The new government-in-the-offing (NGIO) faces four major challenges, along with numerous minor ones. The first of these four challenges is the economy. The second concerns war-like situations on the Line of Control (LoC) and the Durand Line and a full-fledged on-going war inside the country being waged against the terrorists. The third relates to the expanding trust deficit that afflicts our relationship with the world’s sole super power, the US. And the fourth one concerns the so-called civil-military relations which have continued to undermine the democratic aspirations of the nation turning into a kind of vicious war of attrition during the last couple of years, leading up to these elections.
None of the four challenges is any less serious than the other three. All four are equally critical. The NGIO will have to tackle all of them simultaneously and on war-footing.
On the economic front we are faced with an acute shortage of resources to meet our escalating current account deficit as well as our mounting debt repayment obligations. We immediately need as much as $10 billion to meet these two obligations. But even if we decide to go to the IMF as a last resort, it is highly doubtful that it would be in a position to help us as our residual SDR quota is equivalent to no more than about $6 billion.
In case the IMF were to agree to come to our rescue, it would not do so without imposing ever harsher conditions like further devaluation of our currency, withdrawal of all subsidies as well as massive tax reforms
In case the IMF were to agree to come to our rescue, it would not do so without imposing ever harsher conditions like further devaluation of our currency, withdrawal of all subsidies as well as massive tax reforms accompanied by removal of tax exemptions granted to specific activities in all three economic sectors —agriculture, manufacturing and services— impacting the incomes of our entire ruling elite,plus fast paced privatisation of loss making entities like the Pakistan Steel Mills and the PIA.
One also cannot rule out the possibility of a couple of political conditions accompanying the economic ones (in case a bail-out is approved) proposed perhaps by some of the influential members of the IMF board who are currently not very happy with Pakistan.
One recalls vividly that such a condition was attached to the June 2000 IMF bail-out package for Pakistan, then facing an almost identical situation,approved by the IMF Board with both the US and UK representatives sitting out of the meeting as both, under their respective laws, were forbidden to vote ‘yes’ on applications from countries ruled by the Army. As a trade-off Pakistan was nudged towards the Agra Summit.
As soon as the front loaded bail-out package was approved by the IMF, then Prime Minister of India, Atal Behari Vajpayee publicly announced a ceasefire on the LoC. Hizbul Mujahideen, the Pakistan based Kashmiri Jihad outfit reciprocated by immediately announcing the ceasefire on its part. Pakistan followed through immediately by silencing its own guns at the LoC but made it public only in mid-November 2000, just about the same time the IMF started disbursing the ‘assistance’. The Agra process was to continue under the close supervision of the US despite the Summit’s failure in mid-July 2001. But in less than two months of the Summit,the world had experienced an upheaval of great proportion because of 9/11, causing the US to abandon the idea of helping reduce the chances of an accidental war between two nuclear powers of South Asia.Instead, it was seen seeking immediate help from the Pakistan Army as it invaded Afghanistan looking for Mullah Omar and Osama Bin Laden.
One can only make a wild guess as to the nature of the political conditionality the US would encourage the IMF to impose on Pakistan in return for approving an enlarged bail-out package amounting to $10 billion. The NGIO is most likely to accept any political conditionality, in view of the dire economic situation, short of giving up its nuclear programme.
The economic cost of carrying on even defensive actions on the LoC and the Durand Line and waging the full-fledged war against terrorists has seriously eroded our ability to spend adequately on providing our indigent population access to affordable two-square meals a day, affordable education, affordable health cover, affordable housing and affordable transport. Therefore, the NGIO will have to urgently seek some kind of a solution to achieve permanent peace on its Eastern and North-Western borders.
The NGIO also needs to try to reduce the trust deficit that afflicts our relations with the US. Of course, it is a popular position in Pakistan that the US is blaming us for its failure to win the war in Afghanistan, the longest war in US history. But the US does not seem to agree with this position of ours. It believes that by providing safe havens to Afghan Taliban, Pakistan is prolonging the conflict. This perception has eroded trust from the Americans’ side.
Here is where you need diplomacy and not a parade ground solution. This job is done more effectively by trained diplomats, if they are let alone to do their job in the best interests of the country. With input from the Army and under the leadership of an elected government which would be held accountable for all its decisions and policies made and implemented during its tenure come election time, the trained officers of the foreign office would certainly be able to come up with the right kind of answer to this trust deficit problem.
Finally, the wasteful tension in civil-military relations also needs to be addressed urgently. This can be done by adhering strictly to the Constitution. One would, therefore, expect all the elements in the equation to understand that the country could get out of the dire straits it has landed itself in by abiding by the limits the Constitution has prescribed for each and every institution including Parliament, the executive, the judiciary, the civil service and the military.
The writer is a senior journalist based in Islamabad. He served as the Executive Editor of Express Tribune until 2014
Published in Daily Times, July 26th 2018.