71. Promoting Cross-LoC Trade in Kashmir
- Author:
- Moeed Yusuf
- Publication Date:
- 09-2009
- Content Type:
- Working Paper
- Institution:
- United States Institute of Peace
- Abstract:
- Since 2005, Pakistan and India have pursued out-of-the-box thinking on Kashmir and have allowed nominal human interaction and economic exchanges across the Line of Control (LoC). One of the most promising recent developments has been the formation of the Federation of Jammu and Kashmir Chamber of Commerce and Industry (Joint Chamber), the first formal joint establishment across the Line of Control, which is poised to play a central role in future efforts at increasing economic collaboration. The Joint Chamber is still in its infancy and faces a number of critical challenges that are indicative of the potential stumbling blocks any effort at enhancing economic collaboration across the Line of Control is likely to face. Currently, a consensus is missing on the future direction of the Joint Chamber. Not only are the central governments in Islamabad and New Delhi skeptical about according this new body a pivotal position in cross–LoC trade, but even the business communities in the Indian and Pakistani parts of the state suffer from internal differences on the scope of the Chamber's activities. Perhaps most worrisome is the Kashmiri business community's reluctance to lobby proactively for expansion of ties beyond trade in goods. Investment, joint ventures, and transit trade through Pakistani Kashmir and Pakistan hold the real potential if economic interdependence is to ameliorate the long-standing political tensions over Kashmir. The Joint Chamber members need to agree on a clear vision for the Chamber, preferably including concerns not only relevant to goods trade but also to trade in services, investment, joint ventures, and transit trade. To cover this broad horizon the Chamber would have to increase its capacity by involving entities such as trade associations and the civil society at large. Before tangible gains can be made, the Joint Chamber needs a number of scoping exercises to determine the true potential for economic collaboration on all fronts. The current dearth of information is a major shortcoming in determining the specific areas that could expand the hitherto nascent cross–LoC interaction. The Joint Chamber is already engaged in advocating for an increase in the nominal goods trade initiated across the LoC in October 2008. Protocols for physical travel and communication between traders, marketing and banking facilities, and an expansion of the scope of engagement are obvious next steps for this process. The key to the Joint Chamber's success is to strike a delicate balance between nudging the governments to open up and remaining pragmatic about the necessarily incremental nature of the gains.
- Topic:
- Conflict Resolution, Political Violence, Islam, and Bilateral Relations
- Political Geography:
- Pakistan, South Asia, and India