India, Pakistan should learn from China

 "When will India and Pakistan learn that the economy is at the core of national resilience and power and unless a country has a strong economy, it cannot have a strong military?"

by M D Nalapat

(October 13, Beijing, Sri Lanka Guardian) Watching the diplomatic dance between India and Pakistan, such as at the UN General Assembly between the two foreign ministers, what emerges is the fact that the India-Pakistan interaction almost totally avoids discussion of economic issues.

There are many ways in which the two countries can benefit materially from each other, thereby raising living standards. In both countries, several tens of millions of citizens are living in poverty, thereby making it desirable for efforts to be made that can reduce this percentage, the way it has happened in East Asia.

However, unlike East Asians -- who are smart enough to keep their focus on the economy -- South Asians concentrate on other issues, thereby losing the chance for mutual prosperity. Both India and Pakistan need to pay attention to a common friend of both, China, which is concentrating on economic development and in the process, improving the lives of hundreds of millions of ordinary Chinese.

Consider the facts. By 2008, the People's Republic of China had overtaken the UK in the economic rankings, and in the next year, beaten

Germany. This year, the PRC became the world's second-largest economy, displacing Japan, and is on track to become the globe's biggest economy within two decades.

Indeed, this year the manufacturing sector of the Chinese economy has surpassed that of the US, a country where a careful assessment of its finances would show that it has a debt of more than $70 trillion, or about five times more than its GDP. Such a high level of debt would indicate that the US economy is in fact overvalued, the way several European economies are, and that the actual GDP may be closer to $10 trillion rather than $13 trillion.

From 1949, Beijing was careful not to overstep its reach. In the case of the 1962 Chinese border clash with India, the PLA withdrew from all the territories that it had taken over from the Indian army, in a clear sign that Beijing wanted a peaceful relationship with India. Since then, there has not been any other conflict between the two militaries, even during 1965， when India and Pakistan were at war, or during 1971,when several Indian divisions crossed into what was then East Pakistan. During the 1999 Kargil hostilities, China kept aloof.

It is no accident that China has climbed so rapidly in the economic sphere. Clearly, the bulk of attention being paid by Chinese policymakers is going to economic issues.

Interestingly, over the past year, the Chinese monetary authorities have sought to move away from US dollars and even the euro, buying instead Japanese yen, Korean won and even commodities, so as to protect the economy against a sudden crash in the value of the dollar or the euro.

If China is succeeding in becoming a match for the US, it is not because of its military but because of its economy.

When will India and Pakistan learn that the economy is at the core of national resilience and power and unless a country has a strong economy, it cannot have a strong military?

Both India and Pakistan are pathetically dependent on foreign countries for the supply of crucial weapons systems and for spares and maintenance. India has in effect barred the private sector from defense production, so that those taking bribes for making decisions can maximize their illegal gains. Delhi has also prevented the export of Indian-made defense items, so as to avoid hurting the interests of the foreign armaments manufacturers who pump huge bribes into the Indian political and bureaucratic class each year. The only way a country can have a strong defense is to have a strong economy.

When will decision-makers in India and Pakistan accept this reality, and focus their energies on growth rather than on scoring inane points against each other?

Editor's note: The views expressed in this article are those of the author and may not necessarily represent the views of, and should not be attributed to, the Sri Lanka Guardian.

The author is vice-chair, Manipal Advanced Research Group, UNESCO Peace chair and professor of Geopolitics, Manipal University.