Indian Defence Review

One always has a lot of emotional attachment with his or her place of birth. Therefore it is understandable why Prime Minister Manmohan Singh has a very soft corner for Pakistan. He once had sympathised with Pakistan by describing it as the biggest victim of terror. He had overlooked the virtual global consensus that “Pakistan is the epicenter of global terror”. And last fortnight, on the sidelines of the just concluded SAARC summit in Maldives, Singh described his Pakistani counterpart Yusuf Raza Gilani as “a man of peace.” Of course, for a rising power like India, it is desirable that we have a stable and peaceful neighbourhood. In fact, good and enduring relationship between India and Pakistan is beneficial to the Indian subcontinent or South Asia as a whole.

Any amount of  unilateral concessions that India may provide to Pakistan, and this is exactly what the Manmohan Singh government is doing, is not going to change the situation”¦

Viewed in an emotional framework, it is understandable why on its part, the Manmohan Singh government has taken a series of measures in favour of Pakistan recently. It helped Pakistan in what is said to be a very tightly fought elections to get into the United Nations Security Council as a non-permanent member.  Pakistan secured a bare minimum two-thirds majority of 129 votes from the 193 members of the UN General Assembly in a straight contest with Kyrgyzstan for the single Asian seat. India’s vote in favour of Pakistan has surprised many analysts considering the fact  that on issues such as terrorism, disarmament, nuclear proliferation , Afghanistan and expanding the list of permanent members to accommodate India – and these are the priority issues for the Security Council – Delhi and Islamabad have diametrically opposite views.

Similarly, many observers just could not believe last month that India did not veto at the World Trade Organisation (WTO) the European Union’s special trade concessions for Pakistan. The offer from the European Union (EU) would allow the import of 75 Pakistani items earning the country more than 300 millions of dollars for a three-year period. The WTO works by consensus and the EU required all WTO members to consent to the EU proposal. Earlier India had objected to this EU move as it flouted the WTO rules for a level-playing field among trading partners. After all, the items on which Pakistan will be deriving concessions compete against the similar items from India, mainly textiles. But on November 7, India withdrew its objections. If Bangladesh and Sri Lanka do likewise, Pakistan will have a free entry into the European market.

Less than 1% of Pakistans population pays direct taxes. Under such circumstances, it is easier for Pakistans ruling establishment to open trade with India country rather than attempting any reforms at home.

I have come across some arguments that Indian concessions or help to Pakistan did have the intended impact on Pakistan as it reciprocated by granting India “Most Favoured Decision” (MFN) status. However, the comparison is odd, to say the least.  “MFN” is a misnomer. Contrary to the literal meaning, MFN status does not provide for special treatment. Rather, MFN simply means non-discrimination among trading partners sharing the status. That is why in the US and the EU, MFN status is also referred to as normal or third-country trading status. Therefore, Pakistan’s granting of MFN status to India will not confer any special trading rights or privileges on India, though it will give to Indian imports the same treatment as imports from Pakistan’s other trading partners.

In any case, MFN treatment is an obligation in the multilateral trading system put in place by the WTO. Every WTO member-country is bound not to discriminate against other members in terms of both tariff and non-tariff measures. Hence, if Pakistan gives MFN treatment to India, it will not be doing any favour to us but will simply fulfill a basic WTO obligation it had evaded so far. Pakistan has done this by maintaining a positive list for imports from India. The list comprises about 2,000 products, out of the nearly 10,000 products the country imports. Only products on the positive list are importable from India.

Trading on the basis of a negative list means that all products are importable save those on the list. But if the negative list for India contains some 1,000 products or more, it will again deny India the MFN status, because no such list exists for the other trading partners of Pakistan. If India is to have MFN status, imports from India must not be discriminated against in any manner. Therefore it remains to be seen what exactly is following Pakistan’s MFN-decision. If Pakistani media reports are any indication, nothing is clear as yet.

“¦if Pakistan gives MFN treatment to India, it will not be doing any favour to us but will simply fulfill a basic WTO obligation it had evaded so far. Pakistan has done this by maintaining a positive list for imports from India.

It may be noted that even if Pakistan genuinely liberalises its trade regime for Indian products, the advantages will be much more for itself rather than India. In 2010-11, total trade between the two countries amounted to $2.6 billion. Once the MFN status kicks in, this figure may go up by a couple of billion dollars more. Even if it touches $10 billion in the years ahead, it would account for only a small fraction of India’s trade, but it will certainly count for something in Pakistan, particularly when Pakistani economy, critically dependent on American and Western/Japanese assistance, is at a near-collapse stage because of the dubious role in the global war against terror, something that has compelled the donor countries to reconsider their aid-strategy vis a vis Islamabad. Domestically, Pakistan, ruled as it is by an oligarchy that never pays any taxes, has fewer options to raise resources. Less than 1% of Pakistan’s population pays direct taxes. Under such circumstances, it is easier for Pakistan’s ruling establishment to open trade with India country rather than attempting any reforms at home.

While it is true that greater economic interactions always create more stake-holders for peace, the fact remains that Pakistan has not responded to real Indian concerns that have nurtured the hostility between the two countries all these years. As I have argued many a time in these columns, Pakistan’s policies towards India are controlled, in the final analysis, by the Army. Will the Army allow the country’s businessmen and political leadership to have normal relations with India in true sense of the term? Here the indications so far are not encouraging. The Army, which makes and unmakes Pakistan’s foreign and security policies, continues to promote terrorism in India. It wants India out of Afghanistan. It collaborates with China by keeping India in mind. It relentlessly augments nuclear and missile power against “enemy” India.

In “Pakistan: Beyond the Crisis State”, a highly readable volume, edited by Dr Maleeha Lodhi, a leading Pakistani academician, who once was her country’s ambassador to the U.S., one comes across how Pakistani nationalism is India-centric; Pakistan is scared of multiple identities, it rejects indigenous cultures. Worst of all, it is confused. It often plays jump rope between being Muslim and being Islamic, being Indian and being Arab.  Of course, the book reposes great faith in the rising middle class of Pakistan, which, it argues, is going to have a more rational brand of nationalism, not tied with India-centric history (that is full of venoms against Hindus). What this book has  emphasised is the need to bring the country’s politics in sync with the social, economic and technological changes that have been transforming the national landscape and creating a more ‘connected’ society. Electoral and political reforms that foster greater and more active participation by Pakistan’s growing educated middle class will open up possibilities for the transformation of an increasingly dysfunctional, patronage-dominated polity into one that is able to tap the resilience of the people and meet their needs.

 It (Pakistan) collaborates with China by keeping India in mind. It relentlessly augments nuclear and missile power against “enemy” India.

But is that going to happen? At the moment, it looks a Herculean task, given the rising fundamentalism in Pakistan. In a country, if a serving governor of the largest province (Punjab) and a central cabinet minister are assassinated by the fundamentalists but none in the government dares to attend their funerals, the judge who pronounces punishment for the murderer is forced to be banished from the country, and yet the urbanised middle class tolerates all this, it speaks volumes of its capacity. And when one talks of the fundamentalists, they are very clear that Pakistan’s real enemy is a democratic India. They cannot be satiated by their victories just over Afghanistan and Kashmir. They want to rule over the entire Indian subcontinent. The Pakistani Army, particularly the ISI, is perfectly in tune with this philosophy.

Pakistan is really in bad shape. The most important factor that keeps the country united is the factor of “a hostile India”. Any amount of  unilateral concessions that India may provide to Pakistan, and this is exactly what the Manmohan Singh government is doing, is not going to change the situation, at least in foreseeable future.  Thus while India must do what can (after all, we are different from Pakistan) to strengthen the peace constituency in Pakistan, there must never be any slackening on the front of our security preparedness. Unfortunately, the Manmohan Singh regime is not inspiring confidence on this score.