Strained ties with the US strengthen Pak-India relations - Islam online
By: Aamir Latif
Islamonline.net-Islamabad
The increasingly strained diplomatic relations between the United States and Pakistan are bringing two arch rivalsPakistan and Indiacloser with the initiation of holding talks in order to boost the flimsy trade relations between the two neighboring countries that have been at loggerheads since the deadly Mumbai attacks in November 2008.
The two South Asian states, which have fought three full-fledged wars and a three-week long Kargil skirmish, are likely to grant each other status of Most Favorite Nation (MFN), in February, a highly unexpected, and the biggest move the two countries are going to take after various decades.
The decision was taken in a meeting between Pakistani Trade and Commerce Minister, Makhdoom Amin Fahimonce the strongest candidate for the post of Prime Ministerand his Indian counterpart Anand Sharma in New Delhi last week.
Observers believe that the dramatic development is a Pakistani bid to exploit every possible opportunity in order to dispel the impression of being isolate and to explore alternatives in that case of sanctions by the US, which is unhappy with its close ally for not taking on the Haqqani network.
Unexpected
The high-level meeting between the representatives of the two arch rivals, at a time when Pakistan is grappling with extreme US pressure, has surprised many as the trade ministers of the two sides have met after a gap of 35 years.
The two neighboring states were on the verge of another war after the deadly Mumbai attacks in November 28, 2008, killing 166 people. India blamed the Pakistani intelligence agencies for the terrorist attack, an accusation Pakistan denied.
The blame-game, however, managed to crumble the already fragile peace process between the two sides as the US, UK, China and other countries had to intervene to avert a war between two nuclear countries in the wake of the Mumbai attacks.
In another unexpected move, India has agreed to support a European Union (EU) scheme to boost textile exports from Pakistans flood-hit areas with duty waivers, a gesture applauded by Pakistan. Earlier, India had opposed this scheme.
On the other hand, the Pakistani cabinet has approved a plan for starting negotiations with India for signing an agreement on custom cooperation to facilitate the proposed trade activities between the two countries.
The two countries have targeted to boost the trade volume between the two sides to up to 6 billion dollars, more than double of the current volume of 2.7 billion dollars during the next three years.
Currently, The United States, a close ally of Pakistan in so-called war on terror, is its biggest trade partner with a trade volume of 3.58 billion dollars.
Divided
Economic experts and the business community stand divided over the proposed MFN status to India as its supporters term the move positive. However its opponents believe that it would badly hurt the countrys already dismal economy.
This is a positive move, Mirza Ikhtiar Baig, a Karachi-based industrialist and a member of the trade delegation led by commerce minister Amin Fahim said at a press conference upon his return from India.
Baig, a member of Indo-Pak Business Forum, however said that until India abolishes the non-tariff barrier on Pakistani products, increase in bilateral trade is not possible.
If India does that, then the trade volume between the two countries can reach up to 10 billion dollars, he maintained.
Dr. Shahid Hassan Siddiqui, a veteran economist disagrees with Baig and the Indo-Pak Business Forum.
This is a very dangerous move. It will hurt Pakistans already tottering economy, Dr. Siddiqui told Islam Online.
He observes that the proposed rise in trade volume between the two countries will ultimately benefit India.
Those who are supporting this move blindly do not know that India would be sharing a minor portion of its huge exports with Pakistan, whereas we would be sharing almost 25 per cent of our total exports with them [if the 6 billion dollars target is achieved], he said.
Pakistans total exports stand at around 24 billion dollars, of which textile products make up 65 per cent of the share.
Dr. Siddiqui opines that India may suspend trade with Pakistan in case any other incident like the Mumbai attacks occurs.
Where would Pakistan stand then? Siddiqui asked.
India would lose a minor portion of its huge exports, while Pakistans 25 per cent share of its total exports would be stranded.
Secondly, he says, for four major reasons, Indian products will flood the Pakistani markets, which ultimately crumble whatever business and trade activities are going on here.
India has by all means a better services structure. Its economy is much bigger, interest rates are low, services rates are lower, tax-GDP ratio is much better, discount rates are higher, and more importantly security expenses are much much lower than that of Pakistan.
The end result would be that the Indian products will replace local products, and local industry would be destroyed.
Those [businessmen] who are supporting this move, are just thinking about today in order to earn profits, but they are not thinking about its long term devastating effects, he maintained.
This, he said, all is going in favor of India, that is why it has no objections on that despite the fact it is terming Pakistan responsible for global terrorism.
How can trade and enmity go together? If Pakistan is exporting terrorism, then how can one even think of trade with a terrorist? he asked.
Simmering issues
Despite a rosy picture being painted by the supporters of the move, observers see many hurdles in the implementation of the proposed plans, even if MFN status is granted by the two states to each other.
There is a jumble of longstanding issues between the two countries, which may jeopardize any positive development, Abdul Khalique Ali, a Karachi-based political expert told Islam Online.
Ranging from the core issue of Kashmir, to Siachin glacier, and from Sircreek waters to the ongoing rift over construction of water reservoirs, the two countries have had a long history of animosity.
Pakistan and India had fought three full-fledged wars during last 63 years i.e. in 1948, 1965, and 1971. Two out of total three wars, in 1948, and 1965, and Kargil skirmish were over Kashmir.
Trade is just one part of the peace process, which cannot go alone, Ali observed.
If these core issues are not settled, then the trade relations may tumble anytime as it happened after Mumbai attacks, he thought.
I welcome this move no matter whether or not it is effective in bridging the huge gulf between the two countries, but at the same time, efforts must be geared up to resolve the core issues, which are key to long-lasting peace in South Asia, Ali observed.
Strained ties with the US strengthen Pakistani-Indian relations
By: Aamir Latif
Islamonline.net-Islamabad
The increasingly strained diplomatic relations between the United States and Pakistan are bringing two arch rivalsPakistan and Indiacloser with the initiation of holding talks in order to boost the flimsy trade relations between the two neighboring countries that have been at loggerheads since the deadly Mumbai attacks in November 2008.
The two South Asian states, which have fought three full-fledged wars and a three-week long Kargil skirmish, are likely to grant each other status of Most Favorite Nation (MFN), in February, a highly unexpected, and the biggest move the two countries are going to take after various decades.
The decision was taken in a meeting between Pakistani Trade and Commerce Minister, Makhdoom Amin Fahimonce the strongest candidate for the post of Prime Ministerand his Indian counterpart Anand Sharma in New Delhi last week.
Observers believe that the dramatic development is a Pakistani bid to exploit every possible opportunity in order to dispel the impression of being isolate and to explore alternatives in that case of sanctions by the US, which is unhappy with its close ally for not taking on the Haqqani network.
Unexpected
The high-level meeting between the representatives of the two arch rivals, at a time when Pakistan is grappling with extreme US pressure, has surprised many as the trade ministers of the two sides have met after a gap of 35 years.
The two neighboring states were on the verge of another war after the deadly Mumbai attacks in November 28, 2008, killing 166 people. India blamed the Pakistani intelligence agencies for the terrorist attack, an accusation Pakistan denied.
The blame-game, however, managed to crumble the already fragile peace process between the two sides as the US, UK, China and other countries had to intervene to avert a war between two nuclear countries in the wake of the Mumbai attacks.
In another unexpected move, India has agreed to support a European Union (EU) scheme to boost textile exports from Pakistans flood-hit areas with duty waivers, a gesture applauded by Pakistan. Earlier, India had opposed this scheme.
On the other hand, the Pakistani cabinet has approved a plan for starting negotiations with India for signing an agreement on custom cooperation to facilitate the proposed trade activities between the two countries.
The two countries have targeted to boost the trade volume between the two sides to up to 6 billion dollars, more than double of the current volume of 2.7 billion dollars during the next three years.
Currently, The United States, a close ally of Pakistan in so-called war on terror, is its biggest trade partner with a trade volume of 3.58 billion dollars.
Divided
Economic experts and the business community stand divided over the proposed MFN status to India as its supporters term the move positive. However its opponents believe that it would badly hurt the countrys already dismal economy.
This is a positive move, Mirza Ikhtiar Baig, a Karachi-based industrialist and a member of the trade delegation led by commerce minister Amin Fahim said at a press conference upon his return from India.
Baig, a member of Indo-Pak Business Forum, however said that until India abolishes the non-tariff barrier on Pakistani products, increase in bilateral trade is not possible.
If India does that, then the trade volume between the two countries can reach up to 10 billion dollars, he maintained.
Dr. Shahid Hassan Siddiqui, a veteran economist disagrees with Baig and the Indo-Pak Business Forum.
This is a very dangerous move. It will hurt Pakistans already tottering economy, Dr. Siddiqui told Islam Online.
He observes that the proposed rise in trade volume between the two countries will ultimately benefit India.
Those who are supporting this move blindly do not know that India would be sharing a minor portion of its huge exports with Pakistan, whereas we would be sharing almost 25 per cent of our total exports with them [if the 6 billion dollars target is achieved], he said.
Pakistans total exports stand at around 24 billion dollars, of which textile products make up 65 per cent of the share.
Dr. Siddiqui opines that India may suspend trade with Pakistan in case any other incident like the Mumbai attacks occurs.
Where would Pakistan stand then? Siddiqui asked.
India would lose a minor portion of its huge exports, while Pakistans 25 per cent share of its total exports would be stranded.
Secondly, he says, for four major reasons, Indian products will flood the Pakistani markets, which ultimately crumble whatever business and trade activities are going on here.
India has by all means a better services structure. Its economy is much bigger, interest rates are low, services rates are lower, tax-GDP ratio is much better, discount rates are higher, and more importantly security expenses are much much lower than that of Pakistan.
The end result would be that the Indian products will replace local products, and local industry would be destroyed.
Those [businessmen] who are supporting this move, are just thinking about today in order to earn profits, but they are not thinking about its long term devastating effects, he maintained.
This, he said, all is going in favor of India, that is why it has no objections on that despite the fact it is terming Pakistan responsible for global terrorism.
How can trade and enmity go together? If Pakistan is exporting terrorism, then how can one even think of trade with a terrorist? he asked.
Simmering issues
Despite a rosy picture being painted by the supporters of the move, observers see many hurdles in the implementation of the proposed plans, even if MFN status is granted by the two states to each other.
There is a jumble of longstanding issues between the two countries, which may jeopardize any positive development, Abdul Khalique Ali, a Karachi-based political expert told Islam Online.
Ranging from the core issue of Kashmir, to Siachin glacier, and from Sircreek waters to the ongoing rift over construction of water reservoirs, the two countries have had a long history of animosity.
Pakistan and India had fought three full-fledged wars during last 63 years i.e. in 1948, 1965, and 1971. Two out of total three wars, in 1948, and 1965, and Kargil skirmish were over Kashmir.
Trade is just one part of the peace process, which cannot go alone, Ali observed.
If these core issues are not settled, then the trade relations may tumble anytime as it happened after Mumbai attacks, he thought.
I welcome this move no matter whether or not it is effective in bridging the huge gulf between the two countries, but at the same time, efforts must be geared up to resolve the core issues, which are key to long-lasting peace in South Asia, Ali observed.
Strained ties with the US strengthen Pakistani-Indian relations
