India-Pakistan Parleys, Housekeeping in Pakistan

By M.M. Ali

There was an almost unrealistic drumbeating in both Islamabad and New Delhi prior to Gen. Pervez Musharraf’s July 14visit to India. Without question, the United States was instrumental in arranging the meeting between Pakistan’s now-president and Indian Prime Minister Atal Behari Vajpayee. While each side undoubtedly has its own agenda, the comparatively tension-free climate that had been generated between the two nuclear-equipped rivals needs to be read in the larger geopolitical context. A large gulf divides the two countries on questions of mutual interest, including the endemic Kashmir dispute. The language describing their positions on the meeting was telling: while India was willing to discuss “other matters and the Kashmir issue,” Pakistan insisted on discussing “Kashmir and other matters.” With these divergent approaches, even the most optimistic observers wAre not holding their breaths for any significant breakthrough.

In itself, the meeting was a welcome development in an otherwise tense environment. Expectations were that it would be followed by more meetings at different levels, setting a tone for continued dialogue between India and Pakistan. Since this would have served the purposes of both leaders, moreover, Washington may still try to see to it that the process is not derailed—and may even offer carrots to the two countries to keep the dialogue open.

New Delhi appears hopeful of receiving a larger U.S. plum (withdrawal of economic sanctions, bolstering of its military might vis-ˆ-vis China, and possible consideration for a permanent U.N. Security Council seat), and is willing in return to sit across the table from Pakistan and even discuss Kashmir. No wonder Delhi jumped to recognize Musharraf as the new president of Pakistan.

Musharraf derived political mileage as from India’s invitation. Suddenly he looked statesmanlike: he was quick to consult Pakistani politicians in advance of his trip, took the national media into his confidence, and discussed Pakistan-India relations with the international press.

Pakistan is caught in a severe economic crunch, however, and is depending on Washington, the World Bank, the International Monetary Fund and other international donors for immediate relief. Nevertheless, Islamabad cannot afford to forsake its ties with China, which provides the sole counterweight to India’s growing strength and influence in the region. This will require an increasingly difficult balancing act on Pakistan’s part as the Bush administration defines its China policy in the coming months and years—especially since New Delhi has decided to play along with American global strategies.

½merica’s fixation on Osama bin Laden and Afghanistan’s ruling Taliban regime will further hinder any resolution of the Kashmir dispute for the foreseeable future. And, given the two sides’ not-so-hidden agendas, it should surprise no one that the Kashmir Hurriyat Conference—the umbrella group that has spearheaded the freedom struggle inside Kashmir since 1989—was completely excluded from the first round of Pakistan-India talks.

What was once a simple demand by 13 million Kashmiris for exercise of their promised right of self-determination, which subsequently became a dispute between two sovereign states, has now become part of a regional and perhaps even a global issue—unless, of course, Washington decides to help resolve the dispute so that it can proceed with its own Asia policy and not have to worry about South Asian quarrels. Even if the Bush administration decides to become involved, however, it will take months before different options are considered and all parties to the dispute consulted.

The hype that had built up around the visit, however, and the visit itself—begun amid great fanfare—ended abruptly. When Musharraf and Vajpayee were unable to agree on a joint statement, the Pakistani leader on July 16 unceremoniously packed up his bags and returned home in the middle of the night. The two countries are now back to square one—with, perhaps, added tension as a result of the failed talks. While the outcome was not necessarily a surprise, the manner in which the visit ended certainly was unpredictable.

Pakistan’s Bureaucracy Threatened

On Pakistan’s political front, one man who bears watching is retired Lt. Gen. Tanvir Naqvi, chairman of the National Reconstruction Bureau (NRB). Reportedly a confidant of Musharraf, Naqvi has been assigned the task of reformulating the country’s political and constitutional framework. Indeed, General Musharraf’s assumption of the presidency on June 20 was part of the new configuration. The only surprise was the timing of the event.

A no-nonsense general, Naqvi in his inimitable way has described the last decade of Pakistan as an age of “electocracy” (defining a democratic system wherein only the holding of elections matters, not how administrations are run—a commentary on the mismanagement that marked the regimes of former prime ministers Benazir Bhutto and Nawaz Sharif).

The thousands of recommendations and proposals the NRB reportedly has received from throughout the country, and the six major televised discussions Naqvi has held with Pakistani politicians and public figures, all point to the possibility of major structural and constitutional changes that can be expected before the end of the two-year grace period Pakistan’s Supreme Court granted the military government. Among the changes that can be expected include strengthening of the central government, reduction in the authority of the provincial governments, and making the local administrations more powerful through elected nazims (equivalent to mayors). With his new office, Musharraf virtually replaced the latest parliamentary system with a presidential form of government—evoking memories of the days of Gen. Zia ul-Haq.

Interestingly, this time around (there having been three military regimes since 1956), the military seems to be going after the bureaucracy. The Planning Commission, headed by a technocrat, already has submitted its report on the restructuring of the civil administration. It calls for severe cuts in the size of the government and reduction in number of ministries. A separate devolution plan has made district administrators subservient to elected nazims.

These proposed changes have created a sense of frustration and uncertainty in the bureaucracy. Only time will tell if this is merely fear of the unknown, whether the military regime is taking the country down an unsettling path, or whether the army has another agenda. Like the military, Pakistan’s civil service has been one of the country’s more stabilizing institutions.

The Economic Front

“Transparency,” “accountability” and “credibility” are catchwords in Pakistan these days—all flowing out of recent experience where the three elements were seriously missing. Because decisions were made behind the scenes and no action was answerable, trust in the government had eroded.

Unlike its predecessors, the Musharraf government appears to have decided to conceal nothing, and instead to lay everything on the table and be up front with its citizens, as well as with international financial institutions. Reports submitted by different task forces, commissions and committees (of which there have been several recently) are released to the public and commented upon freely by the media.

So far the accounting has been primarily on the activities of previous governments—and even there the National Accountability Bureau (NAB) has had to move selectively because of possible spillover effects. In many instances the cases are overwhelming (just in the case of former Prime Minister Benazir Bhutto and her husband,Asif Ali Zardari, for example, the British government has turned over 22,000 pages of evidence of the couple’s stashed wealth in Europe); in others, information has been concealed by individuals absconding overseas. It is well known, however, that there have been huge sums of misappropriated money, along with illegal transactions and the accumulation of ill-gotten wealth.

Financially Pakistan remains in dire straits—nor can it escape without generous international aid and assistance. Recent data released by the government indicates that, even with the most stringent belt tightening and other economic measures, it will take years before the country can pull itself out of the present crisis. Pakistan faces exhorbitant internal and external debts. Internal public debt must be serviced and charged to the national budget. For almost three decades now, Pakistan has run budget deficits, resulting in the need for external borrowing. Public debt has grown from 155 billion Rupees in 1980 to 802 billion in 1990, crossing the 3,200 billion mark in 2000.

Pakistan’s external debt, which must be serviced each year in foreign exchange, is almost breaking the country’s back. In 1980 it stood at $10 billion, doubling by 1990, and jumping to over $43 billion in 1998. Pakistan’s exchange rate, which was 10 Rupees to the dollar in 1980, has plummeted to its current rate of more than 65 Rupees to the dollar. The country’s medium- and long-term debt service, as a percentage of GNP, is 39 percent. By comparison, India’s is 21 percent and Egypt’s 10 percent.

Unfortunately, there have been few if any successful efforts to reduce the debt burden. The 1998 freezing of Pakistan’s foreign-exchange bank accounts resulted in a serious loss of confidence in the country’s financial commitments. Foreign investment has been discouraging in recent years, and even remittances from expatriate Pakistanis have shied away from official banking channels. Export earnings have been negligible and largely generated by one major sector—the textile industry. Internal revenue creation has been dismal as well. Add to this the fact that defense spending remains twice as high as development expenditures, and the picture looks as bleak for the future as it does at present.

The highest priority for the Musharraf government, therefore, is to set the country’s economic house in order by whatever means necessary. Unfortunately, such a commitment sometimes gets sidetracked by political house keeping and the cleansing of debris left behind by previous regimes. The ordinary Pakistani today is tired, and appears interested only in the improvement of his economic lot. Sadly, political arrangements can take a back seat—at least for the time being. But the regime remains under pressure to restore democracy.

Prof. M.M. Ali, a Washington, DC-based consultant and specialist on South Asia, recently visited the subcontinent.