Some good news for a change from the Indian subcontinent:
Pakistan is unpicking official barriers to trade, after last year offering most-favoured nation trading status to India (reciprocating India’s 1996 offer). Restrictions on traded goods, notably by road, are going, with potentially huge effects. Road transport is only one-third the cost of shipping goods to Pakistan by sea, via Dubai, as happens now.
Until this year, says Nisha Taneja, a researcher at the Indian Council for Research on International Economic Relations, Pakistan let only 14 products enter by road. As that number rises there will be a “quantum leap” in trade relations. She sees “no doubt that trade will increase a hell of a lot” from its level of $2.6 billion a year. . . .
[O]ver 4,000 lorries carrying tomatoes from Maharashtra crossed to Pakistan in the past three months alone, a huge increase. A similar quantity of soyabeans has gone to Pakistan’s poultry farms. A trader says that, in return, 100 lorries loaded with cement, plus others with gypsum rock and other minerals, will soon arrive daily in India, as Pakistani producers meet demand from Indian constructors. A new oil refinery in India’s Punjab may start sending petrol over the border, giving a boost to total bilateral trade.
Anything that promotes trade and normal economic relations between these often combative neighbors is of vital importance for the security of south and central Asia. Pakistan’s Army has been notably complacent about the opening of trade with India. One senior officer pointed to a primary reason for its acceptance of deeper economic ties with its arch-enemy: “The [Pakistan’s] economy needs to be brought up…It [an improved economy] will also affect the military’s budget. Larger the cake, larger the share.”Actually, if relations continue to improve, both India and Pakistan could benefit enormously by negotiating reductions in the military forces on both sides of the frontier. Pakistan in particular would benefit; its economy is smaller and therefore its military expenses are harder to bear.For the world’s future, the development of strong economic relations between these countries means a lot — more, we suspect, than whether the euro breaks up. We’ll keep an eye on the trade and investment patterns between these two countries going forward; progress won’t be easy as powerful forces in both countries are opposed, but Ind0-Pak cooperation would make this world a richer, happier and safe place for all.