SCOTT SIMON, HOST:
Earlier this week the Prime Minister of Pakistan attended the inauguration of the new Prime Minister of India. Now this event is notable not only because India and Pakistan fought several wars and both have nuclear weapons, but also because India's new prime minister, Narendra Modi, is a Hindu nationalist. He is not the kind of politician that you'd imagine Pakistan would welcome in power. We're joined now by Shuja Nawaz. He's director of The South Asia Center at The Atlantic Council. Shuja, thanks for being back with us.
SHUJA NAWAZ: Thank you, Scott, for having me.
SIMON: First, what's your impression of the new Prime Minister of India?
NAWAZ: Well, he's a remarkable individual. He has transformed Indian politics. He has led his party from a very low level in parliament to an enormous majority. He has a party that is the largest single party in the Lok Sabha, the lower house of the Indian Parliament. He is seen as a transformative figure. He's also seen as a divisive figure because of his past, but he has promised - and some of the early indications are - that he's not allowing that extreme element within his party a powerful say in government.
SIMON: You have come out with a study at the Atlantic Council that demonstrates some of the economic costs of the arms race, which includes not just the cost of the arms and the cost of maintaining the vast military structures, but the deficits that have been created - lost opportunities for tourism and other industries. Try and sketch that out for us, if you could.
NAWAZ: Yes, the current trade is only $2 billion. Economics 101 dictates that you trade with your neighbors. It makes no sense for them to have trade with distant countries. But, if they were to go back to the level of trade that they had at the time of independence in 1947, you could have between $40 and $100 billion worth of trade between the two countries. And more important - if they open their borders to each other, you would have tourism trade. You would have religious tourism from both sides and you would have trade with Central Asia through Afghanistan.
And if India is going to become the major power that it wants to be in the region and on the global stage, it will need every ounce of energy.
SIMON: At this point, though, do both countries - and specifically the military establishments of both countries - have an investment in keeping a certain state of hostility?
NAWAZ: The military also can benefit tremendously from this because if trade were to open with India - the military is a major producer of cement. They own a lot of state-owned enterprises, which they run for the benefit of ex-servicemen for the veterans. And they would be a major exporter of cement to India. Moreover, if there was transit trade between India through Pakistan and Afghanistan to Central Asia, the military is the largest transporter in the country.
So there are opportunities that need to be spelled out. But more important, I think, this is an opportunity for the Pakistani prime minister to have a national debate about this issue so that he can bring everybody on board.
SIMON: What has the change been in the past few weeks, even, that gives you some optimism?
NAWAZ: Well, it's not just the past few weeks. I think this is a change that has been occurring in the last decade or so. It's not perfect, and both leaders in India, and Pakistan will face enormous opposition from entrenched interests, apart from having a sclerotic bureaucracy that won't want to give up power and controls and business interests that may have helped them win their elections that want to retain their preferred access to state resources. It's not going to be easy, but I see strong possibility and I see a convergence of the need for economic development and growth, which will benefit people in general.
SIMON: Shuja Nawaz of the Atlantic Council, thanks so much.
NAWAZ: Thank you for having me, Scott. Transcript provided by NPR, Copyright NPR.