Some 60 years ago, in 1947 two nation states emerged from Sub continent India as the British gave in to the independence struggle by Indian people which was initiated in 1857 against their colonial rule in the region. Then two main religious groups, Muslims and Hindus rebelled against their colonial masters on a united front, however in 1947, both Muslims and Hindus of subcontinent India largely participated in two distinct political movements, one led by All India Congress representing Hindu majority polity under Mohandas Karamchand Ghandi who was a proponent of one Indian nation and the other one lead by All India Muslim League representing Muslim majority polity under Muhammad Ali Jinnah who proposed the post-independence division of India on the basis of two nation theory. The idea of two nations took momentum after 1937 pre partition elections which led to the victory of Congress with its Hindu Majority which was then able to make the government and sidelined political concerns of Muslim League.

On August 1947, due to lack of consensus between these two representative parties of Hindus and Muslims, British exceeded power to Indian populace by mainly dividing British India into Muslim majority Pakistan and Hindu majority India also known as Hindustan. Then there was an issue of Princely states who were supposed to accede to either India or Pakistan. One of the prized princely states, Jammu and Kashmir, situated on the Northern highlands of the region, which was ruled by Maharaja Hari Singh, was urged by both Jawaharel Nehru, the leader of India, and Mohammed Ali Jinnah, the founder of Pakistan, to join their respective nations. Raja Hari Singh wanted neither, and delayed his decision, whereas in case of accession the Muslim population wanted to join Pakistan. On the rumours that Raja might accede to India, in early September, a Muslim rebellion seeking unity with Pakistan erupted in the Poonch district. By mid October, the rebel army was only four kilometres away from capturing Srinagar. It was at this point of desperation, that Hari Singh reportedly signed the Treaty of Accession with India. The Indian army would enter the province the same day, and would be at war with Pakistan within a month. The validity of this treaty would be the basis of both nations’ claim to Kashmir.

Irrespective of complexities following the issue of Kashmir accession after the signing of the treaty by the Raja, a simplistic but mutually exclusive perspective for both sides was that for Jinnah, Kashmir was a majority Muslim state and shared a long border with it and thus should have been part of Pakistan considering the observation of a partition rule that Muslim majority lands or princely states have a right to join Pakistan, where as for Nehru and Congress, who have yet to accept the idea of two nation theory, any land which lied outside 1947 British demarcated lands of Pakistan, should have acceded to India as they only accepted Pakistan but not the validity of two nation theory which had been the basis for the creation of two nation states. Now there was a disputed signed treaty to give India the legal rights of Kashmir, but according to rules of Partition, Kashmir should accede to Pakistan since it was a majority Muslim state.

Though the dispute of Kashmir is largely seen as a land dispute between India and Pakistan each claiming their territorial rights over it and each controlling a part it divided by a line of control, the very emergence of Kashmir dispute has its roots in the mistrust which was carried throughout the process of Partition between the leadership of Muslim League and the Congress, whereas this mistrust was the result of those efforts by Congress to isolate Muslim League in subsequent all India elections on the pretext of Congress’s idealistic secular rhetoric on which they failed to deliver and the evidence of Hindu revivalist sentiments among the top Congress leadership as in case of Sardar Patel ensued the surfacing of Muslim League as the most dominant Muslim representative party with the representative agenda to seek the division of India from the British on the basis of two nations.

Thus the two countries Pakistan and India with similar cultural background under a different religious undertone would embark on an uneasy ride from their very inception mired with instances of heightened hostilities which also resulted into outright wars with huge economic and human costs.

The purpose of this article is not to define or re define Kashmir dispute but it does aim to re define India Pakistan relationships in the light of future economic and security dividends of peace but would finish short of providing any solution for Kashmir.

India, the economic darling of today’s world, was perceived quite differently two decades ago by the economic gurus. After independence, Nehru had a socialist vision for his country with a strong communist leaning, whereas local industry was heavily protected from outside competition. Though the country was already 400 million people strong, it failed to promote private sector development and stifled private investment and all major industries were state property. Had this been the case today in India, may be world’s 3rd richest man Indian-born steel tycoon Lakshmi Mittal would have never made it to his riches. India embraced globalisation and opened up in early 1990s, when Manmohan Singh was brought in from World Bank to be the Indian finance minister. He vigorously followed privatisation and shed public burden of ownership and since then there has been no looking back for India as the country is growing at impressive rates for more than a decade now and achieved a remarkable outlook.

Whereas Pakistan only a decade later of its independence, would transform into a prospering nation. So much so that during 1960s, it was widely forecasted that Pakistan would be soon gaining a middle income country status and countries like South Korea would follow Pakistan’s economic policies. Evidently Pakistan was a more open country, with a thriving private sector. Pakistan also witnessed green revolution, a basis for its take off to higher level of development with equally distributed gains to the population. However, partly due to its economic confidence and newly boosted strength, the country would go into 1965 war with India. It seemed to be the right time for Pakistan to use a military option to get the rest of Kashmir by means of force when India just few years ago in 1962 lost a war with China and also had been faltering economically. However, India proved to be more resilient than it was anticipated by Pakistani side as Indian army due to its larger size able to open many fronts along Pakistan and Indian west side international borders and thus after a month of intense fighting the war was a stalemate.

The post war period saw a slow plunge of Pakistani economy as more resources were channelled to defence to regain the defence capabilities which were depleted greatly due to heavy losses in the War. Another post 1965 flash point was that US had also severed its ties with Pakistan and economic assistance halted. Under these circumstances the so called architect of Pakistan’s economic prosperity in 1960s, General Ayub Khan had to leave office by giving way to his predecessor. However, the dried up economy would increase the divide between East and West Pakistan, where East Pakistan was accusing the West side for exploiting their resources. This general dissatisfaction would lead to political disaccord and a move for independence from Pakistan would be initiated by Mujib-ur-Rehman’s Awami League party. Civil unrest would follow soon and Indian army on the pretext of helping Bengali people would enter East Pakistan and also arm Mukti Bahni. In December 1971, Pakistani army in East Pakistan would lay down weapons and Bangladesh would be formed as an independent state where as Indian political leadership would claim that the debacle was a proof of the failure of two nation theory.

Till 1970s, smart indigenous economic thinking had yet to take any roots in the volatile region of larger South Asia when compared to recent times where China and India have both been expected to dominate future economic landscape at a global level. However, 1971 debacle was the first indicator that conflicts would be increasingly based on economic interests or failures rather than on ideological grounds in the region.

A war trodden Pakistan was soon led by Zulfiqar Ali Bhutto, who would nationalise the economy and adopt a socialist approach towards governance, where as relationship with US was severed further and stronger ties with Middle East and China were further developed. On the other hand, India after giving Pakistan a bloody nose would now focus on its larger adversary China, when it undertook its first nuclear test by naming it ‘Smiling Bhudda’. Note that the spiritual leader of Bhudist Monks from Tibet had been exiled to India where he lives till this day, and naming their first nuclear explosion after Bhudda evidently showed that India was now flexing its muscles against China.

Same time, Zulfiqar Ali Bhutto also announced that Pakistan would seek nuclear capability at any cost and initiated efforts to that effect. Much to the alarm of US, he would call it an Islamic Bomb and seek financial help from Arab states. However, poor war trodden economy was not helped by nationalisation and neither did the resources allowed that Pakistan should embark on procuring one of the world’s most expensive defence gadgetry. Thus economic pressures gave way to public unrest, which formed the pretext of General Zia’s Marshal Law.

General Zia ruled Pakistan for an extended period of time and he was generously assisted by the US as Pakistan helped organise and fund Jehad against the Soviet army which was in Afghanistan. Pakistan went on with its nuclear program. General Zia’s rule witnessed increased level of war mongering and Islamic fundamentalism funded primarily by incoming US dollars. The dollars had not only sustained a sound economic outlook but it also gave strength to Jehadi rhetoric to suggest as if Pakistan had been the front line state for the revival of Pan Islamism and all the greatness associated with it. In short, the Afghan War was the economic and the foreign policy of Pakistan primarily funded by the US.

However during the 1970s and 80s, Indians were witnessing serious economic challenges as nationalist policies and inward approach would not sustain increasing pressures of growing population and domestic demand. Furthermore, India entered into an arms race with much stronger adversary China, which diverted resources to defence and domestic pressures mounted as social development was ignored in larger part of India. Many separatist movements would also take momentum inside the country as economic growth rates would remain volatile throughout the two decades, even plunging to negative values for some years. Especially, during mid 1980s, the separatist movement gained a momentum in Kashmir. Now, it was the pay back time for Pakistan to bleed India for its 1971 loss and thus Pakistan actively supported the independence struggle by Kashmiri people and demanded India to implement UN resolutions.

In 1988 after the untimely death of General Zia, Benazir Bhutto the daughter of Zulfiqar Ali Bhutto formed the elected government. US sanctions were also imposed on Pakistan soon afterwards, to put pressure on Pakistan regarding its nuclear program. Simultaneously US ties with India developed further and its nuclear program went ahead relatively unhindered. In 1991, Cold war ended with the collapse of Soviet Union and US left Pakistan to mainly deal with the mess created in Afghanistan. Due to a decade long dictatorial rule and war based economy, Pakistan witnessed a collapse of its political institutions with high levels of corruption. This initiated a political tug of war. Whereas, India had been sailing smoothly on its democratic front - political institutions strengthened and courts were functioning well. Thus once good economic policy was in place in 1990s, there was no looking back for India.

From 1988 to 1996, Pakistan had four parliamentary elections, whereas 3 democratic governments were deposed on the charges of mismanagement and corruption. During this time, though Pakistan continued with its open economic policies, macro economic outlook failed to benefit form it. The last democratic government, before the coup of General Musharraf, was lead by Mian Nawaz Sharif who stayed for nearly 3 years in power till 1999.

1990s have been historic for India and Pakistan for many reasons. Pakistan’s struggle with democracy would be mired with corruption charges on politicians. Nevertheless, under increased sanctions from the US, Pakistan’s economy could not withstand political instability and thus experimentation with different governments continued with two main political parties taking turns. Whereas, India had not only secured its economy, it had increased level of control over separatist movements with the only exception of Kashmir which remained house to Indian army’s largest military contingent. A solution to Kashmir was paramount; to move ahead and seek a more global role as India also started its efforts towards securing a seat in UN Security Council. This time around, India was riding high on the horses of its newly achieved economic success.

The heightened impatience to exploit economic success would land India into political extremism where Congress would be sidelined and Bharatiya Janta Party with its links to extremist Hindu organisations would come to power. In 1998 elections, BJP would re elect on the basis of war mongering rhetoric aimed against Pakistan when Vajpayee would promise to deliver Pakistani held Kashmir to Indian people. Once coming to power, within 2 months, his government would carry out five nuclear tests, where as all of them called Shakti (Hindu Power) only differentiated with numbers.

Under pressure from domestic polity, Pakistan retaliated with five nuclear tests. However as warned, Pakistan was faced with complete international isolation from the Western countries. Further sanctions led to a sharp economic plunge as the country was already surviving severe debt burden. With these circumstances on hand when Pakistan’s nuclear program was also out in public which was earlier run clandestinely, the country had no option but to exploit it’s achieved deterrence against India. Entering into Kargil was the military strategy which would only make more sense for Pakistan, especially when the possibility of outright war would be minimum as nuclear option would deter the Indians to violate international borders. In short 1998 nuclear tests by the Indians eventually led to Kargil war, although Kargil has been generally seen as an example of one sided aggression by Pakistan.

Indian economic and military resilience enabled the country to sustain Kargil and the country continued with its economic boom. However, Pakistan under heavy debts and sanctions came close to become bankrupt as foreign exchange could not finance a month of imports. Yet again democracy dwindled as frustrations mounted and Pakistan found itself with another man in uniform.

General Pervez Musharraf, would seek a professional team to discipline the economy and started his government under the banner of accountability. However, Pakistan’s current economic progress would not start till 2001 when the country joined US war on terror and became worthy of US aid and economic assistance, whereas debt rescheduling would come as a fringe benefit for Pakistan’s steady cooperation. Though in 2002, India amassed its army on Pakistani borders after an attack on its parliament, the standoff did not transgress into outright war partly due to the risk of nuclear exchange. It may also be another political ploy by the Vajpayee government, who just before loosing 2004 elections responded positively on Musharraf’s peace initiatives but could not sell Shining India slogan to the Indian people. With Congress in power the peace talks continued and currently both countries are devising a long term strategy towards a viable solution for dispute settlement.

By going nuclear, both countries have increased the stake of the conflict but also reduced the possibility of war. Furthermore, good economic outlook has also increased the costs of conflict. On its 60th birthday of independence from British, both countries have the opportunity to move beyond historic grievances and shape the future and let the economic prosperity trickle down to the poor with significant resources channelled to social development. Pakistan remains less populated per density when compared to India, and thus in a better position to exploit its economic dividends. Sound economic strategy should be supplemented by strong institutions - political as well as legal.

Much like 1960s, when the country was expected to takeoff, today Pakistan can well move ahead to become a middle income country whereas peace with its neighbour is the key to achieve any such goal. Pakistan, which has traditionally been more open than India, would also benefit from global competition more so with time and may surpass its neighbour if India would not follow sue and open up further. On security issue, peace is not only good news for the common man in the country but it is also good news for Pakistan’s defence capabilities. Higher growth rates would not only mean greater resources being channelled towards development sector, but Pakistan will have more resources to bring greater efficiency to its armed forces by procuring high end technology defence imports. However peace would mean that both countries would decrease their militarization much like developed nations who maintain smaller but well equipped armies. On Indian side, an effective global role for which the country is ready can only be achieved through peace with its neighbour.

The best asset of South Asia is its people and their human capital which brings them at an equal footing with the West. The difference of ideologies in this era of globalisation has become irrelevant for both countries. The same vision and prospects of economic gains and excellence has led China and India to forgo their hostilities and similar should be the case for Pakistan and India.

Let these countries stand tall in international community for their increased responsibility and role is a valid expectation on this day.