My op-ed in Mint — No ‘Kashmir-for-peace’ process

On re-engineering the peace process with Pakistan

Longtime readers will be familiar with The Acorn’s position on the ongoing ‘peace process’ with Pakistan. After the joint mechanism on terror entered into this equation, Kashmir is off the table on matters relating to terrorism and on the table on issues trading sovereignty for promises of peace.

The peace process, therefore, is in need of re-engineering. My op-ed in Mint argues that the first step in that direction requires India to target the right constituency in Pakistan. The following is an extended version of the article that appeared in print.

Peace process re-engineering
India needs a peace process. Not a “Kashmir-for-peace” process.

While the country is lulled into a false sense of progress on the ‘peace process’ with Pakistan, it is ignoring signs that the process is working against India’s long terms interests. It plays into Pakistan’s grand strategy of salami-slicing and taking the entire mile inch-by-inch, achieving in a thousand bits what it could not by a thousand cuts alone. It also plays on a weakness inherent in Indian public opinion—short-term memory. An inch of concession is too little for Indians to either get seriously worked up about or bother to remember. It is, therefore, unsurprising, that an act of appeasement as monstrous as the one in Havana fails to raise the nation’s collective eyebrows. So too the “non-paper†offering joint-control of the Kashmir valley that India has floated behind closed doors.

The UPA government has gone great lengths to spin the Havana appeasement it as the best India could achieve. So former security officials who dare to point out how bad a capitulation it really is are accused of indulging in bureaucratic groupthink. And ordinary citizens who do so are often accused of being war-mongers, too unsophisticated to understand statesmanship.

Many sincere supporters of the peace process do so on the premise that the only alternative to the “Kashmir-for-peace” process is war. Meanwhile, opponents of the peace process fail to address this faulty reasoning adequately, thereby strengthening the perception that those opposed to the peace process are in effect, advocating war.

Getting the targets right
Let’s examine the “Kashmir-for-peace” process. It targets two constituencies within Pakistan: the military establishment and Pakistani civil society. It requires on the one hand, those in power in Pakistan to drop their animosity towards India—ignoring the reality that it is the very animosity that allows them to retain power. On the other, it requires the powerless to take on the military establishment on foreign policy—ignoring the reality that the powerless cannot influence their government even on everyday issues. Engaging these constituencies may give an illusion of progress, but the time-tested reality is that there is no peace to be had by engaging these constituencies.

There is, however, another constituency that can be engaged. It is one that is close to (and often in) power and whose interests are not necessarily served by hostility towards India. This is Pakistan’s pragmatic business class. And the way to engage this constituency is not through political negotiations or feel-good events. It is through trade.

Think about it. India has very few readily usable ways of coercing Pakistan short of the use of military force (or throttling Pakistan’s water supplies). Both are extreme measures. Neither can be used without attracting international opprobrium. Yet India sorely needs some usable cards to play an effective game of carrots and sticks with Pakistan. The mere threat of withdrawal of a carrot should cause powerful voices to whisper or cry in alarm in the ears of Pakistan’s rulers. The surest and fastest way to obtain such leverage is through greater trade and economic intercourse with Pakistan—by making powerful Pakistanis fat on trade with India.

There’s a lot of money on the table
Studies show that there’s an additional $6 billion worth of bilateral trade on the table, with India having a comparative advantage in twice as many areas as Pakistan. Quite obviously, those who benefit from this—on both sides—are likely to be the keenest advocates of peace and harmony. That’s not all. They are also likely to resist any move by their governments that might put their businesses at risk. This can create the leverage that India needs. An entire range of coercive tools—from targeted bans on companies to sanctions against entire industries—become available to India. Such measures would be ineffective if they only hit the ordinary powerless Pakistani. But they stand a much better chance of working when they hit the powerful business class.

So isn’t this exactly what SAFTA hopes to achieve? Perhaps, but one reason why SAFTA is going nowhere fast—especially with respect to Indo-Pak trade—is because the Pakistani ruling establishment is awake to the danger. Supported by the protectionists within its business community it has steadfastly resisted lowering trade barriers until the “Kashmir dispute is resolved”. SAFTA, therefore, may not be the answer India is looking for. And isn’t this why that gas pipeline was a good idea? Not at all, for the pipeline would put a lifeline in the hands of the military establishment, not the business class.

The sound of one hand slapping
What India can do, is unilaterally lower barriers for imports from Pakistan and open up several points along the border for goods to pass through. Pakistani businessmen and Indian consumers will be immediate beneficiaries. It is true that some Indian businesses will face additional competition. But this is unlikely to hurt much, for Indian industry is already successfully competing with Chinese imports. Once this trade picks up, India will have what it needs to coerce Pakistan.

But won’t the effects of trade be reciprocal? In other words can’t the Pakistani government use sanctions on Indian businesses to balance the coercion. Well, to do that, it has to open its markets to Indian businesses first. That in itself is more tangible a benefit than anything the current peace process (or SAFTA, for that matter) can dream of. But what if, after opening up, it uses the threat of retaliatory sanctions to coerce India. It can, but given the size of the economies, it is likely to calibrate its actions carefully, as it risks doing more damage to its business elite at every step. Won’t India lose a valuable bargaining chip to extract trade-related concessions from Pakistan, including transit to Afghanistan? In theory, yes. In practice, keeping the cards is not quite meaningful as it is the Pakistan’s obsession with Kashmir that is the sticking point.

India’s peace process with Pakistan requires re-engineering. There is no need for India to make further concessions over Kashmir. India has the necessary capacity to deal with estranged Kashmiris which it can without such abominations as sharing sovereignty. The message to Pakistan’s rulers needs to be unambiguous—the use of terrorism or armed aggression to change the status quo in Kashmir will be met with a robust military response. Taking Kashmir off the table might leave Pakistan with few incentives to pursue a ‘dialogue’. But if India is open to trade with Pakistan, it does not really matter. It’s all in India’s hands, actually.

10 thoughts on “My op-ed in Mint — No ‘Kashmir-for-peace’ process”

  1. Nitin, by allowing more access to Pakistani businessmen, helping them make more profits; arent we exposing ourselves to the danger that this money might be used to train and finance more jihadis against us ?

  2. Anonymous coward,

    You are right in suspecting that some of our own money may end up paying for bombs and bullets that are used to attack us. Money is fungible, so there is always a risk that we will partly finance terrorism.

    The existence of the risk is no reason to abandon the project, it calls for managing the risk. India could blacklist firms and individuals suspected of being jihadi/ISI fronts. It calls for a greater intelligence and vigilance. How well India manages to do this will determine how much risk it can mitigate.

    The big point is that as long as India lacks tools to meaningfully coerce Pakistan terrorism will continue, regardless of where the financing comes from. Therefore, compelling Pakistan to stop its support for terrorism makes the point of its financing moot.

  3. Nice and valid article regarding use of economic engagement to stave off foreign policy crises.

    I have three specific doubts. I am sure you must have written about them earlier but I may have missed it.

    1. If we leave national strategy aside, how are the best interests of Kashmir served?

    2. What political context would enable this kind of economic engagement to be pulled off? Would the political parties in India agree to unilateral trade with Pakistan given that anti-Pak has been often a political card and did serve well in the past?

    3. I am trying to differentiate the business entity in Pakistan that you mentioned. I think there might be one section which is quite well entrenched and influential with the Army (maybe drugs businessmen) and another section which may truly stand to benefit from India (maybe movie theatres :-). My hypothesis would be that as long as the first section is proving finance to the governing institutions there would be little stimulus for a change. Moreso, without elections there may not be any dependency on the “pragmatic” business class to lend support to stave off any India-related sanctions.

    Apologies if my hypotheses are totally off ground reality.

  4. Nitin,

    Businessmen are influential with politicians only in situations where the latter are dependent on the former for financial support. The absence of an active electoral process might undermine this influence significantly. Using our trade policy as an instrument to impact Pakistan’s foreign policy sounds like a stretch to me. That said, it might still be not as much as a stretch as the “Kashmir-for-peace” process.


  5. Naveen,

    1. If we leave national strategy aside, how are the best interests of Kashmir served?

    For one thing, the objective of the exercise is to end terrorism and a return to normalcy (which includes the reduction in the number of troops). Less indirectly, opening up of the entire border to trade (including along the LoC) will benefit the J&K state economy.

    2. What political context would enable this kind of economic engagement to be pulled off? Would the political parties in India agree to unilateral trade with Pakistan given that anti-Pak has been often a political card and did serve well in the past?

    In the prevailing atmosphere, ‘selling’ this policy is not going to be easy. But once consensus is built, it is easy to implement. Contrast this with the current policy of secret confabulations involving some murky constitutional arrangements and possible dilution of sovereignty/territory. It’s all very easy to cook up these things behind closed doors, but imagine trying to sell such concessions to the people.

    3. I am trying to differentiate the business entity in Pakistan that you mentioned. I think there might be one section which is quite well entrenched and influential with the Army (maybe drugs businessmen) and another section which may truly stand to benefit from India (maybe movie theatres 🙂

    Both, actually. Indeed, engaging the first category is necessary because it has influence over the Army. Some of these are likely to be involved in smuggling drugs etc. India should be concerned about their illicit activities to the extent that they affect India adversely. But there are those among the influential feudal-elite that are likely to want to do business with India legitimately. So the fatten-with-trade policy should target a wide variety of influential and potentially influential segments.

    I would draw the line, however, when Pak army’s own business interests are sought to be included. Their utility function, shall we say, is very different.

  6. Thoughtmogrifier,

    Musharraf remains securely in power today despite (a) a rebellion in Balochistan (b) infuriating the MMA (c) being at odds with the political formations (d) losing ground with the middle-class (as seen from newspaper op-eds). Why? Of course, because the Army supports him. But when will the army stop supporting him? If the economic interests of the rich and the powerful in Pakistani society are put at risk. The elite are significant players in the Pakistan’s political economy even if politicians are not.

  7. Nitin, along with trade we should also encourage pakitani firms to invest in india in the form of FDI. Once that happens, any action which will affect their profitability will be severely opposed by the business class. IN effect they would be against the escalation of tensions in the valley and jehadis causing havoc in india. This would give india a strong voice within the pakistani establishment. Investment has a stronger chance than trade, but trade is the first step.

    If indian cos do invest in pak, unless they provide employment and win the hearts of the people(thru employment and delivering prosperity) they will always be at the risk of expropriation by the pakistani establishment.

  8. The sooner Indian intelligentsia realizes the bungles of its own government the better India would be in a position to win the hearts of ordinary Pakistanis who really want to see relations between India and Pakistan strengthened. The mess in Indian held Kashmir has to be sorted out. The blame game must stop if Indians want that they should be truly accepted at a higher moral pedestal by ordinary Pakistanis. The Pakistani business class particularly Karachi based has no leeway in GHQ of Pakistan military in Rawalpindi. What matters there is the business class of Punjab. If Indians are able to foster strong trade links with the Pakistani Punjabi industrialists and businessmen..yes…then things may start turning for the better as desired by the article.

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