AS was expected, commerce ministers summoned from around the globe to rescue the Doha round of trade talks from collapsing failed in their effort. They met in Geneva on June 30 and dispersed a few hours later. The meeting coincided with the crucial phase of the World Cup. It was the day when Germany was playing Argentina and managed to eliminate it from the competition. Soon, the World Cup was a European affair, with no developing country participation. It was symptomatic of the state of the multilateral trade system.

According to newspaper reports, Kamal Nath, the powerful Indian commerce minister made little effort to play a role in the Geneva talks, an unusual stance on his part given his active role in the previous rounds of discussions. On the first day of the Geneva deliberations, he arrived an hour late at the “green room” of the WTO headquarters, explaining that he was delayed by the Argentina-Germany game he was watching on television. The game had gone into over-time. Why was Nath making an open statement about his preference for football over world trade? He knew well that it would be picked up by the newspapers. The question has an interesting answer which underscores the difficulties the trade negotiations face as they wrestle with the important subject of international commerce in agriculture.

I will illustrate the complexity of international trade and why it has been so difficult to make progress in the Doha round by discussing the Indian stance. The position taken by India is a good example of the politics of international trade; how some powerful constituencies are working against the opening of the agricultural system. Several large developing countries — in particular India — are finding it hard to reconcile domestic politics with the demands of a rapidly evolving system of international commerce.

By publicising his disengagement at the talks in Geneva, the Indian commerce minister was playing to his party’s domestic constituency. His Congress party had won an unexpected electoral victory in 2004 by effectively countering the “Shining India” campaign of the Bharatiya Janata Party. The BJP’s rule had coincided with the remarkable turn-around of the Indian economy. It thought it could take political advantage of this triumph of public policy. It was legitimate boast of Prime Minister Atal Behari Vajpayee and his deputy Lal Krishna Advani they had succeeded in putting India on the global economic map.

India was indeed shining in the minds of hundreds of rich foreign investors, individuals, as well as corporations. Many in the West believed that the country had a more viable model of modernisation in place than China. The blend of democracy and private economic enterprise seemed more durable than the economic strategy dictated by an authoritarian regime.

While the world was loudly applauding the Indian performance and crediting the BJP with its handling of the country’s economy, the Indian peasant had an entirely different view. He did not see any light from shining India brightening his future. While the much celebrated Indian middle class went on a spending spree and pushed forward a cultural renaissance, the Indian peasant continued to groan under the weight of poverty. Inter-personal and inter-regional income disparities continued to widen and enough resentment had built up in the countryside for the rural voters to throw the BJP out of office.

The Indian political system is now based on the ability (or lack of it) of a diverse set of national and regional political parties to form coalitions in New Delhi. The states of India may be run by individual parties with local power bases. At the centre, no single party can command enough support within the legislature, the Lok Sabha, to form a government of its own. That was possible when Jawaharlal Nehru and his Congress party totally dominated the political landscape. Even the popular and highly revered Vajpayee did not have such support within the fractured system of Indian politics.

The Congress came back to power in 2004 under dual leadership. The party was governed by Sonia Gandhi, the Italian-born widow of Rajiv Gandhi who was assassinated by Sri Lankan Tamil separatists while on a visit to southern India. His wife made reluctant and hesitant entry into politics. It was made clear to her that being a foreigner by birth meant that she could not become prime minister. She accepted the constraint and appointed Dr Manmohan Singh, an economist and a member of the upper house, the Rajya Sabha, to lead the government.

The Gandhi-Singh arrangement will continue to work for as long as it continues to keep some of the large segments of the Indian electorate satisfied. The Indian farming community made up of mostly small land owners and landless peasants look to the government for support. This is provided in the form of an intricate system of subsidies, support prices and tariffs on imported farm products. It is this system that is being threatened by the way the Doha round is moving forward, propelled by pressure exerted by Washington.

Kamal Nath wished to tell the Congress constituency of small farmers that he would rather watch football than succumb to American pressure. That notwithstanding, the warming of relations between New Delhi and Washington, especially after the visit to the Indian capital by US President George W. Bush, did not produce enough heat to thaw the frozen trade talks.

Susan Schwab, the new United States trade representative, went to Geneva fully prepared to have her way. Known to be a tough negotiator, she was determined to sell her position about the need for opening the world agricultural system. While a successive round of trade negotiations since the end of the Second World War had opened world manufacturing to competition, agriculture remained closed behind high tariffs. It was also protected by farm subsidies.

The United States provided an estimated $20 billion in subsidies to its farmers but it was not alone in this field. The Europeans had their Common Agricultural Policy which was also built upon a complex system of farm subsidies. The United States was prepared to reduce — or at least restructure its programme of subsidies — provided its trading partners were willing to lower tariffs on agricultural products.

The United States — also Canada, Australia and New Zealand — are different from the rest of the developed world. These countries by virtue of their land and water endowment have a comparative advantage in agriculture. They will do well in a system of international trade in which agriculture is more open. The US is demanding not only a reduction of tariffs by Europe and Japan. It is also demanding the lowering of the tariff wall by the developing world, particularly those countries it considers able to absorb international competition. India is among these countries.

When the commerce ministers met in Geneva, three quite different positions had developed with respect to agriculture. The United States wanted a cut in tariffs by an average of 67 per cent. This was much too drastic an adjustment for the taste of the Europeans and the leading agricultural systems of the developing world. The European Union offered cuts of only 39 per cent in the proposal it formally tabled at Geneva. When its position was derided by other participants, it indicated that it may go down to an average of 51 per cent. The influential group of 20 developing countries was in favour of a position that was somewhere in between that of the United States and Europe.

But, as is always the case in trade negotiations, the opening of the agricultural system as proposed by the various parties was to be accompanied by several reservations. The proposals tabled at Geneva came with “sensitive lists” that include items which would remain protected either by high tariffs or by quotas. This has happened before. In the 1970s, 1980s and 1990s when tariffs were lowered on manufactures, developed countries protected their textiles producers by forcing the developing countries to enter into the Multifibre Agreement, MFA which instituted a regimen of import quotas that restricted the amount of textile goods that could be sold by developing countries in the markets of rich nations.

This time around it is the developing world that is keen on getting sensitive lists incorporated in any agreement that forces down tariffs on agricultural trade. A group of more than 40 developing countries led by Indonesia want to be able to protect at least 20 per cent of their farm produce. This list includes rice, a commodity of considerable interest to a country such as Pakistan that exports a significant amount of it. The reason for this demand is that these products are produced by poor farmers; allowing their free import would seriously hurt them.

According to a study by the staff of World Trade Organisation, under some of the proposed sensitive lists countries with farming concentrated in a few products could protect more than 90 per cent of their actual production. This is not acceptable to the United States which is prepared to accommodate sensitive lists of special products restricted to one to two per cent of all farm products.

Once again, the Indian position points to the difficult road that lies ahead. Recently, Sonia Gandhi wrote a letter to Prime Minister Manmohan Singh saying that a trade agreement that did not protect the interests of small farmers would not be acceptable to her party. “The Congress party feels that instead of opening the agricultural and manufacturing sectors through trade agreements, more effective domestic policy measures need to be adopted to protect and strengthen the growers and manufacturers,” she said.

Having run into a serious road bump at Geneva, what kind of future lies ahead for the Doha round? The fact that an agreement was not reached has created fears about the survival of the system of which the World Trade Organisation is an integral part. The group of six — the United States, the European Union, Japan, Brazil and India — that represents the major components of the global trade system, requested Pascal Lamy, the head of WTO, to lead his organisation out of the crisis. But there was controversy even before Lamy began his work. Sensing that he may be inclined towards the United States’ position — that the multilateral system should not come encumbered with too many exceptions — the Europeans said that “Pascal Lamy should act as the catalyst, but not the author of the agreement.”

What kind of system should Pakistan aim for? In several ways, the country is in a situation that does not reflect the interests of most of the developing world. Being a large textile exporter, it cannot support the least developed countries — a group that includes Bangladesh, a major competitor in the sector — in their demand for preferential access for their products to the markets of rich countries.

Being a major agricultural producer, its interest is not to see the developed countries and other large net importers of agricultural products, to protect their markets. It will have to pursue its own interests. In that context, factoring the development of agriculture into the negotiating position should receive a very high priority in Islamabad.

THE trouble is that we deceive ourselves. So a nation stands silent for two minutes in honour of the 52 who died, while TV commentators and politicians invoke the rhetoric of “the war on terror”.

So, in a faraway places like Helmand province, British soldiers perish for the same supposedly simple cause. We must “let the writ of the Afghan government run”, according to our defence secretary. We must, in the parlance, rescue “a failed state”.

But nobody pauses to observe that Afghanistan has never, ever, been a successful state. It hasn’t failed, for there has seldom been a worthwhile period of steady governance and legality, let alone freedom, throughout its tortured history. It is, and always has been, a dust bowl of violence, lawlessness and profound instability.

And the fact that we don’t see that instantly, that we bumble along hoping to create some new civil society at gunpoint, comes straight back to George Bush’s original 9/11 formulation and the “war” word. Wars — even wars against terrorist groups like Eta or the IRA — are waged between finite, coherent forces. They may end, as those two have ended, via submission or negotiation. There is a structure to them.

But the particular difficulty with Al Qaeda is that it doesn’t fit that pattern — and thus any eventual resolution is non-negotiable. And the particular, grievous difficulty with Afghanistan, far worse than Iraq, is that there is no structure in place to build on. Plaster it with aid and the benign patter of the ballot box, and you’ll still see your dreams come to nothing.

This, in so many ways, is a mediaeval country, a land that time has passed by. It cannot be spun five centuries forward by bemused brigades from Nato who can’t understand who the enemy is or why it hates them so. It pays no heed to the collected speeches of Tony Blair. Try a history of the hundred years’ war instead.

Of course, these differences are difficult to comprehend. They don’t feature in standard military textbooks where battles for hearts and minds have an honoured place. They don’t even fit with Baghdad, where an uncivil society still somehow exists among the debris. Watch an Afghan tribesman on the hillside using the Stingers that the CIA showered on him 20 years ago and you may think you see a sophisticated (if dishevelled) fighting man. What you don’t see is a sophisticated political operator ready to trade in his hardware for a tractor, World Bank grant and single transferable vote.

Democracy simply has no roots in this soil. Perhaps, you could say, King Zahir Shah tried to plant a few seeds of it during his 40 years of feeble power, but they blew away at the first puff of ambition from the zealots and gangsters who ousted him. And remember always that Kabul, with its assassinations and plots, is more of an old city state, cut off from an unchanging countryside — and that the countryside in the south-east stretches, without physical borders, into the wastelands of a Balochistan where Pakistan’s own writ barely runs.

Yet again, the terminology of conventional conflict deludes. Why doesn’t General Pervez Musharraf “clamp down” on the Balochs and Pashtuns? Because, politically and militarily, that’s impossible. His command and control levers don’t function out here. And see how the words we use also suffer from precision creep. Once upon a very recent time, the Taliban came to prominence, with some popular support, because they tried to clean up a land of drug warlords, the same people who are back in big business since their fall. Now defence secretary Browne talks earnestly about vanquishing “the Taliban drug warlords”.

It’s an idiotic conflation. What we’re really talking about is a melee of different groupings, some idealistic, some criminal, uniting as usual against any outside force. The Taliban, with a little malign help from their Pakistani friends, were and are young Afghans, not some foreign implant: the warlords who still run so much in a nation of bewildering ethnic mixes, over 70 languages spoken, are often tribal leaders too. When British soldiers die in Helmand, they are killed by Afghans, just as Red Army soldiers were once killed. Why don’t their killers see that we’re only trying to help? Because they don’t.

In the end the Taliban would have fallen anyway. That’s what happens to every Afghan regime. It implodes, and is replaced. Communism came and went. Mulla Omar’s own brand of militant Islam would have gone too. But “wars” against terror dictated something more proactive, more surgical, more supposedly glorious. Forget it, alas. And forget also the thought that “more” troops will “finish the job”. This is Afghanistan: and the job, whatever it is, has barely begun.—Dawn/Guardian Service

A NEW energy market is developing in the Asian heartland and Pakistan should be well poised to benefit from it. Within a short span of five years the Shanghai Cooperation Organisation (SCO), which recently concluded its summit meeting in Shanghai, has moved beyond its original limited role of demilitarisation of China’s border with independent states of the former USSR and put “economic cooperation on top of the SCO’s list of priorities”.

The SCO has already listed joint energy projects in the oil and gas sector as well as the exploration of new hydrocarbon reserves. Now President Vladimir Putin has recommended further development of this market and called for establishment of an “energy club” within the scope of the SCO.

Since the last quarter of the 20th century, the centre of gravity of economic growth has been shifting towards Asia. Within it, the Asian heartland of Central Asia has now become the new frontier of growth in the 21st century, as no other region comes close to its potential. The rich hinterland of the Central Asian countries had not been explored since the dawn of the Industrial Revolution. It is only after these countries achieved independence that their vast resources of energy and strategic minerals became available to the outside world.

However, these opportunities were not fully appreciated by the West, particularly the US, and were largely neglected for the first 10 years or so. This writer remembers making presentations during the 1990s, among others to the editorial committee of the Wall Street Journal in New York and the equally influential senior management of Council on Foreign Relations about the opportunities opening up in Central Asia and Pakistan’s role in allowing these to materialise.

At the time Russia was preoccupied with the immense problems arising in the aftermath of the dissolution of the USSR and China’s recognition as the industrial powerhouse of the world was still a few years down the road. But nothing much happened, and no follow-up emerged from these presentations. The vast economic potential of the Asian heartland was simply not registering on their radar of urgent and important issues.

Pakistan’s proposal to create the CASA (Central Asia-South Asia) Economic Association to tap into this potential through permanent institutional arrangements did not receive the deserved support until later when participants at the World Economic Forum in Geneva were convinced of its strategic potential and agreed to help create it. But convincing influential circles abroad of its strategic value was easier than protecting the idea from the self-destructive battles of domestic governance raging in Pakistan during the year 1997, when its launching was planned to coincide with the 50th anniversary of the country’s independence.

Now, of course, the world has changed in these 10 years, and I am not talking of 9/11 here. The economic vacuum that existed in Central Asia during the 1990s has been filled. China has established itself as the second largest economy in the world. Its yearly surpluses of scores of billions of dollars give it the financial strength to build the badly needed infrastructure and secure long term energy supplies from abundant reserves in the Asian heartland. Russia has settled its domestic issues and, with vast energy resources of its own, is now in a position to reinforce its old economic linkages with this region

Thus, the economic space available to non regional powers has shrunk from its position during the 1990s. It was, therefore, quite interesting to see concerns and reservations now being expressed by some western analysts as the SCO is working to integrate this Asian heartland into the economic agenda of its future prosperity.

The global energy market resembles the colonial market in the late 19th century when the early pioneers from Europe — England, France and the Netherlands — had captured and colonised most of the rich countries of Asia and Africa. The late comers in the colonial game — Germany and Italy — found their advances effectively checkmated by England and France. This competition for rich colonies was very much at the back of the diplomatic manoeuvrings that eventually caused the two world wars of the last century.

The competition over the rich colonies of Asia and Africa witnessed between the old and new colonising powers of Europe — is now shaping up over the energy resources between the old and newly industrialising powers.

The energy resources of the Middle East have already been largely committed to the US, Western Europe, and to some extent, Japan. Even these old customers will require access to more energy resources for their growing needs.

But the large economies of Asia are also industrialising now and their needs for energy are getting more urgent by the day. They, too, need long term energy security, otherwise their industrialisation process could easily slow down making their products too expensive and non-competitive in world markets.

Therefore, the SCO rises in importance in the context of securing energy sources for Russia and the late industrialising countries of Asia. The SCO is creating a new energy market by itself. It has big energy producers as well as big energy consumers in its six members (China, Russia, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan) and four observers (Pakistan, Iran, India and Mongolia). The coalition of Russia and China in the SCO provides the security protection to this new emerging energy market in the Asian heartland.

Several international energy experts expect an oil shock to hit world markets around 2015. Not if, but when that happens, the most vulnerable region would be the newly industrialising countries of Asia. Any military trappings being alleged by western analysts and denied by SCO representatives should also be seen in the context of the need to access/ protect energy sources.

Oil would continue to be largely controlled by its old customers in the US, the EU and, to a lesser extent, Japan. That means for the newly industrialising Asian economies, natural gas would acquire the role of a critical source of energy to fuel growth — apart from their own domestic production of other sources of energy like coal.

While this puts Russia with its huge oil and gas reserves of its own in a very comfortable position, it means China, India and Pakistan will need secure access to natural gas supplies in order to sustain their pace of industrialisation.

There was a time when Pakistan’s economic potential could have taken off on the strength of its domestic economy. This is no longer the case. No visions of prosperity for Pakistan can now be complete without looking outwards and building linkages with regional economies.

It should not be beyond Pakistan’s economic diplomacy to recreate the supportive framework with Central Asian markets that would help it realise not only the very tangible economic benefits but also political influence in the region.

It must have become apparent from the SCO deliberations in Shanghai that just as Pakistan and India acquired observer status at the same time in the SCO meeting in Moscow in 2005, Pakistan’s full membership is likely to coincide with India.

But that should not deter Pakistan from pursuing the same agenda through the unique advantage it has — its membership in the Economic Cooperation Organisation (ECO), four of whose members are also full members of the SCO.

Pakistan has severely under-utilised ECO’s potential for its own benefit. But if it can recreate the critical initiatives and fill in the missing blanks, it would earn rich dividends not only within Central Asia but also in terms of pursuing its South Asian agenda.

Pakistan’s very close relations with the Gulf countries and its long-established relations with the US put it in a specially advantageous position. The SCO-opens a new and important window of opportunity for Pakistan.

Both the potential and the projects to realise that potential exist. It should be possible to build alliances without antagonising any one. But it cannot be over-emphasised that the route to success lies through economic linkages and not the other way round.

The writer is a former federal secretary.
Email: smshah@alum.mit.edu