Pakistan's Economic Crunch Has International Political Ramifications

By M. M. Ali

The multitude of problems gnawing at the Third World emanate primarily from three fundamental factors: the fast depletion of finite resources, the astronomical growth of already bulging populations, and obscenely high expenditures on defense arsenals.

All other ailments are mere extensions of these. The issues are not exclusive. Each telescopes into another. One part is largely an inheritance from the colonial past. Another has become a disastrous pattern of national behavior that blunts every effort to progress. The third stems from perceived and real hopes and fears and only adds to the growing quota of deepening poverty.

Pakistan is no exception. It is part of that befuddled Third World groping for answers, and looking to the examples of postwar Germany, Japan and perhaps South Korea of what human dexterity is capable of achieving if it is freed of artificial compulsions and counterproductive expenditures.

The Economic Crunch

It is universally understood that the biggest villain in town is the money lender. More US embassies and information services abroad have been targets of local ire than those of anyone else. This, in spite of the fact that the foreign aid and assistance from the United States has been the largest provided by any single country since World War II. Pakistan has been America's close ally since 1947. Its share of US economic and military assistance is exceeded only by those of Israel and Egypt.

All that is history, however. US economic and military aid to Pakistan remains suspended since October 1990. Several reasons are advanced for the US decision, the principal one being the reported military nuclear program of Pakistan. Pakistan disputes the allegation, and claims its program is for peaceful purposes.

During the last decade, Pakistan accumulated a debt of more than $16 billion. Today, debt servicing alone calls for millions in foreign exchange. Dollar remittances from Pakistani expatriates working particularly in the Middle East have dwindled in recent years. The Gulf war reduced these remittances further. Saudi Arabia, which has subsidized Pakistan in many ways, may no longer be so forthcoming.

Japan, the other major provider of aid, is reportedly under pressure to review its commitment to Pakistan. The World Bank and the International Monetary Fund also have enlarged their list of conditions. The privatization process that has been introduced has not gone beyond a couple of small banks and some utility services. Internal investors are shy and external investors are hard to find. In the midst of this economic scenario, the government has launched its Eighth Five-Year Plan with not too bright prospects of meeting all its targets.

The civil sector of the country may tough it out for a fair period of time. Whether the military will go along is questionable. When replacement parts do not come and the air force and armored units are immobilized, pressure is bound to build in the rank and file.

The strongest advocate of democracy, the United States, will find that its decision to stop aid unleashes anti-democratic forces in once-friendly countries now busy re-establishing democracy. Added to this, growing unrest inside Kashmir has the potential to destabilize democracy throughout the subcontinent. Political ramifications of the economic crunch are endless.

Corruption in Pakistan did not disappear with the arrest of former Prime Minister Benazir Bhutto's husband. Nor did crime disappear with the adoption of sharia (Islamic) law. Kidnappings, car thefts, and outright murders are now reported from all over the country.

Prime Minister Nawaz Sharif had to call off his official visit to Japan because of killings in Punjab. His repeated appeals to the people to surrender unlicensed arms have fallen on deaf ears. In many instances the government agencies responsible for maintaining law and order are accused of involvement in crime.

The prime minister has rushed legislation through the National Assembly giving himself authority to appoint special courts to dispense summary judgments in criminal cases, and also making any kind of slur against the person of the Prophet Muhammad a capital offense. The 41 year-old prime minister knows he is opposed by an entrenched feudal core that is still not reconciled to the return of democratic processes.

Many of the zamindars (landlords) and tribal chiefs not only harbor fleeing bandits, but have been behind the kidnappings and even murders. Whether the proposed petty courts can bring kingpins to justice is doubtful. In recent years the Sindh province, and particularly the city of Karachi, have been hotbeds of civil unrest and criminality. A recent shocking press report in Karachi said "young and intelligent" university students were being recruited to serve as dacoits (armed robbers) at high salaries. Such reports, even if untrue, certainly do not make the coalition government of Mian Nawaz Sharif look good.

President Ghulani Ishaque Khan misses no opportunity to remind the prime minister that the political vehicle left behind by the late General Zia has three steering wheels, the third one being in the hands of the army chief of staff.

Nevertheless, the peaceful transfer of military leadership has finally come about. Gen. Mirza Aslam Beg has retired, and Gen. Asif Nawaz Janjua has taken over as the chief of army staff. Such a peaceful transition of military command is contrary to historical experience in Pakistan. Usually generals moved to become presidents. Gen. Beg, who had inherited the number one army spot as a result of the still unexplained air crash that killed former President (and Chief of Staff) Zia, presented himself as a politician in uniform who might have no compunctions about undermining the offices of the elected prime minister and the indirectly elected president.

Beg, however, lacked the political clout that comes with a Punjabi, a Sindhi, a Pathan or a Baluch. He belongs to that Urduspeaking segment of the population, called Muhajirs, that had migrated to Pakistan at the time of the partition of the subcontinent in 1947 and was still striving to be fully accepted in the mainstream.

Gen. Janjua, a Sandhurst trained officer from Punjab, does not seem suited to taking a back seat, nor is he likely to relinquish any extra power that may have devolved on the office of the commander-in-chief in recent years. He arrives at a time when stresses are high in the ranks following the US decision to halt military aid. Prime Minister Sharif will have to practice his balancing act for the immediate future. No one is even thinking beyond that.

Added, the BCCI scandal, although the product of the mismanagement of a group of overzealous private individuals, has hit the headlines with a vengeance in the Western press, causing embarrassment to an already beleaguered Pakistan government. It will be some time before that dust settles.

M. M. Ali is a professor at the University of the District of Columbia.