Friends forsake Pakistan

By A.L.M. Muzammil

Pakistan is once again on the edge of a precipice. The economy is in tatters. Inflation is hitting the roof. Businesses are closing down and investment has dried up. Power riots are becoming the order of the day.

There is no money to import fuel. Large parts of the country are facing food shortages because of production and distribution bottlenecks. There is a massive flight of capital. The country's credit rating has plummeted to below junk bond status. To avoid sovereign default and restore the confidence of international financial markets, Pakistan has no option left but to approach the IMF.

But accepting IMF prescriptions, will by definition, mean that things will get worse before they get better, if at all. The immensely painful stabilisation and structural adjustment measures which an IMF programme normally entails will increase economic distress, which is already close to breaking point. In short everything that can go wrong with the economy is going wrong.

To make matters worse, the economic meltdown has come at a time when Pakistan is in a virtual civil war-like situation with the army desperately trying to regain control over vast swathes of territory that have fallen to Islamist insurgents. The security situation, which is unlikely to improve anytime soon, is further dragging the economy down.

This in turn is severely restricting the Pakistani government's ability to provide even a small measure of relief to the distressed people, much less make the structural adjustments needed to put Pakistan on a self-sustaining, economic growth path.

Unviable and unsustainable

The roots of the terrible mess that Pakistan finds itself in routinely lie in the unviable and unsustainable economic model that Pakistan has adopted. Loans are treated as disposable income to be frittered away on consumption, secure in the belief that when the time comes to repay the loans someone will surely come and bail Pakistan out. After all, the prospect of a 'failed' nuclear-weapon state that is likely to end up being Talibanised is the rest of world's worst nightmare come true.

Pakistan's success in leveraging the horrendous repercussions of its failure has created an economy that thrives on living beyond its means. What is more, to ensure that somebody keeps footing the bills, Pakistan has mastered the art of fitting into the security and strategic calculus of its patrons. For instance, these days one often hears Pakistani politicians and opinion makers saying that if the world wants Pakistan to fight the War on Terror then it must pay Pakistan for it.

The only time when the Pakistani economy gallops is when foreign aid floods the country. And this usually happens when a military government is in power in Islamabad - the 1960's when Ayub Khan was in power and Pakistan joined SEATO and CENTO, 1980's with Zia ul Haque in the saddle and Pakistan became the staging post for the jihad against Soviet occupation of Afghanistan and then in the first decade of the third millennium when Pervez Musharraf signed up Pakistan as a frontline state in the War on Terror.

But as soon as there is a transition from a military government to a civilian government, the economy goes into a tailspin. The political governments are of course not responsible for the crisis; they inherit the crisis and end up carrying the can of the economic follies committed by the military regimes. The harsh measures that the civilian governments are forced to take to save the country from bankruptcy impose crushing economic hardships upon the people.

Quite naturally, the rising levels of economic distress under the civilian governments are compared unfavourably with the boom under the military dictators. An impression gains ground that politicians are incompetent and incapable of improving the economic condition of the people. The fledgling democratic process gets badly undermined and people once again start to yearn for another military strongman, something that should be of concern to all those countries that profess wanting to see democracy succeed in Pakistan.

Help not forthcoming

In the past Pakistan invariably fell back upon its traditional friends, allies and patrons - China, Saudi Arabia, US and UAE - to bail it out. But this time around, there is no oil facility coming from the Saudis, the Chinese have refused to provide any balance of payment support, the UAE has preferred to join the 'Friends of Pakistan' forum and extend support from this platform, and the US has stringent political and strategic demands tied to aid.

Apart from the US, a cold shoulder from the other countries would be understandable if they were facing a deep economic crisis themselves. But this is not the case. The Saudis are sitting on a mountain of petro-dollars, the Chinese are finding it difficult to handle their nearly US$2 trillion of foreign exchange reserves and the UAE is in no major difficulty. And yet they are keeping Pakistan hanging out on a limb. Why?

A charitable explanation would be that Pakistan's 'friends' are letting it know that the time for free lunches is over and that unless Pakistan is willing to undertake rescuing reform and restructuring of the economy there will be no more blank cheques forthcoming. But since international relations are more often than not guided by political and strategic interests and pressures, there could be something more at play than a mere refusal to continuously pick up the tab for a profligate friend.

Increase stock

The Saudis are probably killing two birds with one stone by not opening up their coffers for Pakistan. At one level, by not helping the PPP-led government the Saudis are going to increase the stock of Nawaz Sharif, their political favourite in Pakistan. At the same time, the Saudis are becoming willing partners of the US plan to squeeze Pakistan real hard on the economic front and use this leverage to make Pakistan deliver on the strategic and security front. There is also a possibility that the Saudis want something from Pakistan which Pakistan is vary of giving.

As for the Chinese, they normally use aid as a tool to gain strategic advantage and are not known to give freebies. In the past, China charged Pakistan a price, sometimes exorbitant and at other times concessional, for whatever defence and nuclear technology it transferred.

Despite getting paid for everything it supplied Pakistan, China gained Pakistan's deep gratitude. But more importantly, by propping up Pakistan as a counter-weight to India, the Chinese were able to encircle India and embroil it in the neighbourhood to an extent that India found it difficult to get into a position to stand up to, much less challenge, China's pre-eminence in Asia.

But today, when Pakistan is arguably facing the most serious economic and security threat to its survival as a modern nation state, there is no succour coming from China. Is it because a stable and strong Pakistan is no longer a strategic necessity for China?

Could China be calculating that its interests are better served by a severely destabilised Pakistan? After all, the country that will face the brunt of the fallout of an imploding Pakistan is India. What is more, Pakistan's collapse will be a strategic nightmare for China's real strategic adversary - the US.

Make promises

China will of course continue to promise Pakistan the world - nuclear power plants, fighter jets, projects, investments, a communications satellite - and will even deliver on some of these promises (no doubt, making money in the process) in order to keep its options on Pakistan open and keep alive the impression that China is Pakistan's all-weather friend. But in the end, all this will not add up to anything because it does not address the fundamental problem confronting Pakistan - a belief that the rest of the world owes it a living.

Pakistan undoubtedly needs a massive infusion of funds to avoid bankruptcy. However, all the money given to Pakistan will go down the drain if there is only tinkering with the current economic system.

Conditionalities forcing Pakistan to raise some revenue from here and cut some expenditure there are not going to make Pakistan stand on its feet and rid it of the addiction to foreign aid. What is required is a complete overhaul of the economic system. The problem is, to use the words of J.K. Galbraith, "The rich and privileged, when also corrupt and incompetent, do not accept rescuing reform."

And in Pakistan's story there are lessons for Sri Lanka too and the sooner the governmentlearns it, the better. 

Time to address trust deficit between Colombo and Tamils

By Malladi Rama Rao

What a spat it was! It had turned upside down the logic of campaign journalists on either side of the Palk Strait. No surprise, therefore, all those in Colombo who have been painting a doomsday scenario of sorts between Chennai and Delhi have egg on their face and are groping for new theories to brazen out their jingoism that made the mistake of once again pitting the Sinhalese against the Tamils.

Post-Basil mission to Delhi, the egg heads must realise that neither righteous indignation which is on display in abundance nor an orchestrated media campaign, for a few brownie points, which shows no let up, is a substitute for good governance, which is the only way to end the years of trust deficit between Colombo and Tamils. Some commentators have termed India's Sri Lanka policy as a farce. Some others have branded as tamasha DMK patriarch Muthavel Karunanidhi's politics of ultimatum. Both schools of thought felt that Delhi and Chennai were trying to have the cake and eat it in their own way.

Critics

Expecting Karunanidhi to reduce the Manmohan Singh government to a minority just five-six months ahead of a general election, these critics had gone to town declaring that Delhi was caught between the devil and the deep sea. They have obviously failed to understand,  much less care to read, the fine print on coalition dharma. And also how adroitly the old Dravidian fox was outmanoeuvring his arch rivals - Jayalalitha Jayaram of AIADMK and trusted follower turned political foe, V. Gopalaswamy alias Vaiko.

Karunanidhi had split Vaiko's MDMK a couple of months ago. Now by regaining the Tamil centre space, he has marginalised the likes of Vaiko who are the ardent campaigners of the LTTE. The icing on the cake,  as the DMK faithful see it, is the arrest of Vaiko on charges of sedition and anti-national activities. The arrest should have come as a surprise to the India-baiters in Colombo.

Needless to say, these worthies have not understood the dynamics of democracy and the contours of an administration that swears by the Constitution in India. If they have any doubt they should listen to the recording of Pranab-Karunanidhi joint press conference in Chennai last Sunday.

For the record

Said Karunanidhi: "This issue (ethnic issue in SL) has been going on for 40-years; we cannot expect it to be resolved in four days." Pranab Mukherjee, on his part, put the record straight saying India stands for countering terrorism with resolve. Put differently, it means India will do nothing to reduce the momentum of the SLA operations in Kilinochchi.

Firstly, Pranab rejected the demand voiced by a section of TN politicians for withdrawal of non-lethal military support to the SLA like supply of radars and technical and personnel back-up to keep operational these anti-aircraft radars. Secondly, he reasoned that the 'help' is in India's interest. "Because, given the position of the Indian and Sri Lankan coastlines, the radar that was given would cover vital installations in Indian areas as well," the Indian Minister told a questioner, certainly as much to the delight as surprise of his SL friends.

There is substance, therefore, in the contention that the latest low in India-Sri Lanka relations is not because of any misunderstanding between Delhi and Chennai but because of forked tongues in Colombo. Consider these two facts - one about fishermen and the other about humanitarian aid.

Practical arrangements

The Basil mission to New Delhi has put in place some practical arrangements to deal with bona fide Indian and Sri Lankan fishermen crossing the International Maritime Boundary Line (IMBL).ÿ GOSL will designate sensitive areas along the Lankan coastline.  These areas will be out of bounds for Indian fishing vessels. "Further, there will be no firing on Indian vessels. Indian fishing vessels will carry a valid registration or permit and the fishermen will have on person valid identity cards issued by the government of Tamil Nadu,", a joint statement on fishing arrangements released on October 26 at the end of the BR talks with the Indian Foreign Minister, said.

The fishermen issue has been a principal concern of Tamil Nadu Chief Minister and most law makers from the state cutting across party-lines. Prime Minister Manmohan Singh took up the issue personally two months back with President Rajapakse on the sidelines of the SAARC summit. These concerns have been met with more firings on the Indian fishermen.

Undoubtedly, the latest agreement is the most practical way of dealing with what happens when illiterate fishermen cross the maritime boundary line. On its part the TN government is taking steps to equip fishing vessels with satellite based equipment to indicate their exact location on the high seas.

Licenses

The Sri Lanka Navy has used the moral right to prevent pro-LTTE Indians from Tamil Nadu from assisting the Tigers with material that could be used in the war against Sri Lanka - batteries that can power improvised explosive devices, ball-bearings to add lethality, petrol,  oil and lubricants and small arms and ammunition - to be indiscriminate and vindictive in its actions against the fisher folk.

The proposed system of licenses would induce an element of inspection that would give the fishermen an opportunity to explain their presence and thus avoid being killed instantly on being sighted by the Sri Lanka Navy. So, there is room for optimism that there will be no 'a flare up' near Katchiativu. It will certainly lead to a cooling of the political temperature in the state.

During the Basil-Pranab talks, India had offered to send humanitarian aid - 800 tonnes of relief material - through the Red Cross as a gesture of goodwill. President Rajapakse welcomed the Indian decision and also appreciated Tamil Nadu's offer to make an additional contribution to 'this humanitarian endeavour.'

But his Essential Services Chief S. Divaratne doesn't appear to share the President's enthusiasm. In fact, he shares the indignation expressed by a section of the Lankan leadership which sees in the Indian food aid a repeat of the food air drop in 1987.

Defiance

"Sri Lanka is not an African state in need of food. We can even feed the poor people of India, if need be," he told the media. His remarks have not been contradicted to date. He also went on to add: "The government has buffer food stocks in Kilinochchi and Mulaithivu with a surplus of rice in the Wanni. Even anti malaria drugs, medicines are constantly reaching the Wanni." The Basic thrust of the Basil-Pranab agreement and President Rajapakse's exclusives to select Indian dailies is that civilians would be spared in the course of the Wanni war. But even before the ink on the Delhi agreement dried, three Tamillians -- one of them a 50-year-old mother of three, living in the conflict zone were wounded in SLAF strafing of two civilian settlements in Kilinochchi and Paranthan. The victims belong to the ever increasing tribe of internally displaced persons from Mannar and Kilinochchi.

A school with some 750 students was just 750 metres from the bombed site. This incident could be one of those hazards in a military operation but doesn't help improve confidence levels. At this point in SL history, who pushed whom to war is not material. What is germane is, as some SL commentators have also noted, President Mahinda Rajapakse, while professing full commitment to a political package, has allowed the Sinhala extremists to set an agenda that allows only for a military solution. Defeating the Tigers militarily may not be a big deal.

No plan

The war may at best drag on for a few days or months; the army and air force have to work to a plan jointly and without indulging in their own games. But how is the government to control the large Tamil-speaking areas in the north that have been under LTTE domination for a decade or more? There is no plan in evidence.

Yes, the President promises that he himself will take charge of the political process and see it through politically. But he makes it clear that the current military operations are required to 'free our own Tamil brothers and sisters from the cruel grip of terror and implement a just and enduring political solution based on the four Ds - Demilitarisation, Democratisation, Development, and Devolution.'

He also asserts that his first priority is demilitarisation. "Without demilitarisation first, you won't be able to achieve anything. No democratisation, no development, no devolution. It is useless to give them devolution when they are not ready to accept it or you can't implement it," the President told N.  Ram of The Hindu.

Question mark

This assertion puts a fresh question mark on the future course of events promised by President's emissary, Basil Rajapakse to his interlocutors in Delhi. More over, the LTTE appears to demonstrate its ability to strike even when it has been hurt very badly. As the Stratfor experts say in their forecast, the Tigers will make a stronger attempt to carry out attacks inside Colombo 'in an attempt to prove to their constituency that they are still viable.'

From a military point, that is bad news. Also, from a political point. Because it will give fresh lease to the Sinhala chauvinism and deepen the fault lines further.

Ethnic SL Tamil diaspora has enormous financial and political clout;  it is numerous in crucial Western countries. And they can provide the muscle to the LTTE for decades irrespective of the outcome of today's military campaign.ÿ If the diaspora is to be checkmated and LTTE is to be given a knockout blow, MR, as President Mahinda Rajapakse is known in his close circle, should look into the causes of anger of the Tamils with the Sinhala state with a sense of urgency and commitment. Rhetoric offers no solution. Certainly not banking on state created quislings like TMVP who have neither the reach nor vision.