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| December 7, 2003 | Sunday | Shawwal 12, 1424 |
Peace with India offers economic benefits: report
WASHINGTON, Dec 6: Peace with India, although still elusive, offers tempting economic benefits for Pakistan, says an Associated Press report published in the American newspapers on Saturday.
The report says that after 56 years of conflict with India, Pakistanis are now talking about benefits of peace with their larger neighbour.
The report points out that the first positive result of such a peace would be a reduction in military budget, which will allow the government to allocate desperately needed funds for education and infrastructure. Peace would also encourage foreign investors to invest in Pakistan.
In the past two weeks, the report says, Pakistan and India have taken swift steps toward normalization of ties “with a ceasefire in Kashmir and moves to restore air, rail and sea links. The moves come two years after they almost fought their fourth war.”
“It’s too soon to talk of a lasting peace, given the nuclear neighbours’ history of diplomatic bust-ups and domestic opposition in both countries to making concessions on thorny issues like the divided territory of Kashmir. But Pakistani businessmen and others are quick to see the potential benefits,” says the report.
It notes that official restrictions and a closed border hamstring much of the trade between the two countries. Exports and imports are mostly smuggled or sent via third countries in Asia and the Persian Gulf.
It says that commodities trader in Karachi want to import vegetables from India. One such commodity, tomatoes, costs $1 per pound in Karachi because of a shortage, compared with just 20 to 25 cents per pound in India.
The report says since Indian Prime Minister Atal Behari Vajpayee in April signalled a willingness for talks, tensions have gradually eased.
While Pakistan’s economy has picked up during President Musharraf’s four-year rule, the report says, the burden of confrontation with India still weighs heavily. A third of Pakistan’s 140 million people live in poverty, yet at least 20 per cent of the government’s $14 billion budget goes to defence spending.
The report quotes retired general Talat Masood as telling an Associated Press correspondent in Islamabad that Pakistan’s annual defence budget of $2.8 billion could be reduced by at least 25 per cent if there was peace, opening up resources for social spending, especially education.
That in turn could help tackle religious extremism identified by Mr Musharraf as a threat to the nation’s economic development. If the state could offer better schooling, then fewer young males would pass through the madrassahs, which often propagate a radical form of Islam, the report says.
It points out that the standoff with India also acts as a further disincentive for foreign investors “already leery of Pakistan’s image as a hotbed for terrorism”.
Foreign portfolio investment in Pakistan during the last financial year ending June 30 totalled just $22 million despite a 112 per cent gain in the benchmark stock index during that period because of President Musharraf’s economic reform programme and an influx of Western aid after Pakistan joined the US-led war on terror. Senator Ilyas Ahmed Bilour, president of the India-Pakistan Chambers of Commerce and Industry, tells the AP correspondent that peace would boost trade markedly, not just between the two countries but also in all of South Asia.
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