According to press reports, the government of India has announced that it will welcome investment in India by Pakistani businesses in all economic sectors excluding three sensitive ones. This is a positive development but the concession's being operative is yet to be confirmed by the government of Pakistan.
As per a press report, an official at Pakistan's Board of Investment (BOI) who wants to remain anonymous, the Foreign Office or the BOI have yet to receive from the government of India an official confirmation of this concession but that's only a formality; the decision has been made.
Only the future-blind could oppose Indo-Pak détente but it would be equally illogical to expect that such a détente would be sustainable despite being based on unequal benefits to both sides. Oddly, however, that's not what the otherwise clever Indian policy-makers seem to believe.
This inequity was manifested by the fact that this initiative was not accompanied by a simultaneous permission to businesses in India to invest in Pakistan, even in selected sectors, which gave many in Pakistan's business and industry to comment adversely on this initiative.
Hopefully, it won't add to the knowledge of the Indian policy-makers that Pakistan is facing its worst financial crisis after the 1971 war with India because of, on the one hand a rapid decline in its exchange reserves, and on the other, virtual drying up of foreign investment flows.
In this environment, worsened by other aspects of mismanagement of the state by the regime now completing its term, investment has been flowing out of Pakistan, which is forcing import of many goods traditionally manufactured in Pakistan, while exports are declining.
In this setting, the Indian initiative seems an invitation to the frustrated Pakistani investors to look at India also as a country to shift over to. Had this announcement been accompanied by a permission to Indian businesses to invest in Pakistan, it would have sounded balanced.
This policy lacks initiatives that could popularise a détente with India because the gaps therein give extremists a chance to call an affirmative Pakistani response thereto as "submissive", and stall the crucial process of expanding trade relations. But why blame the Indians alone; our policy-makers aren't conscious of the developing crisis. The Chairman of Sindh Board of Investment thinks that [even if the Indian government does not permit it] the government of Pakistan alone can attract Indian businesses to invest in Pakistan.
Pakistan's policy-makers must note that, while they agreed-despite opposition by operators in the involved sectors-to cut the negative items' list by a hefty 1,209 (impliedly, opened our markets to Indian imports), India's response is self-centred. Example: India's anti-import non-tariff barriers.
At a time when the much needed foreign investment inflows are drying up, besides allowing Pakistani investors to invest in India, of a self-proclaimed 'friendly' India what we expected was to allow Indian businesses to set up joint ventures in Pakistan. Indian policy-makers ignore the fact that Pakistan needs to share the advances in technology and production processes that India's industry achieved since 1991, when its current Prime Minister Manmohan Singh became India's Finance Minister, and opened up India's economy.
Pakistan-during 1960-65 the second fastest growing economy in Asia after Japan-couldn't continue modernising its industrial base because sustained fiscal mismanagement by its successive regimes forced the Pak Rupee to depreciate continually.
In this backdrop, we expected a "helping" Indian hand in reviving our economy, because a Pakistan with growing mismatch between population increase and economic growth does not hold very promising prospects for the region, especially its next-door neighbour India.
Pakistan doesn't need only favours; in some sectors Indian businesses could invest for their benefit. Coal generates half of India's electricity; Pakistan has a huge surplus thereof but not the means to mine it to generate power, and export its surplus. India can help in both, especially after the daylong "black out" in half of India.
India faces a shortfall of cement; Pakistan can meet its demand at the cheapest price courtesy its low transport cost because cement plants in the north could feed northern India (via Wagah) and those in the south of Pakistan could feed south Indian markets (via Rajasthan).
Pharmaceuticals is another sector which India could boost by providing it with cheap raw materials, and setting up joint ventures in this sector because Pakistan is still hugely dependent on imported medicines that become more expensive as the Rupee depreciates.
In the textile sector too, India could collaborate for mutually beneficial results because, while Pakistan has a huge trained workforce in this sector, its production base did not expanded. As a result, Pakistan continues to export a lot of cotton in its raw, rather than value-added forms.
Both India and Pakistan must realise that, in the coming months, things would only go from bad to worse because there are no signs of a global (particularly US and European) economic revival. Asian countries will have to rely more on trading among themselves.
To make this process purpose-oriented, both countries must meet shortfalls in each other's economy through mutually beneficial trade that maximises the value of each other's surplus and cut their domestic deficits by facilitating the export of those surpluses.
There are many opportunities that await materialisation, but won't if India persists with its clever-by-half approach to expanding trade. To succeed, this effort must be balanced so that it makes sense to everyone and shuts up the opponents of this crucial détente.
Prime Minister Manmohan Singh is recognized as an economist par excellence. Global recessions are the tests for the economists leading their nations. This is the time when he must show his talents by creating an Indo-Pak relationship that makes us forget our awful 65-year history.
For nations that share a common land mass, there is only one option; living together as good neighbours, and sharing fairly what nature bestows them with. Continued tensions on their borders, unfair sharing of river water, and pulling each other's leg, is wholly un-befitting of such neighbours.
The latest disclosure by Rehman Malik about Indian role in Balochistan unrest is hardly the sign of such neighbourly conduct. If true, such involvement and support for the BLA shows that Indian businesses and their bureaucracy are not on the same track. While India and Pakistan are apparently moving closer to each other, self-serving policy initiatives must be avoided. Let us not forget that all enmities and hatred have their roots in inequalities, no matter how cleverly created. The truth eventually surfaces, and the clever pay the price of their trickery.