The economic constraints driving foreign policy

In order to tackle its economic crisis, Pakistan needs friendly states to fulfil their economic, energy, and military needs

Any significant governmental shift in policy or change in state-level relations always has substantial factors behind it. The general public often cannot comprehend the real reasons behind these policy changes as they are, at times, deliberately kept secret.

A few days ago, news arose of the government sending an additional 1000 Pakistani troops to Saudi Arabia. According to this news report, 1379 Pakistani troops are already deployed in Saudi Arabia, most of which belong to the army, and with some air force and navy officials as well.

After the news surfaced, on 16 February, there was uproar in the Senate as members stated their concern. Senator Farhatullah Babar of the Pakistan People’s Party drew the attention of the House to the matter, saying that sending troops to Saudi Arabia was against the parliamentary resolution. Senate Chairman Raza Rabbani said that the parliament had regretfully not been part of the decision to deploy the troops.

On 19 February, the Senate summoned Defence Minister Khurrum Dastagir gave a policy statement in which he stated, “Pakistan cooperates for security with various states, including Saudi Arabia. The prime minister approved the deployment of the troops and then the Inter-Services Public Relations (ISPR) formally announced it. Our soldiers are not part of the Yemen war. They will remain in Saudi Arabia, but I cannot give information about the deployment location.” The Senate Chairman maintained that this response from the government was unsatisfactory. To understand this issue fully and see if there is more to it than meets the eye, we must take stock of the facts.

Oil prices in the international market continue to rise while the foreign exchange reserves of Pakistan are dwindling. The government’s economic difficulties are increasing by the day. Pakistan’s power plants depend mainly on imported furnace oil, coal, and liquid natural gas (LNG).

There are various coal-fired power plants including the Sahiwal Coal Power Project (1320 MW), the Port Qasim Power Project (1320 MW), the Maple Leaf Power Project (40 MW), and the Fuji Fertilizer Power Plant Karachi (118 MW). The incumbent government’s obsession with maintaining the exchange rate at around $105 has devastated exports, causing them to plummet by 20 percent from 2012 to 2016. The goal of this obsession was to win political mileage by artificially keeping inflation under control. But now, if the balance of payment situation does not improve, Pakistan may default.

To avoid defaulting, Pakistan may soon have to approach the International Monetary Fund (IMF), which could set severe conditions for any loan offered. The IMF may question how Pakistan intends to repay the heavy loans received from China related to the China Pakistan Economic Corridor (CPEC). The IMF could pressure Pakistan into reducing spending on CPEC projects in order to curtail Chinese loans. This could seriously affect the speed of work on the CPEC.

The US has strong influence over the IMF and is currently annoyed with Pakistan. They have accused Pakistan of increasing instability in Afghanistan and have also already suspended all kinds of aid to Pakistan, including military aid.

Because of the upcoming general elections, the incumbent government cannot afford to compromise on energy. Reduced foreign reserves have created a sense of apprehension about shutting down the imported fuel-powered plants. Doing so could create a horrible energy crisis, which, if it occurred during the interim government, could undo what the whole five years of the Pakistan Muslim League (Nawaz)’s government has tried to achieve. With this in view, the government is likely to take steps to keep true to its election slogan which takes credit for ending load shedding.

Due to the upcoming elections, the government cannot afford to compromise on energy. Reduced foreign reserves have created apprehension about shutting down imported fuel-powered plants. Doing so could create a horrible energy crisis, that could reverse all the PML-N’s gains

With American civil and military aid suspended, Pakistan’s military needs have also been negatively impacted. Pakistan remains in dire need of funds and equipment for the continuing War on Terrorism.

In order to tackle its economic crisis, Pakistan needs friendly states to fulfil their economic, energy, and military needs.

At this time, the Kingdom of Saudi Arabia is encircled by international and domestic troubles. They have not achieved the anticipated victory on the Yemeni front, with the Houthis still frequently launching missiles from Yemen. Under these circumstances, Saudi Arabia needs a trained, proficient, and battle-hardened force to secure its borders and help the House of Saud tighten its grip on the kingdom. Pakistan’s army easily meets these requirements. On quid quo pro basis, Saudi Arabia can lend a hand to the government of Pakistan to help handle its energy crisis or to at least hold off the crisis until after the elections. It can, for the time being, provide oil on a deferred payment, free of cost, or on a reduced payment plan.

If the government wanted to send an army to Saudi Arabia, due to whatever circumstance, the matter should have been debated first in Parliament. The government’s claim that they would remain neutral in the Saudi-Yemen conflict now appears doubtful. Helping Saudi to secure its mainland and borders could free the Saudi military to use more force in the Yemeni conflict. By sending troops to Saudi, Pakistan would be indirectly taking a side in the conflict.

It’s ironic that Pakistan’s government is sending troops to defend Saudi Arabia, the richest Arab country, from Yemen, the poorest Arab country. Moreover, it was Saudi Arabia who invaded Yemen and is perpetually bombarding Yemen — a country who does not even have an air force, a navy, or anything close to a proper army.

Regardless of the legitimacy of the conflict, Pakistan’s policy shift can be better understood from the perspective of the government’s attempts to confront Pakistan’s economic constraints in light of the upcoming elections.

The writer hosts a current affairs talk show on PTV News. Follow him on Facebook at: www.facebook.com/syedzishanhyder

Published in Daily Times, March 4th 2018.