India and Pakistan together boast a market of more than a billion consumers, but their trade relations have always been overshadowed by political tension. Overt and legitimate trade between the two countries has been practically non-existent ever since a total ban was imposed on bilateral business in September 1965. But all this will change if S.M. Inam has his way.
Mr Inam has set his heart on breaking the commercial logjam in South Asia, first and foremost between the two giant economies of India and Pakistan. It is this need that led the burly Pakistani industrialist to champion the setting up of the SAARC Chamber of Commerce and Industry, of which he became the founding President back in 1994.
As his background bespeaks, this former chairman of the Pakistan Automobile and Parts Importers and Dealers Association, is a free trade-wallah. He says with conviction, “It is incumbent upon all the partners of the SAARC. alliance to remove all hindrances in free trade among our countries.” Mr Inam firmly believes that the goal of SAFTA (free rather than preferential trade) is achievable. “It requires better understanding of the issues that are hindering progress. A first step will be the lifting of visa restrictions between South Asian countries, and allowing restriction-free travel and transport of goods.”
This would all seem visionary talk if Mr Inam were not also a man of action, and a social worker to boot. A former flyer and president of an aero club, he heads the Sindh Anti-Tuberculosis Association, and is an active organiser of cricket tournaments. Besides inter-regional cricket matches, he is especially keen on the opening up of Indo-Pakistani trade, which is presently practically non-existent other than for informal dealings and cross-border smuggling.
In 1995-96, the two-way trade amounted to USD 114 million, but this is a pittance compared to what is possible, says Mr Inam. Presently, the bulk of the trade between the two countries is done informally, through third parties like Singapore and the Gulf states. According to one estimate, this informal trade is as high as USD 2 billion. This trade could be far more lucrative to both sides if it were to be formalised, Mr Inam believes.
“Even after signing the Tashkent Declaration in 1966, our governments did not encourage formal trade. But the mercantile community of the two countries continuously strove for better relations, and their perseverance has now begun to pay.” Mr Inam is all praise for India´s recent unilateral decision to issue multiple-entry visas to Pakistani businessmen and industrialists.
Things are still moving too slow for Mr Inam, however. “Despite signing various memoranda of understanding, announcements, agreements and joint declarations, the pace is slow. The reason is the need for political posturing.”
Pointing to the potential for enhanced commerce between his country and India, Mr Inam says, “Transport costs would be reduced because of the short distance. Quick deliveries would lead to smaller inventories, and less damage to goods in transit. Besides, there are the advantages of having no language problem between the two countries, and familiarity with each other´s trade practices, fashions and needs.”
The industrialist argues that it is past time for the South Asians to follow the example of other trading blocs like ASEAN in preparing for the challenges ahead. South Asia´s businessmen and industrialists are pinning great hopes that SAPTA and later SAFTA will at long last help develop the socioeconomic backbone of the seven countries of the region, uplifting the regional economy as a whole, says Mr Inam.
“Our countries constitute an age-old civilisation which should, in these modern times, build up a sense of community for our collective benefit and for our economic survival. In this competitive world, it is time to create a modern economic community of South Asia.”