Pakistan at a Crossroads

Pragmatic policies required to move forward

Pakistan is standing at a crossroads. It seems so obvious that Pakistan is at a point where it has to decide its future: how should relations with USA and China fare, how to improve relationship with India (and should they even be improved); what is the right path to take with Iran, how to deal with the Afghanistan imbroglio, how should relations with the rest of the world be bettered; how can parts of the country, which feel like they are slipping into the cracks, be brought back into the fold — should the emphasis be on gentle persuasion and encouragement, or is this a time to take a more robust stand? And, above all, how a dwindling economy be put on the path to growth and development? 

Pakistan has been at acrossroads several times since its inception. And, in today’s fast-changing regional and global scenarios, the country is again standing at a point where its leadership has to make crucial decision on a host of issues. The good news — and the bad one — is that the questions and the answers are identical. Actually, the problem is not that Pakistan is at a crossroads; the problem is that Pakistan is the crossroads. It is the crossroads between East and West, and between North and South. Trade and transportation routes that weave Asia together intersect in Pakistan — which explains why the country has so many rich variations, so many different traditions and a long and proud tradition of tolerance.

A peep into the past

The area that comprises today’s Pakistan saw some of the greatest cultural and intellectual achievements in world history, from the glory of Mohenjodaro and Harappa millennia ago, to the remarkable flourishing that saw Sindh celebrated as one of the greatest prizes of the Muslim world — when ports like Debul fell to Arab armies at the start of the eighth century. The centrality of the country continued long after that, with thriving centres like Thatta being viewed with wonder by Europeans, who visited in growing numbers in the centuries that followed.

Nor was it the coast of Pakistan that was bursting with life, energy and culture, for cities like Lahore were celebrated a thousand years ago in ways that are immediately recognisable to visitors of the city today: “Lahore,” wrote the author of the Hudud al-Alam, “was a glorious place, marked by spectacularly beautiful places of worship, well-stocked markets, and carefully laid-out orchards.”

It is not surprising therefore that empires have risen, and fallen, in line with the fortunes of the region that today makes up modern Pakistan. This does not only include great leaders like Akbar and Jahangir, who recognised that control of their own empire was best established by controlling Punjab — or Ranjit Singh, who created an extraordinarily successful and diverse state that was a military, political and cultural force to be reckoned with 200 years ago. In fact, what happened in and around Pakistan shaped events and empires far away. The Persian Empire saw perhaps its greatest ever success with the rampaging invasion of Nader Shah which saw Lahore and then Delhi ravaged, and their proudest and richest jewels (like the Peacock Throne and the celebrated Koh-i-Noor diamond) looted to adorn the palaces and crowns of Persian leaders.

And then, of course, came the time of the British, who arrived first as traders, but soon found themselves intermediaries, and as military muscle who could be persuaded to become involved in domestic affairs by ambitious (or desperate) rulers. The process of acceleration — from partners to having privileged positions to administrators and rulers — was echoed in many parts of the world that Europe came into contact with: empire was not part of a European master plan. It just so happened that opportunities kept opening up which were too good to miss out on. In 1757, for example, Robert Clive of the East India Company found himself placed in charge of the entire economy of Bengal. At a stroke, Bengalis lost control of their own fate and, literally, of their own fortunes.

Present-day Scenario

For Pakistan, it is now a decision-making time. It is especially so because all significant constituent parts of the political map of the world are, currently, in a state of heightened and chaotic flux, as they attempt to find their new place in this ever-changing political landscape. Pakistan is not an exception to this rule, as it is a very important player on the political arena. After all, this nation possesses nuclear weapons, has a population of 207 million and an annual GDP of approximately $1 trillion, and its location is of utmost strategic importance in South Asia, a sub-region of the Indian and Pacific Oceans. Pakistan is not just a pawn in a complex game of chess that world players, such as the United States, China and India are playing, but also its independent participant.

Internal Politics

First and foremost, it is important to highlight that after Pakistan Tehreek-i-Insaf came to power after the July 2018 parliamentary elections, two main opposition parties, i.e. Nawaz Sharif’s Pakistan Muslim League (N), and Asif Zardari-led Pakistan Peoples Party, which have been bitter opponents to each other not long ago, seem to have found themselves on the same side of the barricade, which separates them from Imran Khan’s PTI. And, the opposition PM Imran Khan’s government faces from these veterans in Pakistani politics, is intensifying, and has, in turn, added tensions to the internal political environment in the country. PM Khan’s political opponents have solidified their positions as they proclaim that no progress has been made in the last 6 months to resolve the key issue the nation is facing due to a sheer lack of funds in the state treasury.

CPEC

For Pakistan’s economic vows, its Western “well-wishers” point the finger of blame at the gradual descent of the nation into a “debt trap,” created, as they claim, as a result of ongoing work on the China-Pakistan Economic Corridor (CPEC). So, for all the big questions to face up to in the country’s tangled and complicated domestic and international affairs, the one which will have by far the most significant consequences in the future is the CPEC.

The impressive work on the CPEC project has alarmed Washington and its allies. Many western analysts interpreted it as a strategic arrangement between Beijing and Islamabad having hidden military designs to liberate the latter from “Malacca Dilemma”. It is an open secret that China enormously relies on the Malacca Strait (sea-route) as nearly 80 percent of its energy needs come from the Middle East after passing through the Malacca Strait. Conflicts in region, India’s Asia-Pacific strategy to steward Indian Ocean, vulnerability of sea lanes to strategic competition between and among great powers, new maritime alliances and such other factors pose a challenge to China’s geopolitical and energy strategies and other issues that can crop up from time to time. The current Chinese ruling elite cannot underestimate Malacca Dilemma, especially after President Trump declared China as a strategic competitor and approved India’s “leadership role in Indian Ocean security and throughout the broader region” to balance China in the Asian strategic setting. Collusion of India and the United States against China germinates misperceptions about CPEC. Moreover, New Delhi has been involved in sabotaging the project. In this context, it has been using hybrid warfare techniques. What Islamabad should do is to revamp its foreign and strategic policy intelligently and carefully in the transforming global political environment and also vigilantly combat all opposition for smooth execution of CPEC projects.

Foreign Policy

There is no blinking at the fact that robust change in foreign policy has started bearing fruit for Pakistan since the countries like the United States and Russia have appreciated Pakistan’s role in peace process as well as the War on Terror. The opening of Kartarpur Corridor, peace efforts for Afghanistan quagmire and propagating peaceful settlement for Indian-Occupied Kashmir (IOK) on the basis of UN resolutions will certainly bear fruit and carve the way of progress and economic boom for crisis-ridden Pakistan.

Luckily, the diplomatic relations in the existing circumstances have been very effective due to PTI’s effective implementation of external policy to engage with world powers including Pakistan’s all-weather friend, China. The Prime Minister’s visits to Saudi Arabia, China, UAE and Turkey have painted a positive image of Pakistan globally and even in his poll victory speech had drawn the attention of the world that Pakistan intends to establish friendly relations with the world especially China, India, Iran, Afghanistan, Russia, Saudi Arabia, Turkey, US, Central Asian States, the Middle and the Far East.

Pakistan’s Foreign Minister Shah Mehmood Qureshi has also played an instrumental role by visiting Kabul and holding a meeting with President Ashraf Ghani to ensure Pakistan’s role in peace-building process especially the US’s phased withdrawal plan and influencing the Taliban to come to negotiating table.

Russia is taking lead in hosting the Afghan Taliban moot after almost 30 years of Afghan invasion with an aim to find a peaceful political solution to the Afghan mess. Historically, the Soviet Union disintegrated after sustaining a humiliating defeat at the hands of the Afghan Mujahideen and insurgent groups.

Pakistan will keep on playing its role for peace in Afghanistan since it’s in best interests of the country to secure its borders especially the trade routes of CPEC. Pakistan’s surging balance of payments issue was resolved with the assistance of Saudi Arabia, the UAE and China which is the result of the robust reshaping of foreign policy, making it independent and the one based on equality. Pakistan’s re-crafted and redesigned foreign policy serves its interest in the best manner. Realistic rather than provocative narratives need to be developed. Differences need to be contained, addressed and reduced through a realistic working relationship. This will enable South Asia to meet the survival challenges of the 21st century.

Economy

Pakistan’s economy has experienced several rounds of currency devaluation since December 2017, where the rupee has lost around 32percent of its value against the US dollar.

There is a need to end ad-hocism in economic policy and give economy and investors a clear direction. There is also a need to end the culture of writing cheques for exporters in the name of export incentives without first creating exportable surplus. The government has not yet either shown the wisdom to withdraw income tax concessions being availed by the affluent segments.

The government has borrowed from the friendly countries and borrowed time to negotiate with the IMF. Reports suggest that the IMF had asked for harsh fiscal, monetary and exchange rate adjustments in quick successions. Regarding fiscal adjustment, the government has already brought two mini-budgets.

Similarly, quick monetary adjustment has been done in the last six months and the discount rate has been increased to 10percent. In addition, the exchange rate adjustment has already been done to a great extent.

In a nutshell, the government is trying to make these adjustments in an orderly and sequential manner, which has become a big challenge. Meanwhile, it has opened many political fronts, which are further complicating its economic challenges.

Under the current circumstances, a better advice to the government is to close unnecessary political fronts and focus on economic management.

Conclusion

Finally, Pakistan is still within the space where the confrontation between the two world powers is taking place. After a short pause, Imran Khan’s government continued with the policies of the previous decades to establish closer ties with China, by also reaffirming the relevance of the CPEC project.

At the same time, it appears that Pakistan’s friendly ties with the USA, established at the end of the Cold War, that have worsened (seemingly irreversibly) are now improving. Evidence to this effect is provided by Imran Khan’s positive reaction towards Donald Trump’s letter, which suggested that the two nations combine their efforts to resolve problems in Afghanis. Still, the Afghan issue was probably just an excuse in this case to attempt and re-establish the US-Pakistan ties.

In conclusion, it is once again apt to reiterate that the current global political landscape is continuously changing and all of its more or less important parts (for example, Pakistan) are constantly seeking a more ‘comfortable’ place for themselves in it.