The Economist October 9th 2021 Asia 55
In the Taliban Pakistan’s generals have
gained not perfect allies, but a group over
which they exercise more leverage than
anyone else. Significantly, the interim gov
ernment announced by the Taliban in Sep
tember appeared to demote several figures
seen as estranged from Pakistan and to
promote those closest to it. Senior mem
bers of the Haqqani network, widely seen
as a cat’s paw of the isi, hold several posi
tions in the cabinet, including minister of
the interior. Mohammed Yaqoob, the new
defence minister and son of Mullah Omar,
a Taliban founder, is also pally with Paki
stan. It was no coincidence that a relaxed
looking Faiz Hameed, then the Pakistani
intelligence chief, had himself appeared in
Kabul shortly before the announcement.
Many in Islamabad caution, however, that,
although the Taliban clearly listen to ad
vice, they may not always do as they are
told, and may indeed split into factions
and thus be unable to do so in any case.
If Pakistan’s military and civilian boss
es have both profited from the change of
guard in Kabul, what about everyone else?
Despite escaping the worst effects of co
vid19, the country is not in good health.
Over the past decade gdpper person has
grown by less than 2% a year on average
(see chart 1). At barely $1,200 it is not even
twothirds of India’s.
By other development indicators, too,
Pakistan trails its region. The only South
Asian country with a lower life expectancy
is Afghanistan. With its exports perform
ing poorly and imports from China soaring
(and crushing many local industries), Paki
stan has grown increasingly reliant on re
mittances—worth $21bn in 2019—to prop
up its balance of payments. Its other crutch
has been bailouts from the imf: Pakistan
has received 22, more than any other coun
try (see chart 2).
Though the prospect of becoming a re
gional trading hub remains a distant
dream, Pakistan faces a more immediate
crunch. Mr Khan ran for office promising
to build an Islamic welfare state. What
Pakistanis have experienced instead is in
flation—which reached 11% in April but has
now cooled to 9%—and a currency that has
lost a quarter of its value against the dollar
since he became prime minister. Rising
global oil prices are set to deliver another
unwelcome jolt.
Shaukat Tareen, Mr Khan’s fourth fi
nance minister, has been trying to per
suade the imfto ease terms on a $6bn bail
out that was agreed in 2019, but then de
layed until February this year after the
prime minister balked at the required belt
tightening. The release of an added $2.75bn
in special drawing rights in August, Paki
stan’s automatic share of the imf’s global
push to compensate countries for covid
troubles, came in the nick of time to prop
up sliding confidence. In July the stock of
Pakistan’s foreign debtswelled to some
$122bn,closeto50%ofgdpand,morewor
ryingly,almostfivetimesthevalueofits
netforeigncurrencyreserves.
MuchofthisdebtisnowheldbyChina,
Pakistan’s “allweather friend” and its
partner in one of the most ambitious
branchesoftheBeltandRoadInitiative.
The ChinaPakistan Economic Corridor
(cpec) issupposedtoseesome$67bnof
ChineseinvestmentsinPakistan(seemap
onpreviouspage),muchofit invitalpower
plantsandtransportlinks.Butaccording
to a new study by AidData, a research
group,ofthe$34.3bninassistanceprom
isedbyChinabetween 2000 and2017,at
least$27.8bnhascomeintheformofloans
oncommercialterms,ratherthanthecon
cessionallendingtypicalofWesternaid.
TothediscomfortofPakistan’sgener
als,whomightwishforgreaterindepen
dence,thecountryhasalsogrownincreas
inglydependentonChinaforarms.Paki
stanalonesoakedupa hefty38%oftotal
Chinese weapons exports between 2016
and2020,accordingtotheStockholmIn
ternational Peace Research Institute, a
thinktank.
YetChinahasnotalwaysbeenhappy
withwhatis,ineffect,itsclosestallyofany
size. Repeated terroristattackstargeting
Chinese workers, including one in July
thatleftnineofthevisitorsandfourPaki
stanisdead,havediminishedtrust.There
motenessofChina’sborderwithPakistan
fromitsindustrialheartlandandstillpoor
roadlinkagesmeanthereislittleoverland
trade.Whateverthealignmentoftheirin
terests,Pakistan’seconomyisjust1.75%of
China’s. Small wonder that Mr Khan,a
championof Islamiccauses everywhere
else,keepsquietabouttheincarcerationof
China’sMuslimcitizensinXinjiang.
ThepayofftoPakistanforsuchloyalty
isthatChinalendsimmenseandincreas
ing weight to its otherwise disadvanta
geousbalanceofpowerwithIndia. This
hasadownsidefor regionalstability,in
thatitmakesPakistanunwillingtocom
promiseoveritseternalclaimstotheIndi
ancontrolledpartofKashmir,whichin
turnprovokesIndianmulishnessoverits
own counterclaims. In 2019 a suicide
bomb,forwhicha Pakistanigroupclaimed
responsibility,killedsome 40 Indiansol
diersinKashmir,provokingclashesthat
cameclosetoopenwarfarebetweenthe
nuclearrivals.LaterthatyearMrModi’s
governmentstrippedKashmirofitslimit
edautonomy.Thismightinthepasthave
rousedinternationalcondemnation.The
lackofithaspainfullyexposedPakistan’s
waninginfluence.
Letyoudownsomanytimes
Mr Khan’s current diplomatic offensive
comesinthecontextofthedwindlingop
tionsbequeathedby hiscountry’sfeeble
economy, hypocrisy over Xinjiang and
longhistoryofdoubledealing.“Pakistan
istryingtouseAfghanistantorehabilitate
itself,”saysMichaelKugelmanoftheWil
sonCenter,anAmericanthinktank.“Its
messageisthatwewererightallalong,
thereneverwasa militarysolution,soitis
wrongtoblameus.”WhatPakistannow
wantsisforothercountriestolenda hand,
andhelpshoreuptheTalibangovernment
astheonlywayofsustainingregionalsta
bility.Thetroubleisthat,justasPakistan’s
leadersimaginethecountry’sstrategicsig
nificancetohavegrownbecauseitholds
unique influence over the Taliban, the
West’swithdrawalhasentaileda steepde
clineinitsinterestintheregion.
MrKhanmaywellberightthatthebest
hopeforpreventinga humanitariandisas
terinAfghanistannow,andforkeepinga
griponjihadistgroupsthatlingeronits
soil,istohelptheTalibankeepalidon
things. “If Afghanistan destabilises, the
spillover effectcomes to Pakistan,”says
MoeedYusuf,MrKhan’snationalsecurity
adviser.“AfterAfghanistanwearethebig
gestvictimofthepastfourdecadesandwe
arenotinterestedingoingthereagain.”
Butcomingfroma countrythathasforso
longrunwiththefoxeswhilehuntingwith
thehounds,asPakistanhas,suchwords
carrylimitedcredibility.n
Land of the poor
Pakistan, GDP per person
% change on a year earlier
Source: World Bank
1 5 4 3 2 1 0
-1
-2
2000 05 10 15 20
Very well, a loan
Pakistan, value of loans from the IMF, $bn
Source: IMF
2
12
10
8
6
4
2
0
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