Peace between Pakistan and India is a strategic imperative dictated by economic realities and the status of the two countries as de facto nuclear powers. Both Pakistan and India suffer from widespread poverty, low GDP per head and a low level of human development. Peace between Pakistan and India would enable the two countries to reduce or at least to contain their military expenditures so as to increase significantly the allocation of resources for economic development. The possession of nuclear weapons with credible delivery systems makes an all-out war between Pakistan and India an unthinkable option. Neither side is in a position to dictate to the other through military means. It is, therefore, imperative that the leaders of the two countries take well considered steps to restore mutual trust and confidence, increase bilateral trade and economic cooperation on a level playing field, facilitate people-to-people contacts, and resolve outstanding disputes. Given the history of wars and serious disputes, it is inevitable that the process of peace building between Pakistan and India would not be free of obstacles and hiccups. But the only rational choice for the two countries is to persist in their efforts to strengthen peace and stability in South Asia. Their inability to do so for whatever reason would condemn them to a low level of development and their peoples to extremes of poverty for the foreseeable future. It is in this context that the recent visit of President Asif Zardari to India to maintain contacts between the leaders of the two countries must be welcomed.

According to some estimates, more than 300 million Indians, that is about 25 percent of the total population, live below the poverty line. The situation is equally bad in Pakistan where a high percentage of the population continues to suffer from abject poverty. India’s GDP per head is expected to be only $1940 during 2012, whereas Pakistan would lag behind at $1310, according to the Economic Intelligence Unit. In view of low standards of living and grinding poverty, economic development rather than military expenditures should be the top priority of the leaders of the two countries. Unfortunately, that is not the case. India is expected to spend $40.5 billion on defence during 2012-13, reflecting an increase of about 18 percent over the defence budget for the preceding year. It is also planning to buy arms worth $100 billion over the next five years. While Pakistan’s defence budget is about one-fifth of the size of India’s, it is spending too high a proportion of its GDP on defence (about 3.5 percent) because of the smaller size of its economy. Hopefully, the peace process between the two countries would enable them to divert resources from military expenditures to the task of economic development.

We should learn from China’s experience. In 1980, China under Deng Xiaoping determined economic development as its supreme national goal. Its internal and external policies were subordinated to the realisation of this overarching national aim. Internally, China embarked upon a series of reforms in the rural and urban sectors to accelerate economic growth through unleashing the energies of the private sector. Simultaneously, Deng Xiaoping told his generals to manage the armed forces within a budget of less than 1.5 percent of GDP. Externally, China adopted a policy of defusing tensions in relations with its neighbours with the objective of reducing the risk of an armed conflict. China has not allowed its territorial dispute with India to come in the way of growing commercial and economic cooperation between the two countries. Its trade with India is now estimated to be about $75 billion a year. The net result of these policies was China’s phenomenal economic growth rate averaging 9 percent over the past three decades making it the second largest economy in the world. By way of comparison, Pakistan’s growth rate has been around 2.5 percent per annum over the past three years.

While there is a growing awareness of the strategic imperative of peace between Pakistan and India on both sides of the border, it is important that the peace process is managed by the two countries keeping in view the ground realities. Pakistan-India relations suffer from lack of trust and bitterness caused by wars and outstanding disputes. Inevitably, therefore, the progress in the peace process would be slow and marked by hiccups under the best of circumstances. Confidence building measures (CBM) in the military and political fields to assure Pakistan and India of each other’s peaceful intentions and to eliminate the risk of the outbreak of hostilities through miscalculation or misunderstanding must be the starting point of such a peace process. Fortunately, the two countries have already made some progress in this area although a lot more remains to be done.

Pakistan and India must also engage in mutually beneficial cooperation in various fields and undertake serious efforts to resolve outstanding disputes. A number of considerations must be kept in view in carrying forward the peace process. Mutually beneficial cooperation by definition is not a favour that one country grants to the other. For instance, bilateral trade on a level playing field will work to the advantage of both the countries and, therefore, should not be subjected to the condition of prior settlement of outstanding disputes. It is also true, however, that it cannot be totally dissociated from the overall climate of relations between the two countries.

Currently, access to the Indian market is restricted by non-tariff barriers. The Indian businessmen also enjoy the advantage of institutional and governmental support, whereas Pakistani businessmen not only lack such support, but also suffer from the adverse effects of acute power and gas shortages. Little surprise, therefore, that the current Pakistan-India trade of $2.6 billion per annum is heavily tilted in favour of the latter. This imbalance is likely to worsen to our disadvantage with the planned liberalisation of trade with India, unless our government and the industrial/ trading institutions take necessary corrective measures to ensure level playing field in trade with India. Failing that there is a serious risk that our industry will suffer a crippling blow from which it may not recover easily. It is a pity that our government is rushing into a liberalised trade regime with India without the necessary spadework.

CBM’s, growth in bilateral trade on a level playing field, and increased people-to-people contacts will help strengthen peace lobbies in Pakistan and India, enhance mutual trust, and pave the way for the resolution of outstanding disputes. Realistically speaking, it will be easier to make progress towards the resolution of those disputes which are, relatively speaking, less acrimonious and less complicated. Sir Creek, Siachen and disputes concerning the sharing of river waters would fall in this category. The two countries should also cooperate on the issue of terrorism from which they have suffered grievously.

The Kashmir dispute, in view of its heavy emotional and historical baggage, would be the most difficult to solve. A settlement of this dispute, which is satisfactory to the two countries, does not appear to be feasible in the near future given their recognised divergent positions. Therefore, while Pakistan and India should continue to work towards a final settlement of this issue, they should agree in the interim to measures which would ameliorate the human rights conditions of the Kashmiri people in IHK, grant them maximum possible autonomy, demilitarise the area as the insurgency winds down, and facilitate cross-LOC travel and trade. However, durable peace between Pakistan and India will remain elusive until the two countries reach a satisfactory final solution of the Kashmir dispute and until India gives up its hegemonic designs in South Asia.

n    The writer is a retired ambassador.