Geopolitical Analysis

By K.N. Pandit

“Officially, the central bank holds $8.14 billion (£4.65 billion) of foreign currency, but if forward liabilities are included, the real reserves may be only $3 billion – enough to buy about 30 days of imports like oil and food”, wrote the Daily Telegraph of London about Pakistan in its issue of October 6, 2008.

US’ observers on Pakistan make no secret of a grave situation developing there, which the present government in Islamabad calls the legacy left by Pervez Musharraf who quit the office of President last month. The situation has been complicated by the financial crisis worldwide and its inevitable impact on Pak economy despite tall claims that the economy of the country is not in peril.

Armed clashes with the Taliban-Al Qaeda insurgents in Waziristan, growing nexus between Afghan refugees and the Taliban operating on Paki-Afghan border, and growing crescendo of Pakistani terrorist outfits have all made a mess of administrative dispensation.

Observers predict a dismal future or near future of Pakistani State.

Islamabad has asked for a hundred billion dollar financial support from lending agencies all over the world to boost its economy and stop the country from falling apart. Whether this money will be forthcoming within shortest period of time to bridge over the crisis is anybody’s guess.  Saudis have committed to supply 100,000 barrels of crude oil a day against deferred payment so that Islamabad is able to tie over her financial crunch of unpredicted nature.

This is not the first time that Pakistan is in financial straits. She has always been in that situation more or less. American aid in one name or the other, has generally worked as propels to Pakistan’s staggering economy in the past. Since 9/11, when Pakistan decided to be on the side of the US, Washington has poured in nearly ten billion dollars into this country which one of her Presidents, namely Field Marshall Ayub Khan once called “more allied than allies.”

Why has not been Pakistan able to stabilize her economy despite all the monies pumped in over last six decades of her coming into existence? Observers are amused to find an answer to that question.

Most of these monies have gone to the kitty of defence ministry or to be precise to the Inter Service Intelligence, called “a state within a state.”  ISI has a vast agenda on its anvil like wars against India, subversion in India, financing insurgencies in Kashmir, Sri Lanka, Xingjian, Afghanistan, Nepal, and Bangladesh. Apart from this, Pakistan’s coffers are also used to strengthen home-bred Theo-fascism and covert aid to various terrorist organizations and their affiliates in a vast region.

As far as Pakistan Army is concerned, well it has developed the mechanism of self-generating economy and depends little on support from the defence budget to bolster its programmes and plans, which are geared to promoting and supporting financial well-being of her generals in or out of service.

It is Army’s money power that helps it use the governments, elected or autocratic, as pawns on country’s chess board. Pakistan Army and ISI virtually man her elections if at all once a while the country relapses into the absurdity of democratic dispensation.

The question now is this: Is the US in a position to bail out Paksitan’s economy under given international financial conditions or not? This is an important question because the existence or dismemberment of Pakistan is closely linked to this question.

US are bogged with the worst financial crunch since 1930s. Its impact on world markets is also felt and there are reverberations in almost all big money markets of the world. It makes the US less capable of bailing out Pakistan under given circumstances. The lending position of IMF and other lending agencies, too, do not promise immediate relief. What then can happen with this country?

Ever since it’s coming into being in 1947, Pakistan was considered a capitalist bulwark against expanding communism of the erstwhile Soviet Union. In that context, Pakistan’s strategic importance came to her rescue and finally was catalytic to western countries including the US providing her liberal funding in one form or the other besides upgraded weaponry.

Pakistan’s grand opportunity came when the Soviets, out of their foolhardiness, launched a senseless attack on their southern neighbor Afghanistan in 1979. This event changed the entire strategic scenario of the Asiatic region and the world. It paved a way for the Americans to be in the region physically; it raised the strategic profile of Pakistan in the eyes of capitalist world as their indispensable savior; it radicalized Pakistani civil society; it reinforced the fallacy of Islam’s military and tactical invulnerability, and finally it paved the way for Pakistan to receive more funding and ask for much more and not remain content with Zia’s “peanuts”.

9/11 came as a windfall for General Musharraf who, for next eight years, basked in the warmth of American largesse. Washington thought it a fine diplomacy to let Pakistanis and the Taliban-Al Qaeda fight among them and contribute materially to their old ally and thereby kill two birds with one stone. US policy planners miscalculated, and are now facing the music with different tunes.

Nevertheless, Washington has little choice between bailing out Pakistan’s dying economy and allowing Pakistan to head to dismemberment. The US will not afford the second option. She has reasons.

The US must keep Theo-fascism alive and active; otherwise her arms manufacturing industry will face a decline. Pakistan boasts of building a powerful defence mechanism and assault force in the Asian region essentially because of her Indian threat perceptions, which may or may not be there. It means nothing for Washington to maintain balance of power in the sub-continent when her mega industrialists have to strike huge bargains for supplying military hardware.

The US and China combine cannot afford to let Pakistan go into pieces. They need a bulwark against rising India on the Asian map. Only Pakistan has the radicalized manpower to offer suicide bombers without relent not only in Kashmir but now all over India. The creation of SIMI and IM by ISI is a clear pointer towards that objective. Therefore America monies and Chinese arms must flow to terrorist training camps in Pakistan for further dissemination among the jihadis.

As a close ally of Saudi Arabia, and sectarian commonality between the two societies, the US has interest to see to it that Pakistan does not fall apart. A truncated Pakistan will shrink Saudi’s space in the second most Muslim populated country. This will be an advantage to Iran, a country very sensitive to Saudis expanding the sphere of their influence in the Muslim world.

One more reason why US will be averse to Pakistan’s dismemberment is the possible loss of a moderate segment of Pakistani Islamic society which has been largely instrumental in maintaining semblance of cordiality between the two countries in times of crisis. A large number of Pakistanis have settled down in the US. Most of them have expanded their business activities to considerable level and are an economic and political force to be reckoned with. The US would not like to lose their goodwill for they provide her enviable space back in their country of birth.

Lastly given the nature of relations between Russia and the US, Washington would not like to leave the space open for Russian inroads in a weakened and scattered Pakistan. Whatever the situation in this part of Asia, Moscow still nurses the ambition of a link to the warm waters of Indian Ocean.

Additionally, Central Asian hydrocarbon reserves have immensely influenced regional strategies. Importantly, the question of routes for pipe lines carrying the black gold is of vital significance. The Turkmen-Shanghai and IPI gas pipelines are two major projects, which, if finalized and floated, are bound to leave very deep impact on regional politics. China’s building of Gawadar port in Pakistan and India’s big expansion of her naval power are not to be overlooked. Indo-US naval exercises in the Indian Ocean do send messages to all parts of the world.

Thus in final analysis given the background of Pakistan-US relations, and also regional strategies that are likely to shape future political map of Asia, it appears that the US will not hesitate to do all it can to bail out Pakistan from the financial disaster knocking at her door.
(The writer is the former Director of the Centre of Central Asian Studies, Kashmir University).