Conflict and Peace in South Asia: Volume 5

One of the persistent trouble spots in the world is South Asia, which comprises India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives. The conflict started simmering between India and Pakistan with the partition of the British India, resulting in a secular India and an Islamic Pakistan. They fought four wars including Kargil. It is generally believed that Kashmir is the core issue of conflict between India and Pakistan. The latter occupied one-third part of Kashmir through its covert military invasion of Kashmir in 1947–1948.

The geopolitical scenario in South Asia has of course assumed a new dimension at least in three fields: ethno-cultural, strategic configuration and psychological. In the ethno-cultural field, South Asia has become highly volatile and explosive. In most of the states of South Asia, ethno-cultural conflicts exist: for instance, in Sri Lanka where the LTTE militant group is engaged in a bloody warfare vis-à-vis the Sri Lankan State; in Pakistan Shia-Sunni conflicts and the Mohajir Qaumi movement for autonomy; and in India the religious fundamentalism due to the rise of Hindutva that has created a panic among minority groups like Christianity. In Nepal, the Communist Party (ML) is indulged in the worst kind of political violence. These trends show the upper hand of ethno-cultural elements in the geopolitical setting of South Asia.

The left-hand side of Eq. (1) denotes the rate of change of Indian military expenditure. k and n are positive constants, which, following Richardson's terminology, can be called “defence coefficients.” It is difficult to obtain data for China's defence expenditure. If they are not available, we can try to employ some index numbers or use some proxy variables. This Eq. (1) represents the mistrust and suspicion on the part of India against Pakistan and China. It is true that mistrust is a qualitative aspect of a state of mind. However, we assume that military expenditure is a satisfactory yardstick for measuring it.

In many developing countries and some developed countries, government by coalition is the rule. In the Indian central government for the last two or three decades, there was a coalition of the left or right: on the right, the BJP and like-minded party; and on the left, the secular Congress party, like-minded parties, and the Communist party. This coalition of government politics is very much guided by both domestic and international situations. For example, Congress, the major party in the ruling coalition, is in favour of the USA–India nuclear deal. It was not finalized due to the opposition of its coalition partners, particularly the Communist party. As a result, the deal is almost dead. There are many examples in economic policies that are greatly influenced by coalition politics. The same situation exists in state politics. There is considerable scope in using the material in coalition theory literature to determine when and what type of coalition will form and break the pay off, etc. The subject discussed below of such a situation is based on a grossly outdated scenario. We hope a more up-to-date and sophisticated study will be available not only for India, but also for other countries.

An important issue in defense economic literature has long been the modeling the arms race between rival countries. However, although various specifications with different data sets have been employed, little has been found in favor of a clear-cut arms race between the rivalries. Brauer (2002) and Dunne, Nikolaidu, and Smith (2005) provide excellent literature survey regarding the advantages and disadvantages of various specifications in modeling the arms race and/or data measurement issues leading to poor results, particularly in the case of Turkey and Greece. The possible arms race between India and Pakistan has also been a topic of interest for many researchers as the two have maintained a hostile relationship with one another since their creation as separate states in 1947. The religious differences between the two countries are believed to be the main reason of the partition and ongoing hostility, which led to an arms race (Tibbett & Akram-Lodhi, 1997; Deger & Sen, 1990; Alexander, 1987; Ganguly, 1995).

An important issue in the study of economic development is that it examines how participatory democracy influences the efficiency and the equity associated with the utilisation of economic resources. The main research agenda in this context pivots on the question of whether and to what extent democratisation helps to allocate economic resources by serving the interests of the majority of voters. It is widely recognised that democratisation can promote the welfare of the majority by enhancing flows of information between citizens and policy makers and by increasing the accountability of policy makers to citizen voters. On the other hand, it has been widely held that democratisation can adversely affect the welfare of the majority by triggering and increasing unproductive rent-seeking activities in a democracy. Early empirical evidence on the welfare effects of democracy and democratisation have been primarily at the cross-national level and have focused on GNP growth as the outcome of interest (Barro, 1996; Minier, 1998). The results have been ambiguous, and riddled with a myriad of problems with regard to interpretation of national-level data. It also offered little explanation of the mechanisms by which democratisation affects the policy choices that, in turn, impinge on economic performance. It is also widely believed that the capture of public policies by interest groups can thwart the efficacy and the equity of the allocation of resources.

Historians have interpreted the record of human struggle for survival in different ways, varying from a pessimistic to a cautiously optimistic approach. But there is no doubt that human destiny is shaped by the success or failure of human responses to challenges faced collectively as a society (Pendse). Historical records suggest that natural disasters, human violence, and war are common; humans and human groups are also quite capable of using violence and/or collaboration in the process of seeking resources, establishing status, and dominating other humans (Robert, Norwood, & Fullerton, 2004).

Nuclear proliferation in Asia is basically rooted in psycho-cultural complexes of their ruling elites who are engaged in a frantic search for national security, national identity, and influence by developing n-weapon capability. A propensity for acquiring a credible nuclear deterrence as a security guarantee against any potential threat from adverse or hostile neighbours, political and military elites in volatile regions such as South Asia, Middle East, and Northeast Asia are perpetually indulged in producing artificially insecurity syndrome among their people to legitimize the imperative of nuclear weapon building programme. Inter-Asian regional nuclear collaboration, for instance, between North Korea and Pakistan, between North Korea and Myanmar, between Iran and Pakistan, between Pakistan and China are alarming signs of fomenting the nuclear armament and missile race in Asia. Alexei Arbatov, Director of the Centre of International Security, Institute of the World Economy and International Relations, Russian Academy of Sciences; writes that with the ceasing of ideological and geopolitical rivalry between the two superpowers, nuclear proliferation has gained momentum in the horizontal proliferation in countries of volatile regions of Asia – India, Pakistan, Israel, Iran, Iraq, Syria, Libya – with the flawed support systems of the NPT, IAEA, and Nuclear Suppliers Group (NSG). For instance, NPT does not offer any tangible benefits to those countries renouncing acquisition of nuclear weapons, nor does it “envision serious punishment for military nuclear activities” (Arbatov, 2004).

An international aid conference held in Tokyo from 9 to 10 June 2003, conducted with the participation of 51 countries and 20 international finance agencies, granted US $4.5 billion over a 4-year period to Sri Lanka (www.news.bbc.co.uk (a)). The aid, pledged by donors for development and reconstruction in Sri Lanka, was conditional upon the successful continuation of progress towards a permanent solution to the ethnic conflict. The Prime Minister promised ‘a provisional administrative structure with wider powers to the LTTE’ (Wickramasinghe, 2003b), suggesting that the Tokyo aid would enable the implementation of a new framework to re-energise Sri Lankan peace and development. However, the aid package has elicited mixed reactions from key players. In particular, the Liberation Tigers of Tamil Eelam (LTTE) are refusing to participate in further peace negotiations until there is a more equitable distribution of resources, resulting in more aid being allocated to the areas of need in the North, East and South. That is, those areas where they wish to have greater control, and they have condemned the proposed new administrative structure.

The tsunami that swept the shores of Sri Lanka on December 26, 2004, killed over 30,000 people regardless of their ethnic or religious affiliations. This article deals with a different conflict – one fashioned by human beings, which has caused the loss of an estimated 70,000 lives. The vast majority of the lives lost have been from the minority Tamil population. The basic argument of this article is that the desire to uphold a unitary state in Sri Lanka established by the British colonial rulers in 1833 has really been the desire to establish Sinhala hegemony over the minorities, particularly the Tamil minority.

Civil society in Sri Lanka has, to a large extent, been shaped by British colonial rule and the establishment of the modern, democratic state in the first half of the 20th century. In pre-colonial times, grass roots communities organised around the need for collective work in temples and for irrigation. A notion of pre-colonial cooperation and harmony and an ideal traditional Buddhist society, which was lost due to colonialism and modernisation and should be revived, today forms part of the Sinhalese nationalist discourse and of the mobilisation rationale of the large community development organisation Sarvodaya (see Gombrich & Obeysekere, 1988; Brow, 1990).

The economic effects of ethnic conflict in Sri Lanka are multifarious. A discussion of the economic effects of ethnic conflict could encompass the opportunity cost of the war (i.e., the foregone income due to the war at micro- and macro-levels), the economic impact of the military expenditures (on both sides of the war), financing mechanisms (both national and international) of the rebel movement, and the impact of economic sanctions on rebel territory. It should be noted that the economic effects of ethnic conflict in Sri Lanka is a relatively under-researched area (Arunatilake, Jayasuriya, & Kelegama, 2000; Goonetileke, 1998; Grobar & Gnanaselvam, 1993; Gunatilleke et al., 2001; Kelegama, 1999; O’Sullivan, 1994, 1997, 2001; Rankaduwa & Cooray, 1999; Ravano, 2001; Richardson & de Samarasinghe, 1991; Ross & Samaranayake, 1986; Seabright, 1986).

India's engagement with Afghanistan readily became multi-dimensional after the defeat of the Taliban and the installation of an Interim Authority in 2001. This was reflected in an immediate upgradation of Indian representation in Afghanistan from Liaison Office to full-fledged Embassy in 2002. India actively participated in the Bonn Conference and was instrumental in the emergence of post-Taliban governing and political authority in Afghanistan. Since then, India's main focus has been to support the Afghan government and the political process in the country as mandated under the Bonn agreement of 2001. It has continued to pursue a policy of high-level engagement with Afghanistan through extensive and wide-ranging humanitarian, financial, and project assistance, and participation in international efforts aimed at political reconciliation and economic rebuilding of Afghanistan.

Political transition to democracy is hampered by human rights abuses by the military junta against ethnic minorities that constitute a third of the country's population. Human rights violations are unprecedented in terms of human suffering, extra judicial killings, torture, forced labour and displacement, rape and rapine. The situation has further deteriorated due to a bloody conflict between the armed opposition groups from ethnic minority states and central authorities. Armed opposition groups are demanding a greater autonomy, which the military government has been denying. Although the military government signed over a dozen cease-fires with armed groups, there has been no real progress to reach a permanent political solution. As a result, human rights abuses are on the increase, especially in Shan, Kayin (Karen), Kayah (Karenni), and Mon minority states where the military junta's army is engaged in counter-insurgency operations against armed groups.

Conflict resolution and peace building has acquired much significance in the last few years (Siddiqi, 2003).

India and Bangladesh are historically, geographically, and culturally tied to each other to an extent that try as they might they cannot escape this reality and so have to inevitably deal with each other. India's role in the establishment of an independent Bangladesh in 1971 meant that for few years India enjoyed a privileged relationship with the new state. India's assistance to the refugees from East Pakistan as well as its relief and reconstruction aid went a long way in establishing the foundations of a new state. India, not surprisingly, was also the first state to grant recognition to Bangladesh; by pulling its troops out of Bangladesh soon after the end of the war it also acknowledged the new state's sovereignty.¹ In 1972, the two states even signed a “Treaty of Friendship and Peace” for a term of twenty-five years, declaring that each side would respect the independence, sovereignty and territorial integrity of the other, and also refrain from interfering in each other's internal affairs.

The term ‘fundamentalism’ has come of late into popular usage more than any other. It has been used for various Christian movements. During the twentieth century, the term came to be used in Christian–Protestant circles in an effort to define beliefs that are fundamental to Christian religion. The world that emerged after the Second World War saw the emergence of many former colonial and semi-colonial countries as independent nations. Their development caused ferment among the Muslim countries also. It took the form of a resurgence of fundamentalism, Islamic fundamentalism. During the last several decades, the Islamic revival that is sweeping from Morocco in the West to Mindanao in the Philippines is considered with some reason as a response to the predatory policies of Western imperialism. This was the reassertion and the response of the Muslims to the challenge of the West. This was the promise of the fundamentalist Muslims: self assertive Islamic nationalism and simplicity of argument in the hope of recapturing the pristine purity and political glory of Islam (Ahmad, 1991). The first Muslim to react against the alien accretions to Islamic society, not necessarily the result of external or foreign influence, was Shah Waliullah (1703–1762) who was almost a contemporary of Abdul Wahab (1703–1787) in Arabia. Both evolved from attempting to purge the Islamic society of foreign accretions to protesting oppression and corruption of Westernisation (Jansen, 1979). The fundamentalism today is different from that of the eighteenth century. It is not of much use to trace historical continuity in the fundamentalist ideology; although, this does not negate some linkages between Islam's past history and modern day fundamentalist movements (Ahmed, 1994).

Water has been called the oil of the 21st century. Global water consumption is rising steeply and the lack of adequate supplies of quality water is a problem in many parts of the world. Water is one of the most abundant elements of earth, covering nearly 1,400 million cubic kilometers, nearly 70 percent of the planet's surface. However, only a very minor portion of this huge volume is actually usable. The rest forms oceans and polar ice caps. Availability of usable water is further limited by the fact that it cannot be easily exported over long distances.

In the above example, India is more productive in both, chemicals as well as ceramics. However, while Bangladesh is thrice as productive domestically in respect to ceramics as compared to chemicals, India is only twice as productive in the same product relative to chemicals. It will be worthwhile for Bangladesh to specialise in the production of ceramics in which it has a comparative advantage and for India to specialise in the production of chemicals. Both countries stand to gain through trade provided that for each unit of chemical Bangladesh imports from India it has to part with less than three units of ceramics to India, while India, too, gains if for each unit of chemical it sells Bangladesh it can get more than two units of ceramics. Thus, when trade takes place, it benefits both parties when the ratio of exchange for each unit of chemicals varies between >2 and <3 units of ceramics. The exact rate of exchange would depend on relative bargaining power of the traders. A value nearer to 3 will indicate larger bargaining power for the Indian exporter, and a value nearer to 2 would indicate greater bargaining power for the Bangladeshi exporter. In general, if the relative gains are higher the lower the elasticity of demand for the product and the greater the value addition to the product. Thus, manufactured products generally fetch better exchange as compared to primary products.

The GATT/WTO regime based on these four basic principles has played a reasonably productive role in the development and governance of global trade. However, as observed at the outset, the focus of the GATT/WTO regime has so far been the expansion and continuation of market access already negotiated. This, in other words, meant a focus on import control measures.

Globalisation accompanied by the rapid development of the information and communication technology (ICT) has largely boosted international trade in services over the past decade or so. Because services account for a higher proportion of production costs, firms are taking every opportunity to go for lower-cost solutions for the provision of business process services. International sourcing of business support services has, therefore, been a preferred solution to the ongoing cost pressures and related skill shortages experienced in many developed countries.

Pakistan is quite often described as a failing state. Some scholars have described it as a “failed state.” Without indulging into its controversial part, let us see the state of affairs in Pakistan first. Pakistan has been under a mixed spell of military rule and controlled democracy. President Pervez Musharraf has learnt from the legacy of military rule of his predecessors that the best bet to remain in power is to blame democratic leaders for their failure to govern the country in the interest of the people. Musharraf had grabbed power through a bloodless military coup by dislodging the democratically elected government of Nawaz Sharif in October 1999 under a similar alibi. Even after the lapse of more than 8 years of his rule, there has been no change in terms of poverty eradication, economic development, living standards, or internal security. On the contrary, things have taken on a much uglier shape.