08 October 1998 - 10 October 1998

The Sub-Continent: Prospects in the Twenty-First Century

Chair: Professor Lord Desai

At the outset the conference expressed its keen sympathy in respect of the recent flood disaster which had so grievously afflicted the people of Bangladesh.

Our debate (which throughout focused upon India, Pakistan and Bangladesh as the three big countries)  began with a vivid awareness both of the Sub-Continent’s massive extent and population – the latter still growing, and projected half-a-century hence to constitute well over a quarter of humanity, with a high proportion of young people – and of the achievements to the credit of its main member states during the past half-century, including substantial economic growth, big advances in returns from agriculture, the maintenance – especially in India – of vigorous electoral democracy, and the lively activity of free media.  We noted however that cumulative economic growth fell well short of what had been achieved elsewhere, as in East Asia;  and that although average population growth had mostly been slowed, it remained at rates which intensified the problems posed by vast disparities of wealth and, in particular, by numbers in the order of half a billion people still below the poverty line on any reasonable definition.  And while we were careful to eschew any attempts at comparative rating, we could not fail to register concern expressed about particular conditions marking particular countries, such as the malign interaction in Pakistan between economic difficulty (despite average per-capita incomes higher than elsewhere) and disillusion with the probity and efficiency of the state.

Discussion emphasised the continuing need for strategies to manage population growth and the importance, among several possible instruments for that, of education, particularly for women and in rural areas.  Education and more productive use of the region’s human capital – potentially a vast resource in quality as well as in amount – were recurrent themes.  Half the world’s illiterates, we heard, were in South Asia.  For economic development it was essential that much more skilled labour be created (and also retained – we heard unwelcome statistics about outflow, for example of doctors to more developed countries).  The need was not only for more educational investment – drawn perhaps, said one voice, from excessive defence budgets moving against global trends? – but also for better-directed investment.  There was, so it was suggested, proportionately too much in secondary and higher education and not enough in primary education;  there was excessive waste, for example in duplication and drop-out;  and the content of teaching was often poorly matched to the real needs of the marketplace.  We heard concern expressed also about risks that some education might still be provided (despite growing efforts at state regulation) on a sectarian basis apt, through tendentious teaching, to heighten inter-communal hostility, which had already – amid poverty – more than enough wellsprings.

Shortfalls in economic growth, it was strongly argued, reflected unwise paths followed in previous decades;  and though there was increasingly a declaratory consensus (albeit with divergences of emphasis across the three countries) in favour of open market-driven strategies, it remained debatable whether governments and political parties were yet consistently ready to face all the tough client-displeasing choices needed for the countries to become fully part of the global free-market economic system.  There was a lingering tradition, notably in India, of political aspiration to economic autarky (and so to protectionism), and indeed the size of the domestic base made a large measure of self-reliance a proper strand of policy and premature opening of immature domestic markets possibly risky.  Adequate long-term growth nevertheless needed export success and (despite, in India, some contrary instinct) more inward investment – this last, uncomfortably, at a time when sharpening scarcity world-wide increased global competition for capital;  the Sub-Continent, it was suggested, had no great advantage in that competition unless it could now move nimbly enough to use the window of opportunity offered by the East Asian setback.  Some participants pointed to the drag exercised by public sectors both in poor productivity and through fiscal deficits pushing up the cost of funds for the private sector.  Public investment, notably in India, might now need a special focus upon energy and infrastructure.  The wider need however, so it was urged, was to move beyond top-down reform attempts and to build the broader public support needed if market-motivated change was to penetrate effectively.  This would need more positive, courageous and committed political leadership stretching across coalitions and enlisting the explanatory backing of the media.

We recalled that satisfactory economic advance entailed other key components besides well-chosen and well-presented strategies.  Better standards of regulation – better both in integrity and in enforcement-effectiveness – needed to be provided by agencies not dominated by political allegiances;  and black economies and corruption remained very widespread problems requiring to be tackled resolutely and on a pragmatically-prioritised basis.  (We were reminded, at the same time, that it takes two to make a corrupt deal;  and foreign businesses and other external actors had a responsibility accordingly.)  There was need also for more efficient domestic financial institutions;  particularly in India, there was a powerful propensity towards personal saving, but the financial sector was not yet fully capable of translating this usably into the domestic capital resource that could make a major difference to economic achievement.

In this last as in other respects foreign resources, including skills and experience, could bring a valuable contribution, and this contribution was indeed expanding in several fields;  but limitations were still imposed by occasional fears about stability (especially at present in Pakistan) and by perceptions, whether right or wrong, of certain systemic difficulties in conducting business – bureaucratic cumbersomeness, or dislike of outside competition, or the autarkic instinct, or law systems of doubtful predictability.

Alongside the recurrent emphasis on the importance of agriculture, as still far the largest employer of people, we heard concerns about low standards still widely to be found (mostly but not solely from lack of resources) in regard to health and to clean water, both in urban and in rural areas;  and these concerns were partnered by strongly-expressed unease about the damage and costs – often gravely reducing real economic advance below official percentage-growth figures – resulting from harmful environmental effects, for example following growth in motor-vehicle numbers.  There seemed a powerful case for more vigorous public environmental education, for wider use of alleviating technologies available, and for patterns of incentive and prohibition informed – and implemented – by realistic practicality rather than ideal perfection on paper.

As we turned our attention to political conditions and structures we acknowledged the general success in sustaining free democratic elections to establish governments;  and even in the occasional exception, Pakistan, there was nowadays little likelihood that the armed forces aspired to resume the role of government.  It was moreover striking that in India, for all its size and stresses, elections had always remained conspicuously fair.  We were however conscious that electoral democracy alone was far from a guarantee of state health and good governance.  In all three countries, albeit in different forms and degrees, the public institutions and culture that should complement voter-based democracy showed much shortcoming;  political life was deeply infused with the attitudes of patronage, individual or group-based, making honest pursuit of true long-term national interest hard and undermining trust in the fairness of government and the real empowerment of citizens.  Elected politicians could too easily whip up public or press feeling against those seeking to discipline state practice.  Non-governmental organisations were of uneven effect and influence, though complimentary words were spoken about their operation in Bangladesh and in certain aspects of Indian life.  For each of the three countries we heard reference to particularly marked problems.  In Bangladesh, for example, the centralised political predominance of an urban business élite still skewed decision-making.  In Pakistan, there was decline and even decay of the public institutions that ought to provide countervailing power to offset electoral populism, and problems were compounded by grave difficulties of internal unrest – as in Karachi – characterised by a very high incidence of arms possession.  In India, there were the dilemmas of managing an enormous and diverse state without lurching either into unwieldy and insensitive centralism or into an incoherent fragmentation that would deepen disparities and alienation.  In this last regard (not peculiar to India alone) we seemed to agree that the centre must retain a crucial allocative and redistributive role and the power, for example, to enforce national over provincial preference in respect of major infrastructural or environmental projects;  but it was crucial that these central functions should be exercised by politically and economically open process.

In all three countries, several participants stressed, governments needed the will and the skills to withdraw more readily from what they did not have to do – to privatise more, that is;  to do what they inherently and traditionally had to do with greater transparency and consistency;  and to contribute more effectively in newer roles like environmental protection and market-supportive functions such as competition policy.

Issues of religious identity and sectarian perception recurred almost throughout our discussions.  We were not sure that outbreaks of sectarian violence and related loss of life were at higher measured levels than in the past, but there seemed in both India and Pakistan – far less in Bangladesh – a disquieting sense of greater politicisation and more unhealthy rhetoric along sectarian lines;  in India there was perhaps something of a reaction against the determined secularism associated with the Nehru name.  It was nevertheless strongly urged that contemporary perceptions of either state as a sectarian near-monolith, and of the division between them as essentially religious, were harmfully mistaken.  In reality, a society as large and complex as India’s had no choice but to be pluralist.  Hinduism was inherently a tolerant and not an activist creed, non-Hindu population was proportionately significant (and though in India Muslims were still occasionally discriminated against, most of them now increasingly saw themselves as Indian);  and the BJP party, for all its sectarian-seeming rhetoric in campaigning, had had to compromise substantially in order to build a coalition adequate for government.  Pakistan was more predominantly Muslim than India was Hindu, but its Islamism was neither uniform nor rigid, and we were urged not to interpret movement towards Sharia law as betokening a narrow fundamentalism in respect of, for example, the treatment of women or support and sympathy for extremist Taliban behaviour.

India and Pakistan perhaps interpreted one another’s societies too crudely and too narrowly, and misunderstanding might be fomented in both countries by highly-coloured simplifications designed to win electoral favour by politicising religious identity.  The reality was that the deep tensions between them were not truly religious in character but related above all – like the less heated but still substantial ill-feeling between India and Bangladesh, as over cross-border migration – to matters of inter-state dispute.  These tensions, and the resulting inability to cooperate, exacted a formidable price on every side.  There was a massive economic and environmental agenda (just for instance, the exploitation of natural gas, more efficient communications, the management of North-Eastern rivers, the enhanced flow of trade through the grant of status analogous to Most-Favoured Nation) in which the three countries should ideally act together to the great benefit of all, and the agreement over the Indus waters – laborious though its gestation had been – illustrated what could be achieved.  But pervasive mistrust and hostility infected almost every contact between India and Pakistan.

And Kashmir lay of course at the heart of the relationship problem.  We found no new light to shed upon this wrenchingly difficult conflictual issue.  We heard with more hope than confidence of further high-level discussion imminent over the whole range of India/Pakistan issues;  but we were reminded at the same time of the continuing collision – substance quite aside – between Pakistan’s desire to discuss Kashmir before other issues and India’s to discuss it after them.  Some participants suggested that there might be useful procedural precedents in intractable-seeming disputes elsewhere, as in phases of the Middle East process and in tackling Northern Ireland;  in the latter setting there had been value in having means of dialogue whereby interlocutors below top level but carrying the confidence of their principals could speculate together in private and without commitment about outcomes in which each side would be both winner and loser as measured against the baseline of formal public stances.  Others wondered briefly whether there was scope for trade-off between, for example, Pakistan’s unavowed support for armed disruption on the Indian side of the cease-fire line and India’s long refusal to accept the involvement of any other party – even for example as non-arbitrating facilitator – in the Kashmir dialogue.  At least in the perception of outsiders, nuclear developments had inescapably in some degree internationalised the Kashmir dispute.

The nuclear developments of early-summer 1998 naturally commanded special interest.  We exchanged diverse perceptions of why, among alternative prime explanations, India had acted as she did;  and we noted that, whatever might have been the theoretical merits of other possible reactions, it was unrealistic to expect Pakistan to have responded differently.  Most participants from outside the Sub-Continent thought that what had happened was to be regretted, and were conscious of the difficulty of fitting the resulting reality tidily into the global non-proliferation régime (even if, as some urged, it was mistaken to regard that régime as now rendered highly precarious).  We were not sure what substance there might be in hopes that neither country would proceed to develop a full in-being armoury.  But it was in any event strongly argued that however we might judge what had already happened, the time for deploring was past (and too much of it might well diminish future influence, for all that India had probably been taken aback by the weight of non-nuclear disapproval from such figures as President Mandela).  On this view, it would be in no-one’s interest that either sanctions or arms-racing should drive Pakistan deeper into economic difficulty;  and the prime focus of any effort by other countries should now be upon helping India and Pakistan to manage what was irreversible as constructively as possible.  The merits were urged of dialogue not only (though primarily) between the two but also involving existing nuclear countries – even perhaps China – who might usefully share their long and hard-won experience on such matters as cost and design for crisis stability.

In a weekend’s discussion there was much in our huge subject to which we could do scant justice – for example, the “post-nuclear” prospects for India's understandable aspiration to higher global status (including permanent Security Council membership);  the significance of her relations with a dismissive-seeming China;  the regional contribution of collective mechanisms currently little developed, such as the South Asian Association for Regional Cooperation and perhaps a South Asian Free Trade Area;  and the political and economic influence of the significant populations of Sub-Continental origin living in other countries.  But the underlying impressions of the conference were perhaps threefold.  First, the wide range and formidable scale of internal problems weighing upon the region.  Second, the immense resources, above all of human skill, spirit and resiliance, potentially available to tackle these problems if only the resources could be mobilised effectively.  And thirdly, the corrosive and cancerous significance of the Kashmir problem.  It was facile, we recognised, for outsiders to urge that almost any solution would be better for everyone, whatever the narrow win-lose balance perceived by either party, than none.  But there was surely a deep well of popular desire for real peace, which political courage might tap;  and the true costs, direct and indirect, near and long-term, of the conflict’s continuance seemed – even without actual war – vast and appalling.

This report reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: Professor Lord Desai
Professor of Economics, London School of Economics and Political Science


HE Mr Robert Laurie

Australian High Commissioner to India

Dr Naila Kabeer

Fellow, Institute of Development Studies, University of Sussex
Dr Mushtaq Husain Khan
Lecturer in Economics, School of Oriental and African Studies, University of London
HE Mr A H Mahmood Ali
High Commissioner for the People’s Republic of Bangladesh, London

Mr Richard D French
President and CEO, Tata Communications Limited
Professor Ashok Kapur
Professor of Political Science, Department of Political Science, University of Waterloo
Ms Cécile Latour
Director, South Asia Division, Department of Foreign Affairs and International Trade
HE The Honorable Roy MacLaren PC
High Commissioner of Canada to the United Kingdom

Dr Indrajit Coomaraswamy
Deputy Director, Commonwealth Secretariat

Monsieur Jean-Luc Racine
Senior Fellow, Centre for the Study of India and South Asia, School for Advanced Studies in Social Sciences, Paris

Dr Isher Judge Ahluwalia
Director and Chief Executive Officer, Indian Council for Research on International Relations
Mr Jairam Ramesh
Secretary, Economic Affairs Department, All-India Congress Committee

Mr Ali Cheema
Fellow, Sidney Sussex College, Cambridge University
HE Mr Shahid Hamid
Governor of Punjab
Mr Shaharyar M Khan
Chairman, Committee on Foreign Service Reforms, Ministry of Foreign Affairs
Dr Humayun Khan
Director, The Commonwealth Foundation

Sir Nigel Broomfield KCMG
Retired as Ambassador to the Federal Republic of Germany;  previously Deputy High Commissioner, New Delhi
Professor Robert H Cassen
Visiting Professor, Department of Social Policy, London School of Economics~
HE Sir David Dain KCVO CMG
British High Commissioner to Pakistan
Baroness Flather JP DL
Life Peer (Conservative)
Sir David Goodall GCMG
Chairman, Leonard Cheshire Foundation;  former British High Commissioner to India
Sir Terence Harrison DL
Chairman, Alfred McAlipine plc
Dr Peter Lyon
Institute of Commonwealth Studies, London University
Mr Nicholas Maclean
Executive Director, Prudential Corporation Asia Limited
Professor James Manor
Professor, Institute of Development Studies, University of Sussex
Mr Clive Mather
Director of Corporate Advice, Shell International
Dr Edwina Moreton
Diplomatic Editor & Deputy Foreign Editor, The Economist
Professor John Simpson OBE
Director, Mountbatten Centre for International Studies, University of Southampton
Mr Hilary Synnott CMG
Director, Asia Pacific, Foreign and Commonwealth Office
Dr David Taylor
Pro-Director, School of Oriental and African Studies, London University
Mr John Robertson Young CMG
Chief Clerk, Foreign and Commonwealth Office;  High Commissioner-designate, New Delhi

Mr Shashi Tharoor
Director of Communication and Special Projects

Dr Omar Noman
Director, United Nations Development Programme, Regional Bureau for Europe

Mr David A Berenson
Chairman and Chief Executive Officer, International Reserve Group etCompagnie Financière
Mrs Joan B Berenson
President, TRU Resource Management
Mr Marshall M Bouton
Executive Vice President, Asia Society, New York
Professor Robert L Hardgrave Jr
Temple Professor of the Humanities in Government and Asian Studies, The University of Texas at Austin
Mr Jack F Matlock Jr
George F Kennan Professor, Institute for Advanced Study, Princeton
Professor Lloyd I Rudolph
Professor of Political Science, University of Chicago
Professor Susanne Hoeber Rudolph
Professor of Political Science, University of Chicago