Partition's Impact on India, Pakistan Relations & Economic Evolution

“Believe it or not, India and Pakistan were once a solid and unified country: the citizens of the Indian border states of Rajasthan and Punjab were almost looking similar to the citizens of Pakistan” (Paul, 2005). “So when India became free from the British colonizers in 1947, conflicts between the India and Pakistan started to become intense. Since then, India and Pakistan have continuously been angry and uninterested towards each other—in fact, they have already participated in three major wars—and even during periods of peace, the two country’s relationship had always been on the line” (Jaffrelot, 2005).

“Inspired by their conflicts regarding territories” over the region of Kashmir, anger and hatred developed between the two countries over the years. For Pakistanis, the Kashmir dispute has become a symbol of broken pledges and Indian duplicity, and they are constantly attempting to raise the issue whenever possible, thus drawing strong reactions from India; on the other hand, India considers Kashmir as a vital part of the country, and attempts of the Pakistanis are viewed as an act to smear India’s image (Conboy, 1992).

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Read more: Current Political Situation of Pakistan

Up to this day, Kashmir remains the world's largest and most highly militarized territorial dispute. Worse, as the years passed by, many issues have coupled the long-lived dispute over Kashmir, such as: the linked issues of the Siachen Glacier, the Wular Lake Barrage, and the current Kashmiri struggle; communalism and the plight of the minorities; nuclear developments; periodic domestic troubles; the Afghanistan crisis; and the involvement of outside powers (King, 1998).

The Benefits of Pakistan Partition “Economic programs in Pakistan after the period of its partition emphasized on core planning.

The Pakistani government established objectives for controlling private industries. The partition was established in order to improve domestic businesses and reduce dependence on foreign trade. These efforts led to the stability of its economic development in the 1950s” (Jones, 2003). However, excellent results stopped coming in the two straight decades. By the early 1970s Pakistan had succeeded in conquering its goal of stability in terms of food availability, “although this food was not really available to all Pakistanis because of the flawed distribution and shortcomings in the harvest”.

In the late 1970s the Pakistani government began to decrease its power over the economy, which led to slowed development toward this goal. By 1991, however, the Pakistani government still controlled or managed many industries, including mining and financing, manufacturing and construction. Economic development enhanced during this time, at least gradually as a result of economic programs supported by foreign loans (Jones, 2003). A financial crisis after the partition stimulated Pakistan to institute major economic reforms.

Because the partition resulted into an incredible surge in oil prices, Pakistan was haunted by a barrage of payments problem. To gather loans from well-regarded funding organizations, Pakistan made up its mind to implement programs in order to free its economy. These economic programs eliminated many strict government policies on investment, and established tariff systems that maintained trading at a manageable level. “Also, reform deregulated many industries and privatized many public enterprises. These reforms continued through the mid-1990s, although at a slower rate because of political changes in India’s government.

In 1993 Pakistan permitted Pakistan-owned private banks to be established along with a minority of foreign banks” (Holliday, 2000). “With the reforms, Pakistan incredibly made a smooth transition from a closed and very restrictive economy to one that is open and free to the world. By 1996 to 1997, foreign investment had grown to nearly $6 billion, up from $165 million in 1990 to 1991. Exports and imports also improved significantly at the same time. Economic growth since the 1980s has brought with it an expansion of the middle class, which was estimated to form 20 to 25 percent of Pakistan’s population in the mid-1990s.

As a result, the demand for consumer goods has expanded rapidly” (Mittmann, 1991). In Pakistan, the upsurge of innovative activity seems to have had more to do with the advent of partition than with the Silicon Valley phenomenon. The partition has dramatically changed the market and supply conditions, from being shortage and seller driven to being buyer and competition driven. To survive and grow, firms have to focus on improving their competitiveness. They are realizing that the real source of industrial competition today lies in innovation and the rapid technological change taking place throughout the world.

Technology is now a key determinant of strategic change in Pakistani firms. Industrial development based on indigenous technology development is still an elusive dream, but the 'process' of technology acquisition and assimilation is now very much a strategic process, aligned with firms' need to build competencies (Kudaisya, 2001). The partition has stimulated the rapid growth of innovation-driven industries such as information technology (IT), communications technology, biotechnology and pharmaceutical industries.

This has led to a new type of business enterprise known as the knowledge enterprise and a new sector of the economy known as the knowledge economy. This sector is now a significant component of the national economy and accounts for a large portion of economic growth. The partition created renewed interest in innovative entrepreneurship as a key driver for the rapid diffusion of innovation in business and industry. Entrepreneurship occupies centre stage in the wealth creation process in the knowledge economy (Cohen, 2004).

References:

Cohen, S, 2004. The Idea of Pakistan. Brookings Institution Press. Conboy, K, 1992. Elite Forces of India and Pakistan. Osprey Publishing Holliday, T, 2000. Insight Guide Pakistan. Insight Guides; 3rd edition Jaffrelot, C, 2005. A History of Pakistan and Its Origins. Anthem Press; New edition Jones, O, 2003. Pakistan: Eye of the Storm. Yale University Press; 2nd edition King, J, 1998. Lonely Planet Pakistan. Lonely Planet Publications; 5th edition Kudaisya, G, 2001. The Aftermath of Partition in South Asia. Routledge; 1st edition Mittmann, K, 1991. Culture Shock! : Pakistan. Graphic Arts Center Publishing Company Paul, T, 2005. The India-Pakistan Conflict: An Enduring Rivalry. Cambridge University Pres