Breathing easy on the friendship bus

The photograph in The Indian Express showing a signpost beside the Uri road that will lead the bus from Srinagar to Muzaffarabad said it all: ?Better late than never.? By allowing their people to cross the LoC in Kashmir, India and Pakistan have recorded their best diplomatic success in recent times. The people of Kashmir have reason to term Natwar Singh?s current visit to Pakistan as historic. This was evident by the celebratory fervour in Srinagar that greeted the latest agreement. A rare spirit of accommodation has been shown by both sides.

It is early to say that the political will shown by both in dealing with cross-border movement will extend to settling the Kashmir issue once and for all. The road ahead is strewn with hurdles, some of which take the form of mindsets and vested interests. However, there is a whiff of fresh air. Last week, India, reversing its earlier stand, had agreed to negotiate the gas pipeline from Iran to Pakistan as a ?stand alone? project and not link it to progress on other issues. India?s flexibility on the pipeline, from which Pakistan could reap substantial long-term economic benefit, has played a role in facilitating the latest Srinagar-Muzaffarabad bus accord. Its is likely India may unilaterally announce a liberal visa regime for Pakistanis who wish to travel to India.

It would be self-defeating for either India or Pakistan to tout the two agreements as a vindication of individual positions, signifying a gain for one over the other. They must insist the breakthroughs are a win-win for both. The tendency of both sides to score brownie points over the other need to be shunned. For example, it may be tempting, but foolhardy, to argue that Pakistan?s willingness to allow the bus in Kashmir may signify its eventual willingness to accept the LoC as the international border to settle the Kashmir issue. India has done the right thing to allow the use of entry permits and not insist on passports. The fact is that interaction between Kashmiris on both sides of the LoC would go a long way in reducing tension and make peace a popular aspiration among communities on both sides of the LoC. Of course, a lot would depend on how effectively both countries can prevent misuse of the cross-border movement by terrorist elements and drug peddlers.

Likewise, the gas pipeline opens a whole new world of possibilities. Last week, at the Ficci-GAIL Asian gas buyers summit, the petroleum minister brilliantly articulated a new vision, when he said an Asian century would have to be built around gas pipelines that link Asian gas sellers to Asian gas buyers. Peace between India and Pakistan is critical to this vision, which rests on gas pipelines traversing from West Asia through Pakistan and India to East Asia, including China. These would allow both India and Pakistan access to cost-efficient energy sources and also generate revenues to pay for a part of the energy bought. China would gain, too, as it would pay less for gas than it does now. A win-win for all: for the energy surplus countries in West Asia and the buyers across Asia. The energy partnerships in Asia could transform it. And, unlike over the last few centuries, enable its countries to deal more confidently with the western powers. Russia and Central Asia would benefit as well, as the energy business would surely be the biggest business in the Asian century.

The easier movement of people across India and Pakistan would yield an immediate economic dividend. It would promote cross-border tourism, the potential for which is truly huge. And thus generate jobs and incomes on both sides, from Kashmir down to Punjab and Sind and Rajasthan. It would also create awareness of bilateral business potential and people would explore new opportunities.

Not so well noticed was the announcement two days before by Pakistan?s software houses association (Pasha) that they were actively seeking joint ventures with Indian IT companies to bid jointly for IT projects in Pakistan and foreign markets. A similar desire could spring in textiles. With the MFA gone and the apparel capacity in India inadequate to meet the demand for large orders, Indian fabric makers can team with Pakistani apparel manufacturers to meet this demand. There are numerous possibilities that a more open market could discover and distribute benefits on both sides of the border.

To move towards full normalisation of trade relations would be the next logical step. Here, too, flexibility on both sides would be an appropriate strategy. It may make sense for India not to insist on full MFN status, but perhaps explore a method for moving ahead sector by sector, just as the border is being opened at select points. To argue that there may not be such precedents in international trade would be less useful than finding a method of achieving sectoral liberalisation. For example, there could be agreements on normal trade in IT, textiles, or select commodities. And WTO rules could be applied only in these sectors. Sectors where both India and Pakistan have export potential could be chosen. This would help generate confidence in Pakistan that trade is not a one-way opportunity for India, but would yield a dividend to its businesses as well.

Even while both countries contemplate and negotiate on how to move forward on trade, it would be useful to agree immediately on a plan to improving the infrastructure to facilitate future arrangements. With India allowing Pakistan to open a consulate in Mumbai and Pakistan doing likewise in Karachi, the next bilateral announcement could be the introduction of a ferry service and coastal trade facility linking Mumbai and Karachi. An incremental approach that allows both sides to carry their establishments together would be the most sagacious way to move forward.

The writer is an advisor to Ficci. These are his personal views