It’s a sickening tale. Police personnel, some 400 of them, praying at a mosque when it comes crashing down in a blast that was carefully engineered for maximum damage. Dozens lie dead in a strike ostensibly claimed by the Tehrik-e Taliban Pakistan (TTP) and that’s bad enough.
But this is another stick on the back of a country in an economic sinkhole of unprecedented proportions. That’s Pakistan today, even more of a danger to others and itself, when on its knees than it was before.
Most believe that once again, the United States will reach out a hand and help it to its feet. But things have changed. The collapse is worse than ever before, and the world itself is woefully short of funds; the pandemic and now a senseless war in Ukraine have brought about a global crisis where help is not so easy to get. As a neighbour, India must worry about the fallout—from worst case to best case.
What Explains Pakistan's Scrambling State
It's not really easy for a state to fragment in reality, and Pakistan is a well- resourced state with hard-working people and natural resources. But the system has collapsed as a whole, and there’s little hope for salvage.
Look at the facts. The ruling coalition also identified as the ‘elite’, is being seen as at the core of the misery. The sight of the elegant Sherry Reman—reportedly worth USD 250 million—pleading for flood aid, or the alleged leak from the Prime Minister’s office which showed him asking favours for an already wealthy Maryam Nawaz, has shown the major parties in a poor light.
Even the most stalwart Pakistani could not but have been dismayed by the political bickering even as the state quite literally, burnt. Imran Khan has managed a populist image, but is fast emerging as more of a state-wrecker than builder.
The remaining institution, the Army has also been torn down in stature and authority with unprecedented anger on the streets, not only in political rallies but in areas where people have suffered its exacting counter-terrorism operations. This, together with economic misery, has worsened separatist tendencies in every province—the Jiye Sindh in Karachi, the Pashtun movement in Khyber Pakhtunkwa (KP) , the month-long unrest in Gilgit Baltistan over land issues and loss of wheat subsidy, protests in ‘Azad’ Kashmir, and the ongoing movement for freedom in Baluchistan.
Of these KP—particularly its tribal belt—has the most potential to go out of control, given not just the demands of the TTP, but also the entirely peaceful Pashtun Tahafuz Movement which is being strangulated by force, and its leadership imprisoned.
Other than Punjab which is riven by political chaos, every province and ‘non-province’, is hit. Such Balkanisation is dangerous for the region, and could lead to other such flare-ups in China (Xinjiang), Afghanistan, or Kashmir, or even in Central Asia. History shows that such fracturing is a highly uncertain process in terms of its extent of the fissures.
The Worst Economic collapse
The likelihood of such fracturing is worsened by unprecedented daily distress, with even white-collared workers and salaried classes having to do a severe cut-down. Weekly inflation at the end of January increased to 32.57 % Year-Over-Year (YoY) due to a massive surge in prices of especially vegetables like onions, according to the Pakistan Bureau of Statistics. Costs will go up further as Pakistan increased fuel prices by Rs 35 per litre—the second steep increase after June when it was increased by 29 per cent.
The Pakistan Rupee (PKR) has been allowed to reach its actual value as the government removed an unofficial cap on the exchange rate. The Rupee slid to PKR 261 to the Dollar even as the Karachi stock index plunged. The International Monetary Fund (IMF) visit has led finally to a price rise of 30 per cent on liquified natural gas, and a rise in power tariff in an effort to deal with Rs 1.25 trillion payable to power producers.
Cooking gas is already unavailable in most households, and industry struggling. Meanwhile, the State Bank has noted a steady drop in remittances, plunging recently by 19 per cent (YoY), with people either hoarding their Dollars or using hawala again.
This is a huge loss for the economy which was virtually dependent on remittances to keep Forex reserves going. In sum, the fallout of society from the bottom to the middle class, would be huge in the short term. Protests could break out. Starvation among the lower rungs, is near certain. If Pakistan leaders stumble, this could lead to pressure on Indian and Iranian borders—again in the short term. All it needs, is one more crisis, especially a climate-related one this summer.
Pak's Security Investments Need To Be Reviewed
Remember, that the IMF had placed strong strictures on Sri Lanka’s Defence Budget, which has led to the government announcing that it would halve its military by 2030; to be done gradually through less recruitment, in an effort to reduce total wage bill. But Sri Lanka will also cut down on its entire government sector.
In Pakistan, the devil lies in the detail. Available data on defence expenditure which in India, covers several pages of detailed information, is so short as to be a parody.
The total for ‘Defence Services’ is PKR 1.37 trillion, far more than what the federal government transfers to its provinces. That figure doesn’t include pensions pegged at PKR 360 billion and the Armed Forces Development Program at PKR 340 billion.
There are other heads that are opaque including the Defence Services Miscellaneous and Security Deposits, which runs to more than PKR 184 million. Add all of this up, and the total is far above the stated figure. Now, it seems the IMF wants defence pensions to be added to the total, and is asking for a total audit.
What is naturally completely unclear is what Pakistan spends on its nuclear arsenal that includes a variety of tactical nukes, something that has ‘instability’ built into it. The IMF is unlikely to insist on any serious cut that would affect their safety, but ideally would ask for a cut in overall defence expenditure.
To any Army that unlike Sri Lanka, is accustomed to seeing itself at the top of the food chain, this would be hugely unacceptable, and some form of military adventurism is likely. After all, it’s the Army Chief who has been negotiating loans from China, the US and Saudi Arabia. A belief that the Army can ‘set things right’ could result. It can't, but that’s unlikely to be believed.
Pakistan Crises' India Impact
The crux of it all depends on whether politicians place national good above political interests, and adopt some short-term policies to get over the crisis. That means throwing open the borders to India and Afghanistan to get cheaper vegetables and food, and possibly subsidised power from the northern grid—if Delhi so agrees. But there’s another storm coming, and that’s a crisis in the fertiliser industry, and thereby, food production, brought on by the Ukraine war.
Everyone is going to be hit, including India which may not be in a position to open up. Traditional donors may be hard put to provide.
No, there’s no good news in the short term. In the long term, a thorough shake-up of the Pakistan economy and systems may actually have a beneficial effect, cutting flab and bringing a degree of transparency to its finances.
Most important is that bringing its military to a realisation that it is an instrument of the state and not the other way around. It is a very poor crisis that does not also offer opportunity. For Pakistan, this could be the critical turnaround into a normal state. That means getting along with every single one of its neighbours. Quite a challenge.
(Dr Tara Kartha is a Distinguished Fellow at the Institute of Peace and Conflict Studies (IPCS). She tweets @kartha_tara. This is an opinion article and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)