Resolution of Kashmir dispute: Javed Burki proposes trade arrangement under SAFTA

Resolution of Kashmir dispute: Javed Burki proposes trade arrangement under SAFTA
Daily Times, Pakistan
By Iftikhar Gilani

NEW DELHI: Close on the heels of the 14th SAARC summit, a noted Pakistani economist has proposed a regional trade arrangement under SAFTA that might go on to “settle the Jammu and Kashmir dispute between India and Pakistan”.

A paper authored by Shahid Javed Burki for the United States Institute of Peace (USIP) has estimated that a regional trade arrangement could lead to a 9.5 percent annual growth rate in both parts of Kashmir.

The institute has released a $20-billion 10-year plan drawn up by Burki for the development of the region, justifying it by demonstrating the enormous economic, social, and political costs incurred by the two sides – especially Pakistan – as a result of the continuing problem of Kashmir.

“The $20 billion programme of development proposed here would add significantly to the state’s growth rate if it were accompanied by a trading arrangement that allows access to Pakistan. This could be achieved within a sub-regional trade agreement involving India, Pakistan and Kashmir. Such an arrangement could be a corollary to SAFTA,” said the economist in a 60-page report circulated by the institute. Burki admitted that such an agreement could be reached “only if Delhi is prepared to grant the state economic and political powers that go beyond those given to the other states”. He said that it would imply much greater autonomy than that given to Kashmir in Article 370 of the Indian Constitution, and claimed that “India seems willing to offer that”.

He said that similarly, Pakistani President Pervez Musharraf also talked of offering the people of Kashmir “something between autonomy and independence, like self-governance”.

The economist claimed that his plan would bring the rate of GDP growth in the two parts of Kashmir to about the average for South Asia, and generate an additional annual income of $40 million on both sides of the present divide. He said, “This in itself should increase the desire for a peaceful solution to the problem of Kashmir.” He said the programme should be able to attract resources from donors, “particularly given the importance of Kashmir in bringing political, social, and economic security to all of South Asia”.

Referring to how the quality of human resources had suffered a significant decline in both parts of Kashmir since the beginning of the insurgency, Burki quoted statistics from the Indian Planning Commission on how Jammu and Kashmir had slipped in every aspect compared to other Indian states. “Before the start of the insurgency, Kashmir’s economy had a very small modern component. The development of the modern sector suffered because the uncertainty created by the insurgency discouraged new investment,” he noted.

He said the plan proposed by him would create entrepreneurial and employment opportunities in several sectors. “To prepare the population to participate in these sectors would require large amounts of additional investment in education. It would also need the establishment of specialised institutions linked with those already working in India and Pakistan as well as in more advanced countries. The total cost of this effort is estimated at $2 billion over ten years.” Burki also advocated the free movement of people between Kashmir and Pakistan, stressing that it would lead to integration of the sizeable handicraft industry on both sides of the current divide.

“Before Partition of British India and the conflict over Kashmir, the Kashmiri handicraft industry, including wool weaving and woodworking, had strong links with the handicraft industry in the border cities of Rawalpindi and Sialkot. Those links could be re-established,” said his report, which envisages the government spending $4 billion to achieve the full potential in this area with help from trans-national corporations.

Burki also talked of the tremendous tourism potential in Kashmir. “There are reports that some 100 million Chinese may be prepared to join the tourist trade as consumers. Pakistan’s Northern Areas and Kashmir would offer attractive places for the Chinese to visit, as much of that country’s ancient history has roots in these areas. The same applies to tourists from Japan and other East Asian countries.”

The economist also called for experts from both sides to develop a plan to tap the power potential of the rivers in Kashmir, without disturbing the water distribution agreement of the Indus Water Treaty, and said this could be “best done within the scope of a sub-regional treaty”, since the power that could ultimately be generated would be far in excess of the future demand of the state of Kashmir. There would be a need – and an opportunity – to sell the surplus power through a regional grid to India and Pakistan, he added.

However, he stressed that this could be achieved only by reinterpreting rather than renegotiating the 1960 treaty which distributed the waters of the Indus river system between India and Pakistan and ensured enough water was available in the eastern rivers.

From Kashmir’s perspective, he claimed the treaty had frozen the development of water and hydroelectric power resources for its own people.

“The question is whether the treaty could be reinterpreted not to reduce the flow of water to Pakistan, but to jointly develop hydroelectricity to benefit Pakistan, the northern states of India and Kashmir,” said Burki.