Decoding Economic Depression in IOJK Post 2019: Causes, Consequences and Prospective Remedies

Abstract:

The study emphasizes Jammu and Kashmir's economic underperformance despite the fact that the state is rich in natural resources. Using resource curse theory and Conflict Theory as a conceptual framework, this study investigates economic strangulation by occupation troops, its causes, consequences, and prospective remedies in Jammu and Kashmir. The crimes and military methods used in demolishing homes and destroying property are discussed along with its impact on the economic downturn that turned into a long-term recession, which turned into a long-term economic depression. Furthermore, this study also examines the losses in jobs and businesses in IOJK since 2019.

Key Words: Economic Recession and Depression, IOJK, Article 370, GDP, UN resolutions, Resources, Conflict

Overview of the Historical Economic Context in Jammu and Kashmir:

Historically, Jammu and Kashmir witnessed economic strangulation through settler colonialism policies that enabled occupation forces to carry out unlawful confiscation, forced evictions, demolition of civilian properties, and dispossession. Legitimate political rights under UN resolutions regarding self-determination granted to Kashmiris is regarded as an anti-state narrative by India that in return is met by assault, censorship, and humiliation by the Indian state toward the locals.  House demolitions and property damage have been occurring at an alarming rate since 2016 as a result of the establishment of legislation that grants immunity to the military forces for atrocities committed.


With regard to these laws, victims' cases are not heard in courts, depicting their helplessness since there is no door to knock on. Damage to civilian property has prompted Kashmiris to evacuate their homes and leave their respective occupations, adding to the state's already economically devastated situation. Considering there is little data available, this element bared by Kashmiris that is depriving people of their homes and ruining their properties worth billions of dollars is not discussed much and, as a result, is not communicated to the international community.


 Inflicting war tactics like as demolishing homes and causing property destruction in order to prevent locals from resisting the occupation troops because when one has nothing, one must bend down, but the Kashmiri people's resilience will not assist the invading forces in achieving their goals. JKCC, a civil society organization, has viewed house demolition as a collective punishment against villagers in order to render them homeless. Kashmiri lives and property should be protected in accordance with UNSC and UNCIP resolutions.


According to the Geneva Convention and the Hague Regulations, destroying civilian property is a serious crime. However, the Indian forces are employing a variety of measures to weaken the people's determination. Kashmiris witnessed the Cheeni-Chowk fire in 1990, which destroyed more than 100 homes, dozens of shops, and three mosques. In addition, throughout the years, many shops, which are a key source of economic activity in the state, have been demolished. The Handwara slaughter, the Lal Chowk fire, the Sopore fire, and the Palhallan fire are just a few of the prominent occurrences showcasing property devastation at the hands of Indian forces.


Significance of Study & Research Questions:

The research methodology used in the research process is qualitative in nature. Secondary data sources have been gathered including incorporating data sources from websites, research articles, and journals. The significance of studying the economic crisis in Jammu and Kashmir has further increased ever since India abrogated Article 370 in 2019.


It is also imperative to counter misinterpretation and misrepresentation of facts, and deceptive narratives spread out by Indian media and officials to depict normalcy and economic growth in the region. The major aim of the research question is to dig out the truth behind the Indian claims of the so-called “economic boom” in Kashmir after the removal of its special status in 2019. Through this paper, we will try to explore whether there is any objective reality in Indian claims or is just a bluff.


Conceptual Framework:

This study employs the Resource Curse Theory as a theoretical framework. Kashmir is undeniably beautiful, with numerous natural resources such as water, a source of living for the entire Pakistan and India, and a great potential for tourism, reserves of natural resources such as limestone, sapphire, gypsum, and so on. Despite having numerous resources, Kashmir has underperformed economically, and this long-term economic underperformance has had a negative impact. The paradox of plenty is a precious natural resource paradox that frequently generates political and economic upheaval. The Indus River and its tributaries run through the region, providing food and water to humans and animals in Pakistan and India.


This connects us to the subject of Conflict Theory/Marxism, where Karl Marx addresses the economic imbalances that lead to conflict. According to him, the bourgeoisie and proletariat, two social classes, have resource imbalances, with the bourgeoisie occupying higher positions and possessing the most resources, leaving nothing for the proletariat, contributing to disputes. The same is true in the Kashmir conflict: when non-natives have acquired greater power and investment opportunities in a state after renouncing the semi-autonomous status in 2019, locals suffer. While locals have the right to claim resources and decide what to do with them, non-locals now have this duty. Precisely, the Kashmiri locals have developed a sense of economic marginalization which needs to be addressed.

Economic Depression post-2019:

Recession is mild, while depression is defined as a three-year or longer downturn with a yearly GDP fall of 10%.  Consumer confidence is one of the major elements. Kashmiris endured an economic depression when they lost 600,000 jobs, according to an estimate by KCC&I that was cited by Reuters after the seizing of the semi-autonomous territory of Kashmir.  Financial losses totaled $400 billion across all areas of the Kashmiri economy. If we talk about Kashmir's economy suffering a loss in terms of tourism, which contributes 7% of overall GDP, it has lost a lot since tourism has experienced a 90% decline in comparison to 2018 following the repeal of Article 370. Tourism in Kashmir is not only degraded; it is extinct. remarked Trumboo, the owner of Hotel Shah Abbas. This demonstrates the locals' view that the Kashmir economy has seen the worst recession and, ultimately, an incredibly worse depression after 2020.[1]

 

Article 370's repeal had a negative influence on the judicial system, the healthcare system, and individuals involved with academia. Furthermore, the impact of the judicial system was so severe that the detention of the president of the High Court Bar compelled lawyers to protest by resigning, doctors were unable to operate and were unable to obtain international assistance due to severe restrictions, and students were unable to study or attend school. The corporate sector has suffered greatly as a result of internet limitations and the inability to pay for commodities via e-billing.


Hundreds of houses were burned down in Satamaloo in 2020. According to multiple reports, 18 residential dwellings were demolished in 2019. Following the repeal of Article 370, the number nearly doubled in 2020, resulting in the destruction of 114 residential homes.


There is concern that the number will be significantly higher due to the lockdown and communication restrictions imposed following the revocation of Article 370, which created a barrier in reporting these instances. Using explosive devices to demolish rsilpak.org, the armed forces' main objective was causing collateral damage to the people and state by destroying civilian properties, harming the economy, and retaining control of resources in J&K is entirely illegal under international law.

 

Overall Economic Condition and the Altered Economic Landscape of IOJK:

The economy of Kashmir has been irreparably hurt by the frequent restrictions, including curfews and strikes. In 2019, the area witnessed the longest known connectivity outage in history, spanning 214 days, resulting in enormous losses and, in some cases, layoffs for local businesses. The cost of the Kashmir conflict is difficult to measure due to a lack of studies and data on the subject.


The immediate repeal of Articles 370 and 35 A, which had provided Kashmir a special status in the Indian constitution, caused a wave of shock and outrage among Kashmiris, who never expected it to be undertaken without the agreement of Jammu and Kashmir's Constituent Assembly. A contended state forcefully and unilaterally integrated the state into the Indian Union on August 5, 2019, is a huge source of anxiety for all Kashmiris.


The conflict between India and Pakistan has impeded Kashmir from reaching its full economic potential.  Stability and tranquility in the valley are required for the intended prosperity. Tourism has a big potential in Kashmir because of its breathtaking beauty, which draws tourists in. The tourism industry generates significant amounts of tax income, employment, and foreign exchange, ultimately contributing a significant portion to Jammu and Kashmir's GDP. Being a land of saints and Buddhists, pilgrimage tourism has a lot of promise in Kashmir. In the various areas; Jammu, Ladakh, and Kashmir, among these three, Kashmir has had the biggest crises in terms of increased de-stability, which has harmed its tourism business, and the curfew has hurt tourism in these places. Other industries include transportation, hotels, tour guides, and telecommunications, which are dependent on tourism.


The implementation of Section 144 of the Criminal Procedure Code in Kashmir to address the apparent protests of people as a result of abolishing their fundamental right not to be a member of the Indian Union as it is an internationally disputed region with various UN resolutions. Curfews and total communication blackouts, as well as an internet blockade, have not only damaged people psychologically, but economic anguish has also begun. From August 5, 2019, to December 31, 2019, Kashmir's economy incurred significant losses ranging from Rs 14,295 to Rs 17,878 crore. According to the KCCI's 2019 report, Kashmir's economy lost Rs 17,878.18 crores between August 5th and December 3rd. It also shed 496,000 jobs during the same time period.


The abolition of Article 370 elicited a wide range of reactions across India, with several political parties hailing it as a watershed moment in Indian history. Some historians argue it is a "watershed for a new era of peace, prosperity, and development." The Indian National Congress, one of the country's oldest political parties, called the move a "black day in Indian history" and warned the government of dire economic consequences for the region and India. A statement from Minesh Tiwari, an Indian parliamentarian, stated that Agriculture employs 70% of the people in the state, and the sector has lost Rs 10,000 crore in the last seven months since 5th August 2019.


According to the first projection on economic losses in 2019, the tourism industry lost 74500 jobs in 2019. The president of KCCI acknowledged the economic recession, citing losses in the handicraft and horticulture sectors, according to the same institution's 2023 report. He claimed that the handicraft sector's revenue has dropped from Rs 2500 crore to 500-600 crore.  Again, despite the fact that the horticultural sector is worth $90,000, people's requests were not fulfilled. Furthermore, in a media briefing, Javaid Ahmed, president of KCCI, stated that the sales on Eid ul Azha this year are 50% lower than in prior years.

 

Abrogation of Article 370: Accelerating GDP- A Bluff or a Reality?

A 31-year-old journalist on the pretext of confidentiality while speaking to Al Jazeera emphasized we have seen journalists subjected to summonses, assaults, detainment no-fly lists, and now passport confiscation. As a result, he noted, the scope of our reporting is automatically reduced.  When reporting is narrowed down, only the government's narrative reaches the world, while local stories and honest reporting do not. This is a serious infringement on free expression. Subsequently, Indian media exclusively projects beneficial results of policy changes that, according to their narrative, have increased GDP. Mehbooba Mufti, the former chief minister of Jammu and Kashmir, stated that the economic situation is awful because of intense surveillance, which prevents people from freely speaking or expressing themselves.


India’s justification for the abrogation of Article 370 is to spur economic development and improve the security of the Jammu and Kashmir region. Previously, the declining economic security condition was put on the local government’s shoulders however now there is no excuse. Another region of Ladakh was also carved with the Jammu and Kashmir region which is directly controlled by the central government.


Economically also, the situation is bad. Except for displaying the so-called tourism, whether it’s the fruit industry or any other industry, they are killing it. With such surveillance, no one can express or talk,” Mehbooba Mufti said. India’s G20 meeting in Kashmir an attempt to project ‘normalcy’. Hindustan Times itself has reported that no substantial economic activity has taken place since the abrogation of article 370 said Jammu Chamber of Commerce and Industries (JCCI). Traders body also has opposed the proposed property tax.


The sole rationale stated by Indian authorities was that Article 370 is an impediment to economic progress since investors are unable to invest; nevertheless, statistics obtained following the repeal of the same article did not reveal an increase in investments. In the fiscal year 2021-22, overall investment in Jammu and Kashmir was $46 million. Previously, the same investment was $50.5m, which had substantially decreased due to the recession, with figures showing 2017-2018 as $102.8m. As a result, this demonstrates that it was not the Indian government's objective to enhance economic growth, but rather the BJP's political agenda to gain more votes.


Covid 19’s implication on Kashmir’s economy

Undoubtedly, the coronavirus pandemic has affected the economy of Kashmir as well as the economy of other states around the world. However, statistics show that this has not been the biggest factor in the drying up of investment. However, the sharpest decline in pre-pandemic investment occurred in the year the Indian government ended Kashmir's semi-autonomous status, from $72.3 million in 2018-19 to $36.3 million in 2019-19. This amount was reduced by half.


India's justification for abrogating Article 370 is to promote economic development and improve security in the Jammu and Kashmir region. Previously, the burden of worsening economic security rested on local governments, but now there is no excuse. Other parts of Ladakh include Jammu and Kashmir, which is directly administered by the central government.

 

 

Conclusion:

Indeed, Jammu and Kashmir have been experiencing an economic collapse for years, and in recent years, this economic recession has transformed into an economic depression. Locals are facing increased competition as a large number of Indians, primarily Hindus, are moving to the state and purchasing land, in violation of UN resolutions that stipulate that no one in an armed conflict has the right to take locals' property. Outsiders are being deployed and are being granted residence as well as property permits, which has an impact on the state's demographics.


It is vital to regain people's trust. Communication or transportation restrictions will not promote investment in a conducive environment. Although Indian officials would never desire it, free and factual journalism is crucial, the state should not impose control over the media, and restrictions should be eased so that researchers and reporters can openly examine the consequences of this revocation without fear.


Recently India organized side events of the G20 summit in Srinagar and Ladakh to show stability while restricting people's ability to communicate with international leaders and expose the true face of invading forces. Due to constraints on their fundamental right to free expression, it is becoming more difficult for locals to communicate with the rest of the world on a daily basis and transmit the reality of Jammu and Kashmir to the world. Empowering local Kashmiris can only lead to regional stability; otherwise, people's conditions will remain as they are.

 

Bibliography: 

Pandow, B. A. (n.d.). Economics of Kashmir Conflict. DigitalCommons@Macalester College. https://digitalcommons.macalester.edu/himalaya/vol40/iss1/11/. 

Rather, Tariq. "Abrogation of Article 370 of the constitution of India: socio-economic and political implications on Jammu and Kashmir." International Journal of Research and Analytical Reviews 7. no. 3 (2020).

Fayyaz, A. A. (2023, August 5). What changed in Kashmir: 4 Years Before & After abrogation of Article 370. Indian narrative. https://www.indianarrative.com/kashmir-news/what-changed-in-kashmir-4-years-before-after-abrogation-of-article-370-149256.html. 

Maknoon Wani, “Kashmir Is Bleeding. so Is Its Economy.” Business and Economy | Al Jazeera, February 4, 2023, https://www.aljazeera.com/opinions/2023/2/4/kashmir-is-bleeding-its-economy.

[2] Pandow, B. A. (n.d.), Economics of Kashmir Conflict, DigitalCommons@Macalester College, https://digitalcommons.macalester.edu/himalaya/vol40/iss1/11/

[3] Rather, Tariq. "Abrogation of Article 370 of the constitution of India: socio-economic and political implications on Jammu and Kashmir." International Journal of Research and Analytical Reviews 7, no. 3 (2020).

[4] Fayyaz, A. A. (2023, August 5). What changed in Kashmir: 4 Years Before & After abrogation of Article 370. Indianarrative. https://www.indianarrative.com/kashmir-news/what-changed-in-kashmir-4-years-before-after-abrogation-of-article-370-149256.html

[5] Rather, Tariq. "Abrogation of Article 370 of the constitution of India: socio-economic and political implications on Jammu and Kashmir." International Journal of Research and Analytical Reviews 7, no. 3 (2020). 

[6] Maknoon Wani, “Kashmir Is Bleeding. so Is Its Economy,” Business and Economy | Al Jazeera, February 4, 2023, https://www.aljazeera.com/opinions/2023/2/4/kashmir-is-bleeding-its-economy.


Writer: Sawaira Saeed

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