Foreign Minister Ishaq Dar has hinted at a thorough reassessment of the trade situation with India, echoing the concerns raised by the business community.
Speaking at a press conference in London, Dar recalled a pre-budget meeting with the business community where a common plea surfaced: to streamline imports, currently channelled through Dubai or Singapore, to mitigate additional freight, transhipment, and transportation costs. He stressed the imperative of a thorough examination involving all stakeholders to explore avenues for economic activity and trade enhancement, emphasizing that a conclusive decision would necessitate extensive consultation.
Pakistan downgraded diplomatic ties with New Delhi and suspended all bilateral trade in August 2019 following India’s revocation of occupied Kashmir’s special status. However, two years later the proposal to trade with India got tossed into the then Finance Minister, Hamad Azhar’s lap. He boldly declared that importing sugar and cotton from neighbouring India made fiscal sense, given our nation’s weak financial footing and the inflation squeezing the average Joe on the streets. With the Ministry of Trade, under the Prime Minister’s watch, giving the nod, it seemed like a slam dunk for cabinet approval.
In March 2021, the Economic Coordination Committee (ECC) initially gave the green light for the private sector to import 0.5 million tonnes of white sugar from India and cotton via the Wagah border. However, the decision was promptly reversed in response to vehement criticism from the opposition.
Analysts and pundits dissecting Hamad Azhar’s move in context smelled a seismic shift brewing in the region. Speculations flew about the genesis of the proposal, with whispers of both Washington and Beijing’s involvement. India’s eerie silence only added layers to the mystery. Just days earlier, a surprise LoC agreement had sprung forth, swiftly quelling the two-year gunfire, offering a sigh of relief to Kashmiris on both sides. This fuelled hopes that if border calm could be restored in a flash, trade might soon follow suit.
The government’s worst nightmare was that a seemingly good trade deal might carry hefty political baggage.
Yet, as soon as the proposal surfaced, opposition crept in, branding trade with India as synonymous with the Kashmir deadlock. The cabinet shot down Hamad Azhar’s proposal. But his exit from the finance ministry wasn’t tied to his hurried plan. Talk of Shaukat Tareen stepping in had been swirling since Hafeez Sheikh’s departure, hinting Azhar’s stint was temporary.
The mystery behind Azhar’s India trade talk unravelled days before the cabinet shuffle, courtesy of a senior Emirati diplomat claiming his country was the force behind normalizing Pak-India relations, with a nudge from the new US administration. So it turned out that it was Uncle Sam, not China, nudging peace along the LoC.
So, why did the PTI government flip-flop on the trade front despite recognizing its benefits? The UAE may have been blindsided by our sudden move, while the US might’ve been miffed at our geo-economic chatter, backing off. But what probably we grasped, and acted upon, was that the Arab pals ditched Iran for Israel, sacrificing Palestine in the process. We feared following suit might cost us Kashmir. Unlike the Arabs, we have religious-political factions and democracy. The government’s worst nightmare was that a seemingly good trade deal might carry hefty political baggage.
Trading with India certainly aligns with the geo-economics we’ve been leaning towards since the onset of the pandemic. However, kicking the old habit of strategic thinking will be a tough nut to crack, and it’s bound to linger for a while. Has the Shahbaz regime mustered the courage to shake it off? Though Dar’s proposal, dressed up as a demand from the business community, suggests a push, the government doesn’t appear to be rushing into action like its predecessor. It claims it will craft a plan after thorough consultations with stakeholders. You can bet those with a strategic mindset will be watching closely, as they always have.
Meanwhile, Senator Mushahid Hussain Syed, at the helm of the Pakistan-China Institute, is advocating for a “regional reset,” believing that the most potent antidote to terrorism lies in collaboration with neighbouring nations. While he hasn’t yet weighed in on the topic of resuming trade with India, the very notion speaks volumes. With terrorism evolving into an existential menace, the prospect of trade could serve as a compelling carrot to entice neighbouring countries to the negotiation table.
Regional trade can indeed throw a wrench into the works of terrorism, albeit indirectly. By greasing the wheels of economic cooperation among neighbouring countries, it can grease the wheels of stability, putting the brakes on factors that fuel extremism and terrorism, such as poverty and social unrest. Breaking bread together through trade can create a solid foundation for addressing common security concerns and resolving conflicts without resorting to pulling punches.
But let’s not kid ourselves – while regional trade can be a game-changer in the battle against terrorism, it isn’t the whole enchilada. There are other cards in the deck, like political instability and ideological extremism, which also pack a punch in the fight against terrorism. So, Senator Mushahid Hussain’s proposal for a well-rounded strategy to nudge terrorism includes making peace with the opposition too – other than neighbours. That’s where the rubber meets the road – it’s not just about geopolitics but also about bringing down the political temperature down at home front as well.
The writer is an Islamabad-based veteran journalist and an independent researcher. He can be reached on Twitter @riazmissen