The most prudent step forward. Number one problem on the Pakistani side taken up as soon as trade talks gather momentum. This is just the kind of necessary linkage we mentioned – long term projects that force both parties to play down political differences because of favourable economic and financial barter. And electricity will enable greater trade as well, as soon as there’s enough for manufacturing and industry to perform at more productive levels. Subsequent value addition will mean more exports, and a healthier fiscal position in Islamabad.
The trade drive is important also because Asian exports are still vulnerable to the sovereign debt nightmare in Europe – near zero growth and diminished import expenses – as well as weak growth as best in the US. Perhaps increased intra-regional trade and redrawing of economic linkages is one of the better things to have come out of the ’08 recession’s lingering hangover. As we see regional trade blocs forming, there is a feeling that such movement should have begun a long time ago. Still, better late than never.
To give credit where it is due, not even the most enduring of optimists would’ve counted unprecedented commercial breakthroughs in their ’12 outlook for Pak-India relations. And while prospects of an electricity deal have done rounds in the press, surely there are avenues of potential cooperation that will surprise many on both sides. Let’s just hope risk management has been given fair time and attention. We have seen confidence building measures of the past derailed by elements out to harm both countries. They are perhaps the biggest threat to the progress that has been made in the last few months.
