Peace and profits

The new ambassadors of amity

The Pak India peace campaign has now been taken over from starry eyed peaceniks belonging to the civil society by hardnosed businessmen motivated by strong material incentives.

The move has, thus, entered a new stage where economic forces which are in a better position to influence the establishment are playing a dominant role. The last couple of decades have seen the emergence of a section of businessmen in Pakistan who find domestic market too small for their capacity.

Unlike a previous generation which was the product of state patronage and were shy of competition, the newcomers are more confident of being able to stand their ground in the South Asian market.

This was clear at the four day Lifestyle Pakistan expo at Pragati Maidan in New Delhi. Pakistan was represented by big brand names that included Gul Ahmed, Al-Karam, Sefam, Orient Textiles, Nishat Textiles, Asim Jofa and Chen One.

The Sefam which already has a store in the Indian capital’s Greater Kailash market announced it was planning to launch its collection in more than 200 brand stores in Delhi, Mumbai, Chandigarh and Ludhiana by 2015. The stocks were sold out by the last day and Gul Ahmed’s stall had to arrange for merchandise from their Delhi distributors.

“The Indian public’s response is very encouraging. We are very much satisfied with the business in the exhibition”, observed Bashir Ali Mohammed, chairman Gul Ahmad.

Mian Mansha was in New Delhi meanwhile planning to launch franchises to sell his textiles in every major city, buy technology from India, set up a cement processing plant and open branches of his MCB bank. “We hope that Indian banks come to Pakistan too.”

Back in Pakistan, the cement industry, with much more modern plants than in India, was complaining that it was not able to export as much as it wanted due to the Indian NTBs.

There are also big Indian concerns which look at Pakistan as a lucrative market.

Pakistan has a 220 million kg consumption of tea which is increasing at the annual rate of two percent. With Iran stopping its purchases from India due to a payment problem, Indian tea producers are banking on Pakistan as one of the emerging export markets in the coming years. A trade delegation from Pakistan Tea Association was in India last week to strike long-term business deals.

Pakistan also needs Indian petroleum products as its existing refining capacity meets only half its total domestic requirement. India has offered to export petrol, diesel and other petroleum products to Pakistan and there is already a talk of building of pipeline from the Mathura, Panipat and Bhatinda refineries for transporting petroleum products to this side of the border. .

Pakistani billionaire Mian Mansha wants to see energy pipelines across borders, buy software from India instead of paying ‘10 times more’ to European firms and launch his IPL-like cricket team with Indian players. He suggests that trade would ‘cushion’ a ‘soft landing’ to hold the frayed bilateral relationship in case of a future ‘incident’.

Realising the full potential of the mutual trade is vital for the two countries because Asian exports are still vulnerable to the economic slowdown in Europe with near zero growth and diminished import expenses as well as sluggish growth in the US. Intra-regional trade and redrawing of economic linkages alone can help Asian countries to deal with the after effects of the economic crisis in the west.

Free trade between India and Pakistan would substantially increase trade and investment flows, incomes and employment, and would reduce poverty levels.

It would also generate compulsions to resolve the perennial disputes. Interdependence created by Iranian or Turkmen gas flowing through Pakistan to India and Indian supply of power to Pakistan would act as a potent incentive for peace. “Flourishing trade is the biggest confidence-building measure between any two nations,” said Indian Commerce Minister Anand Sharma.

The way to peace and friendship is littered with booby traps though. What can become a game changer in Pakistan is a historic consensus between the political and military leadership over improving ties with India which led Zardari to meet Manmohan Sigh. There are fears this time that the attempt to stall the peace initiative might again come from the Indian side as happened after the Gilani-Manmohan talks at Sharm al Sheikh. It would be unfortunate on the part of the two neighbours if they fail to seize the moment.

The writer is a former academic and a political analyst.