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Home > Business > Reuters > Report

Pakistan calls for economic cooperation with India

Tahir Ikram in Islamabad | May 14, 2003 11:38 IST

Pakistani Prime Minister Zafarullah Khan Jamali said on Tuesday it was time for Pakistan and India to exchange political rivalry for economic cooperation.

Jamali told a conference of donors and lenders in Islamabad that an ice-breaking phone conversation with his Indian counterpart Atal Bihari Vajpayee last month had focused on the need to improve economic ties between the two nuclear rivals.

"You would be surprised," Jamali said. "When I talked to Indian Prime Minister Mr Vajpayee, his first emphasis was economics."

Jamali said he and Vajpayee, in the first high-level contact between India and Pakistan in more than a year, discussed how their economies could develop, but gave no details.

"Things have to change," he said. "How do you change? You don't change by fighting wars. We have had enough of wars, India and Pakistan...the political culture has to change into an economic culture."

Jamali's comments underscored the massive economic and trade benefits the two neighbours could reap by improving relations and resolving their long-running disputes. Pakistan and India have fought three wars, two of them over Kashmir, since gaining independence from Britain in 1947.

Independent economists say their mutual hostility has diverted crucial development funds to defence spending, leaving masses of people in extreme poverty.

"We want development for our people," Jamali told the Pakistan Development Forum, grouping bilateral donors, the International Monetary Fund, World Bank and Asian Development Bank. "We want to give them clean water, we want to give them good health, we want to give them good education."

In the latest sign of a thaw in relations, India named Shivshankar Menon on Tuesday as its new High Commissioner to Pakistan. The two scaled back ties after an attack on India's Parliament in December 2001, which New Delhi blamed on Pakistan-based Kashmiri rebels. Islamabad denied involvement.

Klaus Enders, head of the Middle East Department of the International Monetary Fund, told the conference a reduction in regional tension was a welcome step that could create "tremendous opportunities" for trade and investment.

There is currently no overland trade between the neighbours and trade in many goods is banned. Official bilateral trade via third countries was just $204 million in the year to March 2002.

Economists say the potential for trade is many times this amount should restrictions be lifted, given their combined population of around 115 crores (1.15 billion).

Jamali assured conference participants that Islamabad's programme of economic reform would continue.

Foreign lenders say their key concern about Pakistan, which achieved macro-economic stability during three years of military rule to last October, is that the current elected government will not strictly implement the agreed economic reform plan.



© Copyright 2003 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.


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Number of User Comments: 7




Sub: indo-pak economics terms

My simple message is ' there shouldnt any free trade among pakistan & india '. i myself being a student of economics strictly against this ...


Posted by miss yousaf





Sub: Pak for economic ties

ISI was notorious for a lot of the money laundering and other underhanded 'trade' with India. Is this really an olive leaf that pak is ...


Posted by Krishna





Sub: Trade Ties

Not exactly a bad thing. All problems with our covertly hostile neighbour stem form the Kashmir issue. However one has to note a few things, ...


Posted by podracing@rediffmail.com





Sub: Pak for economic ties with India

This may be the best political move from the leaders of we two rival countries, since independence. If we stop to fight, not only we ...


Posted by Sourav Choudhury





Sub: Economic corporation between hostile nations

Now, the countries realy realised that only the economic ties can bridge the gap of foe bwteen the two nation, Every Indian and Pakistani look ...


Posted by Jay Kumar




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