Pakistan, India and the rise and/or fall of the nation state

November 10, 2008

When the British left India in 1947, they bequeathed what was arguably a European notion of the nation state on a region for which the very concept was alien. I say “arguably” because anything one writes about Partition or the nation state is open to dispute. And until the financial crisis, I relegated this argument to the realm of historians — a subject that interested me personally, but did not seem relevant today.

That was until I noticed a new debate bubbling up on the internet about the future of the nation state. Will it become more powerful as countries scramble to protect themselves from the financial crisis as George Friedman at Stratfor argues in this article?  Or does the need for global solutions to the crisis sound a death knell for the nation state, as John Robb suggests here?

Let’s just suppose the paradigm has shifted and the 60-year-old model defined by the departing British colonial rulers is no longer valid. What does that mean for Pakistan and India?

First the history. India under the British was far from what might have been considered a nation-state. Here’s Friedman’s definition: “A nation is a collection of people who share an ethnicity. A state is the entity that rules a piece of land. A nation-state — the foundation of the modern international order — is what is formed when the nation and state overlap.”

There was no overlap between nation and state when the British left. At the time the region was a patchwork of different people, speaking different languages, with their own ethnic identities. It included more than 500 princely states which had retained nominal autonomy in return for pledging allegiance to the British crown, along with a sizeable proportion of Muslims who fretted about who would protect them in an independent Hindu-dominated India. Yet Britain created not one, but two nation states in the European model — India and Pakistan.

“…the concept of State itself was alien to Indian political thought. It could not be otherwise,” wrote former Indian foreign minister and defence minister Jaswant Singh in his book “Defending India”. “Civilisationally, the Indian nation is a unity, a whole: diverse, multilingual, with numerous shades and varieties of faith and kaleidoscopic cultural distinctions, also varieties of beliefs, languages, dialects, dress, food — but always with that indefinable, civilisational oneness: an Indianness.”

For Singh, a leading player in the opposition Bharatiya Janata Party (BJP), India was an idea that existed independently of defined geographical borders, or indeed of the kind of shared ethnicity that underpinned the nation state. It’s not an argument that goes down well in Pakistan, which until the late 20th century saw the BJP as a party which challenged its very existence as a separate country. But few would argue with his basic proposition: “An Indian state came into existence, for the whole of India, though admittedly for a divided India, for the first time ever only after 1947.”

After independence, India defined itself as a secular state. Its first prime minister, Jawaharlal Nehru, adopted state socialism and central planning to drag his country out of poverty. Its powerful interior minister, Sardar Vallabhbhai Patel, more or less successfully corralled many princely states into joining India, with the exception of Kashmir, which remains a problem to this day.

Pakistan struggled to find an identity. Unlike India, which inherited a functioning administration and capital city, Pakistan had to create a new country out of nothing, among people who had often had little in common with the Urdu speakers of the Indian heartland who had fought for its existence.  These included not only Balochis, Sindhis, Punjabis and — at the time Bengalis — but also the Pashtuns whose loyalty stretched across the border between the newly created Pakistan and Afghanistan — another problem which endures to this day.

The rest, as they say, is history. Starting with the first war over Kashmir in 1947-48, a region which had once had no need for borders became obsessed with borders.

India fought a disastrous border war with China in 1962 over a stretch of land inhabited only by nomads, the Aksai Chin, not because it needed it, but because, as Nehru said in an address to parliament, “national prestige and dignity is involved”.  Pakistan created a nation through years of centralised military rule that lost it East Pakistan, now Bangladesh, in 1971, and left it floundering as it tried to establish itself as a civilian democracy.

India and Pakistan ended up in an expensive arms race which resulted in both acquiring nuclear bombs; they fought three wars and came to the brink of another in 2001/2002; and they developed a highly militarised frontier which choked trade, divided their people and stifled economic growth.

The British imposition of the nation state has not been kind to either Pakistan or India.

So is there an alternative?

A month ago, I asked in this blog whether the salvation of Pakistan’s economy lay in making peace with India. At the time, it seemed as though regional trade might provide the cushion to see both countries through. But as the global economy spirals into recession, I’m wondering if I asked the right question.  In other words, are there other models indigenous to the region that might work better than the now-discredited western postwar view of the world economy?

People are already beginning to talk about the use of barter. In this televised debate, the unlikely duo of former junk bond king turned philanthropist Michael Milken and Nobel Peace Prize winner Mohammad Yunus discuss the value of micro-credit in helping the world deal with everything from poverty and employment to education and healthcare. The idea of providing micro-finance to villagers rather than relying either on state control within nation states or free markets across borders rings true to me, as far as South Asia is concerned, not least because I have seen it in action in India.

But maybe there are other ideas out there? Does the financial crisis offer India and Pakistan a chance to correct the wrongs of history and create their own solutions after 60 years of struggling with a model imposed by an outsider? Or are they condemned, as were western nations by the Great Depression of the 1930s, into the kind of protectionist, nation-state cycle that ultimately led to World War Two?


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1. What author does not understand is, there are probably more Muslims living in India than in Pakistan (or their numbers are very close). We have seen wholesome purge of non-Muslims from Kashmir Valley in 20 year old Jehadi militancy. “If any part of Kashmir is given to Kashmir, a serious question will be raised in India about future of these muslims.” This is not my statement, but was uttered by Indian Foreign Minister Raja Dinesh Singh in 1992/93. It will almost certainly lead to India becoming officially “Hindu Nation”. Pakistan was created as homeland of south Asian muslims- but got divided again in 1971 thus effectively dividing south asian muslims in three parts. INDIA WILL PROTECT KASHMIR VALLEY – at any cost- because, otherwise, its very existance as “secular” state will be gone.

2. India-Pakistan-bangladesh formed a natural trade zone for last 5000 years, and this political divide of last 60 years is one of the reasons why all three economies suffered. India probably recovered early because its big in size.

3. In the next few decades, I see no movement on this relationship even though politicians may talk for consumption of press. But on the ground, till the society at large will reconcile- no progress can be made.

Posted by Dipak Ghosh | Report as abusive

It is true the country of “india” is no more a “nation” than the Soviet Union was.
The people of the Indus Valley Civilization, the ancestors of modern Pakistanis formed a nation around the Indus Valley region which is Pakistan.
Today their descedants also speak a common subranch languages inside the larger Euro-Asiatic family.
Pakistan existed as a nation since the time of the Indus Civilization but as a state since 1947.
The country of “India” has no common language family, no common ethnicity or culture. This is due to the country’s artificial creation in 1947 by the British. Even today there are many seperatist movements throught India because many ethnic groups were forced into “India” against their will.
You challenge the term “partition” and you are correct to do so as infact “India” was created in 1947, not partitioned.

Posted by Faisal | Report as abusive

“…in Pakistan, which until the late 20th century saw the BJP as a party which challenged its very existence as a separate country”

What in the world?? The BJP was founded in 1980, and didn’t have more than a couple of parliamentary seats until 1989! The ignorant statements in your article imply that prior to “the late 20th century” Pakistan felt threatened by a party which didn’t even exist!

What blatant fabrication!

Next you’ll be telling me about
“America, which until the late 20th century continued to watch more movies on Youtube than on DVD”

Absolutely pathetic journalism.

Posted by Sanjay | Report as abusive

I wanted to specify when I said Euro-Asiatic. This reffers to a language family better known as Indo-European which reffers to the landmass stretching from the Indus Valley region (Pakistan) to Europe. The languages spoken in this landmass are majority categorized as a part of a single linguistic family which originated somewhere in in the Baltaic region.
Of this large language family, Pakistanis speak common subranch of languages in this family which is known as “Indo-Iranic”

Posted by Faisal | Report as abusive

Oh! the million dollar Q! I think centre point of this article rolling in Brithish Indian’s mind 21th century more and more. Before going to deep thought, everybody should think the Kasmir vergin war is created to build the nation India & Pakistan? please find the name Who was the supreme authority of the war of India @ Pakistan. The answer will lead everybody to think the matter which differ from Given State History. We see, Mass people goes with their emotion… here British created the ‘two nation theory’ in the name of nation state. Which is actually TWO COMMUNAL STATE THEORY. But now we liquidate in the state programme. To change the situation, we have to rebuild our identity… who we are? therefore we need to clear the secrete of Theory of orintalism. what makes people’s identity as state says…

Posted by Mujtaba Hakim Plato | Report as abusive

Pakistan has everything to gain by moving closer to India and integrting its economy with it and diluting its national borders. India is much bigger, militarily stronger with an economy five times the size.

India has everything to lose by moving closer to Pakistan. Mexico may have a lot to gain by integrating its economy with the US. But the US has nothing to gain except more illegal aliens.

The foundation of Pakistann rests on hatred and genocide of non-Muslims and extreme religious fundamentalism. Hinduism on the other hand is seclar and non-proselytising. There are major civilisational differences between the two. India is going to surge ahead sooner or later while Pakistan will become the sick man of South Asia.

Pakistan is now trying to hang on to India’s coat-tails as a drowning man tries to hug another. Paksitan should stew in its own juice of religious bigotry and economic backwardness. We Indians want nothing to do with it.

Tell me again, what happened to the Islamic paradise that the momins were supposed to estbalish once they broke away from the kaffirs and killed over a million of them?

Posted by Sanjay | Report as abusive

A pile of rubbish indeed. What does microfinance have to do with india/pakistan relations?

Posted by K | Report as abusive

Sanjay, the post is about how the role of the nation state will be affected by the financial crisis and what this means for India and Pakistan. It’s not a history of the BJP and its ideological roots in the RSS, which would be an entirely different subject. When I mentioned the end of the 20th century, I was thinking of Prime Minister Vajpayee’s visit to Lahore in 1999. I’m assuming you are not suggesting he entered politics only in 1980?

Why don’t you address the actual question rather than seizing on one point?

Posted by Myra MacDonald | Report as abusive

India and Pakistan patching up because of the current economic down turn is an interesting theoretical wish of the West because of Afghanistan etc but unworkable or even likely.

Indians are bound by a complicated Hindu philosophy and though we Indians cannot cry or sing in the same language to be one, the 150 million Muslims in India are actually Muslim-Hindus, quite different in the main from Pakistani muslims.There is a chasm. Do read Booker prize WHITE TIGER and how India is a complicated zoo of sorts, like the Animal Farm.

India holds one part of Kashmir against the majority wishes of its now mainly Musllim peoples, and so does Pakistan by brute force, and a fight over Kashmir breathes heavy. Even Obama has refered to it.

Pakistan calculatedly ceeded a strategic part of its Kashmir to China, which gives China a land route access to Pakistan, which will be very important in due course.

It is to the good fortune of the successive Governments of India that the loyal apolitical, sacrificing and professional Indian Army has been the vehicle and glue which has kept Kashmir and North Eastern aspirations for Independence in check. No Government in India therefore would like to see a problematic Pakistan join India, but secretly would like to trade with and dominate Pakistan, which has close ties with China, a nuclear aresnal and holds India back from its aspirations to dominate and aid Afghanistan. Its a very complicated geo strategic situation and we are both emotional peoples, not logical to see what is good for us. The proposition propounded is logical but unworkable.

Ranjit B Rai

Posted by Cmde Retd Ranjit B rai | Report as abusive

Under Chandragupta Maurya and Ashoka, India was under a central rule more than thousands of yers ago.

But that unity was based on a strong central rule
resulting in a stable law and order condition ; ethnicity
and language had no role to play.

European definition of a nation state is not a universal one. There are various others ways in which people can get united apart from ethnicity,language and religion.

When we start dividing people on basis of say religion;
it may lead to further division say -shia ,sunni
protestant , catholic
vaishnavites,shaivites and so on

Further their are divisions on basis of clan , particular region , dialect , family etc

So there is no end to the criterion on which people can be divided.

So we should search for ways to unite people and not dig out historic past to separate them.

Unity is Strength.
Unity is prosperity.

Posted by manhar | Report as abusive

.. The creation of Pakistan was unavoidable.. That was a natural conclusion.. The father of the nation, Hazrat Quaid e Azam,Muhammad Ali Jinnah had once said, ”that relation between Pakistan and india can be like the relation between candad and america..” He had a very peaceful and progressive vision for the subcontinent.. butBut since 1947, india has threatened Pakistan by its size and population.. and did every injustice with Pakistan.. Kashmir.. its an integral part of Pakistan by every standard.. the international community has passed 100’s of resolution that Kashmiris must have given the freedom and there should be a referendum that either they want to live with Pakistan or india..
Look.. There is difference between peace and silence.. silence is what, we observe in graveyards..
Peace can’t exist in times of fear.. peace can be found by respect and equality.. as they say, friends not masters.. so the day when india change its mentality, the day subcontinent will start the journey of real prosperity..

Posted by Nadeem Anjum | Report as abusive

British left what for India and Pakistan after their departure from this subcontinent,which is termed as ‘bequethed European notion’, has no value in the eyes of divided India,Pakistan and Bangladesh in this age globalization.

Being a muslim country,Pakistan is incapable to resist the fractin as well as breach of unity within the nation. The total economy of Pakistan has gone to wane. The country would need immediately extra fiscal support of 4 billion dollars to get a breathing for the nation’s survival. It may be heldso, inany industrially very backwarded country where lack of democracy,does not encourage any advancement or reformation in every sector.

India on the other hand,shouldering a massive population,where the Muslim community exist as the second highest Indian nation after the Hindu. We might have disparities a lot,but we are indifferent and have unbreakeable relationship.ussels and turmoils are mitigated with the ideal of ‘secularism’.A vast geographic region and outsiders provocation that inspires the border terrorism which is the part of our inability. Finacial problemin India at present, definitely not equal to other European countries at all. As per report, India is not at all ready to close any factry or business concern.Stii, you can find any European notion in Indian nation?

Posted by Pranab Hazra | Report as abusive

India has been a nation at times other than Ashoka and the Mauryas. Tugluk’s India encompassed almost the whole of the subcontinent, as did Aurungzeb’s.

Just as with China, India’s territory under central control waxed and ebbed with the tides of history. But just as we don’t dispute the notion that China was a nation before Christ, India too has been a nation for at least ~2 millenia.

Posted by Ravi Rikhye | Report as abusive

The author clearly is ignorant about India’s economic condition. India has achieved a GDP growth of 9% for the last 3 years. India is in much better economic shape than even the UK. Its military is decent and could cause serious problems towards its enemies. Our relatively stable relationship with India also symbolizes its growing stature.

Posted by John | Report as abusive

When British left India , Balochistan was not part of Pakistan , it was an Independent country unlike other princly states of India . Baluchistan was forcefully annexed by Punjabi forces , now we are fighting 5th independence war and will be successfully this time .

Posted by Sameera Bluch | Report as abusive

Throughout history India has at times been unified by both Hindu and Muslim emperors. This is to say that with benevolent and just rulers, religion has not stood in the way of a unified India. At the time the British arrived, the Maratha empire had again unified large parts of India. The Maratha empire was weakened when it was defeated by the Pashtuns at Panipat in 1761 and eventually this led to British rule in India. However, again both Hindus and Muslims fought together in the first war of independence in 1857 crowning a Muslim emperor in Delhi.

Following the first war of independence, the British rulers encouraged the separate growth of Muslim and Hindu nationalism giving rise to the two nation theory. This eventually led to the partition of the country in 1947 and the immense loss of life and treasure that followed.

In my view what was wrought by the British will eventually be undone in some form. For this to happen, a threshold has to be crossed where the West derives more benefit from cooperation with India as compared to the benefit derived by supporting a divided India. After external influence and sponsors are removed from the region, the people can resume their historical economic cooperation and cultural contacts. This will be an effective way of ending conflict and undoing the ill effects of the partition in 1947.

Posted by Amit | Report as abusive

I think what seperated India of the past(the Indian subcontinent) from others is the bottom up culture. India had Muslim rulers for centuries and yet remained a largely vibrant Hindu Society. The western religions required more indoctrination than Eastern ones. This was half-up-ended by the British rule and the creation of two nation-states at war with each other from birth. There are multiple centres of power in modern Indian society but concentration of power has happened. However, the existence of multiple centres does moderate the effects of concentration of powers.

The solution: Demilitarise the whole world. =)

Posted by Himanshu | Report as abusive

Myra Mccdonald,

I think this is a very great article. I have been a finance professional for the past 15 years & have had opportunity to travel to different countries like china,Thailand,Egypt & can claim a familarity to what will work in some of the developing countries.

At a big picture 2T needs to be solved between India & pakistan viz Trust & Transparency.I am not sure a practical solution does exists where we make efforts to move away from our mutual hatred to practical realities.

I read an extremely interesting article sometime back which was written by a Pakistan based business Journalist who spoke about nationalization of Industries which was resorted by Zulfikar Bhutto which prevented the formation of Business conglomerates in Pakistan. I think if you had allowed the business conglomerates to have flourished in Pakistan retrospectively looking, then relationship between india & pakistan could have been warmer.

I think trade alone may not be helpful, You need a Investment climate to be built in Pakistan where they need to allow Indian Professionals & Indian Industries to be set up there so that skills, knowledge & management practices can be transferred. Also an opportunity would be created for pakistan Professionals to work in Indian Industries where they can broaden & understand our functioning.

A negotiated approach to establish some institutes of higher learning like IIT/IIM may help certain sections of Pakistani elites to influence policy decision making favourably.It will surely be in India’s interest to see Pakistan prosperous for then you approach things with more civility in international relation.

I would also think a cordial relationship does benefit multi national company to set up bases which can open markets for their products to a larger Audience.

If economics is divorced from Politics & Religion the world surely is a better place. I am not too optimistic whether we can overcome prejudices of statehood since the bitterness is very vast between these 2 countries.The odds of friendship between India Pakistan looks unrealistic if not impossible.Everything sucks in this part of the world.

May be you can write the next article about how britian & france have helped to overcome their prejudice.

Posted by Vijay | Report as abusive

The opinions expressed in the comments of this article, show some of the different views that exist out there when it comes to the the indo-pak region.However, I think supporters of both sides at times, tend to hype up the status of both countries. A person like sanjay showed his arrogance and ignorance by proclaiming some of the highlights of India when he mentioned the size of the economy and military of India as much bigger then Pakistan’s which is true. However he also ignored the fact that millions of people who are still in poverty and millions more will continue to fall into poverty as well. All this will lead to even more spreading of killer diseases and famine like Aids which still plague the population at high numbers. He also failed to mention the growing problem of Hindu extremism which is lashing out not only Muslims, but Christians and Sikhs as well. This civil unrest is going to cause huge problems in a country as populated as India. The so called “progressive” Hindus are starting to take the form of the Zionists of Israel who have basically marginalized millions of people and are dependent on the U.S and the west to overlook their crimes in order to gain the artificial powers they have gained thus far. Kashmir starting to reflect the likes of the West bank and Gaza, as India continues to claim a region whose people want nothing to do with and one where India has no business occupying it. Let’s not ignore the fact that India’s rise was due in part to it’s “hanging on the coat-tails” of the British. Also the south East Asian region will still be and continue to be more influenced and shaped with the true superpower of China which as history shows is skeptical of India and has relations with the Pakistanis. As far as the Pakistanis are considered, until they get serious in their efforts against the extremist, they will continue to fail economically. Just a few years ago, Pakistan was one of the growing economies in the world, but it seems as if certain parts of the government is more pre-occupied with appeasing the extremist who are backward and illiterate group of people who have no business in being part of civil society. They also need bring up their smartest people into office and take out the idiotic “leaders” like zirdari and nawaz sharif whose uneducated background should be taken more in consideration then their made up political power. Regardless of the animosity that may exist between the two countries, in order for this region to really be stable both countries are going to have to be on good terms politically, economically and militarily.

Posted by sidney | Report as abusive

What is common between European countries? Language, religion, ethnicity? Welcome to India pre-Bristish and post British. India is Europe, multiple countries with one billion people which form a republic.

What is Pakistan? A piece of land born out of Islamic hatered and Islamic centrics ruling it.

How can India and Pakisttan achieve peace? Pakistan associates itself with middle eastern countries and takes India off its radar. Every single Pakistani policy and day to day life of common man in Pakistan is India centric. There is genuine hatered for India not because of Kashmir, but because Islam teaches to be enemies of non Islamic cultures.

This rather crude, but it is a fact and the cause.

Posted by Deepan Gill | Report as abusive

i just want to clear few points that you have mentioned.

“owever he also ignored the fact that millions of people who are still in poverty and millions more will continue to fall into poverty as well.”

it is true millions of people still live in poverty. to be very precise as of ’07 23 % on indians live under poverty line. but you will appreciate it if i mention that at the time of independence and during ’50s it was near 50 % and it went up even to 64 %. for the last 40 years poverty is consistently decreasing at a rate of 1% a year.

“He also failed to mention the growing problem of Hindu extremism which is lashing out not only Muslims, but Christians and Sikhs as well.”

it is also true religious fundamentalism (both hindu and muslim)is in rise in india and it pose a serious problem for the country if unchecked. but so far i haven’t heard anything against sikh. if you have the ’84 sikh riot in your mind. that was not done by hindu extremists.

“The so called “progressive” Hindus are starting to take the form of the Zionists of Israel …….. Kashmir starting to reflect the likes of the West bank and Gaza, as India continues to claim a region whose people want nothing to do with and one where India has no business occupying it.”

kashmir problem has nothing to do with religion. you talk with any other non-hindu indian , you will get the same reply.
also whether india has anything to do with kashmir or not is a complicated issue. so i am choosing not to comment on this here.

“Let’s not ignore the fact that India’s rise was due in part to it’s “hanging on the coat-tails” of the British. ”

gosh! they ruined our country. are you in your senses? check the poverty level, literacy, industrialization, economy …etc. compare the situation before the british and and after they had gone. the rise of britain is due to the “blood money”.

and the rise of india has nothing to do with contemporary britain.

Posted by unknown indian | Report as abusive

Before the event of the British, there was no India, except certain provinces The British brought about the connections between these provinces by building the railway system & eventually India was formed. But then found that India was to big to rule & was more or less draining them. So they looked for an exit strategy & politically found it in Gandhi. Because the truth through history is that (especially in those days), no country could get independence without really fighting for it through battles.
The British left their hallmark Politics “Divide & Rule”
which is being followed till this date & the state of the
country more or less shows it.
This is totally in contrast with the Americans where Washington defeated the British Military might & latter, Lincoln took on & defeated their biggest Strength, the politics of division, through the American civil war.

Posted by abi | Report as abusive

Myra, Its an excellent article. An increased economic activity between the two countries should have a positive impact on the relations. Its just not natural that we import or export to countries thousands of miles away and ignore the markets next door. There is so much that the two countries can gain from each other however Indians have little knowledge about Pakistan and the opportunities it presents beyong a very biased picture painted by Indian media.

Here are some comments from Melchior Selected Trust Pakistan Opportunities Fund; “In looking at the Pakistan market, we see many similarities with India,” Graham said, noting Pakistan had been described as “India at half the price”.

To Sanjay’s comments “…Hinduism on the other hand is seclar and non-proselytising”, how do you explain the Caste System especially the treatement to 250M UNTOUCHABLES or Dalits in this modern age?

Posted by vie | Report as abusive

“Let’s just suppose the paradigm has shifted and the 60-year-old model defined by the departing British colonial rulers is no longer valid. What does that mean for Pakistan and India?”

—-NOTHING– the British were just plain bandits who came & looted India, striping it to the last penny, no contribution, no exchange of culture, just a bunch of shallow Indophobists & superficial western intellectuals trying even till to-date to understand India the great civilization, but can’t scratch even the surface, it’s still beyond their mental grasp…

Posted by Indian | Report as abusive

Before 1947 partition – there was India Afghanistan and Iran in South Asia.

Solution : Confederation of (former India) India-Pakistan -Bangladesh.

*Single military establishment with non-Indian command.

*Single market with a common currency.

*Union States with local administration and designated power to legislate.

Posted by hari | Report as abusive


Every society has many evils.The most liberal country in the world US has still pockets of racism prevalent in most of the “Red States” which are the conservative parts.What you need to appreciate about India is “BJP” which is a party identified with hinduism has not been able to win a majority despite 82% of the population being Hindus. Even if you look at the US elections 95% of the blacks voted for Barack Obama.I think one of the dominant consideration would have been color of the skin.As you fast forward to 20 years ahead i am sure even an AA may not get that percentage of votes.

The point where i am coming from is a Functioning Democracy gradually erases of many ills of the society slowly.For a democracy to thrive secular education in schools & colleges should be inculcated.It is very important that fringe elements in society like sadhu,maulvi,bishops are condemned regularly across the globe, So you can hold elected leaders accountable for governance.Jefferson said to maintain purity of both government & religion it is important to seperate them.

Going back to the subject of this post will Micro Finance be an answer to address a global slowdown.Will globalization collapse in period of economic recession the answer is yes. If you look at periods of peace & prosperity in the world it was during the period 2003 to 2007, this was well reflected in global stock market index which were at its peak. During times of economic turbulence it is very likely across every country opportunist politician will talk of failed policies & whip up passions. The new definition of GDP is GOD,DOGMA & PROTECTION. As long as educated people try to remain above these petty consideration there is hope that we will see some momentum gaining for peace followed by prosperity. One thing surely i would want to see is whether a Islamic country can embrace a secular policy which may be a first step in a new direction called ” Progress”.

Posted by VIJAY | Report as abusive

Micro Finance Model looks a viable alternative solution for countries like India & Pakistan. I know of a company which is focussing on Urban Poverty Alleviation. Some of the way they are making a difference to the Indian landscape are provided below.

1. Associate a funding relationship with well known Institutions like Michael Dell Foundation,Chrysallis Capital & have board presence with former Lehamn Executive. This is very important to establish credibility.

2. Hire great talents, they have roped in people from a diverse segments of the society like media journalist,Bankers, Advertising Executives. They have leveraged the internet to get people across the globe like students from Harvard & Other Premier Institutions.

3.Address some niche needs like they go about funding 90% of the females for some of their needs like capital accumulation for their business,meeting their social needs of childrens education,buying some assets for their house or repaying the costly debts for their business. The tenor for these loans average about 1 year & ticket size is around $500.The repayment track record is 97%.

4.The big advantage i see is there are close to 10000 people who have got a direct employment & they have been able to finance more than 300000 customers. Integrating this as a noble cause the employees have been trained by people from Harvard Grads is an excellent feeling for them.The mutual happiness derived far exceeds the benefits of higher paying jobs.The trained employees have also provided valuable inputs to their customers in choosing & using these credits effectively for their long term sustainable earnings.

5.Is this model scalable & you can bring in 100 Million customers to excite someone like Michael Milken or Blackrock, I am sure it can. The czars of Junk bonds can come up with some debt products which makes this scalable opportunity. In a country like India the state owned banks can move aggressively in lending to these Microfinance companies.

6.There are many trickle down benefits in this model since it can propel consumption,it can propel savings, It can propel government revenues , it can propel a better standard of living than what it was yesterday for people who availed this loans.

7.The threat i see to this model is what is your ability to attract the right talent. This works on a low cost model so incentive for people to grow in this industry are weak. Can the Government help this process, Yes they can by giving Income tax breaks to people who work in this industry & also giving additional incentives like land & opening a supply stores like a military canteen where you get products at cheaper price.There would also be some rocky movements when you scale up at a faster clip with bad loans & liquidity impacting the funding for these loans. It is important to provide some budgetary support of cash subsidy to make this sustainable for the longer run.

8.What form of organisation structure should this evolve into, I would think this should be in the private sector where the ownership stakes are distributed amongst customers,employees & some public holding.It stands a greater chance of success this way.

I want to know views of other readers how they would see this working.

Posted by VIJAY | Report as abusive


About your comment on the caste system and the Dalits – you will find that the link you posted is from a Christian Evangelical organization called the Dalit Freedom Network. Promoting the oppression of the dalits is part of the evangelical business model as it can be used to collect money from unsuspecting people trying to be good Christians.

On the other hand the fact is that the Indian state acknowledges the mistreatment of untouchables and lower castes and hence runs the largest affirmative action program in the world. Further this program was started in 1950 when the Indian constitution was adopted. This official acknowledgement thus preceded similar attempts in South Africa and USA for disadvantaged groups.

Posted by Amit | Report as abusive

Well if this happens , that would indicate unity , which is a dire need of the day. Unity would wipe out the current crisis which the region is facing right now. But any way whats done is done and there is no turning back. what is now required is to bring back the social harmoney that once used to exist in the entire region. Borders fuelled racism , created hatred , and engaged the people into negativity , which other wise would have advanced the region a million times.

The need of the day is to engage people in travel and tourism and cross culture activities which can revive their centuries old affiliation.

Posted by Pk Woodz | Report as abusive

This opinion piece is so utterly Euro-centric or WASP-centric as to deserve being called nearly-racist. I suugest that the author read Wiiliam Pfaff’s analyses. Hhe is fully attuned to the distinction made by some political scientists between the concepts of ‘nation-state’ and ‘state-nation’, having won many highly-coveted prizes for reporting, notably on the recent Balkan wars and ethnic-cleansing episodes, and has contributed excellent analyses on what Ken Ichi Ohmae views as the trend of the near-term future — the rise of ‘region-states’.

In fact, India and Pakistan, together with Iran and maybe Turkey, still have excellent propects of becoming the most successful ‘region state’ after NAMERICA/NAFTA, despite the attempts by the disavowed Bush administration to drive a wedge between India and Iran, notably on the issue of the Iran-Pakistan-India gas pipeline, to the great chagrin of seasoned geopolitical- affairs commentator and former diplomat, Bhadrakumar.

Posted by Mohamed MALLECK | Report as abusive

Mohamed Malleck,

The concept of a common market between India, Pakistan according to me will kick only when both the countries have some commonality.Just study the federal Budget of both the countries, you will then get an idea of what priorities are pursued by both the countries.The investment in education is $400MM in Pakistan while India Invests upwards of $5BN dollars.The competativeness of Indian consumption story was led by gradual reforms over the past 20 years where the Government reduced its dependance on indirect taxes & brought it down from 60% of its revenues to 40%, whereas in Pakistan it is the other way around.Corruption is always prevalent in countries where there is a high incidence of Indirect tax collection & reduces econmic activities.If you study the western countries budget you will notice their indirect tax collection is only 20%, foreign trade thrives in such an environment.I am not saying this as an Indian but pragmatic policies pursued by Indian Leaders like Manmohan Singh ,Chidambaram, Vajpayee have contributed in helping our fiscal siuation to improve considerably where they demonstarted a genuine intent to improve the life of common man,today some of our indian state budget revenues matches the federal government budget of Pakistan.The backward states in India also have some common characteristic like lower education,increased lawlessness,poor state leadership,growth in population,fanatics & bigots whipping passions.The only silver lining i saw was democracy is helping one of the state to slowly inch back to progress.

What is important for Pakistan now is to unleash economic reforms where they shift their taxation policy to make it consumption friendly & make massive doses of Investment in Education at the Primary & Secondary School level & eliminate some of the religious bigots who will sabotage pro growth initiative.It is also important to have a democracy where a single party with a strong leadership & pro business mentality has the reigns of Government.Unless these structural changes are brought about it will not appeal to any rational man that trade or a common market can exist on a sustained basis between countries.

Posted by VIJAY | Report as abusive

The article seems confusing, still the broad message seems to be that what should be the way forward for the subcontinent post financial crisis?

Ground realities are different in Pakistan when compared to India. While India did away with the feudal landlords and to a large extent redistributed the land to small farmers, it did not happen at all in Pakistan where the feudals thrive and actually are part of the ruling establishment along the army and bureaucrats. Feudals would never allow land distribution and thus would block prosperity for the poor farmers. If the grip of the feudals could be loosened it would not only bring wealth to the poor it would strengthen democracy as well.

In India there are other challenges but things are better compared to a decade back. Economic reforms had been ignored by the present government in order to please their communist allies and there is hadly any time left before the next election which is due any time now. It would largely depend on the next governement on providing the economic stimulus. It could go on a spending spree by channeling the high savings of Indians but inflation and high interest rates are to be balanced as well.

Posted by Abhinav | Report as abusive

I have been hearing this from the time i was born.
It is all the British’s fault.

Well, fellow Indians, Get over it. Even if the
queen returns all her jewels and some silly swords etc,
it will not feed the billion indians.

Grains are rotting in food storages and rats and
cockroaches are having a feast. Why can’t we distribute
it to the starving children in the streets – say
through a K-12 education program – food given for free.

Oh! The Indian in you would be waiting for some white
man (say Clinton et al) to show up and show you how to do it, because we have to do every thing only after
someone shows us how. This is exactly what is wrong
with us. Start thinking for ourself and educate and
feed the entire population.

Posted by sreekumar | Report as abusive

The success and rise of the regional superpower, India, has defied in all terms the basic cause behind the two nation theory, Pakistan was based upon.

On the contrary, Pakistan has failed to establish itself as the responsible state/nation. Critics are welcome to debate on this point. I am happy, people from both countries have realized it so soon (No matter it has taken 50 years).

The 4 major ethnic groups in Pakistan have struggled to live in harmony and peace; pretty much similar to the sectarian problems in India. Honestly, We are no better in this regard.

But, we Indians continue to stand united in times of need; Unfortunately this need is felt only during crises.

This is something good within us and makes us feel proud. No country as diverse as India (in terms of everything) has this capability. The resilience and ability to bounce back makes us very special today.

Something about our future.
The only impedance in out path to unification is the apprehension (on both sides) about our differences.

Secondly, the dirty power equation between the politicians. Only a strong leadership could overcome these problems, which I don’t see at least at this point in time.

Our gains.
We Indians have many things to gain from the unification as much as Pakistan. Our defense budgets would be no more needed. Pakistani businesses gets an elixir. Our combined population would makes us largest economy in the world. We can safely tap the natural resources (Petro, Natural gas) from Baloch area and Iran’s Balochistan and Sistan province. Our savings shall increase and cause us to rely less on imports.

US and NATO shall be compelled to remove their forces from Afghanistan and Pakistan. This would bring some needed regional stability.

Gains for Pakistan.
Revival, in first place and a new identity.
Trade and businesses between us shall flourish. Less dependency on Chinese and other goods makers.
The people from the west-most areas of Pakistan would no more be scared of the Taliban insurgents.

Baseline. We once again prove ourself as the most secular and democratic country. This would set an example for rest of the world.

Now something about our history.
We (both Pakistanis and Indians) are totally responsible for the bloodshed during the partition. I don’t see any reason for passing on the blame to English rulers. We were divided from day one and outsiders continued to pour into our territory for their interests.

Today, We both are well known for producing terrorists and religious hard-liners. Don’t forget Dawood Ibrahim is a notorious Mumbai-ite.

Our future is ultimate and that is unification, whether we accept it openly or hesitantly.

Pakistan – Land of pure.
Hindustan – Land of pure (Naqsh-e-Rustom).

Posted by Abhi1980 | Report as abusive