If the EU could do it

A South Asian union based on trade could reduce the incentive for war in the region.

Written by Khaled Ahmed | Updated: July 25, 2014 12:01 am
The idea of the common market is a concealed attempt at nudging the nation-state in the direction of becoming a market-driven state. (Illustration: C R Sasikumar) The idea of the common market is a concealed attempt at nudging the nation-state in the direction of becoming a market-driven state. (Illustration: C R Sasikumar)

Pakistan Prime Minister Nawaz Sharif has told the world that his government will pursue the “economic” interest of Pakistan. What was missed by most Pakistanis was his subtle replacement of the adjective “national”. However, he did not add that the policy he would pursue with India would be “trade-first” rather than “Kashmir-first”. The world would agree with him, knowing that India and Pakistan have to become “normal” with each other before they can agree on Kashmir.

So far, the world has not cracked the “nationalist” carapace of Pakistani thinking. But an ex-World Bank executive active in Pakistan is stubbornly spreading the variant message. In a recent article in Newsweek Pakistan, Ishrat Husain, dean and director of the Institute of Business Administration, Karachi, and a former governor of the State Bank of Pakistan, proposed a regional economic union: “As with the EU, a South Asian economic union will take decades of convincing and [has] much history to overcome. Trade normalisation and the exchange and sharing of knowledge will greatly advance the cause while providing an immediate win-win for the region. India and Pakistan have to take the lead here for the benefit of their own people, the region, and indeed the world. Economic integration makes perfect business sense. It is critical if South Asia is to thrive.”

Husain has been thinking laterally since his governorship of the State Bank and, as far as I know, he is like no one else in Pakistan — frankly indicting Pakistan for resisting national survival. While visiting his alma mater, Government College University, Lahore, earlier this decade, he made a rather clean vivisection of the Pakistani mind. His statement is recorded in a 2008 journal of the college.

On national security: “Those who propound the national security state thesis believe that the security establishment has purposely kept the fear of India trying to break up Pakistan alive to perpetuate their ascendancy. In response, the Indian intrusion in 1971 and their efforts to play up the sentiments of minority ethnic groups in Pakistan against the established state are cited as examples of India’s ‘nefarious design’ on Pakistan.”

On the Pakistani psyche: “Pakistanis, by and large, have developed a highly cynical and negative psyche. Insecurity of the state, that is, the fear of re-absorption by India, the experience of [the] separation of East Pakistan, the poor track record of the credibility of our successive leaders have all contributed to this psyche. But this is harmful in the long run, as lack of national self-esteem becomes a barrier to national development.”

On the conspiracy of the foreign hand: “We blame someone malevolent, who is thought to be pulling strings, or presume that conspiracy is the driving force behind many events. It is not only the default explanation in personal matters but is often the first cause presumed in national and international events. Lack of acknowledgment of one’s own impotence and a justification for inaction have become the mainstream thinking in Pakistan, which is a barrier to objective and inductive thinking.”

On negative thinking: “The phobia and excessive preoccupation with the US dominate our national psyche. Governments in Pakistan are widely believed to be formed and removed by the US. We have developed a unique tendency to disbelieve and discount any good news about our country or our people and exaggerate the negatives beyond any proportion. This is evident in the popularity of newspaper columnists and TV anchors who are highly negative and pessimistic in their comments and who paint gloom-and-doom scenarios. Those who present a more balanced and even-handed picture do not find any space in the newspapers. Nor are they invited to the TV channels.”

Today, in 2014, the Pakistan army has changed its mind. It is now fighting al-Qaeda and its affiliates inside Pakistan, while the armies of Iraq and Nigeria have run away from the jihadi terrorists spawned by al-Qaeda. The Pakistan army has decided to confront the enemy before it is too late. Should the world come to Pakistan’s help as it can’t in the case of Iraq and Nigeria? Of course, yes; but the solution is not so much in military confrontation as in opening the oyster that is Pakistan, clammed shut against its neighbours and threatening them irrationally with non-state actors who are not even loyal to it.

And the solution is in SAFTA, the South Asian Free Trade Area, which will be the first step towards the South Asian union Husain is talking about. Like South Tyrol in Europe, the Kashmir issue will be resolved after “normalisation” through free trade and free cross-border movement of people and capital. The EU has done it, ASEAN in Southeast Asia will do it in 2015. Why can’t SAARC, the South Asian Association for Regional Cooperation?

Another economist like Husain, Manmohan Singh, India’s much sinned-against former prime minister, who gave India its high growth rates before succumbing to politics, had the right vision for SAARC. In 2008, not much after the dreadful Mumbai attack, he had this to say about the region: “Economic cooperation, connectivity (roads) and integration will be the cornerstone of SAARC in the years ahead. We have already agreed to move towards a South Asian customs union and a South Asian economic union in a planned and phased manner.”

Connectivity is a post-Cold War concept grown out of theorising in favour of globalisation. It was a reversal of the thesis that, when conflict occurs, it seriously damages the economic capacity of states. The new message was that, in a conflictual landscape, encouragement to trade and economic interdependence will make war redundant.

The regions that wanted to create their own common markets borrowed the idea of connectivity in an attempt to prevent war so that intra-regional economic integration could take place. The idea of the common market is a concealed attempt at nudging the nation-state in the direction of becoming a market-driven state. Since war is the business of the nation-state, the hoped-for market-driven state within an integrated regional arrangement will reject war as an assertion of nationalism.

It’s all there in the papers signed at SAARC summits, an organisation killed by the armies of South Asia, its headquarters in Dhaka poorly manned by case-hardened diplomats scoring points against one another. But then, ASEAN was conceived in 1963 and is near the finish line today. SAARC was born in 1985 and may finally succeed. Against all odds, today seems like the crucial fork in its passage. India and Pakistan might pull it off, instead of suffering other SAARC states to succumb to their bad example.

How one wishes that Pakistan and India had gone down that road. One must listen to the philosopher of today, the economist, and concentrate like Nawaz Sharif and Narendra Modi on getting big money to come and propel the wheels of the state so far anointed dangerously by nationalism and ideology. Instead of inventing regional “pivots” against each other — China using Pakistan against India and India using Afghanistan against Pakistan and China in favour of America using the Far East as a pivot against China — why not use the pivot of trade, which nicely destroys the frontiers of state-envy?

The writer is consulting editor, ‘Newsweek Pakistan’.

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  1. B
    Bgoswami
    Jul 25, 2014 at 1:35 pm
    It is a very sensible analysis of the problems confronting the South Asians and the suggestions regarding making amends in improving cooperation amongst the countries.I have a suggestion which may soften the atudes which we experience amongst our neighbors especially between the citizens of stan & India. India & stan should allow free travel with no restrictions by those people who were born before 1947 to visit the cities and villages where their ancestors come from.This will enhance removal of suions which people on both sides of the borders harbor and will make any accommodation easier to achieve.This can be further divided into groups of educators,business ,artists & agriculturists to meet their counter parts in respective countries.These senior citizens have a lot to offer to make amends to the fractured relations over the century?
    Reply
  2. A
    Arun Sharma
    Aug 9, 2014 at 8:30 am
    In poor countries like ours, religion and shallow national pride come first than economic well being and peaceful relations among neighbouring countries. Too much money is being wasted in modernizing defence which will never go to full war even in distant future.
    Reply
  3. B
    B.D.SINGH
    Jul 25, 2014 at 9:20 am
    The main difference between EU and SARC is that there was no religious hatred in EU and no country of EU was controlled by army. stan Army is afraid that if India and Pak will be friends, their clout in national policy will weaken. This is main problem in the well wishes expressed in the article.
    Reply
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    PMMKRISHNA
    Jul 25, 2014 at 6:00 am
    WAR BETWEEN INDIA AND STAN IS AN OUTDATED PHOBIA. IT IS THE MYTH CREATED BY ARMY COTERIES. TRADE IS THE MANTRA OF MODERN INDIA UNDER THE LEADERSHIP OF NARENDRABHAI. IF NAWAZ SHARIF WINS HIS INTERNAL FEUD WITH THE ARMY GENERALS THEN STAN WILL WIN THE WAR WITH AL-QAEDA, TALIBANS ETC WITH THE HELP OF INDIA. NARENDRABHAI IS A GENIUS. HE IS THE ONLY HOPE OF INDIA FOR STAN. KHALIDSAHEB IS ONE HUNDRED PERCENT RIGHT. IF WE GATHER OURSELVES AS ONE "HYPERNATION", WE WILL BE ON TOP. WESTERNERS ARE NEARLY BANCRUPT IN THEIR IDEA BANKS - DO NOT FEAR THEM.
    Reply
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    harry
    Jul 25, 2014 at 8:39 am
    Good suggestion, but stani army and the ISI will add a spanner to all the trade. Their interest is at stake.
    Reply
  6. S
    SP
    Jul 25, 2014 at 10:08 am
    This probably can happen if stan gives up its hobby of terrorism. It always uses terror to talk and then talks break because of bigger terror.
    Reply
  7. S
    Suren Singh
    Jul 25, 2014 at 6:32 am
    Can't shake hands with a clenched fist
    Reply
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