Political turmoil that has been unleashed due to American interference could generate internal chaos.
Addressing a public rally on 27th March, Prime Minister Imran Khan charged on the basis of documentary evidence that foreign powers are trying to bring about regime change in Pakistan through supporting the opposition’s no-confidence motion against him. While the opposition has denied these charges, such a serious assertion from the head of government deserves serious scrutiny.
The document in question, a report of 7th March from the Ambassador in Washington – the contents of which were shared with journalists before it was placed before the National Security Committee – reportedly maintains that it is no longer possible for Washington to work with the incumbent Prime Minister and if the no-confidence vote fails then there would be dire consequences for Pakistan. Bur if the motion succeeds, bilateral relations would significantly improve. Intriguingly, these remarks predate the tabling of the no-confidence motion which suggests that this move has American endorsement. Even more alarming is the contention of some government spokesmen that the message contains threats which endanger the life of the Prime Minister.
Western powers have been openly critical of Pakistan’s decision not to join the US-led alliance against Russia for its invasion of Ukraine and of the Prime Minister’s visit to Moscow before the invasion, taking the diplomatically unprecedented and unacceptable step to castigate Pakistan in a joint press statement. More broadly as well, Americans have been critical of Pakistan’s foreign policy direction, specifically relations with China, Russia and Afghanistan while being incensed about the refusal to provide military bases. Therefore, it would not be surprising if regime change in Pakistan is being sought by Washington.
It is worth recalling that Prime Minister ZA Bhutto had claimed an American conspiracy to remove him from power after the 1977 elections owing to his refusal to abandon Pakistan’s nuclear weapons programme for which the US had threatened to “make an example” of him. Later General Zia died in a mysterious plane crash for which many Pakistanis blame the US, on the grounds that Zia had become a liability for Washington after the Soviet withdrawal from Afghanistan in 1989. The ouster of General Musharraf in 2008 was accomplished more openly by the Bush administration with his own naïve collaboration, once the Americans realised that he could no longer mobilise public support for the American “War on Terror”. With the passage of time such charges of American interference are now broadly accepted in Pakistan.
This conviction is strengthened by the more recent publicly acknowledged US policy of regime change such as in Iraq, Libya and Syria. Only a few days ago, President Biden himself called for removing Russian President Putin, though subsequently his officials retracted this statement. There are also several other prominent examples of American regime change documented in numerous books and articles. In 1953, Iranian Prime Minister Mosaddagh was removed in a coup orchestrated by the US and the UK to take control over Iranian oil. In 1961, Prime Minister Patrice Lumumba of Congo was removed and executed with the involvement of the American CIA, for his relations with the Soviet Union.
Similarly, the CIA was involved in the overthrow and death of Salvador Allende, President of Chile in 1973, owing to his socialist policies. Several failed attempts were also made by American administrations to remove Cuban President Fidel Castro including an abortive military invasion of the Island. Similarly, the Reagan administration created the “Contras” to overthrow Nicaraguan Leader, Daniel Ortega. These are among the more well-known instances of regime change by the US which include dozens of others in Latin America and South-East Asia, such as in Guatemala (1953-1990s); Costa Rica (1950-1970); Vietnam (1945-1973); Cambodia (1955-1973); Ecuador (1960-1963) among others listed meticulously by William Blum in his book Rogue State.
With such a track record, it is indeed conceivable that the US would be willing to orchestrate the removal of Imran Khan’s government and promote a more pliable set-up instead. The brief positive trend in Pakistan-US relations, following Pakistan’s facilitation of the American-Taliban dialogue, ended when the Biden administration took over. The American debacle in Afghanistan for which Pakistan has been blamed, compounded further by the refusal to provide bases, has led to vengeful indignation. Such pique has been aggravated by Pakistan’s outreach to China and Russia, especially implementation of CPEC and promotion of regional connectivity which undermines America’s containment of China in the Asia-Pacific. Moreover, India’s continuing tensions with Pakistan over Kashmir and with China in Laddakh, confronting that country with a two-front challenge, undermine India’s role as “net security provider” for the Americans. Therefore, the US wants Pakistan to “normalise” relations with India but on Indian terms which is rejected by Khan’s government. These are the geopolitical considerations that essentially underscore the American compulsion for regime change in Pakistan.
But, even in the event of the opposition succeeding in the no-trust vote against the PM, it is unlikely that American objectives would be realised. No Pakistani government, no matter how pliable, would be able to reverse the popular consensus on key national issues such as Kashmir, the nuclear programme, relations with China and pursuit of a balanced foreign policy. Past experience amply demonstrates this. Bhutto’s ouster did not reverse the nuclear programme. Zia’s removal did not change Afghan policy nor did Musharraf’s abdication. But, due to their arrogance, the Americans are purblind to the reality that any change of leadership in Pakistan cannot deviate from the country’s strategic interests. But the political turmoil that has been unleashed due to American interference could generate internal chaos undermining Pakistan’s political and economic development. It is, therefore, essential for all political parties to recognise and overcome the dangers ahead.
Lessons for Pakistan from Sri Lanka
Sri Lanka defaulted on its external debt of $51bn on April 12, and the country is now grappling with the economic consequences of insolvency. Access to foreign capital markets to raise much-needed loans to finance imports has been cut-off. The country’s finance ministry has asked international creditors, including foreign governments, to capitalize any interest payments or receive repayments in Sri Lankan rupees. Meanwhile widespread protests continue across the country against power blackouts and acute shortages of food, medicine and fuel.
Pakistan does not presently face the grim meltdown seen in Sri Lanka, but policymakers would be unwise to ignore the lessons to be learnt from the island economy. As the international institutional investor, Mattias Matterson of Tundra Funds noted, “Sri Lanka tried to defy economic realities, maintain a fixed exchange rate, refuse IMF support and instead chose capital controls. The result was pent up demand for US dollars, scarcity of essential goods, which caused havoc in the society and the local currency to plummet.” He observed that Pakistan has so far handled the situation better than Sri Lanka.
However, the delinking of the petroleum prices from the international market rates on February 28 this year harmed the stabilization process that the previous Pakistani government had been following until then. The PKR10 per litre cut in petrol prices and announcement of other subsidies, led to the Extended Fund Facility (EFF) program agreed upon with the International Monetary Fund (IMF), being put on hold. The Oil and Gas Regulatory Authority (OGRA) has proposed to reverse the cuts and raise petroleum product prices by PKR21 to PKR50 per litre, but Prime Minister Shehbaz Sharif rejected the proposal on Friday. He appears wary of the “mountain of inflation” that could as a result be unleashed on the public, which may also erode the political capital of the newly formed government. Ironically, while in opposition, senior members of his party, the Pakistan Muslim League (PMLN), criticized the fuel price cuts as being fiscally irresponsible.
Irrespective of OGRA’s recommendation being politically unpalatable, the government is likely to eventually comply with them in order to impose the fiscal discipline required for renewing the EFF program. With foreign exchange reserves depleting and more than USD50bn of external financing required over the next couple of years, support from IMF and bilateral loans from friendly countries, as well as access to international debt markets is vitally important.
Although the Pakistani Rupee has appreciated in the last couple of weeks from a low of almost 189 against the US dollar back to around 180, the perception of default risk in the international money markets persists. Credit Default Swap (CDS) premium for Pakistan – an instrument that is indicative of the risk of a country defaulting – that had risen from around 4 percent to 10 percent with the submission of a no-confidence motion, further increased to 12 percent soon after the formation of the new government.
With CDS at an all-time high, the implied rating by the international bond markets for Pakistan is at CC/Ca or two notches below the official rating of B-/B3, and only two notches above D default. Most institutional investors in the international money markets, including many hedge funds, are mandated not to invest in “hooks”, that is, countries with ratings that are CCC or lower. As things stand, Pakistan is effectively shut out of the international debt markets and in dire need of the support of allied countries.
The new government would be well advised to avoid raising public servant salaries and pensions, and providing other sops to the public that are not only unsustainable, but also likely to worsen public finances.
Pakistan must complete the EFF program in order to access international credit markets. The new government may want to seek better terms in the seventh review with the IMF, but it should avoid trying to depart from the broad outlines already agreed upon. Since timing is of essence, any extended period of negotiations would worsen Pakistan’s external position.
The Fund has indicated its support for Pakistan in pursuing policies that provide inclusive and sustainable growth, and are consistent with the EFF program. These include fuel price increases as proposed by OGRA, but so far rejected by the PM; power tariffs hike of 5 rupees per unit as agreed with IMF in the last review; no tax cuts; avoidance of imposition of import duties to control imports; and a firm commitment to continued SBP autonomy and a policy of inflation targeting. The new government would be well advised to avoid raising public servant salaries and pensions, and providing other sops to the public that are not only unsustainable, but also likely to worsen public finances.
The measures that need to be taken to move ahead with the EFF program may be politically difficult, but are necessary for Pakistan to avert the dire consequences of defaulting on external debt. There must be consensus across the Pakistani political spectrum to reject short-term political expediency in favour of policies that are based on robust economic fundamentals.
Imran Khan’s graceless exit
Leaders come and go, but the manner in which Prime Minister Imran Khan was ousted from power through a parliamentary vote of no confidence has no precedent in Pakistani history.
After the opposition had mustered the necessary support of the members of the National Assembly, Khan could have resigned and exited from power with grace. Instead, he chose to cling to power until the last moment by sabotaging the vote of no confidence proceedings, despite a clear verdict from the Supreme Court to complete the voting process on Saturday. A cricket legend who played politics like a T-20 match; he kept the nation on its toes until midnight. His ego seemed bigger than the country he led.
Khan promised to build a new ‘Naya’ Pakistan, a thriving nation free from corruption beyond the dynastic politics of the past. But his nearly four years of narcissistic rule have been so nightmarish that ultimately public representatives opted to vote for Old Pakistan.
Khan leaves behind a nation with deeply polarised politics, an economy nearing collapse, and a foreign policy that has ruptured relations with major powers and trusted allies. Challenges that will be difficult to surmount by his successor, Shehbaz Sharif, the leader of Pakistan Muslim League-Nawaz.
Pakistan has a chequered political history. In the past half century, long military rules have been followed by unstable civilian eras. This instability is often the result of the military’s intrusion into politics. The current impasse is no different, except that the alternative leader the generals tried to cultivate eventually became a Frankenstein.
To be sure, the post-Musharraf transition to democracy is different from the previous two such transitions of the 70’s and 90’s in the sense that rapid urbanization in the past couple of decades has produced a middle class that is no longer apolitical. Khan’s personal charm galvanised this class, especially its youth segment, leading to the emergence of PTI as a potent challenge to mainstream political parties, including the PMLN and Pakistan People’s Party.
Instead of focusing on the economy, Khan pursued a vengeful accountability drive against the leaders of PMLN and PPP. Their character assassination by trolls on social media, with unfounded accusations of corruption and treason, has introduced a level of toxicity in politics never seen before.
In the PTI’s rise, the military saw an opportunity to discredit both parties. Thus began the unique experiment of a regime built on the premise that civilian and military leaders would remain on the ‘same page.’ The bargain was that Khan would receive unwavering support from the military leadership and his government would, in return, deliver tangible economic outcomes through better governance. Keeping the opposition at bay was a shared interest.
But this bargain took no time to flicker due to the bad economic start of the Khan regime. It wasted almost a year in negotiating a bailout package with the IMF worth $6 billion, which devaluated the rupee. The subsequent period has seen further economic mismanagement amid the global pandemic, curtailing the GDP growth rate from 5.9% in 2018 to 3.4% this year. IMF conditionalities have led to double digit inflation. Foreign borrowing has raised the debt burden significantly. The economic corridor project with China is derailed. Unemployment has also skyrocketed. There is deep public disillusionment as a result.
Instead of focusing on the economy, Khan pursued a vengeful accountability drive against the leaders of PMLN and PPP, who were hounded and jailed on alleged corruption charges that remain unproven in any court of law. Their character assassination by trolls on social media, with unfounded accusations of corruption and treason, has introduced a level of toxicity in politics never seen before.
Islam has been a convenient tool for both military and civilian leaders to divert public attention from real socio-economic issues. But the way Khan has used his religious narrative to cultivate support among the population has no parallel.
Under no circumstances does the military allow civilian leaders to play with its chain of command, but Khan crossed this red line. He also played the American conspiracy card, using a diplomatic cable from the ex-envoy in Washington to claim the no confidence motion was a US ploy to change his regime. All his opponents, he dubbed traitors.
Without the military’s support, Khan could not have made it to the premiership. Its top brassindeed bet on the wrong horse and may have learned a hard lesson. His reckless subversion of the constitution to keep himself in power has also annoyed the judiciary and, perhaps, a significant chunk of his urban middle class supporters who have already borne the brunt of indirect taxes under PTI rule.
Despite his disgraceful exit from power, Khan retains a cult following among the youth. But with key PTI financiers drifting away and his own accountability about to begin, Khan’s political fate now hangs in the balance. The emergence of PTI as an alternative political force to cater to the rightful aspirations of the middle class was a good thing in the patronage-driven politics of Pakistan. Its demise – at the hands of its own leader – will be quite unfortunate.
Back to Square One
The consequences of the agitation started by the opposition from day one could not have been different from what the legal and constitutional crisis we are having today. We have made every institution controversial. The fairness and transparency of no subsequent election after the fateful elections of 1970 have been recognised. The Armed Forces of the country, the superior judiciary, the Accountability Bureau, the law enforcing agencies, the election commission all have been mauled at the altar of our petty political controversies.
This is not the time to lament our disappointing tryst with democracy in the past. It would be in order to review the current political crisis in correct perspective. The elections of 2018 were held under interim governments in the centre and provinces, chosen by both the ruling party and opposition by the election commission headed by a consensus chairman. The law and order was maintained by the army and rangers. The election results were, as usual, challenged by the loosing political parties. They even announced to not take oath.
However, this controversy resulted in the formation of PDM for political agitation. This agitation intensified with the increasing pace of the accountability of the known political leaders finding its way in the parliament with the ruling party and the combined opposition trading barbs and using highly provocative, vituperative and derogatory sobriquets against each other. The National Assembly practically remained dysfunctional. Even issues of national importance got obscured in this political hostility and bitterness though the deadly Covid-19, the tottering economy, Modi Sarkar’s cruel raid on the autonomous state of Jammu and Kashmir, the fast-changing situation in Afghanistan, and the Gulf Region all demanded a concerted national move.
The armed forces, the superior judiciary, the accountability bureau, the law enforcing agencies and the election commission have all been mauled at the altar of our petty political controversies.
This was not the first time the politicians have landed this country into such a legal and constitutional absurdity. The second half of 1970s was marred by a more absurd political controversy culminating in the overthrow of an elected government by a dictator, the ominous slogan of accountability first and elections later, the arrest, mock trial and execution of the most popular leader of the country, the eleven years of absolute dictatorship and a renewed cycle of agitation for restoration of democracy. The years of 1990s witnessed the repeat of the earlier political controversies paving the way for another extra constitutional takeover. Can our worthy politicians tell us how long this vicious circle of political intolerance, immaturity and hostility will last?
The Prime Minister Imran grossly erred in handling the heightening political move against him. Though the political controversy has sent his public popularity soaring to the sky as revealed by his recent mammoth public meetings, he could not muster the courage to face the No Confidence Motion with grace. In my twitters one day before the fateful session of the National Assembly, I had advised him to try to win the No Confidence Motion and then get the Assemblies dissolved for a new mandate. And that if he fails to win the NCM, he should make a graceful exit speech and go to the people. As a political martyr free from incumbency, and his surging public popularity, he will have clear majority in any fair and transparent election.
He followed a bad advice getting the National Assembly dissolved under controversial circumstances. The opposition seems unwilling to go for quick elections. Firstly, they are daunted by the sudden and unexpected surge in the popularity of Imran Khan. Secondly, they have plans to repeal certain laws relating to electronic voting machine and right to oversee Pakistanis to vote in general elections. Thirdly, they want to prune the wings of the Accountability Bureau and get relief in cases against leading opposition leaders from courts and facilitate the home coming of the senior Sharif. Fourthly, they also want to use their new-found political power to dent the popularity of their lone opponent probably by implicating him in some concocted cases.
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