Source: Reuters

Qambar Malik Baloch

Pakistan’s collapsing economy and its impact on Baloch and Sindhi national struggle

The collapsing Pakistani economy is not only worrying for its patrons and lenders but minorities like the Baloch and Sindhis are increasingly expressing their concerns about its political and social implications on these two nations.

Pakistan: the changing allies?

As a client state, since its existence, Pakistan has been rescued by the US and its Western allies out of major economic and political crises on numerous occasions. In the early 1950s, the US saw Pakistan as a military asset and entered into a military assistance agreement with the Islamic republic to keep a watch on Soviet expansionism and to exercise its influence in the region via Pakistan.

Pakistan received $2 billion in US aid in 1955 when it initially became a member of two anti-socialist pacts: SEATO and CENTO. During the 1970s, it received millions of dollars when it helped open a channel of communication between China and the US. With the Soviet invasion of Afghanistan, the US saw Pakistan as a front-line partner to contain the Soviet expansion in the region. By the year of 1981, US administration negotiated a $3.2 billion of economic-military aid to Pakistan.

With the collapse of the Soviet Union, in a uni-polar world, for a brief period, Pakistan lost its importance and its Western patrons openly showed their displeasure over its nuclear ambitions and its continuing jihadist policy. In 1988, the US, under Pressler Amendment Bill, began pressing Pakistan via economic sanctions and military aid cuts to abandon its nuclear proliferation program.

In 1992, Nicholas Platt, the US ambassador to Pakistan suggested to include Pakistan in the list of terrorism-sponsoring countries due to its support to militants causing unrest in India. The US imposed strict economic sanctions on Pakistan including a ban on IMF loans and suspended military aids under the Glenn agreement after Pakistan conducted nuclear tests in the Chaghai district of Balochistan in 1998.

In the aftermath of 9/11 incidents, however, the flow of dollar to Pakistan resumed when its services were required in the “war on terror”. It has received more than $20 billion in US aid since 2002.

However, Pakistan’s allies in the West grew increasingly suspicious of its role in the war on terror accusing it of using the war as a pretext to milk billions from the US and its allies to pursue its own regional ambitions.

Pakistani scientist Abdul Qadeer’s confession in 2014 of providing nuclear designs to Libya, North Korea, and Iran followed by General Musharraf’s confessions in 2008 of using the US aid to fuel militancy against neighboring India, and the discovery of Osama bin Laden under the nose of military are cited as the major issues which created a milieu of distrust between Pakistan and its allies. The US and other Western IMF stakeholders which also see Pakistan as one of the most vulnerable proliferation spots that according to Bulletin of the Atomic Scientists’ released date, is in possession of 130-140 nuclear warheads would want to disarm the Islamic republic of what the later regards as its major shield against foreign aggression.

By 2012, the US in order to exert further pressure on Pakistan to refrain it from sheltering the remnants of Taliban and Haqqani group – who increasingly disrupt the US reconstruction process of Afghanistan – began calling Pakistan to respect the human rights of various ethnic and religious groups in Pakistan including Sindhis and the Baloch.

The international watchdog against money laundering and terrorism financing- FATF, put Pakistan in its Grey List in June 2018 for its alleged support to militants active against India whereas various US security and financial assistance to Pakistan remain suspended.

Experts believe that Pakistan has gone at a tangent from the purpose for which it has been receiving moral, security and financial assistance from the West.

Faced with a record high current account fiscal deficit expected to rise up to $21 billion compared to the $18 billion recorded as of July this year, and declining foreign exchange reserves, its external debt and liabilities have hit a whopping $95 billion, which according to the IMF is expected to rise up to $144 billion in the next five years.

In the past, Pakistan has been rescued by the US-dominated IMF and World Bank in its financial situations. However, the newly-installed government in Pakistan is facing tough conditions from these international financial institutions to seek a bailout to deal its current fiscal deficit problem.

According to different Western diplomats and security experts, there will be more to just economic conditions in any future IMF bailout that Pakistan seeks.

Fearing the complete suspension of the US assistance, Pakistan got inclined towards its old ally China. A market hungry China with global and regional strategic ambitions not only made various military pacts with Pakistan but also agreed to invest $62 billion in CPEC projects as part of its larger Belt & Road Initiative. China that has so far lent $19 billion in loans to Pakistan as part of its CPEC project is keen to keep Pakistan hanging before the release of further loans.

Saudi Arabia, however, has agreed to grant $6 billions of loan providing a short-term relief in the payment of balance.

Yet, it is the role of the US or the Western world which is fundamental in deciding the economic and political prospects of the Islamic republic in the coming years.

Views from the Baloch and Sindhis

 Pakistan is increasingly being entangled with various social and political issues. Currently, it is home to multi-faceted internal and external challenges. The conflict between the civil and military establishment is now open again, one accusing the other for being responsible for the debacles facing the country.

It is not only the economic fiasco but the Islamic republic is facing increasing demands from the Baloch and Sindhis for the right of self-determination. For the last many years, Sindh and Balochistan practically have become conflict zones where the nationalists accuse the state establishment of resource exploitation and widespread human rights violations.

Many observers believe that various regional and international interest groups would certainly try to use the Baloch and Sindh cards in order to pressurize the economically vulnerable and politically volatile Pakistan for towing their line of action.

Whether Pakistani state will go in constant disregard of the US and other Western power’s concerns or will it give in to the pressure will to a great extent determine how the future events within Pakistan unfold. The Baloch and Sindhi nationalist circles are expressing their fear that whether Pakistan bow in or dump its Western allies, in both cases, there will be drastic consequences for both the people. The Sindhis and the Baloch share varying concerns about how the stakes of various regional and international players will play out in the context of the US-Pakistan relations and many other simultaneous regional developments.

The Sindhi scholar, human rights defender and the leader of World Sindhi Congress, Dr. Lakhu Luhana, observes that there would be great impacts on Sindhi national struggle from the US policy on Pakistan. He asserted that the current financial situation of Pakistan has basically emanated from the actions of US screw-tightening in the form of some mildest of sanctions and creating some hurdles in getting an IMF loan package. This was as a result of wider recognition and evidence and annoyance within the current US administration that it is Pakistan’s security establishment that failed the US to achieve their strategic objectives in Afghanistan and kept them engaged much longer than they initially planned. According to his opinion, other changes have taken place in the global alignments:

“First; it is the changing scenario in the Middle East. The US-Saudi relations, the US plans in the Persian Gulf are increasingly converting an already destabilized region more destabilized. The Saudi crown prince and the new de facto ruler of the kingdom, who is prone to adventure and does care the least about human rights and international opinion might bring substantial changes in the minds of western policymakers towards their long-term ally.  Feeling pressure from the west, in the given situation it is only the Pakistani army that could provide protection to Saudis in a milieu of increasing regional conflicts in the Middle East. That is the reason for extending a helping hand towards Pakistan by Saudis. I think it will continue to give financial help in coming years.

Second; the US administration’s obsession with leaving Afghanistan at any cost is apparent. It is clear that they believe that it could not be achieved without Pakistan. They are now openly terming Pakistan as a rogue, has betrayed them, but they want to be out and need Pakistani support.

Third; the worst damages for Balochistan and Sindh would come from the CPEC project. The state establishment of Pakistan has undertaken a systematic, well-orchestrated strategy of disempowerment of Sindhi and Baloch people with the main aim to convert them into minorities in their own motherland and therefore their right to rule. The CPEC projects will hugely increase the speed of this process and would cause manifold irreversible damages to demography, economy, political power and culture.”

Dr. Luhana concluded that in the present circumstances where the US needs Pakistani help to stabilize Afghanistan and China with its huge investment in the CPEC, would like to exploit the natural resources of Sindh and Balochistan in order to secure its investments, there is no immediate support coming from these quarters for the national struggle of Sindhis and the Baloch.

Veteran nationalist writer, Mir Muhammad Ali Talpur who has been associated with the Baloch nationalist struggle since the 1970s believes:

“Pakistan’s interests in the region are at variance with others especially in Afghanistan and it is most likely to continue to work against US interests. However, if there is the threat of force it may give up its mischief. The Baloch insurgency with all its ups and downs has persisted for 70 years now. It has not been depended on external support and as far as US support is concerned there hasn’t been any except for speeches by some US senators and Congressmen. So essentially nothing much changes for the Baloch if the US and Pakistan patch up”.

He asserted that China is a bloodthirsty capitalist and it demands returns for its investments as it did with Hambantota Port in Sri Lanka. It will try the same in Balochistan and a lot will depend on how the Baloch people react to its predatory actions there”.

The Saudi factor

 Saudi Arabia, although historically has been financing religious outfits in Pakistan in general and in Balochistan, in particular, is being seen as a considerable factor in the politics of Balochistan. Pakistan in return of Saudi 6 billion aid has invited Saudi investments in an oil refinery in the port city of Gwadar and in the mining sectors of Balochistan.

Saudi Arabia is increasingly worried about the importance of Chahbar port in western Balochistan, as it will certainly strengthen Iran’s economy and thus its political power in the region causing a serious threat to Saudi interests. Saudi presence in Gwadar provides it with strategic advantage against Iran. However, such moves will compel an aggressive Iranian response in Balochistan dragging China in the Saudi-Iran conflict.

Many observers believe that Iran is taking countermeasures in respond to Saudi led adventures in the region.

“Iran is continuing to work to help rebel groups to form in the minority tribal region. There are Sindhi and Baloch separatist groups that Iran will help fund and support,” Fox News in an article quoted retired Lt. Col Anthony Shaffer, an intelligence specialist.

Although wary of China’s increasing influence in the region to challenge the US monopoly in the Middle East, the current US administration according to several U.S. intelligence and diplomatic officials, is more concerned about supporting a regime change in Iran for which it will need Saudi Arabia’s support, thus overlooking Saudi ventures in Balochistan.

Akhtar Mengal, the leader of the largest nationalist party-BNP is worried about the development of foreign investment in Balochistan.

“We have raised this issue with the new government. If the people of Balochistan are not consulted regarding any concession given to any power on the Baloch coast, it will not only go against the MOU signed between the representatives of BNP and the ruling party PTI, it will also be in complete violation of the unanimous resolution passed by the Balochistan Assembly calling the Federal Government to take Balochistan’s consent before entering in any agreement concerning Balochistan”.

Mengal emphasized that Saudi Arabia has no track record of achieving milestones in either running oil refineries or in the mining sector; on the contrary, the oil refineries in Saudi Arabia itself are run and supervised by non-Saudis.

Therefore, “we see” the Saudi investments either in Gwadar or in Saindak both close to the Iranian borders as part of Saudi-Iran longstanding war for dominance in the Middle East. However, he was worried that this time greatly at the expense of Balochistan, which “we do not approve of”, he further, added.

Pakistan has not completely recovered from its damages caused by its ill-starred intervention in the Afghan conflict since the 1970s. He opined that these new developments will bring far-reaching damages to the people of Pakistan.

Sindh and Balochistan: the battlefields for a new Great Game

The Baloch scholar and a prominent writer on the issues of Balochistan and Sindh, Dr. Naseer Dashti believes that the Baloch and Sindhis suffered during the great game played in the highlands of Central Asia between the Russian and the British empires during the 19th century and it appears that they are in the grip of another great game. He asserts:

“The US and the west would not tolerate any incursion by the Chinese in the region which is still considered to be of vital economic and strategic importance for them. He was in the opinion that the desperate attempts by Pakistan to bring in Chinese and Saudi financial and military influence in the region would start a ruthless conflict between China and the west. Gwadar port with Chinese naval presence is certainly indigestible to the powers who have been dominating the Persian Gulf and the Middle East for the last 300 years. The countermeasures may include encouraging separatist elements in Sindh and Balochistan”.

However, Dr. Dashti emphasized that for the moment these measures besides economic arms twisting would be just to force Pakistan to change its course regarding its China and Afghan policy as well as its nuclear programme. According to him, presently, the West still believes that Pakistan, the prodigal son, would eventually come back home and resume the obedient role. However, the situation might change drastically if they believe that the vital Western interests are not being served by Pakistan.

Due to a lack of monetary mobilization, expenditure control, a rocketing population coupled with unchecked corruption whereas the military taking the lion share of the budget, Pakistan is most likely to remain foreign aid-dependent for a considerable time in the future to keep the state busi,ness up and running.

Failure to adhere to the US conditions will further weaken its economic situation allowing China to exercise more leverage on an economically weak Pakistan to get more favorable terms. possibly the takeover of the port city of Gwadar. The consequences of such a move run the risk of increased US involvement in Balochistan and Sindh.  The US will do whatever it takes to counter China’s presence in the mouth of the Strait of Hormuz.

Baloch and Sindhis are sure to be sailing in deep waters in the near future. What should the Baloch and Sindhi do to safeguard their interests? Are Sindhis and the Baloch nationalist leadership ready to formulate a feasible strategy, which could be the tool of survival in the coming Great Game, or will they repeat the performances of their ancestor during the 19th century and suffer again? This is to be seen.

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Qambar Malik Baloch is a UK-based writer hailing from Balochistan. He writes on various socio-political issues facing the Baloch and Balochistan. He was the ex-chairperson of the Baloch Students Action Committee, BUITEMS, and the Baloch Students and Youth Association, UK.

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