Pakistan needs to focus on economic and political stabilisation now

Published on Aug 11, 2022 02:24 PM IST

The article has been authored by Tara Kartha, strategic security expert and formerly at the National Security Council Secretariat.

As reports indicate that Pakistani army Chief General Bajwa called a senior US official for help in speeding up disbursal of some $1.2. billion from the International Monetary Fund (IMF), and the Pakistani rupee is in full retreat, it is painfully clear that Pakistan is in a full-blown economic crisis.(Reuters File)
As reports indicate that Pakistani army Chief General Bajwa called a senior US official for help in speeding up disbursal of some $1.2. billion from the International Monetary Fund (IMF), and the Pakistani rupee is in full retreat, it is painfully clear that Pakistan is in a full-blown economic crisis.(Reuters File)
ByHindustan Times

As reports indicate that Pakistani army Chief General Bajwa called a senior US official for help in speeding up disbursal of some $1.2. billion from the International Monetary Fund (IMF), and the Pakistani rupee is in full retreat, it is painfully clear that Pakistan is in a full-blown economic crisis. That the targeting of Ayman Al Zawahari by the United States (US) was most likely to have been done with the full cooperation of the Pakistan, adds another aspect to the situation. After all it is playbook it has followed before, when it gave up Khalid Sheik Mohammad a key 9/11 conspirator, who was caught in Karachi.

But there was still a way out back then in 2003. This time, it’s much worse, with even Pakistani analysts only wondering if it will go the Sri Lanka way, or be able to apply the brakes earlier. Though the crisis has been exacerbated with the Ukraine war, divisive politics, a disastrous foreign policy, and the complete corrosion of institutions due to extended army direct and indirect rule have all had their role to play. The tragedy is that Pakistan is not really a banana republic at all. It has considerable resources, industrious people, and generous land. What it lacks is a sustained will to exploit all of this for its own benefit. Now with the country in deep dive, it could be just the time to turn things around. After all, in the innards of a crisis lies the gold mine of opportunity.

Analysts are generally in agreement as to the causes of this free fall. In foreign policy, that includes the decadal Afghan adventure, almost an addiction that Rawalpindi seems unable to shake off. Therefore the blowback continues with terrorist groups hitting Pakistani territory, even jihadi groups inside both countries continue to pose a threat to the region, including as far as Kazakhstan where riots were fuelled by Pakistan-based extremists. To change itself around, Islamabad has to see Afghanistan as economic, not strategic opportunity. Recently, the Afghanistan-Pakistan Joint Chamber for Commerce and Industry bemoaned the fact that trade has fallen to less than a billion, due not just banking difficulties, but chaotic rules and regulations. The potential is at least five times that figure. As international organisations return to Afghanistan, the process of reconstruction could bring big opportunities for Pakistan provided it is seen by ordinary Afghans as making amends for its arrogance and perfidy. And the country who can persuade it to change its methods is the US, the largest shareholder in the IMF. With Pakistan out of shut out of bond markets, it now has no other recourse than the financial body. That’s not blackmail. That’s a way to kick the habit.

Shifting to a position of goodwill means providing Afghanistan with the revenues it craves, particularly since the Ukraine war has led to a slump in global growth from 5.7% in 2021 to 2.9% in 2022— significantly lower than the anticipated 4.1 percent, which means that the world has little spare in aid. But Central Asian or Pakistan’s markets are simply not enough to provide a healthy turnover even for existing Afghan products like dry fruit. Islamabad has to be made understand that first, there is no other option than to open up trade routes with India, the largest market in the region; second, that Indian investment will reduce the present vortex of violence. In the simplest of terms, an Afghanistan on an upward path means translates directly to stability if Islamabad transits to what its Army Chief calls geo economics rather than geostrategy, and be “a bridge between civilisations and connecting conduit between the regional economies”. That one commercial convoy went across is great news, but this is no time for inching forward. Swift action leads to swift revenues, and infrastructure for what could be an exciting venture.

Then is the inevitable question of why an army chief needs to talk geopolitics at all. After all his constitutional boss had made the same argument when at his swearing in as Prime Minister (PM) and got nowhere; as did PMs Benazir Bhutto and Nawaz Sharif, with the one killed and the other forced to flee. No, army rule has been disastrous for Pakistan, eroding institutions that should have grown at least to the level of South Asian standards. Instead the bureaucracy, the law and parliament have all become puppets or cheer leaders of the army. As the IMF pushes and prods the Pakistani budget into shape, the armed forces resources have to shrink, together with the army itself. An Agniveer-like shift wouldn’t be a bad idea, but together with an actual move back to barracks and away from conniving politicians. The army might actually enjoy it.

Pakistani experts also point to the deleterious effects of economic outsourcing to China through the China-Pakistan Economic Corridor (CPEC), as a direct cause of the heavy debt burden, and a corrosive dependency. Beijing got its Gwadar and its northern route to oil markets, Pakistan its much-needed power projects, but at exorbitant rates. After all, as a Chinese professor said, CPEC is not a gift. It was up to Islamabad to set up favourable terms. It didn’t. In the present crisis, there is no choice but to rework this model, even as donor countries prepare to buy Pakistan’s resources. Policy makers need to tie those contracts to local development models, even while encouraging non-CPEC infrastructure and trade. Sensible policy makers will want to reduce dependence on a single state to multiple choices. That needs to be encouraged by those who know the details of those exorbitant Chinese loans.

And finally, there is the issue of Pakistan’s nuclear weapons. Reputed Pakistanis observe that every one of the three wars with India was started by Pakistan. That applies also to Kargil. In the 1980’s Pakistan used its nuclear shield to foster terrorism into India. Essentially, Pakistan’s nuclear weapons have allowed it free rein to interfere to both east and west, but given it no added security, given that India has twice retaliated in 2019 at Balakot and a surgical strike in 2016. Reducing its arsenal may actually making Pakistan more risk averse, and reducing annual outlay of about $2.5 bn a year, for one of the fastest growing arsenals in the world. With just one enemy, and a defence agreement with Beijing, an absolute minimum deterrence is possible. The international community may be more interested in an entirely de-nuclearised Pakistan given its history of nuclear proliferation, and the likelihood that it might sell anything to the highest bidder in its present fragile state. That is something Pakistanis need to debate, keeping in mind the reality that India has never grabbed or wanted Pakistani territory. A binding agreement on mutual respect for sovereignty and a verifiable end to terrorism could work. It’s also time Pakistan gave up its Kashmir obsession, and recognise a border as part of a larger package of stabilising measures when a reasonably stable government emerges. And finally, the Ukraine war illustrates that even a massive nuclear power can’t grab hostile territory, much less hold on to it, at any reasonable cost. As Delhi deals with its own severe economic difficulties, it might be the right time to rethink the fundamental rules of bilateral behaviour.

The article has been authored by Tara Kartha, strategic security expert and formerly at the National Security Council Secretariat.

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