Does the salvation of Pakistan’s economy lie in India?

October 8, 2008

President Asif Ali ZardariPakistan’s economy has survived three wars with India and a long history of tension with its much bigger neighbour. But this time its own domestic economic and political problems, combined with tension on the border with Afghanistan, are running smack into a global financial crisis that will make it harder for its traditional allies to bail it out.

So is it time to break the taboos and ask: Does Pakistan’s best hope of economic recovery lie in making peace with India?

President Asif Ali Zardari certainly seemed to think so when he told the Wall Street Journal in an interview last weekend that India was no threat to Pakistan and said that “there is no other economic survival for nations like us. We have to trade with our neighbours first.”

India’s Business Standard says in an editorial that Zardari is right to say India is no threat and that Pakistan needs to focus on reviving its economy. “The question, though, is not what President Zardari thinks about these issues, but whether the larger Pakistani establishment (including, most importantly, the army) shares his perspectives. At the moment, Mr Zardari seems to be running ahead of the pack,” it says.

India too is beginning to worry about the impact on its own economy of the global financial crisis, as these articles in the Hindustan Times and the Economic Times suggest. So it might also welcome the advantages of higher regional trade.

A chance for peace?


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