Re: Encounter with Rajiv Gandhi: On the Origins of the 1991

[Ashish Hanwadikar <ashish_hanwadikar@yahoo.com>]

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Hi Srinupi,

> A common market for India and Pakistan may not be possible as such a
> link
> would not be strong enough to overcome the fundamental differences
> between the
> two.

Try opening up India's borders to Pakistani goods (no or minimal import
duties) and then see how the trade happens!

I will ask you to perform a simple thought experiment. Try imagining
two bitter enemies! Always fighting physically with each other. They
dislike each other so much that they will kill each other at a moment's
opportunity!

Now tell them that they can trade with each other (but cannot
physically attack each other!). The trade happens because everybody is
ready to give up something which is less valuable to himself in return
for something which is more valuable! Offer such a deal to your enemy
(but first making sure that he cannot physically attack you) and
believe me he will trade with you!

The reason trade is not happening between India and Pakistan is not
that people refuse to do trade with their enemies but because Govt's of
both countries find it political profitable to control the trade!


> Another reason is that the two economies remain relatively
> "weak" in
> terms of GDP and export strength in the forseable future.  For
> example, Mexico
> is more likely to link its economy to US than to say with some other
> country
> south of its border.

Amazing brilliance! The trade will not happen because two economies
remain relatively "weak" in terms of GDP and export strength! What the
heck do you mean? GDP of my family is terribly "weak" and our family do
not have "export strength" but still we trade with others! Try taking
an Economics 101 Class.


> For
> example, Mexico
> is more likely to link its economy to US than to say with some other
> country
> south of its border.

What do you mean link its economy with US? You don't have to link with
any economy to trade with that country! Just get the Govt. out of the
way and see the trades happen! Also, if Mexico is likely to trade with
powerful US rather than other weaker countries in the south, how come
US is ready to trade with "weaker" Mexico?! Trade happens because there
is something to gained by all the trading partners by exchanging! As
long as that condition exists the trade will continue and it will stop
when the condition stops existing (Although, that is nearly
impossible)!
Is this simple thing so hard to understand?

Regards,
Ashish


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