September 24, 2006Foreign AffairsSecurity

Peace process re-engineering

India needs a peace process. Not a Kashmir-for-peace”process.

This is an archived blog post from The Acorn.

It has become obvious that, as feared, peace process’ is working against India’s interests. It plays into Pakistan’s grand strategy of salami-slicing and taking the entire mile inch-by-inch. It also plays on a weakness inherent in Indian public opinion—short-term memory. An inch of concession is too little for Indians to either get seriously worked up about or bother to remember. It is, therefore, unsurprising, that an act of appeasement as monstrous as the one in Havana fails to raise the nation’s collective eyebrows. So too the non-paper” offering joint-control” of the Kashmir valley that India has floated using back-channels.

The UPA government has gone great lengths to spin the Havana appeasement it as the best India could achieve. So former security officials who dare to point out how bad a capitulation it really is are accused of indulging in bureaucratic groupthink. And ordinary citizens who do so are accused of being war-mongers, too unsophisticated to understand the statesmanship of Dr Manmohan Singh.

Many sincere supporters of the peace process’ do so on the premise that the only alternative to the Kashmir-for-peace” process is war. Meanwhile, opponents of the peace process’ fail to address this faulty reasoning adequately, thereby strengthening the perception that those opposed to the peace process’ are in effect, advocating going to war.

Getting the targets right

Let’s examine the Kashmir-for-peace” process. It targets two constituencies within Pakistan: the military establishment and Pakistani civil society. It requires on the one hand, those in power in Pakistan to drop their animosity towards India—ignoring the reality that it is the very animosity that allows them to retain power. On the other, it requires the powerless to take on the military establishment on foreign policy—ignoring the reality that the powerless cannot influence their government even on everyday issues. Engaging these constituencies may give an illusion of progress, but the fact is that there is no peace to be had by engaging these constituencies.

There is, however, another constituency that can be engaged. It is one that is close to (and often in) power and whose interests are not necessarily served by hostility towards India. This is Pakistan’s pragmatic business class. And the way to engage this constituency is not through political negotiations or feel-good events. It is through trade.

Think about it. India has very few readily usable ways of coercing Pakistan short of the use of military force (or throttling Pakistan’s water supplies). Both are extreme measures and neither can be used without attracting international opprobrium. Yet it sorely needs some usable cards to play an effective game of carrots and sticks with Pakistan. The mere threat of withdrawal of a carrot should cause powerful voices to whisper (or shout) in the ears of Pakistan’s rulers. The surest and fastest way to obtain such leverage is through greater trade and economic intercourse with Pakistan—by making powerful Pakistanis fat on trade with India.

There’s a lot of money on the table

Studies show that there’s an additional $6 billion worth of bilateral trade on the table, with India having a comparative advantage in twice as many areas as Pakistan. Quite obviously, those who benefit from this—on both sides—are likely to be the keenest advocates of peace and harmony. That’s not all. They are also likely to resist any move by their governments that might put their businesses at risk. This can create the leverage that India needs. An entire range of coercive tools—from targeted bans on companies to sanctions against entire industries—become available to India. Such measures would be ineffective if they only hit the ordinary powerless Pakistani. But they stand a much better chance of working when they hit the powerful business class.

So isn’t this exactly what SAFTA hopes to achieve? Perhaps, but one reason why SAFTA is going nowhere fast—especially with respect to Indo-Pak trade—is because the Pakistani ruling establishment is awake to the danger. Supported by the protectionists within its business community it has steadfastly resisted lowering trade barriers until the “Kashmir dispute is resolved”. SAFTA, therefore, may not be the answer India is looking for. And isn’t this why that gas pipeline was a good idea? Not at all, for the pipeline would put a lifeline in the hands of the military establishment, not the business class.

The sound of one hand slapping

What India can do, is unilaterally lower barriers for imports from Pakistan and open up several points along the border for goods to pass through [See Sauvik’s argument for unilateral trade liberalisation in general]. Pakistani businessmen and Indian consumers will be immediate beneficiaries. It is true that some Indian businesses will face additional competition. But this is unlikely to hurt much, for Indian industry is already successfully competing with Chinese imports. Once this trade picks up, India will have what it needs to coerce Pakistan.

But won’t the effects of trade be reciprocal? In other words can’t the Pakistani government use sanctions on Indian businesses to balance the coercion. Well, to do that, it has to open its markets to Indian businesses first. That in itself is more tangible a benefit than anything the current ‘peace process’ can dream of. But what if, after opening up, it uses the threat of retaliatory sanctions to coerce India. It can, but given the size of the economies, it is likely to calibrate its actions carefully, as it risks doing more damage to its business elite at every step. Won’t India lose a valuable bargaining chip to extract trade-related concessions from Pakistan, including transit to Afghanistan? In theory, yes. In practice, keeping the cards is not quite meaningful as it is the Pakistan’s obsession with Kashmir that is the sticking point.

India’s peace process with Pakistan requires re-engineering. There is no need for India to make further concessions over Kashmir. India has the necessary capacity to deal with estranged Kashmiris. It can do so without involving Pakistan. The message to Pakistan’s rulers needs to be unambiguous—the use of terrorism or armed aggression to change the status quo in Kashmir will be met with a robust military response. Taking Kashmir off the table might leave Pakistan with few incentives to pursue a dialogue’. But if India is open to trade with Pakistan, it does not really matter. It’s all in India’s hands, actually.

Related Post: Mere pursuit of economic relations is insufficient to serve the ends of peace. More on this in a previous post on the separateness of peace and development.

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