Torpedoed Saarc
Summit Will Cost India Dearly
Praful Bidwai
HOPES
of reconciliation between rivals India and Pakistan have received
a big setback with the cancellation of a summit of the South Asian
Association for Regional Cooperation (SAARC), scheduled to be
held in Islamabad in mid-January.
Technically, it is host-state Pakistan that announced the cancellation
this month. But it is India, and at its behest, tiny Bhutan, that
effectively scuttled the meeting. Both India and Pakistan have
blamed each other for the summit's cancellation.
The cancellation will hurt the chances of SAARC's emergence as
an economic or trade bloc. But ironically, it is likely to cost
India dearly in the long run, a great deal more than any other
member of the seven-nation grouping.
The annulment has greatly disappointed the international community,
which has been asking the two nuclear-armed rivals to begin talks
to restore their diplomatic relations and Communications links
ruptured exactly one year ago.
Hopes of a thaw in India-Pakistan relations soared after the fair
and relatively free elections in Jammu and Kashmir in September-October,
and after New Delhi last month announced it would demobilize its
700,000 troops amassed at the border -- to punish Pakistan for
its sponsorship of
”cross-border terrorism”, in particular, an attack
on India's Parliament House on Dec. 13 last year.
The eyeball-to-eyeball confrontation, totaling a million men,
cost billions -- in India's case more than 2 billion US dollars,
or double the size of its entire higher education budget. It achieved
none of its stated objectives -- above all, a ”permanent”,
”verifiable” end to Islamabad's
''support for terrorism''.
India
is frustrated at this, and resents the fact that Islamabad has
exploited its position as a ”frontline” state in US
President George W. Bush's ”war against terrorism”
to resist pressure to stop supporting secessionist Islamists across
the border. But it is venting its frustration in the wrong place:
SAARC is a multilateral forum whose charter prevents a discussion
of bilateral disputes.
In 1999 too, India had cancelled a SAARC summit following a major
conflict with Pakistan at Kargil, in Jammu and Kashmir. SAARC
has always been a hostage to India-Pakistan's hot-cold war. Unlike
in 1999, India this time around did not tell the SAARC secretariat
it would not attend the summit. Rather, it prevaricated and falsely
claimed that the summit dates were not communicated to it, although
they were, in September.
Later, through statements of various functionaries, New Delhi
made its attendance conditional upon ”progress” toward
setting up a South Asian Free Trade Agreement, and still later,
on Pakistan ending its support to ”cross-border terrorism”.
On economic issues, it accuses Pakistan of dragging its feet and
trying to wriggle out of its commitment to allow more imports
from India and grant it MFN (Most Favored Nation) treatment under
a World Trade Organization agreement.
This is largely true, but the reality is more complex. Not just
Pakistan, but even Bangladesh, feels India is forcing the pace
of trade liberalization. Under the WTO, they are entitled to delay
granting MFN to India citing exceptional circumstances. Bangladesh
can claim this as a ”least developed country”. Pakistan
says the MFN issue is extraneous to SAARC.
Such
tensions have always existed. SAARC has lived with them. Why India
now cites them -- and ”cross-border terrorism” --
to scuttle the summit, has to do with two calculations. First,
its leadership is loath to go to Islamabad and shake hands with
President Pervez Musharraf -- until he stops ”cross-border
terrorism”. But Musharraf wants normalization of relations
with India to be made conditional on talks on Kashmir, which India
is reluctant to hold.
There may be no end to such bickering -- or to the larger, long-term
disputes between India and Pakistan. Absent diplomatic contacts,
and amidst tension, the two could once again get into a nasty
confrontation, brandishing the nuclear sword -- with potentially
disastrous global
consequences.
India's second calculation is that SAARC is dispensable. As its
foreign ministry spokesman said: ”Economic cooperation is
the heart of SAARC; if one of its members obstructs this process,
the entire forum loses its value”.
New Delhi would like to pretend it is in the global big league
by virtue of the size of its economy, the skills of the educated
layers of its population, and its relative success in information
technology.
It would rather do business with superpowers like the United States,
European Union and Japan, and closer home with the Association
of South-east Asian Nations (ASEAN), which is considerably more
dynamic and attractive than SAARC.
India may be deluding itself. In spite of its size, it is economically
not in, say, China's league. China's trade surplus with the United
States alone exceeds all of India's exports.
India is also home to the world's largest population of poor people
-- and to 350 million illiterates. Its information technology
exports account for about one percent of the world's commerce
in software. India's growth, a relatively high six percent in
the mid-1990s, has faltered.
More important, India has found it hard to enter into a cozy relationship
with any trade bloc. Its once-close economic relations with the
former Soviet Union (now CIS) took a huge dip. India has been
knocking on ASEAN's doors, announcing its intention to sign a
free trade agreement
(FTA) with it in 10 years.
But ASEAN is moving at a breakneck pace to set up FTAs with China,
South Korea and Japan.
Only last month, China and six ASEAN states agreed to create the
world's largest FTA, with a 1.2 trillion dollar turnover.
India's chances of breaking into these appear dim. India has also
neglected its trade with other SAARC states - it amounts to just
2.7 percent of its total trade volume. For SAARC as a whole too,
intra-regional trade is under 3 percent of the total.
Thus, India faces the prospect of being squeezed out of all regional
trade blocs. South Asia could also remain the world's only significant
region without serious trade or economic cooperation.
Obstructing and sabotaging SAARC's evolution into a vibrant economic
bloc is the surest way of shooting oneself in the foot and condemning
the region's 1.3 billion people to economic Isolation, social
backwardness and political strife. By holding SAARC to ransom,
India may have accomplished that negative feat.
The
writer is a well known Indian columnist
