As President Musharraf undertook the daunting task of overcoming Pakistan’s multi faceted crisis, he realized early on that peace with India is an essential element to his effort. Given the gathering storm of a deepening economic crisis, rising violence by religious extremists and institutional tensions within the state structure, bringing the ship of state to an even keel required boldness and flexibility. President Musharraf has demonstrated both. Boldness was required to make the protagonists realize that this is a historic moment when there is a real opportunity for peace and building a better future for both Pakistan and India. Flexibility was required to maximize the gains for Pakistan in a rapidly changing situation. The logic of both boldness and flexibility at the tactical level can only be grasped in a strategic perspective. Hence in this article we will examine the implications of Pakistan’s new foreign policy initiative in the changed strategic context faced by Pakistan and India respectively.

A series of initiatives were taken by President Musharraf to break the deadlock: The first was an offer for unconditional talks with India. The second was the offer to cooperate with India in together combating terrorism in the two countries. The third was recognition of the reality that the principal threat to the integrity of Pakistan was not external i.e. from another state, but internal i.e. from the forces of religious extremism within the country. The fourth is the latest statement during an interview with Reuters News Agency (December 18) that the UN resolutions on Kashmir could be set aside in the process of negotiating the Kashmir dispute, provided both sides showed flexibility. As a result of these initiatives, Pakistan is gaining the support of the international community for the maturity and sagacity of its foreign policy with the attendant prospect of acquiring additional leverage in negotiations on the Kashmir issue. The tactical foreign policy initiatives also set the stage for a possible breakthrough during the SAARC Summit when a number of key decisions could be taken for the economic welfare of the peoples of the region. The most important of these is an agreement on a South Asian Preferential Trade Agreement (SAPTA), which could be a step towards a South Asian Free Trade Area (SAFTA). During the days of the SAARC Summit there is also the possibility that the process of bilateral talks between India and Pakistan may begin with an informal exchange between the leadership of the two countries.

When the President in his Reuters interview last Friday said he was prepared to be “bold and flexible” in an attempt to resolve the Kashmir dispute, it was clearly an approach to the process of negotiations and not any particular unilateral concession prior to the process. Let us make a simple proposition on the nature of negotiations: If India and Pakistan wish to negotiate, then the very decision to negotiate signifies the willingness of both parties to set aside their stated prior positions. Further more if a resolution of the dispute is to be achieved, clearly at some point in the negotiating process, a common ground must be found that is different from the initial conflicting standpoints. It is in this context of negotiations that “boldness” and “flexibility” provides the advantage of speed and efficacy for gaining ground. By contrast, diffidence and inflexibility by one party during negotiation would result in it losing ground as the other party runs circles around it.

The initiatives taken so far, have been executed with skill and sagacity by Pakistan’s able Foreign Minister, Mr. Kasuri. They indicate that we now have for the first time in 5 decades, a Kashmir policy rather than a mere stand. A stand is a rigid statement of principle in a deadlock within which there is verbal repetition but no progress and no practical gains on the ground. A policy is a nuanced series of steps to break the deadlock and make progress in optimizing real gains for the country.

The present moment in the sub-continent’s history is defined both by objective circumstances and the individuals at play. It provides an opportunity for establishing a lasting peace because it is now a strategic imperative of not only society but also the state in both India and Pakistan. Let us see how this is so in each case. At the economic level India having established the industrial base for indigenous technological change and a high growth trajectory, needs to sustain its high GDP growth into the future. This creates the imperative of (i) establishing an efficient infrastructure for the supply of oil, gas and electricity and (ii) developing markets for its manufactured exports in South Asia and abroad. Both these strategic needs impel India to seek peace with Pakistan. Oil and gas pipelines from Central and West Asia to be economically feasible would have to pass through Pakistan, just as surplus electricity from Pakistan can be imported by India. Similarly, if an integrated South Asian market is to emerge for the welfare of all South Asian countries Indo-Pak peace is essential.

Peace and economic cooperation with Pakistan is necessary for India not only to secure its strategic economic interests but also to maintain its secular democratic polity. A high growth, open economy framework for India today is inseparable from a liberal democratic political structure. Therefore the growing social forces of Hindu nationalism, intolerant of its minorities will undermine India’s secular democratic structure as much as its economic endeavour. Continued tension between India and Pakistan, will only fuel extremist religious forces in both countries, to the detriment of their economy and polity.

While India needs peace to graduate into an advanced industrial economy, Pakistan with its relatively fragile economy needs peace for its very economic survival. Its economy is growing far below its potential, has stagnating exports, a fragile exchange rate, a major poverty problem, and incipient social forces of religious extremism that can grow rapidly if poverty persists and tension with India continues. Peace with India will mean a substantially improved environment for domestic and foreign investment. Those Pakistani industries that can achieve international competitiveness will grow rapidly within the large regional market of SAFTA. At the same time the capital costs of investment in Pakistan will be reduced as cheaper capital and intermediate goods from India (compared to imports from Europe and the U.S.) become available, thereby accelerating GDP growth. The real incomes of Pakistan’s middle and low-income groups will also increase as they get cheaper consumer goods from India. Electricity costs for Pakistani consumers will fall as Pakistan’s thermal power plants achieve better capacity utilization through export of electricity across the border to India.

I have argued that through peace, both India and Pakistan can reap economic benefits for their people, secure their respective democratic structures against the forces of religious extremism, and provide security to their citizens. Thus, for the first time in the post independence period the economy and the polity of India and Pakistan (although in differing ways) are at a turning point. The pursuit of development, democracy and national security impel both countries towards making peace. In August 1947, Prime Minister Jawahar Lal Nehru in his moving speech referred to independence as India’s tryst with destiny. Today we are in another moment of destiny. The dreams of the people of India and Pakistan at independence for a better life can be fulfilled by living together in peace within two independent states. The people in both countries, already aware of this fact, beckon their leaders to grasp this moment. Will they?