Author: Muddassir Rizvi
Publication: www.pacificnews.org
Date: November 2000
EDITOR'S NOTE: Continued
fighting between India and Pakistan -- both with nuclear arms capability
-- over the disputed region of Kashmir is an ongoing source of concern
in the region. One small source of hope is the desire for trade on
both sides, though there is some question about how bright a candle that
might be. PNS commentator Muddassir Rizvi is a Pakistani journalist
specializing in development issues whose work appears in several weekly
and monthly publications.
ISLAMABAD -- As guns
spit fire along the Line of Control between India and Pakistan in the disputed
Valley of Kashmir, the two neighbors recently signed a sugar trade contract.
The nascent peace movement
in South Asia was happy to see a train carrying 1,500 tons of Indian sugar
roll into the eastern Pakistani city of Lahore.
"The train brought not
only sugar but hopes that the leadership of the two nuclear countries would
not let politics stand in the way of economic common sense," commented
one peace activist here.
But some critics believe
peace with India will only be possible if the issue of Kashmir -- which
the two countries have fought three wars over since 1947 -- is resolved.
The sugar was purchased
by the Pakistani government's Trading Corporation, which accepted an Indian
offer in response to an advertisement it had placed in the international
media. There is an acute shortage of sugar here.
The deal came after weeks
of heavy fire along the border in Kashmir and after the prime ministers
of both countries refused to meet even though they were both in New York
to attend the UN General Assembly session.
It is a clear indication
that Islamabad wants to improve its ties with New Delhi, which have been
at an all-time low since the military takeover in Pakistan last year.
India has refused to enter into talks unless Pakistan commits itself to
halting cross-border terrorism and withholds support to groups fighting
India in Kashmir.
Pakistan denies both
charges.
Many observers saw the
sugar deal as a move to break the ice -- not that trade will bring lasting
peace, but that the two countries will make peace so they can trade.
"We believe that trade
and business should be given a chance to flourish in the subcontinent.
This would also provide an enabling environment to talk about peace and
amity," said the Peshawar Frontier Post newspaper.
Pakistan's government,
despite calls from the business community, has always insisted that trade
with India would only be possible when the Kashmir issue is resolved.
"We must convince our
governments to remove obstacles in the expansion of bilateral trade and
investment," said S.M. Naseem, president of the Rawalpindi Chamber
of Commerce and Industry. His view is shared by his counterparts
in other major cities in Pakistan and India, especially now when foreign
multinationals are coming to tap the South Asian markets.
This view is shared by
some liberal politicians who believe trade with India is essential to a
tension-free South Asia.
The religious right,
however, is opposed to any trade relations with India, on the grounds that
India will completely capture the small Pakistani economy once free trade
is allowed. But these parties never express concern over Pakistan
trade with China or the United States, which have far bigger economies
than India.
"Trade is not the real
issue- - we want India to vacate Kashmir and return it to Pakistan," commented
one leader of the right-wing Jamaat-i-Islami. When the military government
suggested granting Most Favored Nation Status (MFN) to India, the reaction
was so harsh the suggestion was withdrawn.
India awarded MFN status
to Pakistan in 1995 under its World Trade Organization's obligations, but
Pakistan has not followed suit. Commerce Ministry figures show that
between them, India and Pakistan import and export about 600 items worth
$35 million every year. The Economic Survey of Pakistan gives a much
higher figure of $250 million.
Independent studies,
however, put the bilateral trade at between $1 and $2 billion -- most of
which involves smuggling. Smuggled videotapes of Indian films, artificial
jewelry and cosmetics are popular in Pakistan. Videotapes of Pakistani
television plays and dry fruit are smuggled into India.
Pakistan loses an estimated
$500 million annually in custom duties to smugglers. But Pakistan
still imports wheat from the distant United States, which it could buy
from India, and costly medicines and farm fertilizers from third nations
even though they are much cheaper from India.
And in early September,
the military rulers rejected a proposal to sell surplus electricity to
energy-deficient India, even though the producer offered to give half the
profit from the sale to the Pakistani government.
Peace groups see trade
as the only hope for normalizing relations between the two nuclear-armed
neighbors. For them, each trainload of sugar brings more hope, but
others continue to question whether this is enough to sweeten the bitter
ties between the two foes.
