I Overview
Pakistan:
- Political Situation
- Economy– Budget for 2024-25
- Terrorism
- Deployment of Frontier Constabulary in PoK
- Pakistan – China
- Pakistan- India
- Pakistan- USA
Afghanistan:
- Third Doha Meeting on Afghanistan
- Human Rights Situation
- Eid Message of the ‘Islamic Emirate’ leader
- Afghanistan-Pakistan
- Afghanistan-Russia
- Afghanistan-UAE
II Developments in Pakistan
Political Situation
The confrontation between Imran Khan’s PTI and the army led establishment continued. At the same time, there were some signs of divisions within the PTI. Omar Ayub Khan, the Secretary General of the party and also leader of opposition in the National Assembly resigned from the former position. He stated that he wished to concentrate on his work as leader of the opposition. However, around the same time, there were reports of some members of the party intending to form a separate group within it and this discontent might have resulted in Omar Ayub’s decision to quit as Secretary General. Imran Khan accepted the resignation, but within 24 hours, the parliamentary faction of PTI expressed complete confidence in Omar Ayub as Secretary General. Following this, his resignation was rejected by Imran Khan. Clearly, there are functional problems in the party in the absence of its incarcerated leader.
The ruling coalition too was not without its problems. PPP threatened to boycott the budget session, accusing PML-N of not adhering to the power sharing agreement and not taking the PPP leadership into confidence regarding the budget proposals. The party was reported to be unhappy in particular about the PML-N government of Punjab not conceding it adequate political space the politically important province. The government was eventually able to persuade PPP to have at least a token representation in the National Assembly during the budget presentation. A subsequent meeting between the Prime Minister and PPP leader Bilawal Bhutto was reported to have resolved the differences between the two sides, with PML-N accepting most of PPP’s Punjab centric demands. However, the crisis was indicative of the coalition troubles that Shehbaz Sharif will continue to face.
A 13-member bench of the Supreme Court has given an important 8-5 split verdict in favour of allotment of reserved seats to Imran Khan’s party, whose members operate in the National Assembly under the banner of Sunni Ittehad Council (SIC) because of PTI having been deprived of its election symbol by the Election Commission. The decision overrules the ruling of the Election Commission, upheld by the Peshawar High Court, to deprive the PTI group of these seats and allot them instead to other parties, including PML(N) and PPP. It will result in the PTI group getting 22 additional members and emerging as the largest party in the assembly. It also deprives the Shehbaz Sharif coalition of the two-thirds majority that it had enjoyed hitherto with the additional reserved seats of PTI. The split verdict is also a sign of the divided superior judiciary down to the High Courts, in which not all judges are willing to deliver the army’s agenda of crushing PTI. This will remain a challenge for the army chief.
Former Prime Minister Shahid Khakan Abbassi and former Finance Minister Miftah Ismail- both formerly PML-N leaders- have floated a new party Awaam Pakistan with the declared aim to steer the country out of its perennial crises. Khakan Abbassi was entrusted with the Prime Ministership by Nawaz Sharif after his disqualification from holding public office in 2017 and held that post from August 2017 to the election in May 2018. He has frequently spoken against the army’s interference in political affairs and administration. Miftah Ismail was finance minister in Shehbaz Sharif’s first government, but was changed midstream because of his insistence on strictly applying the IMF austerity measures. Both have not shown any notable political charisma so far and the new party’s future remains uncertain.
Economy- Budget for 2024-25
According to the economic survey for 2023-24 released by Finance Minister Muhammad Aurangzeb, most targets of last year’s budget were missed. However, the strong expansion of 6.25% in the agriculture sector resulted in the overall growth of approximately 2.4% as against the contraction of 0.21% in the previous year. Both the industrial and services sectors grew only by a little over 1% each. Inflation eased to 26% as against 28% in the previous year.
The Finance Minister presented the Pak Rs. 18.877 trillion budget for the fiscal year 2024-25 (July 2024 to June 2025). As in the previous years, the net revenue receipts reflected in the budget fall short of just two items of expenditure – defence budget and debt servicing- by Pak Rs.1.52 trillion, thus necessitating dependence on borrowing, external receipts and uncertain privatisation proceeds for rest of the expenditure. The target of economic growth and inflation for 2024-25 is 3.6% and 12% respectively. The fiscal deficit is projected to go down to 5.9% of GDP compared to 7.4% last year. Tax collection is projected to go up by 40% as a result of enhanced taxes and withdrawal of some tax concessions. The defence budget has been increased by 17.6% compared to the last year and is reflected as 1.7% of GDP, though it is well known that this figure does not include defence pensions and several other items of expenditure for major military acquisitions, nuclear and missile programmes.
Even though the government has claimed to have significantly expanded the tax base, independent observers note that the government’s strategy will largely increase the tax burden on those already in the tax net- salaried class and documented businesses- and may not yield the planned revenue. The budget does not bite the bullet of imposing adequate tax burden on the elites and the agricultural sector that have traditionally been the beneficiaries of Pakistan’s tax system.
According to a press release of the IMF, the Fund has reached a staff level agreement with Pakistan for a 37-month extended fund facility of about US$7 billion. It is subject to approval of the IMF Executive Board. The programme aims at supporting the efforts of the Pakistan government to cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth.
Terrorism
With no let-up in the terror incidents, the government has been under pressure within the country to take some visible additional steps to curb it. Stung by the periodic attacks against their citizens and interests in Pakistan, the Chinese are also reported to have been asking Pakistan to conduct an anti-terror operation. The last major operation against TTP and its allies was conducted in 2014. The government can also not ignore the rapidly expanding presence of TTP in Khyber Pakhtunkhwa in the form of setting up of its own courts to resolve disputes and check posts on main highways etc. It is in this backdrop that the apex committee of the National Action Plan against terrorism, chaired by the Prime Minister and including the army chief, approved the launch of Operation Azm-e-Istehkam to eradicate terrorism and extremism from the country. It was stated that the operation would coordinate and align efforts across multiple fronts to address terror threats and effective legislation would be enacted to close legal loopholes in the anti-terror laws. The announcement was met with widespread criticism from opposition parties, notably PTI, which rules Khyber Pakhtunkhwa (KP) and whose cooperation will, therefore, be crucial for the success of the operation. In general all major parties of KP were against the operation. This is understandable as the previous similar operations had caused widespread misery to the people of KP, who apprehend similar trouble now. The KP government said that it would not support Azm-e-Istehkam until its details were clarified. Taken by surprise at the widespread criticism of the operation, the government clarified that Azm-e-Istehkam would not be a kinetic large scale military operation, nor would it entail mass displacement of the local population. Instead, it would be a multi domain, multi-agency and “whole of the system national vision” for enduring stability in Pakistan. It was further stated that Azm-e-Istehkam was meant to reinvigorate and re-energise the ongoing implementation of the Revised National Action Plan against terrorism. Subsequently, the government said that an all-party meeting would be convened to build consensus on the operation and it was reported by the media that PTI had also agreed to participate in it. In contrast to the government’s efforts to build consensus, a meeting of the army corps commanders, presided over by the army chief, castigated those criticising the operation, accusing them of a self-serving agenda aimed at undermining counter-terrorism efforts.
Deployment of Frontier Constabulary in PoK
In a sign of continuing unrest in PoK, Pakistan’s interior minister approved deployment of the paramilitary force, Frontier Constabulary there on the request of “Prime Minister” of PoK. The decision came after the Joint Awami Action Committee, which has been spearheading the agitation for administrative and financial reforms in the territory, threatened that its activists would stage peaceful sit-ins at the entry and exit points of PoK unless the pledges made to them were honoured by the Pakistan government and their detained activists released by June 25.
Pakistan-China
Prime Minister Shehbaz Sharif paid a visit to China from June 4 to 8 and met, inter alia, President Xi Jinping and Prime Minister Li Qiang. Significantly, army chief Asim Munir was reported to have accompanied the Prime Minister during his meeting with Xi Jinping. In a joint statement, the two sides reaffirmed their support for each other’s core concerns, which included one-China principle, Taiwan as an inalienable part of the territory of People’s Republic of China, Xinjiang, Tibet, Hong Kong and South China Sea for the Chinese side. China in return supported Pakistan’s sovereignty, national independence and territorial integrity. Both sides also underscored the importance of maintaining peace and stability in South Asia, the need for resolution of all disputes, and expressed their opposition to “any unilateral action.” Describing the CPEC as a pioneering project of the Belt and Road Initiative, the two sides expressed their commitment to “forge an upgraded version” of CPEC by jointly taking up projects, inter alia, in the areas of exports, environment, energy, innovation, livelihood and empowerment of people. The joint statement mentions in particular the ML-1 project for upgradation of the rail network from Peshawar to Karachi, which has been hanging fire for a long time, inter alia, due to the difficulty in arranging the required financing of $6 to 7 billion; and decided to actively explore advancing the project in a “phased manner” and start working on financing modalities- a joint commitment that does not sound too reassuring. A framework agreement was signed for the Karakoram Highway (Raikot-Thakot) realignment project “for the smooth operation of the only land-based channel between China and Pakistan”. Expressing satisfaction that construction of the Gwadar International Airport will soon be finished, the two sides decided to speed up the development of auxiliary infrastructure of the Gwadar port.
During his meeting with the Pakistani Prime Minister, Xi Jinping was reported to have highlighted the need for Pakistan to provide “ a safe, stable and predictable business environment, and effectively guarantee the safety of Chinese personnel, projects and organizations” working in Pakistan. Periodic terror attacks against Chinese nationals and interests in Pakistan and administrative bottlenecks have been a matter of serious concern to the Chinese and as stated above, they have been asking for a major anti-terror operation. With an eye on these concerns, Shehbaz Sharif assured Chinese businessmen of foolproof security during his meetings with them. He said that his government had already started structural changes to rein in corruption.
There was speculation in the media that in spite of the elaborate joint statement, the Pakistani delegation had left China essentially empty handed and that because of instability in Pakistan and poor economic and administrative environment for investment, China had lost its initial enthusiasm for the CPEC investment. There was also no word on any major debt restructuring by the Chinese or restructuring of the over $15 billion in power plant debt owed to the Chinese energy producers by Pakistan. However, while the Chinese may become more cautious in sinking additional money in projects in Pakistan, they could be expected to continue their emphasis on the infrastructure part of the CPEC, linking Xinjiang to Pakistan’s Makran coast, because of its strategic importance to them.
Pakistan-India
Reacting to the re-election of Prime Minister Modi, the Pakistan Foreign Office spokesperson expressed the hope that India would take steps to create a conducive environment for peace and dialogue and resolution of “long-standing” dispute for the benefit of people on both sides. She added that “superficial electoral exercises” in Jammu and Kashmir could not alter the reality “prescribed by international law”. This was a repeat of Pakistan’s hackneyed position on relations with India. Prime Minister Shehbaz Sharif felicitated Prime Minister Modi on X on taking over office and the latter thanked him in reply. Nawaz Sharif, however, sent a more substantive message to Prime Minister Modi, also on X, conveying warm felicitations on his taking over office a third time. He called the success of the Indian Prime Minister’s party in the recent elections a sign of the confidence of people in his leadership. He also called for replacing hate with hope to shape the destiny of two billion people of South Asia. In his response, Prime Minister Modi said that people of India have always stood for peace and security and progressive ideas. He added, “Advancing the well-being and security of our people should always remain our priority.” The reference to the security of people seemed to allude to the threats posed by cross border terrorism. In spite of the warmth of Nawaz Sharif’s message, the above exchange did not signal any imminent breakthrough in the relationship. Speaking of relations with India at the Institute of Strategic Studies in Islamabad, Deputy Prime Minister and Foreign Minister Ishaq Dar too put the onus on India to take necessary steps to create an enabling environment for purposeful engagement. Visiting troops on the frontline with India, army chief Asim Munir said that any provocation or violation of Pakistan’s territorial sovereignty would be met with a swift and resolute response.
On taking over as External Affairs Minister of India a second time, S. Jaishankar listed a solution to the years old cross border terrorism from Pakistan as one of the items to be focused on by the new government.
Pakistani officials accompanied the World Bank appointed neutral expert to India to look at the hydro power projects in Jammu and Kashmir on which Pakistan has raised objections. It would be recalled that Pakistan has raised some objections on India’s Kishanganga and Ratle projects. Not able to build a consensus between India and Pakistan on referring the matter to a neutral expert or a Court of Arbitration, the World Bank had constituted both mechanisms. India has not accepted the constitution of the Court of Arbitration, but has participated in the proceedings before the neutral expert.
Pakistan-USA
The US House of Repersentatives passed a resolution towards the end of June calling, inter alia, for an impartial investigation into claims of irregularities in Pakistan’s February election. The Pakistan Foreign Office criticised the resolution as neither constructive nor objective due to its lack of understanding of Pakistan’s political situation and electoral process. The National Assembly of Pakistan passed a resolution condemning the above resolution of the US House of Representatives.
III Developments in Afghanistan
Third Doha meeting on Afghanistan
After much foot-dragging, the Taliban announced that they would attend the third UN-led meeting on Afghanistan that took place in Doha on June 30-July 1 and was attended by representatives of about two dozen countries. Their delegation was led by the chief government spokesman, Zabiullah Mujahid. They were not invited to the first meeting and had declined to attend the second one in February this year. It would be recalled that the Doha meetings have been organised as per recommendations in the independent assessment of the UN Secretary General on Afghanistan submitted to the UN Security Council which, inter alia, called for: a high level UN meeting with special representatives on Afghanistan of various countries, a smaller international contact group and appointment of a special representative of UN to facilitate engagement between international and Afghan parties. It was clear that the Taliban had agreed to attend the third meeting subject to certain conditions, one of them being that Afghan women would not attend it. The UN defended this decision, saying demands for women’s rights would certainly be raised at the meeting. The Taliban delegation also did not sit across the table with civil society representatives from Afghanistan.
The 15 point UN agenda for the meeting included issues concerning governance, including the human rights situation and rights of women and girls; issues concerning the Afghan economy, including problems of the financial and banking sectors; terrorism and security threats originating from Afghanistan; and issues concerning drugs and climate change. The focus of the Taliban was on recognition of their regime as the legitimate government of Afghanistan and an end to statements critical of them by the UN Security Council. As in the past, they were opposed to the appointment of a UN Special Representative. In his statement to the meeting on the opening day, the Taliban delegation head Zabiullah Mujahid called upon the West to look beyond the Taliban measures in respect of women and girls, which he described as part of Afghanistan’s religious and cultural values, so as to facilitate progressive relations. He maintained that political understanding between the Taliban and other countries was steadily improving. In this context, he referred to the recent removal of the Taliban from the list of prohibited groups by Kazakhstan, adding that Russia would do the same in the near future. Commenting on the meeting after its conclusion, the US Special Representative, Thomas West said that the attempt was to launch a process that envisions the reintegration of Afghanistan in the community of nations. He spoke of some important mile stones as part of the process, including women’s and girls’ right to education and to work; and fulfilment of their security commitments by the Taliban.
The meeting did not produce any substantive outcomes, including on more aid to the Afghan people, but enabled an exchange of views. The UN had made it clear that the Doha meet was not about recognition of the Taliban; and the Taliban came nowhere close to this goal. But they would be satisfied at their participation in the meeting with envoys from several countries and that too after acceptance by the UN of some of their conditions.
Human Rights Situation
Speaking at the UN Human Rights Council, Richard Bennett, the Council’s Special Rapporteur for Afghanistan criticised the human rights situation there and described the violence against women as strong and widespread. He added that the Taliban attacks on women’s rights had intensified, were pervasive and systematic. However, the Taliban spokesperson, Zabiullah Mujahid, rejected Bennett’s report as an attempt to mislead minds ahead of the third Doha meeting.
Eid message of the Islamic Emirate leader
In a message on the occasion of Eid al-Adha, the Taliban leader Haibatullah Akhundzada said that the Taliban regime wishes to establish political and economic relations with the world, particularly the Islamic countries, within the framework of Sharia. He also called on traders and investors to invest in various sectors for economic development and exhorted the people to “protect, nurture and serve our Sharia based system.” He condemned the “Israeli Zionist attacks” and oppression in Gaza and called upon other countries to prevent these “heinous crimes”. In his speech on the occasion, Akhundzada said that he was ready to step down from his position if asked to, but he did not want divisions, which would be beneficial to the enemies of Afghanistan. He also emphasized the need to ensure women’s Sharia rights. It is not clear what lay behind Akhundzada’s reference to his willingness to quit, but not allow divisions. It could possibly be result of differences within the Taliban on policy issues, including on the hardline agenda of the Kandahar religious faction led by Akhundzada. However, it seems to have been only a threat to those differing with his agenda, because Akhundzada continues to maintain a tight grip on power.
Afghanistan-Pakistan
Speaking to Voice of America towards the end of June, the Pakistan Defence Minister Khwaja Asif ruled out dialogue with TTP and hinted at the possibility of cross border strikes to eliminate militant hideouts in Afghanistan. Reacting strongly to Asif’s statement, a spokesman of the Taliban Defence Ministry described it as an attempt to “muddy the waters”, adding that anyone who violates Afghanistan’s border will be responsible for the consequences. Subsequently, the Spokesperson of Pakistan’s Foreign Ministry said that Pakistan respects the sovereignty and territorial integrity of Afghanistan, but it is critical that Afghanistan takes effective action against the terrorist groups responsible for terror inside Pakistan. Speaking at the SCO summit in Kazakhstan, Prime Minister Shehbaz Sharif, while calling for meaningful engagement with the Taliban, also stressed the need for them to take effective steps to ensure that the Afghan soil was not used for terrorism against any other country.
Afghanistan-Russia
Speaking in early June, President Putin said that there were well known problems concerning Afghanistan, but countries must engage with the current government, which wields power in Afghanistan and governs it. At the same time, he stressed the implementation of the agreements at the UN level, including an inclusive government in Afghanistan. He added that security and stability in Afghanistan were more important for Russia than economic opportunities there. Later, at the end of the SCO summit in Kazakhstan, he described the Taliban “as our allies in the war against terrorism.”
Afghanistan-UAE
The UAE President Sheikh Mohamed bin Zayed Al Nahyan met the Taliban Interior Minister Sirajuddin Haqqani during his visit to the UAE. According to the UAE news agency WAM, “the two sides discussed strengthening the bonds of cooperation between the two countries and ways to enhance ties to serve mutual interests and contribute to regional stability.” It added that “the discussions focused on economic and development fields, as well as support for reconstruction and development in Afghanistan.” The Taliban said that matters of mutual interest were discussed, but did not elaborate. Reacting to Sirajuddin’s visit to the UAE, the Spokesperson of the US State Department said that the countries that host members of the Taliban, who are under sanctions, must do so through a UN mandated exemption process. The meeting was yet another indicator of the growing engagement of other countries with the Taliban to secure their own interests.
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