I Overview
Pakistan:
• Economy
• Musharraf sentenced to death on treason charge
• Extension of tenure of the Army Chief
• Financial Action Task Force
• Pakistan-India
• Pakistan skips Kuala Lumpur Summit of Muslim countries
• Pakistan-US
• Pakistan-China
Afghanistan:
• Peace and Reconciliation
• Result of Presidential Election
II Developments in Pakistan
Economy
The ADB approved two loans amounting to $1.3 billion for Pakistan. The first quick disbursement loan of $1 billion would be part of the economic reform programme led by the IMF to stabilize Pakistan’s economy and meet the government’s emergency financing needs to prevent significant adverse social and economic impacts and lay the foundation for return to balanced growth. The second loan of $300 million is meant to address the problem of circular debt in the power sector, which amounts to $10 billion and is part of a circular debt reduction plan, assisted by the ADB along with other development partners. According to Pak media reports, ADB plans to invest a total of $2 billion in the energy sector of Pakistan over a period of three years.
In a report released in December, IMF stated that notwithstanding the encouraging start of its programme to stabilize the Pak economy, risks of underachievement in the future remained high. Growth remains weak and significant fiscal adjustment is needed in the coming years. Fiscal slippages and more generally resistance to reform from vested interests could undermine the programme’s fiscal consolidation strategy and put debt sustainability at risk. Further, the absence of majority of the ruling party in the upper house of Parliament could hinder adoption of the legislation needed to achieve the programme objectives. The provinces might also fail to deliver on their programme commitments.
Moody’s Investors Service, which had downgraded Pakistan’s economic outlook to ‘negative’ in June 2018, citing heightened external vulnerability risk due to depleting foreign exchange reserves, upgraded it to ‘stable’ in the beginning of December. The change was driven by Moody’s expectation that the balance of payments dynamics would continue to improve supported by policy adjustments and currency flexibility and the ongoing fiscal reforms, including through the IMF programme, would mitigate risks related to debt sustainability and government liquidity. At the same time, they noted the following continuing vulnerabilities: structural constraints to economic and export competitiveness, the government’s low revenue generation capacity, weak fiscal position over the foreseeable future as well as political and external vulnerability risks.
The Pakistan government admitted that the ban on trade with India, imposed by it following withdrawal of special status of Jammu and Kashmir by the Government of India, along with failure of provinces to keep check over middlemen and seasonal factors, was responsible for the prevailing price hike, but expressed the hope that inflationary pressure would ease over the next two months.
Musharraf sentenced to death on treason charge
A special court, constituted by the Supreme Court and comprising a judge each of the Lahore, Peshawar and Sindh High Courts, gave a 2-1 verdict, awarding death sentence for high treason to the former military dictator Parvez Musharraf for his action in declaring an emergency and suspending the constitution in early November 2007, when he was President and Chief of Army Staff. The court relied on Article 6 of the Constitution that provides that any person who abrogates or subverts or suspends or holds in abeyance the Constitution by force or unconstitutional means shall be guilty of high treason. The treason case had been filed by the Nawaz Sharif government in 2013 and the Supreme Court had decided to set up a special court to try Musharraf. However, with the army backing him, Musharraf dodged the trial, left the country in March 2016 for medical treatment abroad and has not returned to Pakistan since then, even though the special court gave him six opportunities to make his statement. Finally, when the court decided to hear the case on a daily basis in October 2019, the Imran Khan government sacked the entire prosecution team! With no further inputs coming from Musharraf’s defence team and the prosecution, the special court delivered its verdict on December 17 in the face of the government’s last minute attempt to stall the trial by expanding its scope to cover Musharraf’s collaborators. The court pointed out that the Supreme Court had decided earlier that the case be proceeded with against Musharraf only. However, in its judgment, the special court also called for prosecution of those who had abetted his crime of high treason and helped him to escape from the country. The army and the Imran Khan government rallied quickly against the special court’s judgment and the army spokesperson said that it had been received by the rank and file of Pakistan armed forces “with a lot of pain and anguish”, adding that Musharraf, who served the country for over 40 years “can surely not be a traitor”. He complained that due legal process seemed to have been ignored and expressed the expectation of the armed forces that justice would be dispensed in line with Pakistan’s constitution. Musharraf’s lawyer said that he would file an appeal against the judgment and the government expressed its intent to support Musharraf during the appeal. Later in the month, the Lahore High Court constituted a full bench to hear Musharraf’s petition against his trial for treason.
Though Musharraf’s successors have not resorted to the extreme steps against constitutional governance that he did, the army leadership has continued to act well beyond its remit in violation of constitutional norms, including interference in elections. Any judicial harm coming to Musharraf could, therefore, leave his successors vulnerable to similar judicial action. Therefore, the army would go to any length to thwart the special court judgment. With the possibility of reversal of the judgment by the higher judiciary and power of the President to grant pardon, should the higher judiciary uphold the judgment and no likelihood of Musharraf returning to the country, the death sentence remains largely symbolic and its deterrent effect uncertain.
Extension of tenure of the Army Chief
The government moved the Supreme Court for review and setting aside of its judgment delivered last month, permitting extension of only six months in the tenure of COAS Bajwa and making any further extension subject to passage of suitable legislation by the Parliament. The government petition sought constitution of a larger bench to consider the earlier verdict delivered by a three member bench, headed by the then Chief Justice Asif Saeed Khosa, who has since retired, and in-camera proceedings. It alleged that enemies of the state had ganged up to destabilize Pakistan and the country faced a fifth generation war, requiring the continued stewardship of Bajwa for the army. The government seemed to be counting on the new Chief Justice, Justice Gulzar Ahmed, to facilitate overturning of the earlier verdict. However, there were also reports of the government working simultaneously on suitable legislative changes to ensure Bajwa’s continuation in office. Signs of a deal between the army and the principal opposition parties- PML (N) and PPP- seemed to suggest that the task of making the required legal amendments may not be difficult. After the judicial permission to Nawaz Sharif to go abroad for medical treatment, courts granted bail to the PPP leaders- Asif Ali Zardari, his sister Faryal Talpur and the senior party leader Khursheed Shah, who had been in prison on accountability charges. These developments could not have come about without a nod from the army.
Financial Action Task Force (FATF)
Pakistan submitted its compliance report to the FATF in respect of its recommendations concerning anti-money laundering and counter-terrorism financing laws. According to Pak media, the Pakistani authorities were hoping to get an extension from the FATF, beyond the current deadline of February, up to June this year for full compliance with its twenty seven recommendations. With an eye on the forthcoming meeting of the FATF, the government also speeded up the process of prosecuting the JuD Chief Hafiz Saeed. An anti-terrorism court indicted him on terror financing charges on December 11 and in yet another similar case on December 21. Pakistan received response on its compliance report from the Asia Pacific Group (APG) of the FATF towards the end of the month. As per Pak media reports, most of the 150 observations of the APG related to action taken by the country against banned groups and internationally proscribed persons. The matter will be discussed further during the APG meeting in Beijing in the fourth week of January and later on in the FATF meeting in Paris in February.
Pakistan-India
The Pak Foreign Office issued a statement, condemning India’s Citizenship Amendment Act (CAA) as a “complete violation of the Universal Declaration of Human Rights” and other international covenants on elimination of all forms of discrimination based on religion or belief. It also described the CAA as violative of various bilateral agreements between Pakistan and India, particularly the one concerning security and rights of minorities in the respective countries and “another major step towards the realisation of the concept of ‘Hindu Rashtra’…” PM Imran Khan also strongly condemned the CAA. The spokesperson of the Ministry of External Affairs rejected Pakistan’s interference in India’s internal affairs and drew attention towards Pakistan’s dismal record of discrimination on ground of religion. Later in the month, the Pak National Assembly unanimously adopted a resolution condemning the CAA. India rejected it. PM Imran Khan continued to make highly intemperate statements against India through the month, alleging inter alia that India might precipitate a crisis in POK to divert attention from opposition to the policies of the government within India. Foreign Minister Qureshi alleged that India was likely to conduct a “false flag operation” against Pakistan as its forces had cut the fence at the LoC at five places and deployed missiles there. He added that he had conveyed the above information to the UN.
Pakistan’s attempt to convene another meeting of the UN Security Council with China’s help to consider the situation in Kashmir did not succeed because of lack of agreement among the Council members.
Pakistan skips Kuala Lumpur summit of Muslim countries
Pakistan had joined Malaysia and Turkey in September last year, in a meeting of the leaders of the three countries held in the margins of the UNGA in New York, to convene a meeting of Muslim countries in Kuala Lumpur to discuss the challenges facing the Muslim world. As the date of the meeting in December neared, it became clear that Saudi Arabia was against it, a brainchild of the Malaysian Prime Minister, Mahathir Mohamad, as it was seen as a challenge to the Saudi leadership of the OIC. PM Imran Khan made a dash to Riyadh to assuage the Saudi feelings. Finally, in the face of the continued Saudi opposition, he skipped the Kuala Lumpur meeting. Foreign Minister Qureshi said that Pakistan had decided to first bridge the gap between Riyadh and Kuala Lumpur and since that could not be done, it skipped the meeting. He claimed that by not attending the meeting, Pakistan had underscored its neutrality on the issue and conveyed that it was not inclined towards one side or the other.
Significantly, within days of the Pakistanis staying away from the Kuala Lumpur meeting, the Saudi Foreign Minister paid a visit to Pakistan followed by the Pak media claim attributed to sources that it had been agreed to convene an OIC ministerial meeting on the human rights situation in J&K and the CAA passed by the Indian Parliament and it was expected to take place in Islamabad in April 2020. It was also claimed that the Saudi minister had extended Riyadh’s “steadfast support to Pakistan’s core national interests” including the OIC’s greater role in Kashmir. Pak media reports also suggested that following the rollover of one year accorded by Saudi Arabia and UAE in respect of the deposits of $5 billion made by them with Pakistan to shore up its balance of payments position, Pakistan was considering the possibility of asking the two countries to convert their deposits into government loans.
Pakistan-US
The US State Department announced that it had been decided to resume Pakistan’s participation in their International Military Training and Education Programme (IMET) more than a year after it was suspended, but the remaining security assistance would not be resumed. A State Department Spokesperson said that President Trump’s 2018 decision to suspend security assistance provided for narrow exceptions to support vital US national security interests and the IMET decision was one such exception. The US also welcomed Hafiz Saeed’s indictment on terror financing charges.
According to media reports, following the use of F-16s by Pakistan in the air skirmishes with India after the Balakot strike, the then US Under Secretary of State for Arms Control and International Security Affairs wrote to the Pakistani authorities that the US authorities understood from the Pakistanis that the aircraft movements were done in support of national defence objectives, but the US government considered that the relocation of aircraft to non-US government authorised bases was inconsistent with the F-16 Letter of Offer and Acceptance.
According to a State Department statement, it was decided to retain Pakistan on the list of countries that tolerate religious discrimination. Pakistan rejected the move, calling it “unilateral and arbitrary”. It also questioned omission of India from the list!
Pakistan-China
Phase II of the Pakistan-China Free Trade Agreement (FTA) came into force on January 1, 2020. Originally scheduled to begin in 2014, phase II was delayed because of prolonged negotiations on its terms and conditions resulting from the concerns of the Pakistani trade and industry regarding phase I. It was stated that China had extended zero duty to Pak exports under 313 tariff lines. Pakistani trade officials claimed that phase II had made 90% of China’s global imports from Pakistan duty free and this would help in increasing these imports substantially. However, going by Pakistan’s experience with phase I, it would be premature to come to such a conclusion.
III Developments in Afghanistan
Peace and Reconciliation
US Defence Secretary Mark Esper stated at the beginning of the month that any future troop drawdowns in Afghanistan were not necessarily linked to a deal with the Taliban. Immediately thereafter, the State Department announced that the US Special Envoy Zalmay Khalilzad would be re-joining talks with the Taliban in Doha after visiting Kabul and discuss steps that could lead to a ceasefire and a settlement to the war in Afghanistan. The Doha talks resumed on December 7. Subsequent media reports suggested that the talks centred on the issues that had proved to be intractable earlier: reduction of violence, ceasefire and intra-Afghan dialogue. The Americans paused the talks briefly following a suicide attack by the Taliban on the Bagram air base and Khalilzad visited Islamabad to hold consultations with the Pakistani authorities. He later on visited Kabul and held talks with President Ghani, Chief Executive Abdullah Abdullah and former President Karzai. The situation remained fluid at the end of the month, with some reports suggesting that the Taliban leadership had agreed to go ahead with a ceasefire and some others that the Taliban were willing to look only at reduction in violence. The Afghan government, however, said that a ceasefire would be one of the pre-conditions to negotiations with the Taliban. There was no let-up in violence by the Taliban till the end of the month.
Result of Presidential Election
In the middle of December, Abdullah Abdullah asked his followers to allow the Independent Election Commission (IEC) to recount votes in the seven provinces, where they had not been able to do so because of opposition of certain Presidential candidates, notably Abdullah Abdullah. Finally, the IEC announced the preliminary election result on December 22, putting President Ghani at the top of the list with 9,23,868 (50.64%) votes, followed by Abdullah Abdullah with 7,20,990 (39.52%) votes. The remaining candidates got 3.85% (Gulbuddin Hekmatyar) or less votes each. The candidates had the option to file complaints against the preliminary result to the Independent Electoral Complaints Commission (IECC), which would have to be resolved before the final result is declared. Abdullah Abdullah’s campaign team said that the preliminary result was the outcome of “widespread fraud”. President Ghani, on the other hand, thanked the IEC for the result and said that his team had a few complaints, which would be filed with the IECC. The IECC was reported to have received 16,200 complaints, which could take long to resolve. If the IECC review reduces Ghani’s vote share to below 50%, a second round would become necessary between the two top contenders. Given that Ghani’s vote was marginally higher than 50% and the large number of complaints needing resolution, a run-off between him and Abdullah Abdullah looked likely. The Presidential election worries of the war torn country were, therefore, far from over.
