Af-Pak Digest - October 2019

I Overview

Pakistan:

• Economy
• Growing role of the Army
• JUI (F)’s Azadi March
• Pakistan at the Financial Action Task Force
• Gwadar Port
• Pakistan-India
• Pakistan-China
• Pakistan-Afghanistan
• Pakistan wades into Iran-Saudi rift
 
Afghanistan:

• Peace and Reconciliation
• Results of Presidential Election delayed
 


II Developments in Pakistan 

Economy
 
In a report released in October, World Bank said that the Pak economy was slowing down as it faced another macroeconomic crisis due to high deficits and low foreign reserves. It noted that because of the stabilization programme required by the IMF bailout, Pakistan’s growth was expected to remain low in the near term, dropping to 2.4% in the fiscal year 2020. The outlook for the medium term would depend upon the country’s ability to implement the necessary structural reforms. Economic policies over the recent years have resulted in increased debt levels and an erosion of fiscal and external buffers, affecting Pakistan’s ability to absorb economic shocks. Inflation is expected to increase to 13% in the fiscal year 2020, but will start declining thereafter. The consolidated fiscal deficit is projected to reach 7.5% of GDP in the same fiscal year. Finally, the report noted that Pakistan’s public debt to GDP ratio was expected to remain high in the near term at around 80% and would not fall below 70% of GDP, the debt burden benchmark for high risk emerging markets, over the medium term.
 
Growing role of the army
 
In a sign of the expanding influence and role of the army under the Imran Khan government, the army chief, General Bajwa met Pakistan’s top businessmen at the beginning of October. It would be recalled that in June this year, Bajwa had been made a member of the newly constituted National Development Council, headed by the Prime Minister. The ostensible reason for Bajwa’s meeting with businessmen was his participation in the concluding session of a seminar on “Interplay of Economy and Security.” However, media reports suggested that it took place in the context of complaints from businessmen concerning government’s economic policies and harassment of the business community by the its accountability machinery. Bajwa told the audience that improved internal security environment had created space for increased economic activity. Media reports further suggested that the army chief gave a clear message that Pakistan was on the road to economic stabilization and there was no question of deviating from it. The business community had to bear its own share of burden. 
 
JUI (F)’s Azadi march
 
Jamiat-Ulema-e-Islam (F) chief, Maulana Fazlur Rehman announced that his party would mount an Azadi march on Islamabad at the end of October to demand, inter alia, resignation of the Prime Minister and holding of fresh elections. This placed other opposition parties- PPP and PML (N)- in a tight spot because of their reluctance to upset the applecart at a time when their top leaders are incarcerated as part of the accountability process, requiring focus of their energies to get relief for them. The Sharif brothers were reported to be divided on the issue, with Nawaz Sharif in favour of support to the Maulana’s march. Eventually, PPP and PML(N) agreed to their leaders addressing the JUI (F) sit-in at Islamabad, but not to participate in any further move that could cause chaos in the capital. There was speculation in the media that the march was being encouraged by some senior army  officers, who were unsatisfied with the three years extension given to General Bajwa by the Imran Khan government. For the Maulana, whose political influence in his traditional stronghold of tribal areas has seen serious erosion in the recent years because of the rise of PTI and who had lost his own seat in the 2018 election, it was an attempt to prove his political relevance. Having failed to persuade him to call off the march, the government gave him clearance to hold it on October 31 in an outlying area of Islamabad. It kicked off from Karachi, passing through Punjab en route to Islamabad, where Fazlur Rehman arrived at the head of an impressive crowd on October 31. Though sudden deterioration in the health of the incarcerated former Prime Minister Nawaz Sharif towards the end of the month gave the government the jitters, it remained firm that the Prime Minister would not resign. Even though the JUI (F) sit-in continued at the end of the month, in view of the backing of the army leadership to Imran Khan and the major opposition parties not extending full support to the Maulana, the government seemed to be in no imminent danger.
 
Pakistan at the Financial Action Task Force (FATF)
 
In the run up to the FATF meeting in Paris, its Asia Pacific Group issued an evaluation report stating that Pakistan faced high risks of money laundering and terror financing, needed to improve its understanding of these risks and those posed by the various terrorist groups operating within the country. The report did not agree with Pakistan’s submission that it had made substantial progress in countering these risks. It further stated that Pakistan, which was placed on the FATF grey list in June 2018, was fully compliant with only one of the 40 recommendations made by the FATF, largely compliant with nine, partially compliant with 26 and non-compliant in respect of the remaining four. It referred in particular to the risks associated with the terror groups operating in Pakistan such as Da’esh, Al Qaeda, JuD, FiF, LeT, JeM and the Haqqani network. Pakistan’s attempt to deflect the attention of FATF by alleging a malicious Indian campaign and politicization of the proceedings by India did not succeed. The general expectation was that in spite of the above deficiencies, the support of China, Turkey and Malaysia to Pakistan would block the consensus to move it to the black list. Following the FATF meeting in Paris, it was decided to retain Pakistan on the grey list. However, its Chinese chair announced, “The FATF is giving a very clear warning that if by February 2020 the country has not made significant progress, we would consider further actions, which potentially include placing the country on the Public Statement, also referred to as the black list.” Pakistan affirmed its political commitment to fully implement the FATF action plan. According to some media reports, it has been trying to convince the IMF to drop the conditionality of full compliance with the FATF recommendations from its bailout package of $6 billion on the plea that FATF has a wider scope, at times of geo-political nature and the IMF support package should be dealt with purely on the basis of financial and monetary policies. However, by the end of October, there was no sign of any relief by the IMF on this count.
 
Gwadar Port
 
Briefing a Senate committee, the Pakistan Ministry of Maritime Affairs stated that it had been decided to route the Afghan transit trade through Gwadar port also and the first such shipment was due to transit in October. In a reminder of the one-sided nature of the CPEC projects, the Ministry of Maritime Affairs announced that tax exemption for a period of 23 years had been granted to the China Overseas Ports Holding Company to facilitate installation of equipment and machinery at the port and relocation of some Chinese manufacturing units to Gwadar.
 
Pakistan-India
 
Pakistan’s fulminations at withdrawal of special status of J&K continued in October along with incidents of ceasefire violations at the LoC. Addressing a meeting of Corps Commanders at the beginning of the month, COAS Bajwa said that Kashmir was the jugular vein of Pakistan and no compromise would be made on the Kashmiris’ right of self-determination. Later in the month, the Indian army chief said that four terror launch pads in PoK were hit and a number of terrorists killed in retaliatory artillery fire by India following ceasefire violation by Pakistan. Pakistan rejected the above claim. Pakistan again denied overflight permission for an aircraft carrying the Indian Prime Minister on a foreign tour. India regretted this decision. Notwithstanding the fraught relationship, both the countries concluded an agreement to operationalize the Kartarpur corridor, permitting visa free travel by Indian pilgrims to the Kartarpur gurudwara located barely 3 kilometres from the India-Pakistan border in Punjab. India went along reluctantly with the Pakistani demand of payment of $20 service fee by each pilgrim, while urging Pakistan to reconsider it.
 
Pakistan-China
 
PM Imran Khan paid a three day visit to China, his third in 13 months. COAS Bajwa, who was in Beijing for defence talks, also joined the Prime Minister in his meetings with the Chinese leaders. The visit came days before President Xi’s visit to India to meet Prime Minister Modi. Qureshi claimed that it was Xi’s desire as well as that of Pakistan to take each other into confidence on the Kashmir situation ahead of Xi’s India visit and that the Chinese leadership would keep Pakistan informed on its conclusion. In a joint statement issued at the end of the visit, China reiterated its solidarity with Pakistan in safeguarding its territorial sovereignty, independence and security. Pakistan reiterated that affairs of Hong Kong were China’s internal matter. The statement added that Pakistan briefed the Chinese on the situation in J&K and “the Chinese side responded that it was paying close attention to the current situation in Jammu and Kashmir and reiterated that the Kashmir issue is a dispute left from history, and should be properly and peacefully resolved based on the UN Charter, relevant UN Security Council resolutions and bilateral agreements.” China opposed any unilateral actions that complicate the situation. Pakistan underscored that the CPEC was a transformational project and a CPEC Authority had been set up to oversee expeditious implementation of CPEC projects. Both sides stated that the second phase of CPEC would promote industrial and socio-economic development in Pakistan. Pakistan stated that the Gwadar port had been granted various facilities enabling it to become a trade and logistical hub. China appreciated Pakistan’s “unrelenting efforts and tremendous sacrifices in countering terrorism” and called on the international community to objectively recognize Pakistan’s contribution to regional peace and security through its success in fight against terrorism.
 
Pakistan-Afghanistan
 
The Afghan authorities informed Pakistan that they were not in a position to keep the Torkham border crossing between the two countries open for 24 hours and it would be functional only for ten hours. It would be recalled that in September, Prime Minister Imran Khan had inaugurated the round the clock opening of the border crossing with a great deal of fanfare. Lack of personnel and resources was given as the reason for their decision by the Afghans. A border clash between the two countries at the end of October left six soldiers and five civilians injured on the Pakistani side.
 
Pakistan wades into Iran-Saudi rift
 
Following his meeting with Tump in the margins of the UN General Assembly in September, PM Imran Khan had claimed that the US President had asked him to help in defusing tensions with Iran and the Saudi Crown Prince had also asked him to talk to the Iranian President. He added that he was doing his best to defuse tensions. In October, he visited Iran followed by Saudi Arabia and reportedly invited Iran and Saudi Arabia to Islamabad for a dialogue. In Tehran, he claimed that his meeting with President Rouhani was encouraging. President Rouhani noted that termination of war in Yemen and humanitarian aid to the people of Yemen would help bring peace and stability in the region and added that the issue could be resolved through talks. Condemning the US sanctions on Iran, he called for their immediate lifting and return of the US to the JCPOA (the Iran nuclear deal) so that it could be implemented. According to a statement of the Pakistan Foreign Office, Imran advised the Saudi monarch to peacefully resolve regional disputes through diplomacy. Foreign Minister Qureshi claimed that the threat of an immediate conflict between Saudi Arabia and Iran had been averted thanks to Pakistan’s efforts. The Saudi Foreign Minister, however, said that there was no mediation with Iran, adding that when people came to them with ideas and suggestions, they gave their response, spelling out what Iran needed to do.


III Developments in Afghanistan

Peace and Reconciliation

A Taliban delegation, led by Mullah Abdul Ghani Baradar visited Pakistan at the beginning of October at the invitation of the Pakistan government in an apparent attempt to kickstart the stalled US-Taliban talks. Following their meeting with Foreign Minister Qureshi, who was accompanied by the DG(ISI), both sides agreed to the need for the earliest possible resumption of the peace process. According to a Reuters report, the US envoy Khalilzad, who arrived in Islamabad around the same time, had a meeting with the Taliban delegation. Reuters quoted a Pakistani source as saying that the meeting did not involve formal negotiations on the peace process, but was aimed at building confidence. Some Pakistani media reports claimed that Pakistan has been pressing the Taliban to agree to a ceasefire or at least give a commitment to reduce the level of violence. According to these reports, the Pakistanis asked the Taliban to agree to an “unannounced ceasefire” if they had a problem with a formal declaration to that effect. The US was also willing to go along with this solution to resume peace talks. The Taliban had not given a response to this proposal. However, the two sides had agreed to take some confidence-building measures before moving on to contentious issues. These included exchange of prisoners.  
 
President Ghani’s administration remained sceptical of the peace efforts. His NSA, while on a visit to the US, told the media that though the Afghan government had managed to control the Da’esh, if the peace process failed to integrate all the Taliban, the hardliners might join it to make it a strategic threat. He stated that there was already a blurred line between Al Qaeda and the Taliban, who inter-marry and work together with a common ideology. He supported President Trump’s decision to call off the talks with the Taliban. In a sign of differing views in Kabul, while the spokesman of the Foreign Office welcomed Pakistan’s hosting of the Taliban and expressed the hope that this time Pakistan would work honestly and effectively with the Afghan government to bring the Taliban to the negotiations table, the Presidential palace stated that hosting a group that was still perpetrating violence was against all principles of national relations. Subsequently, President Ghani fired the Foreign Office spokesman. However, Chief Executive Abdullah Abdullah stated that the spokesman would continue in his role until after announcement of the Presidential election results. He added that all issues of foreign policy required debate at the higher echelons of the government so that all government units could speak on such issues in one voice.
 
Afghanistan continued to be jolted by violence. Over sixty persons were killed in a twin blast in a mosque in the Nangarhar province. The Taliban denied their involvement and blamed a mortar attack by the government forces for the casualties. Secretary of State Pompeo stated that the US remained committed to peace and stability in Afghanistan and will continue to fight terrorism.
 
The US envoy Khalilzad visited Belgium, France, Russia, Afghanistan and Pakistan in the latter part of October to discuss Afghan peace. After his meeting with President Ghani, National Security Adviser Hamdullah Mohib said that the discussion centred around release of two US professors who are in the custody of the Haqqani group and nothing was discussed about the wider peace efforts. In Moscow, Khalilzad participated in trilateral consultations with Russia and China, which were subsequently joined by Pakistan also. They called, inter alia,  for observation of a ceasefire by all sides for the duration of intra-Afghan negotiations to chalk out a political roadmap for Afghanistan and urged the Taliban and the Afghan government to release a significant number of prisoners at the start of intra-Afghan negotiations. They also welcomed the Chinese proposal to host the next intra-Afghan meeting in Beijing with the participation of a wide range of political figures of Afghanistan, including representatives of the government of Afghanistan, other Afghan leaders and the Taliban.
 
Media reports in October referred to a seven point peace plan drawn up by President Ghani. According to the reported details, it calls for discussions among Afghanistan, US and NATO to jointly develop a plan for withdrawal of US and foreign forces and counter-terrorism cooperation thereafter, to be followed by negotiations with the Taliban after they enter into a ceasefire with the government on the basis of an assurance concerning withdrawal of foreign forces. Ghani’s peace plan describes Pakistan as the root of the problem and seeks assurances that it would not harbour terrorists. It also talks of consensus building with regional and international partners and strengthening of institutions at the national level. NSA Mohib confirmed the existence of the seven point peace plan in the course of a press conference. However, it is likely to face resistance from the Taliban and its future would depend upon the result of the Afghan Presidential election.
 
Results of Presidential election delayed
 
The process of counting of votes cast during the Presidential election held in September continued to be marred by controversies and complaints from the Presidential candidates other than Ashraf Ghani. In early October, the campaign team of Abdullah Abdullah alleged that the turnout was lower than what the Independent Election Commission (IEC) had announced and votes had come from some polling centres where no observers of the candidates were present. IEC announced later in the month that it had been able to transfer data from 85% biometric devices to its server and this showed a vote tally of 1.7 million. The Council of Presidential candidates accused Ghani and Abdullah Abdullah of large scale electoral fraud and expressed its intent to write to the UN on the subject. Because of slow processing of the electoral data and the controversies surrounding it, the IEC missed the deadline of October 19 for announcement of the election result. A break-in at IEC’s digital centre caused further controversy and the result remained unannounced at the end of the month.
 
The UN Assistance Mission in Afghanistan urged the government, electoral bodies and Presidential candidates to protect the integrity of the election process. The US Embassy in Kabul called upon everyone to respect the time required by the IEC to complete the vote counting process, adding that it was “better to be right than fast.”

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About the Author

Ambassador Sharat Sabharwal

Former High Commissioner of India to Pakistan and Distinguished Fellow, Ananta Centre

Mr Sharat Sabharwal joined the Indian Foreign Service in 1975. After serving in various positions in the Permanent Mission of India to the UN in Geneva and the Indian Missions in Madagascar, France and Mauritius, he was Director/Joint Secretary in the Ministry of External Affairs in New Delhi from 1990 to 1995. The positions held by him subsequently have been Deputy High Commissioner of India in Pakistan (1995-99), Deputy Permanent Representative of India to the UN in Geneva (1999-2002), Ambassador of India to Uzbekistan (2002-2005) and Additional Secretary/Special Secretary in the Ministry of External Affairs (September 2005-March 2009).

Mr. Sabharwal was High Commissioner of India to Pakistan from April 2009 to June 2013.

He was appointed Central Information Commissioner in November, 2013 and served in this position till September, 2017.
Mr. Sabharwal has been Deputy leader/member of the Indian delegations to the UN General Assembly, the erstwhile UN Commission on Human Rights, International Labour Conference and World Health Assembly. He was also the Deputy Leader of the Indian delegation to the International Conference of the Red Cross and Red Crescent held in Geneva in October 1999 and member of the Indian delegation to the World Conference against Racism, held in Durban in September 2001.

Mr. Sabharwal holds a post graduate degree in Political Science. He speaks English and French besides Hindi, Urdu and Punjabi.

Mr. Sabharwal has been an author at the Indian Express, The Hindu, India Today, The Tribune and The Wire.