A New Turn In Indo-Pak Commercial Ties

November 17, 2011 by · Leave a Comment 

By Nilofar Suhrawardy, TMO

NEW DELHI: Long viewed as permanent enemies, it is going to take a while before the world is convinced about India and Pakistan being keen to “normalize” their ties. Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani met recently in Maldives on sidelines of the 17th South Asian Association for Regional Cooperation (SAARC). They held delegation-level talks, followed by one-to-one meeting which lasted for around 45 minutes. Acknowledging that a lot still needs to be done, after their talks, both leaders expressed their desire for strengthening Indo-Pak relations on a positive note (November 10).

“We have wasted a lot of time in acrimonious debate in the past. The time has come to write a new chapter in relations between India and Pakistan,” Singh said. The next round of talks “should be far more productive and result-oriented and bring the two countries closer to each other,” Singh said. Similar sentiments were voiced by Gilani, who said: “We had a good meeting. I hope the next round of talks will be more constructive and open a new chapter in relations between the two countries.”

The stage for opening a new chapter in Indo-Pak ties was set when the Pakistan cabinet recently declared its decision to give India status of a Most Favored Nation (MFN) for increasing trade relations between the two countries. India had accorded Pakistan this status around 15 years ago in 1996. The decision of Pakistan was preceded by visit of Pakistan’s Commerce Minister Makhddoom Amin Fahim to India. This was the first visit of a Pakistani commerce minister to India in 35 years. Indian Commerce Minister Anand Sharma is expected to lead a trade delegation to Islamabad next February at invitation of his Pakistani counterpart Fahim. Besides, this week has been marked by two-day talks in New Delhi between commerce secretaries of the two countries, Rahul Khullar (India) and Zafar Mahmood (Pakistan).

Displaying optimism on the outcome of Indo-Pak talks, Mahmood said: “We will have interactions in the spirit of mutual cooperation and confidence so please have trust and faith in the process (as) times have changed and the world is coming closer. Through this meeting we want to create an atmosphere through which the composite dialogue can go forward.”

“Our business communities, our politicians and our citizens are looking to both our delegations to deliver a substantial breakthrough — not only for full normalisation of our trade relationship, but to go beyond and lay a strong foundation for preferential trading arrangements,” Khullar said.

At present, business between India and Pakistan amounts to less than $3 billion. During their talks, the two commerce ministers expressed their desire to increase this to $6 billion per year. Besides, it takes place through third countries via Dubai and Singapore. Once India is formally granted MFN status by Pakistan, it is expected to removal of many barriers and also lead to direct trade between the two countries, which would play a major role in cutting down the transportation costs.

It may take some time before Pakistan actually grants MFN status to India. The fact that Pakistan has voiced its decision to do so is by itself a major development. Not too long ago, Pakistan gave the impression of not even considering this till the two countries resolved their problems. Undeniably, India and Pakistan still seem to be a long way from reaching any agreement on certain major issues, including Kashmir. Against this backdrop, the decision of Pakistan to consider India as MFN is indeed a major development.

Once India and Pakistan reach the stage of exploiting their economic interaction “totally,” according to an American think tank, the Peterson Institute for International Economics (PIIE) gravity model, the Indo-Pak trade can “expand to as much as $42 billion.” One of the constraints in trade potential having not been exploited, according to PIIE, is that Pakistan has not yet granted MFN status to India. If India and Pakistan decide to pay greater attention to exploiting their trade potential, it is believed that the step would lead to lowering of tension between the countries. In this context, it may be noted that though Kashmir-issue may remains unresolved the two countries have implemented the agreement to open the controversial Line of Control (LoC) at a few points to facilitate trade and travel. They began the bus service in 2005, across the LoC between Srinagar and Muzaffarabad, capital cities of Indian Jammu & Kashmir and Pakistani Kashmir, respectively. The Poonch-Rawalkot bus service began in 2008.

The strengthening of economic ties between India and Pakistan is also expected to play a major role in enhancing commercial interaction between members of SAARC. Indo-Pak tension has hampered economic interaction between SAARC members and has also prevented its development as an important regional organization. Critics have frequently raised the question as to why has SAARC not progressed as have other regional organizations, such as NATO and ASEAN.

Against this backdrop, India and Pakistan may perhaps never accept each other as close friends, but as latest developments suggest that now they have begun serious talks to facilitate economic interaction between them. And once Indo-Pak trade takes off, it is expected to have a major impact on South Asia as a whole and also convince the world that the two countries can no longer be viewed as permanent enemies!

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Singh & Gilani Agree To “Normalize” Indo-Pak Ties

May 6, 2010 by · Leave a Comment 

By Nilofar Suhrawardy, MMNS India Correspondent

NEW DELHI:  The much-awaited talks between Prime Minister of India Manmohan Singh and his Pakistani counterpart Syed Yousuf Raza Gilani were held last week on sidelines of 16th Summit of the South Asian Association for Regional Cooperation (SAARC) in Thimpu, Bhutan (April 29). Though the two sides still retain differences over several issues, including Kashmir, the high-level talks are viewed as a “positive breakthrough.” The key point is their agreement to revive the Indo-Pak dialogue process, practically put on hold since Mumbai-blasts in 2008. Though the two prime ministers last met at Sharm el Sheikh, Egypt in July 2009, Indo-Pak dialogue has yet to be brought back on track. Till date, it has been held back because of terrorism, sources said. While concern about terrorism still remains high on agenda of both the countries, the positive outcome of talks in Thimpu is that they agreed to “normalize” Indo-Pak ties and decide on dates for talks to be held at various levels.

Briefing media persons on Singh-Gilani talks, Indian Foreign Secretary Nirupama Rao said: “They discussed all issues in a free and frank manner. They agreed that India-Pakistan cooperation is vital, if the people of South Asia are to realize their destiny and if SAARC is to become an effective and powerful instrument of regional cooperation. They agreed that relations between the two countries should be normalized, and channels of contact should work effectively to enlarge the constituency of peace in both countries.”

Singh voiced India’s concern about terrorism to Gilani. “India,” Singh told Gilani, “is willing to discuss all issues of concern with Pakistan and to resolve all outstanding issues through dialogue, but that issue of terrorism is holding back progress,” Rao said. On his part, Gilani told Singh, “Pakistan would not allow Pakistani territory to be used for terrorist activity directed against India.”

“The meeting was an exercise in mutual comprehension because there is a lack of mutual trust in the relationship impeding the process of normalization. The two sides have agreed on the need to assess the reasons underlying the current state of relations, or current state of affairs of the relationship and to think afresh on the way forward. They have agreed that the foreign ministers and the foreign secretaries will be charged with the responsibility of working out the modalities of restoring trust and confidence in the relationship and thus paving the way for a substantive dialogue on all issues of mutual concern,” Rao told media persons.

To a question on dates for taking forward the process of Indo-Pak talks, Rao replied: “The two sides have agreed to meet as soon as possible.” While dates have yet to be decided, Rao said: “The instructions of the prime ministers are that the foreign ministers and the foreign secretaries should meet as soon as possible.”

When asked on whether Pakistan gave any “commitment” to India regarding terrorism, Rao said: “Prime Minister (Singh) was very emphatic in mentioning that Pakistan has to act on the issue of terrorism, that the terror machine, as he termed it, that operates from Pakistan needs to be controlled, needs to be eliminated.” Gilani’s stand, according to Rao, was that Pakistan was “equally seized of these concerns, that terrorism has affected Pakistan’s well-being also, and that they want to address this issue comprehensively and effectively.”

In a separate press briefing, Pakistani Foreign Minister Shah Mehmood Qureshi said that the two prime ministers’ meeting had played a major role in improving the atmosphere between the two countries. The “outcome” of their meeting has been “more than expected,” Qureshi said. “It is a step in the right direction, a concrete development and we will build on it,” he stated. Dismissing prospects of any major breakthrough in immediate future, Qureshi said that “trust deficit” between India and Pakistan has to be bridged through “confidence-building measures.” “We have to be realistic and pragmatic. It (bridging trust deficit) will not happen in a day, it is a process. If we allow the process to continue, obviously with passage of time, the deficit will be narrowed down,” Qureshi said. “There was acknowledgment about deficit in both sides. The two prime ministers have to bridge that divergence and build confidence,” Qureshi said.

Islamabad will be hosting the SAARC home ministers’ meeting this year on July 26. On this, Qureshi said: “We welcome Indian home minister to take part in that meeting.”

Rao and Qureshi held separate press briefings in Thimpu soon after Singh-Gilani talks, which lasted for about an hour and a half. Both described Singh-Gilani meeting as comprehensive, cordial and friendly.

Notwithstanding the fact that diplomatic tension still prevails between India and Pakistan on issues such as Kashmir, their agreement to take forward the dialogue process and “fight terrorism” together is viewed as a major development in their bilateral ties. While in some quarters, this has been described as a “firm, strong step – finally taken,” others view it simply as a “thaw” in Indo-Pak ties which had been “frozen” since Mumbai-blasts.

United States has welcomed the decision of India and Pakistan to resume their dialogue. “Obviously there is a long way to go. But certainly, the de-escalation of tension between the two countries would help in fight against Taliban and Al Qaeda in Pakistan and Afghanistan,” White House Press Secretary Robert Gibbs said in Washington (April 30). Earlier, State Department spokesman Philip J. Crowley said: “We always think that when leaders of countries, particularly countries with the unique history of India and Pakistan, anytime they can get together for high-level constructive dialogue, that is good for the region, and we support it.” On whether US had played any role in making Singh-Gilani meeting possible in Thimpu, Crowley replied: “We have encouraged the leaders of Pakistan and India to restore direct dialogue that has been characteristic of the relationship between those two countries within the last few years, and we’re encouraged that they are taking steps to do that.”

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