Ishrat sees high trade potential for Pakistan, India

THE NEWS

Sunday, February 07, 2010
By Samia Saleem and Farhan Zaheer

KARACHI: Dr Ishrat Husain, former State Bank of Pakistan governor and Dean of the Institute of Business Administration, sees Indo-Pak relations in a new perspective as the two media giants of India and Pakistan provide people an opportunity to present their views, end mistrust and improve economic ties.

Dr Ishrat, having a keen eye on economic affairs, has given key analysis on prospects of growth between the two countries.

“Through their peace initiative ‘Aman ki Asha’, the Jang Group and The Times of India have taken a responsible step towards the cause of peace but have a long way to go,” he feels.

He is of the view that with changing times the burgeoning economy of India will realise the importance of improved ties with Pakistan as recognising the potential of each other is in favour of both the nations.

He says India today is a fast growing economy and a very important economic power-in-making and “we must recognise that”. “At current 80 per cent of the Gross Regional Product (GRP) income of South Asia comes from India and India today has one of the largest markets in the world and the economy of Pakistan can benefit multifold if we have trade with the country.”

He expects the economy of Pakistan can be doubled if Pakistan is able to capture even 10 per cent of the 300 million-middle class market of Pakistan and India.

Dr Ishrat, who has a proficient background as an economist, sees Indo-Pakistan friendship as a step towards prosperity for both.

Quoting a 2004 State Bank study, he says, trade between India and Pakistan can be increased from $1 billion to $5 billion if the entire trade between the two sides through illegal means is brought in the legal net.

He says Pakistan can tap this potential in the sectors where India has already excelled like steel, pharmaceuticals, IT, consumer products and various raw materials.

Quoting an example, he says, “we import coal and iron ore for our steel mill from Australia and Brazil, but can import it from India which has a growing expertise in the industry and will reduce our cost to one-fifth.

“This will cut our cost of production of steel and will have a positive effect on other industries like automobile and construction,” he says.

“We need to increase our growth rate because low growth rate hampers employment opportunities and increases poverty. The problems of today’s Pakistan are non-economic like law and order, terrorism and improper use of natural resources.”

On the failure of dialogue due to disputes between the two countries, he feels that it is not actually the fault of any country but is rather an action-reaction diplomatic retort that mars relations. He feels that economic or any other ties with India cannot be sustained unless the political mistrust and discord is removed.

However, the mistrust cannot be removed unless and until “we recognise each other’s potential, sensitivities and value. But for this, India too has to behave as a bigger regional country instead of being aggressive and arrogant.”

He says ‘Aman ki Asha’ has provided an open platform to the people of the civil society to express their views and concerns about relations of the two neighbouring countries. Unlike the old times when the issue of relations between the two countries was limited to government to government correspondence and stances, this step has provided common people with an opportunity to talk for them openly on their issues, he says.

“Now businessmen and the organisations can put on the table whatever is on their minds and the people can articulate their views openly with the most powerful media groups in both the countries.”

After a bright career as an economist, Ishrat entered the field of education to take Pakistan’s name among top teaching institutes in the world. “This is not a job, rather a passion for me as I want to take the IBA to the next level where it is not only considered the best in the country but also in the world,” he says.

Having a keen eye on the economy relative to the world, he feels that the biggest problem of the country is illiteracy and lack of work on human resource. “This if tackled properly can also become our greatest strength as the population in western countries is fast growing old and the future says that our youth will be in demand provided we train them properly.”

He is of the view that the upcoming business conference under the banner of ‘Aman ki Asha’ this month, where top-notch Indian leaders belonging to the civil and business society will come, is the right step towards bridging the big gap in relations.

Supporting the initiative, he says “given history of relations, Aman ki Asha will see both successes and failures but the key is persistence. And that both media groups should have to go a long way that is to go beyond just seminars and conferences.”