Up From The Ashes

SRINIGAR, INDIA: Surging China is a dragon, roaring India a tiger. But what is Rising Kashmir? It's a sleek new daily newspaper, for one, launched here last Monday with all the pomp of the latest Apple gadget. Despite predictable jeers, the hopeful moniker might apply.

For 18 years this emerald-green Himalayan valley has been ravaged by fierce conflict between the Indian Army and independence-seeking insurgents, resulting in over 50,000 dead. But the uprising lost steam last year, with a third fewer violent incidents leading to 777 conflict-related deaths, a steep drop from the 4500 of six years prior. Indian authorities estimate only 450 insurgents remain, down from about 4000 a decade ago. And that number is dwindling as nearly every week a few haggard militants clamber down from mountain redoubts to surrender for lack of manpower and funding.

Meanwhile the siren song of progress has gained voice. Protest marches remain frequent, but these days locals cry for development as much as azaadi, or independence. Just last week hundreds of road transport employees demonstrated for increased wages and benefits and dozens of doctors marched for enhanced security and better-trained assistants. Both won a measure of success.

Kashmir's economic growth – 6 % and gaining speed – is slower than that of broader India but impressive for a disputed region. “The change is quite obvious and visible,” says Kashmir University Business Professor S. Fayaz Ahmad. High-profile national banks HDFC and ICICI recently opened Srinagar branches. Sleek mobile phone shops have popped up in the central business district. Construction of commercial complexes as well as overpasses and apartments has real estate prices soaring. A 500 sq. ft. space along increasingly posh Residency Road now sells for $250,000, about 80 times what it cost before the violence flared and double the rate of just a few years back. With its hopeful new flying-dove logo, the J&K (Jammu & Kashmir) Bank is the flagship of the local economy and one of India’s fastest growing financial institutions. Its $75m profit through three-fourths of fiscal 2008 points toward 35 % annual growth.

For students, the lure of lucre has overtaken the appeal of militancy. Prof. Ahmad points to a sudden keen interest in business courses, and with good reason. The first graduating class of KU’s popular new two-year Master's in Finance course recently passed out with 100 % high-level job placement, against 10 % for all graduates.

For aid and development organizations the region is safer and more responsive. NGO's Save the Children and Action Aid India ramped up their local efforts last year and the Asian Development Bank recently began a $250m Valley-wide infrastructure rehabilitation program.

For outsiders Kashmir is a paradise reborn. A 1970’s Bollywood film was not complete without a giddy duet set against a vertiginous Kashmiri backdrop. But Indian filmmakers shunned the Valley during the conflict – only two major productions visited from 1989 to 2003. Now Bollywood is returning, with five films shot locally since 2004 and more in the works. Perhaps consequently, Kashmir welcomed nearly 420,000 tourists in 2007, the highest total in nearly twenty years. In Kashmir, tourism is the tide that lifts all boats. Lodgings, restaurants and handicrafts all feel the boon, and a gorgeous early spring points toward a banner 2008.

One boat may be taking on water. The livelihoods of thousands of locals are under threat as India’s Geographical Indications Registry debates whether to award Kashmir sole ownership of the pashmina brand. Sheared from the downy coats of Himalayan mountain goats, the impossibly soft fabric originated in Kashmir and is now among the world’s most coveted. With increased global demand over the past decade -- annual sales now approach $125m – production has proliferated. Pashmina is made across the Line of Control in Pakistan-administered Kashmir, as well as in New Zealand, Nepal, and China, often with automated machines that undercut the time-consuming labor of Kashmir’s expert hand-weavers. Without a Kashmir-specific patent a significant segment of the local economy remains under threat.

Local spirits seem unbowed. Rising Kashmir, that new daily, flew off newsstands this week; several downtown hawkers were sold out by noon. Could be a passing fancy, like many signs of progress here. Could also be a phoenix taking wing.

-- sold to Economist in April 2008.