Pakistan-India Trade:

Perspectives from India
growth economy has a positive impact on the growth of its neighbors.
This of course is not absolute, and it depends critically on interconnectedness,
which I will touch upon in a moment.
Let me start by saying a little about growth in Asia, in South Asia,
and not just India. I recently completed an update on my study on
high growth economies. It turns out that one of the fastest growing
economies in the world was Bhutan between 1982 and 1997. There
have been only 20 such economies in the world, out of all those for
which data is available, and Bhutan was one of them. That growth had
to do with hydropower of course. Another fast growing economy, one
that may surprise you, happens to be Myanmar, which was also among
the fastest growing economies in the world during recent decades. 1
Currently it turns out there are only five (what I call) high growth
economies, or potentially high growth economies in the world. One
of these five happens to be India. So the point here is not India, or
Bhutan, or Myanmar. The point is that growth poles have an effect on
neighbors, and that some of the fastest growing economies in the world
in recent decades have been in South Asia.
This brings us to interconnectedness. Obviously a necessary condition
for neighbors to benefit from fast growth is that they must be
connected to the fast growing economies; otherwise they could not benefit
from the growth pole, whatever it is. There has been a lot of talk
about the soft part of interconnectedness, such as tariffs and QRs, and
the essay in this collection by Professor Nabi mentions the hard part,
namely infrastructure and highways. You need the connections; without
them you cannot have the benefits. Now one of the thoughts that came
to me is that perhaps in developing this interconnectedness in terms of
infrastructure, we could think of public-private partnerships (PPPs), and
business participation, so that the business interest is widened on both
sides, Pakistani and Indian. If some of this infrastructure is developed in
a PPP mode, a wider segment of business can benefit from the construction
activity, not just the government.
My third point is also touched upon to some extent in several of
the other chapters in this volume, including those by Professors Nabi
and Husain. The point I want to make here is that it is very important
for those who have a positive view of Indo-Pakistan economic relations
to do research, and to look for and publicize the conclusions that come
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