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India-US Relations Blog

Afghanistan is Key to India’s Iranian Connection

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Washington grumbles about the Indian relationship with Iran, but the U.S. withdrawal from Afghanistan leaves New Delhi little choice

The striking juxtaposition this week in New Delhi is a nice illustration of how Tehran has become a complicating factor in U.S.-India relations.  Secretary of State Hillary Rodham Clinton was in town to exhort Prime Minister Manmohan Singh’s government to do more on curtailing imports of Iranian oil.  All the while, a large Iranian trade delegation was a few miles away striking deals for the provision of agricultural commodities that Tehran is finding harder to purchase.

On the surface, the awkward tableau was reminiscent of the situation three months earlier when the Obama administration moved to enforce new U.S. sanctions aimed at shutting down the Iranian petroleum sector as a means of pressuring the Islamic Republic to abandon its nuclear weapons program.  At the time, reports emerged that India had overtaken China as Iran’s largest oil customer and that a new rupee payments system and barter trade arrangement were being set up for the purpose of circumventing the sanctions regime.  Adding to the perception of New Delhi’s defiance was the announcement that an Indian trade mission would visit Iran to scope out commercial opportunities created by the U.S. and European Union sanctions.  Even if the Americans and Europeans wished to shun business with Tehran, Commerce Secretary Rahul Khullar was quoted as saying, “tell me why I should follow suit? Why shouldn’t I take up that business opportunity?”

These actions caused the Wall Street Journal to editorialize about “Iran’s Indian enablers” who were “turning about to be the mullahs’ last best friend.”  Nicholas Burns, who during the George W. Bush administration did yeoman’s work in bringing about the new era in bilateral affairs, issued a cri de couer:

This is bitterly disappointing news for those of us who have championed a closer relationship with India.  And it represents a real setback in the attempt by the last three American presidents to establish a close and strategic partnership with successive Indian governments.

Others pointed to New Delhi’s actions as evidence that Washington’s efforts to forge a strategic partnership with India were naïve and foolish.

But things have changed over the last few months.  While New Delhi continues to protest publicly the unilateral character of U.S. sanctions, it has quietly taken steps to accommodate U.S. concerns.  According to media reports, the Indian government has instructed domestic refineries to reduce imports of Iranian oil by 15 percent.  As a result, Baghdad has replaced Tehran as the country’s second largest crude oil supplier and Iranian oil now constitutes nine percent of India’s import profile as opposed to 12 percent last year.  Imports of Iranian crude declined by a third in April compared to March’s figures.  And the state-run Indian Oil Corporation, the country’s largest refiner, did not purchase any Iranian crude last month, down from 75,000 barrels per day in March.

During her trip, Mrs. Clinton publicly commended these efforts but also insisted that “India’s role in the international community” obliges it to go further.  To continue pressing this point, Washington is dispatching a special envoy next week to New Delhi.  This visit is significant since the Obama administration will soon begin rolling out punitive measures against foreign entities that have not lived up to Washington’s expectations.  It earlier granted passes to Japan and EU nations but pointedly left out such countries as India, China, Turkey and South Korea.

There is some speculation that India is in danger of being sanctioned for its continued oil transactions with Iran.  But a better bet is that this will not happen.  The rupee-based payment mechanism that India has fashioned to buy Iranian oil is certainly problematic from Washington’s perspective, though it is something U.S. officials can tolerate since it does not entail the exchange of major convertible currencies like the U.S. dollar or the euro.

Moreover, the third round of the U.S.-India Strategic Dialogue is taking place next month and Washington will not want the sanctions issue to derail the momentum coming out of the talks.  Indeed, according to sources quoted in the Indian media, the matter was not a major agenda item in Clinton’s discussions with Foreign Minister S.M. Krishna:

“Both sides referred to it obliquely, but Clinton didn’t even push it.  In fact, she seemed much more keen to talk about possible deliverables that could be achieved when the two ministers meet again for the bilateral strategic dialogue in mid-June.”

In his joint press conference with Clinton, Mr. Krishna once again pleaded that the country’s burgeoning energy security needs – it imports 75 percent of its petroleum requirements – limit how quickly it can break its oil links with Tehran.  Washington urges India to get more of its supplies from Saudi Arabia, which has happened to an extent though New Delhi remains wary of Riyadh given its close friendship with Islamabad.

But there is another factor at work here than just the geopolitics of oil, one that seems not to have been squarely acknowledged during the Clinton visit: A significant reason for New Delhi’s continuing desire to engage Tehran resides in the adverse effect on Indian security concerns caused by U.S. withdrawal from Afghanistan.

With domestic politics largely driving U.S. strategy, key differences are bound to emerge between the United States and India regarding the political endgame that is now unfolding.  Looking toward the exits, Washington will not be overly concerned with the exact details of the country’s future or the viability of the government in Kabul it leaves behind.  In contrast, New Delhi, which has invested heavily in Hamid Karzai’s government, has strong security interests in ensuring that any regime in Kabul is capable enough to be a bulwark against Pakistan as well as a gateway to trade links and energy resources in Central Asia.

India has traditionally relied upon Iran, whose interests in Afghanistan are roughly congruent, to help accomplish these goals.  After the fall of the Taliban regime, New Delhi played a key role in building a transportation corridor from the port of Chabahar in southeastern Iran into Afghanistan.  Late last year, it announced plans to expand this link by constructing a 900-kilometer rail line to Bamiyan province in Afghanistan, where an Indian consortium has won mineral development rights.

Indeed, New Delhi and Tehran may go so far as to revive their cooperation during the 1990s that provided critical support to the non-Pashtun militias battling the Taliban regime.  (Already reports are surfacing that the old Northern Alliance may be reconstituting itself.)  The Americans will surely grumble about the cozying up with Iran, but the geopolitical logic of the Obama withdrawal leaves New Delhi little choice.

India has for some time now telegraphed how the Afghanistan factor looms over its relations with Iran.  Speaking in mid-2010, at a time of renewed U.S. pressure on New Delhi’s bonds with Tehran, Indian Foreign Secretary Nirupama Rao (who now serves as New Delhi’s ambassador in Washington) gave a noteworthy address on the relationship.  She highlighted the “unique” civilizational ties and “the instinctive feeling of goodwill” between the two countries.  She spoke of how links with Tehran are a “fundamental component” of Indian foreign policy and how there has been a recent “convergence of views” on important policy issues.  Regarding bilateral cooperation on Afghanistan, she argued that New Delhi and Tehran “are of the region and will belong here forever, even as outsiders [read the Americans] come and go.”

Reinforcing this message, a senior Indian official was quoted in the press at the same time as saying that efforts to tighten relations with Iran were a policy “recalibration” caused by the “scenario unfolding in Afghanistan and India’s determination to secure its national interests.”

The tussle over Iranian sanctions is a harbinger of bigger challenges ahead for U.S.-India relations.  One of the key foreign policy conundrums the Obama administration faces is how to reconcile its approach on Afghanistan, which has the effect of aggravating ties with New Delhi, with its recently-unveiled strategic “pivot” toward Asia, the success of which hinges in important measure on a strengthening of the security partnership with India.  The interplay of two conflicting dynamics in bilateral affairs – growing strategic cooperation in East Asia and unfolding differences over the future of Afghanistan – will be a key factor to watch for in the years ahead.

This commentary was originally posted on Chanakya’s Notebook.  I invite you to follow me on Twitter.

Defence And Strategic Affairs Blog

Stand by democracy in Pakistan, Mrs. Clinton!

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If the U.S. is floundering in a region hosting some of the world’s most dangerous religious extremists, a leading cause is the tribe of “South-Asia experts” nestling comfortably in think tanks, government agencies, and university departments across the U.S. Almost all of them have been apologists for the Pakistan army, as even a cursory reading of their published works during the previous three decades would testify. For years, these analysts and scholars have fed off the disinformation abundant in the ISI trough. Even after 9/11, when the BJP-led government then ruling New Delhi offered Washington an alliance against Wahabbi terror, these “experts” ensured that the offer got spurned, and that once again, the Pakistan army was entrusted with the job of guarding the chicken coop. Unfortunately for U.S. interests, the Clintons’ share with the Bushes’ and the Cheneys’  enormous faith in the “South-Asia” experts who evolved from the crucible of the Cold War, when India leant towards the USSR while the Pakistan army was an alliance partner, albeit on its own terms.

 What those in charge of the formulation of policy towards Pakistan have consistently failed to factor in is the contradiction between a stable Pakistan and a strong military.”South-Asia” experts in the U.S. have been voluble in their claim that it is the military that is imparting stability to Pakistan, and have been dismissive of the few who have pointed out that the reverse is the case. That instability in Pakistan is caused by the bloated power of the military, principally the army, which controls domestic and foreign policy within Pakistan to the same degree as the junta in Myanmar did before the last election.

It is the irredentist adventurism of the Pakistan military and its nurturing of terrorism as a strategy of war that has combined with its Wahabbi outlook and its huge demands on the economy to steadily bring Pakistan to the edge of collapse. Although the “experts” favored by successive U.S. administrations may not be aware of this, the reality is that the Pakistan army is involved in a host of criminal activities, including the transport and refining of narcotics, counterfeiting of currency, and the training of extremist groups. Sadly, all this has been facilitated by the U.S. policy of (effectively) unconditional support for the Pakistan army.

 This is not the occasion to recite a litany of the policy errors made by the Clinton administration in South Asia, except to point out to a grievous error of judgment made by the Secretary of State Hillary Rodham Clinton in 2009, when she secretly joined hands with the Chief of Army Staff Parvez Ashfaq Kayani in forcing the Zardari-Gilani civilian government in Pakistan to reinstate the dismissed Chief Justice of Pakistan, Iftikhar Choudhury. At that time, this columnist had warned that this move would neuter the efforts of the Zardari-Gilani duo to establish civilian supremacy over the military. And unless this is done, there is zero prospect of a “stable” Pakistan. The military is the wild card in the pack that has ceaselessly fomented a jihadist mentality within Pakistan society, and has created conditions that have led to contempt for democracy within the establishment in that country.

 Secretary of State Clinton has not hidden her antipathy for the President of Pakistan, nor her backing of the Chief of Army Staff.

Perhaps the “South-Asia experts” she relies on for guidance have not told her that General Kayani comes from a fundamentalist background: one that is almost completely Wahabbi. Or that throughout his career he has been a votary of the Zia Doctrine of the unity of jihadis with the Pakistan army. In contrast, while President Zardari shares with Bill Clinton a propensity for making overtures towards seductive females, he comes from a Sufi background, one where there is zero space for religious extremism. Indeed, the ethos of the Zardari family is even more moderate than that of the Bhuttos, whose apparent lack of fundamentalist beliefs cloaks a vacuum in religious attitude that was filled by a pseudo-western lifestyle. The Zardaris are religious, but in the Sufi rather than the Tablighi tradition favored by Kayani

This being the case, Asif Ali Zardari has from the start shown his willingness to take on the Pakistan military and cleanse it of extremists and their sympathizers. Instead of assisting him in this task, the Obama administration drove a dagger into its heart by conniving at the re-instatement of Iftikhar Choudhury as Chief Justice of Pakistan (CJP) in 2009. While there has been a much effusive comment about the “corruption-fighting” credentials of the CJP, what the U.S. “South-Asia experts” have failed to mention is the fact that Choudhury has not a word to say against an institution that is among the most corrupt in South Asia, which is the Pakistan army. The generals, as also lower-level staff, wallow in graft, to be met by a Nelson’s eye from the Chief Justice, who is equally indulgent towards Mian Nawaz Sharif of the Pakistan Muslim League, whose family leapfrogged from poverty to plenty within a generation by use of methods that defy characterization as ethical or legal. The U.S.-facilitated re-instatement of Choudhury has turned out to be a disaster for democracy in Pakistan, because of the CJP’s obsession with ensuring the dismissal of the elected PPP-led civilian government in Pakistan. Once Kayani got his man in as Chief Justice, and forced through an extension to his tenure as COAS (again with help from Washington), he became even more open in implementing the policy that has been his signature tune since the time he took over as chief of the army.

 This is to do to NATO in Afghanistan what the Pakistan army did to the USSR during the 1980s, ensure defeat. It is no secret that China has entered the Great Game as a major player, or that Beijing is adopting the same strategy in Afghanistan that the U.S. followed two decades ago, which is to use the Pakistan army to ensure the defeat of rival militaries active in the Afghan theater. In 1998, this columnist first mentioned that China was more influential among the senior levels of the Pakistan military than the U.S. This and pointing out the Punjabi domination of the army earned him an effort from Pervez Musharraf to block him from writing in the Times of India. The Pakistan strongman complained to the former Times of India Editorial Director Dileep Padgaonkar about the unflattering comments (though accurate) being made about the Pakistan army and asked why “such writing was being tolerated by the newspaper”. Today, the most recent Kayani visit to Beijing, and his long meetings with Xi Jinping, Wen Jiabao, and other top Communist Party leaders have made clear that Beijing supports the brass in Pakistan in its struggle with the civilian establishment. After all, it is the Pakistan army that is expected to ensure that NATO leave Afghanistan in disgrace by 2014.

 This is the precise reason why President Obama and Secretary of State Clinton need to avoid repeating their 2009 mistake (of backing Kayani over Zardari), and instead support the civilian establishment in Pakistan. If President Zardari and Prime Minister Gilani are given backing from the U.S. and the rest of NATO, they can resume the task that was aborted in 2009, which is to de-radicalize the Pakistan army and make it a professional force that would battle terror groups rather than nourish them.

India-US Relations Blog

Pivot Problems

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The interplay of two conflicting dynamics in U.S.-India relations – growing strategic cooperation in East Asia and unfolding differences overAfghanistan– will be a key factor to watch for in 2012.

 

The Obama administration of late has trumpeted a strategic “pivot” toward Asia that is geared toward sustaining U.S. regional leadership amid China’s ascendance. This shift was a central theme in the president’s trip to East Asia last month, when it received a warm welcome by almost all of the region’s capitals. The idea is that disengagement from debilitating military conflicts in the Greater Middle East (Iraq and Afghanistan) will enable Washington to focus urgently-needed policy attention on a part of the world that will be the center stage of the 21st century. Thomas E. Donilon, President Obama’s national security advisor, contends that “by elevating this dynamic region to one of our top strategic priorities, Obama is showing his determination not to let our ship of state be pushed off course by prevailing crises.”

But translating this strategic shift from the drawing board to the real world may prove difficult, particularly as it relates to India. An emphasis on shoring up the U.S. role in an evolving Asia will necessarily entail a deepening of relations between Washington and New Delhi. But events over the last few months offer mixed signals on this front. Geopolitical cooperation in East Asia is indeed on the upswing. Yet America’s quickening withdrawal from Afghanistan also will increase bilateral frictions, thus pushing relations in the opposite direction.

With domestic politics largely driving U.S. strategy on Afghanistan, key differences are bound to emerge between the United States and India regarding the endgame. Looking toward the exits, Washington will not be overly concerned with the exact details of a political solution with the Taliban, while New Delhi will be all too focused on how the strategic terrain in its neighborhood is shifting to its detriment. This gap in interests explains why, according to one informed analysis, “few tears are being shed in the top levels of the Indian establishment over the state of ties with the US.”

India has strong security interests in ensuring that any government in Kabul is capable enough to be a bulwark against Pakistan as well as a gateway to trade and energy links in Central Asia. Both goals would be undermined if Islamabad achieved a central role in shaping a political settlement or if a Taliban-dominated regime were to come to power.

Yet over the last several months, Washington has granted Pakistan a principal role in the Afghan negotiations. In an effort to repair the strains caused by the raid on Abbottabad, Donilon met with Pakistan’s army chief, General Ashfaq Parvez Kayani, in Abu Dhabi in early October, to begin to flesh out a deal: Islamabad would have a seat at the table where Afghanistan’s future is decided in exchange for delivering the Taliban and the Haqqani network to the talks. Two weeks later, Secretary of State Hillary Rodham Clinton, together with newly-appointed CIA director David Petraeus and chairman of the Joint Chiefs of Staff Martin Dempsey, arrived in Islamabad to finalize the bargain.

Negotiations with the Taliban have also reached a critical stage. According to reports, Washington did indeed reach a preliminary accord with the Taliban last month that U.S. officials hoped to unveil at the December 5th international conference on Afghanistan in Bonn until Hamid Karzai, Afghanistan’s president, torpedoed it at the last minute. Contacts with the Taliban are expected to restart early in the new year, and Obama administration officials may hope to announce a breakthrough at the May 2012 NATO summit in Chicago.

There is no love lost between the Obama administration and the Karzai government that New Delhi has invested so much in over the past decade. Given the focus of U.S. diplomacy, one wonders how committed Washington will be to the current regime’s survival or the protection of Indian equities in an accommodation with the Taliban. The security situation also is likely to deteriorate over the coming year as the military withdrawals that President Obama announced last summer take hold and as remaining U.S. forces shift from direct combat operations to a back-stop role. A newly-minted National Intelligence Estimate reportedly is filled with pessimism about Afghanistan’s prospects.

Mr. Obama has promised to help Afghanistan “move from an economy shaped by war to one that can sustain a lasting peace.” Yet new reports by the World Bank and the International Monetary Fund underscore just how formidable, even impossible, challenge that will be. And a recent report by Senate Foreign Relations Committee staffers concluded that U.S. nation-building efforts have largely failed and warned that with Afghanistan so reliant upon foreign military and development spending it could slide into an economic depression as this funding decreases.

The fallout from the Salala incident last month appears to be a transformation of U.S.-Pakistan relations, from the past decade’s broad if epically dysfunctional security partnership to a more circumscribed, largely transactional arrangement. The upshot for New Delhi is variable. Islamabad will be even more stinting in deploying its influence with the Taliban and other militant groups to benefit U.S. objectives in Afghanistan, while Washington will become less concerned about Pakistani sensitivities there. But the much greater restrictions on the preferred U.S. strategy of drone warfare against militant targets in Pakistan’s tribal areas, as well as higher transit fees on U.S. military supplies moving through Pakistan, will further dampen the Obama administration’s fortitude in Afghanistan. This is all the more as the White House enters a bruising re-election campaign in which the president is keen to demonstrate his focus on domestic policy challenges.

The interplay of two conflicting dynamics in U.S.-India relations – growing strategic cooperation in East Asia and unfolding differences over Afghanistan – will be a key factor to watch for in 2012.

Defence And Strategic Affairs Blog

Emerging Contours of the Indo-US Strategic Partnership

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At a symposium on the emerging contours of the Indo-US strategic partnership, organised by the Woodrow Wilson Centre at Princeton University on November 11-12, 2011, most participants agreed that the partnership was indispensable and that it would shape the geo-political contours of the 21st century. The present state of drift in the relationship does not portend a break down in the long term. The symposium was attended by leading members of the strategic community, including policy analysts, military experts, academics and journalists, from India and the United States.

An Indian analyst was of the view that the balance of power is shifting gradually from Europe and America to the Asia-Pacific region. He ascribed this to the ongoing rise of China and India as emerging economic and military powers. China is investing rapidly in enhancing its military capabilities as it wishes to safeguard its sea lanes of communications (SLOCs) in the Indian Ocean by deploying the PLA Navy.

A U.S. analyst identified three main trends in China’s rise: China is governed by ‘arbitrary despotism’; the main engine of economic growth, i.e. the large-scale move of rural population to urban centres is declining; and, nationalism is on the rise in China. China is likely to engage in a new Cold War with its regional neighbours and the U.S. can and must play a role in acting as a balancer.

Another U.S. analyst spelt out three core pillars of the U.S. strategy in Asia: U.S. engagement anchored by treaty obligations; developing a strong relationship with emerging Asian powers like India, Indonesia and Malaysia; and, building multilateral institutions like ASEAN for stability.

Speakers from both the countries were critical of the sense of gridlock that has gripped domestic politics, particularly when there has been an economic downturn. Both the governments appeared to have ceded space on driving the respective national agendum. There is a need to enhance diplomatic engagement and reduce the newfound proclivity for military interventionism.

An Indian analyst expressed the view that the growing Indo-US relationship merits an ‘A plus’ report card, but there are bound to be some differences in the approach of the two countries to emerging issues like the conflict in the Middle East/ West Asia and Iran’s purported quest for nuclear weapons. Indian participants conceded that India’s nuclear liability Act was problematic and that India needed to suitably address the apprehensions of international nuclear energy suppliers. However, they were of the view that the Indo-US partnership was strategic in conception and should not be reduced to a transactional relationship.

A U.S. analyst stated that international politics is about the distribution of power and the emerging relationship with India was central to the U.S. approach as a strong partnership with India would ensure a favorable distribution of power. An India that was capable and powerful was desirable from the U.S. point of view even if it did not always support U.S. initiatives. There is a perception in India that U.S. power is flagging and if this gains currency, India will have fewer incentives to go with the US.

An Indian participant stated that India is likely to join a future coalition of the willing for joint operations if the desired goal directly affects India’s vital interests. Recent joint military exercises have gone a long way towards resolving interoperability issues and have led to mutual trust and confidence. Major irritants from the Indian perspective include the continuing sale of conventional arms to Pakistan, the lack of U.S. concern about Indian interests in Afghanistan and the enduring reservations on the part of the U.S. about transferring cutting edge defence technology to India.

There was a broad consensus during the symposium that the U.S. and India must work together for peace and stability in Asia. While the Indo-US strategic partnership is not intended to form a joint front against China, should China behave irresponsibly in Asia, or should it implode due to internal instability, both India and the U.S. will need a strong partner to successfully manage the fallout.

India-US Relations Blog

A Marshall Plan for South Asia

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The war of words between the United States and Pakistan in recent weeks has put in stark relief the two core strategic conundrums Washington has vis-à-vis Islamabad, as well as the integral role India plays in both of them. The first is to encourage a more constructive Pakistani approach in Afghanistan, which Islamabad regards as a theater for its endemic rivalry with New Delhi. The second is to steer a nuclear-armed but deeply dysfunctional Pakistan away from failed state status, a harrowing prospect that many believe is all too plausible unless Islamabad is convinced that its prospering neighbor to the East actually represents an economic opportunity rather than an existential threat.

The Obama administration entered office believing that Pakistani cooperation on Afghanistan was a function of addressing its acute security anxieties regarding India. Two weeks before the November 2008 election, Barack Obama declared that resolving the perennially-inflamed dispute over the Kashmir region was one of the “critical tasks” for U.S. foreign policy and worthy of “serious diplomatic resources.” It was a valid observation but the manner in which Washington pursued it guaranteed a quick failure. Moves to appoint a turbo-charged envoy (in the person of Richard Holbrooke) with the mandate of mediating the Kashmir issue– similar to U.S. efforts to broker the Middle East peace talks – met with Pakistani approval but proved too much for the sovereignty-conscious Indians to accept.

For the past three years, Washington has struggled to find a way to bring the two sides together and focus them on their common interests. Fortunately, the parties may have found one themselves. Despite the obvious displays of mutual suspicion in both capitals, a consensus is growing in the two countries – especially evident in their business communities – that the time has come for a more normalized relationship.

After a three-year hiatus caused by the 2008 terrorist strikes in Mumbai, India and Pakistan have restarted their peace dialogue. In July, Pakistan’s new foreign minister, the 34-year-old Hina Rabbani Khar, held unexpectedly warm talks in New Delhi, where she emphasized that a “mind-set change” was occurring among younger Indians and Pakistanis. Last month, for the first time in 35 years, Pakistan’s commerce minister visited New Delhi, bringing with him a notably large business delegation. The trip was especially productive. The two countries pledged to more than double their two-way trade flows – to the $6 billion annual level – by 2015. They agreed to ease visa rules for business travel and to open a new customs post at the Wagah border crossing that lies midway between Lahore and Amritsar. Islamabad also committed to extending “most favored nation” trade status to New Delhi, reciprocating the status India earlier conferred upon Pakistan. This last development promises to enliven the 2006 South Asia Free Trade Agreement which up until this point has been all but a dead letter. India’s commerce minister, Anand Sharma, captured the spirit of the meeting when he exclaimed that “only shared prosperity can bring lasting peace.”

The annals of India-Pakistan relations are filled with numerous false dawns and the current moves toward greater economic engagement could well founder upon the sharp historical animosities that regularly bedevil bilateral affairs. But things may be different this time. Reports out of Islamabad indicate that the Pakistani government realizes the country is in desperate economic straits and that closer ties with India constitute a much needed lifeline. The military establishment is also said to understand that the eastern border needs to be stabilized so resources can be focused on combating rising internal security threats.

If enhanced trade ties were to develop between South Asia’s largest economies, they would produce significant economic and (eventually) security dividends for both countries. Despite the common civilizational and historical bonds that permeate South Asia, as well as the unified market forged by the British Raj, the region today is remarkably fragmented economically. Trade flows between India and Pakistan, for instance, represent a miniscule fraction of each country’s overall trade portfolio.

Wagah is the only vehicle crossing along the 1,800-mile-long international border. The two-lane road there is only open a mere eight hours a day and the cargo that passes through it must be unloaded and transferred to local trucks. Indeed, the crossing, which some refer to as the “Checkpoint Charlie of South Asia,” is better known for the Kabuki-like displays put on by the border guards than as an efficient transit point.

The pervasive barriers to bilateral economic cooperation have also spurred circuitous and highly inefficient trade patterns. A booming India requires cement for its construction sector yet is forced to import it from Africa instead of Pakistan, where the cement industry has excess capacity. Off-the-books trade – the value of which easily rivals official levels – is also conducted via third countries like Dubai, Singapore and Afghanistan. According to various studies, a more liberalized trade regime would increase bilateral exchange at least 20 times above current figures as well as boost economic prosperity in both countries.

The Obama administration would do well to reinforce the current stirrings by launching a Marshall Plan-like initiative geared toward the expansion of cross-border economic linkages between the two countries. One of the keys to the Marshall Plan’s far-reaching success was the major financial inducement it gave European countries devastated by World War II to frame their economic futures in conjunction with their neighbors. By putting an emphasis on reconstruction projects that crossed national frontiers, it was an important catalyst for the historic reconciliation between France and Germany and paved the way for the deep economic integration embodied in today’s European Union.

A similar vision should inspire a U.S. effort to bolster cross-border economic cooperation between India and Pakistan. This initiative would be aimed at helping the two countries, on a joint basis, upgrade and expand the meager transportation infrastructure presenting connecting them. It would support projects that increase road and rail linkages, as well as the number and capacity of customs posts. It would help provide resources for modernized seaport facilities that enable more two-way trade. And with each country plagued by chronic power shortages, it would help bankroll cross-border energy projects such as joint electrical grids or the proposed natural gas pipeline connecting Central and South Asia via Afghanistan.

This effort would dovetail well with the “New Silk Road” initiative that Secretary of State Hillary Clinton announced in Chennai this past July, to foster the economic integration of Central and South Asia. Indian Prime Minister Manmohan Singh, who was born in what is now Pakistan, has spoken eloquently of the powerful role stronger economic linkages can play in bridging South Asia’s deep political fissures. In early 2007, he spelled out his vision for regional integration:

“I dream of a day when, while retaining our respective identities, one can have breakfast in Amritsar, lunch in Lahore and dinner in Kabul. That was how my forefathers lived. That is how I want our grandchildren to live.”

For his part, Pakistani President Asif Ali Zardari has even expressed the hope that India and Pakistan could one day join together in an economically-unified zone like the EU.

The original Marshall Plan entailed a staggering sum of money – well over $100 billion in today’s terms – and an austerity-minded U.S. Congress would certainly balk at any scheme with a similar price tag. But the initiative outlined here need only entail a modest level of expenditures – say, $50-75 million per year over a five-year period – and could be paid for by redirecting funding already authorized under the 2009 Enhanced Partnership with Pakistan Act. Better known as the Kerry-Lugar-Berman bill, the act provides $1.5 billion annually in non-military assistance to Pakistan through 2013. But due to a variety of factors, much of its economic development funds remain unspent.

To avoid potential concerns in New Delhi and Islamabad that Washington might try to extract diplomatic concessions from specific funding decisions, resources could be routed through the World Bank or the Asian Development Bank, where professional staff would assess the viability and impact of proposals submitted jointly by the two countries and make final judgments on which projects go forward. Additional countries, such as those assembled by Secretary Clinton in New York last month to discuss the New Silk Road plan, also could be invited to contribute resources.

Obviously, this initiative offers no magic bullet for transforming the singular intensity of the India-Pakistan strategic rivalry. But it would be a creative investment in nurturing promising developments already underway in both countries, which if they take root over the long term would help lead to a game-changing situation in South Asia: One in which Islamabad looks upon New Delhi more as a partner than as an outright enemy. If such a development came to pass, U.S. interests in the region would be vastly easier to safeguard than they are today.