The issue of granting Most Favoured Nation (MFN) trading status to India is still hanging fire. General Pervez Musharraf’s regime toyed with the idea when back channel diplomacy on Kashmir 2005-06 seemed to take out-of-the-box strides and a composite dialogue on all contentious issues was on the cards. But political instability in 2007-08 put paid to any progress on this initiative. The Zardari regime was constrained by the Indian backlash from Mumbai but took a bold step forward in its last year by abolishing the “negative list” of trade items despite lack of movement on the composite dialogue.
Last year, the Nawaz Sharif government moved swiftly to resolve the issue. It saw MFN not just as a big confidence and trust building exercise with India but also as a potential booster injection into the Pakistani economy. Accordingly, Khurram Dastgir, the commerce minister, changed the red-rag nomenclature of MFN (how can an “enemy country” become a most favoured nation?) to NDMA (Non-Discriminatory Market Access) and clinched a great deal for Pakistan, ensuring that India would reduce its “sensitive” list of prohibited items from 614 to about 100, thereby opening the way for a substantial increase in Pakistani exports to India. The Punjab Chief Minister, Shahbaz Sharif, also parleyed with the Indian Prime Minister, Dr Manmohan Singh, with the same objective in mind. In due course, a cabinet meeting to approve the deal was scheduled last week.
Now Mr Sharif has had a sudden change of heart. He has postponed a decision until after a new government takes charge in New Delhi. It is argued that there is no point in giving a significant trade “concession” to the outgoing Congress government since the chances of it returning to office are zero, better to wait and see what sort of BJP-led government takes office in India and how it intends to shape relations with Pakistan. Specifically, the idea of linking the granting of MFN status to India to a resumption of the composite dialogue is back in fashion at the Prime Minister’s Office.
Surely this argument was as valid three months ago as it is valid today. Every pundit worth his salt had predicted the fate of the Congress government six months ago. Indeed, the issue of linking MFN to the composite dialogue had been shrugged away by Mr Sharif as a failed tactical proposition. Why then this change of mind at the last minute?
A cornerstone of Nawaz Sharif’s strategic policy is to build friendly relations with neighbours India and Afghanistan. Towards this end, he has invited PM Manmohan Singh to Pakistan and taken concrete steps to reassure Hamid Karzai of non-interference in Afghan affairs. But the response from both leaders has been less than encouraging. Dr Singh has declined to negotiate even on less contentious issues like Sir Creek and Siachin while Mr Karzai is still thundering against the ISI. Now that the elevation of Mr Narendra Modi as the next prime minister of India is forecast, Mr Sharif has been persuaded by the Pakistani foreign office and GHQ not to offer any unilateral trade concession to India and bide his time until the new government takes office in India and reveals its Pakistan stance.
Mr Sharif has also hardened his stance on the resolution of the Kashmir dispute. Earlier, he was inclined to talk about it in terms of the Lahore Summit in 1999 (Chenab Formula, non-core, bilateral issue) that was duly emulated by General Musharraf in his out-of-the-box-formula (what is minimally acceptable to both India and Pakistan). But of late he has been talking of Kashmir as the “core issue” linked to “UN Resolutions” (his speech at the UN last September) and asking for Third Party mediation between India and Pakistan to resolve it (his speech at the Nuclear Summit at The Hague last week). Thus it appears that the Pakistani Establishment has persuaded Mr Sharif to adopt these positions as a counter to the projected “hard line” from India.
This is the Pakistani Establishment’s old “quid pro quo” sum-zero strategy that has been a part of the problem rather than the solution. It is aimed at freezing the status quo because the India establishment is not prone to making any “concessions” on Kashmir and Siachin. On both these issues, however, Mr Sharif’s avowed position before coming to power was bold and different. He thought Siachin was a “wasteland” and Pakistan should “unilaterally withdraw” from it. And he thought Kashmir should be “solved” through a non-UN bilateral and transitional arrangement in the foreseeable future. If he had persisted with his theme of unilaterally opening up borders and trade and people-to-people contacts, he would have instilled new hope and enterprise across borders regardless of what type of party rules India. Instead, he has succumbed to the “no-business as usual” advice from the Pakistani Establishment and undermined his dream of Pakistan as a booming economic corridor between Central Asia and South Asia. The Establishment still rules Pakistan.
Last year, the Nawaz Sharif government moved swiftly to resolve the issue. It saw MFN not just as a big confidence and trust building exercise with India but also as a potential booster injection into the Pakistani economy. Accordingly, Khurram Dastgir, the commerce minister, changed the red-rag nomenclature of MFN (how can an “enemy country” become a most favoured nation?) to NDMA (Non-Discriminatory Market Access) and clinched a great deal for Pakistan, ensuring that India would reduce its “sensitive” list of prohibited items from 614 to about 100, thereby opening the way for a substantial increase in Pakistani exports to India. The Punjab Chief Minister, Shahbaz Sharif, also parleyed with the Indian Prime Minister, Dr Manmohan Singh, with the same objective in mind. In due course, a cabinet meeting to approve the deal was scheduled last week.
Now Mr Sharif has had a sudden change of heart. He has postponed a decision until after a new government takes charge in New Delhi. It is argued that there is no point in giving a significant trade “concession” to the outgoing Congress government since the chances of it returning to office are zero, better to wait and see what sort of BJP-led government takes office in India and how it intends to shape relations with Pakistan. Specifically, the idea of linking the granting of MFN status to India to a resumption of the composite dialogue is back in fashion at the Prime Minister’s Office.
Surely this argument was as valid three months ago as it is valid today. Every pundit worth his salt had predicted the fate of the Congress government six months ago. Indeed, the issue of linking MFN to the composite dialogue had been shrugged away by Mr Sharif as a failed tactical proposition. Why then this change of mind at the last minute?
A cornerstone of Nawaz Sharif’s strategic policy is to build friendly relations with neighbours India and Afghanistan. Towards this end, he has invited PM Manmohan Singh to Pakistan and taken concrete steps to reassure Hamid Karzai of non-interference in Afghan affairs. But the response from both leaders has been less than encouraging. Dr Singh has declined to negotiate even on less contentious issues like Sir Creek and Siachin while Mr Karzai is still thundering against the ISI. Now that the elevation of Mr Narendra Modi as the next prime minister of India is forecast, Mr Sharif has been persuaded by the Pakistani foreign office and GHQ not to offer any unilateral trade concession to India and bide his time until the new government takes office in India and reveals its Pakistan stance.
Mr Sharif has also hardened his stance on the resolution of the Kashmir dispute. Earlier, he was inclined to talk about it in terms of the Lahore Summit in 1999 (Chenab Formula, non-core, bilateral issue) that was duly emulated by General Musharraf in his out-of-the-box-formula (what is minimally acceptable to both India and Pakistan). But of late he has been talking of Kashmir as the “core issue” linked to “UN Resolutions” (his speech at the UN last September) and asking for Third Party mediation between India and Pakistan to resolve it (his speech at the Nuclear Summit at The Hague last week). Thus it appears that the Pakistani Establishment has persuaded Mr Sharif to adopt these positions as a counter to the projected “hard line” from India.
This is the Pakistani Establishment’s old “quid pro quo” sum-zero strategy that has been a part of the problem rather than the solution. It is aimed at freezing the status quo because the India establishment is not prone to making any “concessions” on Kashmir and Siachin. On both these issues, however, Mr Sharif’s avowed position before coming to power was bold and different. He thought Siachin was a “wasteland” and Pakistan should “unilaterally withdraw” from it. And he thought Kashmir should be “solved” through a non-UN bilateral and transitional arrangement in the foreseeable future. If he had persisted with his theme of unilaterally opening up borders and trade and people-to-people contacts, he would have instilled new hope and enterprise across borders regardless of what type of party rules India. Instead, he has succumbed to the “no-business as usual” advice from the Pakistani Establishment and undermined his dream of Pakistan as a booming economic corridor between Central Asia and South Asia. The Establishment still rules Pakistan.