Kashmir’s Ambitions Derailed by Renewed Violence
Violence Threatens Investment Hopes in Kashmir
By: Javid Amin
In the tranquil yet tumultuous valley of Kashmir, the fragile security situation has long served as a deterrent for prospective investors and major corporations. Despite a promising improvement in security post-2019, recent violent incidents have starkly highlighted the tenuous nature of this newfound peace, casting a shadow over future investments.
On a recent Sunday afternoon, a grenade attack near the Tourist Reception Centre in Srinagar injured at least nine civilians. The area, known for its bustling flea market every Sunday, became a scene of chaos and fear. This attack was a grim reminder of the persistent threat of violence that looms over the region, potentially jeopardizing its economic prospects.
In quick succession, Srinagar witnessed a firefight between security forces and terrorists in the Khanyar area. This encounter resulted in the death of a Pakistan-based terrorist and injuries to four security personnel. Simultaneously, in Anantnag district, about 75 kilometers south of Srinagar, security forces neutralized two terrorists in a separate gunbattle. These incidents underscore the unpredictable and volatile security landscape of Kashmir.
Impact on Local Business and Tourism
The ripple effects of violence are acutely felt in the tourism sector, a vital component of Kashmir’s economy. Javid Amin, Managing Director of JKL Travels, lamented the significant downturn in business over the past few months. Factors like the Yatra pilgrimage and elections had already slowed tourism, but the recent surge in militant activity led to mass cancellations. “Most properties are on the verge of closure, and the transportation sector is virtually dead,” Amin remarked, highlighting the dire situation faced by the local tourism industry.
The Hopes for Industrial Growth
In an effort to boost the region’s economy, the Jammu and Kashmir government introduced a new industrial policy in 2021, encouraging investments from outside the Union Territory. By December 2023, proposals worth ₹84,544 crore across 40 industrial sectors had been received. The ambitious policy aimed to transform Kashmir into a hub of economic activity and industrial growth.
One of the most significant milestones was the foundation-laying ceremony of a mega mall in Sempora, Pampore, by LG Manoj Sinha in March 2023. Developed by Dubai-based real estate giant Emaar, this ₹250 crore investment marked the first Foreign Direct Investment (FDI) in the region. This initiative was seen as a beacon of hope for Kashmir’s economic revival.
The Need for Stability
Shahid Kamili, a prominent industrialist and president of the Federation Chamber of Industries, Kashmir, emphasized the critical role of peace and stability in attracting investors. “Peace is fundamental for promoting economic growth and attracting investors,” Kamili asserted, although he refrained from commenting on whether the recent incidents would deter future investments.
Political analyst Shahnawaz Hussain echoed these sentiments, stating that the presence of conflict inherently deters private investment. “In a conflict-scarred area, there’s little or no scope for the private sector to flourish,” Hussain explained, underscoring the challenging environment for economic development.
Political Concerns and Security Challenges
The firefight in Khanyar was the first of its kind since 2022, raising concerns about the sudden spike in violence following the installation of a representative government in Jammu and Kashmir. Former Chief Minister and National Conference leader Dr. Farooq Abdullah called for an investigation into the recent terror attacks, suggesting they might be attempts to undermine the new government led by Omar Abdullah. Senior CPI(M) leader Mohammed Yousuf Tarigami emphasized the importance of involving elected representatives in efforts to restore peace.
Conclusion: A Long Road Ahead
The path to economic prosperity in Kashmir is fraught with challenges. The recent violence serves as a stark reminder of the precarious security situation that continues to plague the region. While the government’s initiatives and the new industrial policy offer a glimmer of hope, sustained peace and stability are paramount for translating these ambitions into reality. For Kashmir to truly thrive, it must navigate the complexities of its political landscape and overcome the shadows of violence that threaten its economic future.
