Over the past decade, the South Asian security complex has expanded in four directions. To the north, China has re-asserted itself as a major player in Central Asia, through the Shanghai Co-operation Agreement, and Nepal. To the east, China and India compete for influence in Myanmar. To the south, there is a competitive three-way race for influence in the Indian Ocean. Perhaps most importantly, to the west, we have seen the renewed geopolitical importance of Afghanistan.
The core strategic conundrum that permeates all issues in South Asia, from security to trade to cooperation, however, remains that between India and Pakistan whose rivalry continues to evoke international attention, if not necessarily intervention. Despite superficial cordiality and new personalities, such as the charming Pakistani Foreign Minister Hina Rabbani Khar, the normalisation process between the two seems to be stagnant. But Pakistan agreeing to begin dialogue to grant India the most-favored nation (MFN) status holds out a glimmer of hope. It was delightfully surprising that the Pakistan army decided that trade with India is in its interest. It is still unclear why the military allowed the civilians to go ahead with the dialogue but two factors could have been and could continue to influence its decisions, one way or the other.
Some people argue that the military has an interest in trade with India because of economic investments. My own view is more strategic — Pakistan military, which has its own confrontation with the United States, wants to normalize to some degree its relationship with India. It does not want to fight wars on two fronts. Yet, how this will evolve is still uncertain and the deal may not be consummated. There have been many agreements in the past that really amounted to nothing. We can only hope that this will lead to something.
It is clear that India is very concerned about Pakistan’s integrity as a nation state and would like to normalize relations, but unclear whether Pakistan wants a deeper normalization. Even if the military has allowed the trade dialogue to happen, it still regards India as a strategic problem.
The second factor in the military’s calculations seems to be finance. Pakistan military argues that the country is not destitute and has many assets. It has large quantities of payments coming in, from the Gulf in particular, and it also believes that it can count on China for assistance. It might naively think that a linkage with the Indian economy could help if American aid diminishes.
The country’s economy is structurally in deep trouble. The real problem is agriculture where it still does not have any significant reforms in place. The Indian connection is hardly likely to help. Furthermore, there will be groups in both countries that will stress the negative side of trade. It’s hard to be optimistic that trade normalization will take place rapidly or comprehensively.
Many in India, including Prime Minister Manmohan Singh, believe that normalizing relations with Pakistan is in India’s interest for several reasons, including reducing the influence of China. India would like to see Pakistan strong enough to hold together but not so strong as to challenge it. But Pakistan has found ways of challenging India by using destabilising proxies and terrorism at relatively low cost. The greater danger may be Pakistan losing control over its own state. There are large swaths of Pakistan that are no-go areas for the state, and there are important social sectors that defy the state, and are now attacking it.
With Pakistan having put a foot forward with the MFN concession, it is now up to India to respond, perhaps on some issue such as Siachen or Sir Creek; this may not happen, but if it does, then will Pakistan in turn reciprocate, leading to a genuine peace process? I’m both hopeful and skeptical at the same time.