Pakistan vs rest of South Asia

Who is impeding regional progress?

South Asia is the least-integrated political and economic regional block in the world. Unfortunately, Pakistan holds the same status within South Asia. Developing a case here whether Pakistan is indispensible for the rest of the South Asia or vice versa, the latter option seems to hold ground by all means.

Low integration of Pakistan within South Asia is primarily due to its perennially scarred relations with India. Once again, unfortunately, its Pakistan and not India, which is more affected due to unfriendly relations between the neighbours.

As a matter of fact, Pakistan and all other countries in South Asia need India first as a supplier of relatively cheaper goods and services and second as a biggest consumer in the region given its huge market size and population.

Countries like Nepal and Bhutan are heavily dependent on India as a trading partner. India receives almost 58 percent of Nepalese exports and 51 percent of the Nepalese imports come from India. Similarly, almost 59 percent of Bhutanese exports go to India and the latter accounts for a whopping 75 percent of Bhutanese imports. Pakistan’s trade with Bhutan and Nepal is either minimal or zero and even if it intends to trade with them, it needs Indian territory to reach these countries, as both are landlocked.

Countries like Nepal and Bhutan are heavily dependent on India as a trading partner. India receives almost 58 percent of Nepalese exports and 51 percent of the Nepalese imports come from India

Talking about Maldives, Pakistan is not any one of the major exporting and importing partners of the country. On the other hand, India accounts for almost 10 percent of Maldives’ imports.

Both Bangladesh and Sri Lanka have a free trade agreement with India. According to a study (Nov 2014) by Samavia Batool and Vaqar Ahmed of Sustainable Development Policy Institute (SDPI), both Bangladesh and Sri Lanka trade more with India than Pakistan. In the case of Bangladesh, the study finds that India became the largest trading partner of Bangladesh in 2013. It says that on average, Bangladesh exports to India have increased 25 percent over the last decade whereas the Indian exports to Bangladesh have increased by 19 percent during the same period. Moreover, the land trading route between Pakistan and Bangladesh goes through India, so in no way can Pakistan think of using that land route without normalising relations with India.

For India and Sri Lanka, the study says that “Sri Lanka is now India’s largest trading partner among the South Asian countries whereas India is the largest ‘global’ trading partner of Sri Lanka”. It says that “Sri Lankan exports to India increased from $58 million in 2000 to $566 million in 2005, depicting a ten-fold increase over a period of five years. Later years witnessed a decrease in exports till 2009 after which exports again began to increase and reached $567 million in 2012”. Although Pakistan also has a free trade agreement with Sri Lanka, still the latter trades more with India.

Finally talking about Afghanistan, which is contiguous with Pakistan and not with India, it has been observed that till 2012, Pakistan was the biggest importer of Afghan goods with an import of 33 percent. Interestingly, India was still importing at a ratio of almost 25 percent from Afghanistan. However, Pakistan remained the biggest exporter in the world to Afghanistan with an average of almost 26 percent; whereas Indian exports to Afghanistan were almost six percent.

Pakistan’s increasing isolation within the region, not only on the economic but also on the political front, is already sending negative signals across the globe.

‘It is clear that India and other SAARC countries should consider a ‘small’ SAARC model of integration, one that moves forward with regional connectivity without Pakistan if it is unwilling to integrate further with its neighbours’

An alarming fact for Pakistan out of this regional aloofness is an already existing sub-regional bloc within South Asia named SASEC (South Asia Sub-Regional Economic Cooperation) of which Pakistan and Afghanistan are not members but all other countries of SAARC are. Since its inception in 2001, SASEC countries have implemented 33 regional projects worth more than $6 billion in the energy, transport, trade facilitation, and information and communications technology sectors. SASEC countries aim to strengthen multimodal cross-border transport networks that boost intraregional trade and open up trade opportunities with East and Southeast Asia. All this is because of a shared common vision of these countries and harmonious nature of cross-border relationships.

Similarly, The Diplomat (27, 11, 2014) wrote that “Pakistan is seen as the main country harming South Asian integration. Sri Lanka, Nepal, and Bangladesh strongly supported greater regional connectivity.” It further said in the aftermath of recent SAATC Summit in Kathmandu that “It is clear that India and other SAARC countries should consider a ‘small’ SAARC model of integration, one that moves forward with regional connectivity without Pakistan if it is unwilling to integrate further with its neighbours.”

Moreover, Reuters (26, 11, 2014) also quoted former Nepalese Foreign Secretary, Madhu Raman Acharya, from the recent SAARC Summit “urging the grouping to step up sub-regional cooperation”.

So, in view of this prevailing narrative and an obvious economic alienation of Pakistan within South Asia, concerted and bold efforts are the need of the hour on the political and diplomatic fronts. Pakistan must send some positive and hot vibes across the region, as the prime minister put it in the recent SAARC summit, “My vision for our region is a dispute-free South Asia, where, instead of fighting each other, we jointly fight poverty.”