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Crunch time in Pakistan

Dr. James M. Dorsey

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It’s crunch time in Pakistan. Resolving Pakistan’s financial crisis is likely to require newly appointed prime minister Imran Khan to not only accept an International Monetary Fund (IMF) straightjacket but tackle his and Pakistan’s convoluted relationship to militancy.

With the breeding ground for militancy built into the country’s DNA and Mr. Khan owing his electoral victory in part to the spoiler role played by militants in Pakistani elections, tackling militancy is a tall order. Add to that Mr. Khan’s ultra-conservative social attitudes as well as his abetting of militant concerns.

Mr. Khan, who was once dubbed Taliban Khan because of his support of the Afghan Taliban, advocacy for the opening in Pakistan of an official Taliban Pakistan office, allowing government funds to go to militant madrassas, and enabling Islamists to dictate the content of public school textbooks, is nonetheless likely to find that he has no choice.

To secure IMF support, Mr. Khan will have to avoid blacklisting by an international watchdog, the Financial Action Task Force (FATF), and ensure removal from the group’s grey list by not only reinforcing anti-money laundering and terrorism finance measures but also rigorously implementing them.

That would require both the acquiescence of Pakistan’s powerful military and a reversal of Mr. Khan’s publicly espoused positions. In many ways, Mr. Khan’s positions have been more in line with those of the military, including his assertion that militancy in Pakistan was the result of the United States’ ill-conceived war on terror rather than a history of support of militant proxies that goes back to Pakistan’s earliest days, than he has often been willing to acknowledge.

“If terrorism is not indigenous to Pakistan, and merely imported, then it follows that no larger reckoning of the state’s and society’s relationship with religion can or should take place — a convenient conclusion for religious hardliners,” said South Asia scholar Ahsan I. Butt.

Juggling the demands of multi-lateral agencies and Pakistan’s reality is likely to trap Mr. Khan in a Catch-22 of centrifugal forces that include the roots of militancy enhanced by what Spanish sociologist Manuel Castells termed “the rise of the networked society.”

The appeal of the militants’ intolerance and supremacism, rooted in a literal interpretation of the Qur’an and the teachings the Prophet Mohammed, is reinforced by advances in information technology and proliferation of media that in Mr. Castells’ approach created “a world of uncontrolled, confusing change” that compelled people “to regroup around primary identities; religious, ethnic, territorial, (and) national.”

Mr. Khan’s harsh reality is nonetheless likely to be also shaped by Pakistan’s handling of men like Abdul Rehman al-Dakhil, a probable litmus test of the seriousness of its anti-terrorism measures.

An alleged operational leader of Lashkar-e-Taiba, a group sanctioned by both the United Nations and the United States that openly operates through proxies despite being banned in Pakistan, Mr. Al-Dakhil together with two “financial facilitators” was last month identified by the US State Department as a globally designated terrorist.

“Today’s action notifies the U.S. public and the international community that Abdul Rehman al-Dakhil has committed, or poses a significant risk of committing acts of terrorism,” the State Department said.

Hafez Saeed, the alleged mastermind of the 2008 attacks in Mumbai and leader of Lashkar-e-Taiba and its front organization, Jamaat-ud-Dawa, constitutes a similar litmus test as Mr. Khan seeks to demonstrate to FATF compliance with agreed measures to counter money-laundering and terrorism finance.

The fact that Mr. Saeed despite having been designated a global terrorist by the United Nations Security Council and the State Department, which put a US$10 million bounty on his head, remains a free man and was able to field candidates in last month’s election figured prominently in FATF’s decision to put Pakistan on a grey list .

To demonstrate its sincerity, Pakistan in advance of the election passed the Anti-Terrorism Ordinance of 2018, which gave groups and individuals, including Mr. Saeed, designated by the UN as international terrorists the same status in Pakistan for the first time.

Pakistan also sought to curtail the ability of Mr Saeed’s organizations‘ to perform social and charity work, a pillar of their popularity, by confiscating ambulances operated by his charity,  closing Jamaat-ud-Dawa offices and handing control of its madrassas to provincial governments.

The fact that Mr. Saeed’s candidates and other militants did not bag National Assembly seats in last month’s election would suggest at first glance that it would be easier for the military and Mr. Khan to radically alter their approach to militancy.

That, however, ignores the significance of the militants capturing almost ten percent of the vote and helping deprive Mr. Khan’s main rival, ousted prime minister Nawaz Sharif’s Pakistan Muslim League-Nawaz (PML-N), of votes in crucial electoral districts, according to an analysis of the Pakistan Election Commission’s results by constituency as well as a Gallup Pakistan survey.

It also fails to take into account the extra-parliamentary influence militants garner from their role as spoilers as well as their societal roots.

“In Pakistan, parliamentary seats alone do not a victory make. The religious political parties, particularly the newcomer extremist variety, may not have won big, but they have much to celebrate. Primarily, they can revel in their successful hijacking of this election’s political narratives. Rather than moderate their positions in order to compete, they managed to radicalise part of the mainstream political discourse,” said journalist Huma Yusuf.

Exploiting what governance expert Rashid Chaudhry dubbed “the politics of emotion,” Tehreek-i-Labbaik Pakistan (TLP), campaigning on a platform calling for strict implementation of Islamic law as well as Pakistan’s draconic blasphemy law, emerged from the election as Pakistan’s fifth largest party.

TLP, headed by Islamic scholar Khadim Hussain Rizvi, garnered four percent of the vote even if it only won two seats in Sindh’s provincial assembly and one in Khyber Pakhtunkhwa. The Gallup survey said anecdotal evidence showed that TLP votes pushed PML-N to second position in many districts, “one reason for the loss of PML-N seats.”

Not surprisingly, Mr. Khan has echoed TLP’s insistence on the principle of Khatam-i-Nabuwwat, or the finality of Mohammed’s prophethood, that pervades Pakistan’s body politic. “We are standing with Article 295c and will defend it,” Khan said referring to a clause in the constitution that mandates the death penalty for any “imputation, insinuation or innuendo” against the Prophet Muhammad.

Mr. Khan’s newly appointed human rights minister, Shireen Mazari, a controversial academic, who two decades ago advocated nuclear strikes against Indian population centres in the event of a war, condemned on her first day in office a Dutch government decision to support an exhibition of cartoons depicting the Prophet Mohammed by a member of parliament.

TLP supporters ransacked an Ahmadi mosque in the city of Faisalabad less than a week after Mr. Khan was sworn in, shooting and wounding six people. Supporters of TLP and Mr. Khan’s Pakistan Tehreek-e-Insaf (PTI) targeted an Ahmadi house of worship in Sialkot in May.

Mr. Khan’s backing of the blasphemy clause that has served as a ramming rod against minorities and a means to whip crowds into a frenzy and at times turn them into lynch mobs and inspired vigilante killings came as no surprise to Mr. Butt, the South Asia scholar, who noted shortly after the election that “Khan’s ideology and beliefs on a host of dimensions are indistinguishable from the religious hard-right.”

Yet, securing international support for inevitable structural reform of the Pakistani economy will have to involve breaking with militancy, implementing international standards in anti-money laundering and terrorism finance, and pushing concepts of pluralism and tolerance that are anathema to the religious hard-right. For Mr. Khan to succeed, that seemingly will amount to having to square a circle.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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South Asia

Kashmir Issue at the UNGA and the Nuclear Discourse

Haris Bilal Malik

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The Kashmir issue has more significance in view of the nuclearization of South Asia as many security experts around the world consider Kashmir a potential ‘nuclear flashpoint’ between India and Pakistan. The revocation of the special constitutional status of Kashmir by the BJP government on August 5, 2019, also referred to as Jammu and Kashmir Reorganization Act 2019 and the subsequent lockdown in Kashmir has since considerably increased political and diplomatic tensions between India and Pakistan. India’s recent moves and actions in Kashmir have once again internationalized the Kashmir dispute. This was evident during the UN General Assembly’s 74th Session, where the Kashmir issue remained a crucial agenda item for several countries.

During this year’s session prominent leaders of the world condemned Indian brutalities in Kashmir. Turkish President Recep Tayyip Erdoğan criticized the international community for failing to pay attention to the Kashmir conflict and called for dialogue to end this dispute. Malaysian Prime Minister Dr. Mahathir Mohamad said that Kashmir “has been invaded and occupied” by India despite the UN resolution on the issue. Chinese Foreign Minister Wang Yi also discussed the issue and called for a peaceful resolution of the dispute based on the UN Charter and Security Council resolutions. Based on the grave importance of Kashmir as a potential ‘nuclear flashpoint’ between India and Pakistan, Prime Minister Imran Khan, while addressing the UNGA warned the world community about the dangers of a nuclear war that according to him might break out over Kashmir due to Indian atrocities. The current situation appears to be the most critical time for both the countries and the region as both countries are nuclear-armed.

However, unfortunately, the Indian leaders and media perceived Prime Minister Imran Khan’s warning as a nuclear threat and termed it as ‘brinkmanship’. Contrary to this perspective, it is worth mentioning here that the Indian leadership itself is involved in negative nuclear signaling and war hysteria against Pakistan in recent months. For instance, the 2019 Indian General Election campaign of Prime Minister Modi was largely based on negative nuclear signaling comprising of several threats referring to the possible use of nuclear weapons against Pakistan. Furthermore, as an apparent shift from India’s ‘No First Use’ (NFU) policy, on August 16, 2019Indian Defence Minister Rajnath Singh, while on a visit to the Pokhran nuclear test site paid tribute to the late former Prime Minister Atal Bihari Vajpayee and asserted that India might review its NFU policy. He stated that a change in future circumstances would likely define the status of India’s NFU policy. Since then there is no official denial of this assertion from India which indicates that India might abandon its NFU policy.

Moreover, India’s offensive missile development programs and its growing nuclear arsenal which include; hypersonic missiles, ballistic missile defence systems, enhanced space capabilities for intelligence, reconnaissance, and surveillance and the induction of nuclear-powered ballistic-missile-capable submarines clearly indicate that India’s nuclear weapons modernization is aimed at continuously enhancing its deterrence framework including its second-strike capabilities vis-à-vis Pakistan. This is also evident from India’s military preparations under its more recent doctrines such as the 2017 Joint Doctrine of the Indian Armed Forces (JDIAF) and the 2018 Land Warfare Doctrine (LWD)which are also based upon more proactive offensive strategies and indirect threats of pre-emptive strikes against Pakistan.

As evident from the above-mentioned developments, it seems likely that India aspires to increasingly project itself as a regional hegemon and a potential superpower. The BJP government under Prime Minister Modi inspired by the Hindutva ideology is taking offensive measures under the notions of ‘a more Muscular or Modern India’ based on strong military preparedness. In such circumstances, Pakistan’s threat perception would likely remain increasingly inclined towards its eastern border. Pakistan due to its economic constraints would also likely face considerable difficulties in competing with India toe to toe with respect to its military modernization plans. Pakistan is already punching well above its weight, and nuclear deterrence would be the only way through which Pakistan can maintain a precise balance of power to preserve its security. This could only be carried out by deterring India with the employment of both minimum credible deterrence and full-spectrum deterrence capabilities. This posture clearly asserts that since Pakistan’s nuclear weapons are for defensive purposes in principle, they are aimed at deterring India from any and all kinds of aggression.

Hence, at the present India’s forceful annexation of occupied Kashmir and the resultant nuclear discourse at the UNGA has further intensified Pakistan-India tensions. Under present circumstances, the situation could easily trigger another politico-military escalation between India and Pakistan. Prime Minister Modi has bet his political reputation on his move to annex the region and his political career is on the line. The same way Pakistan’s politico-military establishment is equally unlikely back down from its stance on Kashmir. It would be difficult for both countries to come down from the escalation ladder because politico-military reputations would be at stake at both ends. Consequently, Pakistan might be forced to take action before India’s modernization plans get ahead and might respond even sooner.

The nuclear discourse in Prime Minister Imran Khan’s speech against the backdrop of the Kashmir crisis at such a high forum like UNGA would likely keep the issue internationalized. The situation demands the UN fulfill its responsibility of ensuring peace and to prevent billions of people from the dangers of a nuclear war. However, Indian blame game, aggressive behavior and offensive nuclear signaling against Pakistan all present a clear warning of nuclear war. It would greatly limit the prospects for international mediation especially by the United Nations whose resolutions on Kashmir clearly provide a right of self-determination to decide Kashmir’s future.  

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1.2 trillion rupees on the move: Modi’s greatest piece of purchase yet

Sisir Devkota

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Last week, the RBI (Reserve Bank of India) was taken aback by more than a surprise. Just when it was dealing with the uncomfortable series of events that led to the transfer of surplus 1.2 trillion rupees into the government of India; social media erupted. It quickly realized that losing the battle regarding the transfer would only add fuel to the hoax of closing down nine commercial banks. RBI enjoys considerable amount of autonomy and independence in the largest democracy, and still, it had to kneel down to Modi’s alleged quick fix.

The RBI would have to vouch for the government in times of need, it is primarily what is expected of the institution; but there was a great deal of discomfort in how the government justified it. A committee set up under the ex-governor, Mr Bimal Jalan, cited how central banks would not need so much of surplus to carry out their affairs. Effectively, it was an order, not a request, which became the underlying discomfort behind RBI’s hesitancy in adhering to the views of capital transfer committee. Not that anyone expected the central lender to protest longer, it did however, request Mr Jalan to reconsider the decision at the face of various consequences. To say the least, it was embarrassing for a premier financial institution to be put under the public eye. The social media hoax was another ridicule of the sickly RBI. In the tales of grand conquests, the victorious army steals the wealth from the losing party. Similarly, the BJP led government in India are redefining all forms of state tools in favour of their interests.

Stolen wealth is most often than not used to correct economic blunders. Just like in the tales of grand conquests, the decision to transfer national wealth from the reserve bank is nothing new. It is nevertheless baffling, that the money transfer is looping in the same direction. While the BJP government in India were imposing a comprehensive GST (Goods and Service Tax) policy, they would not have anticipated complaints from large industries over decreased consumer consumption. For a party that is now known to redefine the legitimacy of governance, falling prey to NBFC’s (Non-bank Financial Companies) incompetence or bankruptcy is a visible defeat. Unlike many other soaring economies, there are large group of subsidiary lenders operating in India. On hindsight, economic policies are barely creating tunnels through which the capital is getting recycled in the same loop. Revenues are not generating further revenues. It is merely closing down on its self-inflicted gap.

The Security and Exchange Board of India (SEBI) almost played with fire. Uncharacteristically, it proposed a framework to work together with the RBI in order to claim outstanding defaults from high value clients. The RBI was never going to agree with a defaming offer as such but the incident did fuel the argument of capital shuffling. It only makes the bluff look more real. A strategic plan to counter all measures that would have blocked the transfer of trillions. As Mr Jalan sheepishly implied how the importance of central bank and what is does is only limited to the public perception, RBI fought a fix in between larger or rather dangerous political agendas. Consolidating requests from SEBI to only fall into the whims of the government shows the lack lustre personality of the central funding institution. For the time being, Narendra Modi has his way, a theft of national treasure-like his opposition colleague Rajiv Gandhi expressed in the media. However, there will also be a far-fetched evaluation of Modi’s actions. A move of 1.2 trillion rupees in the same pot. Not by any means, a cunning cover up.

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Walking the tight rope: India’s Diplomatic Strategy in the Middle East

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India’s diplomatic corps have been resolutely articulating India’s stances and furthering its interests in the international fora where multiple challenges emanating from historical and contemporary contexts are being faced. One important factor which India’s astute foreign policy makers have faced is the complicated and crucial engagement with the Middle East. There are multiple facets to India’s engagement in the contemporary context that add to this complexity. One, India’s old adversary and neighbor Pakistan has upped the ante in its diplomatic blitzkrieg especially within the Muslim world. Second India’s has varied strategic interests in the warring Middle East factions. Third, the economic interdependencies and the crisis in the international trade in the Trump era has further complicated India’s position as an economic actor in the region. While there are various constituent elements of India’s Middle East outreach, the contemporaneous concerns relate more to its relationship with the Kingdom of Saudi Arabia, Islamic Republic of Iran and the Republic of Turkey.

India and Saudi Arabia have historically engaged in deep and multi-dimensional political, economic, cultural, defence and strategic cooperation. Saudi Arabia has long been an important Indian trade partner; the Kingdom remains a vital source of energy for India, which imports almost a fifth of its crude oil requirement from Saudi Arabia. Enhanced security cooperation has added a new dimension in the bilateral ties between New Delhi and Riyadh. Recently, Indian PM Narendra Modi was conferred with the highest civilian award of the Kingdom of Saudi Arabia even as the top leadership continues to send signals of deep comradarie and solidarity.

With the ascent of the crown prince Mohammad Bin Salman, various layers in this important diplomatic relationship have surfaced. This has happened in a particularly peculiar geopolitical and geostrategic context where both countries have faced tough challenges to their internal stability and international position. While Kingdom of Saudi Arabia is still emerging from the consequences of the massive attack in its oil fields as well as the widespread criticism of humanitarian crisis in Yemen at the international fora, India is grappling with international criticism and discourse about the situation in Kashmir in context of dilution of its political autonomy as well as prolonged information and communication blackout.KSA has had a mediating role in the Indo-Pak tussle since Pulwama and how this hyphenation has led to competitive photo-ops of diplomatic support. Even as KSA has stood by Indian leadership’s vital interests. However, the Pakistani leadership has been relentless in its attempts to appeal to the leader of the Islamic world for vital economic and diplomatic support, especially in context of the Kashmir situation. Even as Saudi Arabia has managed this delicate equation with deftness, it has given in to Pakistan’s economic demands while making a symbolic gesture of closeness by offering the private jet to Pakistani Prime Minister for his visit to the West.  It doesn’t help that the Indian economy is going through a rough phase. However, the audacious announcement to invest $100 Billion in the fledgling Indian economy is a bold testament of the veritable and vibrant economic partnership between New Delhi and Riyadh. It is pertinent to note that in the contemporaneous challenges that the countries face, Iran as well as Pakistan emerge as key actors that affect the bilateral engagement in a pronounced manner.

Iran is India’s historic ally and third largest supplier of crude oil. However, the India-Iran relationship transcends oil. India, with an investment of $500 million, aims to develop Iran’s Chabahar port as a transit hub for Afghanistan, Central Asia, and the International North-South Transport Corridor (INSTC). Additionally, India is developing two gas fields, namely Farzad-B gas field located in Tehran and the South Pars field located between Iran and Qatar. These projects clearly highlight India’s long-term engagement with Iran. However, India’s muted response to US pressure has been causing slight tension in the bilateral relationship. Even though the top-level bilateral meeting between Indian premier Modi and his Iranian counterpart Hassan Rouhani was successful to diffuse tensions to an extent. The crisis in Yemen, oil trade and even India’s action in Kashmir continue to affect the relationship.

In this context, the challenges emanating from Turkey are also a sign of worry. Even as Turkey has remained an old ally of Pakistan and a supporter of the ‘Kashmiri’ cause, its open support for a rather lonely Pakistan should cause some worry in India’s strategic circles. This is because India has fine diplomatic relations with Turkey and has considerable economic and trade interests.

However, oil being an important consumer and agricultural good in India’s economy, it is important to secure its interests to have access to reliable and affordable Iranian crude oil. The trade negotiations and engagements with the US haven’t had any headway even as the threat of sanctions for buying oil from Iran continues. India could emerge as a trouble-solver in this context especially since this KSA-Iran conflict in oil supply context has global implications. PM Modi’s personal chemistry with the US leadership could be useful in this context.

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