Changing Economic Policy of the USA

 

Leasing out Pakistan

 

Najam Sethi  TFT Issue: 21 Mar 2014

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The Saudi Kingdom has granted $1.5b to the Nawaz Sharif government. Another such donation will accrue in due course. A quick fix of $3b is a lot of free money for Pakistan’s forex-strapped economy that is struggling to cope with significant international debt payments and a rising trade gap that is putting pressure on the rupee and fuelling inflation. Indeed, the Saudi injection has reversed the rapid fall of the rupee, proving that the finance minister, Ishaq Dar, was not bluffing when he warned exporters six weeks ago not to hoard their dollars. Why then all the hush-hush about the Good Samaritan who has eventually bailed him out?

Significantly, the PMLN government has been at pains to hide the Saudi largesse. But after we discovered that the cause of the sudden reversal in the fortunes of the rupee was due to an uplifting shot in the arm of the State Bank, we were told not to ask about the “friendly” source and amount of funds. Then, after we found out about the donor, we were told that the Saudi “donation” was a measure of the personal relationship between our prime minister and the Saudi monarch. That is when our happy surprise turned to suspicious incredulity and the game became crystal clear.

A clutch of high-powered Saudis, including the Crown Prince, has descended upon Islamabad in recent weeks. The prime minister and the Pakistan army chief have made unexplained flying visits to the Kingdom. In due course a joint statement or communiqué was issued from Islamabad stressing the demand for a “transitional” government in Syria while emphasizing that there was no change in Pakistan’s position on the issue. Indeed, the foreign office spokesperson, an apparently haughty lady, was quite aggressive in ticking off inquiring hacks who argued that the demand for a transitional government amounted to a veritable “regime change” in Syria and smacked of a definite policy about-turn. Mr Sartaj Aziz, the de facto foreign minister, has also executed some verbal gymnastics to try and obscure the truth. But we, the public, are not stupid or ill-informed. We are not ready to buy this story hook, line and sinker. We know there are no free lunches, let alone free feasts, in relations amongst nations. So what’s the $3b quid pro quo?

The truth is that Pakistan has agreed to supply, among other weapons, anti-aircraft and anti-tank rockets to the Saudis. Mr Aziz says the End-User Certificate conditions will guarantee that these are not used outside Saudi Arabia. This is a load of nonsense. Why the Saudis should suddenly turn to Pakistan for these weapons when traditionally they have tapped the US and Europe has, however, given the game away. These potential game-changing weapons are clearly meant for use by Saudi-backed Wahhabi-Salafist rebels in Syria who are fighting to overthrow the Baathist secular Asad regime. The Americans haven’t supplied the Saudis because they don’t want such radical Islamist forces any more than Al-Qaeda to succeed in Syria and are therefore having serious second thoughts about regime change in Syria. Indeed, the Saudis’ sudden embrace of Pakistan portends shifting sands in the Middle-East.

The Saudis and the Emirates-Gulfdoms are feeling insecure because of the Shia revival in their heartlands. This is because the restless Shias are sitting on their oil reserves. Iran, too, is unremitting in opposing Saudi influence. Iraq and Qatar, two competitive energy suppliers, are not playing ball either. Egypt and Libya haven’t bought into the Saudi Islamist line. Worse, the Americans are seeking negotiated nuclear solutions in Iran instead of succumbing to Saudi pressure for military action. And American self-reliance on shale gas is the first definite step against continued dependence on Saudi oil.

On the heels of the Saudi VVIPs now comes the King of Bahrain to Islamabad. The PMLN government claims that foreign investment deals are in the offing. But the small print betrays the real motive behind “renewed manpower exports”. The Bahraini Emir wants well-trained and equipped Pakistani military mercenaries to beef up his police and security forces to repress the rising democratic impulses of the majority Shia populations. It is as simple as that.

It is the same old treacherous story. Since independence in 1947, the Pakistani ruling classes and military establishment have lived off rents from leasing out their “services” to the highest foreign bidder instead of standing on their own feet and not meddling in other peoples business. In the 1950s, 60s and 80s, they sold their services to the Americans, first against the USSR and then against the Taliban; now, in the 2010s, they are rolling up their sleeves to stir the Middle-East cauldron at the behest of a rich “friend”. The extremist Sunni blow back from the first lease to the US in the shape of the Taliban, Al-Qaeda and Lashkar-e-Jhangvi is now primed for escalation and blow back during the proposed second lease to the Saudi-Emirates network. We are making another irrevocable blunder, so help us Allah.