Focus on the economics: a new approach is all that is needed

Focus on the economics: a new approach is all that is needed

By Aziz Memon

As they say better late than never. I think it is about time that the leadership of Pakistan and India should change the basis of the dialogue in order to move forward, grow and prosper.

There is light at the end of every tunnel no matter how long or deep it may be. The bitterness of the past could be forgotten in the process of accomplishing the cherished goals that remained elusive earlier.

The message is loud and clear for the movers and shakers in both the neighbouring countries. It is the time for the history to take a backseat and let the economics take centre stage. Let us realize that a few problems are too intractable to be resolved through dialogue.

There are numerous examples to suggest that the best way to deal with them is to change the circumstances that surround them. That is what the wiser nations have done before us having achieved their objectives.

This was what the Chinese did regarding their claim over Taiwan. Slowly but surely they changed the nature of the relationship with the island to have it develop a strong economic vested interest in the mainland. Why can not Pakistan and India try the same approach while dealing with the current situation?

Let us see how shrewdly France and Germany have handled the situation. Both the European giants have had political differences but neither of them allowed it to affect the business relationship between the two countries. They have been doing business normally all along.

There are always added incentives of engaging into business in the neighbouring country. Obviously it would cost much cheaper to bring in something from the country next door rather than getting it from a point thousands of miles or kilometers away.

You do not have to be a top businessman or an economist to find out that importing something from Brazil or USA to Pakistan would be much more expensive than procuring the same stuff from India.

Similarly, India would be much better off getting hold of goods from Pakistan instead of ordering the same from any distant country.

I do not understand how the point has been missed for well over half a century that the neighbouring countries nearly all over the world have maintained normal trade relations irrespective of their political differences.

The worthy decision makers in our two countries should have learnt lessons from others and there should have been much more business activity in this part of the world between the two neighbours than just carrying out discussions on trade.

Let the political issues be handled by the politicians while the normal trade should be continuing between Pakistan and India.

I have been very clear in my mind that both the countries would benefit immensely by having normal business relations. I have said it all along that we cannot afford to lose any more time on this.

I had raised the point when the Indian Prime Minister Rajiv Gandhi had visited Pakistan on the invitation of Prime Minister Benazir Bhutto in 1989. I had suggested in their presence at Islamabad that let the economic activities lead the way in resolving the long-standing political differences.

My point was well taken and the business community had endorsed my views as we firmly believed that the floodgates would have opened if the normal trade activities commenced between the two neighbours.

The business leaders in Pakistan as well as India were absolutely convinced that it was going to be mutually beneficial for the peoples of both the countries. We knew exactly that it was a general practice on part of the neighbours to remain proactively engaged in trade activities.

We were aware that the neighbours in the developed world were the major trade partners. It is an established fact that the economies of proximity and common border can result in substantial increase in trade benefiting the people of both the countries.

Pakistan and India have been carrying out business activities albeit in a restrained manner. They are contained or even handicapped by tariffs and other regulations. The businessmen hesitate about making any long term deals in the present circumstances which need to be changed for a better tomorrow in both the countries.

Needless to say the prospects of increasing bilateral trade between the two countries are considerable. There exists untapped trade potential between the two countries which if adequately exploited can yield significant welfare gains for them. South Asia is the least-integrated region as compared to other regional trading blocs. The improvement in economic relations between Pakistan and India holds the key in the regional integration of South Asia.

Another key reason for trade between these countries is the past pattern of trade in agricultural items to overcome short-term fluctuations in supply. Pakistan and India have traded in primary agricultural commodities like potatoes, onions and sugar etc. to overcome supply shortages caused due to seasonal crop fluctuations.

It is also an open secret that although the formal trade has been marginal, the quantum of informal trade taking place through porous Indo-Pakistan land borders and free ports of Dubai and Singapore has been on higher side. This unaccounted for trade will be directed to legal channels if the business relations are normalized.

Pakistan has been trading with India on the basis of positive list. The number of tradable items has registered a progressive and gradual increase in the recent years but we need to go farther than that.

The studies conducted on the Indo-Pak trade have identified a number of potential areas. According to these studies, import of steel from India will benefit the engineering goods sector. The chemicals and pharmaceuticals used as basic raw materials by industrial consumers have also been mentioned as potential items of imports. These raw materials will help in reducing the input cost and making these industries more competitive in the global market.

Similarly, Pakistan could explore opportunities of exports to India in sectors like textile and textile articles, prepared food stuffs, leather, mineral products, plastics and cement.

Both the countries have definitely hit headlines for registering growth in economy at some point of time or the other but they can turn it around for their respective people by shifting the focus on the bilateral trade.

Comparatively the Indians have certainly registered phenomenal business growth in the recent past but still a lot of people in the second most populous country of the world are in distress. Their lives could be changed by activating trade with neighbouring Pakistan.

There would be multiple benefits if Pakistan and India find the way out to become proactive trade partners with no strings attached. Who knows this could also lead to the resolution of the longstanding disputes besides the resumption of more people-to-people contacts in the two countries.

It is an action time for both the countries whose leadership must realize that they need to do it for the sakes of the millions of people whose lives could be changed with their decision of opening the bilateral trade that is very much the need of the hour.

(The writer is a prominent businessman and National Chairman of Rotary Plus Committee)

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