Developments in Pakistan

Accountability Process

An accountability court pronounced its judgment on December 24 in the two pending corruption cases against the former Prime Minister Nawaz Sharif, who had been out on bail from his imprisonment in yet another case decided in July, 2018. He was convicted and sentenced to seven years imprisonment in the Al-Azizia Steel Mills case, but acquitted in the Flagship Investments case and was lodged at Lahore’s Kot Lakhpat jail to serve his sentence. His brother and PML(N) President, Shehbaz Sharif has also been under detention since October 2018 in a corruption case filed by the National Accountability Bureau (NAB). PML (N) alleged that the judgment against Nawaz Sharif was based on presumptions. Political observers referred yet again to the selective nature of the accountability drive, when NAB urged the Supreme Court to close the Asghar Khan case regarding army’s interference in the 1990 election.  The former President and PPP leader Asif Ali Zardari too faced corruption charges in the Supreme Court. PTI filed a petition to the Election Commission, seeking Zardari’s disqualification from membership of the National Assembly for concealing his assets in his nomination form for the 2018 elections. Zardari attacked the government, the security establishment and the judiciary and appeared inclined to make a common cause with PML (N), when he met Shehbaz Sharif, who had been brought to the National Assembly to attend its session. The combined opposition also forced the government to concede the Chairmanship of the Public Accounts Committee to Shehbaz. However, the manoeouvres of the opposition parties appeared aimed primarily at enhancing their leverage vis a vis the government and the security establishment rather than mounting a decisive joint challenge to the government. With the PTI government enjoying the backing of the security establishment and under no imminent threat, PML (N) seemed content for the moment to follow up the cases against its leaders in the judiciary. Nawaz filed an appeal against his conviction in the Al-Azizia Steel Mills case at the Islamabad High Court, praying for his release on bail, pending its consideration. NAB on the other hand filed an appeal against his acquittal in the Flagship Investments case. 

Economy

Pakistan’s economic horizon remained sombre. Besides the much talked about balance of payments crisis (which was deepening with exports stagnant and imports rising),  growth in the current financial year was predicted to go as low as three percent (down from 5.8% in the previous financial year), inflation was rising, the value of Rupee saw a sharp decline and fiscal deficit was more than 6% of GDP. Fitch Ratings downgraded Pakistan’s long term debt rating to B-Negative due to high repayment obligations. On the positive side, the Abu Dhabi Fund for Development announced that it would deposit $3 billion in the State Bank of Pakistan “to support the financial and monetary policy of the country.” Significantly, the announcement came on the heels of the Taliban meeting with the US Special Representative, Zalmay Khalilzad, at Abu Dhabi, which was facilitated by Pakistan. Finance Minister Asad Umar was reported as saying that the economic crisis had been overcome with the help of friendly countries. However, it was clear that in spite of the government having created some breathing room by obtaining funds from Saudi Arabia and the UAE, an IMF bailout remained inescapable, particularly to secure access to resources from other international lenders. Differences continued to persist between the government and the IMF on the tough policy measures demanded by the latter, including sharp revenue hike. Uncertainty also prevailed on implementation by Pakistan of the action plan agreed with the Financial Action Task Force (FATF). An adverse ruling by the FATF could further constrain Pakistan’s ability to obtain resources from international lenders. It would be worth watching whether the Government of Pakistan makes the necessary structural adjustments to place the economy on a solid footing or resorts yet again to fire-fighting measures, leaving the country vulnerable to future economic shocks.

The federal Cabinet approved the issuance of Pakistan’s first Renminbi-denominated bonds (Panda Bonds) to raise loans from the Chinese capital markets. The approval came on the heel of the government’s decision to delay issuance of the US Dollar-denominated Eurobonds worth $3 billion. 

CPEC

The 8th meeting of the CPEC Joint Cooperation Committee took place in Beijing on December 20. Reiterating Pakistan’s commitment to CPEC, the Minister for Planning said that the stage was “now set to take it to the next level wherein the cooperation can be diversified to more trade and industrial cooperation, socio-economic development, agriculture, people-to-people interaction and knowledge sharing….”  The two sides concluded a Memorandum of Understanding on Industrial Cooperation and establishing a cooperation framework on socioeconomic development. It envisages cooperation in diverse industries such as textiles, petrochemicals, iron and steel, mines and minerals. It was agreed to develop Special Economic Zones in a speedy manner. The areas of cooperation identified for socioeconomic development covered education, agriculture, poverty alleviation, skill development, healthcare, water supply and vocational training. 

The provincial cabinet of Baluchistan expressed its discontent at the finding of the CPEC cell of the Planning and Development Department that the province has received only a miniscule share of the CPEC investment and implementation of such projects as were committed has remained unsatisfactory. Media reports suggest that none of the roads that were part of the ‘Western alignment’ of CPEC have seen any work.

Army’s warning to Pakistan Tahafuz Movement (PTM)


Speaking to the media on December 6, the DG, ISPR, Major General Asif Ghafoor denied that the army had been heavy handed with PTM. He claimed that it had acted on their three demands of reduction of check posts, clearance of mines and tracing out of missing persons. With the improvement of security situation, the number of posts had been brought down to 331 from 469 in 2016. 43 teams of engineers were working in different districts to clear mines. More than half the cases of missing persons had been resolved. However, some of the missing persons could be part of the TTP, fighting somewhere  or might have been killed. He alleged that PTM had gone beyond the above three demands and said that because of the direction in which PTM was headed now, it could “reach a stage where they will cross that line where we will have to use our authority.” He urged PTM not to cross the line where the state has to use force to control the situation.

Pakistan-US

Within days of President Trump complaining publicly that Pakistan had done nothing to help the US in spite of the large financial assistance received by it, he wrote to Prime Minister Imran Khan, seeking Pakistan’s help to establish peace in Afghanistan and bring the Taliban leadership to the negotiating table. Revealing this to the media in early December, Imran Khan said that Pakistan was ready to play its due role in ending the crisis in Afghanistan. In a separate development, Lt. General Kenneth McKenzie, set to take over the Central Command, told the Senate Armed Services Committee in the course of his confirmation hearing that he would make Pakistan a priority engagement. He added that Pakistan continued to use the Taliban as a hedge against India rather than as part of a stable, reconciled Afghanistan. He acknowledged that Pakistan had national interests it wanted addressed “in any future political settlement in the region, including a politically stable Afghanistan” and added that under him, the US CENTCOM would continue to support efforts “towards a diplomatic solution to the conflict in Afghanistan  which includes ensuring that Islamabad’s equities are acknowledged in any future agreement.” He described concrete steps to deny safe havens in Pakistan to violent extremist organizations and curb their freedom of movement from Pakistan to Afghanistan as an important task that Pakistan needed to fulfil. 

The US Secretary of State included Pakistan among the “countries of particular concern” that have engaged in or tolerated systematic, ongoing and egregious violations of religious freedom. This was a shift from the previous year, when Pakistan had been placed only on a special watch list.

 

January 17, 2019

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About the Author

Ambassador Sharat Sabharwal

Former Indian Ambassador to Pakistan and Uzbekistan 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.