Abstract
When Pakistan conducted its own nuclear tests last May in response to India's tests, the domestic and international fallout sent the country into free fall. Pakistan's already fragile political system and economy were crumbling even before international sanctions came into force; now Pakistan's exchequer is almost depleted, and there is no will and no way to keep up pretenses any longer.
Will money come in before Pakistan is forced to declare an official default on its loan obligations to international lending institutions? And what will default mean, in real terms, for a public already stunned by staggering utility costs and soaring commodity prices? When will the government finally collapse? Newspapers, magazines, opinion leaders, and most of all, drawing-room debates are filled with laborious ruminations on these pressing questions.
As of late November, these questions remained unanswered. Meanwhile, Pakistan's wealthy elite is quietly making plans to jump ship before disaster (bankruptcy–or a revolution led by the Taliban from neighboring Afghanistan) wipes out its businesses and the political system that protects it.
Conspicuously absent from the debate is an informed discussion about the merits of having gone nuclear. Prime Minister Nawaz Sharif continues to insist in public statements that the nuclear tests restored Pakistan's lost “national pride.” Politicians and opinion leaders generally supported the government's decision to test, but they have appeared to be confused about how to handle the rest of the nuclear issue. The government has not taken any known steps to address the need for an effective command-and-control system to manage nuclear weapons, for example.
The government has indicated a willingness to sign the Comprehensive Test Ban Treaty (CTBT) by the end of this year, but its spokesmen still insist that Pakistan will not be pressured into signing the treaty, nor will it make compromises.
In the absence of a clear government statement on whether Pakistan ought or ought not sign nuclear treaties, opposition parties such as the vocal Jamaat-e-Islami call the possible signing of the test ban a “treasonous” rollback of Pakistan's nuclear program. Only a few articles in the press mirror the private views of politicians who question whether nuclear posturing was really worth the financial crisis it induced.
Bilateral talks with India have resumed, but as of late November, no progress had been made on the dispute over Kashmir or on a no-first-strike treaty aimed at averting nuclear war. It seems as if the gravity of a nuclear South Asia, and its human implications, is lost on Nawaz Sharif's negotiators.
Nevertheless a fledgling peace movement has sprung up in major cities across the country, with development and human rights organizations banding together to advocate total nuclear disarmament. In Lahore, the Joint Action Committee for People's Rights (jacpr) organized rallies to commemorate the anniversary of the Hiroshima bombing and International Peace Day. Its members include journalists, lawyers, and leading human rights activists, whose skills at raising public awareness were honed in the struggle against martial law in the 1980s.
Their efforts at sounding the alarm on the dangers of a nuclear Pakistan were recently rewarded with the un-ESCO-Madanjeet Singh Prize for the Promotion of Tolerance and Non-Violence. Jacpr shared the $40,000 prize with Narayan Desai, a 74-year old Gandhian and peace worker in India. A Karachi peace group is organizing the first-ever National Peace Conference, which will bring together hundreds of activists from across the country.
The fear that haunts ordinary citizens in Pakistan, including peace activists, is that any effort to avert a national catastrophe may be too little too late. The government's handling of the economic crisis is seen as dangerously inept. For example, the national budget announced soon after the tests ignored the fact that sanctions had been imposed, and the government has had to constantly revise it as funds have grown scarcer.
In a panic to control the flight of foreign capital, the government declared a state of emergency and all foreign exchange accounts within the country (some $11 billion worth) were frozen. The money has since been used to service outstanding debt, prompting one leading news magazine to accuse the government of stealing citizens' money. Foreign investment, which had slowly begun to trickle in as Pakistan opened up its economy, came to a halt. The Karachi stock market crashed.
Next, Prime Minister Sharif began to woo the International Monetary Fund (IMF) for a bailout package–at the same time announcing that the government would go ahead and build the politically controversial, multi-billion-dollar Kalabagh Dam. This move pits the center against the provinces, which oppose the massive hydroelectric project. Instead of resolving outstanding issues–devising ways to increase revenues and resolving disputes over power projects–Sharif recently announced a cut in the tax on electricity as well as a billion-rupee spending plan for massive road-construction projects.
By the beginning of November, the country was more than $1.5 billion in arrears on debt payments. Defaults, albeit undeclared, have already taken place–for the first time in Pakistan's 50-year history. Even if the IMF agrees to resume lending to Pakistan, it is not going to solve a debt crisis that had the economy in its grip even before last May.
Pakistan's accumulated foreign and domestic debt now total more than the country's annual GDP of more than $65 billion. Even before sanctions were imposed, external debt was 46.1 percent of GDP, and debt service consumed a whopping 60.6 percent of current expenditures.
In recognition of India and Pakistan's pledges to sign the CTBT by September (if the right conditions are met), and in particular recognition of Pakistan's “financial emergency,” President Clinton announced an easing of sanctions on India and Pakistan November 7.
But the government still has no coherent policy or strategy for the future, and analysts in Pakistan believe there will be no compelling reason for the imf to offer significant bailout funds. If a default is declared, it will cause a further devaluation of the weakened rupee and a dramatic rise in inflation.
Pakistan has faced financial crisis before–after the 1971 civil war that turned its eastern half into the independent Bangladesh–when the country was bankrupt with no foreign funding on offer. The difference between then and now is that today there is no inspiring political leadership. Zulfiqar Ali Bhutto, a charismatic leader and father of Benazir Bhutto, enjoyed the confidence of the people long enough to tide them through the post-1971 years. In contrast, Nawaz Sharif's support is eroding, and people wonder aloud whether military rule would not be better than the current civilian administration.
In October, when Chief of Army Staff Gen. Jahangir Karamat publicly criticized the ad hoc decision-making process exhibited by Nawaz Sharif and his key aides, the prime minister pressured him to either retract his views or resign. Within a week of Karamat's public suggestion that a council of technocrats, military officials, and politicians be formed to take key policy decisions, the general resigned. Because a similar confrontation had resulted in the resignation of the chief justice of the Supreme Court a year earlier, it appeared that the executive was determined to firmly consolidate its power.
This very suspicion has formed the basis of strong civil and political opposition to Sharif's most recent blunder–introducing a bill to amend the constitution that would further Is-lamize Pakistan. The “15th Amendment (Shariat) Bill” declares Islamic law to be the supreme law of the land and empowers the executive to issue directives on “that which is permitted and that which is forbidden” in Islam. These directives would override any decisions taken in a court of law as well as existing constitutional provisions.
The possible ramifications of the 15th Amendment, if passed, are enormous. For example, in the name of enforcing Islam the prime minister could issue a directive that banned women from appearing in public, or another designed to silence the opposition. Without recourse to appeal, and without a definition of Shariat that would clarify which form of Islamic law the government plans to adopt, the public would be subject to the whims of one man.
Despite the proposed amendment, the religious right-wing political parties continue to criticize Sharif's style of governance. The Jamaat-e-Islami, with no seats in the National Assembly but powerful lobbying strength, argues that the prime minister is neither religious enough to enforce Islam nor patriotic enough to be trusted with the delicate issues of Kashmir and nuclear weapons. His attempt to silence the radical right wing (which includes supporters of the Taliban) by offering the 15th Amendment, seems only to have earned their further disgust.
Meanwhile, the government faces violent rebellion in Sindh, where Karachi's ethnic-based Mutahida Qaumi Movement (mqm) party, once a member of the ruling party's coalition, has withdrawn its support for the government. Sharif has made mass arrests of mqm workers in this strike-torn city and declared a crackdown on “terrorist elements.” Sectarian violence in the Punjab, Sharif's home province, is higher than ever and shows no signs of abating, despite government promises to bring law and order.
Seven months after Pakistan went nuclear, the state is beset by crises, each one more difficult to manage than the next. The nuclear tests remain for some a symbol of the country's aspirations and strength in a hostile global environment. For others, the tests were the catalyst that exposed the country's chronic internal weaknesses.