CHANDIGARH: Former Prime Minister Manmohan Singh today said strained ties between India and Pakistan have been coming in the way of development of South Asian region.
He also said the 21st century will be the era of rise of China and India and during this period "cooperation and competition" will go hand in hand.
"Strained ties between India and Pakistan have been a major factor in preventing growth of cooperative regional development strategies in South Asia," Singh said in his 25-minute speech at the conference organised by Centre for Research in Rural and Industrial Development (CRRID) here. Singh also said that "there will be challenges posed by Pakistan's current internal situation and the future situation in Afghanistan. Geo-politics of the Indian Ocean region will also be the fulcrum of India's foreign policy."
He said that the primary focus of India's foreign policy has to remain in the realm of economic diplomacy. Singh said,"In south Asia our attempts to build on our shared heritage and culture have often been impeded by geo-politics and by our failure to overcome the challenge of geographical and economic asymmetry.
"Proximity and connectivity that should have been the foundation of building strong economic linkages to build SAARC as another ASEAN have eluded the nations of south Asia...," he said.
Singh said that scholars of south Asia need to ponder as to why "we in south Asia move so slowly in matters of strengthening trade and infrastructure linkages when the benefits to our people and governments are so obvious?".
He said that "India is on the threshold of change, provided the right policies are adopted". "Domestic reforms are the key to putting India on a higher growth path and giving the country economic heft to conduct a pro-active foreign policy," the veteran Congress leader said.
He said that this century will belongs to China and India. "21st century will be the era of rise of China and India. As this happens, cooperation and competition will go hand in hand. We are already witnessing several manifestations of these trends in South China sea and the Indo-Pacific region as a whole.
"The recent changes in Japan's Constitution giving more leeway for the deployment of Japanese defence forces abroad is yet another indicator of this trend," the former PM said. Singh pointed out that for India, "it is an era of transition and consolidation". "Inclusive economic growth remains the bedrock of our country's future. Infrastructure, education, development of skills, universal access to healthcare must be at the core of our national policies.
"Being a strong and diversified economy will provide the basis for India playing a more important global role. Hence the primary focus of India's foreign policy has to remain in the realm of economic diplomacy," Singh said.
"India and Pakistan need sustained engagement to realise the vast potential of benefits of liberalisation of trade and investment in the South Asian region," Singh, a noted economist, asserted.
He said that Central and South Asia are geographically contiguous but distant in terms of connectivity. "It is so utterly obvious that an energy deficient region like South Asia that is close to energy surplus region like Central Asia should become natural partners. Yet this has not happened though strenuous efforts have been made on the Turkemenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project that could be a win-win situation for all stakeholders," he said.
Singh, who was accompanied by his wife Gursharan Kaur, was speaking at the concluding session of the international conference 'Cooperative Development, Peace and Security in South and Central Asia'. Yesterday, President Pranab Mukherjee was the chief guest at the conference. The former PM said that south and central Asian nations are India's natural regional partners and engaging them must be at the core of our economic diplomacy.
"India's policy planning structure has to be revamped for meeting these challenges and I hope CRRID will be at the forefront of institutions assisting such policy planning," he said.
He pointed out that connection of electricity grids has now provided benefits to Bangladesh, Bhutan and Nepal, "though not in equal measure".
"Railway connectivity is still work in progress, as are trade facilitation measures and regulatory issues. It appears that Pakistan has chosen to integrate with China via the China Pakistan Economic Corridor (CPEC) and looks westwards towards Iran for energy cooperation," he said. The former PM said that the Iran-Pakistan gas pipeline project is being revived after the Iran nuclear deal and lifting of sanctions on Iran.
"Pakistan has signalled that it sees much greater benefit in its northern and western economic linkages than under the SAARC umbrella. It is, however, difficult to forsee that Pakistan can ignore its links to the East," he stated. Singh said that South Asia accounts for nearly 40 per cent of the world's population (1.64 billion), yet its contribution to global GDP is mere three per cent.
"Hence nearly 25 per cent of South Asians live on less than USD 1 per capita per day. The potential for growth is enormous. Yet the South Asia Free Trade Agreement (SAFTA) remains hobbled and bogged down in non-tariff barriers, negative lists for trade, phyto-sanitary restrictions and poor border trade infrastructure acting as obstacles to enhancing free flow of goods in the region. Continuing further, the former PM said "the uncertain political and economic conditions prevailing in Af-Pak region have impeded connectivity and left few options for increasing trade and economic linkages between these two regions. The International North-South Transport Corridor (INSTC) can help in developing these linkages but can this corridor compete with CPEC?
Iran is yet to fully come out of the shadow of international sanctions and its participation is the key to the INSTC. India-Iran cooperation in developing the Chahbahar port in southern Iran must, therefore, be fast tracked".
Touching upon crucial issue of climate change, Manmohan Singh said "climate change and global warming pose yet another major challenge to world prosperity". "This challenge has to be tackled creatively at the forthcoming Conference of Parties (CoP) scheduled to be held in December 2015 in Paris.
"Among the whole host of issues, the most important would be financing arrangements and affordable access technology for developing countries," he said. He also said that viable strategies for sustainable energy security, laying emphasis on renewable energy sources and clean coal technologies, have to receive much greater attention in controlling carbon emissions. "However, there can be no effective global arrangement without meeting the development needs of the majority of the world's population.
"National mitigation measures are important but ceilings on carbon emissions without legally binding arrangements for financing and affordable access to technology will be unacceptable to the majority of developing countries. "A global paradigm can be constructed and it is not beyond the reach if all stakeholders are on board. Inflexibility and ideological rigidity must not become deal breakers, particularly on the issue of Intellectual Property Rights," Singh pointed out. On CRRID, Singh said the crucial role of think tanks and similar institutions in assisting governments to navigate the complex world of geo-politics and geo-economics in our contemporary world cannot be underestimated. "This is particularly important at a time when the current international order is in flux. The rise of China, since 1980, is a defining feature of the 21st century.
"As the second largest economy in the world today, it has given China the wherewithal to implement widespread modernisation. It has also upgraded its military machine, providing growing capabilities for projecting power. "The challenge before the world is to create a global environment conducive to a peaceful rise of China," Singh said.
On the economic front, Singh said the establishment of institutions like the New Development Bank (BRICS Bank) and the Asian Infrastructural Investment Bank (AIIB) "indicate a new trend that seeks to take advantage of China's greatly enhanced resource capabilities to dilute the influence of the Bretton Woods institutions that have so far ruled the roost in the post World War-2 era. India has rightly, in my view, decided to join both institutions".
"Other institutions like the Shanghai Cooperation Organisation are going to play an increasingly important role in the management of geo-political relations in Asia, with India and Pakistan joining the organisation. Engagement with the Eurasian Economic Zone will open new avenues for cooperation with the Central Asian countries," he said.
Touching upon the low energy prices, Singh, a noted economist, said, "the opportunity thrown by low energy prices is a boon for India, as this contributes to a reduction in India's deficit on current account balance of payment, reduction in fiscal deficit, and also helps to moderate inflation.
"It is important that India takes full advantage of low oil prices to accelerate the pace of its economic development. After all, low oil prices are not going to last in the long run." Singh noted with concern that geo-political risks have increased with "turmoil in Ukraine and several countries in West Asia and North Africa".
"Competing and conflicting interests among Western and regional powers have led these countries to support rebel groups in countries like Iraq and Syria. These rebel groups have joined hands with extremist Jihadist groups to create the Islamic State in Iraq and Syria. "Chaos and civil war have been the bitter harvest of the flawed policies of regime change in Arab countries, leading to unprecedented violence and human suffering, forcing Arab and Afghan refugees to flee in hundreds of thousands to Europe.
"The impact of these developments on a weak European economy will only add to the doubts about sustained economic recovery in the EU," he pointed out. He also said that world is already watching "with some anxiety about the prospects of global economic recovery, though trends indicate a slow and gradual distancing from the financial crisis and recession that set in from 2008." "The recent decision by the American Federal Reserve System to keep interest rates unchanged in view of weaknesses in global economic growth, particularly due to slowdown in growth in China and emerging economies, is indicative of uncertainities in the global economic outlook.
"Groups like G-20 have to evolve coordinated global strategies to cope with the uncertainities in global macro economic environment," he said. Earlier, CRRID's Executive Vice Chairman, Rashpal Malhotra and T K A Nair, former advisor to Manmohan Singh, among others spoke on the occasion.