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Pakistan Mulls Elusive Peace With India

December 6, 2003

ISLAMABAD, Pakistan (AP) _ After 56 years of conflict with India, whispers are growing in Pakistan about the benefits of peace. Rather than shells and bullets, truckloads of fresh vegetables and consumer goods could come across the border from India, they say. A reduced military budget would allow for desperately needed spending in education and infrastructure, and foreign investors could finally come knocking.

In the past two weeks, Pakistan and India have taken swift steps toward normalization of ties _ with a cease-fire in Kashmir and moves to restore air, rail and sea links. The moves come two years after they almost fought their fourth war.

It’s too soon to talk of a lasting peace, given the nuclear neighbors’ history of diplomatic bust-ups and domestic opposition in both countries to making concessions on thorny issues like the divided territory of Kashmir. But Pakistani businessmen and others are quick to see the potential benefits.

Much of the trade between the two countries is hamstrung by official restrictions and a closed border, meaning exports and imports are mostly smuggled or sent via third countries in Asia and the Persian Gulf.

Raees Ashraf Tar Muhammad, a commodities trader in Pakistan’s main commercial center of Karachi, wants to import tomatoes. The vegetable currently costs $1 per pound in the southern city because of a shortage, compared with just 20 to 25 cents per pound in India. ``If we had direct trade with India these days, we would have brought tomatoes within three days to flood the vegetable market,″ he said.

Talk of the prospect of open trade is a marked contrast from December 2001, when an attack by Islamic militants on India’s Parliament pushed the two nations to the brink of war _ their fourth since independence from Britain in 1947. India accused Pakistan’s spy agency of being behind the attack, which Pakistan denied.

But since Indian Prime Minister Atal Bihari Vajpayee in April signaled a willingness for talks, tensions have gradually eased.

``I definitely see a shift in the thinking of (Pakistan’s President Gen. Pervez) Musharraf and his colleagues. They seem to see that it’s important to move toward normalization,″ said Talat Masood, a Pakistani political and defense analyst.

While Pakistan’s economy has picked up during Musharraf’s four-year rule, the burden of confrontation with India still weighs heavily. A third of Pakistan’s 140 million people live in poverty, yet at least 20 percent of the government’s $14 billion budget goes to defense spending.

Masood estimated that Pakistan’s annual defense budget of $2.8 billion could be reduced by at least 25 percent if there was peace, opening up resources for social spending, especially education.

That in turn could help tackle religious extremism _ identified by Musharraf as a threat to the nation’s economic development. If the state could offer better schooling, then fewer young males would pass through the religious schools known as madrassas, which often propagate a radical form of Islam.

The standoff with India also acts as a further disincentive for foreign investors _ already leery of the Islamic country’s image as a hotbed for terrorism.

Foreign portfolio investment in Pakistan during the last financial year ending June 30 totaled just $22 million _ despite a 112 percent gain in the benchmark stock index during that period because of Musharraf’s economic reform program and an influx of Western aid after Pakistan joined the U.S.-led war on terror.

Sen. Ilyas Ahmed Bilour, president of the India-Pakistan Chambers of Commerce and Industry, said that peace would boost trade markedly, not just between the two countries but in all of South Asia.

He said there is $2 billion in indirect trade between India and Pakistan, routed through Singapore, Dubai and Hong Kong, each year. ``If everything opened up, bilateral trade can be $4 billion to $5 billion,″ Bilour said.

Immediate relief at easing tensions has been felt most keenly in Kashmir. The cease-fire has allowed roads shut by cross-border shelling to reopen. Families divided by the conflict have been able to shout greetings to relatives or hurl gifts across the disputed boundary for the first time in years.

India accuses Pakistan of arming and supporting the militants, although Pakistan says it gives only moral backing. India says dialogue over the two countries’ conflicting territorial claims over Kashmir, which date back to independence from Britain in 1947, can only start after Pakistani support for the rebels stops.

The two countries have fought two of their three wars over Kashmir’s control. The insurgency has claimed more than 65,000 lives, mostly civilians.