The Hindu : Putting Pakistan first?

Online edition of India's National Newspaper
Thursday, May 08, 2003

Opinion

Opinion - Leader Page Articles

Putting Pakistan first?

By C. Raja Mohan

Pakistan may not really be ready to put its own economic interests above the jehad in Kashmir... India, however, should not allow the negative signals from Pakistan to undermine its peace initiative.

THE TIME has come, many analysts in Pakistan believe, for Islamabad to put `Pakistan First' in its national strategy. They argue that Pakistan's magnificent obsession to "liberate Kashmir" at any cost since the late 1980s has turned out to be disastrous. The decade of the 1990s in which Islamabad put "Kashmir First" and embarked on a proxy war against India has had extraordinary negative political, economic and social consequences for the nation. While Pakistan has indeed bled India through cross border terrorism it has not prevented New Delhi from significantly increasing the economic gap with Islamabad. The success of the peace process between India and Pakistan, hopes for which have risen in recent days, will depend a lot on whether Islamabad has learnt any lessons from the 1990s and is willing to adopt a new course.

To assess the relative economic and social decline of Pakistan in the region consider the following facts: from the mid-1960s to the mid-1990s, Pakistan was ahead of India in economic terms. Attention has been drawn to the fact that its per capita income has now fallen below that of India. At the turn of the millennium it stood at US$ 460 for India and US$420 for Pakistan. If the present economic trends continue, there is a fate worse than this awaiting Islamabad. Bangladesh, until recently considered the basket case of the region, is poised to beat Pakistan. A combination of factors has made it inevitable that Bangladesh will soon have a larger economic standing than Pakistan.

At the moment, Bangladesh is behind Pakistan with a per capita income at $360. The size of the Pakistan economy today is about $60 billion. Bangladesh stands at $50 billion. But superior economic performance and rapidly improving social indicators over the last decade will soon take Bangladesh past Pakistan. Take a look at the average annual economic growth rate of the two countries in the last two decades put out by the World Bank recently. During the 1980s Pakistan grew at 6.3 per cent and Bangladesh at 4.3 per cent. In the 1990s Pakistan's was 3.7 per cent while Bangladesh moved faster with 4.9 per cent. Reinforcing this reversal of fortunes is the population growth rate. Pakistan has had one of the world's fastest rising populations. From 1980 to 2001 Pakistan's population increased at 2.6 per cent. During 2001 to 2015 Pakistan is likely to bring it down a little to 2.2 per cent. The comparable figures for Bangladesh are 2.1 and 1.6 per cent. For India they are 1.9 and 1.2 per cent. As a result of lower population growth and quicker economic development, Bangladesh will soon be better off than Pakistan.

Equally shocking for Pakistan are other social indicators. In Pakistan, the mortality rate for children under five has barely come down from 128 in 1990 to 109 in 2000. Bangladesh in comparison has brought it down by half from 144 to 77 in the same period. During the 1990s, the percentage of the population completing primary school in Pakistan went up from 44 to 59. In Bangladesh it zoomed from 50 to 70. Bangladesh has also been better at promoting gender equality in education. The ratio of female to male enrolment in primary and secondary schools in Pakistan has marginally increased from 47 per cent in 1990 to 61 in 2000. In Bangladesh it rocketed in the same period from 72 to 103.

Shahid Javed Burki, a leading Pakistani economist, looks at the long term implications of Islamabad's relative decline vis-a-vis New Delhi. If India grows at about 6 per cent per annum its economy will be worth about $10 trillion in purchasing power parity terms by 2025. If Pakistan grows at the current rate of 3.5 per cent, its GDP will increase to $524 billion. Currently, India's per capita income is just above that of Pakistan. In 2025, India's per capita income will be $7,000. If Pakistan stays the present course, its per capita income will be $2,500. Of course, the world does not always move in a linear fashion. But the assessment of the recent economic performance and future projections do not look good for Islamabad. If Pakistan does not get its economic act together, it will soon emerge as the sick man of Asia. With a population expected to touch 210 million in the year 2025, Pakistan would become the fourth largest country in the world. But in economic terms it will be scraping the bottom of the barrel. Islamabad can flaunt its nuclear weapons and terror factories and will certainly try and leverage them for political benefit. But it will still remain the basket case of the region.

The search for political parity with India has been the primary motivating factor driving the Pakistani establishment. Assuming there is no decline in this ardour, Pakistan will have to grow much faster than India to maintain any semblance of equality with India. To stay even close to India, Pakistan requires massive internal reforms. And the success of that reform would demand a respite in the hostilities with India if not genuine peace. To sustain high growth rates, however, Pakistan needs more than an end to tensions with India. It needs economic cooperation. There can be no credible strategy of economic development in Pakistan that does not include trade with its large neighbour. Pakistan cannot grow on the basis of aid flows from the West, which can at best keep it afloat. To increase its trade and investment flows, Pakistan has no option but to actively seek access to the Indian market. Bangladesh and Sri Lanka have recognised this, but Pakistan has remained adamantly opposed to economic cooperation with India.

That the negative view in Pakistan on trading with India has prevailed in Islamabad is confirmed by the confidence building measures announced by the Prime Minister of Pakistan, Mir Zafarullah Khan Jamali, on Tuesday night. In being less than forthcoming on trade liberalisation, the establishment in Pakistan is signalling that it is yet to make the strategic decision on adopting a new approach to India. Its confidence-building measures were designed to do just enough to get the American pressure off its back rather than define a "Pakistan First" strategy that seeks peace and economic cooperation with India.

In recent months, the President of Pakistan, Pervez Musharraf, has himself often talked about putting "Pakistan First". This was articulated in the context of making pragmatic deals with the United States. The slogan was employed by Gen. Musharraf to reject the arguments of the ideologues who wanted Pakistan to oppose the U.S. in Afghanistan and Iraq. When it comes to India, the indications are that Pakistan may not really be ready to put its own economic interests above the jehad in Kashmir.

This message comes despite the declaration of the Prime Minister, Atal Behari Vajpayee, that India is willing to put the Kashmir question on the front burner and begin final and conclusive negotiations on the subject. India, however, should not allow the negative signals from Pakistan to undermine its peace initiative. While demanding movement on the questions of trade and cross-border terrorism before a formal dialogue can begin, India must continue to build on the small steps the two sides have broadly agreed.

In addition, India must also put forward another set of confidence-building measures to keep the peace process rolling along.

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