Decades of rivalry

India is confident pursuing its quest for a permanent seat in the United Nations Security Council. In recent years, it has enjoyed average economic growth of 8 percent and is considered a super power of the future.

Pakistan on the other hand is seen by many observers as a "failed state" that cannot be controlled and is a place of refuge for terrorists and extremists. This was highlighted quite clearly by the fact that al Qaeda head Osama bin Laden was found hiding there earlier this year.

Over a fifth of the world's population live in the two countries, which have fought three bitter wars against each other - two of them over the ongoing bone of contention Kashmir.

However, Lahore-based political scientist Sajjad Naseer points out that this is just one of many problems. "This debate over the Siachen glacier border did not exist before 1984, nor the Sir Creek maritime border dispute or the arguments over dam projects in India. It's no longer only about Kashmir but about much more."

The US wants to pull out of Afghanistan in 2014 and Naseer thinks this will also lead to new tension between India and Pakistan, which both want a say in how the region is rearranged.

"The most important thing that the two countries have in common is that there is great poverty on both sides. There can only be progress when there is peace," Naseer adds, saying that this would also be better for trade.

"We have to make sure that all efforts focus on improving bilateral relations - these should not depend on external events."

A major setback to Indo-Pakistani peace talks were the 2008 attacks on the financial hub of Mumbai, which were carried out by Pakistani terrorists.

Huge defense budgets

According to Indian Finance Minister Pranab Mukherjee, India’s defense expenditure for the coming financial year will be about 37 billion US dollars - 11 percent higher than last year. In this regard, Pakistan is also a big spender. It has the seventh biggest army in the world in terms of active soldiers.

Activists point out that the money spent on defense could be better used in education or infrastructure.

The rivalry between India and Pakistan is not only a hamper to progress in the two countries involved. Bangladesh, which split from Pakistan in 1971, Nepal, Bhutan and Sri Lanka also suffer from the strained relations, unable as they are to form efficient working bonds. This was the hope when the South Asian Association for Regional Cooperation was set up in 1985.

Inefficient regional cooperation

If political problems are not solved economic goals such as removing duties or establishing a free trade zone can also not be attained. A relaxation of visa norms would also help render the region more efficient.

"If the relations between India and Pakistan were better, then an association such as SAARC would be more efficient. It’s never about economic reasons but about political nuances," says Savita Pande from Jawaharlal Nehru University in New Delhi.

She adds that the situation is very confusing. "One day there is war, the next there is peace - all of a sudden we stop speaking to each other and then everything is OK again."

Moreover, the situation is also very sad because in cultural terms India and Pakistan are very close. Indian Bollywood films and soap operas are very popular in Pakistan, whereas Urdu poetry is very much appreciated in India.

Many politicians in both countries grew up in the other country - Indian Prime Minister Manmohan Singh for example and former Pakistani President Pervez Musharraf. This is why many continue to hope for a better future despite a dark past that has cost over a million lives.

Author: Priya Esselborn/Aamir Ansari /act

Editor: Ziphora Robina