Rivals should focus on areas of mutual interest

The early signs were not encouraging as the South Asian regional summit began in Islamabad this week. Although there was a breakthrough in the works on the question of a seven-country free-trade zone, the region's two most influential powers, India and Pakistan, denied speculation that there would be any talks between their leaders on the sidelines of the meeting.

Mutual enmity and nuclear rivalry between these two South Asian giants is the biggest obstacle to stability and economic progress in the region. Hopes were high that the summit would be the backdrop for a major announcement after months of signals from both sides that they were ready for substantive peace talks.

An end to hostilities could lead the way to greater international investment in the region and free up resources the two giants now devote to military spending. Also, the free-trade agreement signed this week, providing for lower tariffs and eventual economic union, would not work without the co-operation of India and Pakistan.

That is why the announcement of peace talks scheduled for next month, following the first meeting in nearly two years between Pakistani President Pervez Musharraf and Indian Prime Minister Atal Behari Vajpayee, overshadowed any talk of trade. It is the most major sign of progress since talks between the two men broke down in 2001 and the two nations sent one million soldiers to a border standoff in 2002.

The bilateral detente did not happen overnight. It was nine months ago that Mr Vajpayee first offered peace talks, on the condition that Pakistan pull its support for separatists using Pakistani territory as a launching pad for attacks into the Indian-controlled parts of Kashmir. Mr Vajpayee got that guarantee this week, following a signal last month that Pakistan might even drop its demand that a referendum be held in Kashmir to determine sovereignty. Since last April, progress has included resumption of cross-border flights and talks on bus services linking disputed border areas.

As the two sides begin peace talks next month, it is reasonable to expect more of the same strategy on display earlier this week and in previous months. Both sides will play down expectations for dramatic progress, especially on contentious issues like Kashmir. Indeed, separatists there have already vowed to keep fighting.

There will be a focus on resolution of smaller, less contentious issues first. This is a strategy that has served India well in its relations with China. An issue of mutual interest - trade - has been promoted, while border disputes and other potential conflicts have been downplayed. If this formulation can be put to work in the interests of peace between the two most influential countries in South Asia, the entire region stands to benefit.