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Sorting Out the State

by Khaled Ahmed
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Aamir Qureshi—AFP

P.M.-elect Imran Khan promised sweeping reforms on the campaign trail. Will he be able to deliver?

After the July 25 polls, in a national address declaring victory for his Pakistan Tehreek-e-Insaf (PTI) political party, Imran Khan dilated on some of the aspects of Pakistan’s security and foreign policy. Recognizing that they affected the country’s economic wellbeing, he was mellow about India and America—the latter a major power at the global stage and the former a big player at the regional level—as the country’s most critical foreign policy roadblocks. He said he would break from tradition and would not indulge in witch-hunting of his political opponents to slake the thirst for revenge in his party despite the strong language he had used against them throughout his electoral campaign. Originator of extreme discourse in Pakistan in recent years, Khan was conciliatory on coming to power.

The Pakistan Muslim League (Nawaz), after coming into power following the 2013 general elections, had managed to break the past decade’s low-growth pattern Pakistan’s economy had been stuck in. This was short-lived. The country succumbed to economic collapse once more for a variety of reasons, one of which was Khan’s prolonged campaign of dharna politics against the incumbent party. As he pledged punishment to the Sharif clan led by currently jailed former prime minister Nawaz Sharif for their corruption, Khan pointed to the good job of governance his government had done in Khyber-Pakhtunkhwa province as an example of what his government could accomplish. The PTI, which is set to form governments at the center, in Khyber-Pakhtunkhwa and potentially Punjab, had earlier issued a plan for how it would go about fulfilling that promise.

In May 2018, two months before the general elections, the PTI unveiled a 100-day program of action detailing their chief commitments to the nation. This document, slammed as ‘unrealistic’ by Khan’s opponents, points to how the PTI government would proceed to set things right in a Pakistan on the verge of bankruptcy.

Nasty nettle

If the 100-Day Program was an indication of how Prime Minister Khan will proceed, one can only marvel at the enormity of the challenges facing him in the six domains of action that would be undertaken: 1) transforming governance; 2) strengthening the federation; 3) revitalizing economic growth; 4) uplifting agriculture and conserving water; 5) revolutionizing social sector and 6) ensuring national security.

In a recent article, well-known security expert Shuja Nawaz had quoted Pakistani economist Rashid Amjad as saying: “A severe foreign exchange crisis threatens significantly the recent economic upturn when GDP growth had crept back up to near 6 percent annually. Pakistan faces a $25 billion financing deficit to meet its imports and repay external debts that are coming due in 2018. This is roughly 8 percent of the country’s GDP. Foreign exchange reserves have been declining and currently are only enough for two months of imports.”

Even if he abstains from opponent-bashing and focuses on the economy, Khan will find the going dangerously destabilizing. His pro-people efforts may actually upset the peace of the country. For instance, what if he were to sort out the two messed-up public sector undertakings his predecessors couldn’t do much about: the Pakistan Steel Mills and Pakistan International Airlines? Going after the black hole of the “circular debt” may actually endanger his government in the first 100 days of his rescue package. His economic adviser may advise staying away from such immediate “rescue” measures as rapid privatization and a steep hiking of the interest rate, but such moves would be vital if the 100-Day agenda is to get off the ground. The former cricketer will also have to cut subsidies, which means a hike in energy prices and leasing out WAPDA’s production, distribution and collection functions to the private sector. There is no alternative to stamping down on imports and increasing incentives for exports by eschewing the old habit of holding back on duty paybacks to exporters.

A currency dealer in Karachi counts U.S. banknotes. Pakistan’s next government faces growing fears of a balance of payments crisis. Asif Hassan—AFP

State sector sorrows

There is no doubt that PTI has a lot of support among Pakistani expatriates, but will this community be persuaded to invest their money back in Pakistan? One should note that more than half of the remittances come from the Middle East where Pakistanis mostly work in the labor sector and send back money to their deeply impoverished families. As for Pakistanis living in Europe and America, so far the trend has been to sell assets in Pakistan and take the proceeds abroad to “safe” economies through what is called money-laundering. An amnesty scheme, initiated by the PMLN government in its dying days, to bring back money stashed abroad might work if the PTI overcomes its political bias and allows it to proceed.

Any 100-Day policy may become hamstrung if the other “implied” policy of “accountability” is allowed to proceed in tandem. Also, if the “promised” reforms, such as the elimination of the private sector’s “expensive” schools to create “one nation,” are allowed to proceed, the result may not be as beneficial as many Pakistani politicians project. The education sector in Pakistan can’t be rescued because it is greatly influenced by the ideology of the state. Elimination of the sector where expensive “English-medium” schools are seen as hostile to the “idea of Pakistan” will drag the country further away from the transfer of technology Pakistan needs in its industrial sector.

Pakistan’s failure in indigenizing technology is another major hurdle, shown clearly in the Election Commission of Pakistan’s failure to collect the voting data effectively through newly deployed computer software. Its automobile industry has already failed in bringing about the transfer of technology implied in allowing foreign cars to be produced in Pakistan. Meanwhile, in neighboring India, not only is the mammoth five-yearly general election conducted through self-produced software, its car industry has completely indigenized the production of foreign cars. In Pakistan, unfortunately, ideology has intervened to divert education from its primary task of developing the mind of the youth.

PTI’s expert on the economy, Asad Umar, has conceded that Pakistan may have to approach the International Monetary Fund (IMF) for the foreign exchange it needs to avoid default on earlier loans and current payments. The IMF is regarded in Pakistan as a hostile institution run by its enemies intent on making the people of Pakistan suffer—a belief no doubt bolstered by U.S. Secretary of State Mike Pompeo demanding that no new loan be used to pay off loans to “all-weather friend” China. Unfortunately, Pakistan has reached the nadir of its resistance to the IMF because of its abysmal tax collection and a sharply declining export sector. Not to mention its wastrel state-owned organizations, which have repeatedly let it down.

Policy prison

It is in the realm of security and foreign policy that the PTI government will most find itself handicapped. These are the “textbook” roadblocks where Pakistani nationalism has been nurtured for decades. India has been permanently defined in the textbooks as the “regional enemy” and America projected by the media as the “global enemy” forcing 85 percent of Pakistanis to define America as such in Gallup polls even in the best of times—when Islamabad was pocketing generous handouts from Washington. This has resulted in the Foreign Office becoming the most non-innovative institution in the country, forcing former prime minister Nawaz Sharif, intent on breaking new ground, to try to have a go at it without a foreign minister.

Imran Khan’s post-polls address pledged “normalization” with both these “enemies” within the known formula: referring to India, he acknowledged any peace would have to include resolution to the ongoing Kashmir dispute, while with America, he said nothing will move without “equality.” Both innuendos are unpragmatic. In the Pak-Indo bilateral dialogue under the Simla Agreement, Kashmir could have been postponed and normalization allowed through free trade without giving up on Pakistan’s claims. Unfortunately, Kashmir was frontloaded and the talks were allowed to drag on and fizzle out amid mutual name-calling.

Today, however, the situation is a lot tougher. Opinions in India have hardened among all classes of people, and high-performing Chanakya-follower Narendra Modi has replaced the statesmanlike Atal Bihari Vajpayee. Seeking “equality” with America seems apparently redundant given Pakistan’s bedraggled economy and internal disorder. “Equality” actually points to a refusal to “do more” against militants based in Pakistan, despite the outlawed Taliban freely publishing their official journal Shariat in Karachi since 2012. Similarly, U.N.-designated terrorist organization Jaish-e-Muhammad publishes its Al-Kalam, seemingly for the benefit of Indian journalists who “inform” the Financial Action Task Force (FATF) currently adjudicating a “grey-listed” Pakistan’s case in Paris. Pakistan’s caretaker government helped “mainstream” some more groups, such as the Ahle Sunnat Wal Jamaat, which still bother such close friends as China and Saudi Arabia, who opted against voting in Islamabad’s favor at the FATF.

PMLN chief Shahbaz Sharif, left, speaks to media alongside other opposition leaders after attending an All-Parties Conference against alleged rigging. Aamir Qureshi—AFP

Sorrows of solitude

It is a good sign that Kabul moved quickly to establish a line of communication with Imran Khan after the PTI’s victory in the 2018 general elections. President Ashraf Ghani wants easing of tensions between the neighboring nations and Khan recommended open borders with Afghanistan during his victory speech. But the latter position will have to be squared with the state’s reaction to the presence of India in its neighboring state. While its certainly not unrealistic, especially in light of the ongoing Kulbushan Jadhav dispute at The Hague, to believe India is employing actors in Afghanistan to stage attacks in Pakistan, it would be disingenuous to ignore the very real threat that the Afghan Taliban and the Islamic State militant groups pose to Pakistan—without any support from New Delhi. This is a foreign policy blinder that Khan will have to overcome.

Pakistan also needs to “normalize” ties with Iran and complete the Iran-Pakistan gas pipeline, delays to which are proving prohibitively expensive for Islamabad under the contract signed by the Pakistan Peoples Party-led government in 2013. But in this case too India has stolen a march and sewn up important gas contracts with Iran despite growls from its ally, the United States. Pakistan’s geostrategic importance has also been watered down by the construction of a new Arabian Sea port in Chabahar by India, which could convince segments in Pakistan to place a negative gloss on relations with Iran. At the current juncture India tends to decide Pakistan’s thinking; but there is also the Saudi factor which impedes Pakistani thinking in breaking out of its regional isolation.

Khan will have to take another look at the regional-strategic importance of the China-Pakistan Economic Corridor (CPEC) and China’s advice to include India in it. It means, once again, normalization of relations with India through trade. He will also be required to take another look at Kabul’s request for a two-way trade corridor to India, which is what most sane foreign policy experts in Pakistan recommend too: let there be an east-west corridor in parallel with the north-south CPEC and fulfill Pakistan’s geostrategic destiny, forever changing its national security state status with dangerously revisionist thinking.

Khan’s most vociferous support has come from the expat community. While, as noted earlier, Pakistanis working in the Middle East are important in terms of their share in the remittances, it is the community in the U.S. and E.U. that is politically important. And that will require Pakistan to change its policy course from proud defiance to pragmatic caution. It is not only that Pakistan’s trade is overwhelmingly concentrated in the two regions; Pakistan must act with more flexibility and pragmatism in the face of changing global values and the decline of the pluralist nature of international affairs. When the big changes come in Europe and America, Pakistanis living there must not be exposed to discrimination.

In 2009, addressing a lawyers’ gathering at the Rawalpindi Bar Association, Khan belabored a certain section of society called liberals—“who fly in the face of national emotion and hurt the state of Pakistan”—and condemned their interpretation of the phenomenon of the Taliban while “obediently following the dictation of the United States.” He blamed them for causing the massacre at Lal Masjid in 2007 by pressuring Pervez Musharraf’s regime into taking brutal action against its “innocent” seminarians. He has been “pragmatic” in his dealings with the Taliban and their madrassas; he must be equally pragmatic in paying heed to the “double-crossing” liberals who continue their hapless advocacy of the rights of women and the minorities.

The PTI’s 100-day agenda pays lip service to women’s development, claiming it will launch women economic empowerment schemes nationwide; it is, however, silent on the rights of minorities. This is particularly worrying in light of Khan’s steadfast support for the controversial Khatm-e-Nabuwwat movement and his party’s post-election outreach to extremist, anti-Shia, leaders. Overcoming the not-unreasonable perception among minority communities that Khan will not fight for their rights will no doubt be another major challenge for the World Cup cricketer’s first 100 days.

Despite the numerous challenges facing it, the PTI’s first 100 days are largely expected to be a ‘honeymoon’ period; detractors will wait to see how the party delivers on its promises, as supporters await their implementation. But 100 days is not a very long time. Sooner rather than later the people of Pakistan will demand accounting for all that Khan has pledged. If he, and the PTI, can deliver as promised, a new, more vibrant Pakistan may well be in the offing.

From our Aug. 4 – 11, 2018 issue

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1 comment

Srinath August 7, 2018 - 10:39 pm

This write-up is as comprehensive and analytical as it gets. Imran’s battle will be won or lost in the short-term itself. What is paramount initially is the need to strike a balance between growth and welfare. It is here that the calibre of his team will be severely tested. More importantly, Imran is believed to be his own man ( and some even suspect him to be a megalomaniac). If history is not to be repeated , he should muster all his political skills and caution while dealing with the elephant in the room.

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