IMRAN’S PAKISTAN AND A WEAPON CALLED ‘REVOCATION OF ARTICLE 370’
How the revocation of Article 370 has undone Pakistan economically.
How the revocation of Article 370 has undone Pakistan economically.
Come end Jan 2021 and it could well be a most interesting time for Pakistan. Why?
It all starts with Article 370, or rather its revocation. But let’s roll back a bit first.
Imran is sworn in as the Prime Minister in August 18th, 2018, but realises that the country is in a dire economic straits.
Saudi Arabia, to maintain its leverage, announced a $6.2-billion package in November 2018 to ease Pakistan’s external sector woes. The agreement is for over $3-billion cash support and $3.2-billion oil facility per annum.
UAE also agrees to replicate the $6.2-billion Saudi Arabian package in December 2018 in the same $3-billion cash support and $3.2-billion oil facility per annum terms.
Everything is going fine. Pakistan gets this $12.4 Billion aid. China is also there with its CPEC program and inconvenient loans. It also gets a loan from IMF. Everything is, though slightly precarious, still manageable and relatively hunky dory.
In Aug 2019 India revokes Article 370. Pakistan goes berserk. Given that the Pak Army has only ONE deliverable as its raison d’etre, which is Kashmir, or at least its wet dream, this seriously jeopardises its existence. Like always, beyond the likes of conducting Pulwama, Pakistan wants to create a global hue and cry and turns to UAE and KSA to help second it.
UAE and KSA, meanwhile, over a few years have realised:
They need to move away from Islamism, cos the money and oil to support it is running out. Moreover, if they DON’T initiate change management now, things will only get dire. They have to move to a collaborative, global value generation economy.
Iran is growing as a fundamentalist threat and it needs to be contained.
The enmity with Qatar and Qatar’s ability to initiate Arab Spring, keeping a radicalised population at home is like sitting on a tinderbox. They need to deradicalise both their policies and population.
India is a safe bet to invest its money in on account of its population and its technical abilities. They have already missed the China boat.
They need Israel to contain Iran. Come to think of it, they never really had that much ill will with Israel, as much as they have with Iran.These factors had pressed them into changing track and architect a completely new plan.
In this plan, playing the radical muslim card was fraught with danger. However, seeing KSA relinquish the ‘Sunni Islam’ leadership, Turkey, the Ottoman Empire redux, wanted its crown back from KAS. Thus, enmity toh hona hi tha!
In such a scenario, Pakistan, like yore, came seeking KSA’s help in chastising India into backtracking from the revocation of Article 370. Now, by now, India is both a stakeholder and collaborator to UAE’s and KSA’s change plan. Thus, while earlier it was OK to rail against India, kyoon ki, kissi ka baap ka kya jata hai?, the scenario had changed. Thus UAE and KSA politely asked Pakistan to pipe down.
Pakistan was having nothing of it. Plus, it was always adept at the game of playing one side against another. They thought they’d do the same with KSA. Pakistan saddled up to Turkey and said ‘Hum toh Mughal kaal se tumhare vanshaj hain!’. Erdogan said ‘Mera Kumbh mey bichdaa beta!’ They hugged and started playing Ertugrul on the populace!
KSA and UAE don’t like this. They politely ask Pakistan to pipe down again. They also ask Pakistan to not rail against India. However Erdogan says ‘Ghabrao nahi beta, hum tumhare saath hai’. Moreover, China is wanting to know what is happening with Gilgit? Pakistan makes noises about Kashmir.
UAE reduced its financial assistance to $2 billion and also shelved the plan to give a $3.2 billion oil facility on deferred payments.
Pakistan HAS to do something. So it goes to UN. En route it stops by Riyadh. He again tries to draw KSA into the Kashmir imbroglio. KSA refuses and asks him to pipe down on it. As a consolation offer to fly him to NY on KSA jet.
At UN Imran rants and raves. Moreover, during the meet, gets together with Turkey and Malaysia and decide to launch another Al Jazeera. If that wasn’t enough, even suggests will mediate with Iran. KSA is very miffed. When the plane is flying Imran Khan back, KSA recalls Imran’s jet back to Riyadh. Now Imran has to fly back by regular flight.
All along Imran is shuttling between IMF and World Bank to get some loans and trying to keep its neck out of the FATF noose. As also cosying up to Erdogan. By now, Pakistanis have stopped being Arabic and are en route to becoming Turks.
By this time both KSA & UAE are hopping mad. Not only did Imran refuse to send troops to fend off the Houthis, despite suckling up so much dollars from the 2 countries, he was cosying up with Turkey and Qatar. Not just that, at the meeting of Islamic States even threaten to dethrone KSA.
Meanwhile, UAE’s finds out, by way of investigation, that an attack in 2017 in Kandahar, which had left 5 UAE diplomats dead, was carried out by the Haqqani Network backed by ISI. Hell hath no fury!
KSA & UAE decide to pull the plug. They start demanding money back from Pakistan. Not just that, suspend credit on oil imports. Pakistan, in such strained circumstances has to keep organising money to pay them back.
Pakistan borrows money from China to pay them. Islamabad has so far paid $2 billion to Riyadh by borrowing from China.
Meanwhile, KSA & UAE decide to normalise relationship with Israel. They have their own compulsions. First, they need Israel’s defence tech. 2nd they need Israel’s intelligence. Third, they need Israels online tools to manage their population. Fourth, KSA is build a new city at the Sinai juncture. So that it is free of Iran and Houthis control. For which it needs to partner with Israel. Thus they decide to ease relationship. In this, both US and India also contribute.
Pakistan, smarting from the punishment UAE & KSA are giving, decide to poke them for normalising relationship with Israel. This really drives UAE mad. It asks for its money back too.
Both KSA & UAE have reportedly asked Pakistan to pay back 1 Billion to each by end Jan. Pakistan is now in a fix. It doesn’t have the money!
Not just that KSA & UAE are deporting Pakistanis working there in droves. Now the money which is remitted to Pakistan by its expats in Middle East is a large part of its foreign exchange reserve. Thus, this is directly hit.
On top of this, UAE has stopped issuing all work visas to Pakistanis. Now that realm, as a means of earning is stopped.
Since Israelis are to start arriving in Dubai from later this month and Pakistanis have deemed to be a threat to them, a class of Pakistanis, who form the major portion of Pakistani immigrants, are now being deported from Dubai.
Meanwhile, Pakistan’s best friend, Turkey, does little much other than send Bamsi Alp, Artuk Bey and other Ertugrul starts to visit in a show of solidarity. Pakistan DID help them out in Azerbaijan after all.
Erdogan’s Turkey has seen its economy slide into a pit. It has postponed its dreams of Ottoman Empire for the moment and has sought to woo Israel.
Seeing all its jobs go off in UAE and KSA, Pakistan is now running to establish diplomatic ties with Israel! Bamsi Alp forgotten!
Through this choppy waters, Pakistani currency has depreciated over 60%. This, ideally would have been great when there are foreign remittance coming in or when exporting. However, when it is a matter of paying external loans, it brings about nearly double the bleed.
Returning of Saudi & UAE loans and expiry of the oil facility will strain the official reserves of the central bank of Pakistan, which are built purely by taking these loans and credits.
On top of this, Pakistan has lost a $6 Billion case of Reko Diq mining contract and will have to organise that payment to A Barrick Gold Corp. and Antofagasta Plc
Seeing all this, China has decided to go easy on CPEC. It has cited security reasons. However, it might have to be with either putting the screws on Pakistan at this juncture and extracting from them. They want Gwadar and other pound of flesh. But, if they start going slow, not only do the project costs increases, but the longer it takes the project to finish, the further will the position to repayment be. Thus, setting off a spiral.
China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project from Karachi to Peshawar, due to the country’s weakening financial position.
Chinese loans to Pakistan has declined from a peak of USD 75 billion in 2016 to just $4 billion in 2019 to around $3 billion in 2020.
Pakistan now is not being able to organise money from IMF or World Bank or any such lending agencies. Thus have to borrow money at much higher rates, by taking commercial loans. On top of this the Damocles Sword of FATF swings.
The gas crisis in Pakistan is set to worsen in January 2021, as Sui Northern Gas Pipelines Limited (SNGPL) will face a shortage of 500 Million Cubic Feet per Day and will be left with no option but to close down Regasified Liquefied Natural Gas (RLNG) supply to the power sector.
Now Pakistan doesn’t have money to pay for an aircraft lease. Let alone have money to import COVID vaccines.
With Kashmir frmly in sight and accelerated by revocation of Article 370, Pakistan hurtles from one precariousness to another…all on the same slope.
Meanwhile, Imran Khan Government has allocated $7.7 Billion to Defence. This constituted an 11.8 percent increase from the budget of the previous year and was 18 percent of the total budget. This is for Army to ‘DEFEND’ Kashmir. The above doesn’t take into account the other hidden and security costs.
Pakistan has jumped up 5 places as the 10th most powerful Military in the world in 2021 followed by allying country Turkey. China Stands at #3. Pakistanis are very happy!
Pakistan’s chatterati are busy discussing ‘Muddi’ & ‘Arnab’!
The trajectory has been set for a while now, and it keeps going the same path!
THANK GOD FOR PAKISTAN’S OBSESSION WITH KASHMIR?
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