Bhutan hopes to break India-Pakistan ice

From the burning-hot plains of Delhi to the wind-and-rainswept capital of Bhutan is such a long journey, but Thimphu is gearing up to welcome all the leaders from South Asia on the 25th anniversary of the founding of the South Asian Association of Regional Cooperation (Saarc) on April 28-29, with nervous anticipation. 

Over the next 48 hours, all the heads of state and government will troop in, but much of the media is already obsessing about a possible India-Pakistan encounter between Prime Ministers Manmohan Singh and Yousuf Raza Gilani. The big question: will Thimphu provide the opportunity for both these leaders to overcome the caution of their respective bureaucracies -- and in Pakistan's case, the extent of the backing being provided to the political leadership by its all-powerful Army -- to break the ice that has clogged the relationship since the Mumbai attacks of November 2008? 

External affairs minister S M Krishna said he "did not rule out a meeting" between Singh and Gilani, but it was already clear that Prime Minister Manmohan Singh was willing to once again stake his reputation and offer to carry the rest of South Asia on the back of India's continuing economic growth. 

For the PM, the Thimphu summit could offer relief from the furore in Parliament back home, although he is unlikely to add to the commotion by straying too far from the script, as he did at the meeting in Sharm-el-Sheikh last year. 

That is how economics could come to the aid of politics, with the PM likely to point out that the 'Bhutan model' could easily serve the rest of South Asia as well. If some countries (read Pakistan) were hesitant about accepting India's economic leadership in the sub-continent and use it as the engine of growth, Saarc instruments in trade and investment could be used to subsume all these sensitivities. 

That is why the document on "trade in services", one of two documents that will be adopted at the end of this 16th summit (the other is on climate change) becomes crucial to the growth of Saarc as an effective trading bloc. Bangladesh has already been identified for its financial services sector, India for IT and Pakistan for transport services. 

As for the 'Bhutan model,' Indian officials point out that in the last decade, Indian investment in Bhutan's energy sector -- helping build a series of hydro-electric projects like Chukha, Tala and Kurichhu –has been so significant that it has completely reversed the huge imbalance in trade with India. In 2008, Bhutan exported Rs 21.48 billion worth of goods to India, dominated by the export of electricity, while it imported Rs 17.33 billion worth of goods from India. 

In fact, after the January visit of Bangladesh prime minister Sheikh Hasina to Delhi, officials added, India was hoping to expand the 'Bhutan model' to that country as well. 

The traditional view in the Foreign Office in Delhi, meanwhile, continues to be dominated by the view that action or the lack of it on terrorism must continue to comprise the litmus test in the India-Pakistan relationship. Sources who spoke on the condition of anonymity felt the "situation in Pakistan must get clearer before a real breakthrough can take place," implying that it wasn't clear whether Gilani or army chief Ashraf Kayani held the real reins of power. 

These sources indicated that the Pakistani action taken on the Mumbai attacks in recent days may not be enough to satisfy India, and certainly, Pakistan's request for Kasab had shown that Pakistan was "not serious" about taking action. 

But, these sources also accepted that a "limited conversation" could take place in Thimphu around the sharing of the Indus waters, as well as the related matter of the Kishenganga hydroelectric project. 

PTI had reported on Sunday that Pakistan had written to India, accusing it of violating the 1960 waters treaty by building a storage dam on the Kishenganga. India's position is that it has only built a run-of-the-river dam on that river. 

Here in Thimphu, meanwhile, the debate around the effectiveness of Saarc as a regional trading bloc is hotting up. One Bangladeshi journalist after another on Monday asked Bhutanese Foreign Secretary Daw Penjo and Saarc Secretary-General Sheel Kant Sharma whether "contentious issues" between certain countries was not holding up Saarc, whether the Bay of Bengal trading community (also called Bimstec, which includes Myanmar and Thailand, but not Pakistan) would go places while Saarc lagged. 

Both Penjo and Sharma said they begged to differ, pointing out that in "this age of regionalism" spawned by globalisation, one could not argue whether one regional trading bloc was better than another and all of them supplemented each other. 

According to Sharma, "fortunately or unfortunately, we have to work together, we cannot go without Pakistan or Bangladesh or any other country". But, Penjo admitted that all the leaders, in this 25th year of Saarc, would "have to take stock of what we have done and where we go from here". 

Asked why Saarc compared so unfavourably with Asean -- for example, intra-ASEAN trade amounted to 25 per cent, compared to a lowly 3 per cent with intra-Saarc trade, Sharma admitted, indirectly, that Asean only took off when key countries like Cambodia and Vietnam were also able to resolve major conflicts. 

"Of course, we would all like to go faster," Sharma added, but pointed out that a slow and steady pace wasn't such a bad alternative. 

Meanwhile, the Bhutanese are hoping against hope that Thimphu will be able to radiate a certain serenity that will enable both India and Pakistan to stop in their tracks, take a deep breath and see whether their actions are best for the region or not. 

"India and Pakistan are like two brothers which have fallen apart," said Benji Dorji, one of Bhutan's foremost citizens, adding, "you can't deny the tension between these two countries in Saarc, but if Bhutan can provide the atmosphere where they can talk openly, that would be a very good thing." 

Added Choki Tsomo, the managing director of Kuzoo FM, a private radio station in Bhutan, "Bhutan is such a happy place, if we can introduce some of this happiness in Saarc and make some of our neighbours feel happy again, it would be wonderful!"