8 ways India can hurt Pakistani economy

First appeared on www.rediff.com. To see slideshow click here or see below.
Prime Minister Manmohan Singh recently said, “Unless we want to go to war with Pakistan, dialogue is the only way out.”

The kind hearted economist must know that the days of conventional warfare are over. Today wars are of two types. One is low intensity conflict of the type that Pakistan specializes in. Two is flooding your market with products at prices that lower domestic inflation but makes the vendor indispensable as China is to the U.S.

Without going to war here are some ways by which PM Singh can express anger over Pakistan’s relentless support to terror?

After UPA 1 came to power, India signed a deal with Pakistan in 2005 to export livestock to Pakistan.

Meat is one of the 11 items which are reviewed by the Pakistan Price Control Committee. It is reported that these items are priced at 15 to 50% higher in Islamabad than in New Delhi. Pakistanis’ insatiable appetite for meat presented a business opportunity. An Amritsar based firm, Narain Eximp, has emerged as a large exporter of livestock. Its President Rajdeep Uppal said, “The demand is unrelenting. In fact, Pakistan’s Ministry of Food, Agriculture and Livestock (MINFAL) have been asking the Indian government to expedite and increase the exports”.

India’s exports have reduced prices for Pakistan’s aam aadmi and enhanced exports of meat and meat preparations. During the period July 2008 to February 2009 it exports jumped by 45% to $ 46404,000. Traditionally, Europe was the biggest exporter of meat and meat by-products to the Middle East but the mad cow disease and possibly India’s exports gave an impetus and to Pakistan’s exports.

One India stops export of livestock to Pakistan.

Incidentally this concession by the UPA in 2005 was followed by July 2006 Mumbai train blasts (209 dead 1400 injured) and 26/11/ (186 dead 300 injured). 

A GOI Press Release dated 16/12/2008 gives a list of top ten items imported from Pakistan between April and July 2008. Imports were $ 116.80 million and exports from India were $ 473.12 million during this period. Top ten imported items are-  

 Sr.No  Commodity  US $ million
 1.  Petroleum, crude & products  48.87
 2.  Cement  30.66
 3.  Cotton yarn & fabrics  13.95
 4.  Leather  5.40
 5.  Lruits & nuts excl cashew nuts  5.17
 6.  Leather commodities  4.25
 7.  Lon-ferrous metals 2.33
 8.  Eool, raw 2.13
 9.  Organic chemicals 2.07
 10.  Metalifers ores & metal scrap 1.97
Total 116.8

Two India must increase the duty on these items such that it becomes uneconomical for companies to import them into India.

After the 2001 attack on Parliament, India denied Pakistani aircraft the right to fly over Indian airspace and land in India. The move makes it difficult for anti India elements in Pakistan to reach Nepal and Bangladesh from where infiltration into India is a cafe walk as is proved by what analyst Bhaskar Roy wrote recently, “The latest case, a Lashkar-e-Toiba (LET) leader, Mohammad Omar Madani was arrested in Kathmandu and brought to India. In his ongoing interrogations, Madani has confessed to the Indian agencies that he was to recruit Indian Maoists/Naxalites to train in terrorism in Pakistan”.

The move will increase cost for both Indian and Pakistan airline companies. By virtue of being a much larger economy we have the ability to absorb additional cost.

Three deny Pakistani aircraft the right to fly over Indian airspace and landing in India.

The messengers of peace, like former Admiral Ramdas, advocated people to people contact. One distinctly remember actress Urmila Mategoankar’s Lahore visit to improve relations (wonder how she felt on the night of 26/11/). During a Pakistani cricket team’s goodwill tour of India the Vajpayee sarkar granted visas to many Pakistanis some of whom preferred to stay back and are not traceable.

Four grant no visas to Pakistani citizens, stop train and bus services.

Pakistan’s ability to strike within India increased after Dawood Ibrahim shifted base to Karachi. Use unorthodox methods to destroy Dawood’s support base in India. This is bound to invite international criticism but those who worry about the repercussions in international law should ask? Did the U.S. and its coalition partners in Afghanistan worry about international law after the al Qaeda inspired 9-11 terrorist attacks in New York and Washington, D.C.?

Five India must destroy Dawood’s local support base, difficult but doable!

The popularity of the Indian Cricket team attracts crowds worldwide more so in Pakistan where an Indo Pak series is equivalent to the Ashes. Our cricket team’s visit Pakistan in 2004 filled up the coffers of a bankrupt Pakistan Cricket Board.

Six India must snap cricketing ties with Pakistan but play only World Cup matches.

Has India gained by talking to Pakistan? Then why must she initiate a dialogue? After all she is the world’s second fastest growing economy, a vibrant democracy, has a large entrepreneurial and intellectual class and a dynamic private sector. The less said about Pakistan the better. 

Seven we will choose the timing of talks that surely is not now! 

The 1961 Indus Water Treaty allows India unfettered right over use of waters of Sutlej, Ravi and Beas. Pakistan is allowed unrestricted use of waters of Indus, Chenab and Jhelum. India can use Chenab and Jhelum only for l*Domestic Use *Non consumptive use *Agricultural Use (with conditions) Generation of Hydro Electric power (with conditions).

According to Surinder Sud, Business Standard, 17/1/2005 http://www.business-standard.com/india/storypage.php?autono=201972, “The state possesses a hydropower production potential of 15,000 MW. If the west-flowing rivers — Indus, Jhelum and Chenab — assigned to Pakistan under the Indus Water Treaty of 1960, are left untapped, a sizeable chunk of this potential will remain untapped. The treaty allows India to generate as much as 8,769 MW of power at 60 per cent load factor from the three western rivers. So far, projects having an installed capacity of only around 1,348 MW have been put up on these rivers. Against the permissible irrigation command area of 1,32,389 acres in the Chenab basin, the actual potential created is only 1,15,619 acres”. 

Eight India must undertake short term measures to utilize its entire share of waters under the 1960 Treaty, seek control of the River Jhelum and subtly increase the quantum of water from the western rivers while adhering to the spirit of the 1960 Treaty. The farmers of J&K want water and power to irrigate their lands, wouldn’t they?

As a cost reduction measure the strength of the Indian Embassy in Pakistan should be reduced by 50%.

Surely Pakistan will retaliate but India must stand firm. At the same time she should not underestimate the strength of her opponents but simultaneously increase the scope and scale of relief work in Afghanistan.

The media’s preoccupation with Pakistan must not result in the Armed Forces and GOI lowering their guard in the East. A brief and lethal attack from across the Himalayas could change equations dramatically. Over time China has proved that a friend in need is a friend indeed. 

The above actions would come to naught if India buckles under international pressure and agrees to talk after a few months as it has done in the past.
Hamari shubh kaam nayein aap ke sath hai Manmohan Singhji.

Receive Site Updates