January 16, 2002


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G Parthasarathy

The other side of the SAARC summit

Dramatics often overshadow concrete results in contemporary diplomacy. This is precisely what happened at the eleventh SAARC Summit in Kathmandu. The author of the Kargil aggression and the erstwhile ardent advocate of jihad, Pakistan's General Pervez Musharraf sought to steal the limelight by the melodramatic gesture of extending his hand of friendship to India's Atal Behari Vajpayee.

Not surprisingly, the invariably soft spoken and courteous Vajpayee responded by calling on Musharraf to rein in the jihadis and terrorists the world knows he sponsors and assists. Vajpayee pointedly reminded Musharraf: "I went to Lahore with the hand of friendship. We were rewarded with aggression in Kargil and the hijacking of an Indian Airlines aircraft. I invited President Musharraf to Agra. We were rewarded with a terrorist attack on the Jammu and Kashmir Assembly and, last month, on the Parliament of India".

The summit was thereafter virtually hijacked by the issue of whether or not the foreign ministers of India and Pakistan would meet. Washington was making it clear that it was anxious that such a dialogue should take place; as conflict between India and Pakistan would seriously undermine its war effort against Osama bin Laden, Mullah Omar and their fanatical supporters. Other SAARC members were equally keen that this issue should be sorted out to prevent the SAARC Summit becoming yet another messy Indo-Pakistan spat.

New Delhi should have anticipated all this and readily agreed to a meeting between the two foreign ministers where it would discuss nothing other than the action it expected Pakistan to take to ban, disarm, disband and effectively block financing of all terrorist groups acting from its soil in Jammu and Kashmir and elsewhere in India. What happened instead was that Mr Jaswant Singh and Mr Abdul Sattar met for over an hour, even as India was destroying its own credibility by claiming that no such meeting took place. One hopes that our diplomacy would be conducted in future with greater finesse and credibility.

Amidst all this tamasha the other members of the SAARC were showing that they were one with India in enhancing cooperation in the "core areas" of trade, finance and investment. It is Pakistan alone that has dragged its feet in moving ahead on these issues while pursuing a political agenda of labeling India as "hegemonic" and wanting all attention to be focused on its "core issue" of Kashmir.

The SAARC leaders have now agreed that they will move ahead to establish a South Asian Economic Union in a phased and planned manner. More importantly, they have also committed themselves to finalizing the text of a Draft Treaty for a South Asian Free Trade Area by the end of 2002. This development has been possible mainly because countries like Bangladesh, Sri Lanka and Nepal see the benefits that they will derive by free access to the Indian market. Pakistan will do its best to stall movement forward on this issue as it has done in the past during negotiations on a South Asian Preferential Trade Area.

But, New Delhi should now undertake a meaningful effort with Bangladesh, Bhutan, Nepal, Maldives and Sri Lanka to see that this Pakistani effort does not succeed. Given our own less than helpful approach in granting trade concessions to neighbors, we should leave this effort to be undertaken primarily by Bangladesh and Sri Lanka who have far more liberal trade regimes than us and not by the ever protectionist and short-sighted Mandarins of our commerce ministry in Udyog Bhavan.

The Kathmandu SAARC Summit has also agreed on the need for a regional framework for promoting investment. There is also a commitment to cooperate on issues of poverty alleviation, women and children and in the social and cultural sectors. India found support from Sri Lanka and Nepal in securing a strong reference to the scourge of terrorism. But this is by no means a substitute for relentless international pressure combined with military and diplomatic pressure from India that has to be maintained to force General Musharraf and the Pak military establishment to see reason. While certain aspects of General Musharraf's address of January 12 are no doubt welcome, India should not lower its guard till we are firmly convinced that support for cross-border terrorism has been finally and irrevocably ended.

Because of our political leadership's preoccupation with Pakistan, we are unfortunately not devoting enough attention to issues of sub-regional cooperation involving Nepal, Bhutan and Bangladesh in the "Growth Quadrangle" on our eastern borders. Our policy of rejecting any role for financial institutions like the Asian Development Bank in assessing projects, especially on issues of water resources, is counterproductive and needs to be reviewed. Both Bhutan and India have benefited immensely from cooperation in hydroelectric projects. But we have to acknowledge that our smaller neighbors feel more comfortable when they are reassured by organizations like the ADB when dealing with us on projects affecting their long-term interests. A similar project oriented approach is needed to lend dynamism to the BIMSTEC regional grouping bringing together Bangladesh, India, Myanmar, Sri Lanka and Thailand.

We are now seeing the emergence of a distinct South Asian identity through expanding non-official contacts between writers, poets, scholars, doctors, Rotarians, chartered accountants and human rights activists. This is a welcome development. But we need to look beyond the boundaries of SAARC and see how we can develop new dimensions of economic cooperation with our neighbors both to our west, like Afghanistan and to our east, with Myanmar and other ASEAN members. Should we not give some thought to considering the admission of Afghanistan to SAARC at an appropriate time? Further, have we studied the adverse implications to our exports to South East Asian markets as China moves to conclude a Free Trade Agreement with ASEAN? Given Pakistan's reservations on trade, investment and economic ties with India it is imperative that we should conclude free trade agreements with Bangladesh and Myanmar, while simultaneously looking beyond our land borders.

The ASEAN economies are moving ahead on the road to recovery. They are likely to revert to the high growth paths that made them the envy of the world within a short time. Countries like Thailand and Singapore are even now interested in seeing that China's economic influence is balanced by having free trade agreements with India. But, rather than viewing these developments as opportunities to be availed of, our Mandarins in Udyog Bhavan are getting into a defensive mode and failing to see the adverse long-term implications of giving China a free run on the markets of South East Asia.

We are displaying the same shortsightedness in our trade relations with South East Asia as we have shown in our dealings with neighbors like Bangladesh and Sri Lanka. It is precisely because of this protectionist approach that we are not particularly welcome in forums like APEC, where removal of trade barriers and trade liberalization are articles of faith. Even when negotiating free trade agreements we seem to focus more on "negative lists" as non-tariff barriers on the exports of our neighbors, while protesting against non-tariff barriers that others impose.

It is true that drastic reforms in the power and other infrastructure sectors and in our small-scale sector are now essential if our industrial sector is to be internationally competitive. New Delhi must firmly tell our industrial houses that they must set their house in order and "compete or perish", instead of constantly seeking shelter behind high tariff walls. It is ludicrous to claim to be a regional power on the one hand, while closing our markets to competition from the countries of our neighborhood on the other. The first ASEAN-India Summit is to be held shortly. Prime Minister Vajpayee should seize the initiative and tell ASEAN leaders that India is ready to conclude Free Trade Agreements individually and collectively with the members of ASEAN. A nation that showed the courage to go nuclear, does not serve its interests by closing its doors to the exports of its smaller neighbors.

G Parthasarathy

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