Saturday, 26 November, 2022
HomeOpinionPakistan linking trade and Kashmir issue shows leaders still don’t understand geo-economics

Pakistan linking trade and Kashmir issue shows leaders still don’t understand geo-economics

For Pakistan, ideology has trumped the kind of pragmatism needed to move away from geopolitics to geo-economics in its external relations.

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Prime Minister Imran Khan’s latest U-Turn on opening trade with India illustrates why Pakistan cannot fulfil its leaders’ stated goal of an economy-oriented foreign policy without moving away from the Islamist ideology that currently defines Pakistani nationalism.

Imran Khan’s Cabinet linked trade with India to the resolution of the Kashmir dispute on terms favorable to Pakistan, rejecting an earlier decision by the Cabinet’s Economic Coordination Committee to import sugar and cotton from India. Given that India has not given in to Pakistan’s demands on Kashmir after 72 years, multiple wars, and Pakistan-backed terrorism, linking the opening of trade to the Kashmir issue runs against the logic of geo-economics.

Pakistan officials have been saying lately that the country is eager to focus on geo-economics instead of geopolitics. Pakistan’s Chief of Army Staff (COAS) General Qamar Javed Bajwa, while speaking at the inaugural Islamabad Security Dialogue in March 2021, spoke of the country’s “geo-economic potential”, the need for “economic security and cooperation”, and of Pakistan becoming the “connecting conduit” between South and Central Asia.

General Bajwa expressed the desire for Pakistan to be “a nation at peace” and South Asia “a region in harmony”. The speech, coming weeks after the ceasefire along the Line of Control (LoC) in Jammu and Kashmir, led many to hope that India and Pakistan may soon return to the negotiating table and might start trading with one another for mutual benefit.

But last week, a day after Federal Minister for Finance, Hammad Azhar announced the decision to import sugar and cotton from India, the Federal Cabinet reiterated the ‘no trade with India unless the Kashmir dispute is resolved’ mantra. Ideology and entrenched strategic thinking trumped the kind of pragmatism that is needed to move away from geopolitics to geo-economics in external relations.


Also read: Why PM Modi and Gen Bajwa mean business with India-Pakistan peace talks. Nothing else matters


Pakistan’s fraught economy

If the Pakistani establishment had truly been on the path to regional integration, as the army chief had stated, then the first step would have been to allow the import of products that Pakistan badly needs and are available from India at lower cost than elsewhere.

General Bajwa’s assertions did not conform to Pakistan’s traditional ideological paradigm. As author and diplomat, Husain Haqqani, wrote in his book Reimagining Pakistan, “Economic considerations have always been deemed secondary in Pakistan’s policy priorities, important only to the extent of finding resources for greater goals such as securing Kashmir, facing the ‘Indian threat’ or reviving Islam’s lost glory.”

Pakistan’s leaders have tended to not understand economics. Unlike other American allies during the Cold War, Pakistan squandered billions of dollars in assistance from the United States in pursuit of a strategic advantage against India, instead of building its economic foundations.

Japan, Germany, South Korea, and Taiwan — all these countries benefitted from American largesse, but they used it for building their economies, educating their populace, and investing in their societies. Pakistan used up American funding in building its conventional army. Instead of seeking American investment and technology, Pakistan shunned structural reforms and ended up becoming a rentier State, living off collecting aid to address American strategic concerns for seven decades before trying to do the same with China.

There is a reason why, despite receiving 22 loans from the International Monetary Fund (IMF) since 1958, Pakistan has yet to implement structural reforms that would enable the country’s economy to move forward on its own steam.

According to the IMF, global economic growth for 2021 will stand at 6 per cent, but Pakistan will only grow at 1.5 per cent. A country with a population of over 210 million, Pakistan’s annual bilateral trade with the world’s largest economy – the United States — stands at $6.6 billion, which is equivalent to American trade with Morocco, a country of 36 million people.

Pakistan wants to compete with India, which has a population six times larger and an economy that is 20 times larger. India’s bilateral trade with the US, at $146 billion, is more than 20 times the volume of Pakistan’s trade with America.

Moreover, Pakistan remains on the grey list of the Financial Action Task Force (FATF), a global body that combats money-laundering and terrorist financing. And international arbitrators have repeatedly found that Pakistan does not fulfil its contractual obligations to foreign corporations.


Also read: Pakistan’s peace offer came with fine print. Optimistic Indians failed to read it


Bajwa’s motives

General Bajwa may wish for “an economically interconnected South Asia”. But for now, South Asia is the least integrated of all regions around the world. Trade between ASEAN (Association of Southeast Asian Nations) countries is 25 per cent of their global trade, but trade amongst South Asian countries is only around 5 per cent.

Attempts at regional economic integration, namely a South Asian Free Trade Area (SAFTA) or South Asian Preferential Trading Agreement (SAPTA), have been held hostage by Pakistan’s insistence that the Kashmir dispute be resolved before any movement on the trade front. Even General Bajwa, while speaking of the need for “sub-continental rapprochement”, reiterated that it would need a resolution of the Kashmir dispute.

Is the current army chief truly seeking to change Pakistan’s foreign policy or is he simply seeking breathing space to consolidate his position? If it’s the former, then General Bajwa would need to go against the army’s own institutional interests and whatever his personal beliefs or preferences, as the institution is more likely to prevail.

As long as the Pakistani establishment does not allow an open discussion on why the country cannot get all of Kashmir, it would be unable to enter into a real discussion with India for a deal. That is why the Musharraf-Manmohan Singh era talks, which reportedly brought the two sides on the verge of a comprehensive settlement, failed to produce anything long lasting.

Pervez Musharraf was strong as long as he remained both army chief and president. But he had to step down as army chief in 2007 to accommodate the demand for promotion from junior generals. His likely successor as the army chief at the time, General Ashfaq Pervez Kayani, covertly supported the Lawyers’ Movement against Musharraf to ensure that he could take over as army chief.

General Bajwa is much weaker than Pervez Musharraf and is aware of this. He is, therefore, unlikely to prevail in undertaking major policy changes, let alone abandoning Pakistan’s national ideology based on Islam and anti-Indian rhetoric. His endeavours must be seen as a pursuit of breathing space and possibly another extension in the top job.

The author is Director, Initiative on the Future of India and South Asia. Views are personal.

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25 COMMENTS

  1. It is in India’s interest to keep Pakistan poor, a richer Pakistan will find it easy to fund jihadi activities in India.

  2. Why so much of space given to a failed state like Pakistan. They are as important to us as Eritrea is.
    Pakistanis want that we Indians give attention to them, that gives them self-importance like a lapdog gets. Just ignore them.

  3. Beggars can’t be choosers… That’s one sentence enough for terrorism supported country and land of terrorists…

  4. Kashmir issue has always been at core with Pakistan. For Kashmir-issue Sake pak can do trade with India,and if it does not,it is for the sake of Kashmir issue.

  5. This Attitude clearly shows The Stupid Dreams of Pakistani Leaders to Capture KASHMIR .
    If they don’t want to Have PEACEFUL NEIGHBOURLY RELATIONSHIPS WITH TRADE , we Should NEVER Budge to be STIFF IN our Dealings with them , NEVER NEGLECTING OUR SECUOURITY & Wish to have A good Neighbourhood.

    With Best Wishes For Betterment Always ,
    SHIVA KUMAR.T.N.

  6. It is needless to say Pakistani’s are obsessed to kill Hindus.Forget not the history India was always attacked.We seldom have the guts to attack Pakistan.They kill our soldiers and in retaliation we kill their so called terrorists and our news channels bark the same.

  7. China has been slowly but steadily collecting data about indians and it is not a secret, that they constantly hack our networks. Also China is deliberately trying to keep our industries from developing by dumping cheap (cost) products using labor that was forcefully made to work in china. India cannot compete with that kind of price war. So we need to stop Chinese brands and Chinese imports. Let us build our industry, then we shall open trade with China.

  8. No trade to be started at the behest of Pakistan. Now that their economy is under pressure, they will start trading with India and once they start getting aid from foreign agencies in the near future, they will again revert to their original stand.

  9. Pakistan can keep chasing something that they can never achieve. If they keep dreaming about Kashmir, it will never happen. So they can remain where they are and who cares in India, except some in the media. India loses nothing by not having trade with Pakistan.

  10. What’s baffling me is why has.modi suddenly decided to talk with Pakistan when BJP was not even willing to look at them let alone talking to them what’s the compulsion.

  11. One point is clear that Pakistan even if bankrupt and in need of settlement to deliver goods and services to the people is still ruled by Jihadi oriented civil administration and probably much of the army. Bhutto’s utterances are coming true, Pakistanis will eat grass but would have the Atom Bomb. Replace Atom Bomb with military modernization since Atom Bomb will invite a massive retaliation, hence this enmity will continue. Next step is to wait for firing to begin at LOC.

  12. Abe kutton apna kaam se kaam rakho. You’re government is ruining the lives of innocent farmers! Why dont you report news on that? Why not report news on innocent you’re killing. Do you need statistics of how many you’ve killed since the 80s??? You need to start reporting indian news more and Pakistani news less. You guys are obsessed with us!

    • No one cares about pakistan and pakistani people so stop speaking about them, you terrorist sympathizers

      They dont have money, they dont have skilled workers, they dont have an intelligent diaspora abroad, they have 0 natural and 0 agricultural resources, they have contributed nothing to science and human development.

      Pakistan is slowly becoming chinas financial slave.

      They have essentially become an south asian North Korea, where Pakistanis only have grass to eat and an atom bomb to show

    • Look… Terrorist is talking… While world knows where osama was found… Indian media has right to report what they want. First stop terrorism and try to improve your damn economy. Focus on economy and not jihadi… Your madaras are the worst fir your country.. All jihadis come from there.. Everyone knows that… 🤣🤣🤣

  13. To term Pakistan’s obsessions as “ideology” is to insult the word. Their only reason for existence is hatred of india and jihadi attitudes. Trying to reason with them about economy, trade, realism and this existence on the planet is a waste of breath. Let them stew in their own dreams of Jannat etc.

  14. For Politician of Pakistan ,ban on trade with India is Economic Jehad though directed towards and backfires their own financial stability alongside livelihood of common people.

  15. It has become fashionable in India to deride, mock Pakistan’s views on Kashmir. A phantom which allows its Army to play an outsize role in national life, dictate security and foreign policy, claim large budgetary and other resources. The other leg of the narrative stool is wobbly – Pakistani politicians do not in fact use India as a bogey on the campaign trail, which is now becoming very true in our case. 2. The fact remains that this is a dispute that has kept both nations apart since their creation, sometimes led to war. Had both nations not been nuclear armed, it may not have been possible to keep conflict at bay since 1971. The rest of the world is not weighing in forcefully on either side, but does acknowledge the existence of a dispute. What the contours of any eventual solution will be like is not for me to speculate upon. However, some of our recent breezy unilateralism may not be the enduring solution all South Asians seek.

    • You should just get lost…go jump into Arabian sea because of your naivety. And if you don’t jump, then please read some serious stuff on the conflict, perspectives and insights from experts. Till then stop opening your mouth on China and Pakistan.

  16. India is offering sugar and cotton at very competitive rates. It’s a missed opportunity of Pakistan. Eventually the people and industry of Pakistan will be impacted.

  17. It is not Pakistan if it is not about ideology and visceral hatred of India. Geo-economics can make sense to Pakistan if it is having to do with other countries where such actions will hurt India. It does not matter what is beneficial to Pakistan; it should be harmful to India.

    With this background, there can never be peace between India and Pakistan. Period.

  18. For INDIANS atleast terminology such as geo economics must immediately sound another attempt at tactical move to divert attention from terrorism and get financial relief. Any INDIAN who says otherwise is obviously doesn’t want to believe what his or her brain is telling them.

    Pakistan was, is and will always remain obsessed by fundamentalist beliefs and a desire to kill HINDU infidels. That’s what all most all pakistanis learn in school curriculum .

    This obsessive compulsive disorder of religious intolerance makes pakistan a country which will as BHUTTO said eat grass but never compromise with HINDUS.

    Any move towards PEACE is just a break before planning more deadly attacks by PAK ARMY.

  19. The survival of every government in Pakistan has been on anti-India narrative with Kashmir at it its core. It is absurd to imagine that any progress without reference to Kashmir from the Pakistani side is possible. All Bajwa is doing is the press the pause button for seeking an exit from power without the fear of arrest or exile post retirement.

  20. Same applied to ourselves as well. Our beloved PM systematically pushed for boycott China movement. We are not different than Pakistan. In coming times, I just wish we should not reduce to Pakistan due to blind Nationalism.

    • In pakistan it’s not blind nationalism but religious fanaticism and the reason for india or any other country hating china is okay is because of two undeniable reasons.
      1)china is Communist
      2) because it is Communist it needs to have a be nationalist mindset to its people to an extent that it almost becomes dangerous and to do that they repeatedly picks fight with neighbours but never going too far and on top of that china won’t back down if the agreement is not in its favour which means that agreement either need to be a win – loss or win- win between china and others respectively and if it’s a win – loss then it means the issue is no longer there and then to maintain the stream of nationalism they will need to pick another border to fight on so only option is to stall the argument for another time with a win win which is hard to fund in sine cases.

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