India’s stake in a stable Pakistan

India’s stake in a stable Pakistan

By Sunil Khilnani and Arvind Subramanian 

As government-to-government talks resume between India and Pakistan, it is time to consider other channels of engagement that can contribute to improving relations or at least minimising the distrust between the two countries. Cricket helps, of course, and we can hope that the World Cup now underway may rekindle some of the good spirit among fans that prevailed some years ago.

But the interaction needs to be constant rather than episodic: and it needs to move beyond the symbolic and dialogic to the substantive and tangibly beneficial.

The best option would be to intensify trade between the two countries. It is true that when countries trade goods, they are less likely to trade blows (although there are famous and violent exceptions as with Germany and the rest of Europe prior to World War I). While there is consensus that this is a good idea, little has been done to realise it.

A major obstacle to expanding Indo-Pak trade is in fact our two governments. Pakistan does not grant most-favoured nation status to exports from India. India does – but Pakistan claims that MFN status does not translate into greater exports from Pakistan because trade barriers, especially in areas of Pakistani comparative advantage such as textiles and clothing, remain high. Claims and counter-claims fly between the two capitals, echoing the stilted sound of the security discourse. It’s time, therefore, to think beyond the traditional, and to look for other economic options.

Consider the following possibility. Both Pakistan and India are searching for ways to improve their educational outcomes. Recent Indian experience offers one interesting lesson – which could benefit Pakistan. The demand for education, especially English-language education, changed dramatically in India with the rise of the information technology sector. The returns to possessing English language-cum-computer skills increased so dramatically that parents started seeking education and the private and non-government sector stepped in to make up for the dysfunctionality of the public sector. All over the streets of metropolitan and small town India, it’s possible to see the evidence – proliferating signage, announcing hole-in-the-wall operations teaching English and computing.

In Pakistan, the spread of modern technical education is not just an economic necessity as in India; it’s also something of an existential imperative. Modern education may be a way to check some of the more pernicious effects of those madrassas that spread religion-inspired illiberalism. Creating the incentives for seeking such technical education will require a dynamic information technology sector, and here the Indian private sector could make a difference.

Suppose, for example, that Narayana Murthy, Azim Premji, Shiv Nadar, Anand Mahindra, and Ratan Tata announced the following. Together the quintet would commit to creating the basis for a new IT sector in Pakistan within five years. The commitment would require as a first step physical investments in IT-technical institutes as well as imparting skills – including English language competence – to thousands of young Pakistanis in newly created facilities within Pakistan itself. It would also involve locating BPO centres in Pakistan, to provide employment for the newly-trained youth.

To that end, the crowning commitment that our business leaders could make would be a declaration that says five percent of the value added on all international contracts that they receive over the next 10 years would be from the newly created Pakistan-based facilities. In other words, when Indian IT firms deliver a final product overseas, they will have to ensure that the quality of Pakistani input is up to world standards: that is the risk that they will have to incur. But if successful, Pakistan can show the world its capability in this sector. In that sense, India would be committing to creating a Pakistan brand for IT – as part of its own, inclusive and forward-looking ‘Brand India’.

This initiative is minimally demanding on the two governments, especially the Indian government. While some forms of distance-training, making use of the technology itself, could be developed, no doubt some initial movement of Indians to Pakistan would inevitably be required, in order to help establish and run the training centres. Therefore, some reliable security arrangements would be necessary. But since the emphasis would be on self-skilling, with a view to Pakistanis rapidly moving into training and management positions, the physical presence of Indians in Pakistan could be minimised.

The prospects for success would be good. After all, the basis of India’s comparative advantage in IT – low cost and qualified English-speaking technical personnel – is replicable in Pakistan. In terms of infrastructure requirements on Pakistan too, the IT sector is relatively less demanding, both in terms of sheer scale of investment and challenges of security management. Creating the necessary forms of digital connectivity is easier than trying to build power plant infrastructure or to police a gas or oil pipeline.

Success would bring with it real social and economic benefits to Pakistan, as well as political gains to India. There would be economic costs to India – the foregone Indian value-added for example – but incurring them would demonstrate India’s stake in, and contribution to, a stable and prosperous Pakistan. And it would be a chance for our increasingly mature and confident private sector to take the lead in a matter vital to the subcontinent’s future – to step boldly where neither of our two governments has been willing to tread.

Sunil Khilnani is director, India Institute, King’s College London. Arvind Subramanian is senior research professor at the Johns Hopkins University

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