In the present meeting, the foreign ministers agreed to take forward the Summit consensus to promote regional cooperation in poverty alleviation, trade, environment, communications, energy, IT, womens empowerment and social development. These are the equivalent of motherhood and apple-pie issues, wherein there is no basic divergence but the movement from word to deed by individual States has been hesitant. despite a collective population of almost 1.5 billion people and sufficient resources, SAARC is characterised by glaring socio-economic asymmetries, both intra- and inter-state. Over the last 50 years, inter-SAARC trade has dropped from a high of 19% in 1949 to under 5% in recent years.
As of now, the agreement on SAFTA is scheduled to come into force from January 1, 2006 and expert groups are meeting to work out the modalities. In this connection, India had mooted the establishment of a SAARC High Economic Council comprising the finance and commerce ministers of member States to promote ideas and initiatives related to regional integration in economic, trade, financial and monetary areas. Predictably, this has been received with some anxiety and apprehension and Pakistani sources voiced concern that India would overwhelm the regional grouping and make it as exclusive market for Indian goods.
Two aspects highlight the contradiction between the Pakistani State and the trade constituency. On July 22, a day after the SAARC meeting concluded, Islamabad unveiled its trade policy for 2004-05 and set an ambitious, yet feasible, export target of $13.7 billion and an import target of 16.7 bn. This represents an increase of 12% from the previous years exports by Pakistan that totaled $12.3 bn. The relevant observation is that trade, either within SAARC or with India, did not find any specific mention.
Conversely, when India and Pakistan agreed to the composite dialogue in January 2004 and the prospects for increased official bilateral trade was hinted at, local Pakistani traders were very enthused. While they conceded that India had an edge in industry and finished products across the board, Pakistan had the advantage in certain commodity products. Cotton was identified as one such product and, for the first time in many years, Pakistani mills have booked 150,000 cotton bales from India. Potentially, the bilateral commodity list could include sugar, wheat, soya meal, tea etc, and these are the areas that would benefit the populace on both sides who produce and trade at the lower end of the socio-economic-technology agrarian scale.
However, the current official Pakistani policy is to go slow in the trade area with India, both at the bilateral level, where the MFN status is involved, and the regional arrangement. To that extent, it remains to be seen if the Musharraf regime will enable this sector which has clear and tangible gains for the people and the exchequer of Pakistan. This is borne out by the fact that the clandestine/illegal-cum-third-country bilateral trade between India and Pakistan is estimated to be between $2.5-3 bn and if this were legitimised by Islamabad, it would represent almost 10% of Pakistans total two-way external trade.
But the prevailing political ambience in Pakistan does not appear to be as conducive to advance trade and commerce and consequently, this has placed a damper on the overall SAARC aspirations. The Pakistani reticence apropos relations with India was reflected in the meetings that foreign minister K Natwar Singh had with his Pakistani counterpart on the bilateral track. While the determination of the UPA government to stay the course as far as the composite dialogue process begun in January 2004 was reiterated, the fine-print reflected major areas of dissonance. After a meeting with General Musharraf, Mr Singh noted that India and Pakistan are committed to discuss and settle all bilateral issues, including that of J&K, to the satisfaction of both sides. The intent to carry on a sustained and steady dialogue with Pakistan was highlighted with a reiteration by both sides to continue the dialogue process in an atmosphere free of violence, and to tackling the scourge of terrorism with renewed vigour.
The Pakistani emphasis was characteristic and General Musharraf dwelt on the need to come up with a settlement on Kashmir... in a reasonable time-frame. Given the complexity of the Kashmir issue, the need for the right mix of patience and perseverance cannot be over-stated and thus Natwar Singhs response: That while there was a continuum that linked earlier agreements such as Shimla, Lahore and Islamabad, the peace process could not become a 100 metre race nor could it be artificially rushed. The differences, in short, remain firmly in place.
In an ironic twist, while Pakistan was unable to obtain consensus on including bilateral peace and security issues in the SAARC agenda, the Natwar Singh-Musharraf meetings, which were mainly about this central concern, succeeded in overshadowing the other aspects of the SAARC ministerial council. The tea leaves are clear if SAARC is to make any tangible progress, the complex and deeply es-tranged India-Pakistan relationship needs to be untangled.
Yes, the atmospherics at Islamabad were very upbeat, but this could well be the beginning of a bleaker phase if the next foreign ministers meeting on September 5-6 proves inconclusive.
The author is deputy director, Institute of Defence Studies and Analyses, New Delhi