Afraid of free trade

Diplomacy in South Asia is given over to give-no-quarter bureaucrats, who cleave to a nationalism that continues to trump economics.

Both sides have to talk on the whole spectrum of issues and all problems to make the peace process more sustainable, Foreign Office spokesperson Tasnim Aslam said. The SAFTA agreement that both countries signed contains Article 8, which refers to the “removal of intra-SAARC barriers to investment.
Written by Khaled Ahmed | Updated: April 25, 2014 12:38 am

Diplomacy in South Asia is given over to give-no-quarter bureaucrats, who cleave to a nationalism that continues to trump economics.

Pakistan and India signed a South Asian Free Trade Area (SAFTA) agreement long ago and were expected to move to the free trade regime by April 1, 2013. Pakistan hemmed and hawed throughout that year under Prime Minister Nawaz Sharif, who won at the polls promising an “opening up” with India. He was supported overwhelmingly by all chambers of commerce and industry in Pakistan.

In the year 2014 too, he has held back the award of the Most Favoured Nation (MFN) status, which India granted to Pakistan long ago. The latest news is that MFN will be granted to the new government after the elections in India. If the excuse was that the Manmohan Singh government was lame-duck, it was quite feeble. There were other reasons, the same that cropped up when the more “pro-India” Pakistan People’s Party was ruling.

Pakistan’s non-state actors don’t want trade with India; they also have a pre-modern view of the economic function as such, and look at trade as a dangerous alternative to the sacred duty of war. Punjab Chief Minister Shahbaz Sharif, through a massive slip of the tongue, had said the army didn’t want trade with India.

The army has a slightly different view, related to geopolitics and Pakistan’s status as a crucial “median” state. Free trade with India would not only mean allowing Indian goods to conquer Pakistan but also allowing India to conquer Central Asia through a transport corridor that would run across Pakistan.

There are two ways of looking at “geopolitical importance”, or two ways of deriving benefit from it. One is the “civilian” approach, which means that the geographically important state has to develop its roadways and railways and other infrastructure, such as hotels, to facilitate those who wish to pass through. Once the geographically “connective” state has become an effective corridor of passage, its “strategic” importance no doubt increases. And the dividend of this importance comes in economic terms and through an absence of war.

The other way is the “military” approach, which relies on geography as “hindrance” rather than “connection”. The military mind says: We are in the middle and we will not let you pass unless you agree to our terms. (To India, Pakistan says let’s talk Kashmir before we talk free trade.) This is a warrior’s approach and signals his opposition to economic activity, concealing the real doctrine of economic development through conquest. In the case of Pakistan, it is the military view of geopolitical importance that has held sway.

But is India more wedded to the idea of free trade? Does it …continued »

First Published on: April 25, 2014 12:12 amSingle Page Format
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