Summer commentary #2

http://www.dailytimes.com.pk/default.asp?page=2007%5C08%5C15%5Cstory_15-8-2007_pg5_1

In this article, the history of animosity between Pakistan and India has caused the slowing of trade between the countries through an inefficient method of transportation. The current system doesn’t allow trucks carrying goods for trade into either country and forces them to unload their goods and have a different truck on the importing country’s side come pick them up and take them to their destination. This is obviously a waste of time and money for both the importing and exporting country and also usually causes damage to the goods being shipped. Most goods are shipped by land and because of this forced transfer of goods between India and Pakistan, trade between surrounding countries (Afghanistan, Nepal, Bhutan, Tajikistan) that are being driven through either of these countries also suffer, especially ones that are land locked and have no other option for mass transportation. Both Pakistan and India have much to gain by streamlining their border crossing process because due to this inefficient system both countries are suffering massive losses to their GDP. In the article it’s mentioned that trade between the countries has been valued at 400 million for the past six years, however it has been estimated that it could instead be between 3 billion and 10 billion. Obviously this is an enormous increase and would be a big boost to both countries’ economies. Also because India and Pakistan are the among the most economically strong countries in the South-East Asia region, low trade between these two countries is a big limitation on growth in this region and if trade increased, both countries, especially India, would significantly strengthen economically.

What both countries should do is to allow free entry of cargo trucks from both countries, therefore eliminating the costly and potentially goods damaging transfer process. Also because both countries are part of the South Asia Free Trade Area, trade between both countries would increase and as a result so would the GDP’s of both countries and the surrounding countries, as they too would have easier access to the markets in India and Pakistan. International trade would increase as well because the land locked countries around India and Pakistan, such as Afghanistan, Nepal and Bhutan would have access to the ports in both countries and allow for greater ease in shipping their goods around the world.