By Nazir Shams
Exclusive Article
Pakistan an ‘Asian Tiger’ of 1960s and India ‘a basket case’ have changed sides today! India’s economy has grown to $1.06 trillion that is almost eight times the size of Pakistan’s $207 billion. The good trade between two countries plummeted to a very low after 1965 war, that kept fangs spread bruising the efforts to keep it moving. Now the significance of MFN has gained currency to address the socio-economic problems confronting Pakistan. Diplomatic, both covert and overt efforts and back door diplomacy have been on the move to resolve the issues blocking bilateral relations. Resorting to CBMS (confidence building measures) including people to people contact, so essential to build a mutual trust, has brought a positive thinking on both sides.
MFN is a hot button dilemma in Pakistan. Divided opinion of Pakistani people on the issue obliges an appraisal suggesting approval and apprehension as well. Those with cold feet mistrusting a full-fledged trade with India, have in their hindsight that it is easier said than done to overlook the unresolved flashpoint issues between the two. Those who espouse, hold forth that trade can be pinnacle to mend bilateral relations between them: hence pave way for diplomatic solution to unresolved moot points.
A rarely known fact is that India has already granted MFN status to Pakistan complying with the principles of WTO in 1996. Interestingly, India and Pakistan were among the original 23 signatories to the GATT (General Agreement for Trade and Tariff) in 1947 that led to MFN principle. The unanimous decision taken by the government on November 2 2011 to grant MFN status to India is laced with the same spirit of WTO’s principles. Put on hold because of serious reservations by various sections of Pakistani society, the resolution is qualified for more gridirons.
Siachen still has words and Sir Creek remains on a back burner. Emerging water disputes with India manifest incalculable fears and apprehensions. Kashmir still hangs fire with no exegesis in sight. APHC (All Parties Hurriat Conference) leader Ali Shah Geelani in Occupied Kashmir, Pakistan based Jamaat ud Daawa, (Jud), a part of Lashkar e Tayaba aligned with APHC still stage protests. Jamaat e Islami and Ahle Sunat wal Jamaat are on the same page in killing the idea. A dispassionate look admits of an Indian military’s strategic posture that remains poised against Pakistan. With Indian army’s 23 out of 31 divisions deployed along Pakistani border and her Air Force maintaining majority of its forward air bases in the close proximity of Pakistani border, ring the tocsin. Indian navy’s sitting on its west coast always sounds a warning. Bulk of Pakistan army’s commitment on its western side handing down very little bite for the east, leave her in the lurch and acutely vulnerable to Indian hegemonic designs. Such posturing acting as a hanging sword; validates disquiet in pulling the relations en masse. That qualifies Army’s concerns to be taken seriously before the initiation of such a gigantic step.
Let us visit today. Tanked to its lowest ebb, the current Pakistani economy manifests an annual GDP growth rate that is astoundingly low at 2.4%. Indian GDP growing and flourishing at a vibrant 8.5% rate bears down upon us a sizing up to do like. A square assessment would lead to the conclusion that Pakistani industry, in severe financial and economic despair, is going down in its lifesaving fight for its subsistence and viability. The unease in Pakistani quarters that promulgation of MFN will utterly annihilate Pakistani industry leading to massive layoffs and unemployment has missive coming to one.
We do have practical sticklers impacting our buying and selling. Pakistani farmer will undergo prejudicial competition against Indian farmers: Indian government provides fertilizers to its farmers at a highly subsidized rate while fertilizer costs in Pakistan have skyrocketed and increased two-folds. Therefore, in order to protect local farmers and industries, safeguards needs to be employed in the form of tariffs or in some instances completely blocking selected trade items. According to an IMF report, India’s restrictiveness scales 8(on a scale from 1 to 10), while Pakistan measures 6, is indicative of liberal regime by Pakistan. Indian trade barriers consist in import licensing, tariff rate quota’s grant, methods of valuation, complicated political and security clearance, rigorous enforcement of sampling, uncalled for inspections, technical and standard certification, labeling, making, and packaging rules. All this makes the trade irksome and puzzling.
Let us visit the benefits that will flow from this trade. MFN, an extension of CBMs, is a positive development for normalizing the unpredictable and thorny relations between two neighbors. Enmity can be consummated as the world has witnessed a great big jump in bilateral relations between China and Taiwan through the instrument of trade. Moistening the explosive fluctuations in their working relations, trade has watered down the path for extensive trade that has gone over ton$100 billion in 2010 from $8.1 billion in 1991. Again, rather than getting them to a blind alley, the business has toned down the sharp edge of political and territorial rivalries between India and China and put them on solid footings of unprecedentedly flourishing business. Even trade between USA and Vietnam has been booming since decades. So is a possibility of ‘quantum leap’ in the initiation of a process of friendliness chartering Pakistan and India to cut through the red tape and underwrite the opening to conduct bilateral trade with ease and confidence. Mercantilism, a normalizer, is possessed of finesse to cut across the rigors of diplomacy and statecraft and cut in the outstanding issues creating an environment where a scope or opportunity would emerge to tone down ‘extremity’ in minds in approaching the problems and pave way for resolving the issues on the negotiating table while sitting rather than ‘box on’ posture.
Barriers of mutual hostility and rankling never called it quits, and the interchange remained a possible genre. The fact is that buying and selling doubled in the last few decades, though not commensurate with existing capability. Making way for smuggling, the porous border has kept the illegal trade intact, laying a pasture for the mafias and contrabandists. That makes way for the terrorists and hardliners to make hay while the sun of easy money shines. Here lies the setback of alternate going of ventures notwithstanding on the beam ‘modus operandi’ right at hand in the neighbor. MFN is the antidote. Things, ‘je ne sais quoi’ change into high-priced when passing through third country reckoning in added time, additional reach and greater amount of documentation. UAE is the third hub of such goings on.
The potential of business ranging between $5.2 billion to $15 billion, stands underutilized thanks to the dominant blocks in our relations. We have approximately 2000 items on Positive List (PL) which we allow India to export to us whereas she has a potential to send us more than 6000 items which she can or desires to send. This PL can be converted to a small Negative List (NL) thereby making it easier to let the flow of items from one side to the other. Most sensitive items can be placed on NL as a safety valve to protect each other’s industry. Valuation of routine items like tea, spices, auto-parts, IT and pharmaceutical brings up a saving for Pakistan up to $900 since move showing the sea the door, grow economical. Again large number of items importable from India on sale priced rates is paid for on higher rates from incompatible countries. Swap of goods with India holds much larger a market for Pakistan sitting just across the border, promising an environment so disposed for business, easy interacting and economical bargains. Fast across movement, more circulation of money, and shot up tourism would move hand in hand. A lure for Murree and Northern areas would agitate the people from Delhi to here and visitors from here would journey to Simla to beat the heat of simmering summers. Big exchange of guests will help melt the prejudices to be destined to the dustbin of ignominious past. There exists a possibility of importing electricity through connectivity between Amritsar and Lahore up to 500 MW promising a substantial flow of power for our domestic and commercial needs.
Even in the absence of MFN status to India, our mutual trade has doubled since many years after 1965 war. Indian exports cover almost 53% of our import items. The argument that our industry is still in infancy is an illusion. Our industrial base is substantial and sturdy that can ride roughshod the rigors to be held out by trade with India. As China has touched our industry and its heat is being felt in and outside the country, the trade with India won’t be worse and will make us still competitive and ready to fight. ‘Even the lion has to defend himself against flies’. NL should in any way come forward to play its role. Need is to resolve our gas and electricity problems and manage our policies efficiently. We are no less than anyone.
Hard liners have abodes on both sides and have the right to speak out but national interest runs supreme and merits ascendency, expediency and farsightedness. If economy booms, hard lining dooms. ’We triumph without glory when we conquer without danger’, said Corneille. We need to dare. ‘Who dares nothing, need hope for nothing’. Today Europe stands united by reason of getting into the idea of living in peace and its blessings that accrue resultantly. That equally applies to and obliges us to work for peaceful and productive economic and political doings. The key to success lies in addressing all the outstanding issues between the two. Nothing positive will come out till dedicated efforts are unleashed to take on the challenges head on. It is imperative and need of the hour to deescalate the tensions and neutralize the frictions. Therefore, bilateral trade between India and Pakistan can be a game changer and play a stupendous role alleviating apprehensions between two countries; eventually, leading to subsiding of hostilities between old foes.
We must give peace a chance.”Peace hath her victories. No less renowned than war”, explained Milton. Economic boost will help curtail Pakistan’s spending on defense readiness which will join in social sector to bloom to its upmost potential. Sophisticating our armed forces will add punch to their readiness. Bilateral trade promises betterment and stands for the best interest of both the countries. Dream of evolving an economic community that is self-sufficient, affluent, and integrated into a regional economic power is no more a fairy tale. It is a fact not a fiction- it is a certainty. Civil society on both sides needs to show its muscle to achieve the ultimate goal. Politicians, scholars, academia, the media, traders and their connected organizations, and legal experts have the supreme responsibility to acquit themselves honorably in the pursuit of bringing off prosperity and opulence. Let us head for becoming economic giant not a nation ever fighting against the wind. Let us take the step remembering that a journey of a thousand miles starts with a single step.
-The writer is a freelance columnist and a regular contributor to pkarticleshub.com. He can be reached at nazirshams@yahoo.com
Agreed. Excellent Article.