Pakistan needs to divorce economics from politics

Pakistan’s refusal to sign the motor vehicle agreement and to open up the road link for India and Afghanistan is a major setback to the efforts of Afghanistan President Ashraf Ghani to work for a trilateral arrangement through which all three countries may benefit in the economic arena.

The Pakistanis have indeed asked India to conduct trade via the Karachi port. President Ghani’s sharp retort to Pakistan — that if they do not open up the road to India, it will deny Pakistan access to Central Asia – is appropriate and reflects Ghani’s matter-of-fact approach. Chief Executive Officer of Aghanistan Abdullah Abdullah has said in an interview to an Indian TV channel, “If Pakistan wants access to Central Asia, it must respond in kind.”

Ghani has started out in power with an open approach with Pakistan and China and in the process has distanced himself from India. Whether this will be a long-term policy or he is merely testing out Islamabad and Beijing to open a dialogue with the Taliban and al-Qaeda with which Pakistan has some leverage only time will tell.

By snubbing Pakistan for not allowing transit to Indian goods for Afghanistan he has indicated that in his foreign policy he will not be anybody’s hostage.

Pakistan’s stand on transit has exposed the limitations of the South Asian Association for Regional Cooperation (SAARC) as a regional grouping in unlocking the potential for trade step-up between the member-countries.

Unlike the European Union and ASEAN which have made considerable progress in regional integration, SAARC is a pale shadow of these counterparts.

Transit arrangements between India, Pakistan and Afghanistan could provide hefty royalties to Pakistan for the movement of vehicles between India and Afghanistan using Pakistani territory. Likewise, transiting through the North-East can be hugely beneficial for Bangladesh while bringing in transit fees for India.

There can also be huge benefits from sharing of shipping services. All in all, it is time that the SAARC members look at the benefits of economic cooperation with greater pragmatism, learning to divorce economics from politics.

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