The current improvement in India-Pakistan relations represents a major breakthrough. There is a palpable sense, both in India and in Pakistan, that the shape of this relationship will now change profoundly. A number of things about this round of talks inspire confidence. Unlike summits in the past, that were wrecked by a paradoxical combination of high expectation, sentimentalism and intransigence, the Islamabad declarations are founded on the bedrock of realism. Neither India nor Pakistan has claimed victory or called each other names. There is a better realization that progress on a number of fronts — trade, civil society relations, travel restrictions, sporting links — will be necessary to create the right climate for handling the tougher issues later on. Neither regime has given in to the temptation to grandstand to its domestic audience. And what is significant in Pakistan’s case is that the dialogue involves more protagonists than Pervez Musharraf.

It included significant members of parliament and the chief of Inter-Services Intelligence, suggesting that this outcome represents a wider consensus among Pakistan’s elites and is therefore likely to be more enduring. The incentives of all parties are finally aligning: Pakistan has realized that terrorism has extracted a bigger price from Pakistan than it has from India; and India has realized that engaging Pakistan rather than demonizing it will pay dividends. There is great international pressure to sort out this quagmire. If Musharraf acquires the ambition to transform Pakistan, and Atal Bihari Vajpayee the ambition to leave a statesmanlike legacy of peace, we can be confident that enduring progress will result.

So there is much to be optimistic about. But the road ahead is still likely to be very tough for both Pakistan and India. Let us assume that the dominant sentiment in civil society in Pakistan and even in substantial sections of the elite is in favour of better relations. Let us assume further that Pakistan wants to genuinely emancipate itself from its recent history and become a modern state, not tethered to an assortment of military groups, mercenaries, religious fundamentalists and permanently in the throes of an identity crisis.

This assumption is not outlandish: Pakistan recognizes the hole it has dug itself into. But will this realization be enough? There are two overwhelming difficulties. First, power in Pakistan is still institutionalized with those who have a stake in violence. Pakistan can become a stable modern state only if the domestic power and influence of the military, the ISI and the violent groups they have supported are considerably reduced. The raison d’être of these institutions has come from a rivalry with India; no rivalry, no power for them, no justification for the dominant role they play inside Pakistan.

It is not easy for any institution to liquidate its own long-term power. Even small groups, entrenched in key positions, can block progress if they see progress resulting in their own irrelevance. An enduring peace will require not just the diminution of anti-India sentiment, which will not be very difficult to achieve. What it will require is a major transformation of the way power is organized within Pakistan. Pakistani society may be ready for such a transformation. The question is whether those in power will give it up so easily.

The second long-term challenge comes from the fact that any regime is vulnerable to opposition just for the sake of it. Musharraf has enough detractors who would want to embarrass him. Even if Pakistan moves to a more open political system, grandstanding against caving in to India is not entirely ruled out. And the temptation not to appear weak to a domestic constituency, whether real or imagined, is a great inhibitor for any leader. This is why it is extremely important that any settlement or progress not be seen as a victory for India, because this will make regimes within Pakistan that go for a settlement vulnerable.

The current round of talks represents a victory of sorts for India: no mention was made of Kashmir, there is a commitment to clamp down on terrorism, Pakistan has agreed to India’s position that talks can proceed on issues other than Kashmir, and the vision of an open South Asian Association for Regional Cooperation economic zone is more India’s than Pakistan’s. But India was careful not to present it as such. But India has its task cut out for it in the following sense: as far as anyone can tell, Pakistan is not going to get a single major concession from India. What can India give Musharraf that allows him to say that the terms of any settlement contemplated were not tilted entirely in favour of India? The issue is not whether India’s claims are just, the issue is whether a settlement can be made politically credible inside Pakistan. And as far as one can tell, there is no clear answer to this question. And this uncertainty could still haunt talks in the future.

There are three related ways of getting around this dilemma. The first option is to go very slow. Stick to de-escalating tensions and a few easy issues, continue talking, but give Pakistan enough time to come to terms with its own institutional dilemmas, so that its leaders are secure enough not to have to worry about caving in. But this will require patience on both sides. The second option is also long term. Present any settlement not just as a bilateral settlement, but also as part of an attempt to alter the terms of discourse in the region as a whole, away from competitive nationalism. That is why the concept of SAARC is not peripheral to this enterprise.

If the ultimate goal of SAARC is to dissolve the procrustean boundaries, then all kinds of institutional possibilities open up. What would the terms of discourse be like if the region had a greater commitment to the freer movement of goods and people? It would render conflicts born of artificial closure of identity irrelevant. Most important, any settlement within a framework of SAARC allows the possibility of thinking, not in terms of what India and Pakistan can wrest from each other, but in terms of the directions in which the region as a whole should be heading. This is the framework under which all sides can claim victory.

But for SAARC to succeed, there will have to be a robust consensus, not just on the benefits of trade, but on a basic set of values. If SAARC is to be something akin to the European Union, an arrangement, not just for trade but also for the pacification of violence, there will have to be a common ideological commitment. No regional agreement can succeed without a consensus about the value of peace, human rights and a sense that no community should be threatened for simply being who they are. This last challenge is one that Sri Lanka, Bangladesh, Pakistan and in its own way, India, also face. The point of opening up relations has to be to evolve a commitment to these core values, the third prong in the strategy for long-term peace. But these values, despite the optimism generated over the last year or so, still remain fragile aspirations, and a lot of political hard work, cultural transformation and governmental diligence will have to go into making them possible.

As everyone knows, India-Pakistan relations are not just about India-Pakistan relations; they are premised upon a gamut of assumptions about national identities, about the proper role of governments and have often licensed a violation of human rights and constitutional values on both sides of the border. If we are serious about peace, we ought to be serious about transforming the political culture of south Asia. Vajpayee’s transition from master strategist to statesman, and Musharraf’s from army commander to peace-broker will depend upon this transformation. The good news notwithstanding, the jury is still out on this one.