THE debate on the question of granting the Most Favoured Nation (MFN) status to India has been far from edifying and the danger that Pakistan may once again miss the opportunity of adopting a rational trade regime cannot be ignored.
Two decades ago, the commerce ministry submitted to the government the findings of a study that resumption of normal trade with India would benefit both the people and the government of Pakistan. The government was too afraid of the hawkish lobby to engage in a serious discussion. After 20 years, the commerce ministry has picked up the courage to offer MFN status to India and the government is still betraying a lack of will to take on the critics in a straightforward manner.
Those in favour of the move have tried to argue that opposition to MFN status for India was based on ignorance. It has also been pointed out that by treating India as a most favoured nation Pakistan will only be fulfilling its obligations under the WTO Protocol and reciprocating New Delhi’s decision of 1996. As usual the debate is continuing on two planes — one economic and the other political. Those opposed to the official move reject it on both grounds.
The trade organisations are divided, though not as sharply as earlier. The president of the Karachi Chamber of Commerce and Industry says it is a misconception that opening up trade with India will harm Pakistan. He is quite optimistic about a doubling of the volume of the two-way trade. The Lahore Chamber of Commerce and Industry does not reject the MFN move but cautions against any steps at the cost of the national industry.
The most commonly advanced argument against normalisation of trade with India is that the economies of the two countries are competitive and not complementary and that Pakistan’s export potential is much less that India’s.
Pakistan is, therefore, unlikely to gain much from trade liberalisation with India or any other country. A factor that tilts the balance against Pakistan is its lack of human resources and skills, such as India has employed to protect its interests within the WTO regime. However, it is conceded that Pakistan’s misfortunes are due to its own mistakes, mainly in the form of excessive reliance on earnings from export of raw material and semi-processed products.
This analysis simplifies the issue. Is it in Pakistan’s interest to persist in a system of economic management that continues to erode its export capacity on the one hand and on the other compels the industrial entrepreneurs and consumers to pay for equipment and goods more than they would if they found trading partners nearer home?
Does Pakistan have the resources to defy the world market forces and thrive on the strength of isolationist policies? The cost of liberalising trade with India is not denied but equally undeniable is the fact that such costs will increase with the passage of time.
Is it fair to increase the liabilities of the future generations only for the sake of covering up the muddle-headedness of the past and the present generations? Leave economists and traders aside, common sense alone can guide any citizen to answers in accord with the national interest and reason. True, the creation of a new trade regime cannot be a push-button affair, but wisdom lies in starting the process sooner rather than later.
While objecting to the MFN move on economic grounds no one should ignore the fact that for years illegal/informal trade between India and Pakistan has been twice as much as the trade through official channels. The gap will continue to grow and both the state and the people will be the losers.
A similar line of argument can be developed to answer those who oppose the MFN move on the ground that it will mean abandonment of Pakistan’s stand on Kashmir. These critics assailed the government for ignoring the military’s interest. Such elements are unlikely to be satisfied by the foreign minister’s statement that all stakeholders, including the military, had been taken on board. Even if her view is contested the idea of allowing a state service the power to override the wishes of the state and the people will have to be discarded.
Is the MFN move any worse than the bargain that Gen Musharraf was reported to have struck with New Delhi? Besides, nobody has shown that by sacrificing the gains that will accrue from normalisation with India, Pakistan will secure a Kashmir settlement.
As has often been pointed out there are only two ways of resolving the Kashmir issue — one by military force and the other through the international community’s intervention. The military option became unavailable years ago. Even the most purblind among the defenders of the nuclear weapons policy cannot claim that atom bombs will help Pakistan wrest Kashmir from India’s stranglehold.
As for international pressure for implementation of the UN resolutions by which we swear, more by habit than conviction, these resolutions were the Anglo-American bloc’s reward for an unquestioning camp follower and it stopped obliging Pakistan four decades ago. As things stand today, Pakistan can bank on the support of neither the US-Nato alliance nor China nor even the so-called Muslim bloc for a fair solution to Kashmir.
There is no doubt that the people of Kashmir have a just cause and to the extent their cause is supported, regardless of their views on the territory’s future, Pakistan will have an objective worth struggling for — of course, short of war. This struggle cannot be conducted by an unstable, non-democratic, aggressively theocratic, politically divided and economically dependent Pakistan. Nobody will lift a finger for Pakistan unless it achieves political cohesion and economic strength under a democratic canopy.
The plea that the MFN issue should be debated in parliament appears to be reasonable. One wonders, however, whether the argument has been advanced to cover up the interest the leaders of the party concerned have always shown in fullest possible trade with India.
This does not mean rejecting the need for well-thought-out and measured steps on the road to normalisation with India. It is the tendency to irrationally bar access to this path that must at the moment be resisted. An idea of the kind of emotional blackmail to which successive Pakistan governments have succumbed can be had from the following newspaper comment on the MFN proposition:
“Those concerned with the country’s defence and security have described this decision (to allow MFN status to India) a greater disaster than the Pakistan army’s surrender at the time of the fall of Dhaka. According to them, giving a congenitally deceitful and dangerous enemy access to its markets under the cover of two-way traffic amounts to giving it (the eternal enemy) an opportunity to seize the foundations of the country.”
The MFN move appears to be a relatively small matter when one ponders the threat to the people’s socio-political-economic interests, indeed to their mental health, posed by the vendors of poison quoted above. In fact the top-most priority for Pakistan is to dismantle the self-destructive mindset developed and defended by the frequently discredited protectors of its national interest.