Power equations

When Prime Minister I.K. Gujral announced his intention to start buying power from Pakistan, Delhi rejoiced because it could look forward t...

When Prime Minister I.K. Gujral announced his intention to start buying power from Pakistan, Delhi rejoiced because it could look forward to an empowered summer. But the implications of the agreement, which is under consideration now, go far beyond keeping air-conditioners humming in the Capital. This is the first time that the subcontinent is seeing a straight commercial deal involving a core sector, without the usual attendant baggage of development and security concerns. In the past, India has helped set up generation facilities across the border 8212; in Bhutan8217;s Chukha project, for instance 8212; which have brought power into the country, but it has never gone in for a straight purchase. These projects have primarily been international relations exercises, aimed at generating a better rapport with our immediate neighbours. The fact that they actually delivered power was incidental. Chukha was largely motivated by the need for maintaining good relations with Bhutan, an important buffer between India and China.

However, it is time priorities changed and a more realistic appraisal of imperatives was taken. Good diplomatic relations are indeed useful, but surely, given the sectoral resource crunch facing every nation in the subcontinent, other considerations ought to find a place in decision-making. India can no longer afford to make gestures that do not bring economic gain. Besides, it is highly developed in certain areas, like skilled manpower, but deficient in other factors of production, like power. Our neighbours are plagued with similar problems. Pakistan8217;s only successful industries are all low-tech, for instance. Right now, the Karachi Stock Exchange is desperately trying to call in investment from overseas. And Nepal, which also has surplus power, has no industries worth speaking of. Buying power from neighbours will result in better efficiency and comfort levels at home. It will also better the lot of the foreign trading partners. There is, therefore, no need for making gestures which can be construed as the posturing of a would-be regional Big Brother. A feel-good factor would operate on both sides of the deal, which would not be complicated by implicit expectations. Hence, the power deal with Pakistan is an important precedent which can set the keynote for the future. Similar deals can be struck with Bhutan and Nepal, which are expected to be the powerhouse of the region in the future.

These deals could set a climate where diplomatic considerations do not colour every aspect of relations. It would finally be appreciated that differences over Kashmir have nothing to do with whether Pakistani exporters ought to be given access to the Indian markets. Each issue calls for an independent decision. In fact, South Asia has a lot to learn from Europe, where 15 nations, some of them traditionally enemies, have merged their economies while keeping their polities almost completely sovereign. Of course, a common currency will not work here thanks to widely disparate economic levels, but the dismantling of non-tariff barriers would be a start. The ideal starting point for the SAARC free trade zone is intergovernmental deals. India and Pakistan can have the satisfaction of making a serious beginning in this regard.