Plans for prosperity


It’s time to start building the subcontinent as a zone of co-existence and prosperity

India-Pakistan relations are stuck in a warp since 1948. The world has moved on and it is time to rethink each element in the light of new strategies better suited to the global com­petition India now faces with China, Russia and the West, which goes well beyond Pakistan’s dark dispositions.

For decades, Pakistan’s military establishment and its venal political allies have made ‘drift towards Islamic fundamentalism’ a mask for their main agenda of retaining power and expropriat­ing national wealth, regardless of cost to ordinary citizens. And a perplexed India has followed each twist in these sagas and fought both hot wars and diplomatic battles to deter Islamabad from irrational adventurism. It has focussed heavily on building overwhelming military power and undermining Pakistani attempts to gain friends and sympathisers around the world.

One unintended result of Delhi’s success in deterring Islamabad’s hotheads has been to worsen chaos within the governance of Paki­stan. It has motivated militarists to use Islamic fundamentalism as their main proxy weapon against India. They well know that it cannot dis­rupt the Indian Republic, but it does help them to keep their own citizens down. Constant skir­mishes with India build the atmosphere of inter­nal tension necessary to prevent the Pakistani people from being able to take a half step back to consider whether the secular Indian democracy is really an enemy of Islam in Pakistan.

Openings are emerging now for India because much has changed over the past 15 years. Islamic fundamentalism has morphed into an existen­tial threat to the national unity and survival of Pakistan. Sunni fundamentalism has engen­dered too many shades of grey within itself to give comfort to any hard-line authoritarian seeking to use Islam’s coat-tails to bask in polit­ical power. Both the royals of Saudi Arabia and the militarists of Pakistan are struggling to fend off violent challenges from the Islamic State, A1 Qaeda, Taliban and other jihadists.

Therein lie opportunities for change in India’s policies towards Pakistan to start build­ing the entire subcontinent as a zone of co-exis­tence and growing prosperity. A great beginning would be for Delhi to encourage Beijing to achieve all its proposed development activi­ties in Pakistan as part of Xi Jinping’s New Silk Road projects. Massive Chinese investments of
money and technology to build a grand spin; column of oil and gas pipelines, roads and trair through Pakistan, linking the new Gwadar po to major Chinese trade centres, are the sure way to stabilise Pakistan and separate it fro: Islamic fundamentalism.

Beijing fears Islamists more than Delhi do« It needs stability and will ensure that Pakist; shelves its fundamentalist ‘weapon’ before poi ing money into the country. It also has mu< greater motivation to take economic risks Pakistan, because it really needs those trar port links from the Arabian Sea to the Chint people. The huge influx of wealth and bu ness activity will surely give a giant boost Pakistan’s economy, thus increasing the stai for Islamabad’s militarists in internal a regional stability.


Some Indian hardliners will complain of 1 security threats arising from encirclement China using Pakistan as a proxy. That risk can almost completely dissolved by some far-sigh diplomacy with Beijing. Xi Jinping fears en clement more than Delhi might ever do. He Japan, the US and America’s friends glaring him from the Pacific region and South China 5 Russia is playing nice for the moment because its problems with Europe over Ukraine, but a hereditary rival. And Indian military powe no slouch either.

Xi does not want more trouble. Delhi’s n interference in his plans for trade routes thro Pakistan will win friends in Beijing. It is wc pursuing if we can work diplomatic deal: ensure that China will not use Pakistan as a I tile proxy against India. The US would be gla help in such an endeavour.

Similarly, Chinese finance, labour and t nology to develop Afghanistan, Myanmar Bangladesh should be welcomed because i are sorely needed for the economic developr of those poor and unstable countries. In diplomacy, backed by the US and Europe, c help to keep in check China’s military a tions in Afghanistan, Pakistan, Bangla and Myanmar.

None of them wants to be a vassal of Beijin, all need the investments that are farbeyond In capacities. Indian economic growth would benefit greatly from an improved transport economic ecosystem in the sub-content


India and Malaysia, a nation right in the middle of South­east Asia, have a lot in com­mon. Both countries are part of the Commonwealth, NAM, G15 and the Asian Union. The other striking similarity is the transfor­mation. Malaysia, a multicultural democracy has transformed from an agricultural dependent economy and an exporter of primary products into an industrialised trading nation and a broad-based economy, as effectively as a culturally and ethnically diversi­fied and democratic India, which has moved from a closed, agriculture- driven state to a liberalised economy powered by IT and services.

The two nations began their for­mal foreign relations as early as 1957, the Malaysian year of independence, with the establishment of the High Commission of Malaysia in New Delhi and the High Commission of India in Kuala Lumpur. Since the establishment of this diplomatic rela­tionship the bond has been strong and friendly. Being home to one of the largest Persons of Indian Origin (PIO) communities in the world, the historical relationship has assisted in expanding the relationship to
cover multifaceted cooperation such as in trade and investment; science and technology; education; human resource development, tourism and culture.

Early connect

Tracing the genesis – with regard to defence, during the early nine­teenth century, under the British Rule, the Madras Native Infantry served in Malacca and Penang. The British Indian Army too defended Malaya against the Japanese troops during World War II. Ever since, the two countries have conducted sev­eral joint training exercises. Two of the alumni of the Indian Military Academy (IMA), Tun Hussein Onn and Tun Ibrahim Ismail, went on to become the third Prime Minister of Malaysia (1976-81) and the Chief of Defence Forces (1971-77) respec­tively. Keeping this history in mind, Malaysia and India signed a mem­orandum of understanding (MoU) in 1993 for facilitating the supply of military equipment and security dialogues between the two nations. Additionally, an MoU was signed in September 2000 for cooperation in Air Service operations.

In the field of education, both India and Malaysia have been rich centres of education. During the 1960s and 1970s, as many as 30,00( Malaysian students were studying in Indian educational institutions This number has increased signifi­cantly over the years with the estab­lishment of Melaka Manipal Medical College in 2001; the Manipal Univer­sity estimates that it alone has over 3,000 alumni in Malaysia. Another


Modi: Act East strategy


Trade and commerce

Long-standing commercial links have only strengthened over time with Indian industry establishing its presence in Malaysia as early as 1968 with Godrej’s operations. Cut to date, bound by a framework for stra­tegic partnership, India and Malaysia are looking at developing a multifac­eted relationship with a view to ele­vate bilateral relations to the level of a long term and strategic engage­ment, which was further elevated in 2011 with the signing of the Malay- sia-India Comprehensive Economic Cooperation Agreement (MICECA), a bilateral Free Trade Agreement (FTA) which covers all aspect of trade and investment cooperation between the two countries

Explains V.V.L.N. Sastry, MD of the Mumbai-based Firstcall Equity, “The triggers are already there in the rap­idly growing economic and com­mercial exchanges highlighted by Malaysia’s emergence as the third largest trading partner for India within the Association of South-East Asian Nations (ASEAN), and India as the largest trading partner for Malay­sia from among the countries of the region, excluding China.”

Numbers speak

Looking at pure numbers, Malay­sia being India’s third largest trad­ing partner in ASEAN and India being Malaysia’s largest trading partner in South Asia, bilateral trade between the two countries has grown slowly but steadily from $2.5 billion in 1998 to $15.5 billion in 2015. “The MICECA between India and Malaysia and the Trade Agreement with ASEAN covering goods, services, invest­ment and other areas of coopera­tion is expected to lead to stronger commercial and economic ties across government and businesses. In gen­eral, India is a very important market and has always been Malaysia’s big­gest trading partner in South Asia. Malaysia-India bilateral trade has increased by more than three-fold for the past 10 years. From 2004 to 2014, the average trade growth was 14.6 per cent. With the implemen­tation of the MICECA, bilateral trade has grown tremendously by 17.97 per
cent from 2011 to 2014,” says Mazlan Harun, Consul (trade) at the Malay­sia External Trade Development Cor­poration (MATADE) based in Mumbai pointing out that, despite tough external environment, Malaysia’s trade with India expanded by 3.5 per cent in 2014 to $13.84 billion from $13.37 billion in 2013 boosted by a better exports performance, making India Malaysia’s 11th largest trad­ing partner and accounting for 3.12 per cent of Malaysia’s total trade. Malaysia’s exports to India grew to $9.76 billion in 2014 on the back of higher exports of palm oil; crude petroleum; electrical and electronic products; and chemicals and chemi­cal products. India was Malaysia’s 8,ll biggest export destination and also currently the biggest importer of Malaysian palm oil.

In terms of foreign direct invest­ment (FDI), Malaysia has made India an important investment destina­tion. Based on the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, India, Malaysia was the 23rd biggest investor in India in the last 15 years (from April 2000 to Feb­ruary 2015) with investment worth $732.77 million (however, this figure does not include substantial flow of Malaysian investment via establish­ment in third countries which will bring Malaysia’s cumulative invest­ment to an excess of $6 billion), while Indian cumulative investment into Malaysia during the same period has been more than $2 billion with over 100 Indian companies including 60 Indian joint ventures operating in Malaysia. Malaysian investments in India are mainly in non-conven- tional energy, construction, metal­lurgical industries, services, power arid telecommunication.

Some of the landmark projects with Malaysian companies’ involve­ment in India are the Mumbai Monorail; power plant in Chhattis- garh; MCD Civic Centre building in New Delhi; Western Transport Cor­ridor in Karnataka; airports in New Delhi and Hyderabad; mixed devel­opment project in Hyderabad; and First City in Nagpur. Overall, Malay­sian companies have completed 81.


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