Engaging Pakistan In A New And Non-Diplomatic Way to hurt it

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June 3, 2016, 9:22 pm

SNAPSHOT

India needs to relook and change its diplomatic policy towards Pakistan and
its sponsored terror
Indias economic strength should be properly deployed to change Pakistans
agenda
India has been pursuing traditional diplomacy in handling Pakistan and its use
of State sponsored terror. This approach has not succeeded.
Using economic strength as an instrument of foreign policy is the best way to
deal with Pakistan, in a manner that satisfies Indias domestic objectives,
while ensuring that its actions dont attract adverse international attention.
Pakistans ability to force its agenda on India, peaked in 1991 - when the
Pakistan `won in Afghanistan and Indias ally, the USSR, withdrew. India had
both political instability and a serious insurgency in Kashmir and had a less
robust economy. India has moved ahead since then with the gap only

increasing. We hypothesise that this was because Pakistan, in 1991, chose

Islamisation as its path forward, while India chose liberalisation.
By 2001, (after Kargil and 9/11), though Indias progress relative to Pakistan
was obvious, Pakistan continued on a path of increasing and more radical
Islamisation, which caused it to fall further behind and made a normal
relationship with India impossible.
2007-08 represented a tipping point in Indias strength relative to Pakistan.
Firstly, Indias per capita income overtook Pakistan (Indias GDP growth has
been higher than Pakistans in every year since 1991) and the gap keeps
increasing. Secondly, the number of security forces and civilians killed in
Kashmir, since 07-08, dropped to below 100 and those numbers continue to
broadly decline while Pakistani casualties in its own war on terror have
increased.
India will soon start `adding a Pakistan to its GDP each year. At the same
time, internal conflict within Pakistan and societal divisions, have made it far
more unstable than India and can give India leverage that it hasnt capitalized
upon. These include the various ethnic and social divides in the army (`Green

vs greener, Punjabi vs. Pashtun), insurgencies in Baluchistan & KP provinces

etc. All happening amid steady radicalization of Pakistani society.
Added to this are unfavourable external and economic factors. Pakistan has
never been more isolated internationally, with its neighbours (Afghanistan and
Iran) against it as well as its traditional allies (Gulf countries & USA) having a
warmer relationship with India than Pakistan.
Declining water and power availability, low literacy and adverse balance of
payments are other problems Pakistan faces.
In this context, we believe the relationship between India and Pakistan would
soon resemble that between South and North Korea. Thus Indias policy
should be based on:
Silent economic strangulation: Measures that can be taken quietly to
exacerbate Pakistans economic problems.
Hit exports: Textiles make up over half Pakistans exports, led by cotton
products. Any dent in this through enhanced Indian exports, could push
Pakistans BOP deficit over the edge- while helping our farmers. Banning
cotton exports to Pakistan ($ 381 million in 2014) and a rail subsidy (eg. from
Gujarat to TN) are required. The interest subvention scheme for textile exports
should be extended to cotton yarn and merchant exporters, while the MEIS
scheme can have a 5% benefit instead of 3% for tariff lines significant to
Pakistan. Indian companies could also be subsidised to acquire assets of
companies in Vietnam and Uzbekistan, which compete with Pakistan for
cotton exports.
Basmati rice is Pakistans second largest export and given the very low
exporter margins, even a minor subsidy (eg. reduced rail freight) will severely
hit Pakistans exports.
Remittances: Remittances (mostly from the Middle East) are Pakistans 2nd
biggest source of foreign exchange. If the Indian Government steps in as a

`placement agency for State run companies in the Middle East, it could
ensure that the cost of recruitment for both employer and worker are reduced
(no commission charged), worker quality improved and more Indians are
recruited from lower wage areas in the country (rather than higher income
states like Kerala) who would be induced to work at the falling wage levels in
the Gulf, thereby displacing Pakistani workers.
Trade: India should continue extending MFN (most favoured nation) to
Pakistan, even if Pakistan does not, because it does not make any difference
to Indian trade, but enables India to show that it believes in a prosperous
Pakistan through enhanced trade (which is why normal diplomatic and track 2
engagement should continue). Trade policy should focus on the impact on
inflation, or economic competitiveness in Pakistan. Thus power should not be
exported, as it would alleviate Pakistans crippling power shortages, nor beef
(the increased price of which leads to social unrest). India can also stipulate
that foreign companies bidding for projects in India, cannot be a supplier to
any Pakistan state run organisation (though exceptions can be made and
bans can be on grounds of national security, rather than official policy). Visa
denials for Pakistani executives (on the same grounds) would have a far
bigger impact on the Pakistani business environment (and none in our media)
than a visa denial to a performing artiste.
Afghanistan: The developing of Chabahar port in Iran and development work
in Afghanistan are `baby steps in what should be a much larger intervention
to develop Afghanistan and use it as a base to undermine Pakistan.
Afghanistan has 0 duties on many items which have high tariffs in Pakistan.
Exporting these items to traders in Afghanistan, who smuggle them across
into Pakistan, will not only undermine Pakistans import duty collections, but
finance freedom fighters in Baluchistan whose representatives can handle
distribution into Pakistan. To facilitate this, India needs a military presence (to
train the Afghan army) in Nimroz province - bordering Iran and Baluchistan
(where it has built the only highway in the province), along with enhanced
development of the railway from Iran to Afghanistan and increased
development work. Indias relations with Iran and Afghanistan have never

been better and their relations with Pakistan have never been worse, which
gives India the perfect opportunity to enhance its profile in the region.
Water: Pakistan will soon be one of the most water stressed countries on
earth (per capita water availability will soon be half of Indias). Even if India
sticks to the provisions of the Indus water treaty -in which 80% of Indus water
goes to Pakistan, it can take several legitimate measures to restrict water
availability for Pakistan such as:
Work with Afghanistan to complete hydel projects on the Kabul-Kunar
river system, (which contributes 16% of the total Indus river water available to
Pakistan)
Upper Indus rivers: Using the Kishenganga project arbitration award as
a template, complete other identified `run of the river projects. India has
exploited only about 6000 of the 20,000 MW of power potential from these
rivers. Completing projects on the Indian side quickly also renders unviable
Pakistans own hydel projects and reduces the flow of water to Pakistan in
winter. India should also fully utilise the irrigation potential allowed under the
treaty currently only 0.79 million acres are irrigated, of the 1.34 million
permitted.
Lower Indus rivers: Extending the Rajasthan canal to Kutch (a project
the PM identified back in 2002) and completing the Sutlej-Yamuna canal, will
sharply reduce water availability to Pakistan from the 3 lower Indus tributaries
(the water from which is fully allotted to India under the IWT, but not fully
exploited).Taken together, these measures will badly affect water availability
for Pakistans rabi crop.
Exploit Internal divisions in Pakistan
Kashmir dominates India-Pak discussions and puts India on the defensive.
However, Pakistans own disaffected ethnic groups want `Azadi more than

Kashmiris in India and form a larger proportion of Pakistans population. The

increasing economic gap between India and Pakistan also means that income
levels in Indian Kashmir (already higher than POK) would result in
unfavourable comparisons with POK (where the level of autonomy and
freedom is possibly less than in Indian Kashmir). This is missing from GOIs
narrative on Kashmir.
Increased tourism can quickly result in sharp increases in income and
employment for Kashmiris. The development of tourism is constrained by poor
transport connectivity in the State. The completion of the UdhampurSrinagarBaramula railway can be a game changer (currently barely 10% of
the number of tourists visiting Vaishno-Devi, visit the Kashmir valley), as can
building the Balaspur-Mandi-Leh railway possibly a better showpiece for
Japanese aid and technology and more useful to India, than the bullet train
project. Increased operating hours for Srinagar airport, a massive increase in
hotels and development of rural tourism are required to exponentially boost
tourist numbers.
Pakistan faces serious internal conflicts from the Baluchi insurgency and from
the Pak Armys operations against the Pashtun population in its North West. If
India helps Afghanistan develop TV and radio, it can have media channels
(with a heavy Bollywood influence) in Pashto & Baluchi, disseminating news
content influenced by India, which will strengthen the Baluchi & Pashtun
peoples struggle against the Pakistan state. (e.g. Pak army kills Pashtun
civilians in air strikes, though most members of terrorist groups are Punjabi).
The targeted use of visas (for ethnic minorities), development work in
Afghanistan, water projects that help Afghan Pashtuns, trade from
Afghanistan that helps Baluchis (who can also smuggle weapons) should all
be undertaken.
Reduced availability of water will also exacerbate tensions between Sindh and
Punjab and between South Punjab (Saraiki speaking) and North Punjab
(Punjabi speaking). Military options

Pakistani Army has been able to run to country, despite failing to win a single
war, because the public are unaware of its failures.
If Indias military doctrine aims at degrading Pakistans economic
infrastructure which can be done since its key cities, river headworks and
power plants are close to the border, the impact would be quickly felt (e.g. in
the form of crippling power shortages, or severed rail links) by Pakistani
citizens.
Indias unofficial Cold start doctrine, which looks at a rapid mobilisation, can
be tweaked, to include as the principle objectives, attacks on economic
infrastructure rather than only Pakistani military formations. If India announces
that it will conduct a limited duration war (e.g. punitive raids in response to a
terrorist attack) and NOT seek to occupy Pakistani territory or demonstrably
defeat the Pak army, the risk of the conflict going nuclear is reduced.
An Indian military presence on Pakistans Western border i.e. basing rights for
the Indian Navy at Chabahar, an airbase (where the IAF `trains the Afghan air
force), providing security in Nimroz province and protecting hydel projects
would be a nightmare scenario for Pakistani defence planners, with the
psychological impact well in excess of Indias actual military presence.
(This is a summary of a policy paper by the authors)