Border Crossing

"Clear out! I'm going to blast!" A lanky man shouts from the top of a bamboo ladder, lighting the last stick of dynamite embedded in a rock wall. There's a brief silence, then the booms: one, two, three, four, five. When the sound of settling rocks ceases, the miners waiting in an outcropping nearby trickle into a valley of jagged, apricot-colored mountains. One of the men announces with flourish, "The end!"

In fact, it is just a beginning. Most mornings, crews like this one arrive with the sun at this mining site in the district of Jhelum in northeastern Pakistan, loading melon-size boulders of gypsum onto waiting trucks. The mineral will be ground to a fine white dust and added to cement. In the 1930s, Jhelum's gypsum used to be sent down the road, to a cement plant that is now a ghostly hunk presiding over the sunbaked landscape. More and more, the rocks blasted out of these hills are sent over one of the most militarized borders in the world to India, where it is literally helping build the economic boom of Pakistan's most bitter rival.

It's a small but important start to what the subcontinental neighbors hope will bring larger economic and political dividends. Pakistan said it would officially grant India most-favored-nation (MFN) status by the end of December, a deadline that has come and gone. Pakistan's government says it is still planning to make the move by spring, which would lift most of the trade restrictions remaining against India and give a boost to regional trade.

Both sides have high hopes that more trade will help stabilize the fraught relationship between these two nuclear-armed neighbors, which have gone to war three times since independence from Britain in 1947, twice over the disputed region of Kashmir. After cargo-and-customs facilities were improved last year at the Attari-Wagah border, many more truckloads of gypsum, dates, tomatoes, onions and chemicals, among other things, are making the crossing. Projected to reach over $2.5 billion this fiscal year, trade between the two countries is still tiny, compared with India's $350 billion target for export revenue in the same time. But Pakistan's exports to India have almost doubled since 2010. Follow the path of one product, gypsum, along its route across the border, and you see the huge potential of trade to bring these old adversaries closer — and the challenges they'll face along the way. "Trade means you develop a permanent relationship," says Hasan Askari Rizvi, a political scientist based in Lahore, Pakistan. "If you have a stake in the relationship, you want it to stay good. If the relationship runs into trouble, your business runs into trouble."

Raw Materials
For the men blasting the hills of Jhelum, the final destination of the rocks they pile onto trucks "makes no difference to us," says Mohammad Arif, a 32-year-old wearing broken rubber sandals. Since more gypsum started moving across the border in April, he says, "nothing has changed for the better." He still gets less than $2 for every ton he helps to load and still has no helmets. Mining-company owners in Pakistan may earn more than laborers, but the owner of a nearby operation points out that he gets paid the same price, about $6 per ton, whether he sells gypsum in Pakistan or to an exporter. Shaukat Hussain Malik, who owns a mining company in the town of Pind Dadan Khan in Jhelum, wonders why Pakistan is selling a raw material that can be turned into a value-added product in India. "This rock is for my country," he says. "What will this do for us?"

That sense of imbalance makes progress fragile. After three Pakistani and two Indian soldiers were reported killed in clashes near the Line of Control separating Pakistan and India-controlled Kashmir in January, hard-liners in both countries questioned whether they were really ready to move toward peace. Pakistan still has far more to gain from an enhanced relationship; of the $1.9 billion in bilateral trade last year, $1.5 billion came from India's exports to Pakistan. But every political crisis puts normalized trade a little further away. Meanwhile, protests over the targeted killings of Shi'ite Muslims and anticorruption protests in Islamabad have set the nation on edge. Opening up trade with India is one of the few things that most of Pakistan's political players can agree on. Pakistani Foreign Minister Hina Rabbani Khar said in a recent speech in New York City that her government was committed to keeping dialogue going despite the clashes with India and the angry rhetoric that followed. "What do we see today?" she asked. "We see warmongering, which puts the last 60 years actively back into our memories."

Closer to the border, political ambivalence is overshadowed by the enormous potential for profit. It wasn't until December that India and Pakistan formally agreed to ease visa restrictions for business travelers, creating an opportunity for the Pakistani middlemen in the border areas who come from established trading communities and already have relationships within India. In the gypsum trade, they purchase the rocks in bulk from mining companies and truck them to Attari-Wagah, where they are inspected, unloaded and purchased by traders on the Indian side. Global Traders, a Lahore-based company near the border, said revenue generated by buying gypsum from Pakistani mining companies and selling to traders in India had shot from about $400,000 in 2011 to more than $7 million by October. "And we could be doing more," says Muhammad Afzal, one of the company's traders. The problem, he says, is that "there's a very long line at the border."