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SD Conferences
Missing Links in Sustainable Development: South Asian Perspectives
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AbstractsSub-theme: Globalization Panel 1: Trade and sustainable development: The WTO needs a new face Session: Regional trade agreements and conflict mitigation
Sri Lanka as an Enabler of South Asian Regional Integration It is commonly agreed that South Asian regional initiatives such as the South Asian Free Trade Agreement (SAFTA) and South Asian Association for Regional Cooperation (SARRC) have not been very effective in facilitating regional integration. Analysts cite various reasons for this failure. Domination of India in South Asia in terms of size and military and economic power coupled with its complacent attitude towards a regional block can be read as the major reason. Geopolitical situation of South Asia also remains a main obstacle where India shares borders with all South Asian countries and has a conflict with almost all of them. The nature of products and services to the international markets by the SAARC countries is also a reason for more competition rather than collaboration. However, Sri Lanka gives an encouraging example for regionalization in South Asia. Sri Lanka has been able to successfully negotiate bi-lateral free trade agreements with India, Pakistan and Bangladesh. Sri Lanka has been an active member of SAFTA and SAARC from the beginning. The island nation has opened up its economy to international investments in 1977 well ahead of other countries in South Asia. It does not have border conflicts with other countries. Its location, size and democratic governance are major aspects of Sri Lanka’s strengths in pioneering regional collaboration. * Chaminda Hettiarachchi is a Lecturer in Management Studies and Political Science at the Department of Management of Technology, University of Moratuwa, Sri Lanka. His current PhD research interests are in technology for economic developments, technology for decentralization and federalism. Trade, Aid and Security: An Agenda for Peace and Development Trade and aid are powerful conduits of finance, ideas, products and influence. The direction and priorities of trade and aid policies, largely decided by the rich countries, have profound impacts on the economies, societies and stability of the developing world. In effect, trade and aid policies both reflect and reinforce global power disparities. The globalization of weakly-governed markets for natural resources, coupled with the occasional misuse of development assistance, and with the aggressive promotion of unbalanced trade and macroeconomic management rules, can lead to conflict in a number of ways. This volatile mix can drive economic degradation, fuel tensions within and among countries, create a space for sub-state actors to enrich themselves through the perpetuation of conflict, and strain international and national mechanisms for keeping the peace. It is increasingly clear that the rising tide of international trade in natural resources does not automatically reinforce stability. Nor is aid as currently constructed successfully achieving its aim of poverty alleviation. Our contention here is that failure on both fronts reflects an inadequate appreciation of the links between these policy spheres. The collapse of the Doha round, current moves towards greater aid harmonization and growing instability around the world mean that all of these policy areas are in flux. This presentation will explore the relationship between trade, aid and security—both positive and negative. It concludes by suggesting six priority areas where international action could ensure that trade and aid policies support, rather than undermine, peace and development i.e. through; conflict-sensitive trade and aid policies, responsible business conduct in fragile states, good governance, more effective action on conflict resources and better management of revenues from natural resources and overseas aid. * Mark Halle is the Director of Trade and Investment Programme and European Representative, The International Institute for Sustainable Development (IISD), Canada. Business First, Politics Later: Testing the ‘Trade-Peace’ Hypothesis in India-Pakistan Case Leading Indian defense and security analysts have been advocating the use of the ‘China Model’ as viable alternative for conflict resolution between India and Pakistan. What is exactly the China Model? It basically refers to the idea that India and Pakistan should move ahead full throttle on the economic front without letting the Kashmir dispute getting in the way, just like India and China have done. The argument is that economic cooperation will lead to the traditional rivals developing a stake in each other’s security, which will ultimately culminate in the political cooperation. The background of this model is that India and China fought a bitter war in 1962. The resulting humiliation changed Indian strategic thinking entirely. The diplomatic relations between India and China were severed off for a long time. In 1988, Indian Prime Minister Rajiv Gandhi traveled to Beijing and the two countries agreed to put border dispute on the backburner while concentrating on improving economic relationship. Interestingly, improvement in trade relationship resulted in the betterment of political ties also. It was in this backdrop that K. Natwar Singh, the then Indian foreign minister proposed ‘China Model’ for improving relations with Pakistan immediately after assuming charge. Pakistan has expressed extreme distaste regarding ‘China Model’. The proposed paper argues that there are subtle differences in India-China and India-Pakistan cases and the so-called ‘China Model’ is not likely to be successful in resolving the Kashmir dispute. Ignoring the border dispute and improving economic relationship worked in the case of India and China but due to various factors, this strategy is not likely to be successful in resolving the Kashmir dispute. In their enthusiasm, the proponents of the China Model are ignoring certain basic ground realities. The paper will also make recommendation for an alternative model for conflict resolution between India and Pakistan. * Dr. Rajesh Kumar has been working as a Senior Lecturer, Department of Political Science, PPN College, Kanpur, India, since 1996. He has specialized in India-Pakistan relationship, role of the US in South Asia and impact of media in South Asian political systems. The Costs of NOT Loving Thy Neighbour as Thyself: The Trade and Development Costs of India-Pakistan Rivalry Although the principal focus of the contemporary conflict literature is on civil wars, the relationship between nations is also marked by strife—over markets, natural resources, and territories. The work of Findlay (1996) elegantly characterises territorial expansion or disintegration in terms of an extended production function. International trade and commerce can promote peaceful co-existence and liberal democracy, as well as providing the motivation for violent competition (see Polachek, Robst and Chang, 1999). At some critically high level of economic interdependence countries will cooperate; trade with one another rather than fight. Liberal democracy may promote this process. This view cannot, however, explain secession and civil war as regions and ethnic groups within a nation state have highly interdependent economies in terms of the exchange of goods, services and factors of production. Hegre, Ellingsen, Gates and Gleditsch (2001) have demonstrated a U-shaped relation between democratic institutions and the incidence of civil war over time. The probability of civil conflict is lowest both in established, well functioning democracies, and perfect autocracies. It is at some intermediate stage between autocracy and democracy that the risk of internal conflict is greatest. Both highly developed autocracies and democracies imply the absence of the state failing in its basic functions. The paper will also examine the pattern of Pakistan’s international trade, and its relation to democratic development and periods of international tension. * S. Mansoob Murshed is associated with the Birmingham Business School, University of Birmingham, UK. Dawood Mamoon is associated with the Institute of Social Sciences, The Hague, Netherlands. References: Findlay, R. (1996) 'Towards a Model of Territorial Expansion and the Limits of Empire' in M R Garfinkel and S Skaperdas (eds), The Political Economy of Conflict and Appropriation, Cambridge: University Press. Hegre, H., T. Ellingsen, S. Gates and N-P Gleditsch (2001) ‘Towards a Democratic Civil Peace? Democracy, Civil Change, and Civil War 1816-1992’, American Political Science Review, 95, 17-33. Polachek, S., J. Robst and Y. Chang (1999) 'Liberalism and Interdependence: Extending the Trade-Conflict Model', Journal of Peace Research, 36, 405-442. Regional Trade Agreements in South Asia: Trade and Conflict Linkages The world has witnessed a proliferation of regional trading arrangements (RTA) over the past two decades. Since 1990, close to 250 RTAs have been officially notified. The last year has been the most prolific period in RTA history, with 43 RTAs being notified to the WTO. The drivers of RTAs are heterogeneous, reflecting economic, political, social and cultural forces. These drivers can be new markets and trade opportunities, growing frustration with multilateral trade negotiations (e.g. WTO), an attempt to establish countervailing negotiating power, or an attempt to reduce illegal trade and smuggling. They could even reflect attempts to export models of regional cooperation such as the EU to other regional blocks. The heterogeneity of these drivers illustrates clearly that RTAs promote far more than just trade or, for that matter, economic integration. They ought to be seen in an inclusive manner, as a means to achieve socio-economic prosperity and political stability within the region. The reality in South Asia is that RTAs have failed to promote peace. Despite tariff reducing agreements via a preferential trade agreement (SAPTA) and, most recently, a free trade agreement (SAFTA), regional tensions continue to stall economic integration and interdependence. Political instability within smaller nations as well as animosity towards a surging India is largely responsible for stalled talks – which appear to create an environment where little progress is visible. Economic globalization also complicates regional integration, as national agendas take second billing to extra regional arrangements, eroding confidence-building measures that would contribute towards regional cooperation. In short, “conflict” is a driver of trade rather than its consequence. The recourse is a series of bilateral relations, promoted largely by private sector actors, where the larger South Asian nations leverage their size to ensure one-sided benefits. Further, a noticeable rise in intra state tension has imparted a negative dimension to South Asia’s experience with economic globalization. The findings of this paper suggest reverting to SAARC’s mandate. An approach that takes into account shared commitments to institutional, cultural, religious - spiritual, social and environmental development, is more likely to yield measurable steps that build peace between all nations, equitable development and in turn, address the concerns of groups responsible for intra-state instability. Joint efforts through a SAARC parliament, management of environmental resources and celebrating a common heritage would encourage stability through real people to people contact. The international community could best contribute by ensuring that policies formulated at the global level take into account the needs for the equitable distribution of wealth to marginalized segments of society, particularly in rural areas throughout the region. An overarching, integrated effort could also catalyze sector-country comparative advantage and by promoting regional trade would generate secondary peace dividends – both inter and intra-state. * Dr. Shaheen Rafi Khan is a Research Fellow at the Sustainable Development Policy Institute, Islamabad, Pakistan. He earned his Ph.D. in economics from the Columbia University, USA.
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