Conflict between Two Neighbors: Will Trade Act as a Conflict Mitigating Strategy?
Mohd Imran Khan
Centre for Development Studies (CDS) India
Rashid Rasheed Wani
affiliation not provided to SSRN
March 10, 2012
The state, Jammu and Kashmir has been lagging behind in reaping the benefits of globalization as compared to other states in India. Historical evidences reveal that, trading of agricultural produce and manufacturing goods to the neighboring places was major activity in the state. However, partition of the country, which happened in 1947 seem to have created trading restrictions across the line of control thus led to geographical blockade of trade links and routes which had badly affected its imports and export of goods and services which were traded through. As a result, economic activity in the state had gradually declined, which was further aggravated by the internal conflicts. In the present context, the state economy is facing the challenges of various issues such as overdependence for funds on centre, lack of industrial sector, infrastructure and high costs of capital. The revival of the trade between the India and Pakistan via historical routes through Jammu and Kashmir State will help in two ways; first, it’s geographically feasible because of locational factor and second, it will act as conflict mitigating strategy between two countries. Further nourishing of the trade will reduce the economic dependence of only viable route (Banihal road) to that connects Kashmir valley with the rest of India. In this light, the initiation of Cross-Line of Control (LoC) trade across Jammu and Kashmir in October 2008 via Uri-Muzaffarabad and Poonch-Rawalakote routes had been a welcome step. Hypothesizing that trade will act as an engine of growth for conflict ridden state of Jammu and Kashmir, the present study will examine the potentiality of a beneficial trade across LoC. The study will also look trade as an important constituent of confidence building measures (CBM) discussed by the governments of India and Pakistan.
Keywords: Trade, Conflict, Jammu and Kashmir
JEL Classification: F10, D74
Date posted: March 12, 2012 ; Last revised: July 21, 2013