Manmohan-Gilani Summit: Opening New Chapter in Bilateral Ties

India and Pakistan have talked about writing 'a new chapter' in their accident-prone ties, with Islamabad assuring New Delhi that the terrorists behind the Mumbai carnage, that virtually froze relations between the neighbors, will be brought to justice soon.
In a sign of the new spirit of mutual accommodation, Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani agreed to open a new chapter in ties and hoped the next round of talks will be 'more productive and constructive'.
Meeting on the sidelines of the 17th South Asian Association for Regional Cooperation (SAARC) summit in Addu (the Maldives), the two leaders held delegation-level talks for around half an hour in a seaside beach cottage at the idyllic Shangri La resort hotel and followed it up with nearly 45 minutes of one-on-one talks.
In addition to resolving to candidly discuss all outstanding issues, ranging from Jammu & Kashmir to Sir Creek, the Prime Ministers focused on terrorism and trade. The two leaders agreed that the measures to facilitate trade and travel across the Line of Control, decided upon by the Foreign Ministers in their July meeting, should be implemented expeditiously. Both Prime Ministers urged a greater degree of openness in discussing all issues of discord during the next round of line Ministry-level talks.
Terrorism Menace
With relations having languished since the cataclysmic 26/11 terror attacks nearly three years ago, the two sided agreed to push a host of initiatives, including the revival of the joint commission, a preferential trade agreement and liberal visa regime.
The Indian prime minister conveyed to his Pakistani counterpart that both countries have an obligation to ensure that terrorism does not spoil relations between them and pressed for justice for 26/11 victims.
Terrorism is a perennial concern. We have an obligation to ensure that it does not spoil relations between the two countries," Manmohan conveyed to Gilani during talks.
Singh told Gilani that "it is imperative to bring the perpetrators of 26/11 attacks to justice." The two leaders agreed that terrorism posed the most serious threat to peace and stability in the region."
Foreign Ministers’ Meeting
External Affairs Minister S.M. Krishna and Pakistani Foreign Minister Hina Rabbani Khar discussed trade and terrorism issues with a view to broadening the two countries’ engagement.
The two ministers informally indicated to the media that the atmosphere was positive. Krishna is learnt to have stressed the need for Pakistan to deal effectively with those responsible for mounting the 26/11 attacks on Mumbai, and not allow its soil to be used by terrorists targeting India.

MFN Status
India announced a trade-related confidence-building measure to match Pakistan according the Most Favored Nation (MFN) status to India. Ms Khar indicated Pakistan would soon finalize its decision to offer India the “MFN” trading status as a means to widen the engagement process.
Earlier on 2 November, Pakistan decided to grant MFN status to India, 15 years after New Delhi accorded it the same level of treatment.
MFN is a level of treatment accorded by countries interested in increasing trade with each other. Countries achieving MFN are given trade advantages such as reduced tariffs on imported goods. Special consideration is given to countries classified as "developing" by the World Trade Organization (WTO), which also enforces the status.
Pakistan has already bestowed MFN status on over 100 countries, including its all-weather friend China, but had been hesitant to do so in the case of India because of the fear that Indian exporters may flood Pakistani markets with their merchandise once normal trade is allowed.
Formal trade between India and Pakistan averages $ 2.5 billion annually, it is the informal route through the trading centers of Singapore and Dubai that is bigger and is estimated to be around $ 3.5 billion. Now Pakistan has granted India MFN status, formal trade may shoot up to $ 6 billion. Pakistan’s Planning Commission estimates that trade will to grow to $ 10 billion soon once MFN status is given to India. Freeing up many trading items could see the two countries making value additions to each other products.
Preferential Trade Agreement
India has decided to move toward a Preferential Trade Agreement (PTA) with Pakistan as both sides agreed to put in place a liberalized visa regime soon.
The decision to move towards a Preferential Trade Agreement with Pakistan under the South Asian Free Trade Area (SAFTA) that will lead to zero customs duty on all traded goods by 2016 came during Singh-Gilani meeting. The two leaders also agreed that bilateral trade will be conducted on Most Favored Nation basis.Both leaders decided to put in place a liberalized visa regime that is being negotiated at the earliest and revive the Indo-Pak Joint Commission that has not been in operation since 2005. The SAFTA is an agreement reached in the 2004 SAARC summit in Islamabad which created a free trade area of 1.8 billion people in Bangladesh, India, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.

Global Financial Recession Affects Bangladesh's Exports

The country's export sector has been gripped afresh with recession. And as a result, the export orders in the country's main export earning sector -- the readymade garment (RMG) industry -- are declining. The orders in the past six months decreased by 20 to 25 percent. The growth in the RMG sector declined to 28 percent in July 2011 from 42 percent in June the same year. The export sector of Bangladesh has started experiencing a negative impact, as a fresh recession hit the RMG buyer countries, including those in the United States and Europe.
Exporters said buying orders in the knit and woven sectors have decreased. If the trend continues, it will turnout to be bad for the industry. Work in most of the RMG units at this moment has reduced by 50 percent. If the recession is a fact, the government will have to activate the announced taskforce right now.
Sector's Real Export
It has been learned that the RMG sector is the highest export earner of the country. In the knit sector of this industry, the export growth is 46.25 percent. The sector's real export has stood at $9.482 billion against the target of $7.131 billion. That means the real growth is 32.96 percent higher than the target. The growth in the oven sector has been increased by 40.23 percent. The sector exported items worth $8.432billion against the target of $6.614billion. The real export in the sector has been increased by 27.48 percent against the target.
This sector is not getting their exact export orders due to the gas and electricity crises. Bangladesh has lost a goon number of buyers as orders could not be supplied on due time. Many entrepreneurs had to supply the consignment by planes spending more money to contain the buyers.
Portion of Export Orders
In addition, recession in economy of the United States, Europe, Greece and Canada is pushing the coming days toward a crisis. By this time a considerable portion of export orders has gone to our neighboring country. Export to the United States, the United Kingdom, France, Italy, the Netherlands and Japan been declined. Among the South Asian Association for Regional Cooperation (SAARC) countries, the exports to Afghanistan, Pakistan, Bhutan, Nepal and Sri Lanka have decreased.
About the state of exports, former BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association) President Mohammad Fazlul Haque said our orders have reduced in comparison with the normal time. He said the orders started declining from two months back, which is 20 percent less than the expectation. He said the US economy has a definite impact on all over the world. The Europe is undergoing recession. We are apprehending a crisis in the coming days. Our economy is experiencing unrest in the export order. Things will not be clear before two or three months onward. He said it will be very difficult to contain the growth that achieved in the last fiscal (2010-2011).
Overcoming Recession
For maintaining the growth, he suggested taking initiatives in the private sector. He said we have to diversify our import basket. We have been confined to some items. We have to come out of that. He said we are unable to produce more diversified items and this is our failure. He said helps from the government is necessary to enter new markets. The governments of our competitors are giving that.
Exporters Association of Bangladesh President Abdus Salam Murshedy said it is true that our export orders are declining. Not only in the RMG sector, there is a fall in overall export. He said we could overcome the recession in the fiscal 2010-2011. But a new recession is approaching us. Our buying countries are also gripped with recession. The economy of Europe, America, Greece, Portugal and Denmark has been suffering from recession. Their purchasing power is also decreasing due to the recession.
He said our readymade garment has 90 percent export market in Europe and America. He said the export in July 2011 reduced to 27 percent from 50 percent in June 2010. The export is likely to reduce further in the coming days. He said the overall export order has been reduced by 20 to 25 percent.
Country's Economy
Murshedy said our export is about taka 240 billion. He said it is urgent to form the taskforce suggested by the Prime Minister. The activities of the taskforce should begin soon. He said we will have to increase the ability in completion to contain the growth rate. He said initiatives will have to be taken for solution of the present electricity and gas crises. He said the diesel and furnace oil based industries will have to be given duty-free facilities. He said capacity of the Chittagong Seaport will have to be increased. Mongla Seaport will have to be built as an alternative port. He suggested reducing the high rate interest on bank loan. He said we have been failing to survive in the race with our competitive countries due to these reasons. He also stressed the need for ensuring political stability in the country. He expressed the apprehension that the country's economy might suffer a lot in the recession set to recur before the passage of one-year time.
About the present state of export, Faruk Hasan, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the orders in the export sector have been reducing for the last two months. Some of the RMG factories have already been closed down for lack of work orders. But the condition of sweater industry is good. The sweater industry has enough work. The recession is continuing in the cases of knitwear and oven garment orders. He said 50 percent work has reduced in factories of the said sectors. Faruk Hasan believes from August to October 2011 will be a very bad time. He said 50 percent of our export is going to Europe, 5 percent to Canada and 26 percent to the United States. We are taking preparations to fetch export markets in the neighboring countries. We will be able to increase our export to the neighboring countries by 10 percent in the next 5 years. The export decreased in July 2011 as against June 2010. The export stood at 28 percent in July 2011, which is higher than that of the previous year.
Foreign Exchange Reserve
Economist and Adviser to Former Caretaker Government Dr AB Mirza Azizul Islam said reduction of order in our export sector is not an unusual phenomenon. He said the US economy suffers from considerable uncertainty. The governments could overcome the recession in the fiscal 2008-2009 through bailout packages. But they have no such a scope this time. He said the condition of economy in Greece, Portugal and Spain is not good. Under the above circumstances, he said, the reduction in export order is not an unusual event.
He said: “We have to see whether quantity or value is declining.” He said the growth in RMG export in the last year increased export by 15 percent. And the value was increased by 35 percent. He said more abnormal situations might be created in the coming days. Our remittance is declining. The foreign exchange reserve is on the wane. He said the price of oil in the Middle East will fall if the recession strikes. And as a result, this will leave a negative impact on the Bangladeshis working in the Middle East countries.

Zardari's Japan Visit

The 31-point joint declaration, issued at the conclusion of President Asif Ali Zardari's three-day visit to Japan, states both countries decided to further strengthen mutual relations, encouraging private institutions, to start joint ventures, and enhance cooperation in the fields of finance, banking institutions, agriculture, food, mineral development and energy sector for the sake of enhancing comprehensive partnership.

Peace and Stability
The Pakistani president and the Japanese prime minister reemphasized that peace and stability in South Asia is necessary for peace and prosperity in Asia but throughout the world. Earlier on, during comprehensive dialogue between the two leaders, both countries decided to strengthen mutual relations as well as trade and economic ties by promoting comprehensive partnership.
The president also called on Japanese Foreign Minister Seiji Maehara. The president said that Japan was an important friend and trade and development partner of Pakistan. There was a need to further promote the existing cooperation, he said. He emphasized on the need for Japanese cooperation in various fields, including trade, development, security, energy and institutional capacity building. The Japanese foreign minister assured continuing Japanese assistance for revival of the Pakistani economy.

President Zardari's visit to Japan highlights the continuity of stable relations between Pakistan and Japan. There is no doubt about the fact that Japan has played a significant role in providing technical assistance in Pakistan's social, economic, academic, technical life in addition to financial assistance and cooperation for development. In view of the changing regional situation, Japan's support of the Pakistani viewpoint shows the deep relations and mutual trust between people of the two countries. There is no doubt that relations between the two countries will be further strengthened because of the president's recent visit.

Nuclear Energy for Peaceful Purposes
President Zardari exchanged views with the Japanese leadership on an important issue and highlighted Pakistan's concern in that regard. He said that why cannot Japan cooperate with Pakistan in the field of nuclear energy, and provide it nuclear energy for peaceful purposes if it can do the same for India? Pakistan also deserves that and there is no justification of denying Pakistan nuclear technology. The president made it clear that India had forced us to become a nuclear power. Pakistan does not want to join the arms race in the region. There is no truth in the media reports that the number of our nuclear weapons is greater than those of India. The fact is that the United States showed discrimination against Pakistan with regard to civilian nuclear deal, and refused to provide nuclear technology to Pakistan for its economic and social development in spite of its needs and insistence. This was the gist of the president's earlier interview with the Japanese media, in which he was asked if he would raise the issue of nuclear cooperation during his meetings with the Japanese officials. The president said that he did not know what questions will be raised at that point. He said that the objective behind his visit is to apprise the Japanese Government and people of the situation and challenges confronting Pakistan. The president emphasized on the Japanese automakers to install plants in Pakistan.

A delegation of the Pakistan People's Party (PPP) Japan also called on the president. On the occasion, the president said that PPP activists should make every effort for welfare and development of the Pakistani community in Japan.

This was his second visit to Japan after he took charge of the president's office. Meeting with Japanese Emperor Akihito and formal negotiations with Prime Minister Naoto Kan were part of this visit's schedule. During the meetings, mutual relations, regional situation and important regional and international issues were reviewed.

Zardari also called on members of the Japanese cabinet and MPs, in addition to renowned businessmen. It is good news that Pakistan and Japan, while agreeing to have close cooperation in the fields of trade, economy, defense, education, health, disarmament and nuclear nonproliferation, decided to continue dialogue and political consultation, and to start joint ventures.

Eliminating Terrorism
In his meeting with President Zardari, Japanese Prime Minister Naoto Kan, while reiterating his resolve for full cooperation with Pakistan in the war on terror, emphasized on regional peace and stability and showed interest in playing role in South Asian Association for Regional Cooperation (SAARC). He said that Japan would fully cooperate with Pakistan in water and power resource management and infrastructural development.

Both leaders decided to enhance contacts between MPs, traders, youth, and public in addition to training of defense officials and cooperation between the two countries' military education institutions. The Pakistani Government will work on simplifying the process of issuing visa and granting immunity to Japanese traders and tourists.

Economic Issue
In his meeting with Japanese Minister of Economy, Trade and Industry Banri Kaieda, the president said that Pakistan considered Japan a large market for its exports and desired joint ventures, consortium and trade contacts with Japan.

Addressing the Japan-Pakistan Business Cooperation Committee, President Zardari declared that strong economy was inevitable for victory against the terrorists and their supporters. He also emphasized on the need to provide employment opportunities to the people. The president recalled to the Japanese leaders that the government took courageous steps for improving the demolished economy, which he had inherited and adopting the way of reconciliation with all political forces instead of repeating the history of political clashes. As a result of this consensus, extraordinary constitutional changes have taken place.

Despite ravages of floods and international economic depression, the Pakistani economy is improving. It is expected that the Gross Domestic Product (GDP) will grow by 2.3 percent this year. Pakistan is a natural course for trade and energy for Central Asia and Western Asia. The Japanese investors can fully utilize Pakistan through joint and individual economic ventures. The investors will be provided full security and all the possible facilities.

Demand of Situation

President Zardari's visit basically springs from the need that Pakistan-Japan relations should move toward mutual social and economic development and technical information, practical sharing and financial assistance from Japan should be utilized in the best possible manner to eradicate the social and economic problems confronting the country.

There is a need to follow the Japanese strategy to end uncertainty. Academic, practical, and technical capacity of every individual should be built so that the country takes rapid strides to development on modern footings. It is regretting to note that a UNDP [United Nations Development Program] report has disclosed that Pakistan lags behind Laos, the smallest country on the world, in terms of human development in the list of 169 countries. Pakistan stands 125th throughout the world. If we closely review president's visit and Pakistan-Japan friendship, they have positive message for us, namely social and economic stability, and coordinated effort in that regard is the demand of the situation.

India's Initiative for Talks and Pakistan

India has once again invited Pakistan for foreign secretary-level talks. A positive response has been given, yet Pakistan is projecting the Indian invitation for the resumption of dialogue as a decision taken under international pressure. There is truth in this comment, for the world attention is once again attracted to Pakistan owing to the conditions prevalent in Afghanistan and the Taliban activity. The Western troops are in a hurry to quit Afghanistan, but the Taliban problem persists unabated. Under the circumstances, North Atlantic Treaty Organization (NATO) countries once again need Pakistan.
If Pakistan did not take effective action against the Taliban, it would again spread instability in Afghanistan. And if its demands are not conceded, then Pakistan will stop fighting with the Taliban. In such conditions, the United States and the NATO nations would again endeavor to water down the India phobia being put forward by Pakistan. It is as a consequence of this very consideration that foreign countries are constantly exerting pressure on India to resume talks with Pakistan.
India is not desisting from talks with Pakistan. In fact, the Indian policy is to maintain peace in the Asian region for it is in the interest of the entire South Asia region, including India. But Pakistan has been employing all sorts of tactics to destabilize India.

Pakistan's Support to Militancy
In Kashmir, militants continue to receive the Pakistani support until today and the Pakistani intelligence system and its military continue to hatch designs to carry out terrorist attacks in India from time to time. Which is why, India does not deem it fit now to hold talks with Pakistan because there is no likelihood of any better outcome emerging from the talks.
As soon as India and Pakistan make some headway to agree on some issue, the Pakistan intelligence and military system tries to sabotage the prospects of bringing the mutual consensus to some positive end, by launching an attack on India. And when tension mounts between the two countries the security system in Pakistan finds an opportunity to register its importance and attract the government's attention to itself.
In Pakistan, there exists a strong lobby on a permanent basis that is determined to disrupt progress in India in any circumstances and wants to create an environment of uncertainty by spreading instability in the region.
The Pakistani Government favors resumption of the dialogue process between the countries, yet the fact remains that the Pakistani regime is not in a position to exercise control over anti-India elements in its country. Unless and until Pakistan does not bring about a transformation in its system, it will be extremely difficult to make headway in the talks between the countries.

Unclear Decision
At this juncture, why has the Indian Government made a decision to restart dialogue with Pakistan is not clear. It is, however, true that Pakistan has decided to prosecute Zaki-ur-Rehman Lakhvi and others who have been linked to the terrorist attack in Mumbai on 26 November 2008. Nevertheless, the stance adopted by the Pakistani Government in the past on the issue is absolutely negative. It is no secret that instead of reining in the Mumbai attackers and terrorist organizations or their kingpins, Pakistan has been finding excuses to prolong the issue by putting forward all kinds of pretexts or remaining in a mode of denial.
In so far as the Kashmir problem is concerned, the Pakistani Government never denied that several militant organizations impart training to terrorists and thereafter pushed them into India for waging the so-called "jihad." All this notwithstanding, the Indian Government gave no clarification whatsoever for making an abrupt decision to resume dialogue with Pakistan. The South Asian Association for regional Cooperation (SAARC) summit is to be held in Bhutan in the coming days. Ahead of the meeting, home ministers of SAARC countries are due to hold a meeting in Islamabad. Union Home Minister P. Chidambaram is proceeding for Pakistan toward the end of February. India has taken this step probably because Pakistan itself is surrounded by militant outfits. Every other day, bomb blasts are taking place in that country and dozens of people are being killed.
In North Western Frontier Province (NWFP), a sort of war is being fought between the government and terrorists, and the United States also is extending support to it. Until now, not only have hundreds of terrorists and troops died, but a number of top leaders of Taliban jihadi organizations have also been killed in drone air attacks. The Pakistani Government finds itself entrapped in the war and seems to be directionless. Now, there are speculations that the country can disintegrate, and militant organizations can capture its major regions.

Consequence of Talks
One consequence of the resumption of India-Pakistan talks could, of course, emerge in the fact that the Pakistani Government will feel encouraged in its fight against terrorism with its country. It can also be imagined that in such a situation, it might be constrained to review its policy of exploiting terrorism for its strategic interests.
In our perception, India's decision to restart the dialogue process with Pakistan is not its weakness but a step taken under diplomatic considerations. For, by now, it has become certain that a majority of common people of the two countries are in favor of development of mutual friendship and brotherly relationship. It has also become clear that it is imperative to maintain cordial bilateral relations to brighten the destiny of millions of people of the two countries. It is to be hoped that the Pakistani Government takes the Indian offer for talks to help promote this spirit so that not only will mutual ties between people of the two countries improve but also it will be instrumental in raising the standard of life of people in the entire region.