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Tuesday, September 23, 2008

Trading Across The LoC

The Hindu/22nd Sept, 2008
PoK eyes cross-LoC trade for economic progress on its side
Nirupama Subramanian
As efforts gather pace to quickly open up the Line of Control for intra-Kashmir trade, the initiative has stirred visions in Pakistan-occupied Kashmir not just of “de facto unification” but of the emergence of their side as a “trade hub” that could help it shake off its present under-development and poverty.
But PoK businessmen and others are saying that for this to become a reality, cross-border trade has to be more than a symbolic gesture by India and Pakistan towards Kashmiris.
Indian and Pakistani officials will meet in New Delhi on Monday to discuss the details of the cross-LoC trade, including items that the two sides will be permitted to trade and the arrangements at the crossing point such as serviceable roads, parking areas and customs facilities.
A delegation of PoK businessmen and traders was also due to reach Srinagar for a meeting on Sunday with Valley business leaders, but put off its visit apparently on the advice of the Kashmir Chamber of Commerce and Industry to arrive after the Eid festival.
India is keen to get the initiative off the ground as one way of defusing the two-month-old crisis in the Valley. The Pakistan government, criticised by Kashmiris for doing nothing to help them in their latest protest against New Delhi, also sees this as a chance to redeem its image in the Valley.
Fired by the spirit of the recent “Muzzafarabad chalo” rally in the Valley that ended in violence when Indian security forces stopped the marchers, the PoK government, its civil society and businessmen are all rallying behind the move to open the LoC to trade.
They see Kashmiris in the Valley as under siege by chauvinist Hindus in Jammu and there is a feeling that “we must do whatever we can to help our brother Kashmiris” on the other side.
Shah Ghulam Qadir, Speaker of the PoK Assembly, told The Hindu that it was a long- awaited development that “will reunite two brothers separated long ago.” He said it was the “best way” to deal with “Jammu extremists” who had blockaded the Valley.
Ershad Mahmud, an independent analyst who writes extensively on Kashmir affairs, said PoK was looking forward to cross-LoC trade “as an opportunity for de facto reunification of the Jammu and Kashmir state.”
But beyond emotions, people in PoK are also looking at what cross border trade can do to improve their own lot.
Though numbers are difficult to get, it is widely acknowledged that PoK’s economy is underdeveloped. Over 80 per cent of its estimated 3.5 million population lives off agriculture and a majority of them are subsistence farmers. Fruit and vegetable cultivation is not as advanced as on the Indian side or as extensive.
There is very little industry in the region. Poverty has increased since the 2005 earthquake that tore up areas of PoK, taking with it not just lives but also livelihoods, especially those of small businessmen, artisans, weavers and the like. An expected post-quake construction boom did not take off, and the people are yet recover fully from the after-effects of the disaster.
With few opportunities in PoK, the urban population is mainly employed in the services sector in Pakistan. Under these circumstances, intra-Kashmir trade is being viewed as a step with potential for positive change for PoK.
“We are quite excited about the prospects,” said Zulfiqar Abbasi, president of the Azad Jammu and Kashmir Chamber of Commerce. “Cross LoC trade is a real window of opportunity for us.”
Economic cooperation between the two Kashmirs, Mr. Abbasi said, would act as a spur for the development of local industry on the Pakistan side of Kashmir, that could serve the needs of the bigger Kashmiri market on the other side, while also providing the local population with employment opportunities as they set up businesses to trade in goods arriving from Jammu and Kashmir. The businessman, who owns a steel mill in Mirpur, said for “meaningful trade,” there should be no restrictions on what can be traded between the two Kashmirs.
But the lists being discussed so far include fruit, vegetables, dry fruit, furniture, carpets, rugs and shawls. The items have been a subject of fierce discussions between officials, and have not yet been finalised. Neither India nor Pakistan want that the duty-free access agreed for made-in-Kashmir goods should turn into a back door for free trade in goods manufactured in each other’s countries.
Even with a restricted list, it is accepted that for now, Srinagar will have more to send to Muzaffarabad than the other way around. But going by what Kashmiris on the Pakistan side say, this is not discouraging them.
“This side of Kashmir has very little to offer. It is well known that all the Kashmiri heritage was inherited by the Indian side. The artisans are more skilled on the other side, the weavers also. In terms of industry also, Azad Kashmir is no comparison to the other side,” said Colonel (retd) Masood-ul-Hassan, a former head of the PoK government’s Small Industries Corporation and a native of Muzaffarabad.
But, said Col. Hassan, the Pakistani side of Kashmir had nothing to fear.
“The flow of goods will be one way, but this should not be seen as exploitation of our market. What the other side sends will fulfil the needs of Kashmiris on this side,” he said.
Depending on volumes, the ultimate market for the J &K goods has to be Pakistan as the small PoK population does not have the capacity to absorb imports from the Kashmir Valley or Jammu, according to Mr. Mahmud, the Kashmir affairs analyst.
“The hope is that AJK can emerge as a trade corridor or a regional trade hub,” he said. Traders in PoK are still coming to grips with all the possible effects of intra-Kashmir on them, but according to him, they see themselves primarily as “a bridge between Kashmiri traders and Punjabi traders” in Pakistan.
Mr. Abbasi believes PoK can also become a bridge for Kashmiri goods to markets in the Gulf countries and Europe via the PoK Kashmiris settled in these countries.
But for all this to come true, PoK businessmen are urging India and Pakistan to ensure that the cross-border initiative goes beyond symbolism. There is concern that the cross-LoC trade may go the way of the cross-Loc bus services that began with fanfare, but go virtually empty because of the difficult procedures to obtain a permit to cross the LoC.
The restrictive list of items for trade is already being viewed as a handicap, but Mr. Abbasi said businessmen were still ready to take the plunge but wants the two governments to take some “minimum” steps: a more user-friendly permit system to enable businessmen on both sides to interact freely and frequently — possibly give businessmen a multiple-entry permit — and better road infrastructure on either side.
At present, the Aman bridge at the LoC on the Srinagar-Muzzafarabad road can take not more than five trucks a day.
“If they do not take these steps, the quantity of trade will be very less and meaningless. It will boil down to traders going in the bus between Srinagar-Muzaffarabad with a couple of suitcases stuffed with shawls and carpets,” he said.
Indian and Pakistani officials are saying that once a beginning is made, the wrinkles can be ironed out. That is also the view of some politicians in PoK.
“Let us take the first step. You need a ladder to reach the roof. Some years ago, did we imagine there would be a bus service connecting the two sides? Now, that bus service is going to become weekly, which means there will be more people coming and going,” said Mr. Qadir, the PoK assembly speaker.
“Cross-LoC trade is something that no one is objecting to,” he said, “so let’s make a beginning.”

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