Wednesday, October 03, 2007

Truck to Pakistan

TODAY'S EDITORIAL: Truck to Pakistan
3 Oct 2007, Times of India

The Attari-Wagah border crossing was a place where India and Pakistan ritually enacted their hostility through a spectacle of goose-stepping soldiers on either side. But on Monday it witnessed something new when, for the first time since August 1947, trucks crossed the border carrying goods to be traded by the two sides. It’s astounding that between two contiguous neighbours, one with a $130 billion economy and the other close to a trillion dollars, trade should amount to only $2 billion, most of which is routed indirectly through Dubai.

Such circuitous trading through informal routes makes Indian and Pakistani goods uncompetitive in each other’s markets and raises costs for both economies, besides cutting off customs departments of both countries from a lucrative source of revenue. A study by a noted economic research agency estimates that bilateral trade could be stepped up immediately to $6.6 billion if the South Asia Free Trade Agreement were to be implemented and direct trade links established between the two countries. The trucks crossing over at Attari illustrate both the promise of direct trade and the obstacles facing it. The convoy was attacked by porters on the Indian side, who were afraid that their jobs would be taken away. The porters were used to lugging the goods across the border on foot, which was the only form of trade allowed till now. It’s an apt symbol of lack of pragmatic relations between the two nations that human muscle power should propel the trade between them at the beginning of the 21st century. That’s a sure way of drastically limiting the amount of goods that can be traded, even if it provides petty employment to a few thousand porters.

If trade across the border could be stepped up and more roads and warehouses built, more jobs would be generated and the same porters could be gainfully employed. While Punjab CM Parkash Singh Badal, accompanied by ministers and MPs, flagged off the first truck with great fanfare from the Indian side it was received coldly in Pakistan, with a lone officer of Pakistan Rangers present. The Pakistani business community may be gung-ho about trade with India but the authorities have reservations about it, as they fear being swamped. That is comparable to Indian leftists’ fear of being swamped if India traded with the West.

But India is successfully integrating with the global economy, neither is Pakistan being swamped because it has a free trade agreement with hyper-competitive China. Trade is the one thing that can anchor and lend long-term stability to the India-Pakistan relationship, besides catalysing prosperity in both countries. The opening of the Attari-Wagah route to cargo trucks should be seen as an incremental but vital step in this regard.

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