
Brahma Chellaney, The Hindustan Times
Debt-ridden Pakistan is very vulnerable to Western sanctions, yet it is unclear whether US President Donald Trump’s administration is willing to squeeze it financially in a way that could help reform its behaviour. Washington also seems reluctant to strip Pakistan of its status as a Major Non-NATO Ally (MNNA) or target its military for rearing transnational terrorists.
The main driver of Pakistan’s nexus with terrorists is its powerful military, whose generals hold decisive power and dictate terms to a largely impotent government. With the military’s rogue Inter-Services Intelligence (ISI) rearing terrorists, Pakistan has long played a double game, pretending to be America’s ally while aiding its most deadly foes that have killed or maimed thousands of US soldiers in Afghanistan. Pakistani forces only target terrorists that fall out of line or threaten Pakistan itself.
The recent media attention on the multilateral Financial Action Task Force’s planned action against Pakistan obscured that country’s success in preserving its status for another two years under the European Union’s preferential trading (GSP+) programme. Pakistan is the No. 1 beneficiary of the GSP+ programme, which grants Pakistani exporters, especially of textiles, tariff-free access to the EU market in exchange for the country improving its human rights and governance. In effect, GSP+ rewards a sponsor of terror whose human-rights record has only worsened.
Trump’s suspension of most military aid to Pakistan is unlikely by itself to force a change in the behaviour of a country that counts China and Saudi Arabia as its benefactors. Only escalating American pressure through graduated sanctions can make Pakistan alter its cost-benefit calculation in propping up militant groups that have helped turn Afghanistan into a virtually failed state, where the US is stuck in the longest and most-expensive war in its history. The US failure to take the war into Pakistan’s territory has resulted in even Kabul coming under siege.
Yet, swayed by geopolitical considerations, the US has long been reluctant to hold the Pakistani generals accountable for the American blood on their hands. Indeed, Washington for years heavily funded the Pakistani military and turned Pakistan into one of its largest aid recipients — a strategy equivalent to feeding milk and honey to pit vipers in the hope of changing their biting habits. Even when the US, after a 10-year hunt, found Osama bin Laden holed up in a compound next to Pakistan’s main military academy, it did not abandon its carrots-only strategy. Such an approach has only helped to tighten the military’s grip on Pakistan, thwarting movement toward a genuine democratic transition.
Worse still, the US has dissuaded India from imposing any sanctions on Pakistan. If anything, India has been pressured to stay engaged with Pakistan, which explains the secret meetings the national security adviser has had with his Pakistani counterpart in Bangkok and elsewhere. The recent launch, with US backing, of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project illustrates why it is difficult for India to impose even diplomatic sanctions on Pakistan, which maintains a bloated, ISI-infested high commission in New Delhi.
To be sure, the Trump administration is searching for a new strategy on Pakistan. Yet it is an open question whether it will go beyond the security aid suspension, which excludes economic assistance and military training. Aid suspension in the past has failed to change Pakistan’s behaviour.
With Washington loath to label Pakistan a state sponsor of terrorism, it must at least strip that country of its MNNA status, an action that will end its preferential access to US weapons and technologies and deny it the financial and diplomatic benefits associated with that designation. To force Pakistani generals to cut their nexus with terrorists, American sanctions should target some of them, including debarring them and their family members from the US and freezing their assets. Among the half a million Pakistanis living in the US are the sons and daughters of many senior Pakistani military officers.
Pakistan’s vulnerability to potential US-led sanctions is apparent from its ongoing struggle to stave off a default. Despite China’s strategic penetration of Pakistan, the US is still the biggest importer of Pakistani goods and services. US financial and trade sanctions extending to multilateral lending, as well as suspension of military spare parts, can force Pakistan to clean up its act.
To end Pakistan’s double game on terrorism, Washington will have to halt its own double game of rewarding or subsidizing a country that, in Trump’s own words, has given the US “nothing but lies and deceit”. To address a self-made problem, it is past time for US policymakers to put their money where their mouths are.
Brahma Chellaney is a geostrategist and author.





US President Donald Trump’s recent decision to freeze some $2 billion in security assistance to Pakistan as punishment for the country’s refusal to crack down on transnational terrorist groups is a step in the right direction. But more steps are needed.


Moreover, as Sri Lanka’s experience starkly illustrates, Chinese financing can shackle its “partner” countries. Rather than offering grants or concessionary loans, China provides huge project-related loans at market-based rates, without transparency, much less environmental- or social-impact assessments. As US Secretary of State Rex Tillerson put it recently, with the BRI, China is aiming to define “its own rules and norms.”
To strengthen its position further, China has encouraged its companies to bid for outright purchase of strategic ports, where possible. The Mediterranean port of Piraeus, which a Chinese firm acquired for $436 million from cash-strapped Greece last year, will serve as the BRI’s “dragon head” in Europe.
By wielding its financial clout in this manner, China seeks to kill two birds with one stone. First, it wants to address overcapacity at home by boosting exports. And, second, it hopes to advance its strategic interests, including expanding its diplomatic influence, securing natural resources, promoting the international use of its currency, and gaining a relative advantage over other powers.
China’s predatory approach – and its gloating over securing Hambantota – is ironic, to say the least. In its relationships with smaller countries like Sri Lanka, China is replicating the practices used against it in the European-colonial period, which began with the 1839-1860 Opium Wars and ended with the 1949 communist takeover – a period that China bitterly refers to as its “century of humiliation.”
China portrayed the 1997 restoration of its sovereignty over Hong Kong, following more than a century of British administration, as righting a historic injustice. Yet, as Hambantota shows, China is now establishing its own Hong Kong-style neocolonial arrangements. Apparently Xi’s promise of the “great rejuvenation of the Chinese nation” is inextricable from the erosion of smaller states’ sovereignty.4
Just as European imperial powers employed gunboat diplomacy to open new markets and colonial outposts, China uses sovereign debt to bend other states to its will, without having to fire a single shot. Like the opium the British exported to China, the easy loans China offers are addictive. And, because China chooses its projects according to their long-term strategic value, they may yield short-term returns that are insufficient for countries to repay their debts. This gives China added leverage, which it can use, say, to force borrowers to swap debt for equity, thereby expanding China’s global footprint by trapping a growing number of countries in debt servitude.
Even the terms of the 99-year Hambantota port lease echo those used to force China to lease its own ports to Western colonial powers. Britain leased the New Territories from China for 99 years in 1898, causing Hong Kong’s landmass to expand by 90%. Yet the 99-year term was fixed merely to help China’s ethnic-Manchu Qing Dynasty save face; the reality was that all acquisitions were believed to be permanent.
Now, China is applying the imperial 99-year lease concept in distant lands. China’s lease agreement over Hambantota, concluded this summer, included a promise that China would shave $1.1 billion off Sri Lanka’s debt. In 2015, a Chinese firm took out a 99-year lease on Australia’s deep-water port of Darwin – home to more than 1,000 US Marines – for $388 million.
Similarly, after lending billions of dollars to heavily indebted Djibouti, China established its first overseas military base this year in that tiny but strategic state, just a few miles from a US naval base – the only permanent American military facility in Africa. Trapped in a debt crisis, Djibouti had no choice but to lease land to China for $20 million per year. China has also used its leverage over Turkmenistan to secure natural gas by pipeline largely on Chinese terms.
Several other countries, from Argentina to Namibia to Laos, have been ensnared in a Chinese debt trap, forcing them to confront agonizing choices in order to stave off default. Kenya’s crushing debt to China now threatens to turn its busy port of Mombasa – the gateway to East Africa – into another Hambantota.
These experiences should serve as a warning that the BRI is essentially an imperial project that aims to bring to fruition the mythical Middle Kingdom. States caught in debt bondage to China risk losing both their most valuable natural assets and their very sovereignty. The new imperial giant’s velvet glove cloaks an iron fist – one with the strength to squeeze the vitality out of smaller countries.