IMPORTANC OF ECONOMIC FACTOR FOR RES0LUTION OF TENSION BETWEEN INDIA AND PAKISTAN
BY: SANA FAROOQUI*

One cannot deny the importance of economic factor in the relation of any country. Pakistan and India are neighboring countries but they are adversaries of each other and have fought three wars on the Kashmir Issue, which is still unresolved and this has affected their relations in the economic field. After the post cold war era this world has appear to be a world of geo-economics and the real strength of a country is hidden in its economy. If you are more economically stable then you are stronger and it is the economic factor, which boost in upgrading the financial aspects of a country that is based on economic environment.
The best example of the same theme is “European Union”, as we have seen the European country who were adversaries of each other and have fought two world wars, but then they realized their potential in accelerating their economy and now they have emerge as big economic power because free movement of people, goods, services and capital between them lead to deepening of credibility and confidence. This method can also be applied to India and Pakistan.
India is the biggest country of South Asia. Its economy is stable because it has a continuous process of economy. In India labor is low cost and there is a huge middle class who make it an attractive market but there are still more poor people in India then in any country. Approximately, 430 million Indian’s live on less then 1 dollar a day. So one can say that still India has a long way to go to become an economic power.
As we have already discussed the overall scenario of the Indian economy, now we will put into consideration the Pakistani economy. Our nation has all the potential to become economically strong but because of the political system our economy has not got that much space to become stable, but now it has started to become stabilize comparatively. Pakistan has to give attention to its regional markets and should have regional trade to a greater extent in order to enhance its economy.
Economics is changing the relations rapidly as the globalization process and the W.T.O. are making attempts to make things smooth. The developing states are seeking to boost their economy through larger trade in the local markets. Last year Pakistan exported 81 million dollars worth of goods to India, while imports from India stood at 300 million dollars. However, the unofficial trade between the two nations via third country stood in billions and instead of the people smugglers are taking benefits from the prospects. So it is the responsibility of both the countries to do something for the prevention of this situation. This is the world of globalization where third world states facing the challenges of European Union, W.T.O., I.M.F. So now they are focusing on the regional trade.
It’s a great pity that both the nations have not given desired importance to the economic factor in their relations. There are extensive opportunities for both the nations to prosper their economy. Pakistan can get enormous share in the Indian market, roughly the 1 billion people market, especially to sell its home textile products and surplus sugar. India has already granted Pakistan the status of Most Favorite Nation (MFN). But Pakistan is still considering to give the same status to India, as it is afraid that the Indian economy might over shadow Pakistan’s economy. But now it is necessary to emphasis on Bi-lateral trade and to promote SAARC and SAFTA in accordance with the W.T.O. implantation in the year 2006. It’s in the benefit of the two countries to come closer, now they should take the Kashmir issue more seriously as it has been taken for granted in the past. Because of the fact that a huge amount of the total fiscal budget has been spent on the defense and artillery section as compared to the economic developments, which includes the Education, Health, and Public Services sectors respectively. It will be in the favor of the deprived people of both the countries, which are living below the poverty line.

CONCLUSION
Pakistan and India can resolve their political dispute by economic co-operation, rather then using trade diplomacy. It may become a ladder for solving the political disputes as we can see in the case of China and India, who have already realized the importance of economics in their relations and they have improved their relations despite of the territorial disputes. In the same manner, Pakistan can also change its trade policies and revise its strategies in a positive direction.
As “Morgenthau” has quoted:
“ Competition through co-operation not by confrontation”

* Student, B.A (Hons) IIIrd Year, Department of International Relations, University of Karachi

All content (C) Department of International Relations, Karachi University

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