Political and Internal Developments

The reverberations of the meeting between Law Minister Babar Awan and PMLQ leader Chaudhry Pervez Elahi week before last continue to be heard in the politics of Pakistan. With the PMLN openly rooting for a mid-term election to get rid of the current dispensation, Prime Minister Yusuf Raza Gilani was provoked to declare in the National Assembly that “I will not dissolve the National Assembly and the Pakistan Army has no desire to impose martial law, so there is no option of mid-term elections”. The Leader of Opposition Chaudhry Nisar was, however, quick to point out that apart from dissolving the House and military intervention, there was also the option of affecting an in-house change in the government.

The PMLN appears to have hardened its opposition to the ruling coalition. Nawaz Sharif has accused President Asif Zardari and Prime Minister Gilani of letting down the country. There are also reports that Nawaz Sharif has given the go-ahead to his party leaders to try and evolve an understanding with other political players to either force a mid-term poll or else replace the current dispensation with a temporary arrangement which will then call for a mid-term poll.

Not only is the PMLN reported to be wooing the ‘forward bloc’ lawmakers from the PMLQ, it has also managed to strike a deal with PMLQ leadership on the issue of nomination of legislators to the Parliamentary Committee on Appointment of Judges. While the PMLN has nominated a PMLQ MNA to the committee, the PMLQ has nominated a PMLN senator to the same committee. In the process, the Muslim League’s have managed to deny the PPP the desired 3/4th majority in the committee, which is required to reject the judges recommended by the Judicial Commission for appointment to the superior judiciary.

The PMLQ leadership has meanwhile started trying to win back the loyalties of its disgruntled members. Apparently, the Chaudhry faction of the PMLQ has been nudged by the PPP to get the forward bloc back in its fold because only after this will it be possible to replace the PMLN led government in Punjab. The PPP and PMLQ are believed to have reached a tacit understanding whereby the PMLQ will stymie any move to destabilise the PPP-led government in the Centre, especially if the MQM pulls out of the ruling coalition. At the same time, the possibility that the PPP and PMLQ are using their talks to increase their political leverages vis-a-vis their allies and opponents cannot be ruled out. In other words, the PPP could be using the Chaudhries of Gujrat – Shujaat Hussein and Pervez Elahi – to keep its disgruntled allies and restive opponents unsettled, while the PMLQ leadership could be using its talks with the PPP to signal to the PMLN leadership to back off from its rigid stand over inclusion of erstwhile allies of Gen. Pervez Musharraf from a unified Muslim League. It is however still not clear how the PMLQ cookie will crumble. There are conflicting reports in the Pakistani press with some papers reporting that majority of the PMLQ members are in favour of an alliance with PPP to form the government in Punjab, other reports indicating that PMLQ members are in favour of uniting with PMLN and still others claiming that PMLQ members want to retain their identity as a party.

Even though the PPP is making moves to tie up with the PMLQ, it has as yet not given up on the MQM completely. Interior Minister Rehman Malik has been meeting the MQM top leadership in London and has claimed that the alliance with MQM remains solid as ever. President Asif Zardari too has indicated giving in to one of the major demands of the MQM when he told his party to prepare for the Local Body polls which will be held in ‘not too distant a future’. On its part, while the MQM has not yet burnt its bridges with the PPP, it has at the same time made countermoves. The MQM has reacted strongly to the 10% rise in process of petroleum products and has boycotted Parliament in protest.

While the Supreme Court has eased off on the politically sensitive cases against the government, it has notched up pressure on cases involving economic issues, namely the Gwadar port case, the loan write-off case and the Pakistan Steel Mills corruption case. The Supreme Court has also taken suo moto notice of a letter allegedly written by a Saudi prince in which allegations of corruption in organising the Haj have been levelled against the Religious Affairs ministry. But it is the Supreme Court’s notices to top officials of the Punjab government in a case involving disappearance from the jail of some terror accused persons who had been acquitted by the High Court that has shaken up the officialdom which has been threatened with prison if they fail to recover these persons.

Amidst reports that Pakistan is sitting on gold and copper reserves of close to $ 260 billion in Balochistan – the Reko Diq mines – which have been leased out in a 75-25 deal to a Chilean mining company, the Balochistan chief minister has demanded that provincial government should not be by-passed in granting the mining license for the project. He has insisted that the project should be run and managed by the Balochistan government. Meanwhile, both the governor and chief minister of Balochistan have once again tried to reach out to the disaffected and ‘angry Baloch brothers’ who are waging an armed struggle against the state and urged them to come on to the negotiating table. They have also called upon the Federal government to remove the grievances of the Baloch people. Even as Balochistan continues to burn, sparks of ethnic separatism have also been felt in Sindh. On four consecutive days, railway lines in Sindh were blown up. An obscure and until now unheard off group – Sindudesh Liberation Army – claimed responsibility for the attacks. Whether this is the start of a new separatist movement remains to be seen.

All is also not well on the economic front. The 10% raise in prices of petroleum products has caused a political storm. But plans to raise electricity tariffs by 2% every month over the next six months to eventually raise the energy prices by around 30% in order to eliminate the crippling circular debt problem could well be the last straw on the back of the Pakistani masses who have braved around 75% hike in energy charges in the last two years. The government has reportedly given in to pressure to effect the tariff hike across all slabs which will impose a crushing burden on the poor.

Meanwhile, the IMF is leaning hard on Pakistan to clean up its economic act. Although Finance Minister Hafeez Shaikh has been speaking of the need to widen the tax net and increase government revenues, and he has also assured the IMF that the Reformed GST (RGST) will be imposed by December 1, a trust deficit has developed between Pakistan and IMF because of the failure of Pakistan to meet key targets set by the IMF. Not only has the IMF criticised the slow progress on taxation and energy sector reforms, it has also refused to allow any exemptions for critical sectors like textiles on the imposition of the RGST. According to reports, the IMF has gone to the extent of threatening to cut off aid to Pakistan if the country did not come up with a credible and irreversible reform plan for the power sector and tax regime. A similar warning has been issued by the Pakistan Development Forum. But while the international donors are demanding that Pakistan undertake the necessary reform, the leaders of the country continue to behave as though the rest of the world owes Pakistan a living. This was the message sent out by the Senate which unanimously called upon the international community to write off its loans or at least reschedule them, grant market access to Pakistani products and make investment to reconstruct flood hit areas in the country.

Foreign Relations / Foreign Policy

China has signed a Renminbi 86.5 million concessional loan contract with Pakistan to finance a satellite ground control segment project for Pakistan’s Paksat 1R satellite that will be launched next year.

Foreign Minister Shah Mehmood Qureshi has said that Pakistan will soon be taking an initiative to enhance engagement with Russia. Separately, in a meeting with the visiting Bangladesh Foreign Secretary, Qureshi called for tapping the huge potential of a partnership between the two countries and expressed a desire to expand trade between them to achieve a target of $ 1 billion.

The new US ambassador to Islamabad, Cameron Munter, has said that drone attacks are very much part of the war on terror and indicated that despite the outcry in Pakistan over these attacks, they will continue. The Americans have meanwhile decided to set up special units in various ministries and departments in Pakistan to monitor the utilisation of funds under the Kerry-Lugar aid package.

Even as Foreign Minister Qureshi has declared that Pakistan would decide on launching a military operation in North Waziristan on the basis of its own requirements, resources and priorities, the special assistant to the US president and coordinator on Afghanistan and Pakistan, Douglas Lute, visited Islamabad and held a meeting with Foreign Minister Qureshi. There was also a visit by the commander of US troops in Afghanistan, Gen David Petreaus to Islamabad. According to reports, the US and Pakistan have major differences over the definition of ‘reconcilable’ Taliban, with the Pakistanis including the notorious Haqqani network among the reconcilables while the US is opposed to dealing with the Haqqanis. With Petreaus leaning on the Pakistanis to crackdown on the Haqqani network in North Waziristan, the Pakistanis are working on a targeted and limited operation in the area. Such an operation will probably assuage the Americans without degrading the capability of Pakistan's strategic assets among the Taliban.

Relations with India

The visit of US President Barack Obama to India is being watched closely in Pakistan which is nursing a grievance for being excluded from Obama’s itinerary and is concerned over the conclusion of understandings during the visit which may lead to the enhancement of India’s comprehensive national power and its international standing. The fact that Obama would be visiting the site of the 26/11 carnage – Taj Mahal Hotel in Mumbai – is being seen as bringing greater pressure on Pakistan to act against terrorist groups like the Lashkar-e-Taiba and its holding company, Jamaatud Dawa and other front organisations like Tehrik-e-Azadi- Kashmir. Nevertheless, the Pakistan foreign office has been putting up a brave face, maintaining that “our relations are independent of what is happening in US-India relations”. It has also given a positive spin to the visit by saying that “we do not have any concern. Frankly speaking, the US President’s visit should help promote stability and peace in South Asia...We hope President Obama during his visit to India would take up those issues which are central to ensuring peace and stability in this region.”
The Pakistanis, who have been encouraged by a petition forwarded by 12 Congressmen to Obama asking him to appoint a Special Envoy for Kashmir, have also been trying to pressure the Americans to raise the Kashmir issue during the visit. While expressing confidence that Obama is “conscious about the importance of resolution of Kashmir issue for the stability of the region”, the Pakistan foreign office spokesman said that “in case the US shows total indifference to an issue central to peace in the region, then, we will obviously be concerned.” At the same time, the Pakistanis have left wriggle room for themselves by maintaining that it is entirely possible that Obama will raise the Kashmir issue in private discussions.

The Pakistan foreign office rhetoric on Kashmir has started becoming increasingly more shrill with the spokesman calling upon the international community to “not look the other way, giving India carte blanche to continue killing innocent Kashmiris in blatant violation of the UN Charter and Universal Declaration of Human Rights.”

Pakistani lawmakers have accused Indian films of corrupting the minds of Pakistani children. The culture minister has however defended the exhibition of Indian films on the grounds that banning Indian films will lead to the death of cinema culture in Pakistan.