In optimism over India-Pakistan trade, a warning flag

May 13, 2012

In 1997, the business-friendly Nawaz Sharif was prime minister, relations between Pakistan and India were thawing and the two countries were trying to use improved trade  to put decades of animosity behind them. Or as the Indian journalist Salil Tripathi wrote at the time, “this sorry state of affairs may be about to improve – through commerce.” Then came the nuclear tests in 1998, the Kargil war and a coup in 1999, mass military mobilisation in 2001-2002,  the Mumbai attacks in 2008, and now, finally, we are here again.

Trade is the new/old panacea of India-Pakistan relations, moving ahead rapidly after Islamabad said last year it was ready to match India’s offer of Most Favoured Nation (MFN) trading status. The Economist called it “a profound and welcome shift” that could eventually open up for India trade through Pakistan to Afghanistan and the markets of Central Asia and beyond. As trade increases, so the argument goes, India and Pakistan will build the trust needed to tackle their territorial disputes, while economic inter-dependence will reduce the risk of conflict.

The problem with this scenario is a dangerous mismatch in expectations between India and Pakistan. India sees improved trade ties as a useful end in themselves; Pakistan, in contrast, is looking for rapid progress on territorial disputes. That could be an academic argument, were it not for the fact that this mismatch echoes problems that have bedevilled relations since 1947. Even since their first war over Jammu and Kashmir left India with the more important parts of the former kingdom – the heartland Kashmir valley and control of the rivers on which Pakistan depends – India has been a status quo power. Pakistan, in contrast, has been fighting to change that status quo, nurturing Islamist militants to fight asymmetric warfare against its bigger neighbour, with lethal consequences for the region, and increasingly, for itself. With little or no progress on territorial disputes, the approach of improving trade ties while leaving the rest to a better day risks falling foul of the same cycle of violence.

So far, an agreement on Kashmir appears as elusive as ever. There has been no progress in resolving a boundary dispute in Sir Creek, which lies in the marshlands between Gujarat in India and Sind in Pakistan. And of most immediate importance, there is no change in attitudes to the Siachen region, a wasteland of mountains and glaciers high in the Karakoram beyond Kashmir, which since 1984 has been turned by  India and Pakistan into the world’s highest battlefield.  After losing 139 soldiers and their civilian staff last month to an avalanche, the Pakistan Army has appealed for talks on the demilitarisation of Siachen. India has rebuffed that call, officially reiterating its stand that Pakistan must first authenticate India’s higher and more advantageous positions before any military withdrawal. The Indian media narrative has taken an even harder line, with some suggesting that the Indian positions be permanently agreed as the boundary between Indian and Pakistani territory – thereby not only reinforcing the status quo, but also negating any possibility of a territorial compromise further down the road.

From an Indian point of view, focusing on trade first appears to make sense. With Pakistan’s economy struggling and relations chilling with the United States, it too stands to gain from better trade. As Sadanand Dhume at the American Enterprise Institute argued in a discussion on Twitter, Pakistan should stop seeing better trade ties as a concession to India.

“Pakistan hurts itself by seeing trade as a concession to India. Pakistan’s economy needs the boost much more than India’s,” he argued. “Robust economic ties will create constituencies for peace on both sides. In short, both sides would benefit from more trade even if neither budged an inch on Siachen, Sir Creek or Kashmir.”

With its growing political and economic clout, India sees little reason to make early territorial concessions to Pakistan, especially with the wounds of the 2008 Mumbai attacks still raw, and the man it believes masterminded those attacks, Lashkar-e-Taiba founder Hafez Saeed, continuing to play an active public role. And increasingly, it has the United States on its side – Secretary of State Hillary Clinton used a visit to India this month to renew pressure on Pakistan to tackle Islamist militants – a choice of location that irked many Pakistanis. In short, according to the Indian view, Pakistan should take what is on offer for its own benefit, and what is on offer right now is better trade.

Or as former Indian intelligence chief Vikram Sood said on Twitter, trade would be beneficial to Pakistan and should not be seen as a concession to India. But, he added, greater trade need not lead to a political settlement. “It is a mistake or a forlorn hope that trade will lead to political solutions.”

“Why must India make territorial concessions?” asked former Indian foreign secretary Kanwal Sibal in an op-ed this month. “The notion that India as the bigger and stronger country has to be generous with Pakistan is egregious. If this principle should dictate the conduct of international relations then China should be generous towards India on issues that divide us – which it decidedly is not – and the U.S., as the world’s most powerful country, should be making concessions to virtually all others – which it decidedly does not do.”

The United States does in fact make concessions to Pakistan (though it is certainly not seen that way inside Pakistan.) It is still willing to provide aid to Pakistan even while suspecting its army of encouraging militants to attack its soldiers in Afghanistan. It has not even begun to unleash the economic, diplomatic and military firepower it could bring to bear if it decided to get really tough with Pakistan. It does so not out of generosity, but to secure its own interests and because it believes, rightly or wrongly, that Pakistan would become too much of a danger to itself and others if Washington were to disengage altogether.

The risks of the Indian position is that by hewing too closely to the status quo it deprives itself of diplomatic flexibility, while also undermining the constituency for peace inside Pakistan - which includes the civilian government - and strengthening hardliners. Pakistan’s security establishment has always tended to respond with fury to any perceived Indian indifference to settling territorial disputes. A very rough analogy would be to compare Kashmir to a child in a custody dispute where India has custody and says there is nothing to discuss, while Pakistan reacts with spluttering rage.

India need not, and will not, settle its territorial disputes with Pakistan quickly. But it can show good faith by demonstrating a willingness to address them in the future, rather than simply waiting it out in the hope they will eventually be forgotten. It could, for example, offer to send joint teams of Indian and Pakistani scientists to Siachen (a ceasefire has been in place since November 2003) to investigate the impact of global warming and the war on the huge glaciers there - thereby acknowledging that both countries have a shared stake in the region.

A little warning flag went up this month when Pakistan cancelled talks on Sir Creek originally scheduled for May 14-16. It gave no official explanation, but Indian media interpreted it as a means of putting pressure on India to make progress first in talks on Siachen due on June 11 and 12 before Sir Creek is discussed. It was only a small warning flag, hardly noticed in the rising tide of optimism over trade, a bit like that little red flag on the beach that tells you not to go in the water.

But it was a warning nonetheless. Territorial disputes matter to Pakistan – as the smaller country, and increasingly worried about its water supplies from rivers that come through Indian-held territory, they matter more to Pakistan than to India (though India too can be fiercely territorial). As a Pakistani general once told me in Rawalpindi, “India can withdraw a thousand miles and still be India. We can’t afford to withdraw an inch.” Watch for more of those warning flags going up if we continue down the same track of increasing trade ties with no accompanying progress on territorial disputes.

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