Lessons from the neighbourhood

The Bangladeshi Prime Minister doesn wear Prada; her Indian counterpart isn exactly James Dean either. But as the two mingle in Bangladesh, they have managed to gather way more attention from international media than the Pakistani Foreign Minister garnered even with her Hermes Birkin handbag and Jimmy Choo shoes. And for good reason. The premiers of both countries are on the verge of settling long standing disputes over their common border, with the stroke of a pen. The agreement will include the exchange of control over some 150 enclaves that the two countries currently control in each others territory. By the end of PM Manmohans trip to her country, Bangladesh Prime Minister Sheikh Hasina will also have successfully revitalised the Inland Water Transport Treaty of 1972 that was originally signed by her father Sheikh Mujeebur Rehman, weeks before his assassination. This pact will enable the use of road, rail and river networks in Bangladesh by India as well as Bhutan and Nepal. Experts contend this will, in turn, address problems of connectivity, water and power supply in the region. Local business leaders are citing these developments as glaring examples of regional progress through cooperation. "We have always maintained that commercial partnership with Pakistans neighbours is vital. It is the best solution to our trade account woes," insists former FPCCI president Zubair Motiwala. While an overwhelming majority of local businessmen support liberalised trade and improved diplomatic relations with India; there are some dissenting voices. "Local industries will be run out of business by much bigger Indian competitors that have the ability to dominate the local market," warns President ECO Friendship Forum, Farooq Afzal. Fears of local industrialists are not entirely unfounded. For every dollar of exports from Pakistan to India; five dollars of imports were received in FY11,up from $1.9 worth of imports against each dollar of exports in FY05. Moreover, many Indian imports make their way to the country via Dubai and other hubs. However, before the dissenters are vindicated, it is pertinent to note that Bangladesh has also seen its trade deficit with India surge to five times its size back in FY06. Yet even the most ardent opponents of ties with India like Bangladesh National Party and Jamaat-e-Islami have toned down their rhetoric, eyeing economic progress instead. "India is rapidly emerging as an economic super power and its neighbours can confidently look forward to partaking in its prosperity, trade and technological innovations," says Economic Affairs Advisor to PM Bangladesh, Dr. Gowher Rizvi. The rumour mills are churning that Pakistan is on the verge of granting MFN status to India. The federal commerce minister is also scheduled to lead a trade delegation to India between September 26 and 30. Perhaps, the political leadership can take a leaf from the Bangladeshi book when they reach the negotiating table in New Delhi. Bangladesh extracted a credit line worth $1 billion from India, last December. The former has also secured larger quotas for its textile exports to the country. In Pakistans case, arguably the biggest non-tariff barrier that should be knocked down is the plethora of restrictions on visas to India. Small businesses will gain access to markets and resources across the border if business visas are provided promptly and do not involve arduous processes of registering with local police stations, seeking affidavits of support from hosts and the mindless restriction of being allowed to visit only three cities. Secondly, Pakistans economic managers must lobby their Indian counterparts to establish uniform quality standards for pharmaceutical goods, cement, home textiles and other products. After all, how is it possible that Pakistani cement is unsuitable for Indian construction while it is extremely popular throughout the Middle East? These barriers can only be knocked down by the same means that are needed to bridge the trust gap between the two nations: meaningful dialogue. While it is true that India, being the gargantuan economy may benefit more from this arrangement; Pakistan too will be better off.