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The Economic Factor | By Muhammad Tahir Iqbal

The Economic Factor | By Muhammad Tahir Iqbal

Henry Jhon Temple was a British Whig who served twice as Prime Minister of England in the mid 19th century. Once while speaking to the House of Commons on March 1, 1848, he uttered words inscribing the most pragmatic policy principle in the world of politics. He said, “We (England) have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual…With every British Minister, the interests of England ought to be the shibboleth of his policy.”

The kernel of these lines is that the interests of individual countries determine the nature of their bilateral ties. So much for the policy of conflicts at the stake of economic benefits! Conflicts and issues may stay there in the back cupboard, but bilateralism coming out of politico-economic ties should not be suffered – this is how the whirligig of transnational politics demands when it comes to have relations with other countries. Succinctly, money matters.

Much has been said about Obama’s visit to India –
What is behind all the warmth given the fact that this is the same Modi who was denied a visa to the US because of his notoriously complicity in the massacre of the Muslims in Gujarat?

It’s quite simple. The same Modi is now the ruler of one of the biggest markets of the world. The US doesn’t want to miss it. Explicitly, the US wants to sell; India wants to buy. Money matters. The US wants India to buy nuclear fuel and technology supposed to be used for energy generation. The US also wants to sell its modern warfare in ever bigger quantities. In the last five years, India has bought weapons from the US accounting for $10 billion.

Making defense pacts with India may also orientate a major shift in India’s foreign policy of being too dependent on the Russian defense industry which had been supplying 79% of the weapons to India between 2008 and 2012. But in 2014, the US became India’s biggest arms supplier, selling $1.9 billion of weaponry equipment to New Delhi. Aiming to become a leading regional power, India now looks to buy about $130 billion worth of weapons from the US in the next seven years.

Being strategically close to the US should never connote that India would sever its ties with China and Russia on the commands of Washington. There are conflicts between India and China, but these conflicts are not going to eclipse bilateral trade relations between the two.

Just preceding Chinese President Xi Jinping’s recent visit to India, there arose border skirmishes between Indian and Chinese troops, but better sense did not let this conflict blunt the prospects of $20 billion of investment by China.

Beijing doesn’t want to miss the Indian market either, despite the existence of persistent issues. For instance, India’s ties with Japan may be disturbing, for Japan is China’s main rival in East Asia. The Japanese Prime Minister, Shinzo Abe, has promised $32 billion to help improve India’s infrastructure. Japan was also invited last year by Mr. Modi to join in the naval exercises with the United States and India. The ambitious Modi did not stop there. During Obama’s recent visit, Mr. Modi went as far as to suggest forming a loose security network alliance among the United States, India, Japan and Australia, a grouping that China views with suspicion.

Another fact: having trade ties does not imply that everything is going well between states.

Though India has trade ties with China, it is ultra conscious of China’s growing influence in the region, and wields tactics dextrously to counter Chinese influence especially in small neighbouring countries. A recent report revealed by Reuters is eye opening. The report divulges how Indian RAW played a role in destabilising the pro-China Rajpaksa government in Sri Lanka in favour of pro-India Sirisena who is now the current President. The report notes how displeased India was when Rajapaksa allowed Chinese submarines to dock in Sri Lanka without warning New Delhi. Sensing the threat, Indian intelligence craft played its game; Rajapaksa lost the election, and the new pro-Indian President came in to control the reins.

India also enjoys good affinity with Russia. India knows that the US and the EU anger over its ties with Russia which have been allegedly supporting the pro-Moscow rebels in eastern Ukraine. But brushing aside western concerns, India went into signing twenty pacts with Russia in December last. The pacts include deals in nuclear energy, crude oil, gas and other sectors, including defense, fertilizers, space, and diamonds.

The same principal of mutual economic gains befits the nature of the United States’ ties with other countries. For example, the US is implicitly in conflict with China on many fronts. Notwithstanding daunting challenges in the way, the US is also well aware of a booming Chinese economy. The irony is that, despite wielding the policy of containing China regionally and globally, the US maintains and endears trade ties with China. Statistics conducted by Wayne M. Morrison under the Congressional Research Service reveals that the biggest import merchandise of the US comes from China – and that stood at $440 billion in 2013.

This is how growing economies are settling the parameters of their relations: on the basis of economic gains. All major powers treasure their gains first in the form of economic benefits. There is many a lesson for Pakistan which has over the decades been entangled in theories of conflict at the stake of economic gains and progress in the country.

Source: http://nation.com.pk/columns/04-Feb-2015/the-economic-factor

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