The stage is being set for the oath taking of Imran Khan as
Prime Minister of Pakistan. Concurrently the names to head finance, foreign
affairs and defense ministries are being finalized. These three ministries are
critically important as these will set the pace of economic development and
contain cross border terrorism.
In one of my earlier posts I have outlined the top priorities
for Asad Umar, the finance minister in waiting. While he is expected to keep
his focus on two prime deficits, budget and trade, the influx of foreign exchange
to meet debt servicing will be dictated directly by foreign policy. Most
probably funds will be released on the instruction of Saudi Arabia and United
States or China will have to extend more loans to facilitate Pakistan payoff
loans obtained in the past.
The US, which in the past had been more than gracious in
advising International Monetary Fund (IMF) to lend money to Pakistan, now seems
very hostile. In the prevailing scenario, Pakistan has no option but to
approach other friendly countries, Saudi Arabia and China that can extend
soft-terms loans to avoid default.
Reportedly, Islamic Development Bank (IDB) has been
instructed by Saudi Arabia to lend US$4 billion to Pakistan after Imran Khan
takes oath as country’s next prime minister. The offer was made immediately after
a statement by Asad Umar that Pakistan would decide on whether to seek a
bailout from IMF or friendly nations such as China and Saudi Arabia. A point
yet to be clarified is whether the loan by IDB would be in addition to a
three-year US$4.5 billion oil financing facility for Pakistan activated in July
2018.
Umar has expressed intention to seek a US$12 billion bailout
package from IMF. However, after the response of the US president, other contingency
arrangements have to be made. The PML-N government, which also enjoyed
godfathering of Saudi Arabia, has left Pakistan with huge burden of external
loans resulting in balance of payment crisis and massive depreciation of Pak
rupee.
It goes without saying that global and regional super powers
have special interest in Pakistan. The US is heavily dependent on Pakistan for
logistic support for the combat troops stationed in Afghanistan. Pakistan also
provides transit facilities to Afghanistan. In the prevailing scenario ‘do more’
mantra of the US goes on but it can’t afford to antagonize Pakistanis to
disrupt NATO supplies. Despite being a super power, the US suffers from ‘bitten
once shy twice’ situation that happened after attack on Salala post.
While the US considers Pakistan a partner in war against
terrorism only, China has substantial economic interest in Pakistan. At no
point in time China can afford a situation where pace of work on China Pakistan
Economic Corridor (CPEC) may be jeopardize. Over the last one year Chinese
loans have kept Pakistan afloat and support of any magnitude in the future can’t
be ruled out. As the economic interest of China grows in Pakistan, it will also
have to extend military support to save the country from any aggression. While President
Trump may not be aware of this fact but the US administration is fully
cognizant that any retaliatory move will allow China to get sold footing in
Pakistan.
Whether people accept it or not, Saudi Arabia, India and
Iran are three regional super power and all the three wish to maintain cordial relationship,
but at their own terms. A past mistake of India to bid farewell to
Iran-Pakistan-India gas pipeline project has caused it colossal losses. Even investment
of millions of dollars in the construction of Chabahar Port in Iran by India has
not provided it and efficient and effective access to Afghanistan. India is
keen on the construction of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas
pipeline, which will also pass through Pakistan. Therefore, India is obliged to
maintain minimum working relationship with Pakistan. In this endeavor it is
support by Iran also.
Maintaining cordial relationship with Iran and Saudi Arabia
is a must for Pakistan. The country can’t afford any hostility with either of
the countries because it encourages terrorists to use its province, Baluchistan
for cross border terrorism under the disguise of Baluchistan liberation
movement. Some of the quarters allege that in the past terrorist using Baluchistan
as safe sanctuary were provided fund and arms by the US through the courtesy of
Saudi Arabia.
Saudi Arabia has enjoyed good relations with Nawaz Shariff and
its concerns with the change of government are natural. Imran Khan has
expressed to adopt a more independent course and also expressed willingness to
mediate in improving relationship between Saudi Arabia and Iran but, it becomes
a nightmare for Saudi Arabia that Pakistan develops cordial relationship with
Iran.
In a phone call with Iranian President Hassan Rouhani, Khan
has accepted an invitation to visit Tehran. Reportedly, Saudi Crown Prince has
also expressed intention to visit Pakistan soon in a bid to strengthen
bilateral relationship.
“We want to improve ties with Iran. Saudi Arabia is a friend
who has always stood by us in difficult times. Our aim will be that whatever we
can do for conciliation in the Middle East, we want to play that role. Those
tensions, that fight, between neighbors, we will try to bring them together,” Khan
said.
It is not an easy situation for Khan to handle. Saudi Arabia
has welcomed US President Donald Trump’s withdrawal from the 2015 nuclear
agreement that curbed Iran’s nuclear program and his efforts to economically
strangle the Islamic republic with harsh sanctions. Saudi Arabia has not forgotten that Pakistan’s
parliament rejected in 2015 a Saudi request to authorize Pakistani troops to
participate in its troubled military campaign in Yemen.
Appointment of Ms. Shirin Mazari as Defense Minister, also
becomes a source of concern for the monarchy. She had openly criticized in a
series of tweets the fact that Pakistani general Raheel Sharif commands the
41-nation, Saudi-sponsored Islamic Military Counter Terrorism Coalition
(IMCTC). She had asserted that Pakistan should not cooperate in Saudi Arabia’s
alleged pursuit of a US agenda and should instead forge ties to Iran and India.
Khan will have to follow the collective wisdom of
maintaining cordial relationship with global and regional powers. However, he
will also have to safeguard Pakistan’s sovereignty. Pakistan should not be made
subservient to any country for seeking bailout packages. He will also have to
nurture the culture of living within means, rather than enjoying extravaganzas
on borrowed money.
