When India is shining can Pakistan be allowed to lag far behind? When Asia is rising should South Asia not be a part of this turnaround in the global balance of power? The SAFTA accord signed at the SAARC summit in Pakistan, if implemented a few years from now, provides obvious answers to these questions.
Doubtless, SAFTA has the potential to enhance South Asia?s profile in the process of globalisation marked by regionalism. Yet cynicism and doubts persist, considering the history of failed attempts to resolve the Indo-Pak tangle. An argument could be built that India need not worry about trading with Pakistan. The competencies of Indian companies and professionals are now well-recognised the world over and the global economy offers a huge opportunity to Indians. Over the last decade, India?s economic growth has outpaced Pakistan?s by a good margin and the gap would only grow, even if Pakistan and India do not mend fences.
A logical extension of this argument is that India can afford continued hostility with Pakistan and bleed it with an arms race the way the US had bled the Soviet Union in the 80s, hastening its eventual disintegration. However, the history of regions marked by inequalities among member nations show that failing regimes spell danger to their own country and their neighbours. It is now evident that for Pakistan, integration with South Asia and through India forms a critical ingredient of any recipe that country needs to revitalise its economy. The doles that it receives from the US for fighting terrorism can at best work as palliatives. These have not helped to arrest its widening economic gap with India.
In terms of purchasing power parity, India?s per capita income is currently over $3,000 while Pakistan?s is around $2,000. This is accompanied by substantial differences in human development parameters such as health and literacy ? with Pakistan lagging behind India in most of these. If Pakistan continues the way it has over the last decade this gap would become much wider.
As a commentator in a Pakistan newspaper aptly remarked, while India houses offices of Microsoft, General Electric and IBM, Pakistan is marked by offices of Lashkar-e-Taiyyaba and Jaish-i-Mohammed. At some point in future, the economic drift in Pakistan has the potential of forcing poor Pakistanis to migrate to India to scout for economic opportunities. Common language and culture with the sub-continent makes India and not Afghanistan, China, Central Asia or Iran, a natural choice for migration. India already knows the dangers associated with similar migration from Bangladesh, and make no mistake, the number of migrants from Pakistan could be potentially very large.
The best option for Pakistan is to discover economic recovery by integrating with India. A throwback to partition clearly shows that before 1947, 56 per cent of Pakistan?s exports were to India and nearly a third of its imports originated from here. Over five decades of hostility has finished this trade and barely 1 per cent of the two countries? trade is with each other. The potential for trade between the two is well-known and one need not go into details of products that can be vigorously traded. Suffice it to say, once trade is liberalised, the integration in the sub-continental economy that prevailed before partition can be attained once again.
A rising tide lifts all boats and a booming Indian economy can well be the engine of growth that Pakistan is looking for. The peace dividend that India is looking for from the thaw in Indo-Pak relations will have many facets. The saving in defence expenditure is just a minor factor. Growth of incomes and new jobs in Pakistan would be the more important part of the peace dividend as this would prevent spill-over of social unrest into India and provide the best antidote to jihadi ideology. As SAFTA spreads across the Gangetic plains to the Sunderbans, Pakistan would also gain from enhanced trade with Bangladesh, eventually. The Asian highway currently under construction to link India?s north-east with Bangkok through Myanmar has the potential to create new opportunities from Peshawar through Dacca to the Mekong.
India?s look-east policy has begun to pay dividends. Vajpayee?s vision aims at convincing Pakistan that it too has to look East to generate mutual advantage for itself, India, Bangladesh and other Asian countries.
The author is an advisor to Ficci. Views expressed herein are personal