Military, Militants and Mandarins: prospects for trade and peace between two nuclear powers


Small but promising steps towards normalisation between India and Pakistan have implications beyond their bilateral relations, given the challenging neighbourhood the two states inhabit.

Emma Hooper
2 November 2012

“Act small, think big” could be the slogan capturing the recent gestures towards rapprochement between India and Pakistan.  A slow shift towards a relationship built on economic opportunity rather than security threats is epitomised by thinking in small steps that may avoid negative (or indeed apocalyptic) outcomes. This “softly, softly” approach offers considerable promise and an open window of opportunity for peace between two nuclear nations.

“Act small, think big” could be the slogan capturing the recent gestures towards rapprochement between India and Pakistan.  A slow shift towards a relationship built on economic opportunity rather than security threats is epitomised by thinking in small steps that may avoid negative (or indeed apocalyptic) outcomes. This “softly, softly” approach offers considerable promise and an open window of opportunity for peace between two nuclear nations.

An opportunity in a challenging neighbourhood

The state of relations between India and Pakistan has implications that go well beyond bilateral concerns alone.  What happens in Kabul affects Delhi and Islamabad – and vice versa. The ways in which the upcoming withdrawal of US troops and the 2014 elections in Afghanistan play out, and what kind of residual US presence is left in Afghanistan post-2014, will affect US-India relations, the currently dismal US-Pakistan relations; and will influence India and Pakistan’s stances towards one another.  The long-term process of addressing bilateral considerations is therefore impacted by externally driven pressures, as well as more narrowly national preoccupations. For example, instability in Pakistan poses clear dangers for Delhi, while many of the sources of that instability have roots in the conflict in Afghanistan, where Indo-Pakistani rivalries have been played out in a proxy theatre of cold war. 

As key concerned stakeholders, India and Pakistan have the capacity to influence Afghanistan’s future – and consequently, that of the region. Moves to address India and Pakistan’s individual interests there, and to reach understanding on mutually-acceptable “red lines” that should not be crossed, are therefore critical for: (i) achieving stability in the region; (ii) improving stability in Pakistan; and (iii) reducing the opportunity costs for India of its continued security-based preoccupations.  If competition between these two nuclear powers over Afghanistan intensifies, it is not only Afghanistan that will suffer. Recent trade and visa normalisation-based moves between India and Pakistan therefore have implications that go well beyond the merely economic.

More than “just” economics

Historically, any move towards improving India-Pakistan relations has been caught up with finding a solution to the Kashmir problem (ongoing since 1947).  Since the issue is intimately bound up with how each country perceives its respective national identity, the question of whether or not Muslim-majority Kashmir should form part of Pakistan (regardless of what Kashmiris themselves may want) creates high levels of mutual distrust.  However, the recent slow, but (relatively) sure, steps towards opening up trade opportunities and visa liberalisation between the two countries appears to hold out real hope of rapprochement.

In India’s case, due to its impressive - if currently somewhat faltering - economic growth, and in Pakistan’s, due to its economic weaknesses, a sense appears to have arisen that greater links around more neutral areas of engagement could both be mutually beneficial and also contribute to improving bilateral relations on more thorny topics (including the Wullar Barrage, the Sir Creek and the Siachen Glacier).  None the less, whilst there are indications that this recognition is growing on both sides, it is far from being felt across the board by all the vested interests concerned.  One factor that has hitherto prevented an improved bilateral relationship is an absence of constituencies with self-interest in promoting a better relationship.  The relatively recent emergence of constituencies on both sides of the border with the power to lobby for small but important political changes, leading to practical engagement and improved levels of trust – in the current instance, the business communities – could therefore represent a real breakthrough in normalising relations, not least because of their established role in helping shape political agendas in both countries.

This progress notwithstanding, significant challenges remain.

Public opinion will need to be mobilised, in a context where this is often at odds with political opinions.  For example, hostility towards India is reflected in the educational curricula in Pakistan and media hostility is mutual on both sides. Though civil society dialogue has been in place at a low level for a number of years (delightfully termed “cricket diplomacy”), mutually unfavourable opinions are held by large proportions of the public, in both countries.  A relaxed visa regime, confidence-building measures across the Line of Control on the Siachen Glacier, and increased trade can help in diluting some of the negative perceptions held by the general population about each other – perceptions that persist mainly because the people of India and Pakistan do not really know one another, despite all the Indian movies watched in Pakistan, the Pakistani TV series watched in India, or the two countries’ common heritage.

Economic and political pay-offs

As pointed out by Gareth Price in a recent paper, Pakistan is trapped in a vicious circle, whereby insecurity harms its economy, and its economic circumstances in turn feed insecurity and militancy. Foreign direct investment in Pakistan – a much-lauded panacea for the economy in the early part of the first decade of the century – is notably absent, unsurprisingly put off by militant violence, chronic political instability, the poor state of government finances (running a fiscal deficit of more than 5% of GDP), low levels of tax revenue and consequent under-investment in infrastructure, and a rampant energy crisis which cripples economic growth. Indeed, the energy crisis itself has led to Pakistan avidly following up every possible opening that could help to overcome it - including with India. So, for Pakistan, trade with India is a high-gain opportunity in itself, as well as a step forward towards economic regeneration.

The small, but symbolically huge, steps quietly taken towards normalising trade relations with India could therefore have both economic and political payoffs.  Political parties in Pakistan (the PPP, the PML-N) are loudly in favour (a reflection of the level of representation of the business communities in their membership, and indeed of the commercial interests of their respective leaders, Asif Zardari and Nawaz Sharif).  The chief ministers of both Pakistan and Indian Punjab are pushing strongly for closer trade ties – (unsurprisingly in the case of Shahbaz Sharif, the Chief Minister of Pakistan Punjab, and brother of Nawaz, whose family have strong industrial interests including in cement and sugar, and have a close eye on the Indian market).  What is more, if trade between the two Punjabs takes off, it could also potentially lead to a reinstatement of the old trade routes between Sindh and Gujarat provinces.

Those in favour... and those against

However, beyond the pro-trade commercial-political lobby, there are other critical sets of vested interests whose stances also have to be taken into account: the military, the intelligence services, non-state militant actors, and the civil service bureaucracy.

The Military

For once, on the Pakistan side, the military is leading the charge towards a radical change of heart.  This is particularly significant, because it is they who lead on foreign policy towards India, not the politicians.  At present, the military is strongly cognizant of Pakistan’s troubled relationship with the US, and the resulting decline in aid flows, and it is this which has brought it (and the Chief of Army Staff and former Director of the ISI, General Kayani, specifically) to regard trade with India as an opportunity to generate alternative sources of economic benefits and financial revenues, including foreign exchange.  As noted by the journalist Khalid Ahmed, “After more than a decade of resistance from the Pakistan Army, and a Pakistani mind nurtured by the textbook narrative of 'enemy at birth', Pakistan has signed a liberal visa protocol with India that will be transformational for the region, not so much for India as for Pakistan, if it is implemented.“  In Ahmed’s view, this transformation may – or may not – lead to normalisation of Indo-Pakistan relations, but could well lead to what he terms the “normalisation” of Pakistan as a state.  This means that for the first time, both the liberal and (some) conservative elements of Pakistan are on the same page.  None the less, there has been resistance: independent television media, the Defence of Pakistan Council, representatives of the Jamaat i Islami and some retired military personnel still see visa and trade liberalisation as the slippery slope towards Pakistan’s “final subordination to the joint enemy of the US and India”.

The Intelligence Services

The fact that the 2008 Mumbai attacks were not allowed to derail Pakistan’s foreign policy stance towards India is of considerable positive significance. India too has chosen to set aside preconditions on terrorism, previously attached to any Pakistani attempt at normalisation of relations.  However, also of great significance is the fact that the militant groups allied to the Mumbai attackers are so powerful that they are not within the control of the Pakistani state.   (The “Punjabi Taliban” in particular are said to feel so strongly about the war in Kashmir, that they have the potential to reduce the latest visa agreement to nothing.)  A third factor is the ability of the Pakistani intelligence services to act as “spoilers”. The role of the latter has been much discussed in the context of support for the former Taliban regime in Afghanistan.  In relation to India, past visa agreements endorsed by the Cabinet were subsequently reportedly sabotaged by the ISI through a unilateral (and some say illegal) doctoring of the final text.  On both sides of the border, disputes have reportedly been created to postpone normalisation (by Pakistan) or to postpone resolution of core disputes by focusing on non-core disputes (by India).

The Mandarins: The “Yes Minister” Syndrome

A legacy of the British colonial heritage, the civil service bureaucracies of the Subcontinent can be objectively characterised as slow, cautious, and conservative.  They are also often downright obstructive.  As any viewer of the 1980s British television series “Yes Minister” will remember, perfecting the fine art of “running” one’s ministers to avoid their being able to do anything at all – even something seemingly innocuous – which the civil service saw as inimical to their interests, through an attitude of “agree, stall, spoil”, resonated strongly in both India and Pakistan and had an avid following of fans. Both their perspectives and their world view, as well as their training, predispose the civil services towards acting as spoilers. Therefore whilst prospects for rapprochement look encouraging at the political level, the Mandarins on both sides may yet scupper the ship.  A “cold war” mentality and the absence of a facilitating attitude towards change certainly do not help bring about confidence-building change.  In Pakistan, the concept of India as the “hidden hand” behind all unexplained incidences of political intrigue, the editing out of India in the curricula of government schools in particular (which the bulk of civil servants attended), the influence of the “Islamist” right wing on popular thinking, and with any form of questioning of entrenched positioning seen as calling into question Pakistan’s nationhood, make overcoming such attitudes far from easy.

For Pakistan’s political leadership, peace with India is an existential issue.  The fact that there are new actors with a stake in the peace process is all to the good.  In 1991, Stephen P. Cohen wrote “India cannot make peace, Pakistan cannot make war”. But maybe in 2012, both can make trade, and peace may follow.

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