India's choices after Pulwama terror attack

     Written by : SMTV24x7 | Mon, Feb 18, 2019, 08:54 AM

Indias choices after Pulwama terror attack

New Delhi, Feb 18: The military options without declaring war on Pakistan may be a few. While ground strikes and surgical strikes are certain to be planned, air strikes may be problematic. The planning of disciplinary strikes has been left to the armed forces.

But what about economic action against Pakistan?

India has already taken one in Pakistan being placed on the Financial Action Task Force (FATF) greylist. India has to press now for that country to be blacklisted by October 2019, which will happen if it didn't curb money laundering and terror financing.

India has also withdrawn the "Most Favoured Nation" status given to Pakistan. However, India cannot remove key threats only by force. India has to capitalise on its economic power to hurt Pakistan.

But, as author and strategic analyst Dhruva Jaishankar argues in a series of relevant tweets on the subject, there is not much more India can do to hurt Pakistan economically as it has already taken considerable action in this regard.

Being on the global terrorist financing watchlist, Pakistan has found itself under search like never before. Its economy has suffered so badly that Imran Khan has been forced to go on trips with a begging bowl to Saudi Arabia and other Gulf States, besides appealing to the IMF for bailout funds. The Pakistan economy has been saved temporarily by large inflows from donor countries.

As Jaishankar points out, Pakistan has also been hit hard since 2014 from cuts in US aid. More so in the Donald Trump regime when the cuts have also come with hard rhetoric about Pakistan being a terror haven. The last major cut in US aid was from $1 billion to just $150 million in the last quarter of 2018.

The picture of Chinese investments in Pakistan through the Belt and Road initiative and other projects is far from rosy, with Jaishankar pointing out that total investment may be in the region of $19 billion and nowhere near the projected $60 billion. On the contrary, China's FDI in India has been steadily increasing in the technology sector.

Jaishankar, a Fellow in Foreign Policy Studies at Brookings India and the Brookings Institution in Washington, highlights the fact that the Indian economy, which is marching towards $3 trillion now has left Pakistan far behind in the last decade since the size of the economies were fairly similar around 2008.

He estimates the current Pakistan GDP at $305 billion, which is less than that of a big Indian state like Maharashtra.

India-Pakistan trade is negligible in terms of India's GDP but further screws can be put by placing curbs on them although India would suffer as its exports to Pakistan are near $4 billion while imports are just 720 million, including informal trade that still thrives, particularly through Dubai. Turning the screws as an economic game may appear to be the better solution.