Developments in POK and Gilgit Baltistan, Implications for India

By K.N. Pandita

Legal status

In 1939, Muslim Conference was rechristened as National Conference to accommodate non-Muslim segment into the political struggle and structure of the State. In July 1947, Muslim Conference had passed a resolution demanding the merger of the State with Pakistan – the new dominion about to emerge with the transfer of power. The resolution was passed in the house of Sardar Ibrahim Khan despite opposition by some members including Chowdhuri Ghulam Abbas. The part of the original State of Jammu and Kashmir illegally occupied by Pakistan was given the name of “Azad Jammu and Kashmir” meaning the liberated territory of J&K. Sardar Ibrahim Khan was installed its first President.

How much free (azaad) was the part of the territory given the name of “Azad Jammu and Kashmir is best described by a ruling of the High Court of AJK dated 23 February 1998? It said, “The area under Pakistani control is nothing more than a province of Pakistan and that it’s much acclaimed ‘autonomous status’ is only a myth and that its Interim Constitution as well as the position taken by the UN on Azad-Kashmir status does not make it an independent state”. Justice Manzoor Gilani ruled that ” the Articles 31-33 and 58 of the Azad-Kashmir Constitution-1974, surrendered Foreign, Communications, Defence and Trade powers to the federal government of Pakistan and that Azad-Kashmir government was no more ‘powerful’ than any other Pakistani provincial government”. This ruling came in response to a legal petition filed by Mirpur-based Amin Shipping Corporation which questioned the legitimacy of Foreign Imports Tax Duty imposed on them by Pakistan Customs Offices.

Pakistan divided the illegally occupied area into two parts (i) Azad Jammu and Kashmir occupying 13,528 sq km, and (ii) Northern Areas of Gilgit and Baltistan occupying an area of 72, 495 sq km. Following the inception of a provisional government, a nominal Prime Minister and Legislative Assembly were thrust upon AJK. This ad hoc status of the “AJK government” continued while the forces of India and Pakistan remained engaged in fighting for the ownership of the state. Though the newly formed temporary government in Muzaffarabad had no office, no chair and no typewriter, yet, at the behest of Pakistan it raised a force in Poonch and Mirpur regions to supplement the Pakistani regulars engaged in fighting with the Indian army on various fronts. Under the machinations of the Anglo-American bloc, a ceasefire was brought about on January 1, 1949. On July 29, 1949, India and Pakistan signed an agreement in Karachi defining the ceasefire line in Jammu and Kashmir. Sadly, Pakistan construed it as indirect recognition by India of the hitherto fake State of AJK as a party to the dispute.

Prior to the signing of Karachi Agreement in July 1949 between India and Pakistan, a tripartite agreement was signed between Pakistan government, AJK and the Muslim Conference on 28 April 1949 now known as Karachi Agreement. Nationalists of AJK and Northern Areas (Gilgit-Baltistan), besides many legal luminaries and political analysts, have severely criticised the Karachi Agreement as illegal and void of political propriety. In particular, they have challenged its validity in regard to the dispensation of Gilgit and Baltistan when there was no representative of these areas among the signatories to the Agreement. Distinguished political analyst Debidatta wrote, “The Karachi Agreement was a big landmark in that and it sought to institutionalize the subservience of AJK to Pakistan.” No fewer than 12 crucial portfolios like defence, foreign policy, negotiations with the UNCIP etc. and above all the coordination of all affairs related to Gilgit and Baltistan were handed over to Pakistan. The nationalist political parties of Gilgit and Baltistan have not only challenged but also rejected the Karachi Agreement on the basis that neither the Muslim Conference existed in those areas at that point of time nor had any popular representative of the people of the region taken part in Karachi deliberations or become a signatory to the Agreement.

The question is what is the political status of a region whose major and crucial administrative units are handed over to an adjoining state? Truly, it is nothing less than a fake state in which people have no defined rights or duties because according to the Article 7 (2) of the Constitution of AJK, the President and the Prime Minister have to take an oath of loyalty “to the cause of accession of the State of Jammu and Kashmir to Pakistan”. ¬¬¬

In 1960, General Ayub Khan, President of Pakistan introduced a new system of the election through the “votes of basic democrats “. “Azad Jammu and Kashmir” (AJK), including Gilgit-Baltistan was also brought within the ambit of this dispensation. This meant that the President of AJK was to be elected through the votes of basic democrats because that practice was true for the rest of Pakistan. Another body is known as ‘ AJK State Council’ was also introduced and supposed to be elected by the basic democrats. Another 12 members were elected by the refugees of Jammu and Kashmir State settled outside AJK in Pakistan.

In 1964, this system was replaced by the AJK Government Act, 1964. Under this Act, the provision for the State Council was amended; eight of the State Councillors were to be elected by the basic democrats. In 1965, the provision was made for the nomination of two members by the President from amongst the refugees settled in Pakistan. The Chairman of the Council was to be nominated by the Chief Advisor (usually a representative of the central government) under the Act, from amongst the Council members. The Chairman had to act as the ex-officio President of AJK. Further, according to the Azad Jammu and Kashmir Government Act, 1968, eight members were elected and four members were to be nominated by the Chief Advisor from amongst the refugees settled in Pakistan to the State Council. However, the Chairman of the Council, elected by the Councillors, was also the ex-officio President. In 1969, a caretaker government was inducted. In the elections to the above positions, limited people from AJK had the right to franchise. In 1970, major constitutional changes were introduced in AJK. The system of the adult franchise was adopted through the Azad Jammu and Kashmir Act, 1970. For the first time, the Legislative Assembly, as well as President of AJK, were elected on the basis of the adult franchise by the people of AJK, and the refugees of the State of Jammu and Kashmir settled in Pakistan. The Assembly consisted of 24 elected members and one co-opted female member.

The presidential system worked for about four years after which in 1974, the parliamentary system was introduced in AJK under the AJK Interim Constitution Act, 1974. This interim constitution was brought jointly by the Law and Kashmir Affairs ministries of Pakistan during the regime of Z.A. Bhutto. The people of PoK had no say in it whatsoever. The Interim Constitution has undergone about 11 amendments so far. The Assembly now consists of 41 elected Members and eight co-opted members (five females, one member from Ulema-e-din or mashaikh, one from amongst AJK technocrats and other professionals, and one from amongst Jammu and Kashmir nationals (state subjects) residing abroad.

Since 1975, the Prime Minister has been elected by the members of the Legislative Assembly. He is the Chief Executive of the state, whereas the President is the constitutional head. Besides, the Executive and the Legislature, a Judiciary was also introduced through this Act. The Supreme Court, High Court and subordinate courts are now functional, in addition to many other courts established under various laws.

All of these changes in PoK administrative and constitutional structures were made through executive decrees by the Pakistan government and were not based on recommendations or representations made by any representative body of the people. Their prime objective was to introduce a pattern of administration in the AJK which would be similar to the one prevailing in Pakistan with the exception that AJK would have a Council with Prime Minister of Pakistan as the Chairman, six elected members, three ex-officio members including President AJK (Vice-Chairman of the Council), the Prime Minister of AJK or his nominee, Federal Minister for Kashmir Affairs, and five Members to be nominated by the Prime Minister of Pakistan from amongst the Federal Ministers and Members of the Parliament. The Council remains a constitutional body and has extensive powers under the third schedule of the 1974 Act.

In sum, the AJK government enjoys only nominal powers and it functions under the strict control of the Pakistani state. The Ministry of Kashmir and Northern Areas (now renamed as Gilgit-Baltistan) is the de facto body which controls by remote, the affairs in PoK administrative and constitutional structures were made through executive decrees by the Pakistan government. These were not based on any recommendations or representations made by any representative body of the people. The AJK government enjoys only nominal powers and it functions under the strict control of the Pakistani state. Writing under the caption ‘The AJK and GB fiasco’, in the Daily Times of Pakistan, Manzoor Gilani says,” However, it (AJK and GB) was still practically governed by Pakistan under different legal instruments, beginning with the Karachi agreement of April 1949.GB continued to be vexed under the Frontier Crimes Regulations (FCR), while AJK got its first ever dignified constitution in 1970, complete with all legislative and executive powers other than defence, foreign affairs, communication and the responsibilities of the UN Commission on India and Pakistan. Other federal powers were exercised by the government of Pakistan without any formal legal arrangement. GB also received a ‘symbolic’ legal framework in 1994.”

How much free is AJK?

The original draft report of Baroness Nicholson on Kashmir titled ‘Present situation and future prospects’ was finally passed by the European Parliament on May 27, 2007. This report gives deep insight into how Pakistan has built a façade of so-called “Free” (Azaad) AJK behind which it treats the region nothing better than a colony. Prestigious Pakistani newspaper Dawn of 30 January 2007 reported with Muzaffarabad dateline (29 Jan) that “the police baton charged a protest march of National Students Federation organisation to break up and prevent it from approaching the UN military observers’ mission here. They were carrying placards saying Emma Nicholson’s report was nothing but the truth. They were demanding Pakistan to vacate Kashmir.”

Governments are made or broken in POK at the behest of the rulers in Islamabad. During Ayub Khan’s regime, late K. Khurshid, the President of PoK was made to resign by a Pakistani police officer and later jailed in Palandhri and Dalai Camp in Muzaffarabad. At one time he happened to be the private secretary of M.A. Jinnah. In Z.A. Bhutto‘s regime. Another elected President, Sardar Qayyum Khan was removed by a DSP of Federal Security Forces in Muzaffarabad holding him by his beard. During Gen. Zia’s regime, Brig. Hayat Khan was imposed as President on PoK for seven years. After Zia’s disappearance in an air crash, PPP came to power in Islamabad and installed a PPP-led regime in PoK. However, when PPP government was out, Abbasi, the then Minister for Kashmir Affairs told newsmen, “I can send a policeman from Pakistan to arrest PoK Prime Minister Rathore.” He precisely did what he said, and Rathore was brought to Islamabad in a chopper and made to sign a letter of resignation.

When Nawaz Sharif came to power Sardar Qayyum became the Prime Minister of PoK. Sharif’s statement during his first stint is on record. He said, “We shall give 12 mohajir seats in Pakistan to Sardar Qayyum as a gift.” Precisely he did it. Qayyum’s son Atiq belongs to Dherkot (Ghaziabad) in PoK. But he was elected on a Kashmiri mohajir seat in Karachi. Thanks to the dead bodies of Kashmiris dropping down in the valley owing to which Benazir did not oust Qayyum. However, elections brought in PPP regime again. Everybody including Nawaz Sharif called it ’selection’ not ‘election’.

No elections in PoK can be fought without taking an oath of allegiance to Kashmir’s accession to Pakistan. In preceding elections, nationalists formed a National Alliance to fight elections jointly. All of their nomination applications were rejected for not filling accession to Pakistan oath document. The Constitution of Azad Kashmir specifically prohibits activities that may be prejudicial to the state’s accession to Pakistan, and as such regularly suppress demonstrations against the government. Are the people of that land free or enslaved?

No Minister, Prime Minister or President in PoK can assume office unless he takes an oath of Kashmir’s accession to Pakistan. Nobody in PoK can be appointed on any government job unless .he/she expresses loyalty to Kashmir’s accession to Pakistan. Only enslaved people make such pledges not the free and independent people.

All high ranking officers like Chief Secretary, Finance Secretary, IGP etc. for PoK come from Islamabad. These senior functionaries have the interests of Pakistan uppermost in their mind and not of the people over whom they rule. During Z.A. Bhutto’s regime, Azad Kashmir Rifles militia was disbanded by Pakistan government and integrated into Pakistan army only to lose its identity. This was to make PoK totally dependent on Pakistan for security and maintenance of law and order. Does it speak about the freedom and independence of PoK?

Islamabad regimes do not pay any royalty to PoK for Mangla Dam built on PoK land and with water from PoK Rivers. PoK neither gets its share of foreign exchange earnings nor the share towards tax realizations and sales tax. A region and people providing energy resource to others without the right to ask for its cost and allowing its own people to remain deprived cannot be called free. As against this, NWFP (now Khyber-Pakhtunkhwa or KP) receives full royalty on Tarbela Dam. Is it not blatant discrimination, and are not people of PoK justified in protesting against discrimination?

For the last 50 years, people in PoK have been held hostage to so-called “freedom of Kashmir”. People finding no avenues of subsistence in their land immigrate to Gulf countries, Middle East, European countries and other lands to become what metaphorically is called ‘hewers of wood and drawers of water’. During the past 28 years of turmoil in the valley very few people have immigrated to foreign countries but in PoK, a large number of people have emigrated in search of livelihood.

Thousands of PoK youth do menial jobs in Rawalpindi, Islamabad, and Lahore etc. More often than not these Pakistani immigrants pose as Indians because people in foreign countries are wary of the name Pakistan.

POK youth working hard in foreign countries remit billions in foreign exchange to Pakistan. In 1977, the amount was computed to seven thousand million rupees. In 1988 the Pakistan Finance Minister said in a statement that PoK deposits in Pakistani banks were around 24 hundred thousand million rupees. Despite these huge remittances, there are no industries in PoK to provide employment to the youth. With these enormous foreign remittances industries in Karachi, Lahore, Hasanabad and Faisalabad are flourishing in full bloom.

Gilgit and Baltistan

The northern part of the Dogra kingdom was called Gilgit and Baltistan. There are other smaller principalities in the region of which some were the vassals of the ruler of J&K and some were semi-independent under Dogra suzerainty. The region emerged of much importance during the “Great Game” in Central Asian region and the warm waters of the Indian Ocean in the empires of the day namely Great Britain and Czarist Russia were competing with each other for dominance of the Asian region and the warm waters of the Indian Ocean in around the middle of the 19th century. With the replacement of Russian monarchy by the Soviet dispensation, the rivalry between the two powers intensified. Apprehensive that the Soviets would make inroads into the vulnerable northern tip of their Indian Empire, the British decided to create a buffer between the southern border of the Soviet Union and the Northern areas of their Indian Empire. In 1935, the British Indian Empire brought pressure on the Maharaja of J&K and carved Gilgit Agency from the northern part of Gilgit leaving the rest of the Wazarat to the control of the State government. They established the Gilgit Commiserate as the administrative unit and also raised Gilgit Scouts for the defence and security of the Agency. It was the soldiers and officers of the Gilgit Scouts who revolted against the Governor appointed by the Maharaja of J&K. Brigadier Ghansara Singh was besieged and taken a prisoner at the beginning of November, and Pakistani flag was raised on the Governor’s House by one Babara Khan, a Subedar of Kashmir Scouts with full support and complicity of Major Brown, a British officer then commanding the Gilgit Scouts. This is briefly the story of how Gilgit and Baltistan were illegally annexed by Pakistan in November 1947 days after they had launched the tribal attack on Kashmir.

The Karachi Agreement between Pakistan Government, AJK and the Muslim Conference was signed on 28 April 1949 at Karachi. The Agreement stated that” all affairs of the Gilgit and Ladakh areas were to be under the control of Pakistan through their political agent in Gilgit. The Political Agent enjoyed full powers. At that time Baltistan happened to be a part of Ladakh wazarat that is why the term Ladakh and Baltistan was used in the A Nationalists in PoK and GB never accepted the Karachi Agreement as valid for some strong reasons. It has not been signed by any genuine representative from Gilgit Baltistan. Secondly, the region belonged to the ruler of J&K and he alone had the legal authority to decide its fate. The Muslim Conference represented only AJK and not GB because this party had not been established in GB till then. India had challenged the Agreement saying that it violated the spirit of the ceasefire concluded between the two countries.

Ever since it’s illegal occupation Gilgit Baltistan region has been ruled directly by Islamabad. Yet its constitutional position has remained unclear. Article 1, sub (2) of Pakistan Constitution 1973 defines the territorial limits of Pakistan. It excludes GB and vaguely mentions “ such statutes and territories as are or may be included in Pakistan, whether by accession or otherwise”. The term “otherwise” simply means by force and illegally, and that is precisely what Pakistan did.

In 1952, the joint secretary in the Ministry of Kashmir Affairs was made ex-officio Resident of Northern Areas. In 1967, a separate post of Resident based in Gilgit was created with all administrative, revenue and judicial powers. Federal Crime Regulations, introduced by the British Indian rulers for the frontier province were introduced in Northern Areas. Under these Regulations, collective fines were levied on the people and collective punishment was imposed. Ruled by FCR, no basic and fundamental rights were allowed to the people of the area. No political parties and no political activity was allowed. All decisions were taken first in Karachi and then in Islamabad and the views of the people over who Pakistan ruled were never sought. On March 2, 1963, Pakistan signed an agreement with China that gave away 5180 sq km of Hunza to China despite the strong opposition of the Mir of Hunza. This agreement changed the alignment between Chinese Xinjiang and Gilgit Baltistan region of Jammu and Kashmir. The Northern Areas Advisory Council constituted by Gen Yahya Khan in 1969 had purely advisory function and was headed by the Secretary of the Ministry of Kashmir Affairs. After the Shimla Agreement, Islamabad pursues further integration of the region with Pakistan. “It abolished princely states, annexed Chitral and merged it with NWFP and started administering the region with ad-hoc ordinances,” writes Alok Bansal. In 1972, AJK Assembly passed a resolution asking Pakistan to return Northern Areas which it had taken temporarily as a result of Karachi Agreement. Islamabad has not responded to it so far. Instead, Pakistan brought in some administrative reforms with the clear objective of tightening the grip over the area with conceding rights to the people of Gilgit-Baltistan. Among other things Northern Areas Advisory Council was converted into Northern Areas Council with 14 directly elected members but presided over by the Commissioner with neither legislative nor executive powers.

In April 1982, President Zia-ul-Haq of Pakistan asserted that Gilgit, Hunza and Skardu were outside the Kashmir dispute and integral parts of Pakistan, Four major political parties with influence in the region had joined the Movement for Restoration of Democracy (MRD) sent a jointly signed letter to Zia on May 4, 1982 asserting that they belonged to the State of Jammu and Kashmir and like the rest of the constituents of the State, their final status was yet to be decided. Conversion of Northern Areas Council into Northern Areas Legislative Council in 1999, was an only eyewash as till 2004 it failed to legislate on any subject.

Unrest and demonstrations

The brief history of the legalities involved in Pakistan’s handling of Gilgit and Baltistan clearly show that not one but a plethora of reasons were there leading to wave after wave of discontent among the people of the region against the highhandedness and denial of rights by the Pakistani authorities. There has been a systematic denial of civil and political rights. Pakistani authorities have been behaving in a discriminatory manner that has triggered sectarian clashes very frequently. Political parties have been voicing anger and resentment of denial of rights and development. People suspect that Pakistan in collusion with China wants to loot the natural resources of the region leaving the people deprived and destitute. Complaints of bringing about demographic change to the benefit of the sectarian elements have become rampant. The killing of a prominent Shia leader Agha Ziauddin has triggered great sectarian hatred and has been the cause of many sectarian clashes. In short absence/denial of political rights, sectarian and ethnic marginalization, lack of representative character of administration, economic exploitation, cultural and linguistic discrimination and spreading of tenterhooks by rabid sectarian terrorists in the region are among the most prominent reasons of dissatisfaction among the people leading to recurring protests, clashes, shutdowns and acrimonious interlocution. Taliban and rabid Sunni terrorist groups have been holding the entire civil society at ransom. A number of Islamist militant groups operate in this area including Al-Qaeda, with tacit permission from Pakistan’s intelligence. According to the Human Rights Commission of Pakistan, Pakistan’s Interservice intelligence operates in Pakistan-administered Kashmir and is involved in extensive surveillance, arbitrary arrests, torture, and murder. Generally, this is done with impunity and perpetrators go unpunished. The 2008 report by the United Nations High Commissioner for Refugees determined that PoK was ‘Not free’. According to Shaukat Ali, chairman of the International Kashmir Alliance, “On one hand Pakistan claims to be the champion of the right of self-determination of the Kashmiri people, but she has denied the same rights under its controlled parts of Kashmir and Gilgit-Baltistan”.

The main demand of the people of Gilgit-Baltistan is a constitutional status to the region as a fifth province of Pakistan. However, Pakistan claims that Gilgit-Baltistan cannot be given constitutional status due to Pakistan’s commitment to the 1948 UN resolution.

In 2007, International Crisis Group (ICG) stated that “Almost six decades after Pakistan’s independence, the constitutional status of the Federally Administered Northern Areas (Gilgit and Baltistan), once part of the former princely state of Jammu and Kashmir and now under Pakistani control, remains undetermined, with political autonomy a distant dream. The region’s inhabitants are embittered by Islamabad’s unwillingness to devolve powers in real terms to its elected representatives, and a nationalist movement, which seeks independence, is gaining ground. The rise of sectarian extremism is an alarming consequence of this denial of basic political rights”.

A two-day conference on Gilgit-Baltistan was held on 8–9 April 2008 at the European Parliament in Brussels under the auspices of the International Kashmir Alliance. Several members of the European Parliament expressed concern over the human rights violation in Gilgit-Baltistan and urged the government of Pakistan to establish democratic institutions and rule of law in the area. In 2009, the Pakistan government implemented an autonomy package for Gilgit-Baltistan which entails rights similar to those of Pakistan’s other provinces. Gilgit-Baltistan thus gains province-like status without actually being conferred such a status constitutionally. But there has been criticism and opposition to this move in Pakistan, India, and Pakistan occupied Kashmir.

The move has been dubbed as an eyewash to hide the real mechanics of power, which allegedly are under the direct control of the Pakistani federal government. The package was opposed by Pakistani Kashmiri politicians who claimed that the integration of Gilgit-Baltistan into Pakistan would undermine their case for the independence of Kashmir from India. 300 activists from Kashmiri groups protested during the first Gilgit-Baltistan legislative assembly elections, with some carrying banners reading “Pakistan’s expansionist designs in Gilgit-Baltistan are unacceptable” In December 2009, activists of nationalist Kashmiri groups staged a protest in Muzaffarabad to condemn the alleged rigging of elections and killing of an 18-year-old student.

On July 8, 2018, Zee news channel reported that huge anti-Pakistan protests have broken out in at least two places in Pakistan-occupied Kashmir (PoK) over a rise in the activities of Islamabad-backed terrorist outfits in the region. The protestors have accused Pakistan’s military-intelligence establishment of sabotaging their struggle for Kashmiri independence. The local anger comes after months of increased terrorist infiltration activity along the LoC with the guidance and assistance of the Pakistani military.

Other factors driving the protests include poor infrastructure, the failure to hold elections and the lack of governance and funds, reported news agency. “We have loudly said that the non-state actors, who are being smuggled to Jammu and Kashmir by Pakistan’s secret agencies, have sabotaged our struggle. The world is now seeing it as an act of terrorism. Nobody is listening to us” said Sardar Jagir Khan, a senior leader of the Jammu and Kashmir Liberation Front (JKLF). He added, “When the international community put pressure on Pakistan to eliminate Lashkar-e-Taiba, they activated Jaish-e-Mohammed led by Maulana Masood Azhar. Now, JeM is getting promoted in PoK,” Khan added.

It will be noted that the Pakistani plan of granting GB the status of the 5th province of Pakistan has been stoutly opposed not only by the people of that region but by large numbers in PoK as well. They call it destroying the identity of the people and the region. The country’s leading newspapers The Express Tribune, Dawn and The News have reported that the government of “Azad Jammu and Kashmir” has strongly opposed the provincial status for the Gilgit-Baltistan region, saying that it will dent the “Kashmir cause”. Most of the nationalist political groups or parties in PoK and GB are protesting against converting their land into a terrorist den from where trained terrorists are pushed into the Indian part of Kashmir for subversion and unleashing of destruction. They demand that these activities should be stopped forthwith.

Implications for India

Cognizable presence of China in Gilgit Baltistan, the area touching on our border in the strategic north, is a real threat to our security and territorial integrity. It is so particularly when the Chinese have free accesses to the area under the cover of Karakorum Highway, CPEC, development of infrastructures, laying of the rail line and developing hydroelectric power generating projects etc. There are alarming reports of China installing long-range ballistic missiles including the ICBMs kept hidden in the tunnels dug for Karakorum Highway. Not only the main Indian cities but even our naval build-up in the Indian Ocean comes within the striking range of these missiles. Security threat escalates with the proposed plans of Beijing streamlining road connectivity, CPEC and railway line, not only to boost the trade and commerce but also to manage to stockpile military equipment as well. China has already invested massively in the rich copper ore exploration and exploitation in Afghanistan. She has sounded Afghan authorities that she is interested in a military base in the Wakhan corridor. It was also reported in sections of media that Sino-Pak authorities have had preliminary discussions on the subject of China looking for a military base in the Waziristan area of Pakistan.

With massive Chinese presence in Gilgit Baltistan, the area emerges as a very sensitive watchtower for the Chinese to overlook the vast tracts of the Himalayan watershed. Here the borders touch with those of Xinjiang, Tibet, Tajikistan, Afghanistan, Pakistan and India. China has invited the countries in the region including India to become participants in its CPEC project. Interestingly, Russia has responded favourably to the invitation and Russia’s relations with Pakistan has remained frozen for a long time, are now undergoing a sea change. Russia’s acceptance of CPEC will be a diplomatic setback for India because Russia has always supported India’s position that the northern areas are part of Indian administered J&K.

With no end in sight to an amicable solution of Kashmir dispute between India and Pakistan for last seven decades and with China that has made its presence felt in a big way in Gilgit Baltistan, the apprehension of covert destabilisation of a peaceful border In Kashmir by China in the east and Pakistan in the west cannot be ruled out. The two enemies sitting on our borders can enter into a vicious conspiracy of fomenting serious trouble in Kashmir. Two years ago, Chinese literature pertaining to guerrilla warfare and other hostile activities was seized from the possession of a militant captured in Baramulla. China’s claim of adopting a neutral stance on Kashmir is belied firstly by its policy of issuing a visa to Kashmiri citizens on a separate piece of paper and not on their regular passports. Secondly, China twice opposed the proposition of designating Azhar Mas’ud of Jaish-e-Muhammad, a Pakistan-based terrorist organization, as a terrorist by the Security Council who was involved in Mumbai carnage.

Protest rallies

India should draw mileage from the recurring protests and anti-Pak demonstrations in PoK as well as in Gilgit Baltistan. Highlighting these demonstrations and the resentment of the people of those regions will ultimately have the desired impact on the alienated people off Kashmir. The important point is to know how Pakistani security forces are handling the protesters particularly when they turn violent and the resultant street clashes. Pakistan cannot escape the blame of violating the right to survival and fright to religious and other freedoms of the people in the region of Gilgit and Baltistan.

India can capitalize on it by giving media hype to these demonstrations, strikes, clashes and imposition of Section 144 or other stringent measures taken by the Pakistani security forces. How can Kashmir separatists condone the charges of violation of human rights by Pakistani security forces? These public demonstrations are also a lesson for the Indian authorities not to fall prey to such gimmicks in Kashmir.

I have heard people saying that in case Pakistan declares G-B as the fifth province, India should retaliate by taking over Ladakh as the Union Territory and also reorganizing the full- size identity of the Jammu province. I would like to warn such day-dreamers that a big country and a big nation like India does not play retaliatory and revengeful politics. Our policies are essentially based on justice and natural law. India’s strength lies in uniting her people not dividing them.

Nevertheless, we have to be prepared to face some tough situations. As the country moves along the path of economic development via the politics of democracy, we will find among our populace the accelerated urge for recognition of identities. Ours is a long-suppressed nation and we need the great capacity of tolerance and patience to pull our people out of the morass of social disabilities and economic disparities.

It is also very important for our policy planners, think tanks and the army top brass to understand that Pakistan, a rogue state, cannot either eradicate violence and terror from the minds of her state-sponsored terrorists just because these people have been fully brainwashed and then indoctrinated with hate-India ideology in thousands of madrassahs or Islamic seminaries run by hardliner Jamat-i-Islami missionaries. And the second is that these terrorists and jihadis will continue to receive full moral and logistical support from the civil society of Pakistan as long as their bullets are directed towards India. Security forces will have to be made fully adapted to the ground situation. Though one would wish that political leadership of Kashmir Valley wriggle out of fear syndrome and interacts with people more briskly keeping in mind that peace is the pre-requisite of economic development.

End Notes

1) Samuel Baid, ‘Northern Areas’ in Jasjit Singh (ed) Pakistan Occupied Kashmir under the Jackboot, p. 98.
2) Ibid, p. 4
3) Ershad Mahmud, ‘Status of AJK in Political Milieu’, Policy Perspective Journal, p.109
4) Debidatta Aurbindo Mahapatra, ‘Electoral Politics in AJK’, Across LoC (Jammu) Vol. 2 No. 1, January – March 2006, p. 1
5) Samuel Baid, op. cit. p. 110
6) ‘Pakistan Occupied Kashmir: Changing the Discourse’, 15 IDSA PoK Project Report the AJK government.
7) Daily Times of Pakistan, 15 December 2018
Ahmad Hasan Dani, loc. cit., n 36, p. 327.
10) Paul Beersmans, ‘Political and Democratic process in Gilgit Baltistan’ in K. Warikoo (ed) The Other Kashmir …….. New Delhi, Pentagon Press 2014, pp. 172-73
11) ‘Electoral Politics in Pakistan Occupied Kashmir’, Seema Shekhawat in India Quarterly, New Delhi. Vol. XIII, July – Sept 2007, p. 146.
12) Samuel Baid, loc. cit. pp. 131-32
13) Gilgit-Baltistan, Pentagon Press, New Delhi, 2018, p. 83
14) ‘Northern Areas of Pakistan: Facts, Problems and Recommendations’. Institute of Policy Studies, Islamabad. Website
15) Zee news July 8, 2018.

South Asian nuclear power in a debt trap

By K.N. Pandita

It sounds ludicrous that Pakistan, a South Asian nuclear power, is caught in a debt trap and is beating every nerve to be bailed out. Amusingly, the debt trap is laid out by none other than a country which she proudly calls all-weather friend. Nevertheless, it is not the first time that Pakistan is faced with financial crunch. She has braved many such critical situations in the past and found a temporary solution that the country is faced with fiscal expertise deficit in borrowing loans to pay the loan instalments. The situation today is that economic growth has slowed down and sharply increasing fiscal imbalance is hindering the government to fulfil its developmental commitments to an increasing population.

According to a recent Bloomberg study, Pakistani rupee has been on the downslide since June 2017 losing more than 3.7 per cent value by the end of 2017. In December, the value of rupee against a US dollar was 105 but did not halt there and went up a steep rise reaching 119.84 in June 2018. This is a great shock to the macroeconomic situation as it has given rise to many more problems for the economy of that country. Standard Chartered PLC predicts that the rupee will fall to 125 per dollar by the end of the year and International Monetary Fund may request authorities to weaken it even further. As of third week of November 2018, a Pakistani rupee is valued at 132.81.

Foreign debt has reached nearly US dollars 95 billion. Debt servicing costs are crippling. Foreign exchange reserves are at almost the lowest level in the financial history of the country. Exports have dropped, and have the quantum of foreign remittances. Devaluation of Pakistani currency has increased inflation dramatically. Western think-tanks have made the observation that Pakistan economy presents the most dismal picture.

Why is Pakistan faced with economic crisis intermittently? Is it because of fiscal expertise deficit in the country? Is it because of not prioritizing production and export? Is it wide-scale loot of public exchequer by the invisible but privileged actors in and outside the government, or is it because of what is axiomatically called “a state within a state”, which is consuming the largest chunk of country’s annual budget. Commentators come out with numerous theories, practical or theoretical, but strangely they avoid unravelling Pakistan’s political-religious-military conundrum. Very few analysts are willing to dispassionately debate the financial impact of Pak army throwing out the elected governments and jumping into the seat of power under the oft-repeated pretext of setting right the derailed administrative machinery owing to large scale corruption by people holding public office. At the end of the day when military rule is withdrawn and power is restored to the civil society, we find more corruption and more irregularities committed during the martial law regimes. It is a different matter that the media cannot summon courage to spill the beans.

However, notwithstanding a political angle to the debate, let us come to the brass-tacks while examining the technicalities of the economic and financial crisis. It has to be remembered that developing countries have been taking loans from various international lending agencies. Pakistan is not an exception even though she has been a beneficiary in the past. The problem with which Pakistan has got stuck up now is of debt servicing, which has been accentuated by inflation and sharp decline in the value of rupee against dollar.


Writing in the Economic Leader of 4 August 2018, Gareth Heather argues that at the background to mounting and seriously increasing economic crisis is the ambitious and big infrastructure raising programme Chinese collaboration. Sandwiched between the world’s two giant financial powers, Pakistan has borrowed heavily from China and also from the Western world. She has taken out billions in Chinese loans and run up a huge Chinese-funded master plan to revamp its ports, roads, bridges and railways. A 62-billion dollar plan called China-Pakistan Economic Corridor {CPEC} running through the disputed regions of Gilgit and Baltistan and protested by India, has been celebrated by both countries as a long term investment that will increase trade. That is why China is financing ambitious infrastructure projects across Central and South Asia. Beijing considers these projects as ways to demonstrate its power besides securing allies.

Certainly, Pakistani economy needs to grow beyond rice and textile. That means building new infrastructures. But the question is that in pursuing the ambitious projects, China is pushing Pakistan’s deficits to unsustainable levels. Debts are rising rapidly while country’s hard currency is running out to pay its bills. As a consequence, Pakistan is left with no choice but to beg for monetary fund for a multi-billion dollar bailout which would be one of more than a dozen that Pakistan has received since 1980s. China is seeking new markets for its construction companies and new pathways to ship its goods. That is why she is financing ambitious infrastructure projects across Central and South Asia. Obviously, China views it as a way to project its power and secure allies. China claims that its loans do not have the same strings attached as the loans from various international lending agencies. This is not wholly true, and Pakistan is a standard example. Much of the profit from new power plants and rods goes straight back to Chinese companies. Another glaring example in this context is that of Sri Lanka. When Lanka could not pay back the money she had borrowed from China, she surprisingly, she showed extraordinary impatience in handing over Gwadar seaport to China. Sien Fenner, the lead Asia economist for Oxford Economics, a global research firm, made the cryptic remark that “Pakistan is clearly falling to the Chinese side.”

The CPEC is based on a $46 billion loan (now it $55 billion) that Pakistan has taken from China under Sovereign Guarantee. From the original allocation the $11-billion amount for infrastructure purposes is a Chinese loan whereas the $35-billion investment for the power sector. Infrastructure investments offered by China for CPEC is to be paid back as equity (ROE) which is guaranteed at either 17% or 20%.

A close examination shows the actual malpractice in CPEC Projects. With a substantial portion of the Chinese investments focused on power projects. The viability of the projects is based on interest rates charged by the China Development Bank and the China EXIM Bank. Official documents have revealed that with an estimated debt-equity ratio of 80%-20%, and these investments guaranteed a 17% to 20% rate of return in dollar terms on their equity (only the equity portion, and not the entire project cost). China will recover its investment in less than 26 months, and bleed Pakistan for the 25 year contract period. Not only that, such hugely expensive electricity will cripple their economy, making them a wheelchair case.


In comparison, global funding sources fundamentally focus on stabilizing the distressed economies and help countries avoid unsustainable financial imbalances. Loans are sanctioned with strict conditions to increase the chances that the country will clean up its finances and be able to pay back its loans.

Soon after Imran Khan took the reins of the new government in his hands, he was informed of critical financial situation into which the country had landed. The rhetoric of bringing accusations to the preceding regime resounded furiously for some days but recalling the tall promises made by the Pakistan Tahreek-I Insaf party (PTI) under the leadership of Imran Khan, the new government had no choice but to consider possible sources of raising loans running into billions. Three sources were identified (a) IMF, (b) friendly countries, and (c) Pakistani Diaspora.

An appeal to the people and the government functionaries to observe austerity in national interests or imploring Diaspora to accentuate foreign remittances can have only marginal response. The reason is the trust deficit which Pakistani governments have been generating among the Diaspora and also in a large section of citizenry at home. We may call it a gift of widespread corruption in the administrative structure as well as in the defence sector. Since in Pakistan power rests with the triumvirate of feudal lords, entrenched bureaucrats and Generals, it is very difficult for any government, especially the well-meaning one, to call the powerful to book. Even the parliamentarians seldom muster courage to table any motion aimed at probing the accumulation of enormous wealth by anyone of the triumvirate. Imran Khan did not touch on the subject of enormous monies stashed by Pakistani elite and highly affluent segment of society in foreign banks, especially UK or Switzerland.


Saudi Arabia is a close friend and benefactor of Pakistan. Imran Khan made two jaunts to Riyadh breaking his commitment made during election campaigns that for six months after taking into his hands the reins of the government he would not go on any foreign trip as a symbol of austerity measure. Deeply.

Notably more than ever before Saudi monarchy is careful not to antagonize the US at a point of time when it is faced with simmering discontent among a large section of its own people. Imran Khan’s second visit to Riyadh took place when Riyadh was in deep anguish about the murder of Khashoggi, the columnist of Washington Post. Trump administration had mounted pressure on Saudi Arabia to identify the culprits and bring them to book after Egypt held King Salman of Saudi Arabia responsible for the murder.

Saudi Arabia agreed to sanction a loan of 5 billion US dollars to Pakistan to bridge over the difficult financial position. It has to be remembered that no donor country gives loans without strings attached to it. We are not aware of the conditions of the deal between Pakistan and Saudi Arabia on a loan of 5 billion dollars but it has trickled down from Pakistani sources that King Salman has asked Imran Khan to mediate in the dispute Saudi has with Yemen. On his so-called triumphant return to Islamabad, Imran Khan announced that Pakistan will be ready to hammer out a deal to bring an end to the Gulf war.

There are two clear reasons why Pakistan agreed to make a mediation effort though a similar effort made earlier had ended in a fiasco. Firstly, Pakistan wants to get money immediately to restore the financial well-being of the country. Secondly, Pakistan had declined to join the Gulf Islamic Force that would have launched an attack on Yemen even when Pakistan permitted the services of retired army chief Raheel to be utilised to lead this force. This development had soured Pakistan’s relations with Saudi Arabia. But now Pakistan wants to restore traditional relations with the Saudi ruling house by agreeing to undertake the mediation mission despite knowing that the differences between the Saudis and Yemenis are so deep as to leave no scope for an amicable solution.

The US

Ever since the creation of Pakistan, the US took this country under its wings considering Pakistan a bulwark against the southward expansion of the communist ideology. The contours of this relationship began to show a change after the rise of Taliban in Afghanistan and Pakistan’s clandestine support to the Taliban. Since the US is directly involved in NATO+US engagement against the Taliban in Afghanistan, she has evidence to show that Pakistan is providing safe havens to the Taliban leadership, especially Haqqani network, on her soil and indirectly supporting their fight against the US in Afghanistan. The US demanded that Pakistan stop giving safe havens to the Taliban failing which she could take punitive measures. Instead of obliging the old ally and playing a responsible role, Islamabad stuck to its “denial” policy to the deep displeasure of President Trump. The result is the cancellation of 300 million dollars aid to Pakistan to meet the expenses for fighting the Taliban and their terrorist activities in Pakistan. Pakistan stubbornly opposed the American move. When Pakistan began approaching the IMF for sanction of about 11 billion dollars, Washington stepped in and warned the IMF seniors not to sanction loan in favour of Pakistan. The US is the largest donor of the IMF and naturally she has a say.

Pakistan’s frantic attempt to motivate IMF and prepare its mindset for considering the her request continues to be a burning issue but at least the IMF chief has hinted that Pakistan needs to put its house in order before approaching the IMF. Washington’s argument is that Pakistan will divert the loan money to pay the interest instalments to China which has stakes in Pakistan.


It will be noted that even China, too, told Pakistan to put its house in order and Pakistani financial authorities have conceded that there remains much to be done to provide crutches to her economy. Pakistan has nearly (in 2017) $72 Billion debt all together which is nearly 70% of their GDP which are not part of CPEC and Current Account Deficit is now raised to 120%. Even currently Pakistan has raised loans at 8.75% interest rate from I.M.F. by mortgaging Motor Ways, Air Ports, Radio & TV stations. To pay interest Pakistan is taking other loans to cover it and will reach alarming levels of bankruptcy. In Pakistan only 1% of the population is registered in the Tax System, and the Government collects just 9% of country’s wealth in taxes, which is the lowest in the world. This is the major cause why Pakistan Government is highly depended on loans.

To sum up, it may be said that low tax realization, endemic corruption and tax evasion, slide down of industrial growth owing to expensive energy resource, feeding the white elephant called Pakistan Army and spending around 9 billion dollars a year for purchase of arms with India-centric defence policy and patronizing terror – the Frankenstein of its own creation, all put together have dragged Pakistan to the brink of bankruptcy. To crown all this, the CPEC, which has been trumpeted as the game changer, is actually proving a canker eating into the vitals of the country. Experts say that even if the IMF sanctions a loan of 5-6 billion dollars that is not going to cure the ills of Pakistan as it needs anything to the tune of 20 billion dollars to overcome the crisis.
(The author is the former Director of the Centre of Central Asian Studies, Kashmir \University, Srinagar:

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