I’m glad India is making more commitments to improve trade relations with South East Asia. Looks like Bimstec is finally getting somewhere.
Commerce minister Arun Jaitley and his counterparts from Bhutan, Nepal, Thailand, Myanmar and Sri Lanka inked the agreement after two days of deliberations and the signing ceremony was witnessed by Thai premier Thaksin Shinawatara. Bangladesh foreign minister was also present although his country has not signed the pact. [The Financial Express]
However, the India Singapore FTA is at a difficult stage given its ambitious deadline and the impending elections.
Also, Pakistan’s Shaukat Aziz was in Singapore this week promoting the euro-bond issue and explaining that the bond issue will not been negatively affected by the nuclear proliferation imbroglio. At the same time he signaled Pakistan’s desire to enter into a free trade agreement with Singapore, although its not yet clear when the real discussions will start. Singapore’s incumbent telco SingTel has expressed an interest in picking up a stake in Pakistan Telecommunications (PTCL) as well as a mobile telephony license.
While its investment climate may still be fraught with frequent stormy weather, I think we should welcome Pakistan’s greater integration into the global economy. Last year, I wrote
(Thomas Friedman) argues that no two countries with McDonalds have ever fought a war with each other. My own guess is that Friedman’s theory has failed in South Asia, thanks to Kargil. I’m not sure if Pakistan had a McDonald’s at that time though, and Musharraf would point out that Kargil was not a war, but only a raid by freedom-fighters. I would argue that (Friedman’s) theory holds for ‘rational’ states, that is in countries where the government percieves development (over dogma) as the overarching national interest. Hitherto in the case of Pakistan it has always been the other way around.[The Acorn]
The hope is that greater economic integration and globalisation will help Pakistan bury its dogma of hate. But the path to globalisation is fraught with dangers of initial disillusionment, and lacking any early success stories its going to get difficult to convince Pakistanis that it works for them (just as it was/is in India).
Meanwhile, Bangladesh seems to have decided to stay out of the Bimstec FTA. It is famous for missing opportunities. A decade ago, when telcos from over 70 countries came together to build a submarine cable backbone linking South East Asia – Middle East and Western Europe (SEA-ME-WE-3) Bangladesh stayed out because of a perceived threat to its national security. That cable was instrumental in providing cost-effective connectivity to so many developing countries – linking them to key hubs and markets like Japan, ASEAN and Europe. It formed the infrastructure that helped countries like India and Philippines build up the IT and outsourcing industries. Bangladesh missed that opportunity. And it is in a greater danger of missing greater opportunities if it remains ever so doubtful of free trade.