South Asia in the New World Order Rapidchangeshavetakenplaceinthestructureoftheglobaleconomy,and thisbooklooksathowSouthAsiacantakeadvantageofthesechanges.The author argues that the developing global economy will be more complex thanoriginallythought,thatinsteadofabipolarmodelwithtwocountries, the United States and China, at the centre, it will be multipolar with eight centresofeconomicactivity,includingIndia. The book goes on to suggest that in the context of such a model, there shouldberegionalcooperationbetweenIndiaanditsimmediateneighbour- ingcountriesforSouthAsiatoadvanceasaneconomicregion.Itarguesthat South Asia will need to look at its history, and that changes in attitudes, particularlyinIndiaandPakistan,arenecessary.Thepossiblebenefitstothe region,intermsofincreasesintheratesofeconomicgrowthiftheregional approachisadopted,arediscussed.Thebookpresentsausefulcontribution tostudiesinSouthAsia,aswellasAsianEconomics. Shahid Javed Burki is a professional economist. He was previously FinanceMinisterofPakistanandVicePresidentoftheWorldBank. RoutledgeContemporarySouthAsiaSeries 1Pakistan 10HumanDevelopmentandSocialPower Socialandculturaltransformations PerspectivesfromSouthAsia inaMuslimnation AnanyaMukherjeeReed MohammadA.Qadeer 11TheSouthAsianDiaspora 2Labor,DemocratizationandDevelopmentin TransnationalNetworksandChanging IndiaandPakistan Identities ChristopherCandland EditedbyRajeshRaiandPeterReeves 3China-IndiaRelations 12Pakistan-JapanRelations ContemporaryDynamics ContinuityandChangeinEconomic AmardeepAthwal RelationsandSecurityInterests AhmadRashidMalik 4MadrasasinSouthAsia TeachingTerror? 13HimalayanFrontiersofIndia JamalMalik Historical,Geo-PoliticalandStrategic Perspectives 5Labor,GlobalizationandtheState K.Warikoo Workers,WomenandMigrantsConfront Neoliberalism 14India’sOpen-EconomyPolicy EditedbyDebdasBanerjeeandMichael Globalism,Rivalry,Continuity Goldfield JalalAlamgir 6IndianLiteratureandPopularCinema 15TheSeparatistConflictin RecastingClassics SriLanka EditedbyHeidiR.M.Pauwels Terrorism,Ethnicity,PoliticalEconomy AsokaBandarage 7IslamistMilitancyinBangladesh AComplexWeb AliRiaz 16India’sEnergySecurity EditedbyLigiaNoronhaandAnant 8RegionalisminSouthAsia Sudarshan NegotiatingCooperation,Institutional Structures 17GlobalizationandtheMiddle KishoreC.Dash ClassesinIndia TheSocialandCulturalImpactof 9Federalism,NationalismandDevelopment NeoliberalReforms IndiaandthePunjabEconomy RuchiraGanguly-ScraseandTimothy PritamSingh J.Scrase 18WaterPolicyProcessesinIndia 29MohajirMilitancyinPakistan DiscoursesofPowerandResistance ViolenceandTransformationinthe VandanaAsthana KarachiConflict NicholaKhan 19MinorityGovernmentsinIndia ThePuzzleofElusiveMajorities 30Nationbuilding,GenderandWarCrimesin CsabaNikolenyi SouthAsia BinaD’Costa 20TheMaoistInsurgencyinNepal RevolutionintheTwenty-first 31TheStateinIndiaafterLiberalization Century InterdisciplinaryPerspectives EditedbyMahendraLawotiandAnup EditedbyAkhilGuptaand K.Pahari K.Sivaramakrishnan 21GlobalCapitalandPeripheral 32NationalIdentitiesinPakistan Labour The1971WarinContemporaryPakistaniFiction TheHistoryandPoliticalEconomyof CaraCilano PlantationWorkersinIndia 33PoliticalIslamandGovernancein K.RaviRaman Bangladesh EditedbyAliRiazandC.ChristineFair 22MaoisminIndia ReincarnationofUltra-LeftWing 34BengaliCinema Extremisminthe21stCentury ‘AnOtherNation’ BidyutChakrabartyandRajatKujur SharmisthaGooptu 23EconomicandHumanDevelopmentin 35NGOsinIndia ContemporaryIndia TheChallengesofWomen’sEmpowermentand CronyismandFragility Accountability DebdasBanerjee PatrickKilby 24CultureandtheEnvironmentinthe 36TheLabourMovementintheGlobalSouth Himalaya TradeUnionsinSriLanka ArjunGuneratne S.JanakaBiyanwila 25TheRiseofEthnicPoliticsinNepal 37BuildingBangalore DemocracyintheMargins ArchitectureandUrbanTransformationinIndia’s SusanI.Hangen SiliconValley JohnC.Stallmeyer 26TheMultiplexinIndia ACulturalEconomyofUrbanLeisure 38ConflictandPeacebuildinginSriLanka AdrianAthiqueandDouglasHill CaughtinthePeaceTrap? EditedbyJonathanGoodhand,JonathanSpencer 27TsunamiRecoveryinSriLanka andBenedictKorf EthnicandRegionalDimensions DennisB.McGilvrayandMichele 39MicrocreditandWomen’sEmpowerment R.Gamburd ACaseStudyofBangladesh AmunuiFaraizi,JimMcAllister 28Development,Democracyand andTaskinurRahman theState CritiquingtheKeralaModelof 40SouthAsiaintheNewWorldOrder Development TheRoleofRegionalCooperation K.RaviRaman ShahidJavedBurki South Asia in the New World Order The role of regional cooperation Shahid Javed Burki Firstpublished2011 byRoutledge 2ParkSquare,MiltonPark,Abingdon,Oxon,OX144RN SimultaneouslypublishedintheUSAandCanada byRoutledge 270MadisonAvenue,NewYork,NY10016 RoutledgeisanimprintoftheTaylor&FrancisGroup,aninformabusiness This edition published in the Taylor & Francis e-Library, 2011. To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk. © 2011 Shahid Javed Burki TherightofShahidJavedBurkitobeidentifiedasauthorofthis workhasbeenassertedbyhiminaccordancewithsections77and78 oftheCopyright,DesignsandPatentsAct1988. Allrightsreserved.Nopartofthisbookmaybereprintedor reproducedorutilisedinanyformorbyanyelectronic,mechanical, orothermeans,nowknownorhereafterinvented,including photocopyingandrecording,orinanyinformationstorageor retrievalsystem,withoutpermissioninwritingfromthepublishers. Trademarknotice:Productorcorporatenamesmaybetrademarksor registeredtrademarks,andareusedonlyforidentificationand explanationwithoutintenttoinfringe. BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary LibraryofCongressCataloginginPublicationData Burki,ShahidJaved. SouthAsiainthenewworldorder:theroleofregionalcooperation/ShahidJavedBurki. p.cm.--(RoutledgecontemporarySouthAsiaseries;40) Includesbibliographicalreferencesandindex. 1.SouthAsia--Economicintegration.2.Economicdevelopment--SouthAsia. 3.SouthAsia--Economicpolicy.4.SouthAsiancooperation.I.Title. HC430.6.B872011 337.1’54--dc22 2010036173 ISBN 0-203-83006-7 Master e-book ISBN ISBN: 978-0-415-58726-6 (hbk) ISBN: 978-0-203-83006-2 (ebk) The book is dedicated to my grand children, Shaafi, Leila and Nafees “Only the youngcanlive in the future, and only the old can live in the past” Will Durant, The Story of Philosophy Contents Listoftables xii Acknowledgements xiii 1 Prologue 1 2 Challengesandopportunities 8 Introduction 8 SouthAsia:Theformativephase 12 Theriseof“therest” 14 Demographyisdestiny 18 GlobalizationandSouthAsia’sresponse 20 TheneedforIndia’sleadership 26 PossiblecatalystsforbringingpeacetoSouthAsia 29 SouthAsiamaybegettingready:Arealignment ofthestars 33 3 Reshapingtheglobaleconomy:Thedawnof theAsiancentury? 38 Introduction 38 Previous“catch-up”periods 39 Changesinthestructureoftheglobaleconomy, 1945–2007 41 Iscapitalismpassé? 45 Thestate’sroleintheAsianeconomies 50 ThestateinChinaandIndia–thetworisingstarsofthe globaleconomy 53 CasesofstatefailureinAsia 55 TheAsianstateandeconomicmanagement 58 Conclusion 60