The writer works for Pakistan Customs Service and has a Master’s in Public Administration from Harvard University
Chinese Premier Li Keqiang’s decision to visit India and Pakistan on his first official trip abroad after taking office reflects some important aspects: the level of importance China allocates to the region and the kind of weight it attaches to its relationship with both countries. The Chinese premier voiced his keen interest in developing better economic and technical cooperation and the creation of greater investment opportunities with both countries. This should give positive signals to the incoming government in Pakistan. Another aspect to glean here is the force of regionalism at play, a phenomenon getting stronger globally.
Economic regionalism, though not a new concept, has fast gained traction in the last two decades with more and more countries entering into bilateral and regional trading arrangements, including customs unions, free trade areas and common markets. This outcome can be partly explained by the endless procrastination of the Doha Round of the WTO having pushed multilateralism to the background. But political exigencies between countries and genuine economic pressures exerted by businesses and industry within countries to strengthen international supply chains and acquire deeper market access for their products have substantially spurred this global trend to forge trade and economic ties within and across regions. Economic interests have even roped in countries otherwise eternally divided on crucial diplomatic and strategic issues. The search for better economic prospects has led countries to make unholy alliances, putting apparently intractable disputes aside. Hence, logic and economic wisdom dictate that countries should be able to prevent economic gains from being dampened by political irritants, especially in interlinked economic environments with spillover effects.
To mention just a few examples, India and China have a long-standing border dispute but China is India’s largest trading partner with bilateral trade between the two targeted to reach $100 billion by 2015. The Chinese premier’s gesture to visit India as the first country after assuming office and the warm welcome accorded by his Indian counterpart, though under pressure to call off the visit due to border tensions between the countries having escalated, points to overriding gains not to be lost to such sporadic incidents. Also, India’s continued support of the Tibetan freedom struggle and provision of safe sanctuary to the Dalai Lama and the self-proclaimed Tibetan government in exile has incurred China’s strong opposition all along. But these contentions have not affected trade relations between the region’s largest economies. The Spartly Islands dispute in the South China Sea involves China and countries, which are predominantly members of the Association of Southeast Asian Nations (ASEAN) and the trading bloc created by the ASEAN Free Trade Area (AFTA). The China-ASEAN FTA is the largest free trade area in the developing world in terms of trade volume and the largest in the world in terms of population and GDP. The Qualifying Industrial Zones (QIZs) in Jordan and Egypt set up in collaboration with Israel, countries riddled with historic border and territorial disputes in the Middle East, is another case in point. History is replete with examples where economic concerns have been pivotal in averting political flashpoints between countries due to mutual economic interdependence.
In this context, are Pakistan and India ready to enhance their trade relations despite outstanding disputes? Do they feel a serious need for better trade and investment ties with each other, no matter how turbulent things get on other fronts between the two? Can we in Pakistan afford to remain aloof from the economic prospects on offer in the huge market of a billion-plus people in India? Will Pakistan’s improved economic relations with India help speed up the envisaged plan of making the country a transit hub in the region? Will the MFN status granted in principle to India be allowed in reality? Will it carefully counterpoise the gains and economic realities of both countries and not just symbolise the fulfilment of a binding commitment?
These are some of the questions to mull over by the new government while arriving at long-term policy decisions to enhance our economic ties and deeper integration in the region. This can only happen if economic gains are separated from political differences, a wise lesson to learn from the Chinese premier’s visit to India.
Published in The Express Tribune, May 30th, 2013.
COMMENTS (27)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Sir,
It is very common in India to compare everything with China. The common refrain among Indians is: "China and India were level on most development indicators till 1980. Look where they are today, and look where we are".
This is the common starting line before everything is compared.
Few people realize that we are comparing incomparables. China has a political and economic structure which is completely different from India or Pakistan.
Everybody knows that progress in democratic states is slow and intermittent, while non-democratic states can enjoy tremendous growth in relatively short time period.
On the flip side, democratic countries are liable to be more durable over the long term and are not likely to implode or get into external/internal conflict of any kind.
Hence it would be better to compare apples with apples and not oranges.
Suresh
@Sridhar: It is time the two neighbours and their people shed their old perceptions of antipathy and distrust. Thus usher in the new era of cordial bilateral relationship with trust and amity.
@Yasin: Yasin Mian, During the middle ages, brute force mattered, so that even the Afghans could come and rule Delhi by forcve while hindu kings were not united and fought against each other. Islam was then a unifying force. What do u see today? Technology has replaced "brute force". It is not possible for Pakistan to defeat India in war. It has tried many times, last time being "Kargil". Also, Indians have a system that has united them. It is called democracy, where dissent is allowed and various opinions are taken into account. So, Kerala became the first place in the world to have a democratically elected "communist" govt at state level. There is space for all shades and opinions. All live in peace, including shias, sunnis, ahmadiyas. As M.J Akbar put it nicely: India is the only place in developing world where muslims have seen uninterrupted democracy for 50 plus years. Look at Pakistan. Islam has not unified muslims. Bangladesh broke away in 25 years. Muslims in Pakistan today are killings muslims. Shias are being targeted in Karachi and other places. Ahmadiyas have been persecuted since they were declared "heretic" by the majority community. So, the myth of "islamic warrior" or "flag flying over red fort" is just that, a myth. It must be good to dream such things since u guys have little else to look forward to today!
Pakistan will soon be begging for some "energy deal" with India to offset its perenneal "load shedding". We will then know how "ghairat" is the Pakistan nation. A "Ghairat" nation does not allow drone attacks on its soil, does not have IMF sitting and dictating to you what you should or should not do. Pakistanis have been indoctrinated into thinking "india" as the enemy. This serves well for the ruling elite which can then justify the large % of GDP sent on defense. This indoctrination has reached such a level that there are very few Pakistanis with enough wisdom to see what is truly ailing Pakistan. A truly democratic nation would have Army under civilian control. when that happens in Pakistan, then the civilian govt will strive for peaceful relation with India. This includes increasing trade and economic activity. Trade cannot happen until the "army" in pakistan is tamed and brought back to the barracks. Do u think this will happen easily or that Army will easily give away its perks and priveleges? Noway!
Good to read such a positive article which focuses on need to move forward keeping the past behind. In fact,the idea of a trilateral agreement is good and it should extend to a South Asian Common Market with China, India, Pakistan, Bangladesh, Sri lanka and Nepal. At a later stage it could enlarge to include Vietnam, Cambodia an others.
The time has come for the two neighbours Pakistan and India to shed their bilateral differences, distrust and antipathy and adopt an approach of mutual understanding, trust and amity. The development of a more cordial diplomatic relationship wherein economic relationship can act as a catalyst need to be promoted. Pakistan's proposal to grant to India the MFN status (Most Favoured Nations) should further push forward peace and friendship between the two neighbours and will be an example for many other nations of Asia and the entire world. Sino-Indian relationship that has grown on the economic front can be an example for Pakistan to move forward in this regard. The need for economic nationalism to take over the driving seat from political nationalism becomes most essential for the two countries. There can be another step forward in the regard wherein India, Pakistan and China together can form a common economic front wherein a trilateral trade agreement should be worked out and a rupee, yuan trade can be considered as the medium of exchange between the three currencies viz Indian rupee, Pakistan rupee and Chinese yuan. The task may not be as simple as it may seem however the controller of treasury in each nation can come together to frame out a strategy in this regard. India in the past had enjoyed a rupee rouble trade with the Soviet Union (now Russia) which now will require a greater planning as three currencies shall be involved. The Reserve Bank of India and State Bank of Pakistan along with the Bank of China can work out a long term strategy. The task needs a proper, comprehensive planning and off course a mutual trust among the three neighbours.
@Haider: If you think like an economist, you will realize that India's population is five times larger than pakistan's with a much larger middle class. Free trade with India will open up this market for Pakistan. Due to close proximity, the transportation cost for goods will be lower. From India's perspective, buying from Pakistan will give them cost and time savings in terms of transportation and lead time. Pakistani manufacturers can expand their capacity and benefit from economies of scale which will bring the cost of production down. The Pakistani consumer will benefit not only from economic growth but also from lower prices resulting from cost savings.
Pakistan has a choice to either trade with India for import of goods at a competitive price, to improve economic condition of its people. Every country will take a call on trading partners on strategic and economic reasons. But common sense would say, trading with nearest supplier will be economical. India will have to work hard to get imports of cement, tyres, textiles etc if they are found competitive. Why should India waste opportunity ? We will have to show greater statesmanship in handling trade relationship with Pakistan. Only win-win situation can help us to build sustainable relationship.
@Yasin, "what is Tintin? Did you mean tin? " this is really good one !!!!!!! Tintin and prisoners of Alcazar .....is to be remembered.
@yasin: you better take the advise given to you by @Wir Juden seriously..as your mental status seems to be perilously hanging by a thread..and Tintin not something that you eat or something you get in hardware store, but a comic suitable for all kids below 14,also above 14 whose head encountered brain rest at a very young age..
@Wir Juden
What is Tintin? Did you mean tin? I know tin. We buy it from hardware stores. But how can we read tin? You are very funny.
@sid Kindly read it again i wrote (Hindu Baniya “Gandhi”). Reason was to highlight term Baniya is to indicate the Ideology of Extreme Kindness, Surrenders, and Non-Violence.(thats why we are in such conditions) Dont take it in Physical community means. Hope you understands now
Very nicely written and advice offered is well worth consideration by our concerned people.
@Yasin: Dude by your comments it will be very advisable for you to be reading Tintin, or maybe a captain avenger. Leave the expert opinion on policies for people with a minimum degree of education.
Just see what Chinese do with corrupt officials. A few executions would make things much better in Pakistan.
@Gulam Rasool "Kuldeep sharma": Baniya..........What's wrong in being a baniya ???????lazy people envy baniyas because of there wealth.............No other people have contributed to creating jobs as baniyas............
Pakistan can sell China what it needs badly and desperately. Pakistan should launch massive investment in mining. Mining of all the raw material China needs. I am absolutely sure Pakistan has lots and lots of such raw material. So mining should be given top priority.
@Ganesh It was a Hindu Baniya "Gandhi" who let it happened in 1947. Same Ideology is ruling India these days, reach out from your Imaginations, although Yasin looks like an Idiot but no he is not, he is absolutely right.
@Yasin: hahahaha!!Forget about Muslim rule in India or even kashmir[independant] again!!Hindus will never let it happen - be it "Secular" Congress,"communal" BJP,Communist parties or regional parties...!!Everywhere Hindus are the leaders and in imp postions...hahahah!!And as far as Pak winning over India,u could snatch Kashmir till now mia...hahahaha!!
Also, India’s continued support of the Tibetan freedom struggle and provision of safe sanctuary to the Dalai Lama and the self-proclaimed Tibetan government in exile has incurred China’s strong opposition all along.
India has long since acknowledged that Tibet is an autonomous region of China. India does not support the "Tibetan freedom struggle", though India should. The Dalai Lama is forbidden by the Indian government to engage in political activities.
"In this context, are Pakistan and India ready to enhance their trade relations despite outstanding disputes?"
India has long since advocated trade between the countries and had accorded the MFN status to Pak in the mid nineties. It is Pakistan that has to make up its mind.
let me explain one thing. One a person gets severe sick suffering from anemia,he needs blood to survive and medicines to cure the disease. Medicines can be bought from the market any cost but you have request nears and dears to come forward and donate some blood so that the patient might survive. Pakistans economy is ailing. Getting unilateral trade(buying from India and selling nothing) is just like drugs. Pakistan needs investement in each and every economic field. Will India invest in Pakistan?? Never..!! Secondly why trade with India is so crucial for Pak?? What do they produce that Pak is sterile of??? Be sensible, think like an economist.!!
Coming few years are going to be make or break for Pakistan, Let us see whether economy wins or ideology. Situation in Pakistan might turn out to be somewhat like in Bangladesh where there is a war going on between civil society and Islamists. Let us see how it unfolds. Opening economic relations with India will bring Islamists in street.
Pakistan is a 'ghairiat' nation and not like ba-ghairiat China that trades with India. Pakistan should never trade with the enemy.
@Yasin: Kashmir first then Red Fort, the capital of Indian empire during Muslim rule. You can hear that more often from tour operators than the Pak army these days. Give it a try. @Author: In this context, are Pakistan and India ready to enhance their trade relations despite outstanding disputes? Madam, India has advocated this all along - we granted the MFN to Pakistan in 1996. Any non-tariff barriers that India has in place are applicable to all trade partners - and they don't seem to deter anyone from investing or trading with India. IKEA has recently been cleared by the Indian Govt to invest USD 4 B over a period of time to be able to take advantage of the huge potential that the burgeoning Indian middle class presents. Second, the only way that Pakistan can take advantage of its "strategic location" (yawn) is to ensure that Afghanistan remains stable and prosperous, and to allow two-way transit trade between India and Central Asia. If this is too difficult, India can afford to wait until better sense prevails - can Pakistan?
@ Yasin... The way it is going ... it looks like Karachi first and then Islamabad ... period...
A wonderful Article. I Agree 100%. Our leaders, both civil and Military, have always rented themselves fully to every other nation. If you bend for everybody for Aid (money), there`s a high chance of getting AIDS. Pakistan has bent before US, West, Saudi and other Gulf Countries and now the latest being China. Atleast, US, West and Gulf Countries paid well for our services, but China never even pay well.
Now, China has become even closer to India and its just a matter of time that the chinese will dump us like the American
s did with the Nuclear Deal. We should learn as Pakistanis that thinking should be the work of the Brain and not the heart.Instead of constantly looking for new friends its important to keep old and add new friends, which is what India is doing. Pakistan should try and bring a visa free policy between china and Pakistan where Pakistani`s can go to china freely for education and work.
India is a different case altogether.Period. Kashmir first then Red Fort, the capital of Indian empire during Muslim rule.