India and Pakistan: The Business of Doing Business

Dr. Jag Sheth talks to Kavita Chhibber


While the world’s political pundits continue to wax eloquent on the political games, the issue of Kashmir, and the terrorist activities that continue across Indo- Pak borders, a new economic picture is slowly emerging. In an exclusive with Kavita Chhibber, Dr. Jag Sheth, traces past history, the Kashmir crisis and why he is seeing the possibility of a strong economic alignment between the two countries.

At the time of independence the assumption that Pakistan (which included both east and west Pakistan) and India would continue to coexist peacefully as good neighbors politically, militarily and economically didn’t come true, but I do believe that finally after 58 years things are going to change.

It’s a well known fact that both countries were supported by outsiders- India by the Soviet Union and Pakistan by America and China. India was very anti Britain and USA post Colonialism and so USA aligned with Pakistan by default not because it had rejected India. Today India is aligning with USA and USA already has a good military relationship with Pakistan. I don’t think China and Russia will come in to counter balance the American influence in that zone.

Politically, Parvez Musharraf and Manmohan Singh have a better chance of working things out than Musharraf had with the BJP. Musharraf is a military man, and Manmohan Singh is an economist. Neither of them is a true blue politician. So they don’t carry the baggage that comes with being one. They are relative straight shooters. . I am hopeful that both leaders will be more geared towards thinking what they can do for the country than looking at their own self interest.

It is also a well known fact that Congress has always carried the minority vote be it Muslims or Sikhs, or Christians, just as the Democratic party in the US carries the African American vote. Under Congress the minorities have done better, and today we see a President who is a Muslim scientist, the Prime Minister a Sikh economist and the Leader of the party an Italian immigrant. It’s unheard of anywhere else.

I believe that on the military side the two countries will begin to cooperate with each other. Neither country wants to abandon its political leadership and create a political void which may be filled by the AL Kaida movement. Look at what happened in Russia-the mafia took over the moment there was a political void. The same thing happened in Afghanistan. Again the countries that were creating the wedge between the two nations no longer want to do that.

America has always wanted a competitor, a challenger to unite it. The Boston tea party, the Civil war, World War I and II, communism, all acted as unifying forces. Today the unifying force is China, an emerging rival and competitive power which America is trying to contain by creating as many allies as it can and the strategic borders of India and Pakistan are very important to America, along with central Asian nations.

There is still the issue of Kashmir, but my take on that is that the main differences are between the Kashmiris on both sides and should be resolved by the Kashmiris themselves.

I think another problem will be to unify a country as diverse as India in how it reacts to Pakistan. Unfortunately the Border States were ravaged by the aftermath of partition and still carry a lot of resentment. While Pakistan by and large is a homogenous nation, India is not and it’s going to be hard work to get a unified positive reaction to Pakistan especially in a democracy.

While the two countries struggle militarily and politically, to be on the same page, I think they are going to skirt around these obstacles and become economic allies. Both India and Pakistan are growing economies. It’s not just the Indian stock market that is doing well, but Pakistan’s stock market is too.

This is also where the business community will step in. It’s is interesting that if you look at their history, the non resident Indians and Non resident Pakistanis have lived together in great harmony in countries like South Africa, Dubai, Malaysia in large numbers and done business together. USA has a very small number of people from both counties residing here. Till recent times the Indians and Pakistanis living abroad always thought of each other as brothers. The rivalry between the two began only when the younger generation started to be brainwashed in schools with anti India and anti Pakistan sentiments.

Still I think it will be the way it has been with the Cuban community in Miami. They have put a lot of pressure on the government to ignore Fidel Castro and focus on the 18-20 billion dollar trade potential. Similarly the business community will put pressure on Pakistan to align with India economically because of the tremendous growth both countries can enjoy in doing business with each other.

I think India should align in a multilateral way with America. While India is already emerging as a powerful trade destination for the world, for Pakistan to have a healthy economic future it’s very important to align with India. It may be the kind of relationship Taiwan has with China- politically they are poles apart but economically Taiwan has aligned itself with China.

DR. JAG SHETH is a renowned scholar and world authority in the field of marketing. His insights on global competition, strategic thinking and customer relationship management are considered revolutionary.

Dr. Sheth is the Charles H. Kellstadt Chair of Marketing in the Goizueta Business School at Emory University. Prior to this, he was a distinguished faculty member at the University of Southern California, the University of Illinois, Columbia University and the Massachusetts Institute of Technology.

Professor Sheth has published more than 200 books and research papers in different areas of marketing and business strategy. Many of these are considered classic references.

Disclaimer: The views and opinions expressed in these columns are solely those of the writers and do not necessarily represent those of the editor/publisher.

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