I Overview
Pakistan:
- Political Situation
- Economy
- Terrorism
- Pakistan-Saudi Arabia
- Pakistan- Iran
- Pakistan-India
- Pakistan-US
Afghanistan:
- Repressive Rule Continues
- Eid Message of the Taliban Supreme Leader
- Impasse on UN Proposals
- Afghanistan-Pakistan
- Afghanistan-India
- Afghanistan-Iran
II Developments in Pakistan
Political Situation
Harbouring widespread resentment at the rigging of the February elections and the continued incarceration of its top leaders, PTI has formed an alliance with some smaller parties to confront the government. This has so far not resulted in any major political upheaval for the Shehbaz Sharif government, inter alia, due to the army’s backing to it. However, dissent surfaced within the ruling party- PML(N). Voiced publicly by some Nawaz Sharif loyalists, it centred around the strong public perception and the reality of the army’s control over the government. The above reality goes against Nawaz Sharif’s politics of asserting civilian supremacy over the army and had resulted in alienation of many of his supporters during the last election. Moreover, there is also an apprehension within the party that like Shehbaz’s government before the elections, his current government will have to take the flak for the harsh measures that it will be forced to take to stabilise the economy. Towards the end of April, there were signs of the party leadership moving to address the above concerns. It was reported that Nawaz Sharif, who has been cleared by the judiciary of the cases against him, would assume the post of party President, hitherto held by Shehbaz Sharif. Foreign Minister Ishaq Dar, a relation and close confidante of Nawaz Sharif, has been designated as Deputy Prime Minister. Another Nawaz loyalist, Rana Sanaullah has been made Adviser on Political Affairs to the Prime Minister. Some more Nawaz loyalists are also likely to be accommodated in the government. However, in spite of such steps, some fundamental fault lines will continue to persist. First, given the numbers in the National Assembly and sharp political polarisation, the government will continue to depend upon the support of the army to survive. This will remain a serious limitation on Nawaz’s policy of pushing back against the army. Second, Shehbaz Sharif has all along been in favour of seeking an accommodation with the army and has had his own ambitions. However, lacking Nawaz’s charisma, he has had to play second fiddle to him for most of his political career. Political circumstances 2022 onwards resulted in him becoming the Prime Minister, thereby strengthening his strand of thinking within the party. Therefore, the tussle between those wanting to work with the army and the Nawaz loyalists, who support his civilian supremacy narrative, is likely to continue.
PML(N) secured the majority of seats in the by-elections to five national assembly and sixteen provincial assembly seats held recently. However, given that it controls both the federal and Punjab governments and PTI continues to operate under severe restrictions, this was no measure of the actual support enjoyed by the party.
The Supreme Court has started consideration of various petitions seeking its intervention in response to the allegations made by six Islamabad High Court judges at the end of March regarding interference by the intelligence agencies, notably ISI, in their work.
Economy
In its Asian Development Outlook released in April, ADB said that Pakistan’s economic outlook was uncertain with high risks on the downside, as political uncertainty would remain a key risk to the sustainability of stabilisation and reform efforts. With Pakistan’s large external financing requirements and weak external buffers, disbursement from bilateral and multilateral partners would be crucial, but such inflows could be hampered by lapses in policy implementation. The Bank projected Pakistan’s economic growth during the next financial year at 2.8%, adding that further pickup in growth will depend upon economic reforms.
A recently released report of Pakistan’s Federal Bureau of Revenue (FBR) shows that revenue loss because of tax concessions to various groups in the country remains high at close to 3.5% of GDP. This figure pertains only to the federal government and more concessions are given in provincial taxes. Such tax concessions given to elite groups in Pakistan are one of the causes of its economic problems and result in heavy dependence on borrowing.
The Executive Board of the IMF approved release of the last tranche of $1.1 billion of the $3 billion, nine months arrangement that Pakistan had entered into with the Fund in June 2023. While announcing this release, the Fund noted that Pakistan’s efforts under the above arrangement have resulted in progress in restoring economic stability, moderate growth has returned and, while still high, inflation has begun to decline. At the same time, the Fund called for continued sound macroeconomic policies and structural reforms of the economy.
In a meeting with the IMF Managing Director and some members of its board of governors in Washington DC, Pakistan’s Finance Minister Muhammad Aurangzeb expressed Shehbaz Sharif government’s resolve to carry out aggressive reforms to stabilise the economy, including broadening the tax net, privatising loss making state owned enterprises, expanding social safety nets and facilitating the private sector. Such resolves in the past have failed to make any material difference. It is to be seen if such wide ranging reforms are permitted by the elite groups, including the business empire of the armed forces, that benefit from the current economic environment. Speaking later at a think tank, Aurangzeb expressed the expectation of a significant new bailout programme of $8 billion from the Fund. He also hinted at a review of the current share of 57.5% for provinces in the federal revenue collection to make its distribution between the federation and the provinces more equitable.
Reiterating the role of the army in the country’s economy, army chief Asim Munir stated at a recent Green Pakistan Initiative Conference that the army will continue to provide all possible support for the economic development of the country and will contribute towards comprehensive national security.
Terrorism
Periodic terror attacks continued in Pakistan. Five Japanese nationals working in an automobile company had a miraculous escape in a suicide bombing close to their vehicle in Karachi. Media reported that the slain suicide bomber had links to a Baloch separatist outfit. It was speculated that he may have mistaken the Japanese nationals for Chinese. It would be recalled that three major terror attacks against Chinese targets in Pakistan had taken place within a period of seven days towards the end of March.
A Sessions Judge posted in South Waziristan was abducted and his vehicle set on fire. Subsequently, a video was released by his kidnappers, in which he said that the Taliban had brought him to a jungle and a war was going on there. He requested the authorities to accept the demands of his abductors to get him released. Two days later, the authorities claimed that the judge had been released unconditionally by his captors. This does not, however, mean that no quid pro quo was involved, as the authorities have generally been reluctant to reveal the deals struck with captors in such cases.
Pakistan-Saudi Arabia
Prime Minister Shehbaz Sharif, accompanied by his ministers of foreign affairs, defence, finance and the chief minister of Punjab, visited Saudi Arabia in April and met, inter alia, the Saudi Crown Prince Mohammed bin Salman. The Pakistani media reported at the end of the visit that the Saudis had agreed to increase their deposits with Pakistan’s central bank from $3 billion to $5 billion to shore up Pakistan’s foreign exchange reserves. It was also stated that Saudi Arabia would be making the first tranche of $5 billion investment in Pakistan. In a social media post, the CEO of the Saudi Arabia Holding Company Mohammed AlQahtani said that the agreement was to inject investment into a new oil refinery and a copper mine.
A Pakistani media report stated that around the time the Saudis gave a nod to increase their deposit in Pakistan by $2 billion, Pakistan banned the Iranian backed Zainebiyoun brigade, which is reported to have been formed by the Islamic Revolutionary Guard Corps (IRGC) of Iran after the Syrian civil war began and had been mobilising Pakistani Shia militants to fight the forces opposing the Syrian regime. In March, some reports had emerged regarding arrest of Zainebiyoun members of Pakistani origin in international waters for carrying weapons for IRGC.
Within days of Shehbaz Sharif’s visit to Saudi Arabia, a high-level Saudi delegation, led by Foreign Minister Faisal bin Farhan bin Abdullah and including Saudi ministers of Water and Agriculture; Industry and Mineral Resources; and Investment visited Pakistan. Speaking at a joint press conference with his Pakistani counterpart, the Saudi Foreign Minister said that he was impressed with the new initiative and arrangements being put in place by the Pakistani authorities to attract foreign investment. His reference was apparently to Pakistan’s Special Investment Facilitation Council (SIFC). No specific investment was announced, though media quoted sources in the Pakistan government as saying that such announcements will be made during the expected visit of the Saudi Crown Prince to Pakistan later this year.
Pakistan-Iran
President of Iran Ebrahim Raisi paid an official visit to Pakistan from April 22 to 24. It took place in the backdrop of a flare up between the two countries earlier this year amidst accusations by both sides regarding presence of terrorists operating against them on each other’s territory. In a joint statement issued at the end of the visit, the two countries agreed that their border should be one of ‘peace and friendship’ and reiterated the importance of regular interaction to combat threats of terrorism, narcotics smuggling, human trafficking, hostage taking and money laundering. They also agreed to expand trade and economic cooperation, including expeditious finalisation of a free trade agreement, setting up of joint border markets, economic free zones and new border openings. They reiterated the importance of cooperation in energy, including trade in electricity, power transmission lines and the Iran-Pakistan (IP) gas pipeline project. They agreed to boost their trade to $10 billion over the next five years. The two countries also spoke of leveraging their geographic location to promote connectivity in the region. The joint statement had a reference to the “issue of Kashmir” and called for its resolution through dialogue and peaceful means based on the will of the people of the region and in accordance with international law. They reiterated their commitment to the development of Afghanistan as a peaceful, united, sovereign and independent state, free from the threats of terrorism and drug trafficking.
The joint statement is full of pious wishes that do not reflect the reality of the relationship. There was no breakthrough on the IP gas pipeline, where Pakistan has not been able to fulfil its side of the commitment, leading to Iran demanding a hefty compensation. The US Administration has repeatedly hinted at progress on the IP gas pipeline and other business deals between the two countries attracting sanctions. In dire need to an IMF bailout and keen to rebuild its relationship with the US, Pakistan cannot afford to ignore such warnings. Pakistan and Iran have had an uneasy relationship over the years, inter alia, due to the festering border management problem, the Shia-Sunni fault line in Pakistan and Pakistan’s transactional relationship with the US. At the same time, the two countries have been conscious of the need not to enter into an all-out confrontation and manage the relationship. Though Raisi’s visit has eclipsed the flare up of January this year between the two countries, the fault lines of the relationship are likely to continue.
Pakistan-India
Referring to a report in The Guardian, alleging India’s involvement in the assassination of certain individuals in Pakistan, the Pakistan Foreign Office alleged that the Indian network of extra-judicial and extra-territorial killings was a “global phenomenon” and requires coordinated international response. India has denied the allegations made in The Guardian report.
Pakistan-US
The US Administration imposed sanctions on four entities – one based in Belarus and three in China- for supplying missile-applicable items for Pakistan’s ballistic missile programme, including its long range missile programme. The Pakistan Foreign Office castigated the US move stating that political use of export controls would only lead to an arms race and disturb strategic balance.
III Developments in Afghanistan
Repressive Rule Continues
The Taliban Ministry of Justice reiterated the ban on the activities of political parties in the country and stated that only charity organisations can operate with an official license. In a show of adherence of the Taliban regime to punishments in keeping with their interpretation of Sharia, six persons, including a woman, were publicly flogged in the Logar province for adultery.
The Taliban showed no flexibility on education for women and girls in spite of repeated criticism of the international community. The Taliban Interior Minister Sirajuddin Haqqani said that education is an internal issue of Afghanistan and other countries should not interfere in this matter.
Eid Message of the Taliban Supreme Leader
In a written message on the occasion of Eid, the Taliban Supreme Leader Haibatullah Akhundzada said that the Islamic Emirate seeks good relations with others based on mutual respect and understanding and the attempts of the enemies of Afghanistan to create a rift among the officials of the Islamic Emirate will not succeed. He called for respect for Afghanistan’s sovereignty, integrity and dignity, adding that any disagreements should be addressed through dialogue and mutual respect. He added that the Taliban seek diplomatic and economic relations with all nations, ensuring that Afghanistan’s security, stability and prosperity serve as a favourable opportunity for others. He emphasized that Islamic Emirate’s foundation lies on the principles of Islam and well-being of the Muslim community; and injustice and opposition to Sharia leads to insecurity. He urged government officials to encourage and motivate people towards Islamic values and inspire them through gentle persuasion rather than force. He skirted the issue of education for women and girls and said that it is the responsibility of every Muslim to provide good upbringing, education and opportunities for their children, so that they could attain religious knowledge. He criticised the international community for always falling short in effectively addressing the injustices faced by the Palestinian people. In a separate message delivered personally in a rare public appearance at the Eidgah Mosque in Kandahar, he said that the Taliban will never compromise on their principles or Islam and that he would not take even one step away from Sharia.
The above messages were on the expected lines and conceded no ground in response to the demands of the international community for an inclusive set-up and ensuring the rights of all sections of people, including women and girls.
Impasse on UN Proposals
The impasse on the appointment of a UN Special Envoy for Afghanistan continued with the Taliban remaining strongly opposed to the proposal. However, the spokesperson of the UN Secretary General said that efforts were continuing to appoint a Special Envoy. The Taliban, however, stressed that since Afghanistan has achieved security and has emerged from a state of war, there was no need for the proposed Special Envoy. Separately, Pak media stated quoting diplomatic sources that yet another proposal of the Secretary General to constitute a contact group of Afghanistan’s immediate neighbours and other relevant stakeholders also remained stalled due to Pakistan’s opposition to inclusion of India in it.
Afghanistan-Pakistan
The differences between Pakistan and the Taliban regime continued to persist. Speaking at the 19th meeting of SCO Security Council Secretaries held in Astana in early April, the representative of Pakistan said that a peaceful and stable Afghanistan was a strategic imperative for regional prosperity and called upon the SCO members to follow a holistic policy to address the multifaceted challenges confronting Afghanistan. Following a Corps Commanders’ conference, the Pakistan army said that terrorist groups operating from Afghanistan were acting as proxies against Pakistan and its economic interests, especially the CPEC and posed a threat to regional and global security. Speaking at a think tank in Islamabad, Pakistan’s Special Representative for Afghanistan, Asif Durrani, said that Pakistan has suffered more due to Afghanistan’s internal situation than in three wars with India in terms of blood spilt and finances drained. However, he added that with deft diplomacy, Pakistan can overcome its difficulties with Afghanistan, including the TTP challenge. Durrani was silent about Pakistan’s own counterproductive policies, including the quest for strategic depth in Afghanistan, that are largely responsible for its current security dilemmas.
The Afghan Ministry of Industry and Commerce said that a meeting was held to explore alternative trade routes for Afghanistan through regional countries; and importance of optimizing the use of the Chabahar port was emphasized. The spokesman of the ministry stated that the idea was not to block the existing commercial paths but to provide more routes for the trade community. While reporting on the above meeting, Tolo News quoted Afghan traders as saying that alternative routes, such as providing more facilities at the Chabahar port and constructing the Wakhan corridor, should be explored expeditiously. They were further quoted as referring to the problems created by Pakistan for the Afghan traders and that it would be better to develop alternative routes now rather than leaving this task to a future date.
Afghanistan-India
A spokesman of the Taliban Ministry of Justice said that steps were being taken to return the lands seized from Hindus and Sikhs to their rightful owners. He added that the Commission for Prevention of Land Seizure had instructed the provincial authorities to identify the seized land falling in the above category and return it to its rightful owners. Referring to reports on the above, the spokesperson of the Indian Ministry of External Affairs said that if the Taliban administration had decided to restore property rights to their citizens belonging to the Hindu and Sikh community, India saw it as a positive development.
Afghanistan-Iran
The Taliban regime described the recent action of Iran in firing missiles and mounting drone attacks against targets in Israel as a legitimate defensive action. They called on the influential countries in the region and the world to halt further escalation of the crisis and stop the conflict in Gaza.
