Trade as strategy: Shourie's tasks

NEW DELHI Nov. 10. As he takes temporary charge of the Commerce portfolio, the Union Minister for Divestment, Arun Shourie, would hopefully decide to focus a bit on boosting India's trade with the rest of the subcontinent. A broader vision on regional commerce has for too long been the missing link in India's strategy towards the neighbourhood.

If the reform-oriented Mr. Shourie could get Commerce Ministry bureaucrats to think big about trading with our neighbours, he could transform the regional scenario. A smart strategy from New Delhi to accelerate cross-border commerce has the potential to end the economic partition of the subcontinent.

Commerce, as never before, has become a potential catalyst to move the stalled political relations between India and her neighbours. The Prime Minister, Atal Behari Vajpayee's visit to the SAARC summit in January is tied to Pakistan's willingness to end its no-trade policy with India.

India is smug when pointing to the cussedness of the Pakistani establishment in resisting deeper trade and economic relations with its largest neighbour. But New Delhi has been equally cussed about opening its market to its smaller neighbours — Bangladesh, Sri Lanka and Nepal.

Despite soaring trade deficits with these nations in India's favour, the Commerce Ministry has refused to facilitate imports from these countries. New Delhi's reluctance to provide greater market access has hobbled India's political relations with the rest of the subcontinent.

A more innovative approach to trade with Dhaka that will promote greater Indian investments in and more imports from Bangladesh could break the current political logjam between the two countries. Sri Lanka, under the more pragmatic premiership of Ranil Wickremesinghe, has been knocking at India's door for greater economic integration.

Nepal desperately needs an imaginative trade policy from India — not just to improve its long-term economic fortunes but also to cope with the Maoist insurgency that has pushed the nation into a deep political and financial crisis. Despite the imperatives of a bold trade strategy, the Commerce Ministry has been tied down by the inertia of small thinking. Mr. Shourie needs to shake the Commerce Ministry out of its stupor and unveil a trade policy that aims to promote economic re-integration of the subcontinent, if necessary, through unilateral trade ``concessions'' by India in the short term.

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The Foreign Office has been aware for a while of the importance of trade as strategy in the subcontinent. The External Affairs Minister, Yashwant Sinha, has given special attention to improved economic ties with the neighbours since he took charge in July.

Recognising the centrality of trade in transforming bilateral relations in the subcontinent, Mr. Sinha has lobbied to set up an inter-agency task force of senior officials to work out a coherent regional trade policy. Officials from the Ministries of External Affairs, Finance and Commerce form this group.

Mr. Sinha and the Finance Minister, Jaswant Singh, are already on board for a new approach to trade in the region. But the Commerce Ministry's thinking is clouded by the worm's eye view; and there apparently has been little progress in drafting a new regional trade policy. Mr. Shourie has the opportunity to change all that.

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The United States, which until recently had concentrated on combating terrorism and on avoiding a war between India and Pakistan in the Subcontinent, is now taking a greater interest in promoting freer trade in the region.

A more liberal trade regime among New Delhi, Islamabad and land-locked Kabul, Washington hopes, could improve the living conditions of Afghanistan, boost the economic performance of Pakistan through transit trade, and pave the way for the normalisation of Indo-Pak. relations.

But the key to this win-win situation lies in the U.S. knocking some economic sense into the Pakistani establishment. While the Bush administration, which is shaping the government-formation process in Islamabad, has an important role, India too could take its own unilateral economic initiatives towards Pakistan to unfreeze the current situation.

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As the historic Sixteenth Congress of the Communist Party of China winds up this week in Beijing, the Chinese President, Jiang Zemin, is all set to be installed in the pantheon of modern China's leaders. The world is also waiting to see the new line-up of Chinese leaders who will run China in the coming years and what kind of political influence Mr. Jiang is likely to wield.

Foreign offices everywhere will also be interested in finding out who the new mandarin of Chinese diplomacy will be. Although the Foreign Minister of China is a key player, it is the party boss on diplomacy who lays down the guidelines.

Until now this job has been held by Qian Qichen, a former Foreign Minister, who ran the CPC leadership groups on external relations and Taiwan policy. The suave Mr. Qian, who is expected to retire at this Congress, is widely seen as China's greatest diplomat after Zhou Enlai, the first premier of the nation. Mr Qian played a crucial role in ending China's international isolation after the incidents at Tiananmen Square in June 1989.

Speculation is that Dai Bingguo, current head of the International Liaison Department of the CPC, might succeed Mr. Qian. Most senior Indian leaders who visited China recently have met Mr. Dai.

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