Pakistan-India Trade:
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Pakistan-India Trade:

Pakistan-India Trade: Pakistan-India Trade:

michaelkugelman
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26.03.2013 Views

Pakistan’s Trade with India: Thinking Strategically losers from liberalizing trade with India, and suggest ways to compensate them, and should help in formulating a broader regional trade and investment promotion strategy. Initiatives like Aman ki Asha (a campaign promoting mutual peace and the development of diplomatic and cultural ties between Pakistan and India, initiated by the Jang Group and the Times of India) have the capacity to build large constituencies for healthier India-Pakistan relationships. Such efforts should be encouraged as part of the strategy to move toward a more orderly transition to a liberalized economic relationship with India. india’s role in ProMoTinG BilaTeral and reGional Trade 8 All paths to economic development and prosperity do not have to be routed through sweatshops catering to affluent western consumers. A large and vibrant Asian regional market would constitute a significant and, given demographic shifts, growing part of global demand for products. India’s long-term strategic interest is to help create that Asian market. That, in turn, requires strengthening Pakistan to be an effective regional hub that connects the Asia-wide market. Successful management of the new liberalized India-Pakistan trade regime to scale it up to a full-fledged economic relationship will be key. In the short-term, it may well mean exercising voluntary restraint on exports that hurt small and medium-sized Pakistani manufacturers. It would also require focusing on the export of machinery and technology to Pakistani firms that currently import these at high cost from more expensive developed country sources. Joint ventures and other investment strategies would need to be developed to set up production units for the Asia-wide market. The visa regime will have to be liberalized and travel facilitated, so that small entrepreneurs develop cross-border business linkages and gains from liberalization are shared more widely. Above all, an Indian response to isolated terrorist attacks that results in the complete breakdown of communications, visits, and trade flows between India and Pakistan (and thus does not discriminate between the few perpetrators of militant acts and the vast majority of the Pakistani | 51 |

Ijaz Nabi population) will have to be avoided. Imposing sanctions on people already hurting from barbaric acts of terrorism is counterproductive in realizing the vision of a prosperous and peaceful Asian economic region. endnoTes 1. This essay draws on Ijaz Nabi and Kiran Javaid, “Regional Trade Panel Report,” DPRC Working Paper, Development Policy Research Centre, Lahore, April 2011, a report prepared for the Pakistan Business Council, http://dprc.lums.edu.pk/components/ com_publications/attachments/Regional-Trade-Panel-Report.pdf. 2. Pakistan Ministry of Finance, Budget Speeches, 1947–48 to 1984–85 (Islamabad: Budget Wing, Government of Pakistan, Finance Division, 1984). 3. Ijaz Nabi, India-Pakistan Relations: An Economist’s Peek into the Future (Lahore: South Asia Free Media Association, 2010). 4. Mohsin S. Khan, “India-Pakistan Trade: A Roadmap for Enhancing Economic Relations,” Policy Brief No. PB09-15, Peterson Institute for International Economics, Washington, DC, 2009. 5. Nabi and Javaid, “Regional Trade Panel Report,” 5. 6. Pakistan Ministry of Commerce, Pakistan-India Trade: Transition to the GATT Regime (Islamabad: Government of Pakistan, 1996); Ijaz Nabi and Anjum Nasim, “Trading with the enemy: A case for liberalizing Pakistan-India trade,” in Sajal Lahiri (ed.), Regionalism and Globalization: Theory and Practice (London: Routledge, 2001), 170–197; Zareen F. Naqvi and Ijaz Nabi, “Pakistan-India Trade: the Way Forward,” in Michael Kugelman and Robert M. Hathaway (eds), Hard Sell: Attaining Pakistani Competitiveness in Global Trade (Washington, DC: Woodrow Wilson Center Asia Program, 2008), 149–171. 7. Garry Pursell, Ashraf Khan, and Saad Gulzar, “Pakistan’s Trade Policies: Future Directions,” International Growth Centre, report prepared for the Planning Commission of Pakistan, 2011, http://www.theigc.org/sites/default/files/Pursell%20 et%20al_Pakistans%20trade%20policies.pdf. 8. This discussion is based on Ijaz Nabi, “Lifting the India-Pakistan Trade Game,” The Hindu, March 28, 2012, http://www.thehindu.com/opinion/lead/lifting-up-theindopak-trade-game/article3251761.ece. | 52 |

Ijaz Nabi<br />

population) will have to be avoided. Imposing sanctions on people already<br />

hurting from barbaric acts of terrorism is counterproductive in<br />

realizing the vision of a prosperous and peaceful Asian economic region.<br />

endnoTes<br />

1. This essay draws on Ijaz Nabi and Kiran Javaid, “Regional <strong>Trade</strong> Panel Report,” DPRC<br />

Working Paper, Development Policy Research Centre, Lahore, April 2011, a report<br />

prepared for the <strong>Pakistan</strong> Business Council, http://dprc.lums.edu.pk/components/<br />

com_publications/attachments/Regional-<strong>Trade</strong>-Panel-Report.pdf.<br />

2. <strong>Pakistan</strong> Ministry of Finance, Budget Speeches, 1947–48 to 1984–85 (Islamabad: Budget<br />

Wing, Government of <strong>Pakistan</strong>, Finance Division, 1984).<br />

3. Ijaz Nabi, <strong>India</strong>-<strong>Pakistan</strong> Relations: An Economist’s Peek into the Future (Lahore: South Asia<br />

Free Media Association, 2010).<br />

4. Mohsin S. Khan, “<strong>India</strong>-<strong>Pakistan</strong> <strong>Trade</strong>: A Roadmap for Enhancing Economic<br />

Relations,” Policy Brief No. PB09-15, Peterson Institute for International Economics,<br />

Washington, DC, 2009.<br />

5. Nabi and Javaid, “Regional <strong>Trade</strong> Panel Report,” 5.<br />

6. <strong>Pakistan</strong> Ministry of Commerce, <strong>Pakistan</strong>-<strong>India</strong> <strong>Trade</strong>: Transition to the GATT Regime<br />

(Islamabad: Government of <strong>Pakistan</strong>, 1996); Ijaz Nabi and Anjum Nasim, “Trading with<br />

the enemy: A case for liberalizing <strong>Pakistan</strong>-<strong>India</strong> trade,” in Sajal Lahiri (ed.), Regionalism<br />

and Globalization: Theory and Practice (London: Routledge, 2001), 170–197; Zareen F.<br />

Naqvi and Ijaz Nabi, “<strong>Pakistan</strong>-<strong>India</strong> <strong>Trade</strong>: the Way Forward,” in Michael Kugelman<br />

and Robert M. Hathaway (eds), Hard Sell: Attaining <strong>Pakistan</strong>i Competitiveness in Global<br />

<strong>Trade</strong> (Washington, DC: Woodrow Wilson Center Asia Program, 2008), 149–171.<br />

7. Garry Pursell, Ashraf Khan, and Saad Gulzar, “<strong>Pakistan</strong>’s <strong>Trade</strong> Policies: Future<br />

Directions,” International Growth Centre, report prepared for the Planning<br />

Commission of <strong>Pakistan</strong>, 2011, http://www.theigc.org/sites/default/files/Pursell%20<br />

et%20al_<strong>Pakistan</strong>s%20trade%20policies.pdf.<br />

8. This discussion is based on Ijaz Nabi, “Lifting the <strong>India</strong>-<strong>Pakistan</strong> <strong>Trade</strong> Game,” The<br />

Hindu, March 28, 2012, http://www.thehindu.com/opinion/lead/lifting-up-theindopak-trade-game/article3251761.ece.<br />

| 52 |

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