Political and Internal Developments

Prime Minister Yusuf Raza Gilani, in a surprising development, took back his accusations that the army and ISI chiefs had acted illegally and unconstitutionally by submitting an affidavit before the Supreme Court without first getting it cleared by the government. Gilani explained this retraction by saying that his statement in the matter had been made against the backdrop of ‘events that were taking place at that point in time’ and that he had said what he said in that context. Papering over the cracks in the relationship with the army, Gilani said that action had been taken against officials who were responsible for the ‘discrepancies’ in the replies and it was therefore important to ‘dispel the impression’ that the army and ISI chiefs had acted wrongfully. While his retraction is aimed at restoring a working relationship between the government and the army, it corroborates reports that relations between the two were near break point. The PMs statement also lends credence to reports that the army chief had asked the President to make the PM retract his remarks in order to give closure to the latest spat between the government and the army.

The PM’s statement came after a meeting with the army and ISI chiefs to discuss the security situation and developments in Afghanistan. Earlier, all the service chiefs were present in the Aiwan-e-Sadr for an investiture ceremony bestowing one of the highest national awards on the naval chief. The investiture ceremony itself followed an unprecedented undertaking demanded by the Supreme Court from the government that it had no plans to sack the army and ISI chiefs. The Supreme Court sought a written assurance from the government to this effect while hearing a petition seeking to impose a bar on any move by the government against the army and ISI chiefs. The court ruling raised eyebrows and came in for scathing criticism from the jurists and analysts who pointed out that the order effectively tied the hands of the government from taking any administrative or disciplinary action against the army and ISI chiefs even if they stepped out of line. It is also appears to indicate that the Judiciary and the military had a congruence of interest in working against the government.

Mansoor Ijaz, at the last minute, cited security concerns and refused to come to Pakistan to testify before the judicial commission investigating the case. Whether his refusal to come was the result of his being browbeaten by statements from senior government functionaries or it was the outcome of a deal, understanding or even realisation of a mutually assured damage for all the principal actors in the entire drama is something that is still not clear. The government of course took an uncharacteristically strong stand on the security being demanded by Ijaz. Prime Minister Gilani dismissed Ijaz’s security demands, including that an army battalion be dedicated for his protection, by saying that he was no Viceroy or Head of State to be given security by army commandos. Nevertheless, the government took complete responsibility for Ijaz’s security and said that if required it would seek assistance of the army as well. Both the PM and Interior Minister Rehman Malik indicated that while there would be no obstacles for Ijaz coming to Pakistan, his exit would depend on the directions of the Parliamentary Committee on National Security (PCNS) which was holding a parallel inquiry into the ‘memogate’ affair. Plying further pressure, Malik said that Ijaz would be made answer queries regarding his role in destabilising Benazir Bhutto’s government in the mid 90’s and the ‘vilification’ campaign against the Pakistan army and ISI. A senior PPP leader also filed an application seeking Ijaz’s trial on charges of sedition. The proverbial last straw on the camel’s back was the US embassy in Islamabad’s refutation of Ijaz’s comments that he had received assurances of support from the US government for his travelling to Pakistan for testifying before the judicial commission.

The truce between the government and the army comes amidst reports of back-channel talks of a political deal between the PPP and PMLN for holding early elections. Although some reports claim that the talks have got stuck over when to schedule the general elections with the PMLN insisting on elections to be held soon after the Senate polls i.e. between late March and early May, and the PPP holding out for the elections in September/October date so that it can present the next budget. One of the central players believed to be handling the negotiations between the PPP and PMLN is Maulana Fazlur Rehman who has claimed that a broad understanding has been reached on the principles of a deal. These include an agreement for an independent Election Commission, transparent and accurate electoral rolls and a neutral caretaker government. The wily Maulana has indicated that polls are most likely to be held in September/October, not so much because that’s what the PPP is angling for but more because the revised electoral rolls will only be ready by May leaving little time for holding elections before September because Ramzan is due in June after which the Haj starts.

The issue of electoral rolls has gained salience after the Supreme Court banned all by-elections until the electoral lists were revised and bogus voters removed. While passing this order on a petition challenging by-elections held on around two dozen National Assembly seats after the passing of the 18th Amendment, the Court gave two weeks time for passing the 20th Amendment which seeks to provide protection to the lawmakers elected in by-elections that were organised by an Election Commission that wasn’t in conformity with the law as laid down by the 18th Amendment. The ban on by-elections coupled with the insistence of the Supreme Court to revise the electoral rolls by February 23 saw a spat between the Court and the EC with the latter not only calling the ban unconstitutional but also emphatically stating that it was not possible for the EC to have error-free electoral rolls by the date set by the Court. According to the EC, the earliest it can revise the electoral rolls is only by late May and any hasty revision would lead to a repeat of the same problems that currently afflict the electoral rolls.

Cut to the bone by the EC calling its order ‘unconstitutional’, the Supreme Court issued two back-to-back clarifications explaining the constitutionality of its order. The Court said that it had not barred by-elections per se but only specified that these couldn’t be held until the voter lists were cleansed of bogus names. It also said that it was a fundamental right of a citizen to vote in elections and this right would be violated if the electoral rolls either exclude eligible voters or include bogus voters and reiterated its order that the voter lists must be revised by February 23.

Apart from the EC, the army too has started coming under fire from the apex court. After years of keeping in the cold storage the infamous case of ISI making pay-offs to politicians to defeat the PPP in 1990, the Court has now revived the case and set February 29 as the date for its hearing. The revival of the case which is based on a petition by the former Air Chief Air Marshal Asghar Khan is expected to open a can of worms that will sully the image of many a born-again democrats (including Nawaz Sharif) and put in the dock retired army officers like former army chief Aslam Beg and ISI chief Asad Durrani. Further discomfiture for the army and ISI is likely to come from notices issued to the ISI and MI chiefs on a petition filed by a woman whose three sons were allegedly kept in illegal custody by the army and one of whom died in custody last week. The men are suspected of involvement in the attack on the GHQ and an ISI camp in Rawalpindi.

The prospect of an early election has meanwhile propelled political deal making and manoeuvring by all the parties. Apprehensive of the meteoric rise of Imran Khan Nawaz Sharif has swallowed a bitter pill and in a major initiative, the PMLN has reportedly made an overture to the Chaudhry cousins, Shujaat Hussein and Pervez Elahi, of the PMLQ through the PMLF leader Makhdoom Ahmed Mahmood. Nawaz Sharif is believed to have conveyed his willingness to join hands with the PMLQ and reunify the Muslim League if the PMLQ severs its ties with the PPP. The Chaudhry cousins are however not biting the bait just yet because they are still not ready to trust Nawaz Sharif and are asking for guarantees that they will not be ditched. Clearly subscribing to the maxim of a bird in the hand being better than two in the bush, the PMLQ is heavily involved in negotiations with the PPP on sharing seats in the Senate elections and reaching an agreement on seat adjustments and sharing in the general elections. While the PPP alliance with the PMLQ seems far more robust than anyone had predicted, the alliance with the MQM continues to be buffeted by their competing and often contradictory political interests in Sindh. Even as the two alliance partners have been unable to settle their differences on the local government law in the province, a new irritant has entered their relationship. Sindhi lawmakers cutting across political lines have moved a resolution in the provincial assembly opposing a clause in the MQM sponsored constitutional amendment bill on formation of new provinces that seeks to scrap the condition of securing a two thirds majority in the provincial assembly for altering the territory of any province. The Sindhi lawmakers see this as a first step to break up Sindh in the future.

Amidst reports that the ISI chief Lt. Gen. Shuja Pasha held a secret meeting with Gen Musharraf in Dubai to dissuade him from returning to Pakistan, the latter addressed via video conferencing around 150 top retired military officers who have formed a ‘non-political pressure group’ – Pakistan First Group – to ‘counter army and ISI bashing’ and ‘support democracy and rule of law’ and told them that he would return to Pakistan not on the back of the army but with the support of the people! But the retired officers got their comeuppance the next day after the Senate passed a resolution asking the government to arrest Musharraf as soon as he returns and try him not only for committing treason but also for being involved in the murders of Benazir Bhutto and Nawab Akbar Bugti, entering into secret deals with foreign powers and surrendering national sovereignty to them and for committing acts of criminal nature (including forced disappearances of citizens) against the people of the country.

The Senate also expressed its outrage over the resumption of drone attacks – 5 terrorists were killed in a drone strike in North Waziristan last week – by the US and demanded an explanation from the army chief as to why despite declaring that such attacks would no longer be tolerated, no action was taken by the military against the drones. Taunting Gen Kayani, the leader of opposition in the Senate, Maulana Ghafoor Haideri said that if Kayani did not have the courage to take action, he shouldn’t make bombastic statements.

The Islamists were also stirring up the Pakistani Street against the US and NATO and last week the conglomeration of right-wing, radical and reactionary parties, including international terrorist organisations like the Jamaatud Dawa (holding company of the Lashkar-e-Taiba), organised a rally in Rawalpindi under the banner of the Pakistan Defence Council (PDC), where the Jamaat Islami chief threatened to hold nationwide protests if the government and the army restored the NATO supply lines. India too was in the crosshairs and the government was warned of dire consequences if India was granted MFN status. Addressing the rally, the JuD chief Hafiz Saeed said that India was a bigger threat to Pakistan than the US and accused the government of ‘conspiring with the US to give India supremacy in the region’. He also said that the people of Pakistan and the Taliban were one in the jihad against the US.

With terrorist organisations once again operating openly and with complete impunity, the recent spike in incidents of sectarian terrorism was only to be expected. Sectarian target killings have made a comeback in Karachi and in an apparent tit-for-tat attack, three Shia lawyers were gunned down a day after gunmen shot dead two Sunni lawyers who were providing legal advice to the extremist Sunni organisation, Ahle Sunnat wal Jamaat (ASWJ), the new avatar of the banned Sipah-e-Sahaba Pakistan. Equally shocking was the order by a review board of the Lahore High Court ending the detention of the notorious Lashkar-e-Jhangvi terrorist Malik Ishaq because of lack of evidence. The only saving grace was that the same day the police nominated Ishaq in the Khanpur bombing case in which 18 Shias were killed week before last.

If the latest data released by the State Bank of Pakistan is anything to go by, Pakistan is well on the way to a debt trap situation. According to the SBP, the total debt and liabilities servicing increased by nearly 40% in the last year and reached the Rs. 1.47 trillion mark, which is almost equal to the entire tax revenue earned by the Pakistani state in 2011. Despite this perilous state of national finances, there appears to be no move to get a grip over the spiralling debt. Last week, in the face of opposition by the SBP, the cabinet decided to enter into a Rs. 160 billion debt swap agreement with the commercial banks to partially resolve the circular debt crisis which has crossed the Rs. 400 billion mark. The interest rate on the debt will be passed on to electricity consumers in the form of higher tariff. Meanwhile, economists are predicting that the government will almost certainly have to go to the IMF once again before the end of the financial year because the spike in oil prices, reduction in international aid flows, and slowdown in export growth are together expected to create a balance of payments crisis.

Foreign Relations / Foreign Policy

At a time when the country is on the verge of a huge debt crisis, reports that ‘all weather friend’ China is likely to roll over a $ 500 million loan given in 2008 for shoring up balance of payments will provide some comfort to the beleaguered economy. A few weeks earlier the Chinese had entered into a $ 1.5 billion currency swap agreement that will ease the foreign exchange crunch.

President Asif Zardari visited Myanmar last week to confer the Benazir Bhutto award for Democracy on the Myanmar’s icon of democracy, Aung San Suu Kyi. During the visit, Zardari met the President of Myanmar and called for setting up of a Joint Economic Commission and a Preferential Tariff Arrangement between the two countries. He also discussed entering into a currency swap arrangement and sought closer interaction between the business leaders of both countries. Zardari offered prayers at the mausoleum of the last Mughal emperor of India, Bahadur Shah Zafar, and made an offering of $ 50,000 for the upkeep of the shrine.

There are reports in the Pakistani press that the Afghan Taliban have shared with Pakistani authorities and the Haqqani network the ‘functional blueprint’ of their negotiation strategy with the Americans and have asked the Pakistanis for their inputs and objections to the ‘prioritisation’ of the issues being discussed. While the Afghan Taliban are keeping the Pakistanis in the loop, the negotiations between the Pakistani Taliban and Pakistani authorities is believed to have stalled. Meanwhile, Prime Minister Gilani has asked foreign minister Hina Rabbani Khar to visit Kabul to take stock of the situation that is emerging with regards to the reconciliation talks between the Taliban and the Americans.

The Pakistan army has come out with its detailed response to the NATO inquiry report on the bombing of two Pakistan army posts in the Mohmand agency on November 26 last in which 24 Pakistan soldiers were killed. Rejecting as ‘unjustified and unacceptable’ the US contention that the NATO forces acted in self-defence and employed ‘proportional use of force’, the Pakistan army said that the facts were contrary to what the Americans were stating. Putting the blame for the incident on the failure of the ISAF troops to share at any level information regarding their operations near the Pakistan border and pointing out that all mutually agreed procedures were violated by the ISAF on that night, the Pakistani report said that the basic problem was that the US and NATO forces considered Pakistan an adversary and not part of the friendly forces. The Pentagon has, however, dismissed the Pakistani report and said that it stands by the validity of their own findings. While a Pentagon spokesperson said that it was ‘simply false’ for the Pakistanis to suggest that the attack on the Pakistani posts was unprovoked, an olive branch of sorts was held out to the Pakistanis who were told that the Pentagon wanted to put the incident behind and build a good, cooperative arrangement with the Pakistan military.

Notwithstanding the continuing spat between the US and Pakistani militaries, there are indications that the two countries are working towards putting their relationship back on track. Pakistan is believed to have informed the Americans that the supply lines would be restored after the Parliament deliberates over the recommendations of the PCNS. While new terms of engagement, and indeed tariffs (some reports suggest that a $ 1000 per container charge is likely to be levied), will govern the NATO supply lines as and when they are restored, Pakistan's foreign minister has indicated that Pakistan will insist that the Americans respect their red-lines.

Relations with India

Pakistan and India are believed to be close to an agreement on the TAPI pipeline and are working on a joint strategy to settle the issue of transit fees that will be levied by Afghanistan on transportation of gas. During the visit of Pakistan's Petroleum Minister Dr Asim Hussein to New Delhi last week, the two sides also discussed the possibility of Pakistan importing diesel and other petroleum products from India.

Pakistan's commerce minister Amin Fahim has said that India would not be given ‘full MFN’ status since Pakistan would continue to maintain a negative list of items that cannot be traded. Addressing a Press Conference, Fahim shifted the goalposts by reverting to the old Pakistani position linking progress in the field of trade and commerce with progress on other issues comprising the Composite Dialogue process between the two countries. Fahim also said that the December 2012 date given for conducting trade on the basis of a negative list instead of the current positive list was only an indicative date and not a rigid timeline by which Pakistan is bound.