by Palepu Ravi Shankar
In the heat of our election results a news item slipped by. “Pakistan test-fires ballistic missile Shaheen-II”. The thought again came to mind. Naya Pakistan- Na tel (no oil). Na Pani (no water). Na Paisa (no money). Na Izzat (no honour) … but…it carries out a missile test which it proclaims will cover India! It reflects Pakistan’s psychology, entrapped in an anti-India mental cage, perpetually conjuring nonexistent enemies and flailing at windmills. The country is going through a summer of extreme discontent which might end in a free fall. It will still carry out a missile test it can ill afford. There are many events and developments which clearly point out that Pakistan is in a state of delusion reality and turmoil which one has not seen before. Here are the ingredients.
Economy. Their economy is crashing. A column in Dawn mentions that while the present Pakistani government inherited the current situation, it was never seriously taken. It was always believed that the problem could be addressed through Charity, Lottery or Begging from friendly countries. As Pakistan seeks its 22nd IMF bailout, it is experiencing its highest inflation in 5 years and lowest growth in 9 years. Double digit inflation is around the corner. GDP growth is down to 3.29%. Debt liability has risen to 91.2%. That is a whopping 17.4% increase since Jun 18. External debt has grown by 11.1 %. IMF has stipulated that Pakistan must get letters of comfort from China, UAE and Saudi Arabia to roll over their loans to the tune of 8.6 bn USD. This is a precondition to ensure that the IMF loan is ring fenced and not used to service/pay off other loans. Only after that will they get anything from IMF. The dollar now fetches 153 Pakistani Rupees and State Bank of Pakistan interest rate is 12.25%. There is only Gloom and Doom.
Social Conditions. There is a widespread feeling that Pakistan as a nation and its individuals are living beyond their means. As per Dawn “Unemployment, cost of living and pauperization of the bulk of the population will increase, inequality will grow, crime rate could surge, the cost of law enforcement might mount higher, and discrimination against women and minority communities might become more intense. Nobody can deny that Pakistan’s system of governance is rotten to the core. If the resources now available are to be handled by this system, nothing short of an apocalypse is in store for this country. The country can no longer afford enrichment of the state and the members of the elite while a vast majority of the population becomes poorer and inequality becomes more and more debilitating. All these factors will only compound annually by the werewolf called “water scarcity” which is not being addressed at all. The next 3-5-year period is going to be very tough for the country. After that the werewolf will definitely take over.
The Third Front Trouble. The third front was not formed in Indian politics. In Pakistan it is fully formed and in trouble. The Baloch Liberation Army (BLA) attacked the only five-star hotel of Gwadar- the Pearl Continental. They followed it up with a video warning to China to keep off Baluchistan. By many standards it is a small but significant event, which proves that tactical actions often have strategic ramifications in such situations. This action comes after a series of attacks targeting the Chinese. Immediately the Chinese called on the COAS (not the PM!), who assured safety of CPEC. What’s more, Pakistan is going to dedicate a Division sized force for protection of Chinese interests and CPEC in Baluchistan. As I have been predicting, CPEC – the third front of Pakistan will give them more trouble than the Indian or Afghan fronts. The security costs for Pakistan are ramping up. Death by a thousand cuts is being dealt to the CPEC. Pakistan has riled enough people who will now merrily fund BLA to carry on. Consider this. Gwadar is the core project of CPEC. CPEC is the core project of BRI. If Gwadar goes bad, there is a lot at stake not only for Pakistan but China too. Reports indicate that the Chinese are not happy with the emerging situation in Pakistan. There is discussion that Chinese troops can get deployed for protection duties. Rust strains on the Iron Brothers! More trouble ahead.
Trade War Fallout. Trade war with the USA and Trumps tariffs will cost China 1% in its GDP. Huawei has been barred from the USA. Indications are that more Chinese firms like Hikvision could be kept out of the USA. Add the existing cooling down of the Chinese economy. The expectations are that Chinese growth will go down to around 5-5.5%. Combine this with security and economic problems in Pakistan. Also remember that the second phase of CPEC projects have not been concluded. The CPEC is going nowhere. Why CPEC? Even for BRI, the road is uphill. China might have to trim its ambitions. Overall, the way the trade war is going, bodes ill for Pakistan.
Oil Discovery Failure. Some time back Imran Khan tweeted that he was hopeful of discovery of huge oil reserves off the Karachi coast which would change the nation’s fortunes. The 18th attempt at finding oil was declared as a failure. The only fortunes that changed were of the firm, which was carrying out the exploration with a rig, which it had discarded and was lying idle. It was refurbished for this exploration! They charged 100 million USD for the operation which Pakistan could ill afford. A case of throwing more good money in a bad deal. Militarily it is called reinforcing failure.
Iran and Afghanistan. The tensions between Iran and US will have a fallout on Pakistan. The Saudi pledge for a 10 bn USD Petrochemical complex in Gwadar only complicates the Pak- Iran equation. Once the Saudis step into this project in Pakistan, a Saudi- Iranian proxy war in and around Gwadar will start. It will only destabilize CPEC and Baluchistan even more. An unstable Baluchistan is further bad news for China. On the other hand , the Afghan situation is heading nowhere but towards further chaos. It is in a stagnant sort of a phase. The western front is troublesome. That’s not great news for Pakistan. The only peaceful front seems to be the Indian one! Hand it to the Pakis, they do not see it!
Political Developments. There are already calls for removal of the PTI government. The Naya Pakistan promised by Imran Khan is worse than the purana Pakistan of Nawaz Sharif and Zardari. Some Pakistanis also feel that at present there is no alternative to Imran Khan’s PTI. There are also reports that the Army Chief is unhappy with the Government. Specially its handling of the FATF. His view is that FATF was handled better by Pervez Musharraf. At that time, even though Pakistan was under investigation, the militants could still loaf around freely. Of course, these reports do not factor in that the world has wised up to Pakistan’s tricks from then to now. All Pakistani bluffs are called. No one needs Pakistan anymore. In fact, the USA has stopped issuing Visas to even government officials on flimsy reasons. The days of wining and dining Packistanis seems to be over! The question is – Is Pakistan heading into familiar territory? Coup? New Government? The only thing that is sure in Pakistan is that the political and social outcomes in the next 3-5 years remain uncertain.
Military Paradox. Pakistan has spent 11.5 % on defense in 2018 and its defense budget is a high 4% of its GDP. It is still carrying out Missile tests! So far, The Deep State appeared as the only institution which was unaffected by all these events. However, for the first time probably, the National Security Committee which focuses on internal and external security situation discussed the country’s economy. It appears that the economic situation has upset the Pakistani geopolitical equilibrium. There would have been a lot to ponder. A nuclear power of 230 million people must now consider how to feed itself in this environment of receding lifelines. Pakistan might be living on borrowed time. That still does not affect their Army Chief. One report indicated that he is contemplating whether to grant an extension to himself or take up a lucrative appointment in Saudi Arabia as commander of Islamic Forces. A clear case of Nero Fiddling when Rome is burning.
Analysis. In my view, our new government must get off to a running start on the situation. This is the best opportunity to defang Pakistan. While this is a tall order, India must ensure that no part of the IMF loan goes into funding any part of Pakistani nuclear program. Diplomatically this must be a priority task. Additionally, if their fissile material plants could be brought under international control, it will be a bonus. I feel the time has come for many sane thinking countries to start this process. The opportunity is now open. The other line of action is that we must convey to the Pakistani people that India is not a threat to Pakistan. We do not covet any part of their land or assets. India cannot sustain the burden of 230 million NPAs! Pakistan’s greatest existential threat is itself. While that be so, we must continue to deal with our irrational neighbor who tests missiles even when bankrupt! We must also heed to what Pakistani opinion makers say – “In Pakistan the collapse of a government before completion of its term has led to conditions getting worse and non-democratic forces becoming more powerful”. This is on the cards. Our least cost factor is to strengthen our Armed Forces so that we can deal with this irrationality adequately.