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Kashmir: Security concerns to limit economic gains from loss of special status

  • August 11, 2019

The removal of special privileges enjoyed by Jammu and Kashmir will attract fresh investments in India’s northernmost territory and create job opportunities, Home Minister Amit Shah told the Indian Parliament during a debate on the erstwhile state’s autonomy earlier this week.

The minister claimed Article 370 of the Indian constitution, which gave the region significant autonomy from the rest of the country, had undermined development in Jammu and Kashmir for decades by dissuading investments and qualified professionals from other parts of the country.

Jammu and Kashmir, which is at the center of a decades-old dispute between India and Pakistan, has been mired in violence due to a separatist insurgency against India’s rule. The heavily militarized region frequently sees shutdowns and large-scale street protests.

“Those are the things that spook investors,” Sushant Sareen, a senior fellow at New Delhi-based think tank Observer Research Foundation, told DW. “There is an expectation that there will be major investments which will make their way to the territory. But I would imagine that the investments will be somewhat contingent on the security situation in the state.”

The state — which has been bifurcated in two “union territories” of Jammu and Kashmir and Ladakh — continues to be in a state of lockdown even days after it was stripped of its special status in anticipation of violence the decision might trigger. Thousands of troops are patrolling the streets and internet and telephone networks remain shut.

Read more: Kashmir: The world’s most dangerous conflict 

Realty check

The region’s real estate market is most likely to get a boost from the removal of Article 370, which among other things gave Jammu and Kashmir’s permanent residents the exclusive right to own property in the province.

But property developers from other parts of the country may not be in any rush to grab a pie of the relatively virgin territory.

“Jammu and Kashmir will not even be on the radar of real estate companies right now,” Samir Jasuja, founder and managing director of real estate analytics firm PropEquity, told DW. “It’s too premature for any movement in the territory’s real estate market till one gets a confirmation that all anti-India activities are not going to happen.”

Jasuja also points to the liquidity crunch plaguing the real estate industry across India to stress that developers are unlikely to venture into a new, uncharted territory at least in the next 6-12 months.

“There is a perfect storm brewing up in the real estate market,” Jasuja said. “The real estate companies are concentrating only on Tier 1 (bigger) cities right now. I think Jammu and Kashmir initially for 6-12 months will be on wait and watch.”

Much will also depend on how the Kashmiris react to government’s decision to revoke their special status and how open they are to “outsiders” living in their midst.

“For an outsider to come and buy property in JK, he has to have a great level of comfort with the locals. There has to be job creation, business opportunities and real estate will eventually follow that,” Jasuja said.

Read more: India and Pakistan’s troubled history

More than 14 million tourists visited Jammu and Kashmir in 2017, only 80,000 of them were foreigners

Chronic problems

Jammu and Kashmir, which counts tourism, handicrafts, horticulture and agriculture among its main industries, suffers from mass unemployment and underemployment. The region’s jobless rate in July was 17% — more than double the national average, according to the Centre for Monitoring Indian Economy.

The region — which ranks higher than more than half of the Indian states, including Prime Minister Narendra Modi’s home state of Gujarat, on the Human Development Index — largely depends on grants from the Indian government to sustain its economy. Many in New Delhi say that the grants have failed to yield desired results because of rampant corruption in the former state.

Lack of reliable electricity supply has also hurt the region’s investment prospects, including in dozens of newly-identified tourist destinations. There is no foreign direct investment. Exports from the region, which mainly include fresh fruits and handicrafts, are close to negligible.

“We are very bullish now. There is a great opportunity for various products to be exported from Kashmir,” Sharad Kumar Saraf, the president of the Federation of Indian Export Organizations, told DW. “Now that the government has allowed exporters from outside Jammu and Kashmir to make investments, floodgates have opened.”

Saraf said Article 370 prevented exporters from places like Delhi and Mumbai to set up backup infrastructure such as storage spaces and local offices. The revoking of the article would allow investments to flow into the region in sectors like tourism, real estate, carpets, handicrafts, sports goods, horticulture and food processing.

Saraf stresses that with New Delhi now having a direct oversight of Jammu and Kashmir’s law and order, the region would be a much safer place to do business in.

  • India-Pakistan rivalry: Kashmiris pay a high price

    An unprecedented danger?

    On February 27, Pakistan’s military said that it had shot down two Indian fighter jets over disputed Kashmir. A Pakistani military spokesman said the jets were shot down after they’d entered Pakistani airspace. It is the first time in history that two nuclear-armed powers have conducted air strikes against each other.

  • India-Pakistan rivalry: Kashmiris pay a high price

    India drops bombs inside Pakistan

    The Pakistani military has released this image to show that Indian warplanes struck inside Pakistani territory for the first time since the countries went to war in 1971. India said the air strike was in response to a recent suicide attack on Indian troops based in Jammu and Kashmir. Pakistan said there were no casualties and that its airforce repelled India’s aircraft.

  • India-Pakistan rivalry: Kashmiris pay a high price

    No military solution

    Some Indian civil society members believe New Delhi cannot exonerate itself from responsibility by accusing Islamabad of creating unrest in the Kashmir valley. A number of rights organizations demand that Prime Minister Narendra Modi’s government reduce the number of troops in Kashmir and let the people decide their fate.

  • India-Pakistan rivalry: Kashmiris pay a high price

    No end to the violence

    On February 14, at least 41 Indian paramilitary police were killed in a suicide bombing near the capital of India-administered Kashmir. The Pakistan-based Jihadi group, Jaish-e-Mohammad, claimed responsibility. The attack, the worst on Indian troops since the insurgency in Kashmir began in 1989, spiked tensions and triggered fears of an armed confrontation between the two nuclear-armed powers.

  • India-Pakistan rivalry: Kashmiris pay a high price

    A bitter conflict

    Since 1989, Muslim insurgents have been fighting Indian forces in the Indian-administered part of Kashmir – a region of 12 million people, about 70 percent of whom are Muslim. India and Pakistan have fought two of their three wars since independence in 1947 over Kashmir, which they both claim in full but rule in part.

  • India-Pakistan rivalry: Kashmiris pay a high price

    India strikes down a militant rebellion

    In October 2016, the Indian military has launched an offensive against armed rebels in Kashmir, surrounding at least 20 villages in Shopian district. New Delhi accused Islamabad of backing the militants, who cross over the Pakistani-Indian “Line of Control” and launch attacks on India’s paramilitary forces.

  • India-Pakistan rivalry: Kashmiris pay a high price

    Death of a Kashmiri separatist

    The security situation in the Indian part of Kashmir deteriorated after the killing of Burhan Wani, a young separatist leader, in July 2016. Protests against Indian rule and clashes between separatists and soldiers have claimed hundreds of lives since then.

  • India-Pakistan rivalry: Kashmiris pay a high price

    The Uri attack

    In September 2016, Islamist militants killed at least 17 Indian soldiers and wounded 30 in India-administered Kashmir. The Indian army said the rebels had infiltrated the Indian part of Kashmir from Pakistan, with initial investigations suggesting that the militants belonged to the Pakistan-based Jaish-e-Mohammad group, which has been active in Kashmir for over a decade.

  • India-Pakistan rivalry: Kashmiris pay a high price

    Rights violations

    Indian authorities banned a number of social media websites in Kashmir after video clips showing troops committing grave human rights violations went viral on the Internet. One such video that showed a Kashmiri protester tied to an Indian army jeep — apparently as a human shield — generated outrage on social media.

  • India-Pakistan rivalry: Kashmiris pay a high price

    Demilitarization of Kashmir

    Those in favor of an independent Kashmir want Pakistan and India to step aside and let the Kashmiri people decide their future. “It is time India and Pakistan announce the timetable for withdrawal of their forces from the portions they control and hold an internationally supervised referendum,” Toqeer Gilani, the president of the Jammu and Kashmir Liberation Front in Pakistani Kashmir, told DW.

  • India-Pakistan rivalry: Kashmiris pay a high price

    No chance for secession

    But most Kashmir observers don’t see it happening in the near future. They say that while the Indian strategy to deal strictly with militants and separatists in Kashmir has partly worked out, sooner or later New Delhi will have to find a political solution to the crisis. Secession, they say, does not stand a chance.

    Author: Shamil Shams


Article source: https://www.dw.com/en/kashmir-security-concerns-to-limit-economic-gains-from-loss-of-special-status/a-49947009?maca=en-rss-en-bus-2091-xml-atom

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