Bailing Out Pakistan from bankruptcy

Global Geopolitics Net Sites – Global News Blog
Tuesday, October 21, 2008

© Copyright 2008 Malladi Rama Rao. All rights reserved.

By M Rama Rao

New Delhi (Syndicate Features): As terrorism, a creature of its own creation, starts to devour parts of it, Pakistan finds itself in an economic meltdown that has prompted President Zardari to send an SOS for a $100 billion bail-out to ‘old friend’ United States and ‘all- weather friend’ China as also the three million- strong overseas Pakistanis. Inflation is running at 25 percent; foreign exchange reserves are not even enough to meet a 15-day oil import bill; a $3 bn debt repayment default appears imminent with the Standard & Poor’s placing Pakistan’s sovereign debt just a few notches above the default level.

Islamabad may get a reprieve from both the US and its Western allies and also China extending generous handouts. Not all of this help, from at least the US and EU, which are themselves in learning the limitations of capitalism the hard way, may come in the shape of cash flow. And Pakistan may have to accept the usual bitter pill from the global lenders – IMF and World Bank. It will feel relieved if debt repayments are deferred once again and some emergency aid commitments are promised.

China, with an overflowing foreign exchange reserve of $2 trillion, is in a position to help; well, that was the expectation of President Zardari when he visited Beijing last week. He was cold shouldered. Apparently, China shares the western perception that Pakistan is given to fiscal profligacy and is living beyond its means. It only promised a soft loan of $ 1 billion and made it clear that Pakistan must listen to IMF advisories, which mean less subsidies and more taxes.

Every now and then Pakistan appears on the international stage desperately crying for alms. During his long innings, Gen Musharraf and his ex- Citi Banker Prime Minister Shaukat Aziz had proclaimed that they had achieved an ‘economic miracle’, and heralded a high growth regime to match India’s growth story. These claims stand punctured by the high prices of essential commodities and power shortages that are bringing people on to the streets to demonstrate their exasperation from Peshawar to Lahore to Karachi and Quetta.

Pakistan received massive direct and indirect financial doses after 9/11 on the pretext that having done a U-turn on its policy of supporting Taliban it needed hard cash—apart from military hardware—to combat extremists at home who breed easily in poverty and backwardness. A natural disaster, a powerful earthquake that hit both parts of Kashmir, found Pakistan extending its arms for hard cash to rehabilitate the victims. Munificence came in plenty though it is a different matter that the rehabilitation work of the government was criticised widely for its inadequacies. Importantly, the critics had decided not to make an issue out of the fact that the so-called banned extremist organisations were openly active in the quake-hit areas mixing rehabilitation work with recruitment drives.

All this begs a vital question. How come Pakistan with its claim of being ‘one of the fastest growing economies in the world’ is in frequent need of monetary help when it is never short of funds either for its programmes to constantly upgrade its military machine with the latest warfare gadgets or to finance dubious operations against its eastern and western neighbours?

The generous doses of help from China, in cash as well as military equipment and even clandestine transfer of nuclear weapons technology, can be understood. Both China and Pakistan are joined by a common animosity towards India and they lay claim to Indian territories. Terrorism and religious extremisms may have hit parts of China but the country does not react to terrorism the way the rest of the world does.

So much so, it can be understood if China does not admit that it shares the general belief that Pakistan is the hub of global terrorism. But the US and Europe have hardly hidden their disappointment with Pakistan in waging, at best, a half-hearted war against terror while trying to exploit the terrorism factor to collect massive foreign aid.

A ‘bankrupt’ but nuclear-armed Pakistan will not be a welcome sight, for India or the rest of the world. More so its practice of freely milking the affluent countries in the name of fighting terrorism when it clearly has no intention of eliminating the terror infrastructure that it has created over the years as an adjunct of its (anti-India) foreign policy. When the pressure mounts on Pakistan—usually from the US—to show more seriousness and sincerity in the fight against terrorism it resorts to some cosmetic changes. Sometimes a few militants are captured and handed over to the US—against cash. At other times, stories are planted in the media that a reshuffle in the top ranks of the armed forces has been affected to remove officers suspected to have sympathies for the Taliban types from important posts.

The recent change of guard at the ISI headquarters is a case in point. The previous ISI boss—handpicked by the US ‘pet’ Gen (retd) Pervez Musharraf when the latter was president of the country—was said to be playing a double game in the hunt against the home grown and foreign Taliban militants. But it will be difficult to believe that the new boss will go after the same set of militants and extremists with a gusto as long as Pakistan continues to believe that jehadi terrorism must remain an important part of its foreign policy, which in a nutshell looks to ‘re-taking’ Afghanistan for ‘strategic depth’ and ‘bleeding’ India into surrender of Kashmir..

Those who argue that with the ‘free run’ terrorists are enjoying across the country, Pakistan has no option but to turn away from its old policy of nurturing and supporting the jehadi marauders. The proceedings of the ‘in camera’ of Parliament session held for a briefing by the ISI boss show such optimism is misplaced. Most members shied away from any implicit and categorical denunciation of Islamists and Jehadis.

In fact, as both The Dawn and The News International noted on October 19, only as few as 60 of the total 442 MPs were present in the special session. Even the benches of the ruling party remained empty, suggesting not only little interest but also a lack of discipline, given that the party leadership had several times urged everyone to attend. The high rate of absenteeism is rather odd since the session was called to evolve a national consensus on terrorism. The Islamist JUI speaking like the spokesperson of the Taliban demanded that military operations be called off in Swat and Fata, for instance.

The quality of discussion was anything but reassuring, according to reports in Pak media. The session was marked by an exchange between a senior PML-N member and the federal information minister on whether the testimony of two women was equal to one man. Such theological debates will not get Pakistan very far in the global war on terror, which President Zardari says is Pakistan’s own battle within its territory, and the economic meltdown, to name but a few challenges. .No surprise, therefore, bemoaned a leading Karachi daily editorially: “Pakistan politicians have rarely demonstrated the dedication and will required taking a country past crisis and to success”.

The mainstream Pakistan politicians have always supported the jehadi terrorists whom they call ‘freedom fighters’. Those among them who double as ‘real terrorists’ striking within Pakistan may be a cause for worry; maybe some ‘rogue’ elements in the army support them. But the overriding interest in Pakistan is in retaining the terrorist network to further its foreign policy objectives. Frankly, Pakistan is not in a hurry to give up the policy of ‘running with the hare and hunting with the hounds’. This policy worked before President Zardari. It will work during and after Zardari rule also. In fact, as long as powerful governments really matter on the global theatre are not keen on any accountability from the recipient of their charity. (Syndicate Features)

About the Author

Malladi Rama Rao is an analyst and writer on the Indian political scene and geo-political and security issues of South Asia. He directs a Weekly Feature Service in English, Syndicate Features, in colloboration with his wife Vaniram. He is also the India Editor of Asian Tribune.

SYNDICATE FEATURES

B-308, Puneet Apts. B-10, Vasundhara Enclave, Delhi; Ph -22617660 E-mail: syndicatefeatures@rediffmail.com