 Hello, welcome to NewsClick, I am Zubair Sophie here in Srinagar with the former Finance Minister of Jammu and Kashmir, a former MLA for People's Democratic Party, Haseeb-e-Drabu. We'll ask Mr. Drabu a few questions regarding the recent ban on cross-LOC trade, which was one of the main decisions taken by the Sunni government after the Pulwama attack. Post to the aftermath of the Ammanath agitation of 2008, Muzaffarabad Road was open for LOC trade. In spite of difficult formalities and trade limit to 21 items, this trade had reached Rs. 5000 crore in March 2018. Therefore, by stopping this trade, which showed much promises, is in government of India increasing the problems and sufferings of the people of Jammu and Kashmir. And secondly, this trade was also a deterrent against potential Jammu-based RSS mischief again. Don't you think this aspect also should be considered along with the economic implications? I know what aspect you are referring to, but the issue is the cross-LOC trade was not essentially an economic decision, it was a political decision, which is why you see that this trade was monitored or regulated by the Home Ministry not by the Commerce Ministry. There are serious issues with this trade. Right from the word go when we started it. It is a CBM, but it is also at some level a very important initiative to free up the economy of J&K. Not only this, I thought it was also a much larger initiative which could be replicated elsewhere in the country. The trade started adding the basic confusion was about the trade. Is it trade between India and Pakistan? If at all, one should define it, it wasn't defined what it was. It essentially boiled down to being a barter trade to the extent that exports were not called exports, they were called traded out goods. Imports were not called imports, they were called traded in goods. So, the design of this entire trade was flawed and there was resistance both from the government of India, from the government of Pakistan because I was involved with the whole process at some point of time and as soon as the trade was launched, I had written that time itself that look this is not going to go very far. But beyond the economics of it, it was both Ravala court as well as Mozaffarabad and trade in Jammu was actually far more buoyant helping the economic system more than even Mozaffarabad. So, it is not that it was region specific to only the valley, it was both across Jammu as well as Kashmir. The real issue was that this was one way of leading to interactions between the people on this side and people on that side, that was a very important thing. Once that would have happened, now the basically the social connect which exists, there are people I know whose relatives are across the LOC, but that is a social connect. How do you transform a social interconnectedness into a relationship, a business relationship? Had it grown, it would have transformed itself into interdependence between the two regions. Had it grown further, you would have institutional relationships. You would need bank facilities, you would need all kinds of things and institutional involved and at some level, you would see that the two parts of JNK would have come closer and that would have helped the resolution of the larger issue which has been there for the last 70 years. So, while symbolism is important, the real issue was that this trade lacked substance and to take a decision of this kind, all of a sudden take it off. I do not even back, just been suspended. I think it should be kind of reworked, given a certain nature because you cannot run what is called a blind barter in today's day and age of thing. It had no networks on which it would be built. So, is barter trade illegally and economically viable? The world started the barter trade. It is not about whether it is viable, it is about how do you want to build this trade. Like when you look at India-Pakistan trade, it is done in ACUs, Asian currency units. Now neither country wanted to do that because it involved issues of sovereignty. If you say that this is an import from that part of Kashmir, then you are acknowledging implicitly that that is not your territory. So, there are serious issues here, but there are ways. There is a way of bypassing all this. One could have thought of it. In fact, I wrote a piece in 2014 also, how one can design this trade, how one can introduce banking relations and all that because while it started in the barter, that was important at the good step. It needs all kinds of support, banking support, communication support, even resolution. Suppose you are a trader from across the LOC and I am a trader here, then between the two of us, there is a dispute. Who will resolve the dispute? There has been dispute solution mechanism. Some legal framework has to be evolved. So, all these networks were important, had the trade to go, but the important point is, as you said, the trade had grown to 5000 crores, which means there is a business waiting to be done. And when you are a landlocked economy like we are, then these opportunities are very important opportunities to grow the economy of JNK and not be dependent on a set of investments coming in, whether it is from government of India or elsewhere. So, it was a very vibrant thing and from what I know, the trade within JNK was far more vibrant and far more beneficial than it was within Kashmir. So, after the major losses Kashmir faced during 2014 floods or 7 month long shutdown in 2016 and recent ban, 48 hours ban on highway traffic, how do you think this LOC trade ban will affect the economy of JNK? You know, it is not going to have a huge impact in terms of, because a magnitude of that 5000 crores is when you look at it from totality of the SDP and all, it is not that large number, but it so surely will affect little shake confidence is you would actually walk quite a distance to get to here to arbitrarily kind of call it off on the pretext that there is, you know, Havala money coming in and all that, which was the first reaction of the trade from Amritsar and Lahore. Both said Havala money racket is happening here. So, where my argument is that if there is a problem, maybe there is, I do not know, but if government of India believes that there is a problem of narcotics, there is a problem of guns or whatever, then that reflects that there is a problem with the modality of trade, right. Exactly. It is like saying for instance that in election black money is used, therefore call of elections, you do not call of elections, you change the system, bogus voting, you made EVMs, right. So, you want to make the system more transparent. So, the solution to this is that let us design a system that will not allow, if you have no regulator, obviously there will be a problem. On the field, when I was finance minister here, I am aware of the fact that a lot of the trade was driven by mafia from outside the state. So, that is where I think some issues were raised and it is a revision that needs to be done. So, cross illicit trade was started as a confluence building major between India and Pakistan and both of the, both of, from both of the sides, the trade was happening and a political analyst believed that this was more apolitical driven decision rather than economically. So, what are your comments about it? Of course, the question over. Look to start with the political decision also to set up the trade. Let us face that fact. It was a political decision. What is the CBM? It was political, but then it got a life of its own and it reached 5000 crores despite neither government of India nor government of Pakistan being willing to kind of engage with this. So, there is a business problem. It is of course a political decision, but what is even more significant is that this is coming in context of the whole renewed move to abolish 35A. Now, if you look at the design of the trade and that is where I think rational arguments need to be made rather than breast beating and chest thumping, that is not going to work. The reason why this is becoming a concern, greater concern rather is that this trade was defined for A, state subjects and B for locally produced goods. Over time, locally produced goods didn't remain. We started exporting bananas. Bananas don't go in Kashmir. So, trader was getting the bananas and then supplying them, which is really not what it ought to have been, but it was there. It was raised and discussed also. The second part is outsiders were involved but invisible. They were partners. Now, this is I think also a rounded attack on that part that look 35A is like a tree which has grown around. It has various branches in various parts of the thing. So, I see this more as trimming those branches to kind of bring it align and see that because it is spread all over the place in the last 70 or 35A has gone in different directions. So, this in the context of 35A makes it even more political and even more dangerous. So, is there any other way or alternative India and Pakistan can choose as confidence building major? But that depends on the political executive what they want to do. I mean I don't think this is the right time to even discuss those because the kind of stress that exists between the two is large and that two election types. So, let's also see it this way that these of course are you know issues that are made during elections and whatever, but there are I mean for instance this itself could be a large thing which you know can be designed much better, much more robustly without infringing on the sovereignty or the claims of the two sovereign nations. We could look at you know at some level joint policy formations or disaster management. The two great areas I went for instance earthquake struck that you know Uri side and whatever the first reach out was from across the LOC because there is a geographical link. So, suppose there is a earthquake in Kerala or Bombay it may not affect you, but if there is a earthquake in Mozaffarabad it is bound to affect you. So, if you want to do joint disaster management policy for instance you could probably it is not controversial it is humanitarian. You could look at joint regulatory for the agriculture disease. Now, the disease that strikes at the apple in Pulwama in Sopo is likely to get across the LOC also. So, you do these non-contentious issues build confidences this is not the right time to speak about it, but since you ask these are the areas one should look at. So, an I claim the trade was misused. So, what major should have been put in place to know prevent this misuse that an I claims. Of course, five basic networks make the trade bankable then you know today you have no idea right communication network. You must be able to communicate transparently right you must have that regulatory framework who is regulating the trade. You know it is like you say you work on its own see how it happens a legal distribution mechanism someone must. So, these things must be put in place if you want misuse not to happen, but you did not do that for a variety of reasons very lazy lethargic thinking. Let us do it it was half hearted. So, let us do it and start this trade. If it is thought through and we put in place a set of measures then this kind of you know misuse not happen. If they are saying and I read this somewhere that under invoicing is happening. I mean I will request the authorities to show me one trade in the world between partners where under invoicing does not happen, but you do not stop interesting trade we are invoicing that. So, you put a penal system into that. So, depending on the nature of what they found no evidence has come to ground at the moment. So, if you feel that there are issues there then each can be addressed by a proper systemic framework within which state should operate. So, if the allegations made by NIR are true do you think India can effort to go ahead with the LSE trade? Look it is not about really allegations the point is if there is a concern the government of India has huge policy wings government of Pakistan has huge policy wings they can sit down and work out the framework within which these things as I give example of election people say that money is paid now we saw in somewhere in North Kashmir some fellow distributing money. So, auto mitigation commission came said you do this whatever or you know election commission has done whatever it has done to make elections fair. Similarly, you put in policy measures that will ensure that this is not happen. So, don't you think it is in a way good that former Kashmiri militants who have settled in Pakistan are taking to business instead of picking up arms again. I don't know I don't know that because are they doing it? I have no knowledge I mean and I wouldn't assume that also these are regular people I met the trade guys when I was chairman of jaking band in 2008 their chamber of commerce came to meet me. So, it was driven by that I don't see militants running this trade I mean I would be surprised nor would I want to see it that this is a rehabilitation measure no I see it much more as that there is a social connect how do I deepen the connect? I have a cousin across, but that is limited to that is a family thing. Now, then there is a relationship, but can I take it to a partnership can I build it further? How do I do you know more and get to know people like you know you will the chamber of commerce will interact the banks will start interacting regulatory firm starting. So, you become like a normal neighbouring thing you start working with them on some of these issues. So, it is not so much about a rehabilitation scheme don't see it like that because that again is a symbolism I would much rather see it as robust as I said you can conceive of this kind of trade in rest you know in other states as well Tamil Nadu Sri Lanka, West Bengal, Bangladesh, Gujarat Sindh you know that kind of stuff. So, if there is a localized thing it probably will add another dimension to regional. So, I would much rather see this as a measure for regional integration than regional cooperation. So, what was the communication between PDP BJP government and central government on illicit trade? I think there were two or three initiatives one of course, at a personal level there was which I had been I had sent letters to Mr. Chidambaram and he was finance minister we had also a president central government to make it formal and whatever, but there were I remember from industry department a number of measures that were sought one of them being that we should increase the number of commodities from 21 to whatever we should start the cargo manifest system we should try and formalize the trade. So, there were these incremental steps that the government at that point has suggested. So, overall business communities understand scanner how do you see it impacting the economy and politics of Gemma and Kashmir ahead in the future? Well, it is unfortunate that you know business community gets targeted as it is there is hardly a business community here of a certain size it is a very small business community. So, if that gets enmeshed into this kind of thing then obviously you know it is going to impair the economy the thing also is that as it is out of 365 days probably business does not function for more than 200 days rest or or whatever. So, there is a lot of pressure on business and this is certainly not the fact of the LLC trade being suspended, but the overall the way things are going it would shake the thing plus what it does is really is not about you know how much do I lose what happens is it starts impairing the business networks. Now, if you are a businessman you have 20 different relationships with people some in Bombay some in Delhi some whatever and then you come under the scanner you may come out clean in two months time you may find nothing it will impair all the relationships you will have to rebuild that and that is a loss it just breaks the business networks because it makes them suspect you know why do I want to get into something that business I am doing business to do business to make money for myself pure business. Now, if you get enmeshed in politics of the situation then I would not want to partner with you because why should I I do not want to get into litigation but then I have my book to be opened so tomorrow I am your partner out of Bombay I am supplying you stuff your books are under scanner they will find 10 entries from my books I will get into it for no rhyme or reason I am working I have no knowledge of this thing. So, it just makes the whole area very vulnerable and it will insulate and isolate the businesses in JNK. I do not think it is creating a bad image of you know like German Kashmir trade you know to the rest of the world. Well I do not know the rest of the world yes it is creating but I mean I must also say that the trade itself needs to look inwards I mean every now and then they are in the forefront of politics I have been I kept telling them for three years that your job is doing business do business why are you enmeshing in yourself into politics but then there are gray areas in what you do you know you are per four circumstances you also led to do something but they must also take a review I think it is important for them to also see what they are most interested in. So, it is it is easy to kind of look at it in black and white but it is gray I would also urge the local businesses to kind of take a stock of where they are going what they want to do if they want to focus on pure that is what they should do because that is what the core competences.