Pakistan Weekly Political Brief

Political and Internal Developments

Politics is in a flux ever since Imran Khan shook up the political chess-board with his remarkably successful rally in Lahore week before last. With Imran Khan on a roll, his supporters and his party, Pakistan Tehrik-e-Insaaf (PTI), is on a high and has been displaying all the signs of arrogance, hubris, intolerance and supreme (over)confidence that comes quite naturally to upstarts who are suddenly catapulted on to the centre-stage.

Even as Imran Khan was visiting China last week to imbibe lessons from the Chinese on tackling corruption, enforcing discipline and developing the economy, back in Pakistan politicians were coming to terms with the emergence of the PTI as a possible player on the political stage.

Politicians at a loose end are making a beeline for Imran Khan who is seen as their ticket to power. Names of high profile politicos like Jehangir Tareen and his bunch of 30 odd ‘clean politicians’ including Ishaq Khakwani, dissident PPP members like Shah Mehmood Qureshi and the former IB chief Masood Khattak, disgruntled PMLQ leaders like Khurshid Kasuri, Raza Hayat Hiraj etc. are all reported to be ready to jump on the PTI bandwagon, either by joining the party or else entering into an electoral alliance with it. This development is a bit of a catch 22 situation for Imran Khan. On the one hand, these politicians fill a critical gap in Imran Khan’s arsenal – absence of winnable candidates. But on the other hand, it blows holes in Imran’s USP of being an agent of change.

While the search for greener pastures by politicians out in the cold is understandable, the growing shadow of Imran Khan over Pakistan's politics can also be gauged by reports that even the PMLN has made overtures to PTI for a political tie-up against the current PPP-led government. Clearly, the intention behind this fledgling move is to kill two birds with one stone: bring down the PPP government and force early elections on the one hand and on the other hand try and defuse and disarm the growing threat from Imran Khan. Of course, the latter is not biting and has made it clear that he will not enter into any tie up with a party that is involved in corruption and has continued to insist on his demand for making public the assets of all politicians. Despite smarting under the rebuff, the PMLN hasn’t quite given up. Party chief Nawaz Sharif has issued instructions to go easy on Imran Khan and is also reported to have approached the Jamaat Islami to broker peace and a political understanding (either seat adjustment or an election alliance) with PTI. For its part, the Jamaat Islami too is keen on a tie-up with PTI. At the same time, moves are also underfoot to explore the possibility of reviving the religious parties alliance, MMA. The PTI meanwhile is seeking to build on its success in Lahore and is planning to extend its footprint beyond central Punjab into south Punjab and Sindh.

Even if the conspiracy theories about the PTI acting as a proxy of Zardari to cut into the PMLN vote bank are discounted, one of the unintended consequences of the PTI’s rise has been a new aggressiveness in the PPP in its dealings with PMLN. Prime Minister Yusuf Raza Gilani last week virtually challenged the PMLN to bring a no-confidence motion against his government and scoffed at attempts by the PMLN to bring down the government through Long Marches and public rallies. Tearing into the Punjab Chief Minister for the language he used against President Zardari, Prime Minister Gilani accused the PMLN of playing both sides i.e. being in government in Punjab and playing the opposition in the centre. He said the PMLN neither wanted to let anyone else act as the opposition nor wanted to leave the government to play opposition itself. Turning in the knife, Gilani said that the public response to Imran Khan’s rally in Lahore was a clear indication of the anger in Punjab against the PMLN government and added that the federal government would hold by-elections to fill up any vacancy in the event that PMLN resorted to mass resignations from the assemblies.

In order to add to the political difficulties of the PMLN, the PPP took another step in the direction of bifurcating Punjab and carving out a new province in South Punjab. Last week, the PPP Punjab unit was split into two and a new unit was formed in South Punjab headed by Makhdoom Shahabuddin. Although the party spokesman denied that this move had anything to do with the creation of a Seraiki or South Punjab province, the political grapevine is telling a completely different story, especially in light of the PPP plans to move a resolution in Punjab assembly calling for a new province in South Punjab. There are also reports that the PPP is planning to go full steam ahead in its demand for a Seraiki province in the weeks and months ahead so that it has a potent election issue in hand by the time of the next general elections.

As part of its preparations for the general elections the PPP is also reported to be considering a major cabinet reshuffle. The only question is whether such a reshuffle will take place before the Senate elections next March or after. Meanwhile, relations between the PPP and MQM could once again go in a tailspin because of the failure to reach an agreement on the local bodies law in Sindh. Despite strenuous efforts to reach some sort of a middle ground between the two parties, there was no breakthrough resulting in the lapsing of the ordinance that had restored the Musharraf era Local Government law and paved the way for the return of the MQM into the ruling coalition. To fill the administrative vacuum, the Sindh government has notified the old Local Government law that splits Karachi into five districts and brings back the Commissionerate system. For now, the MQM is keeping its peace, probably because it finds itself politically outmanoeuvred and doesn’t really have the option of once again walking out of the coalition. But such a situation will not last interminably and if the MQM finds itself pushed against the wall, it could once again hit back. Already, there are straws in the wind that suggest that the MQM might be looking for options and alternatives. MQM chief Altaf Hussein last week called for a peaceful revolution and congratulated Imran Khan for the successful rally in Lahore. Altaf went on to say that he didn’t care too much if the people rallied under the flag of the MQM or of PTI.

The PPP is banking a lot on the boom in the rural areas, where it gets maximum votes, to win the next elections. According to data published last week, the PPP policy of changing the terms of trade in favour of rural (agricultural) sector by raising the support prices of agricultural produce has resulted in a massive transfer of wealth from the urban to rural areas – almost to the tune of Rs. 1 trillion since the PPP came to power in 2008. But while the PPP might be able to retain its core support in rural areas, the general impression is that it will be swept aside by the constellation of forces arraigned against it. PPP supporters however feel that the anti-PPP vote will be split so many ways that it will allow the PPP to romp home. The problem is that generally when there is a wave, it is generated in urban areas and its impact is also felt in the rural areas. Add to this the fact that the PPP’s political mobilisation seems to be non-existent and the prospects of the PPP don’t appear quite so good.

More than charges of corruption and incompetence, what could be the determining factor against the PPP is the collapsing economy which is in a sense exemplified by the state of affairs in the Public Sector behemoths like the Railways, PIA and Pakistan Steel, all on the verge of collapse. While last week, the first serious effort was made to restructure the Railways by organising financing for the ailing utility and making significant changes in its operational strategy by bringing in the private sector to run passenger and freight operations, there is as yet no movement on rescuing the PIA which needs a minimum of Rs. 20 billion to keep flying.

Even as the government muddles through on saving the big PSUs, it has taken a few significant steps to bring some semblance of order in the energy sector. For one, as part of the power sector reforms, four thermal power generating companies have been amalgamated into a new Genco Holding Company. But even more important has been the settlement of the circular debt which had almost reached the Rs. 400 billion mark. The problem has been resolved by the government taking on the entire debt (which will increase the fiscal deficit by 1.8% of GDP in the current fiscal) and issuing to the banks five-year maturity Pakistan Investment Bonds (PIBs) equivalent to the amount of 50% circular debt and issuing treasury bills for the balance 50% amount. But this measure will not obviate the need to raise the power tariffs by around 15%, because if this is not done then the under-recoveries will continue giving rise to another circular debt crisis. Having bitten the bullet, the government hopes that the way for around $ 2 billion in loans from the World Bank and ADB will have been cleared.

An anti-terrorism court last week indicted 7 persons, including two senior police officials, in the Benazir Bhutto assassination case. The two police officers have been charged with negligence on duty (washing down the assassination site and not ensuring an autopsy) and not providing adequate security to Ms Bhutto. The other five accused have been charged with being part of the conspiracy against Ms Bhutto and for assisting in the execution of the plot. Meanwhile, arrest warrants were issued against the former chief minister of Balochistan Jam Mohammed Yusuf in connection with the Nawab Akbar Bugti assassination case.

In a shocking move, the Pakistan government has removed the international terrorist organisation, Jamaatud Dawa, from the list of banned organisations and allowed it the freedom to collect donations and animal hides during Eid. Although the previous avatar of the JuD, Lashkar-e-Taiba, continues to figure on the banned outfits list, the fact of the matter is that the JuD and its ‘welfare’ arm, Falah-e-Insaniyat, are nothing but the LeT operating under a different label. The ban even on the 31 odd terror outfits (some of them actually wrongly listed as terrorist outfits because they are engaged in the freedom struggle in Balochistan) in any case is only of symbolic value because it is hardly enforced sincerely or stringently on Islamist terror groups. Indeed, some of the so-called terror groups continued to operate with complete impunity and were openly engaged in collection of funds and hides despite being listed as banned organisations.

Pakistan's nefarious nuclear programme once again came under the international spotlight last week after an IAEA report indicating the involvement of the AQ Khan network in a suspected Syrian nuclear facility and a highly damaging article in a US magazine, Atlantic, on the unsafe handling and moving of nuclear weapons by Pakistan to deceive the Americans. Rather than showing any concern, much less contrition, the Pakistanis reacted with their by now typical blanket denial: AQ Khan rejected the IAEA report as ‘absurd, baseless and ridiculous’ and the Pakistan foreign office dismissed the Atlantic report as ‘pure fiction....baseless and motivated’. The foreign office also issued a veiled threat, warning that ‘no one should underestimate Pakistan's capability to defend its national interests’. Alongside, the military spokesman issued a statement on the induction of 700 new personnel in the elite nuclear security force which reportedly is 8000 strong and responsible for the protection and safety of Pakistan's nuclear assets.

Foreign Relations / Foreign Policy

Even as the CIA continued to launch drone strikes in the FATA region, there were reports in the US media of an agreement between Pakistan and US on the procedures for launching these attacks. Under the new arrangement, the Americans have made certain concessions to Pakistani sensibilities (no attacks will be carried out when Pakistani officials were visiting the US) and agreed to have not only greater oversight over the selection of targets (the State Department will have to be taken on board) but also to take the Pakistanis on board by giving them prior information of ‘signature attacks’ in which more than 20 terrorists were expected to be killed. There were also reports of the two countries having agreed on a still unspecified ‘work plan’ for the ‘restoration of dialogue, economic cooperation, reconciliation efforts and other related issues.’ This ‘work plan’ is believed to have been the result of Pakistan committing to tackle the Haqqani network and bringing them on to the negotiating table. Meanwhile, in the US, the patience of the US lawmakers appears to be running very thin with Pakistan. At a time when US Secretary of State Hillary Clinton has been trying to impress on the Congress to continue with the financial assistance package to Pakistan and the State Department has said in a report that the US government intended to fund ‘signature’ projects (for instance the controversial Diamer-Bhasha dam in Gilgit Baltistan region of Pakistan occupied Kashmir), a senior US Congressman Gary Ackerman has said that the time has come for the US to stop treating Pakistan as an ally calling it as an enemy country . He said that “They [Pakistan] are not our allies; they are not our partners; they are not on our team; they are not on our side,” and added that “no matter how much aid we give them, no matter what military capabilities we provide them, and no matter what promises, assurances or pledges we make to them, these facts are not going to change.” Scepticism about Pakistan assurances was also reflected in the remarks of Michael McCaul, head of the US Homeland Security department delegation that visited Islamabad last week. After a meeting with President Zardari who promised to work with the US to ‘eradicate’ the Haqqani network, McCaul doubted whether anything Zardari said could be taken seriously considering that he probably didn’t have the power to live up to his pledges.

Prime Minister Yusuf Raza Gilani visited St Petersburg last week for the Shanghai Cooperation Organisation Heads of Government meeting. On the sidelines of the meeting, Gilani met his Russian counterpart, Vladimir Putin who promised $ 500 million assistance to fund the CASA 1000 project for building power transmission lines from Central Asian states to Afghanistan and Pakistan. In addition, Putin offered another $ 500 million to revive the ailing Pakistan Steel Mills and increase its production capacity from 1 million tonnes to 3 million tonnes. Russia is reported to have endorsed Pakistan’s quest for full membership of the SCO.

Relations with India

In spite of the brazen disregard of Indian sensitivities shown by the government of Pakistan in removing the Jamaatud Dawa from the list of proscribed organisations, the Indian External Affairs Minister SM Krishna claimed that the ‘trust deficit’ between the two countries was shrinking. His Pakistani counterpart, Hina Rabbani Khar, adopted a similar stand and said on the eve of the SAARC summit that trust deficit has been largely reduced. But Ms Khar’s positivity was not reflected by the Pakistani foreign office mandarins who suspected an Indian hand behind Bangladesh’s continued objection to the EU trade concessions given to Pakistan.

Notwithstanding attempts by the Pakistan government to shed some light over whether or not India had been granted the MFN status, the issue continued to generate heat in Pakistan. According to clarifications issued by the government, all that the cabinet had done was to empower the commerce ministry to negotiate with India on trade issues with the purpose of eventually granting India the MFN status. Prime Minister Gilani himself stated that the MFN status will only be given on the culmination of this negotiation and that too if it was in Pakistan's national interest and on favourable terms to Pakistan. While the foreign office spokesperson maintained that Pakistan was not backtracking on the issue of granting MFN status to India, media reports revealed that the adverse reaction in Pakistan to the move had forced the government on a go-slow mode over the issue.

Amidst reports that the government was taking all the stakeholders (read Pakistan army) on board as regards granting India the MFN status, Prime Minister Gilani made a valiant, if unconvincing, effort to demonstrate the supremacy of the civilian government by asserting that the issue did not really concern the army and the only legitimate stakeholders who needed to be taken into confidence were the business community and stock exchanges. But the fact that the government convened meetings to apprise the military and other political stakeholders of its policy belied Gilani’s claims of independence. What is more, his own foreign minister said that the army was completely on board on the dialogue with India and supported the government’s initiative!

At the political level, the JUIF leader Maulana Fazlur Rehman has insisted that the issue of MFN be discussed in parliament and the Kashmir committee of Parliament must be taken into confidence before India is given the MFN status. His erstwhile ally Jamaat Islami has threatened a countrywide movement to protest the government move on MFN on the grounds that once trade with India opened up, it would push the Kashmir issue on the backburner. Adding his own two bits worth to the debate, Imran Khan has underscored the need for good relations with India but also added that not only should all stakeholders be taken on board before giving the MFN status but also that the government should ensure that non-tariff barriers imposed by India have been lifted so that Pakistani businesses can benefit from opening of trade with India.