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China’s ‘Debt Trap’ for Pakistan: Dilutes FATF Ruling

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Under normal circumstances, a one billion dollar loan between two sovereign countries would have gone unnoticed by global community, but what makes China’s one billion dollar lending to Pakistan so special is the timing of this loan and the strategic intention behind it. The economics of this loan to justify the need to buffer Pakistan’s foreign currency reserves, which nosedived to $9.66bn last week from $16.4bn in May 2017, taking China’s lending to Pakistan to over $5bn in this fiscal year, has been well covered by all the segments of media in India and abroad. The messaging and the strategy behind this bailout need deeper analysis.

Timing and Messaging

The timing of the loan, which raises eyebrows, is that it comes immediately after Pakistan being officially included in the grey list of Financial Action Task Force (FATF). FATF is a global body, (of which China is also a member), aims to combat money laundering and terror financing, while taking the decision was convinced that Pakistan has failed to act against terror financing on its soil. China’s tried its best to help its ‘All weather friend’ Pakistan by responses to indicate that they are doing their best to fight terrorism and have made enormous sacrifices towards that. This aid package indicates China’s resolve to signal the global community, that it intends to keep Pakistan economically afloat irrespective of FATF ruling. China is apprehensive that if Pakistan sinks economically (if it does not get IMF aid package which it will bid for after elections), it may well happen that China may not find enough investors for CPEC, and may be its own companies may find it difficult to sustain the project. With this gesture China has tried to raise the confidence level of its investors in CPEC/BRI, despite the risk of criticism of diluting FATF, despite knowing that Pakistan cannot pay the interest of its loan and needs further loan to repay its interests with sinking economy.

Why Pakistan is strategically lucrative to find donor for bail out?      

Pakistan’s geographic location is strategically so important that US, as well as China will like to have influence over it. For US, Pakistan is relevant to keep its competitors under check and have bases to launch operations in Afghanistan, especially against al-Qaeda and Haqqani network. As Pakistan provided the bases and manpower to enable US to fight in Afghanistan against Taliban giving shelter to both, it extracted billions of dollars from them as bailout packages, besides military hardware on the excuse to ward of Indian threat to concentrate on fighting on Afghanistan borders to serve US interest. Now US is acting tough on them, post “New South Asia Policy of Trump Administration”, blocking the aid to them, as it is convinced that Pakistan did not do enough to target al-Qaeda and Haqqani network and continues to help them. US is however, in no mood to give a free run to China to cede this strategic space so easily in this region, hence the strategic competition in this region is not yet over.

China needs warm water access for its Western region and smooth flow of energy and trade through this region besides some of the minerals in Pakistan. CPEC and the related infrastructure also give China an opportunity to utilize its overcapacities in Pakistan. This will end up in insurmountable loan for Pakistan, beyond its paying capacity, which may result in Chinese land grab as well as resource grab and some compromise to sovereignty of Pakistan by “Debt/Financial Offensive” by China, which has been very successful in some countries like Myanmar, Maldives, Sri Lanka and others. China also has a strategic interest to keep US out of this region. China therefore has enough strategic reasons to keep Pakistan economically afloat for its own strategic interests, hence it has gladly taken over this role from US.

Pakistan transition to Chinese colony/Terroristan

From global prism and Indian perspective the financial crisis of Pakistan is dangerous. If China continues to be determined to bail it out every time, Pakistan’s status will be reduced to a colony of China, with considerable PLA’s presence in context of protecting CPEC and other investments. Presently Pakistan is a sham democracy with Pakistan Army giving an impression of binding and protecting the country by holding all levers of power. If Pakistan collapses, then, with the number of terrorist groups being nurtured, there is a danger of it coming under Jihadi rule or becoming another Islamic caliphate, which the world community has to deal with, which can be far more dangerous with nuclear assets including tactical nukes present there. With Pakistani Army’s and ISI honeymoon with terrorists, including getting them a backdoor entry into politics through Hafiz Saeed’s Milli Muslim League fighting elections, the radicalization of Pakistani Army is reasonably evident. It is time for the global community including China to revisit their support to Pakistan, and prevent it from being diverted to self destroying Terroristan.

The author is a veteran Infantry General with 40 years experience in international fields and UN. A globally acknowledged strategic & military writer/analyst; he is currently the Chief Instructor of USI of India, the oldest Indian Think-tank in India.

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Afghanistan and the Quest for Democracy Promotion: Symptoms of Post-Cold War Malaise

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The U.S. withdrawal from Afghanistan should be the first step in a reduced American overseas force posture. Democracy promotion in the form of perpetual force deployment and endless military engagements has resoundingly failed to deliver tangible benefits for the United States. Those who celebrated in the wake of the USSR’s collapse as an unqualified vindication of liberal democracy ignored the role of strategic overextension and deteriorating domestic affairs in the latter. The unipolar U.S. moment was bound to be ephemeral, and should have been used to reevaluate and refocus strategic goals in order to ensure we avoid the same fate of our ideological counterpart.

Instead, the United States dispensed with any notions of humility and allowed democratic peace theory to continue guiding its foreign policy decision-making. Even though it is true that democracies are less likely to engage in military confrontations with one another, only hubris could have led us to believe we could universally create this sufficient condition. Afghanistan is a definitive rebuke to the notion that we can simply will the circumstances for democratic peace—on our own terms and with no compromise—into existence.

Luckily, there is still time to readjust the country’s strategic calculus and begin allocating its limited resources in a less myopic manner. Following through with withdrawal could be a starting point for a new trend of U.S. restraint. The most logical region of the world to address next would be its position in Europe. Relative European weakness at the end of World War 2 threatened the balance of power on the continent as the specter of Soviet Communism crept its way West. With Russia a shell of the Marxist empire, there is no logical reason for the United States to maintain its current outsized military presence in Europe; indeed, the EU collectively holds a GDP 11 times the size of Russia’s, has 3 ½ times the population size, and spends 4 times as much on defense.

The United States should demand that European allies adopt a share of their own defense that is more commensurate with this fact. The decision of the previous U.S. administration to remove 12,000 troops due to Germany’s inability to meet NATO spending targets was a good step. The current administration could continue to capitalize on this trend and set more targets for troop withdrawals. Withdrawal will also signal to countries that use political tension with Moscow to decrease their saber rattling. This includes Eastern European NATO members, as well as countries like Ukraine and Georgia. It must be made explicit to the latter two that they cannot engage in bellicose political brinkmanship, and then hope to simply rely on U.S. led NATO to come to their defense should the situation escalate. It may seem counterintuitive, but this may very well result in a more stable European security environment, at least in regard to its posture towards Russia.

This will also reverberate back into the European political arena, as there will be less incentive for inflating the Russian threat. Moscow acts strategically in accordance with its limited national security interests, anticipating Western responses and reactions. Clear signaling that the United States and NATO do not have the goal of encircling Russia and rendering it strategically inert will only serve to increase U.S.-Russian relations, as well as European-Russian relations. This will free up U.S. resources for more pressing national security interests such as preparing for strategic and economic competition with China. It will also decrease the incentive for closer Russian-Sino cooperation.

Ideally, this would cascade into a reevaluation of U.S. strategic postures in other regions as well, such as Southeastern Asia and the broader Middle East. The former is another area in which the United States could reduce its force presence and incentivize increased defense spending by allies. A decreased U.S. presence would also message to China that the United States does not inherently oppose Beijing as a threat. It should, however, be made explicit that aggression towards a U.S. treaty ally would be met with an asymmetric response, but that does not mean that increased tensions with China need to be the status quo. In the Middle East, large scale U.S. military withdrawal in exchange for a primarily diplomatic mission to the region could also serve to decrease one of the major sources of terrorist recruitment.

An interventionist foreign policy was perpetuated as the product of learning the wrong lessons from U.S. victory in the Cold War. A communist doctrine of proselytizing to the alienated masses with axiomatic dogmas and theological certainties failed not because of the weakness of its scripture (which would require a much different, longer article), but because its millenarian quest for world revolution led the Soviet empire to overextend itself beyond its economic means. Behind the façade of military might, the domestic population grew increasingly disillusioned and dissatisfied. Unfortunately, there are alarming parallels with the current domestic situation in the United States today.

Refusing to remain mired in Afghanistan could be an important catalyst in beginning to reevaluate U.S. foreign policy. If Washington focuses its resources on limited goals that prioritize key national security interests, it can better tend to the state of its own republican government and society. It might not be as romantic as crusading for democracy, but it could be essential in preserving the Union.

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What, in fact, is India’s stand on Kashmir?

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Women walking past Indian security forces in Srinagar, summer capital of the Indian state of Jammu and Kashmir. Nimisha Jaiswal/IRIN

At the UNGA, India’s first secretary Sneha Dubey said the entire Union Territories of Jammu & Kashmir and Ladakh “were, are and will always be an integral and inalienable part of India. She added, “Pakistan’s attempts to internationalise the Kashmir issue have gained no traction from the international community and the Member States, who maintain that Kashmir is a bilateral matter between the two countries (Pakistan is ‘arsonist’ disguising itself as ‘fire-fighter’: India at UNGA, the Hindu September 25, 2021).

It is difficult to make head or tail of India’s stand on Kashmir. India considers the whole of the disputed state of Jammu and Kashmir as its integral part. Yet, at the same time, admits it to be a bilateral matter still to be resolved between India and Pakistan.

What bars Pakistan from agitating the Kashmir dispute at international forums?

India presumes that the Simla accord debars Pakistan from “internationalizing” the Kashmir dispute. That’s not so. Avtar Singh Bhasin (India and Pakistan: Neighbours at Odd) is of the view that though Pakistan lost the war in East Pakistan, it won at Simla.

Bhasin says, `At the end, Bhutto the “dramatist” carried the day at Simla. The Agreement signed in Simla did no more than call for `respecting the Line of Control emerging from the ceasefire of 17 December 1971. As the Foreign Secretary TN Kaul [of India] said at briefing of the heads of foreign mission in New Delhi on 4 July 1972, the recognition of the new ceasefire line ended the United Nations’ Military Observers’ Group on India and Pakistan (UNMOGIP) role in Kashmir, created specifically  for the supervision of the UN sponsored ceasefire line of 1949, since that line existed no more. Having said that India once again faltered for not asking the UN to withdraw its team from Kashmir, or withdrawing its own recognition to it and its privileges (Document No. 0712 in Bhasin’s India-Pakistan Relations 1947-207).

Following Simla Accord (1972), India, in frustration, stopped reporting ceasefire skirmishes to the UN. But, Pakistan has been consistently reporting all such violations to the UN. India feigns it does not recognise the UNMOGIP. But, then it provides logistic support to the UMOGIP on its side of the LOC.

India keeps harassing the UNMOGIP vehicles occasionally. Not long ago, three members of the UNMOGIP had a close call along the LoC in Azad Jammu and Kashmir after Indian troops shot at and injured two locals who were briefing them on the situation after ceasefire violations.

India even asked UNMOGIP to vacate 1/AB, Purina Lila Road, Connaught Place, from where it has been functioning since 1949.

Bhasin says (p.257-259), `The Pakistan Radio broadcasts and…commentators took special pains to highlight …the fact: (i) That India have accepted Kashmir to be a disputed territory and Pakistan a party to the dispute. (ii) That the UNSC resolutions had not been nullified and contrarily (iii) Kashmir remained the core issue between the two countries and that there could not be permanent peace without a just solution based on the principle of self-determination for the people of Kashmir. And Pakistan was right in its assessment. It lost the war won the peace. At the end India was left askance at its own wisdom’.

Obviously, if the UNSC resolutions are intact, then Pakistan has the right to raise the Kashmir dispute at international forums.

India’s shifting stands on Kashmir

At heart, the wily Jawaharlal Lal Nehru never cared a fig for the disputed state’s constituent assembly, Indian parliament or the UN. This truth is interspersed in Avtar Singh Basin’s 10-volume documentary study (2012) of India-Pakistan Relations 1947-2007.  It contains 3649 official documents, accessed from archives of India’s external-affairs ministry.  These papers gave new perspectives on Nehru’s vacillating state of perfidious mind concerning the Kashmir dispute. In his 2018 book (published after six years of his earlier work), India, Pakistan: Neighbours at Odds (Bloomsbury India, New Delhi, 2018), Bhasin discusses Nehru’s perfidy on Kashmir in Chapter 5 titled Kashmir, India’s Constitution and Nehru’s Vacillation (pages 51-64). The book is based on Selected Works of Jawaharlal (SWJ) Nehru and author’s own compendium of documents on India-Pak relations. Let us lay bare a few of Nehru’s somersaults

Nehru disowns Kashmir assembly’s “accession”, owns Security Council resolutions

Initially, Nehru banked on so-called Instrument of Accession and its authentication by `Constituent Assembly. Yet, in a volte-face he reiterated in New Delhi on November3, 1951 that `we have made it perfectly clear before the Security Council that the Kashmir Constituent Assembly does not [insofar] as we are concerned come in the way of a decision by the Security Council, or the United Nations’(SWJ: Volume 4: page 292, Bhasin p.228). Again, at a press conference on June 11, 1951, he was asked `if the proposed constituent assembly of Kashmir “decides in favour of acceding to Pakistan, what will be the position?”’ he reiterated,  `We have made it perfectly clear that the Constituent Assembly of Kashmir was not meant to decide finally any such question , and it is not in the way of any decision which may ultimate flow from the Security Council proceedings’ (SWJ: Volume 15:, Part II, page 394. Bhasin page 56). He re-emphasised his view once again at a press conference in New Delhi On November 3, 1951.

Nehru does not label Pakistan an aggressor at the UN

And then labels it so in Parliament

He never labeled Pakistan an aggressor at the UN. Yet, he told parliament on March 1, 1954 `that “aggression” took place in Kashmir six and a half years ago with dire consequences. Nevertheless the United States have thus far not condemned it and we are asked not to press this point in the interest of peace (Bhasin pp. 55-56).

Nehru disowns the Security Council as just a non-binding mediator

On July 24 1952, Nehru said, `Unless the Security Council functioned under some other Sections of the Charter, it cannot take a decision which is binding upon us unless we agree to it. They are functioning as mediators and a mediator means getting people to agree (SWJ, Volume 19, page 241. Bhasin page 56).

Security Council re-owned

Bhasin points out (page 57 op. cit.) `At the same press conference on 24 July, 1952 when asked what the necessity of plebiscite was now that he had got the Constituent Assembly [approval], he replied “Maybe theoretically you may be right. But we have given them [UN] an assurance and we stand by it (SWJ: Volume 19, pp. 240-241. Bhasin, p. 57, Bhasin pages 256-257).

Concluding remarks

Pakistan’s recourse to the UN is India’s Achilles Heel. So it is as India’s stand on disputed Kashmir is a rigmarole of inconsistent myths.

To avoid internationalization of the Kashmir issue, India’s own former foreign secretary Jagat Singh Mehta offered proposals (rebranded by Pervez Musharraf’s) to soften the LOC in exchange for non-internationalisation of the Kashmir dispute for 10 years. Mehta presented his ideas in an article, ‘Resolving Kashmir in the International Context of the 1990s’.

India had no consistent stand on Kashmir. There was a time when Sardar Patel presented Kashmir to Pakistan in exchange for Hyderabad and Junagadh. Reportedly, the offer was declined as Pakistan’s prime minister Liaquat Ali Khan thought it could retain not only Kashmir but also Junagadh and Hyderabad. Jawaharlal Nehru approached the United Nations’ for mediation. He kept harping his commitment to the plebiscite.

It is eerie that the whole architecture of India’s stand on Kashmir is erected on the mythical `instrument of accession’ and its endorsement by the disputed state’s assembly, Accession documents are un-registered with the UN. The Simla Accord text makes crystal clear reference to the UN charter.

Let India know that a state that flouts international treaties is a rogue state: pacta sunt servanda, treaties are to be observed and are binding on parties. Self-determination is not only a political but also a legal right in disputed lands. Sans talks with Pakistan, and UN or third-party mediation, what else is India’s recipe for imprisoned Kashmiris? A nuclear Armageddon or divine intervention?

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Afghanistan may face famine because of anti-Taliban sanctions

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Food and blankets are handed out to people in need in Kabul, the capital of Afghanistan, by © WFP/Arete

Afghanistan may face a food crisis under the Taliban (outlawed in Russia) rule because this movement is under sanctions of both individual states and the United Nations, Andrei Kortunov, Director General of the Russian International Affairs Council, told TASS on Monday.

“A food crisis and famine in Afghanistan are not ruled out. Indeed, Afghanistan is now on life support, with assistance mostly coming from international development institutes, as well as from the United Nations, the European Union, and the United States, i.e. from Western sources and institutes close to the West,” he said. “The Taliban is under international sanctions, not only unilateral US and EU sanctions, but also under UN sanctions. That is why, in formal terms, the Taliban coming to power may mean that these sanctions could be expanded to the entire country, and it will entail serious food problems. Food deliveries from the World Food Program and other international organizations may be at risk.”

According to the expert, statistics from recent years show that annual assistance to Afghanistan amounts to about five billion US dollars, but this sum is not enough to satisfy the needs of the country’s population. “It is believed that a minimal sum needed by Afghanistan to maintain basic social institutions to avoid hunger in certain regions stands at one billion US dollars a month, i.e. 12 billion a year,” Kortunov noted. “Some say that twice as much is needed, taking into account that population growth in Afghanistan is among the world’s highest and life expectancy is among the lowest. And around half of Afghan children under five are undernourished.”

He noted that despite the fact that the issue of further food supplies to Afghanistan is not settled, some countries, for instance, China, continue to help Afghanistan but a consolidated position of the international community is needed to prevent a food and humanitarian crisis. “A common position of the international community is needed and it should be committed to paper in corresponding resolutions of the United Nations Security Council, which should provide for reservations concerning food assistance in any case,” he added.

However, in his words, the key question is who will control the distribution of humanitarian and food assistance inside the country. “There were such precedents when countries and regimes under sanctions were granted reservations and received food assistance. But a logical question arises about who will control the distribution of this assistance. This has always been a stumbling block for programs of assistance to Syria, as the West claimed that if everything is left to Damascus’ discretion, assistance will be distributed in the interests of [President Bashar] Assad and his inner circle rather than in the interests of the Syrian people. It is not ruled out that the same position will be taken in respect of the Taliban,” Kortunov went on to say. “It means that the international community will be ready to provide food assistance but on condition that unimpeded access will be granted to the areas in need and everything will not be handed over to the Taliban who will decide about whom to help.”

After the US announced the end of its operation in Afghanistan and the beginning of its troop withdrawal, the Taliban launched an offensive against Afghan government forces. On August 15, Taliban militants swept into Kabul without encountering any resistance, establishing full control over the country’s capital within a few hours. Afghanistan’s President Ashraf Ghani said he had stepped down to prevent any bloodshed and subsequently fled the country. US troops left Afghanistan on August 31.

From our partner RIAC

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