Pakistan’s 2020 Perspectives Dismally Suggest ‘Failed State’ Syndrome – OpEd

By Dr Subhash Kapila

Pakistan figured repetitively in the last two decades as a ‘Failed State’ mired in economic bankruptcy and dysfunctional political governance but was repeatedly bailed out committedly earlier by United States and now China with more economic colonisation impulses than commitment. On the verge of 2020, Pakistan once again is tottering on economic bankruptcy and likelihood of intensification of political turbulence.

Before an analysis is attempted, it is imperative to highlight that the sole reason for Pakistan’s economic and political woes is the vice-like stranglehold that Pakistan Army exercises on the governance of Pakistan and being the root cause of Pakistan’s economic bankruptcy by misappropriating the lion’s share of Pakistan’s limited budget for its nuclear weapons and missiles arsenal, running an economic industrial empire contributing nothing to Pakistan’s national budget and illegal funds for spawning Islamic Jihadi terrorist groups used against India and Afghanistan.

Pakistan thus stands starved for badly needed financial resources for the social and economic upliftment of its present 210 million Muslims for whose supposed upliftment Pakistan was created with bloodshed as a Nation State. Nearing 2020, Pakistan as a Nation State seems headed once again towards being a ‘Failed State’.

In the last two decades, Pakistan was virtually for the first decade under direct Pakistan Army military rule and in the second decade Pakistan Army pre-empted PML-N PM Nawaz Sharif from completing his full second consecutive term. Pakistan Army then contrived a ‘Judicial Coup’ with once again an obliging Chief Justice of Pakistan to pave the way for fresh elections to install the Prime Minister of its choice in 2018 in the person of PM Imran.

PM Imran Khan raised high hopes within a tired Pakistan populace that he would usher-in a New Pakistan or as he stated in his election campaigning a “Naya Pakistan’. PM Imran Khan peering towards 2020 would be sorely perplexed that he would not be able to deliver on his various election pledges of social and economic transformation. And therein lays the rub in terms of dismal 2020 perspectives hovering over Pakistan headed towards ‘State Failure’ once again.

The politico-economic challenges that PM Imran Khan and the dilemmas confronting him stand reflected in a Column in the Pakistan English Daily DAWN some months back by Dr Niaz Mustafa whose selected excerpts are reproduced below:

• ‘The near impossibility of anyone being able to rule Pakistan may undermine this regime too. The PTI faces a unique double jeopardy. Its top leaders are middle class but it has co-opted many traditional elites too”.
• “It (PTI) is the only party that must perform the impossible task of satisfying the woolly desires for rapid change of the merit-based middle class and the patronage needs of traditional elites and poor clients. It is almost doomed if it does or doesn’t. If it tries reforms, it pleases middle class but angers its traditional allies.”
• “Since reforms will likely fail given entrenched elite power and the PTI low capacity, it may end up irking all. If it does not treat the current economic ills, IT WILL CREATE A MELTDOWN.”
• “But some say it’s poetic justice and just penance for it (PTI) unseating the PML-N via dubious polls. So POLITICAL INSTABILITYWILL LIKELY PERSIST.’

Pakistan in 2020 is also likely to witness prolonged political instability not only because of its poor economic health and economic future but also because PM Imran Khan in deference to Pakistan Army dictates who contrived his succession as Prime Minister of Pakistan has churned up the political turbulence within Pakistan by a witch-hunt against the two most powerful political clans of Pakistan, namely the PML-N and the PPP by arrests of their leaders on corruption charges. As if to say that all the Generals of Pakistan Army, both serving and retired, are above board on corruption.

The above political witch-hunt of Opposition leaders will likely lead to coalescing of the PML-N and PPP to jointly oppose PM Imran Khan’s Pakistan Army dictated political witch-hunt and unleash political protests intensifying and stormy political turbulence.

PM Imran Khan foreclosed his policy options and flexibility by fully gravitating towards China and dispensing with United States as patron saviour of Pakistan for decades. His political utterances in the run-up towards election as PM were decidedly anti American possibly dictated by Pakistan Army. PM Imran Khan during his election campaign was favoured recipient of Chinese Ambassador in Pakistan interactions. So much so, that when economic bankruptcy was staring in his Government’s face PM Imran Khan asserted he would not request IMF for bailout loans.

In terms of 2020 economic perspectives the overall analysis suggests a depressing picture of Pakistan’s economic future. Pakistan’s balance of payments position, FDI flows being virtually zero and industrial activity not worth the name Pakistan is mired in 2019 in economic distress and possibly insolvency. Is external debt servicing of exorbitant loans from China is staggering. Its income tax base is minimal with some reports suggesting that hardly 1% of Pakistani population pays income tax. Investor confidence on Pakistan is very low because of the gloomy economic future and political instability hovering over Pakistan.

Initially, China, Saudi Arabia, UAE and now Qatar have pitched in with loans of about 2-4 billion dollars each. That inflow is still meagre to bail out Pakistan financially. Swallowing his own pride, the Imran Government finally turned to IMF for sizeable double figure bailout loans. The IMF has also laid down some very hard stipulations for Pakistan to meet before it advances the loans. The major one being Pakistan must provide full details of its loans from China and written guarantees that IMF bailout loans would not be used for servicing outstanding loans to China.

Another serious factor that has cropped up is that IMF loans may not be forthcoming to Pakistan unless it fully complies with FATF stipulations on curbing terrorism from its safe havens.

 Economically, the picture is depressingly pessimistic for Pakistan because China is already paying the price globally for its strategic sustaining of Pakistan and with no return on its economic investments primarily on the CPEC. CPEC within Pakistan is facing sabotage threats adding to China’s concerns. Saudi Arabia and the Gulf Monarchies cannot be expected to unendingly bestow financial munificence on Pakistan with dismal future perspectives.

With such dismal perspectives on Pakistan 2020 the crucial question that crops up is that to pre-empt this meltdown and State Failure can Pakistan Army once again reinvent its strategic utility for the United States and much to the dislike of PM Imran Khan gravitate back wholly towards the United States? If developments unfold this way what will be the reaction of China to being stabbed in the back by Pakistan and how does it up stick from Pakistan with billions of dollars sunk in CPEC?

Perplexing questions, to say the least but yet need to be assessed and answers hazarded. The only way Pakistan can reinvent its strategic utility for the United States is to collaborate with United States on containment of Iran. This will suit Saudi Arabia also. But will Pakistan risk this venture?

China will not go down without a stiff fight for up-sticking from Pakistan after affecting a colonial hold over Pakistan and sinking billions of dollars in CPEC and Pakistan’s nuclear projects. China’s singular advantage is that it has the most powerful ally in Pakistan Army Generals whom China has assiduously nurtured. Pakistan Army Generals have not forgiven the United States for their severe loss of reputation and image within Pakistan in the wake of US Special Forces liquidating Osama bin Laden in the midst of Pakistan Army’s most formidable garrison of Abbottabad.

The global community must no longer be blackmailed by Pakistan Army Generals that in case of Pakistan State Failure and meltdown regional stability will be endangered by Pakistan’s nuclear arsenal. If United States is attempting denuclearisation of North Korea why cannot the United States and the West attempt denuclearisation of Pakistan?

Concluding, the three main conclusions that emerge from the foregoing analysis on Pakistan’s 2020 dismal perspectives suggest that Pakistan is headed in 2020 towards ECONOMIC MELTDOWN.POLITICAL INSTABILITY and LIKELY STATE FAILURE—something on which Major Powers should deliberate and also on the consequences.