December 12, 2003
New Delhi

PM's inaugural address at the Symposium on the Peace Dividend: Progress for India and South Asia

When the Hindustan Times Leadership Initiative invited me to this Conference, what really attracted me was the powerful imagery of the peace dividend as the engine of progress in our region. At the same time, I must confess to some sadness that – over half a century after all the countries of our region attained independence – this truth still needs to be emphasized.

The peace dividend for South Asia is the creation of new hope and opportunity for its billion and a half people. We need no stronger justification for peace than this simple statement. The investment inputs required to reap this dividend are pragmatic policies, rational economics and popular participation.

There can be no argument about our inherent advantages, common interests and complementary strengths, which present a tremendous opportunity for our region to realize its full potential:

  • First and foremost, our rich and varied human resources. Our citizens have created waves around the world with their technical, financial and managerial expertise. Their energies and talents can find greater application in regional cooperative enterprises.

  • Second, our populations are younger than the world average, and will therefore constitute an increasing proportion of the global workforce in the future.

  • Third, our technological advances have put us at the vanguard of today’s Knowledge Economy, enabling us to accelerate our development process.

  • Fourth, the size and increasing purchasing power of our collective market create economies of scale for cost-effective production.

  • Fifth, efficient exploitation of our synergies can vastly enhance intra-regional trade, even as we work towards a rule-based international trading regime.

  • Sixth, the region has massive untapped capacities for hydropower and unexploited hydrocarbons, which can more than meet its huge energy deficit.

  • Seventh, the rich diversity of our bio-resources – in the Himalayan region and elsewhere – are yet to be exploited for our common benefit.

  • Eighth, our combined political weight and economic strength can give us considerable leverage in pursuing our shared objective for a cooperative multi-polar world order.

The peace dividend lies in converting this exciting potential into vibrant reality. Our region is heir to a centuries old tradition of tolerance, pluralism and creative interaction. We need to recapture this ethos in the modern context.

In the post-Cold War world of globalisation, countries around the world are increasingly focusing on regional economics. Political disputes have been resolved diplomatically or quietly deferred for tackling at a more opportune time. Conflict has given way to cooperation; dialogue moderates differences. There is a clear recognition that hostility only stunts economies, inhibits trade and retards progress.

This realization has dawned not only in the developed world, but also in developing regions that have experienced bitter differences and violent conflicts in the past. It encompasses Mercosur and the Andean Pact, COMESA and SADC, NAFTA and APEC. Nearer home, we have the outstanding example of ASEAN. South Asia needs the wisdom to heed these lessons.

By most estimates trade within regions accounts for nearly three-fourths of global trade. Yet inspite of our geographical proximity, shared economic characteristics and similar development infrastructure intra-South Asia trade is under 5% of our total foreign trade.

We must discard the myth that, because of the asymmetries in our economies, the smaller countries do not benefit from closer economic integration within South Asia. Our free trade agreements with Nepal and Sri Lanka have resulted in narrowing the trade deficit of both these countries with India. In fact the success of the India-Sri Lanka Free Trade Agreement has inspired us to expand its scope to cover services and investment in a comprehensive economic partnership agreement.

Energy is one area with the greatest promise of mutually enriching partnerships. Nepal and Bhutan today have an estimated potential of 100,000 MW of environmentally clean hydro-power. Bangladesh has similarly promising reserves of natural gas. They need to sell these energy sources. India is the only viable buyer and its energy demands are expanding exponentially. There is obvious scope for win-win arrangements. The hydroelectric projects in Bhutan illustrate this dramatically. Bhutan’s per capita income of $ 600 today is expected to double by the end of 2005, when the 1020 Megawatt Tala power plant is completed.

The optimum management of our regional water resources for irrigation, navigation and flood control can have a multiplier effect on infrastructure, development and growth in our entire region. This requires not only financial investments, but also maturity of policy. We should recognise that an enduring partnership can only be built on the basis of each country wisely exercising the rights of a lower riparian, and responsibly fulfilling the obligations of an upper riparian.

Our region sits astride the land routes and sea lanes that connect the worlds’ big energy sources of the Middle East to the expanding energy markets of East and Southeast Asia. With our extended neighbourhood of Iran and Afghanistan, our land mass also links the new energy sources of Central Asia with the warm water ports of the Indian Ocean in the South. It does not require much imagination to envisage how close regional cooperation can cash in on the strategic importance of our location.

Our most important common war today is against poverty, disease, hunger and under-development. We can share experiences and promote intra-regional linkages for economic and social development. A small, but significant, beginning has been made by our SAARC Experts Group on Poverty Alleviation. The Group, drawn from all SAARC countries, has extensively documented best practices in poverty alleviation programmes across the region. It has made detailed recommendations for regional dissemination of information on these practices and for regional capacity building. We have to show dedication in implementation of these recommendations and multiply such examples of regional experience sharing.

As we develop greater economic stakes in each other, we can put aside mistrust and dispel unwarranted suspicions. We will also develop mutual sensitivity to each others’ concerns and promote more of our common interests. If we provide legitimate avenues of free commercial interaction, we can eradicate the black market and underground trade. We could jointly tackle smuggling, drug trafficking, money laundering and other trans-national crimes, which today flourish in our region because of our mutual rivalries and inadequate coordination. Once we reach that stage, we would not be far from mutual security cooperation, open borders and even a single currency.

If this seems unrealistic and utopian, perhaps we are being unnecessarily cynical. Let us remember that the world did not anticipate the sudden end to the Cold War or the collapse of the Berlin Wall. No one thought Apartheid South Africa could be transformed bloodlessly into Mandela’s Rainbow Country. Not many political analysts would have predicted that the hostile suspicion between Russia and China could be converted in such a short time into a strategic partnership.

Each one of these developments flowed from objective factors in the global environment, but actually occurred because of some enlightened and responsible decisions by people at the helm of affairs.

I would suggest that the demands of globalisation and the aspirations of our people provide the objective bases for our energetic pursuit of a harmoniously integrated South Asia. Our people, businesses and organisations are waiting to interact more closely with each other. This includes producers and consumers, investors and markets, doctors and patients, artists and audiences, students and universities. They are all part of the supply and demand dynamics of a vast sub-continent. They see the unexploited potential in their own neighbourhood. They have waited for over an half century for its fulfilment and are now impatient to move ahead.

We can sense this impatience in the outpouring of popular sentiment after our initiatives. The increased travel between India and Pakistan of Parliamentarians, businessmen, artists and sportsmen show the intense desire for amity and goodwill. We have to respond to this desire by seeking every possible way to banish hostility and promote peace.

If we in South Asia look back objectively at the experiences of our freedom struggles and of our nation-building, the one stark lesson that stands out is the imperative of forging a unity based on our commonalities. Whenever we have dissipated our energies in internal squabbling, external forces have come in to sort out our differences and stayed on to exploit our resources. We should never create the possibility of reliving these historical experiences in new forms and on different fronts.

All these are aspects which your conference could discuss as it exchanges ideas on the economic, strategic and geopolitical future of India and South Asia, ahead of the forthcoming SAARC Summit. Our search for pragmatism, maturity and wisdom will have to involve both governments and civil society. It will also require a wide-spread understanding that in today’s context, collective regional interest is an expression of enlightened self-interest.