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The geo-strategic picture

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Tuesday, March 27, 2007

The geo-strategic picture
By Syed Mohammad Ali

Many future developments in this region are inextricably tied to larger geo-strategic realities. Change in one country invariably affects the others. Such are the realities of the new world order; dismissing them just leads to over-simplification and a much less nuanced understanding of the part of the world that we live in.

In our contemporary world, varied regional groupings are readily made on the basis of ideology, prospects of economic cooperation, ethnic homogeneity or geographic proximity. There is a strong case to be made for clustering countries like China, Iran, Afghanistan, India and Pakistan together, not for the purpose of integrating them into a regional association however, but merely to understand the larger context of the ongoing developments initiated by the ‘war against terror’.

After more than a decade and half of neglect, there is renewed US interest in this sub-region, which has multiple long-term implications. Besides wreaking immense destruction, the US ‘war against terror’ has also led to a large inflow of foreign aid. Since 2002, international donors have pledged nearly $24 billion for developmental activities in Afghanistan. Yet the Afghani economy has not reached a critical mass where it could take off on its own strength. Pakistan, too, has been the recipient of immense bilateral and multilateral aid, not only for its support to the US but also due to the 2005 earthquake. The US itself has recently committed $800 million for countering ‘Talibanisation’ in the northern areas of the country.

Only India has decided, since 2003, to phase out foreign aid from all but six major donors. Instead, it has become one of the largest donors to Afghanistan. It has even signed a preferential trade agreement with Afghanistan. But Pakistan is wary of providing a land route to India, since the two countries are competing for the same consumer-goods market in Afghanistan. Pakistan only allows Afghanistan the transit rights for its exports to go to India, but not the other way round. While Pakistan still has the largest volume of trade with Afghanistan, many more trade routes could be opened across the lengthy border region if the security situation improves.

Given that Pakistan has been unwilling to grant India preferential trade status without progress on the core issue of Kashmir, India has begun to look eastward to forge closer relations with ASEAN, and to form new partnerships like the Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation (BIMST-EC), which plans a free trade pact by 2017. China too has become India’s second largest trading partner, with their two-way trade worth $20 billon dollars a year and expected to double by 2010. On the other hand, trade between China and Pakistan has increased by 35% since 2004. This trade balance still remains overwhelmingly in China’s favour, whose exports amounted to $1.8 billion compared with Pakistan’s $575 million.

While still continuing to reward Pakistan’s cooperation in the ‘war against terror’, the US Congress has begun warning of aid cuts to Pakistan with the weakening of the Republicans under Bush. If elected to the White House, the Democrats may withdraw from Afghanistan and take a much tougher stance against Pakistan by using India to apply pressure from afar. The US-India Peaceful Atomic Energy Co-operation Act, signed under the Clinton administration, was already a step in this direction. An important implication of this US-India deal is a reference to integrating Non-Proliferation Treaty outliers like India and Pakistan into the mainstream through a Regional Non Proliferation Regime to prevent export of nuclear technology to other non-nuclear states. The implications of this attempt for Pakistan have yet to become overt. Nonetheless, besides increasing Indian nuclear energy outputs, US support will also lead to increased Indian access to technology in other spheres, which Pakistan will be increasingly wary of.

Pakistan is thus keen on developing even closer ties with China. Ignored by the US, Pakistan is now undertaking nuclear energy cooperation with China. There are plans to build six more nuclear reactors, besides the one already built with Chinese help in Chasma. China has helped Pakistan build the Gawadar deep-sea port as well. For Pakistan, Gwadar’s distance from India is of strategic importance. Gwadar also provides China a foothold in the Arabian Sea, which heightens India’s feeling of encirclement by China. But China is currently more interested in getting a strategic foothold near the Persian Gulf region, vis-à-vis the US. China is in fact on a path of rapprochement with India, but unlike the US it remains more cautious about not sidelining Pakistan in this process.

There are internal compulsions requiring greater cooperation despite the lingering tensions between previously hostile neighbours. Cooperation in the energy sector to fuel economic growth is one such example, although this example is not free of contentions either. One of the proposed projects is a gas pipeline between Pakistan, Iran and India, and Turkmenistan, India and Afghanistan, respectively. Many experts have opined that there is no evidence of huge quantities of gas in Turkmenistan to justify the laying of a pipeline. Besides, the government in Kabul is in no position to guarantee the security of such a pipeline. Moreover, it would be difficult to raise finances for such a risky project in Western financial markets, even though the US is more in favour of this pipeline than one going through Iran.

Besides an escalation of violence in Afghanistan and creating more turmoil in Pakistan, another immediate consequence of a strike on Iran as part of a broadening of the US ‘war against terror’ would be a humanitarian crisis in terms of the movement of refugees into the Herat, Farah and Nimruz provinces of Afghanistan, and towards Balochistan in Pakistan. An influx of Irani refugees into Afghanistan would no doubt destablise an already fragile Afghan government. Already, Pakistan has announced that all 2.4 million Afghan refugees must return home by 2009, despite the Afghan government’s inability to ensure their adequate resettlement.

Many future developments in this region are therefore inextricably tied to larger geo-strategic realities. Change in one country invariably affects the others. Such are the realities of the new world order; dismissing them just leads to over-simplification and a much less nuanced understanding of the part of the world that we live in.

The writer is a researcher. He can be contacted at ali@policy.hu

http://www.dailytimes.com.pk/default.asp?page=2007\03\27\story_27-3-2007_pg3_5
 
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finally Pakistani news papers are starting to write about realities.:tup: :flag:
 
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Yeah man, I thought the artice was worth to be posted here. :tup:
 
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Where's the picture?

But seriously, India has been one step ahead of us in all aspects...why? Because they're focusing on the bigger picture. We need to look ahead and plan further into the future, in not just a military role, but economically and socially as well.
Yes it's good having China as such a close friend, but in today's world as quantity in friends is much more usefuly than quality.
 
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The writer fails to mention that pakistan is also moving toward freetrade agreements with bangladesh and srilanka. we are also trying to get a freetrade agreement with malaysia and indonesea. we are aslo working on a FTA with GCC countries. I might not be sure about this but i heard that a few months back our minister for economics also did a tour of latin america
 
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Asia Pulse | July 20, 2006

Pakistan Edges Closer to Fta With South American Trade Bloc

KARACHI, July 20 Asia Pulse — Pakistani Commerce Minister Humayun AKhtar Khan will visit Argentina and Brazil for the signing of the Framework Agreement on Trade between Pakistan and Mercosur - a customs union comprising Argentina, Brazil, Paraguay, Venezuela and Uruguay.

The Minister will also participate in the Mercosur summit scheduled to be held on July 21, in Buenos Aires, Argentina.

President Pervez Musharraf initiated negotiations for a Free Trade Agreement (FTA) with Mercosur during a visit to Latin America.

Pakistna’s neighbour India signed a Preferential Trade Agreement with Mercosur in 2004.

Mercosur represents a combined market of 210 million people, with a GDP of over a trillion dollars. The Mercosur countries produce 50 per cent of Latin America’s GDP and contain 43 per cent of its population and 59 per cent of its total landmass.

It’s per capita GDP is 30 per cent higher than that of Latin America as a whole.

Argentina and Brazil dominate Mercosur, accounting for over 90 per cent of the trading block’s GDP.

Pakistan’s export diversification drive requires region specific strategies. There is a need to evolve a strategy comprising pragmatic and doable actions.

(PPI)

source: Asia Pulse
So with all due respect to this author we are in a better position than we think we are.
 
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Asia Pulse | July 20, 2006

Pakistan Edges Closer to Fta With South American Trade Bloc

KARACHI, July 20 Asia Pulse — Pakistani Commerce Minister Humayun AKhtar Khan will visit Argentina and Brazil for the signing of the Framework Agreement on Trade between Pakistan and Mercosur - a customs union comprising Argentina, Brazil, Paraguay, Venezuela and Uruguay.

The Minister will also participate in the Mercosur summit scheduled to be held on July 21, in Buenos Aires, Argentina.

President Pervez Musharraf initiated negotiations for a Free Trade Agreement (FTA) with Mercosur during a visit to Latin America.

Pakistna’s neighbour India signed a Preferential Trade Agreement with Mercosur in 2004.

Mercosur represents a combined market of 210 million people, with a GDP of over a trillion dollars. The Mercosur countries produce 50 per cent of Latin America’s GDP and contain 43 per cent of its population and 59 per cent of its total landmass.

It’s per capita GDP is 30 per cent higher than that of Latin America as a whole.

Argentina and Brazil dominate Mercosur, accounting for over 90 per cent of the trading block’s GDP.

Pakistan’s export diversification drive requires region specific strategies. There is a need to evolve a strategy comprising pragmatic and doable actions.

(PPI)

source: Asia Pulse
So with all due respect to this author we are in a better position than we think we are.

ISLAMABAD (March 28 2007): The Asian Bank's Annual Development Outlook 2007 has pointed out that a number of structural challenges face Pakistan despite buoyant macroeconomic growth in recent years. The growing current account deficit, continuing high inflation, and the emerging power and gas shortages are potential risks to the country's medium-term economic prospects.

Any deterioration in the security environment would be another. In addition, the ending in 2008 of PRC-specific safeguards were imposed by the US and EU against textile and clothing imports could further weaken Pakistan's textile export prospects.

Despite sound macroeconomic management policies and pursuit of structural reforms in key areas, the report says. Important structural challenges remain and have to be tackled promptly to sustain the present growth trend, it added.

Despite healthier investment, the investment-to-GDP ratio is still low relative to countries that have experienced sustained strong growth. Even if investment in the country is underestimated, gross capital formation in 2004 was less than half of that in the PRC and about 60% of that in India or Thailand. Total factor productivity has improved, but insufficiently either to compensate for low investment or to sustain high growth.

Similarly, gross savings, as a share of GDP needs to pick up substantially. In recent years, the demand-driven growth and negative real interest rates on bank deposits have contributed to low savings.

Another issue is the narrow industrial base, which is linked to the lack of a diversified export base, which in turn must cope with rising international competition.

Human capital development remains a major structural challenge. Despite the recent rise in pro-poor spending, historical under-investment in human capital has critical implications for growth and competitiveness. Public spending on education was only 2.0% of GDP in 2004, compared with 6.0% in Malaysia, 4.0% in Thailand, and 3.0% in the PRC and India. Unsurprisingly, the human development index rating was the lowest among these countries as well.

The government has, however, announced its commitment to increasing education expenditures to 4.0% of GDP. Finally, critical physical infrastructure bottlenecks impede high growth. The government is tackling these structural challenges over the medium term by bringing reform, strengthening the environment for investment, and by prioritising resource allocation for infrastructure development and the social sectors.

The main issue is exports' heavy reliance on textiles as well as limited geographic diversification. Between them, textiles and clothing, cotton, leather, rice, and sports goods account for over three-quarters of total exports - textiles and clothing alone for three fifths. Thus a downturn in these segments has a significant overall impact.

Another issue is that the bulk of Pakistan's trade is with a handful of countries, particularly in Europe and North America. It is expected that the growth in trading volumes in those regions will decline in 2007, hitting Pakistan's exports there.
http://www.brecorder.com/index.php?id=543866&currPageNo=1&query=&search=&term=&supDate=

with all due respect we don't have industrial base for free trade.free trades work if you have industrial base to sell some thing.in this case all you would be doing is importing.how bout we first get some heavy industries other then textile.before we go sign free trade.Most here were happy that Pakistanis are finally starting to see the light.then u jump in with same ol same ol.:coffee:
 
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Well its not all good but atleast we are working on it. But i think you are right we do need get some heavy industry working
 
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http://www.brecorder.com/index.php?id=543866&currPageNo=1&query=&search=&term=&supDate=

with all due respect we don't have industrial base for free trade.free trades work if you have industrial base to sell some thing.in this case all you would be doing is importing.how bout we first get some heavy industries other then textile.before we go sign free trade.Most here were happy that Pakistanis are finally starting to see the light.then u jump in with same ol same ol.:coffee:

AsSalam oAlaikum
Brother Cheetah786 has a very valid point. We have traditionally relied on a handful of export items to a small group of countries. Most of it is either cash crop or agricultural items. On top of that we have had a spate of corrupt leaders who would do anything for their own personal gains.As an example, in 1954-6 we had a trade surplus. our relations with the former USSR were good and they offered us a steel plant. Instead we bought hundreds of Cars with that cash. we are seeing the same happening today. The fact remains that we export a lot less than we import.
The only way around it is to enter the higher end export items like electrical/mechanical items and computer related items(hardware as well as soft ware). The problem in this regards is the lack of security and stability of setup which would encourage enterpreneurs to invest in Pakistan.The reason India is ahead of us is their political stability and the focus of their leadership towards the betterment of its people and country. While the situation is still not ideal, they are obviously stable enough to have attracted massive investment.
We also do not lack the facilities and infrastructure to attract investment.We also tend to be late in initiating plans so that we are always behind India and China This is a catch 22 situation.However looking at Karachi on my recent visit gives me assurance that things are moving in the right direction.
I feel we need astable setup ruling the country for a long period of time to invite the sort of investment we need.
wasalam
ARAZ
 
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Tuesday, March 27, 2007

The geo-strategic picture
By Syed Mohammad Ali


http://www.dailytimes.com.pk/default.asp?page=2007\03\27\story_27-3-2007_pg3_5

AsSalam oAlaikum.
Brothers we live in very interesting times. What a lot of us forget when we analyze a situation is that in international trade there are no permanent friends or enemies. One thing that we should know is the only interest that the Americans look after is their own. Believe me India is as aware and vary of this as Pakistan. I dont think this is as simple as it seems as the American Hagemony will not stop at Iran only. They will then subdue Pakistan and subsequent India and then have a go at China. I think the Nuclearization of SE asia has made both pakistan and India realize that a war in this reagion would not be in anybodies interest.
I would even put my foot out and say that I would not be at all surprised if in the not too distant future,we see a joint front put up by China, India and Pakistan against Uncle Tom. Believe me the top heirarchy have discussed this possibility, and are convinced that we may yet need to do that.
WaSalam
Araz
 
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AsSalam oAlaikum.
Brothers we live in very interesting times. What a lot of us forget when we analyze a situation is that in international trade there are no permanent friends or enemies. One thing that we should know is the only interest that the Americans look after is their own. Believe me India is as aware and vary of this as Pakistan. I dont think this is as simple as it seems as the American Hagemony will not stop at Iran only. They will then subdue Pakistan and subsequent India and then have a go at China. I think the Nuclearization of SE asia has made both pakistan and India realize that a war in this reagion would not be in anybodies interest.
I would even put my foot out and say that I would not be at all surprised if in the not too distant future,we see a joint front put up by China, India and Pakistan against Uncle Tom. Believe me the top heirarchy have discussed this possibility, and are convinced that we may yet need to do that.
WaSalam
Araz

Good Post, for the very fact that you try to understand otherside as well,
I dont think it was Indian Government which led the Indian Economic Developement , but Rather the Indian Education System, which led to fine Business Men and Technocrats who inturn forced the government to act against its populist policies. Chinese Development is compeltly attributed to its Government who had the forsight.

About India-Pakistan-China I dont think it is possible as of now, There isnt even a remote possibilty, Russia on the other hand are trying to make India-China come together along with Russia as a block, Something India has been refusing, even china aint that optimistic.

I am not ready to Dismiss USA, they are very experienced, Long term-focussed, and moreover already the winners of Cold War, They are the most powerful country in the world
 
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