Who loses in Islamabad’s embargo on Indo-Pak trade?

Residents move their belongings from their submerged houses after heavy monsoon rainfall in the Rajanpur district of Pakistan's Punjab province on 24 August (Photo: Shahid Saeed Mirza/AFP)

The massive floods that have hit Pakistan couldn’t have come at a more inopportune time. Struggling to keep its economy afloat by relying on the lifebuoy of international loans, the widespread destruction caused by the unprecedented deluge will only make its financial situation even more precarious. While the UN and international community has pledged financial assistance and material aid to ameliorate the suffering of beleaguered Pakistanis, the assistance provided can never be adequate to meet the actual requirement. So, these are indeed desperate times for Islamabad, which obviously call for desperate measures.

While restoration work on the extensive infrastructural damage caused by floods could commence subsequently, what can’t wait is the burgeoning food crisis caused by the almost complete damage to crops and vegetables. Flood victims evacuated to temporary relief camps are already complaining about food scarcity and the situation is only worsening. However, it’s not that Islamabad is not doing its bit to overcome this crisis- as per media reports, the government has allowed the import of tomatoes and onions from Afghanistan and Iran to meet the shortage of vegetables.

However, Islamabad has categorically ruled out importing vegetables from India, and though a very questionable decision, there’s nothing unusual about this. Yet, given the enormity of food shortage and its near empty coffers, one had expected Islamabad to act more responsibly, especially when its own people are facing a severe nutritional crisis. In fact, with Pakistan’s Finance Minister Miftah Ismail telling media that “If we have to import vegetables from India, we will do so”, it was assumed that Islamabad had finally decided to jettison its habitual [and self-defeating] approach of playing politics at its peoples’ expense.

Surprisingly, shortly after the Pakistani Finance Minister’s announcement, local media reported that Prime Minister Shehbaz Sharif had “virtually ruled out the possibility of vegetable imports from India” to overcome shortages caused by the devastating floods. The stated rationale for doing so is his unfounded allegation that “There wouldn’t have been problems about trading with India but genocide is going on there and Kashmiris have been denied their rights”, andhis preposterous claimthat “Kashmir has been forcibly annexed through abolition of Article 370”.  

Thus, isn’t it evident that just like any other prime minister of Pakistan, Sharif too remains a hostage of the Kashmir issue? And his argument is indeed comical. While sermonising that “We shouldn’t be doing politics at this point,” hasn’t he himself done the same by saying, “… that minority rights are being subjugated in India.”? At a time when Pakistan’s foreign exchange reserves are the lowest in the country’s history and its people are facing a humongous food crisis, isn’t foreclosing one of the most cost-effective options of importing essential items from across the Radcliffe Line merely to display a concern for the non-existent ‘subjugation’ of minority rights in India, ill-timed and downright politicking?

This isn’t the only time that Islamabad has first mooted and then itself rejected the idea of importing commodities from India. Readers may recall that in March last year, Pakistan’s Economic Coordination Committee [EEC] announced that it had allowed its private sector to import sugar and cotton from India. Admitting that while high international sugar prices were very high, while “in India, the prices of sugar are much less as compared to Pakistan,” the then Pakistani Finance Minister Hammad Azhar announced that Pakistan had “decided to reopen sugar trade with India”, as this decision was “in the interest of the people.”

Since the rate of sugar in India then was nearly 20 percent less than that in Pakistan, the ECC’s decision to allow its import was undoubtedly, an extremely sound economic decision. However, the very next day, Pakistan’s Interior Minister Sheikh Rashid sprung a big surprise by announcing that “We have deferred the import of sugar and cotton till India reverses its decision of removal of Article 370 from Kashmir”. Ironically, this puerile decision came at a time when the then Prime Minister Imran Khan was waxing eloquent on how he was working overtime to better the lot of the common Pakistani by creating a “Naya Pakistan.”

So, just like Imran Khan, Shehbaz Sharif too has conveniently sacrificed the wellbeing of the ordinary Pakistani just to appease both the radical lobby and middlemen community. While Islamabad continues to take the high moral ground by projecting its decision of not importing commodities from India as proof of Islamabad’s solidarity with the pro separatist lobby in Kashmir, but unfortunately, the fact of the matter is that despite its vitriolic rhetoric, Indo-Pak trade continues unabated- thanks to middlemen based in the Middle East.

While on the one hand India is in a good position to export a wide variety of items, Pakistan on the other hand has the distinct disadvantage of being unable to meet its domestic demand for consumables.  Thus, Islamabad’s embargo on direct trade with India allows middlemen to make a killing by facilitating import of a wide variety of commodities into Pakistan at price. Needless to say, it’s the consumer who ends up footing the exorbitant brokerage fees demanded by middlemen, which being a completely avoidable expenditure, lucidly reveals how public interests in Pakistan are being sacrificed on the altar of political expediency just to appease unscrupulous middlemen!

Proof of Islamabad’s unpardonable duplicity on trade with India can be gauged from credible media reports that while Islamabad has ruled out direct import of vegetables from India, it’s not averse to importing Indian vegetables sourced from Dubai.  This is yet another example of Pakistan’s enduring proclivity for following a penny-wise and pound-foolish economic policy that has contributed to its financial woes. With Islamabad playing such puerile charades by splurging money for rhyme or reason as well as blindly chasing unattainable illusions, it seems unlikely that Pakistan will, in the foreseeable future, be able to extricate itself from the economic mess that it has not only precipitated itself, but unashamedly continues to further exacerbate! 


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