout satyagrahi by the name of Potti Sreeramulu died after a hunger strike for creation of separate province of Andhra Pradesh. The Government had to bow down and thus started the process of linguistic provinces. But in the 90’s the division was based on tribal affiliation thus creation multiple provinces in the North-East. The last 3 provinces were created in 2000 viz. Chattisgarh, Jharkhand, Uttarakhand and for most the reasoning was the perceived deprivation of these provinces economically. Even now the provinces where such struggles are present have economic considerations and not linguistic ones like Vidarbha, Telengana, Bundelkhand, Gorkhaland etc. This is not to say that linguistic considerations have evaporated, just that they are down in the pecking order.

    Language most certainly can’t be equated with culture. Especially in India where there is a huge proliferation of dialects and the same language undergoes mutation as one traverses a province. Middle-class are more comfortable in English because in reality in the professional space, one gets to work with people from all the provinces and generally the only common language for all people is English. This acceptance of an alien language by no way makes them any less affiliated to their provinces.


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