Sights set far
The recent visit to Pakistan by the Indian trade delegation headed by Commerce Minister Anand Sharma may have been a disappointment with the neighbour not granting the promised Most Favoured Nation status, but the pressure on both sides is enough to bring down the trade barriers sooner than expected
Ashok Tuteja in Pakistan

Amritsar and its surrounding areas had witnessed a fair amount of rain last Sunday, a day before Commerce Minister Anand Sharma was to cross the Attari border at the head of the first ever Indian business delegation to Pakistan. But the downpour was enough to expose the quality of infrastructure on the Indian side. As top business honchos waded through mud-laden roads to cross into Pakistan, one of them ruefully remarked: “How can we do business with Pakistan if this is the state of roads here?”

Union Commerce Minister Anand Sharma and his Pakistan counterpart Makhdoom Amin Fahim at Attari on Monday. Photo: Vishal Kumar

Immigration counters with outdated technology and drunken porters out to fleece passengers presented a pathetic sight of how ill-prepared we were when it came to doing business with Pakistan.

Poor infrastructure, high tariffs, trade barriers, costly transportation, excessive red tape, corrupt bureaucracy, strict regulations on visa and customs procedures, and major political conflicts have ensured trade between the two neighbours remains far below potential.

South Asia is about the least integrated part of the world. Neighbours supply just 0.5 per cent of India’s imports and consume less than 4 per cent of its exports. India and Pakistan, mutually antagonistic, represent one-fifth of the global population. Yet, the official trade between them is about 3 billion dollars a year.

Lahore is just half an hour’s drive from Amritsar. India, given the size of its economy, should have been Pakistan’s largest export destination. But Pakistan does not even figure among India’s 50 top suppliers.

FAVOUR DIPLOMACY

While India granted the Most Favoured Nation (MFN) status to Pakistan in 1996, Islamabad agreed “in principle” only last November, after a gap of 15 years, to reciprocate the gesture. However, it is still far from moving ahead for a negative list of goods to pave the way for granting the MFN status. The proposal to shift to a negative list from a positive list — one that restricts exports to only 1,963 items from India at present — is now expected to be placed before the Pakistani Cabinet at its next meeting.

The apprehension among the intelligentsia in India is that free trade between the two countries could add to India’s security concerns, or even lead to an increase in terrorist activities. The Indian business lobby, too, is apprehensive about unhindered import of certain commodities from Pakistan. For instance, Vinod Juneja, managing director of the Binani Group of Industries, who was part of the Indian delegation, was of the view that large imports of cement from Pakistan had affected the Indian cement industry badly.

The lurking fear in Pakistan, however, is that once India is formally accorded the MFN status, Indian goods will invade Pakistani markets at the cost of the domestic industry. Recently, traders and associations of chemists in Rawalpindi criticised the government’s decision to accord the MFN status to India, arguing it would exhaust Pakistan’s raw material. Auto and textiles industries in Pakistan too have been cold to the proposal for opening up the market for Indian products. Hardliners in the country, particularly the ‘jehadi’ groups, have only been too happy to capitalise on the sentiments of the business community.

This has certainly made difficult the task of the civilian government to improve trade and economic links with India, though it is not alone in favouring such ties. An Indian diplomat in Islamabad said the Pakistan Army was also now on board on improving economic links with India, though it still regarded India as a strategic problem.

The change of heart on the part of the army stems from the fact that Pakistan’s economy is in doldrums. Also, the army believes it can count on China for assistance on the economic front, but linkages with the Indian economy could also come handy if the American aid diminishes.

According to the Indian official, the reason why the all-powerful army preferred to remain in the barracks despite the ongoing political crisis in Pakistan, which provided it an opportunity to intervene, is that the Army Chief, Gen Ashfaq Parvez Kayani, does not want to get embroiled in domestic issues at a time when the economy is in miserable shape. If the situation worsens, the army will have to bear the blame should it intervene in political affairs.

THE BENEFIT IS MUTUAL

It is now dawning on the policy makers in Pakistan that high import duties and other non-tariff barriers have crippled Indo-Pak trade relations, with virtually no FDI flows at present. Pakistan needs 140 million kilos of tea annually. India, despite being its immediate neighbour, contributes only 5 million kilos due to 30 per cent tariff imposed on Indian tea. A Maruti Alto car costs less than Rs 2.5 lakh in India, while Pakistan imports the Suzuki Alto from Japan for nearly double the price. Indian Maruti cars can be seen on roads across South Asia, but not in Pakistan.

Similarly, the cost of most common medicines is up to seven times what it is in India. There are a number of other such instances where India produces the goods needed in Pakistan, but their export to the neighbour is very low due to restrictions. Conversely, there are many commodities that India could import from Pakistan, but there are difficulties. As a result, smuggling through a third country, particularly Dubai or Singapore, is rampant. This deprives both the economies of the potential profit from bilateral trade and drives up prices.

Trade apart, even travel links need drastic improvement. There is no direct flight between New Delhi and Islamabad. One has to fly first to Lahore and then board another flight or travel by road to reach the Pakistani capital. Pakistan International Airlines (PIA) is the only carrier that has direct flights between the two countries, but those are not daily.

The expectation of the Anand Sharma-led Indian delegation was that Pakistan would announce the negative list during its stay in Pakistan. However, Islamabad disappointed the Indian team.

“We had only one desire: that the thinking of the two nations changes such that trade relations between the two countries improve. And that was achieved on this trip,” Sharma said, summing up his visit to the neighbouring country while delicately avoiding the question whether Pakistan had backtracked on its commitment on expediting the finalisation of the negative list.

HOPE AMIDST DESPAIR

Sharma has established a reasonably good working relationship with his Pakistani counterpart, Makhdoom Amin Fahim. The Pakistani minister, a votary of normal trade relations with India, is, however, not someone as aggressive as Interior Minister Rehman Malik, who manages to push through his agenda in the Pakistani Cabinet. The mild-mannered and soft-spoken Fahim was cornered by his own colleagues in the Cabinet meeting last week when he pressed for approval of the agenda item on the negative list with India. Some of them questioned why he was in a tearing hurry to open trade with India. Not prepared for confrontation, Fahim took back the proposal, which is now expected to come up before the Pakistan Cabinet at its next meeting. In any case, Pakistan has reaffirmed its commitment to announcing the short negative list by February-end, which is expected to pave the way for the MFN status.

Just as Sharma was beginning his trip to Pakistan, the largest ever India-specific trade exhibition in Pakistan was coming to a close in Lahore, having attracted huge crowds during its three-day duration. Indian traders say they were surprised and impressed by the strong response from the Pakistani public.

More than 100 stalls showcased products as diverse as jewellery, cosmetics, chemicals, textiles and apparel, information technology, auto parts, handicraft, engineering goods, health care, tourism, and commodities like tea, coffee and spices. Some of the largest crowds were seen at stalls displaying jewellery and saris.

There is no denying the fact that India and Pakistan have made considerable progress towards normalising trade relations since the resumption of Commerce Secretary-level talks in April last year, when the dialogue process between the two nations was revived after a hiatus of more than two years in the wake of the 26/11 Mumbai carnage.

The progress was underscored when Fahim became the first Pakistani Commerce Minister in 35 years to visit India in September last year to finalise a road map for liberalising bilateral trade. Both countries are committed to more than doubling their bilateral trade to 6 billion dollars in three years.

It is very clear to the Indian leadership that a strong, peaceful and prosperous Pakistan is in India’s own interest. Prime Minister Manmohan Singh has time and again emphasised that India cannot achieve its full economic potential and take its rightful place in the comity of nations unless it was at peace with Pakistan. India is also acutely aware of the fact that it is the army which calls the shots in Pakistan and not the civilian administration.

WHO TO TALK TO

Even though mandarins at the South Block have often contemplated opening channels of communication with the Pakistani Army, the political leadership is very clear that it would only talk to those at the helm of affairs in Islamabad.

But this has not helped India’s cause in any way. The army remains the most trusted institution in Pakistan despite the humiliation it suffered when American forces caught it unawares and killed Osama bin Laden at Abottabad, deep inside Pakistan in last May. The average Pakistani still believes the army would steadfastly remain the protector of Pakistan, regardless of who heads the government in Islamabad. Perhaps it’s time India looked at the possibility of establishing some contact with the army.

Indian policy makers say it was easy for them to deal with Islamabad when Pervez Musharraf was at the helm of affairs, for he was not only the President but the army chief too. Now, there are multiple centres of power, making the task of dealing with Pakistan somewhat difficult.

Many in India argue that normalising relations with Pakistan is in India’s interest for several reasons, including reducing the influence of China there. India would like to see Pakistan strong enough to hold together, but not so strong as to challenge it.

India would also like Pakistan to follow the example of its “‘all-weather’” friend China in the economic field. China is today India’s largest business partner. The two countries have put the complex border dispute and other issues on the backburner and are concentrating on strengthening economic links. New Delhi wants Pakistan also to put issues like Jammu and Kashmir, Siachen, and water in deep freeze, and give priority to economic issues.

But the Kashmir issue is too emotive in Pakistan to be ignored by any administrative structure. For years, Pakistan found its own ways of challenging India by using destabilising proxies and terrorism at a relatively low cost. But now Pakistan is losing control over its own strategic assets. The very terrorist groups that it propped up for a proxy war with India, are now challenging the Pakistani state. There are large areas in Pakistan where the writ of the state does not run, and jehadi groups rule. There are important social sectors that defy the state, and are now attacking it.

The apprehension in India, however, is that all initiatives on the normalisation front with Pakistan, particularly trade links and people-to-people contact, could come to a nought should there be another major terrorist attack on Indian soil perpetrated from across the border.

THE DISTANCE COVERED

Sharma’s visit may have not produced the expected results, but the two countries did sign some key agreements to address issues related to non-tariff barriers. They also agreed to consider opening the Munabao-Khokhrapar route for bilateral trade. Sharma also announced that the integrated check post at the Attari border would become operational for trade by April.

The two countries have in principle agreed to permit each other’s banks to open branches. The Reserve Bank of India and the State Bank of Pakistan are scheduled to meet in Mumbai in March to finalise an agreement. Pakistan, it is learnt, is opposed to the idea of the Jammu and Kashmir Bank opening branches in the country for fear it might weaken its Kashmir “cause”.

India, meanwhile, has offered to export petroleum products to Pakistan. The first meeting of the expert group on trade in petroleum products is slated to be held in New Delhi next month. The two countries are also finalising the modalities of electricity trade between them.

The restrictive visa regime between the two countries is set to be liberalised, particularly for businessmen. The new visa agreement that will replace the one inked in 1974 is ready for signature.

India is also considering permitting Pakistani businessmen to invest in India by making relevant changes in the Foreign Exchange Management Act (FEMA). Pakistan does not have to take any such step on its side since there is no bar on Indians investing in the neighbouring country.

The winds of change are blowing, and in the right direction. Yet, one is hopeful and sceptical at the same time.

We had only one desire: that the thinking of the two nations changes such that trade relations between the two countries improve. And that was achieved on this trip. — Anand Sharma, Union Commerce Minister

fifty fifty
Kishwar desai
Election and the baba log
A less respectful and more rigorous media and better inner-party democracy needed to make elections look different and more meaningful than a male dominated, feudal beauty parade 

THE dominance of the visual medium has ensured that we are rapidly cutting down on the space allocated for ‘radio faces.’ We only want to see young, well-groomed and pleasant faces, everywhere. Anything will do — as long as they are not naturally askew. It is a bias that is now spreading to every field, even politics.

And as election fever catches up in India -it is quite apparent that there is a growing desire in the media to focus on those few political leaders who are good looking and somewhat articulate, politely called ‘charismatic’-and a cult is built around them.

This is being resented by those parties who either don’t have the same number of good looking candidates and who have not followed dynastic politics! Particularly badly hit are parties like the BJP and the BSP, for whom non-dynastic politics was the trump card, but it is now emerging as a handicap as the rules of ‘natural’ succession are being hijacked by media savvy sons and daughters of party leaders eyeing the top seat.

Political dynasties

Since the dynastic claim, thus far, is the only way the youth has been allowed entry into mainstream politics-the stain associated with it has been washed away. And now we are rejoicing in the fact that we have so many young faces — quite forgetting that they have inherited the seat and not struggled for it.

But how can eyebrows be raised on whether parties follow inner party democracy — when there are so many children and spouses of politicians flooding the arena? It has become a non-issue and the finger pointing has slowed down. No doubt at some stage, some form of regulation, perhaps an open election of candidates even for the party ticket will have to be imposed. (Is the over-worked Election Commission listening?)

Priyanka (Far left), Rahul Gandhi (Left) and Akhilesh Yadav campaigning in UP

The reality is that television has changed our needs, and when once upon a time elections meant a quiet, unseen, strong upsurge of democratic sentiment, it is now becoming more and more led by a noisy debate in a TV studio, or the views of a loud anchor in election buses, or ‘on the campaign trail’.

This is despite the fact that only the most interesting candidates or the party leaders are respectfully followed by TV crews and are presented almost like ‘commercials’ for their party. Where once there was space for a rough hewn Lalu Prasad, or a gruff voiced Mayawati - this time the electoral battle is throwing up more and more angrezi speaking boys and girls, who are younger and possibly more media savvy than their older colleagues.

Of course, most of these politicians are in their forties -and already older than the forty per cent of ‘young India’ they claim to represent -but at least they are representative of a welcome generational shift within their respective parties. It is also a good idea to present them as party spokespersons as they turn the attention away from many of the other candidates who are not media literate.

But can we really blame the media for focusing on a few individuals? If the requirement is for an articulate, fairly intelligent -but nice looking person-Indian politics has been particularly challenged, unlike the rest of the world. And thus the emergence of the Gandhi parivaar on the campaign trail - including the grandchildren and son-in-law, Robert Vadra — is another side of feeding the media cauldron with photo ops. Staging events which continuously put the opposition on the back foot, and make it look outdated and old is a clever public relations move.

The aggressive stance by the Gandhis has not yet been countered by any other political family in these elections, allowing the trinity of Sonia, Rahul and Priyanka or SRP factor to dominate the front pages. By openly coming out and campaigning together — the three have dominated the headlines every single day-much to the annoyance of the other candidates and campaigners. Even other ‘dynastic’ inheritors such as Akhilesh Yadav or Sukhbir Badal have not been able to stall the SRP juggernaut, and this is something they might want to revisit.

Style & substance

But bludgeoning the electorate with family moments is a trend that has been visible for a long time in American politics-with some truly well packaged presidential campaigns, comprising of very telegenic candidates (and their families) emerging : Ronald Reagan, Bill Clinton, Barak Obama . Even in the present Republican primaries , there are those with frankly film star appeal ( though perhaps little else) such as Mitt Romney.

America has set the tone and tenor for campaigning styles — and so the hugging and kissing, and working the crowds, even bringing out the family for a photo op — is very much associated with the (then) youthful leaders such as John F. Kennedy and Bill Clinton and even, in the UK, Tony Blair.

But while television thrives on the media-friendly faces and personae-it comes with a caveat that these well-presented packages aren’t taken at face value, and in fact subjected to intense scrutiny, as in the US. Because once the polticians, their families and even their campaign managers come into the public political space -they give up their privacy. The statements, style and even the background of the candidates are then gone through with a fine toothcomb, and political analysts as well as the opposition grab any lacunae or goof up, as it can lead to the eviction of a candidate from the elections altogether.

In the US (and the UK) even the family is not spared, and often this has resulted in leading candidates falling by the wayside, and perhaps never recovering their mojo. This happened with Sarah Palin, among others. The electorate can be swayed -but it is unforgiving.

Thus while the SRP factor will be the big take away from this election -and possibly remembered even more than the results — it is a wake up call for both the political parties as well as the media.