The international community should call Pakistan’s fiscal bluff: Pakistan has long employed not just nuclear blackmail but also fiscal blackmail — help us financially or face the perils of the country falling apart.
Brahma Chellaney, The Hindustan Times
The subcontinent’s military crisis is anything but over. Pakistan’s military generals fear another surprise Indian strike, which explains why much of Pakistan’s airspace is still closed to commercial traffic: Most international overflights remain barred, while domestic flights must stick to a narrow western corridor close to Iran and Afghanistan. Pakistan’s armed forces are on full operational alert, with combat air patrols continuing and the army beefing up deployments along the India frontier.
Yet, emboldened by China’s support, Pakistan is ignoring international calls to take concrete, irrevocable steps against the terrorist groups that operate openly from its territory. Indeed, Pakistan has yet to take the first credible step, which is to declare a policy — embraced by the chief of army staff (COAS) and the chairman joint chiefs of staff committee (CJCSC) — to deny sanctuary and financing to all terrorist groups.
The COAS remains Pakistan’s effective ruler. Imran Khan is not just one of Pakistan’s weakest prime ministers ever but also has shown himself to be the military’s willing puppet. Even while announcing the Indian pilot’s release as a “peace gesture”, Khan denied Pakistan is cultivating terror groups but justified terrorist attacks and suggested Pulwama was an Indian conspiracy.
Against this background, China’s action in again blocking UN action against Jaish-e-Mohammed (JeM) founder Masood Azhar was aimed at thwarting international pressure on Pakistan to take credible, irreversible anti-terror actions. That China still protects a terrorist who reportedly is on his deathbed undergirds the extent to which it shields Pakistan’s proxy war by terror against India.
It also helps highlight China’s own proxy war against India by employing Pakistan as a surrogate for containment. While reaping an ever-increasing trade surplus with India, China is systematically undermining Indian interests. Yet, since the Wuhan summit, India’s China policy has become more feckless than ever.
It is not a question of whether but when an Indian target will be attacked again by a Pakistan-based terrorist group. If war is to be averted, major powers other than China must tighten the screws on Pakistan. A major source of international leverage is Pakistan’s current desperate need for a $12 billion International Monetary Fund bailout. This will be Pakistan’s 22nd IMF bailout in six decades, and the largest ever. The IMF should bail out debt-ridden Pakistan only in return for concrete anti-terror action.
An international financial squeeze can effectively force Pakistan’s hand. The key to this is the US, which has the IMF clout (underscored by a dominant 17.46% voting share) to put off the impending bailout or tie it to specific conditions. India must seek to persuade the US — and other key IMF members like Japan and Germany, with 6.48% and 5.60% voting shares respectively — to not let go the present opportunity to reform a scofflaw Pakistan.
US President Donald Trump’s administration, far from welcoming Khan’s tokenistic anti-terror measures, has insisted Pakistan take “sustained, irreversible action against terrorist groups.” However, Trump’s zeal to finalize a tentative deal that his administration reached with the Pakistan-created Afghan Taliban in late January offers Pakistan’s generals their trump card.
Through their brutal proxies, the Taliban and the Haqqani Network, these generals have compelled the US to negotiate the terms of its exit from Afghanistan and to seek Pakistan’s help to midwife the deal. However, the US will be able to honourably end the longest war in its history, and get the Taliban to keep up its end of the bargain, only if it makes Pakistan’s generals realize that sponsoring cross-border terrorism in Afghanistan carries major costs. If the generals are to take concrete anti-terror steps, there must first be tangible action on America’s part, including stripping Pakistan of its “Major Non-NATO Ally” status, adding it to its list of state sponsors of terrorism, or at least leveraging the IMF bailout.
Pakistan is trapped in a vicious circle, seeking new loans to repay old ones. Despite recently getting $7.5 billion in cash from Saudi, Emirati and Chinese transfers, it cannot do without a large IMF bailout. Pakistan’s cycle of dependency on IMF has paralleled the rise of its military-mullah-jihadist complex. Foreign aid and lending have helped underpin Pakistan’s collusion with terrorist groups.
Today, an IMF bailout will aid Chinese designs by freeing up other resources in Pakistan for debt repayments to Beijing. It will thus implicitly support China’s debt-trap diplomacy with Pakistan, the largest recipient of Belt and Road financing. Such lending has contributed to Pakistan’s dire financial situation, locking it in debt servitude to China.
Pakistan has long employed not just nuclear blackmail but also fiscal blackmail — help us financially or face the perils of the country falling apart. If Pakistan is unwilling to sever its links with state-nurtured terrorists, it is better for the world to let it fail than to continue propping up its military-mullah-jihadist complex with aid and loans — the equivalent of giving more alcohol to an alcoholic, instead of treating the addiction. The treatment now must centre on making Pakistan take verifiable and unalterable anti-terror steps.
Brahma Chellaney is a geostrategist.