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How Will Military Generals Solve Economic Issues? Why Pakistan Is Stuck in a Broken Carousel
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How Will Military Generals Solve Economic Issues? Why Pakistan Is Stuck in a Broken Carousel

Husain Haqqani

A quotation often misattributed to Albert Einstein defines insanity as “doing the same thing over and over again but expecting different results”. The Pakistani establishment’s assumption that control over all levers of power and a single national narrative can rid Pakistan of its myriad problems definitely matches that definition.

Pakistan’s generals see themselves as the solution to Pakistan’s problems instead of realising their own contribution to the country’s long-standing issues.

Pakistan’s praetorian establishment has run the country since its inception in 1947 on the basis of a narrow state ideology. There have been modifications, but the official worldview has shifted only within the narrow space between an Islamic nationalism and complete Islamisation. At the heart of Pakistan’s state ideology is a constant sense of insecurity, the fear that external and internal forces are out to undo Pakistan.

The country has been caught in a vicious circle. The large army inherited from the British Raj must keep this sense of insecurity alive to justify the allocation of a significant portion of the country’s resources for the military. That leaves little money for social or human development, which in turn constrains economic growth.

Economic difficulties make Pakistan dependent on assistance from outside powers, which have their own expectations and demands. These demands become fodder for conspiracy theories, which further feed the national sense of insecurity. The insecurity strengthens the military’s hand and limits debate about what really ails Pakistan.

Pakistan in deep trouble

The military’s control over Pakistan’s affairs is, once again, complete and comprehensive, as is the virtual surrender of mainstream political forces. But it is unlikely that its efforts will bring different results this time around. Pakistan’s economy remains precarious, and its international reputation is in tatters. The country’s name is in the international media for all the wrong reasons.

The US Department of Justice charged five Pakistani businessmen on 15 January for “operating an international network of front companies to export U.S.-origin products to Pakistan for use in that country’s nuclear program”.

Only last week, the Henley Passport Index ranked Pakistan’s passport as one of the worst on account of the few countries its holders can travel to without a visa. Pakistan ranked at 104 out of 107 for the third consecutive year, tied this time with Somalia. The index, which measures global access on the basis of nationality, listed only three war-torn countries — Syria, Iraq and Afghanistan — below Pakistan.

Stories about human rights violations, enforced disappearances, extreme blasphemy laws and recurrent cases under them, legally inconsistent judicial rulings, and constant political strife define Pakistan for outsiders. The impact of these events within the country, too, cannot be hidden by domestic media control. After all, those who endure the atrocities, and those close to them, know what is going on in Pakistan.

Pakistan is struggling to comply with the requirements of the Financial Action Task Force (FATF) regarding terror financing and money laundering to get off its grey list. But the fact that it has been grey listed more than once and that its compliance with global norms is far from consistent discourages capital inflows into the country.

Fitch, an international rating agency, recently gave Pakistan a B- rating for credit worthiness, saying that “Pakistan’s rating is constrained by structural weaknesses, reflected in weak development and governance indicators.” According to Fitch, Pakistan’s per capita GDP of $1,382 is well below the $3,470 median of countries with a ‘B’ rating. It described Pakistan’s governance quality as low, citing a poor World Bank governance indicator.

Pakistan’s external finances remain fragile even after an IMF loan and monetary assistance from friendly countries. Pakistan is expected to require external financing of more than $20 billion to make debt repayments and other needs. Although the current account deficit has reduced, it is because of a drastic reduction in imports, not because of a significant rise in exports. The reduction in imports is likely to hurt overall productivity because Pakistan’s manufacturing sector often needs imported machinery and components.

The World Bank’s latest Global Economic Prospects report suggests that economic growth in Pakistan in fiscal year 2019-2020 will bottom out at 2.4 per cent and reach 3.9 per cent by 2021-2022 if “macroeconomic conditions improve and structural reforms support investment.”

While economists might hope for improvement in conditions in a few years due to macroeconomic reforms, the Pakistani populace is feeling the burden of galloping inflation and rising unemployment.

The issue with Pakistan’s generals

Security-driven restrictions, such as on trade with Afghanistan and India, and security-oriented policies, such as tolerance and support for Jihadi extremists, are definitely factors in Pakistan’s economic crisis. But Pakistan’s generals rarely see beyond it.

I had earlier compared Pakistan Army chief General Qamar Javed Bajwa’s effort to consolidate power with similar autocracy under Pakistan’s first military ruler, Field Marshal Ayub Khan. I listed Bajwa’s expectations and his team’s hopeful assertions, assuming that my record of criticism of the Pakistani establishment would suffice for readers to realise that I did not expect these hopes to be fulfiled.

It seemed obvious to me that the latest version of a tried-and-tested formula would not succeed when its ingredients have proved insufficient for success in the past. But some Pakistani readers misunderstood my comments as ‘going soft’ or even endorsing General Bajwa. That is, of course, not the case.

As former BBC journalist Shahzeb Jilani observed, it was “a clever piece, nudging [General Bajwa] to take the long view, revisit pointless feuds, and embark on a journey of course correction”. Still, it did not stop some from wondering if I was ‘repositioning’ myself. So, I now need to lay it out, again, without any possibility of confusion.

The road ahead for Pakistan

Notwithstanding the disappointing performance of Pakistan’s mainstream politicians, I still believe that Pakistan needs civilian supremacy and rule of law under constitutional democracy. That goal can be attained more easily if Pakistan’s political parties practice internal democracy and do not accept crumbs of power from the military’s table.

Pakistan should conduct fair elections free of military-intelligence manipulation, which will lead to the rise of a civilian government that addresses Pakistan’s myriad problems without being stopped from pursuing specific courses in foreign or domestic policy. The political class should not engage in recriminations with rivals, which only strengthen the military’s hand.

More significantly, Pakistan also needs to jettison its religion-based nationalism, allow ethnic diversity to flourish, implement true federalism, end tolerance and support for jihadi terrorism, allow free thinking and stop seeing Afghanistan and India as permanent enemies.

It should invest in human capital, aim for high economic growth and improve the living standards of its people instead of obsessing over real or even imaginary security threats.

I continue to advocate a comprehensive reimagining of Pakistan with fresh policies, not another round of military-backed engineering of politics. In fact, until such reimagining, Pakistan will only witness another rotation of the carousel it has been stuck on since the 1950s.

But saying ‘B says he wants to do X’ is not the same as saying ‘B will do X’, and defining what a fundamental reimagining of Pakistan may look like cannot be the same as declaring that it will actually take place.

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