Down Taliban Road

Published September 30, 2021
The writer is a business and economy journalist.
The writer is a business and economy journalist.

IT is not in Pakistan’s interests to go too far down the road of advocating for the Taliban regime in Afghanistan before the international community. Countries around the world will not make up their minds on whether or not to extend formal recognition and legitimacy to the Taliban regime, whether and how to provide humanitarian aid, and whether or not to engage with the leadership in Kabul short of formal recognition, based on what we say.

They will make their decision based on how they see their own interests. We can highlight some of the problems that are arising in Afghanistan, and the dangers posed by a potential failure to consolidate centralised authority in that war-torn country, but we cannot change the calculus on the basis of which countries around the world will make their decision.

This is not to suggest that Afghanistan should be ditched altogether. It is clear that a humanitarian disaster is shaping up in that country if urgent aid is not provided. It is equally clear that a collapse of centralised authority over there, and a descent into conflict one more time, carries grave risks for Pakistan, the regional countries and the world community. Pakistan must play a role to ensure that key people in the foreign policy community of important world capitals understand this. But it is critical that in pushing this message, we don’t forget about Pakistan in the process. And given the emphasis that Afghanistan currently commands in our foreign policy, the risk that our own country and its interests will fall by the wayside are increasing.

Afghanistan should not be ditched but Pakistan should also keep its own interests in mind.

It is important to bear in mind that Pakistan itself is moving into a very difficult situation. The growth spurt that the government has been touting with such bravado all year has now run its course. The country no longer has the resources to keep it running, and yes, it is high time to admit that this growth was the result of massive government inducements, both fiscal and monetary. By now the inevitable has happened. The large growth spurt in the economy has produced its imbalances, and managing those is eating into the country’s fiscal and foreign exchange resources.

Many among the policy elites of this country have figured this out. The finance minister himself has described the situation as “overheating” in one of his television appearances. If true — and the finance minister would not use this word if it wasn’t a true description of what is happening in the economy — then a very serious situation is shaping up.

On top of this, there is a price surge in commodities in global markets that is straining the country’s capacity to manage its import bill. Prices of raw materials like plastics and metals, as well as fuels like LNG, petroleum and coal, and edible items like palm oil, sugar and wheat, are surging to levels where they are causing serious problems in countries with far stronger economies than ours. This surge has already arrived on the shores of our economy, but at the moment its impact is being felt primarily by industry. In the months to come, this impact will start travelling through the price level in our economy, affecting the lives of the common citizenry. Some of it has already begun, with the recent large increase in the price of petrol. Some is imminent, like on the impending fuel-cost adjustments in the price of electricity. The rest will come in due course.

The task of meeting these challenges cannot be left to the finance minister alone. It will take the combined efforts of the entire government, from the prime minister down, to ensure that the coming time of troubles does not derail the country’s fragile and faltering economic recovery. These challenges require a deep policy response, not announcements of individual schemes for the poor or incentives for the rich.

But what can Pakistan do to safeguard its economic interests in the near future?

Read: Once upon a Taliban

It must seem somewhat ironic to audiences in Washington, D.C. to see Pakistan sitting on one table asking for resources for Afghanistan, while on another it is trying to negotiate the resumption of an IMF programme for itself. A country dependent on its creditors to underwrite its own economic growth, in fact its entire economic viability, has very limited room in which to urge others to see things through its eyes. This is not a pleasant fact to face up to, but it is a reality. Nothing reminds us of the fragility of our position more than the Senate resolution tabled by a group of Republican senators asking for a comprehensive review of the failure of US policy in Afghanistan, including Pakistan’s role in bringing this about.

The resolution is unlikely to pass. But the fact that it has been tabled, the fact that it calls for excavating a past we would prefer remained buried, and calls for punitive actions such as sanctions against Pakistan (should the findings of the review merit such a course of action) are enough to send the signal that storm clouds are hanging over the future of Pakistan’s relations with the US. Given that the country has to negotiate an IMF programme, appear before the FATF to make its case for graduating out of the so-called grey list, and also float an international bond, all in the month of October, it has very limited room to push a case for another country’s troubles.

At this critical juncture, the government has not even managed to secure its finance minister’s tenure, whose term is set to expire in mid-October, let alone take stock of the massive challenges coming its way. Now we are hearing reports that a Senate seat may well be arranged for the finance minister, but this is coming at the last minute, since IMF talks are set to begin within a week. This kind of last-minute attention to details that are critical to secure the country’s economic interests is what worries me.

The more Pakistan is seen advocating for Afghanistan’s difficulties, the more our destinies will be joined in the eyes of those we are trying to persuade. This outcome must be averted, for which the focus of the state must return to its own interests first and foremost.

The writer is a business and economy journalist.

khurram.husain@gmail.com

Twitter: @khurramhusain

Published in Dawn, September 30th, 2021

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