The recently concluded 13th SAARC Summit (November 12-13) was held in Dhaka after the 8 October earthquake causing the human misery in its wake, and the Delhi bombings on 29 October. These events cast a pall of gloom over this summit, which had been postponed twice before. Statements emanating from India and Pakistan indicated that these two events were predominant in the minds of the leaders. The other issues in focus were trade, terrorism, disaster management, Afghanistan's membership and Observer's status for China and Japan. Of course, there were differences in priorities.

While terrorism in Kashmir was India's priority, Pakistan prioritised demilitarization. That the security forces on both sides of the LoC have been in the forefront of relief, rescue & reconstruction operations did not enter the Pakistani calculus appreciation of the ground situation. The current demilitarization plan resembles the troop-reduction plan (from Baramulla and Kupwara) that Musharraf had proposed in September. There were indications of this argument in evidence before the SAARC summit commenced. India did not reject the plan immediately but it believes that Kashmir's demilitarisation cannot be unilateral nor is it feasible while the situation of violence worsens in the Valley.

During their 12 November meeting on the sidelines of the summit, Aziz gave a spin to this issue by linking free trade between India and Pakistan to 'progress' on Kashmir. Restrictions on trade and non-tariff barriers faced by Pakistani traders were Aziz's concerns. The tactic of attaching riders is a ploy that Pakistan often uses during the composite dialogue. This tactic keeps Kashmir in focus as the 'core issue' and constrains India's efforts to insulate other issues like trade, settlement of border disputes outside Kashmir and people-to-people contacts. By Aziz's admission, the talks focussed on demilitarisation on the borders and the 'self-governance of Kashmiris'.

For his part, Manmohan Singh reiterated India's condition of cessation of violence in Kashmir before consideration of the demilitarisation plans. In his address to SAARC leaders he said, "No member country should allow its territory to be used against the interests of another member country. There should be zero tolerance for cross-border terrorism and for the harbouring of hostile insurgent groups and criminal elements. It is only in an environment of mutual confidence and a collective commitment against the scourge of terrorism, that we can register the progress we all desire in more intense interaction." This statement shows India's concern over its neighbours - especially Pakistan - harbouring terrorists on their soil and the wider ramifications for the region of trade opportunities, investment and development in the region.

Singh's statements also cast doubts on Pakistan's ability to rein in cross-border terrorism, which it spawned in the 1980s. The terrorist strikes in Kashmir in the immediate aftermath of the quake, the latest being the series of three attacks in Srinagar on 14, 15 and 16 November, and the fact that jehadi groups openly carried out relief operations in PoK reveals the continued sustenance which terrorism receives in Pakistan, which are ominous for both India and Pakistan.

True to their professional background, both the Oxford-educated economist Singh and the former executive VP of Citibank, Aziz used economic terms to describe the state of Indo-Pak relations. Aziz reported a 'trust deficit' that could be bridged. Singh's hoped for a 'trust surplus' in the future. The behind-the-scenes parleys held to extend an invitation to Afghanistan to become part of SAARC and granting of observer status to China betrayed the extent of trust deficit. However, Nepal and Bangladesh are important actors behind this decision due to their growing relations with China. Shipping and sea linkages were also discussed during the meeting. The much-touted shipping protocol for port access and services between the countries is now on the cards. Pakistan has proposed 9-10 December as dates for negotiations on the protocol. Here, too, the delay in facilitating this commercially viable sector for interaction since it was mooted in October 2003 shows that even trade-related CBMs are hostage to 'trust deficits'.

India and Pakistan need to mitigate this 'trust deficit' by investing political and economic capital into the peace process. If past precedents are any indicators, the response to the quake, the ineptness of disaster management systems, the avoidable delays in setting up and functioning of LoC transit points and other CBMs requires a renewed infusion of 'trust' into the process. On the conclusion of the SAARC summit, Aziz called for ways to build on the momentum generated by these CBMs to explore ways for 'conflict resolution' instead of 'conflict management'. A judicious balance between the two must be maintained; compromising on either of these objectives will be unwise.