Pakistan’s $51 Billion Nuclear Gamble

cut off own headFor some people, the current period of tension with India is a gift. Social media activists, media walas, hyper-nationalists, trolls, comedians, and satirists have been handed the premiere topic for getting the prized clicks and re-posts that build careers, and the feeding frenzy has created an instant feedback loop that is quickly spinning out of control. Did India cross the LoC? Did Pakistan capture enemy soldiers? At the most extreme, Defence Minister has openly threatened to unleash a nuclear war.

While the nationalistic chest thumping has the benefit of feeding the patriotic sentiments, there are costs as well. Obviously there are the possible costs of millions of dead in the case of an actual nuclear war, but this remains unlikely. There are other costs, though, which are paid in national reputation and can be measured in purely financial costs.

Minister for Planning, Development and Reforms Ahsan Iqbal recently said Pakistan is borrowing an additional $5.5 Billion from China to upgrade and modernise the Karachi-Lahore railway, raising total CPEC financing to over $51 Billion. At the same time, China has publicly called on Pakistan to resolve differences and improve bilateral relations with India through dialogue.

So far, officials in Rawalpindi and Islamabad have ignored China’s call for peaceful resolution through diplomacy, instead choosing to escalate tensions to the point of threatening nuclear war. In effect, officials are making a $51 Billion gamble that China will continue to invest in a country that says it is on the brink of nuclear war.

Snakes and Ladders

snakesandladdersThere is a new game being played. Everything that we thought we knew is now wrong. It is different players and different rules now. Old allies are now our enemies, and old enemies are still our enemies too. This is the claim of the Munir Akram in his latest analysis of our national security, and it is probably the most important analysis to understand where we are going. I say this not because I am a huge admirer of Munir Akram, but because I was told it was important by Army itself.

Sometimes we are given signs in the streets. Yesterday we were given a sign on Twitter. Either way, we must read the signs to know where we are headed. So where has this latest sign pointed us? First let us understand who are the players.

According to the latest ISPR-approved analysis, our enemies are now India, Iran, Afghanistan, and the US. Our allies are China, Saudi Arabia, and Turkey. One might think this is not a good sign to have three of our neighbors as enemies, but then one sees our friends and everything starts to balance out. One problem, though. China is an atheist country that even bans fasting in Ramazan. Saudi Arabia funds radical madrassehs in Pakistan. What will happen if jihadi militants trained in Pakistan keep doing attacks in China? And what about the problem of radicalism in Turkey? How will this affect our strategic thinking if two-thirds of our allies are projecting radicalism?

On the other side of the table are sitting Iran, India, and Afghanistan who have been working together towards economic and diplomatic improvements. The most obvious result of this has been the new agreement on Chabahar. Dr Haider Shah explained this in his piece.

While Pakistan has relied heavily on its strategic assets like the Haqqani network to remain a key player in the Afghan game, India has been enhancing its influence by forging stronger economic ties with the war-battered country. As Pakistan has not facilitated Indo-Afghan trade by extending the transit land route to India, India aims to use the new link for a maritime route to enter Afghanistan. In times of estranged relations, the US may also like to use this route thus minimising its reliance on Pakistan.

The project is important for Iran as well. After years of economic sanctions the reformist government wants to play a more active role in the world affairs. Without economic revival such a vision is however not achievable. The Iranian hardliners, on the other hand, want to see President Hassan Rouhani fail in his attempts, as the state of despondency is always beneficial for radical elements. Chabahar is the first sign of international investment coming to Iran. Tehran is opening itself up to the world.

Our new enemies are all working together to build each other up, while our new allies all have very different priorities based on what is good for themselves alone, not the greater good of all. In this new game we are playing, those we are calling our enemies are quickly climbing ladders. We should beware that we do not find ourselves landing on snakes.

Rising Pakistan (Costs)

CPECChina’s $50 billion investment in Pakistan was hoped to be the game changer that would save the country from the brink of economic disaster. However we are not only still awaiting to see the good effects, the economy seems to be very badly managed creating serious questions among economists about whether any benefits will be squandered.

Last week, National Assembly was informed that external debt has soared by $5.3 billion since the last three years. Last month, Bloomberg warned that Pakistan is risking default on billions in debt. Ahsan Iqbal announced that Pakistan needs 7-8 per cent growth for next 10 years in order to accommodate the population growth, but since 2011 Pakistan has not achieved even 5 per cent growth.

Will CPEC be able to turn this around? Economists are privately expressing worry as they are seeing important indicators that all is not well. In power sector which is closely linked with CPEC, circular debt continues to rise despite rising costs imposed on consumers.

Many had hoped that even though much of the CPEC investment would actually be spent on contracts with Chinese companies, Pakistan would benefit from the taxes. However, this too appears to have been a pipe dream as China has demanded exemptions from taxes paid to Pakistan. Meanwhile, Pakistan is spending countless sums to provide security for Chinese workers.

CPEC may be a game changer for Pakistan, but only the future will tell if it is a change for the better or for the worse. So far, the only thing rising in Pakistan are the costs.

Disneyland Lahore: Who Benefits?

As reported by media, Punjab government has signed a deal for a Chinese company construct a mega-theme park in Lahore. With a price tag of Rs36 Billion, the new destination is described as ‘Disneyland Lahore‘. That’s not even the entire price. Punjab is also going to pay someone Rs7.78 billion to build apartments for all the labourers who will be building this massive project.

Who are these labourers is not known. We already know that the theme park contract has been awarded to a Chinese company. Can we assume that this means that the 2,900 new apartments are going to be housing for thousands of Chinese labourers coming to build it? Will this be another project, like Gwadar, where the only real jobs for Pakistanis are providing security for our Chinese guests?

Setting aside questions about whether or not China and not Pakistan will reap the economic benefits of this ‘Disneyland’, there is also the question of who will the actual enjoyment is meant for. It cannot be missed that this massive entertainment centre is being built in Lahore, only widening the gap between Punjab and the rest of the country. Already CPEC is heavily criticised for being Punjab-centric, and this ‘Disneyland Lahore’ is only the icing on the cake.

We need something hopeful and entertaining. Is a new theme park the answer? I don’t know. But whatever it is it needs to be carefully thought out to avoid certain obvious problems, even if those problems such as paying billions to foreign companies and foreign workers while unemployment here affects millions. It should also be considered whether such entertainments are being built for Pakistan or only for a small elite that already enjoys so many options for leisure, further widening the gap between Pakistanis who ‘have’ something and Pakistanis who ‘have not’. Ignoring these points will only invite new grief, not happiness.

Gwadar Colony

CTHRXMsWIAAIr2HThe loud slapping sound you heard yesterday was not a cracker, it was the sound of millions of simultaneous facepalms when news broke of a new proposal to require visa for Pakistanis to travel to Gwadar…in Pakistan. Even though some were shocked by the news, the move was immediately appreciated by those like Ahmed Quraishi.

He explained his approval by comparing to other cities requiring entry visas like Hong Kong and Macau.

Giving credit where it is due, Ahmed Quraishi might have a point this time. After all, both Hong Kong and Macau required entry visa because they were foreign controlled colonies. Hong Kong was a Chinese city controlled by the British Empire, and Macau was a Chinese city under control of the Portuguese Empire.

In an official ceremony tomorrow, Pakistani authorities will formally hand over 2,281 acres of Gwadar to China. The Chinese will have formal control over this part of Pakistan, and Pakistan will provide extra security to Chinese citizens to protect them from Pakistanis.

There is strong belief that these are the necessary steps to develop Balochistan and save the nation’s economy. Maybe that is true. But even if it is true, we should be willing to submit to this without pretending that it is something other than what it is…colonisation.