The Hindu Business Line : For the future, look East

To what should one attribute this sudden change of heart among the leadership and peoples of once sworn-enemies? The answer clearly lies in the demonstrated benefits of cooperation.

China-India trade has grown by leaps and bounds in the last few years despite the deep political divide between the two countries. India's software majors have set up shop in China and Chinese industrial products and consumer goods have begun to flood our market.

If this is what can be achieved amidst political tensions, imagine what is possible if the two smoke the peace pipe. Give the devil its due: globalisation and trade have made politics irrelevant. Flag follows trade.

Seeing the Indian economic boom, the average Pakistani — and more so the President, Gen Pervez Musharraf — cannot but think that the route to progress does not lie in "Kashmir obsession".

In fact, the enlightened Pakistani would be right in concluding that it has led the country nowhere, only making travel and migration to and economic relations with the affluent West — still the lodestar for Asians — very much more difficult.

A heavy price has been paid in terms of missed opportunities. As far as China and India are concerned, it is time they sat together as a countervailing force to the US and other G-7 countries. "If China and India get together, they do not need the rest of the world", is not an uncommon refrain nowadays.

Add Brazil, Russia and South Africa and you have BRICs - an acronym coined by Goldman Sachs to describe these growth locomotives of the 21st century.

We have not yet come to the benefits of the peace dividend. If India and Pakistan reduce their arms spending, there will be less pressure on foreign exchange and more important, their fiscal position will improve dramatically — defending the Kargil wilderness alone costs several thousands of crores every year — which means lower interest rates for investments, development and creating new jobs.

One searched in vain for one bit of mention and analysis on the implications of the China-India-Pakistan peace process for their economies and markets. There was none. Instead, the Indian stock market crashed, taking its cue from Wall Street.

One would have thought that there could be no better booster than the opening up of the huge Chinese market for our products instead of our relying entirely on the cyclical economies of the US and Europe.

Someone ought to tell our markets that our future lies in the East, and not the West.

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