The Forgotten Economics of SAFTA

bolta_aaina,
I agree with you that SAFTA would bring social changes in the region. But I donot agree that only Pakistan, BD etc would be the only ones affected. India would be tremendously affected. Also you seem to overplay the importance of religion and underplay the importance of social changes brought in by economics like the moving of jobs.

I personally think South Asia is under-prepared for SAFTA.

Layman,
As far as taxes go, the souther and western states already give up a large part of their tax revenues to states like UP, Bihar courtesy the PLANNING COMMISION.

RE HP,DOST-MITTAR,LAYMAN

HP- I think you have taken my point of cultural and spritual seat well. The portions where Pakistan and Bangladesh are situated have never influenced the mainland. Now for example, what does an Indian Hindu or Muslim have at stake in Pak or BD. Both the communities have all those centres which affect them socially, culturally and religously within their country. But when the thing open up, Pakistanis and BDs will naturally look more and more towards the mainland which has those centres. This may lead to an identity crisis in them as citizens of sovereign countries which would not be without consequences.

DOST-MITTAR- We will leading towards a disaster if we ignore the social aspect of SAFTA by thinking that the economics will be a great leveller. We subcontinentalites cannot be compared to other like NAFTA, EU, ASEAN etc. We were historically one people, decided to separate and then again deciding to unite. Although this step is welcome and our ultimate future lies is living under a single roof--whatever that may mean to different people-- but we have weigh the social costs first. If we fail, we may not get the second chance. If we force something from the above for which people are not ready, then it will be suicidal. The only thing is that before we embark upon something as SAFTA, the common people are to be taken into confidence, they are to be informed of their likely impacts and social & cultural changes it may lead to.

LAYMAN--What exactly will be the final shape of SAFTA, we dont at this moment. Thats what we are trying to analyse. But it is certain that though a large majority of people will integrate but some people will be left out altogether. For example, Sindhi, Punjabis, Bengalis, North Indians and others will definitely integrate. But what about Kashmiris, Pathans, Balochs, North-east Indians? The immediate biggest beneficiaries will be Punjab, Sindh, Gujarat , Rajasthan and Bombay. The people of these places have been doing business with each other since centuries. The others will have to wait till they get the real fruits of SAFTA.

In the final analysis, SAFTA is welcome, but dont ignore its social costs.

#3 bolta_aina: ``Further to Post#2, talking about SAFTA is opening the lock of the gate of Reunification. Are we ready for that or is it acceptable to us in the ultimate?? Because when people, goods and services start moving freely then this question is difinitely going to arise in India, Pakistan and Bangladesh?``

Look at it from another angle. Will SAFTA increase fissiparious tendencies within India? When free trade and free movement of people, goods and services happens all over the sub-continent, what is the additional incentive for people to continue remaining citizens of India? Will they not be better off with greater political freedom, while continuing to enjoy the benefits of an economic union. Will true SAFTA not push us towards an EU type model especially for various large Indian states? Why would a TN or a Maharashtra or a Gujarat want to share their tax revenues with a Bihar or UP or MP?

HP #13

`` For all practical purposes Sindh had never been politically a part of mainland India until it was occupied by the rulers in Delhi both Moghals and British but Sindhi never really considered themselves non Indians. There is a strong sense of independence in Sindhis but that independence never overrode the Indianness. ``

Sind was occupied by Ashoka, Harsha, any reasonably powerful ruler @ Delhi. Sind was a non-significant entity in Indian history until Punjab was developed. That lead to the development of Karachi port.

masadi #12

`` NAFTA has produced misery for the Mexicans, with falling real wages and no rise in the standard of living and a greater concentration of wealth and resulting inequality, and a miserable growth rate for the Mexican economy. Is that the reason why our esteemed author is suggesting troubles with any regional integration between our countries? No that is not the reason, what he is suggesting as scare tactics is because the US will not be involved in such an integration and hense there wont be the usual exploitation of the poor countries whenever the US steps in- like it has in the case of NAFTA. We need to break free from the US dominated world economic system otherwise no regional alliance or free trade zone or whatever will be successful. (period) ``

Mexico cannot compete with USA on the high end. They cannot compete with China in manufacturing and India in services.

The availability of petroluem and easy $$$ in the way of remmittances has prevented the corrupt Mexican elite from introducing any serious reforms.

Blaming Mexico problems on USA and NAFTA misses the boat. Mexican elite never misses a chance to lash out at the gringos.

As an addendum to #12, get a hold of the Population Data Sheet of the Census Bureau`s PRB, and go through the population/economic indicators of various countries of the world. After they received their token independence from the colonial powers, no country of any average size has been allowed to succeed- regardless of culture, government in power, leftist or rightist or whatever none of them have developed- so when you look for an explanation of why that didnt happen you have to look at things bigger than individual countries that is causing them to remain at the same level and that is the global economic system, dominated by the US and a handful of developed (European) countries and US occupied Japan. Now how many more lives have to be lost by poverty and misery before you all will realize what the actual cause is? All these illusions of IT and technology led development are merely distraction tactics, carrots that are dangled before an otherwise starving world.

Unless we break free from this world system of tyranny and set up our own economic system, trading with the developed world only on equal terms when it benefits our economies, there will be no development, there will be no end to misery and there will be no end to the regional BS wars. The FIRST step to take in this after we reject this system is to get rid of the apparatus of enslavement, the colonial nation state system that has bureaucratized colonization.

#11 by dost-mittar

I am not just talking about the cultural affinity but the political undercurrent that run way deep to be neglected by just 60 years of politics. As I look at it, at different times in the subcontinent history different areas of India politically alienated themselves from Delhi or the political centre of India. Sometimes this alienation lasted 100s of years but none of those areas were able to detach themselves completely from the mainland India.

For all practical purposes Sindh had never been politically a part of mainland India until it was occupied by the rulers in Delhi both Moghals and British but Sindhi never really considered themselves non Indians. There is a strong sense of independence in Sindhis but that independence never overrode the Indianness.

Punjabi fought against Moghals and even had an independent state but they were still Indian. Often this independence lasted over 100s years but eventually things stabilized.
As I see it, though, things are bad between Pakistan and India now but looking at the history of India this alienation may not last more than a couple of hundred years.

What intrigues me is the attitude Pathans and Baloch have about India. Pathans, we would assume would look at Kabul for political leadership but they don’t and they look at the East. Similarly Baloch are ethnically more Persian than Indian/Pakistani but they too don’t look at Iran for political leadership but look eastward. Why is that?

Culturally both Pathan and Baloch are closer to Iran and Afghanistan but they would rather affiliate politically with India or Pakistan.

There are many Pathans in NWFP and Balochistan that are still called Congressi and would prefer a political alliance with India rather than with Afghanistan. Baloch never look towards Iran for political help but they would always welcome India for help.

Just some more abstract thoughts...

#8 NAFTA has produced misery for the Mexicans, with falling real wages and no rise in the standard of living and a greater concentration of wealth and resulting inequality, and a miserable growth rate for the Mexican economy. Is that the reason why our esteemed author is suggesting troubles with any regional integration between our countries? No that is not the reason, what he is suggesting as scare tactics is because the US will not be involved in such an integration and hense there wont be the usual exploitation of the poor countries whenever the US steps in- like it has in the case of NAFTA. We need to break free from the US dominated world economic system otherwise no regional alliance or free trade zone or whatever will be successful. (period)

HP, bolta_aina:

I think that one should keep the cultural aspects separate from economic aspects. The cultural invasion/integration will continue regardless of the progress towards SAFTA or even common trade. It started when the VCR made it possible for every Pakistani to have access to the Indian movies and, I might add, Indians got access to the PTV dramas. But the real cultural invasion started with the advent of the satellite TV. TV brings characters characters into the living and family rooms and we start getting ``intimate`` with the ups and downs in the lives of the characters, whether they are characters in ``Friends`` or in ``Ghar ghar ki kahani``. People are affected by those soaps and Krorepati programs because they can relate to the emotions, the relationships and feelings expressed there. I doubt very much if any Arab or Iranian programs would have the same appeal in Pakistan, except for any scene showing Hajj or Namaz. I can see why Pakistanis who want to create a distinct Non-Indian identity for their country would feel uncomfortable, but this process is independent of any economic union, or even any normal flow of trade between the two countries.

#2 by bolta_aaina

“Here we have to keep one thing in mind is that the spritual and cultural seats of both Hindus and Muslims lie in the mainland India only.”

You are so right…
This incidentally is the main cause of Indian-Pak relations not moving forward. I am too of the opinion that Pakistani would go back to looking at their old spiritual and I might add cultural centers for leadership.

I know many Pakistani would not agree with me on this but the reality is that Pakistani already look at Bombay, Delhi and Lucknow as the cultural centres for Pakistan too. The popularity of Indian movies is not because they are in Urdu but the reason is that those movies represent the indigenous Pakistani culture too.

Before Partition, Bombay movies were equally popular in Peshawar, Quetta, Lahore and Hyderabd Sindh and they are still popular there.

Not having access to the cultural seats in India has created an intellectual void in Pakistan. Subcontinent for the last 1000 years was led from Delhi and UP and my gut feeling is that people in Pakistan are still not reconciled with the Pakistan politicians as they are still considered local politicians and not National politicians. National politics still attached with the leaders from Delhi and from the central India.

Manto(Yasser) would kill me for saying this but Delhi is the historical capital of Pakistan too. No snark here. All I am saying is that Delhi is the capital of India and Islamabad will remain capital of Pakistan but the real capital of India and Pakistan is still Delhi. That is the history and eventual everyone would come around to accept that.
I know these are some abstract thoughts I will try and elaborate as time permits.

Botla_aaina,

Could you please further elaborate on your thoughts while I get time to post something on this very important part of the India-pak relations?

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Dear Osama:

I am so glad that you wrote the whole article on SAFTA without mentioning the `K` word. This is an economic issue and countries should assess the potential benefits and costs in economic terms only.

I disagree that the effects of free trade zone have been negative. All three countries in NAFTA have benefitted from the arrangement and attempts are being made to extend the arrangements to all of America. The same is true of ASEAN. The European Union is so successful that new countries are always wanting to join in.

It is also my opinion that in the contemporary world, a country with a smaller and less developed economy will benefit more from the arrangement. The impact of SAFTA on India would be small, but its potential effect would be huge on smaller countries in the group. Smaller countries would also need to build transitionary safeguards to give their less efficient industries to catch up with the more advanced ones. But in the end, the smaller countries, especially Pakistan, would gain more once they have access to the same factor input prices that India has. It is possible that three out of four Pakistani firms in a given industry would fold, but the fourth one which survives would have access to ten times its current market and more than make up for the loss of the other three. Any company contemplating establishing/expanding operations in South Asia, including Indian companies, would have to seriously consider the locational advantage of Pakistan relative to other countries on the subcontinent.

And if it turns out that all Pakistani industries are uncompetitive compared to India`s, that would be an indication of an over-valued Pakistani rupee and an adjustment therein would make the Pakistani industry more competitive.

It is well to remember that at the time of the partition, more than two-thirds of Pakistan`s trade was with India and vice-versa.

Total nonsense trying to discourage poor countries from coming together. Unless the poor countries realize the fact that the US elite with their militarism will NEVER let them succeed or come together, they will always fail in thier unification. We need to get rid of this divide and rule nation state bureaucracy that has been forced by the previous colonial powers upon us to keep this superior/subordinate relationship with them going. Get rid of the slave keeping apparatus and the slave mentality and we are bound to succeed together by going against the system of domination employed by the US elite.

That said, let us see what motivates this person for writing such a piece. To understand that we need to look at the think tanks in the US that are apologists for its permanent war economy and help not only mislead the public in the US but also push the agenda of the Military Industrial Complex in the US. One such think tank is the RAND CORPORATION

Now, go to their website and look under their origin information and they tell you (themselves) that:

<<< The Origins of RAND
World War II had revealed the importance of technology research and development for success on the battlefield and the wide range of scientists and academics outside the military who made such development possible. Furthermore, as the war drew to a close, it became apparent that complete and permanent peace might not be assured. There were discussions among people in the War Department, the Office of Scientific Research and Development, and industry who saw a need for a private organization to connect military planning with research and development decisions. >>>

I would suggest you read the whole thing at their website at http://www.rand.org/about/history/#origins

So we have house slaves like the above author of the article, who wants to scare our poor countries from forming alliances even as he pushes the agenda of the US elite and their permanent war economy. Shame on him, double shame on him becuase he has sold his soul, and double shame on CHOWK for publishing such articles time and again and deliberately censoring the ones that I submit that are critical of the US elite and thier world system of tyranny. We need alternative voices on here, ideas like the above are pushed to the hundreds of millions by the corporate media day and night, why does CHOWK have to be another forum for such nonsense? You do nobody a service by become a mini corporate outlet for their BS.

Good day to you all.

Even if those theorized benefits were to be realized, none of these countries seem to have either a plan in place ( e.g. a social safety net for those who will lose jobs by hundreds and thousands)


social safety nets? Huh? Do these countries have a social safety net NOW when they`re not trading?

All people are better off when countries trade...some people will make millions...some people not as much...but they`ll be better off than when they didn`t trade..

The benefits of trade far outweigh any such imagined concerns...

Re: # 3

Free trade sounds good. It`s a win-win for all sides.

Reunfication???? No thank you. We respect your Pakistan and Bangladesh. I think most Indians and Pakistanis would agree that we are better off as seperate countries.

SAFTA will not have any immediate benefits but would have immediate costs. As far as the long run, we really don`t know how the countries are going to cope up with cross-border effects. For example, lack of common market has insulated the effects of mayhem in one country on other countries. A free trade area would change all that. It would also mean changes in laws in all of countries.

Also common currency as well as reunification are a big ``NO``. The costs of it would just overwhelm any benefits.