12/7/2020

Missing political approaches

THE recent upsurge in incidents of terrorist violence,
mainly in Sindh and Balochistan, by violent ethno-
nationalist groups has revealed two things. First, the threat
of terrorism from both religiously inspired and nationalist
groups persists. Secondly, the underlying factors of
terrorism as well as conflict cannot be eliminated through
force alone; it requires a holistic approach including
political reconciliation and negotiation.
In Balochistan, the state has largely tried cosmetic and half-hearted
political options, which is why results have remained elusive. One
reason for the state’s reluctance to engage politically is related to the
fear that a softer approach towards violent actors would be interpreted
as the state’s weakness. Critics of this attitude, however, argue that
political engagement and negotiation will only earn the state the trust
of the marginalised and aggrieved.
But state institutions believe they can deal with the issue through hard
security approaches; even the weak reconciliatory processes of the past
happened under the influence of this perception. While the nationalist
insurgency in Sindh is not even considered a threat to national
security, the one in Balochistan is assessed to be on a low to medium
scale. But there are few prospects that these movements, mainly the
Baloch insurgency, will disappear soon. Constant security
engagement, however, has its own financial and political costs, and it
also builds up anger in communities, especially the youth.
The Balochistan Liberation Army has emerged as a major violent
group in Balochistan, and its operations have increased, especially
after the launch of CPEC. The BLA’s Majeed Brigade is dedicated to
targeting CPEC projects and other Chinese interests in the country.
This BLA section conducted the recent attack on the Pakistan Stock
Exchange. Though the attack was thwarted by the timely response of
law enforcers, the group achieved what it wanted: international focus.
 The grievances of the people are deep-rooted and
Balochistan has a long history of insurgency.
In recent weeks, Sindh has emerged as a violent flashpoint after a long
hiatus. Though no religiously inspired militant group was involved,
violent Sindhi actors drew domestic and international attention by
carrying out five attacks in June. The Sindhudesh Revolutionary Army
(SRA) and Sindhudesh Liberation Army (SLA) carried out attacks in
Karachi, Larkana and Ghotki, targeting the Rangers and an office of
the Ehsaas programme. The media had reported that the federal
interior ministry had decided to include these two Sindhi groups,
along with the Jeay Sindh Qaumi Mahaz, on its list of banned
organisations under the Anti-Terrorism Act. Sindhi insurgent groups
have a history of perpetrating sporadic, low-intensity attacks.
However, in June, they managed to create more impact in terms of the
number and intensity of attacks.
The increasing capacity of such Sindh-based groups is also seen as a
result of their nexus with Baloch insurgent groups. Reportedly, the
SLA and SRA have developed a nexus with the BLA, which is providing
training to their militants in return for logistical support for its
operations in Karachi. While the future impact of such links remains
to be seen, there is very little space for an insurgent movement to
develop in Sindh because of the growing middle class and the stakes of
the educated youth in the system. The political landscape is not fertile
for any popular separatist movement either.
Balochistan’s situation is completely different; the grievances of the
people are deep-rooted, and the province has a history of nationalist
insurgency and armed conflict. The political governments have tried to
give reconciliation a chance but in vain. In 2008, the PPP initiated a
special package for the province, Aghaz-i-Huqooq-i-Balochistan.
Similarly, former prime minister Mian Nawaz Sharif introduced the
Pur-Aman [peaceful] Balochistan initiative in 2015 for the return of
angry Baloch into the national mainstream. Later, the PTI government
decided to continue with the plan. The initiative was in line with the
National Action Plan, which promised to empower the provincial
government to deal with the problem politically. The approach was
based on the conclusion that Baloch separatists shall not be conflated
with Islamist militants, as the cause of the Baloch insurgency was
purely economic and political, and solutions should be political too.
The ‘securitisation’ standpoints, however, overshadowed these
political initiatives. The reconciliation processes begun by the
provincial governments — including former chief ministers Nawab
Aslam Raisani and Dr Abdul Malik Baloch — were abandoned on the
way without providing sound reasons. The security institutions
preferred the ‘surrender policy’ and announced incentives for
surrendering insurgents. Now Pur-Aman Balochistan revolves around
the surrender policy, although most political leaders and analysts
believe this is a flawed approach. Many influential sardars and
political leaders exploited the policy and managed fake surrenders for
financial and political advantages. The number of real fighters, called
farari, surrendering to the authorities is far less than claimed.
Last year, the Balochistan government had announced it would
facilitate 2,200 farari in getting employment, but little is known about
the initiative, except that the federal government had committed to
providing half the money (around Rs200 million) for it. But the
provincial government claims the amount has not been received so far
and that it is running the initiative through its own resources. The
rehabilitation of these fighters is a challenge. But when the returning
fighters are encouraged to form death squads to target the insurgents,
it discourages those willing to enter the mainstream. These death
squads also misuse power and do not bring a good name to the
security institutions.
The government has also failed to address the genuine grievances of
the people of Balochistan. Akhtar Mengal has parted ways with the
PTI government’s coalition, citing reasons of non-implementation of
two agreements made with his party. These agreements revolved
around ‘six points’ including the recovery of missing persons,
implementation of the National Action Plan, implementation of a six
per cent quota for Balochistan in the federal government, and the
construction of dams in the province to resolve the acute water crisis.
When the centre turned a deaf ear to these demands, it sent a negative
signal to the people of Balochistan. What more can the insurgents
want when the federal government itself is strengthening their
narrative?
The writer is a security analyst.
Published in Dawn, July 12th, 2020
The right to rule

irfan.husain@gmail.com
AMONG the first things senior military commanders are taught is never to fight
on two fronts.

Hitler and his Nazis learned this the hard way by attacking the Soviet Union while the
German army was engaged in the West. Although the USSR lost over 25 million
lives, the effort bled the Germans white, and led to their defeat.

In Germany’s case, it was Nazi ideology and Hitler’s hubris that drove the Panzers
towards Moscow. Today, it is largely Trump’s mantra of ‘Make America Great
Again’, combined with a right-wing belief in American supremacy, that has pushed
the country into a pointless feud with China.

This is not to imply that a shooting war is around the corner, or that China is entirely
blameless in this conflict. But basically, as the ban on Huawei demonstrates, the
Americans are terrified of losing their technological edge. So to hold China back
while they catch up, they are using their diplomatic clout to force compliant countries
like the UK to fall into line.

If Trump is re-elected, US-China tensions can be

expected to rise.
China, for its part, has refused to kowtow before American pressure, and has thus far
mostly matched American sanctions in the trade war. But its actions to claim
sovereignty over parts of the South China Sea has caused alarm across the region, and
lost it friends like Vietnam, Myanmar and the Philippines. South Korea and Japan are
now reviewing their defence postures against what they see as a resurgent China.

On the remote, mountainous Indo-Chinese border, the recent clashes show a

willingness on both sides to use whatever it takes to keep the bits of that useless land
they already have. Fortunately, good sense has prevailed in Beijing where the
leadership seems to have realised that it had opened too many fronts, and the one with
India could be moved to the back burner without losing much face.

When the opening up of the Chinese economy began under Deng Xiaoping, the new
post-Mao leadership realised that despite Mao’s rhetoric, the economic and military
imbalance between China and America was too great for an open confrontation. Their
long-term strategy was therefore to achieve economic strength that would lead to
acquiring modern military capability.

Until Xi Jinping’s elevation to the presidency, China’s immediate ambitions were

relatively modest, focusing on the economy, cutting-edge technology, modern
armaments and training. But increasingly, its naval and aerial patrols began
challenging US ships and planes that approached its coast.

Now, following Trump’s election, and his sabre-rattling over trade, Xi has stood his
ground and exchanged duty hike for duty hike. However, China’s brutal treatment of
the Uighur Muslims and its crackdown on Hong Kong protesters is helping America
forge an anti-China front. The emergence of Covid-19 in the Chinese city of Wuhan,
and Beijing’s mishandling of the early information about the disease, didn’t help
varnish China’s image either.

President Xi’s visionary Belt and Road Initiative has been suffering from delays and
charges of extortionate rates on loans, as well as allegedly corrupt practices by local
and Chinese investors. All these factors have combined to transform China into the
bad guy; luckily for Xi, Trump’s behaviour has moved the focus of some of this
acrimony to Washington.

But while there have been protests and editorials in the West against the inhumane
incarceration of up to a million Uighurs in Xinjiang province, the Muslim world has
been shamefully silent. Had this happened to a group of Muslims in the West, you can
bet there would be violent protests every day. But by staying out of the internal affairs
of usually harsh Muslim regimes, and selling them arms with no questions asked
about human rights violations, China has earned a get-out-of-jail card from most of
them.

If Trump gets re-elected, we can expect tensions to escalate with the real possibility of
the ongoing cold war turning into an armed conflict. Four more years of Trump are
too awful to contemplate. And even if Biden gets into the White House, don’t expect a
U-turn: both countries are carrying too much baggage at this point to back off.

I often ask English critics of the curtailment of freedom in Hong Kong how much
democracy was permitted in the colony when Britain was ruling it in the last century.
The fact is that far worse human rights violations have happened in ex-British
colonies in the recent past without drawing the kind of protests we are seeing against
the Chinese treatment of violent Hong Kong demonstrators.

There’s a general feeling in much of Europe and America that China’s rise is
upsetting the ‘natural order of things’. In fact, these were the words used by an
English politician who was castigated for racism recently. However, said or unsaid,
this is the sentiment in even liberal circles who seem to feel that somehow, the white
races have a God-given right to call the shots. So China’s rise is generally welcomed
by non-white countries.

irfan.husain@gmail.com

Published in Dawn, July 18th, 2020

Creative policies
EMERGING economies like Pakistan are facing an economic
catastrophe due to Covid-19. The World Bank recently noted
that analysts do not know how deep or persistent this
recession will be. Some days ago, the IMF said that economic
growth for Pakistan in 2020-21 is going to be even lower
than the government’s estimate of one per cent, dashing all
hopes of a V-shaped, or strong, economic recovery. This
plummeting economy, according to the Pakistan Institute of
Development Economics will result in 4.23 million
Pakistanis losing their jobs; 67m would be pushed into
poverty!
Chairing a meeting of economics and finance experts, the prime
minister correctly urged the need for out-of-the-box or creative
thinking to arrest the deteriorating economic situation. Surprisingly,
the experts came up with run-of-the-mill policies centred on
stimulating the economy through the construction and housing sector.
The problem with such thinking is that, instead of stimulating the
economy, a singular focus on construction and housing may actually
end up hurting it.
Last year, Atif Mian, the Pakistani-American economist, warned
against using a credit-fuelled housing programme since a big “…
increase in mortgage-credit and housing demand will fuel demand for
imports, without an increase in exports”.
Proponents of the construction and housing sector argue that Mian
was correct at the time because last year Pakistan was nursing a huge
current account deficit — about five per cent of GDP. But, the
economic situation, they aver, has recently taken a turn for the better
with the current account entering surplus territory and thus large
increases in housing demand will not weaken Pakistan’s external
position.
 A radical idea is that cash, like medicine, should
expire.
But, even a cursory look at trade data from the State Bank shows that
the improvement in Pakistan’s external position has come at the
expense of economic growth as exports are at a 13-year low. Creating a
huge demand for imports at a time when exports are down only means
that the current account will again become unsustainable in no time.
Are there any creative policies?
To find an answer, Pakistani policymakers may want to look at the
work of Silvio Gesell, whose admirers included John Maynard Keynes.
Gesell, like Keynes, understood the significance of injecting money in
order to escape from recessions, especially in capitalist economies. A
witness to the severe economic recession of 1891 in Argentina, Gesell
saw firsthand how uncertainty forced people to stop spending and
hold on to their cash reserves. This cash withdrawal from the economy
resulted in what was later termed a negative ‘multiplier effect’ by
Keynes. Once people stop spending and hoard cash, firms unable to
sell their wares fire workers who, in turn, end up losing their job and
money to buy goods, thereby negatively impacting the sales of
additional firms. In short, the negative impact of withdrawing cash
cascades far and wide bringing capitalist economies to a near
standstill, or to an economic growth rate of 1pc.
Giselle came up with a radical idea that cash, like medicine, should
expire. Specifically, cash savings would need to be stamped for a fee
after some time, otherwise the cash would become useless. What this
meant was that now savings in cash would incur a negative interest
rate creating an incentive for people to spend it sooner to avoid the
stamping fee. For years, cash with an expiry date remained a
theoretical idea, but during the Great Depression many cities in
Europe and the US ran successful experiments with stamped money.
In 1933, Irving Fisher, the famous economist, even lobbied US
Congress in favour of stamped money so that relief could be provided
to distressed Americans.
Giselle’s work has recently gained attention with papers being
published by the IMF, no less. Given the urgent need to stimulate this
economy and the lack of policy options, policymakers could
experiment with multiple creative policies. The government could
legislate that for the next year, one-fifth of all salaries would be paid in
a parallel currency — Pakistan riyal, if you will — that would expire if
not renewed every quarter. The parallel currency would not be
convertible into any other currency or be usable online. Rather, the
parallel currency would only be able to purchase goods made in
Pakistan, thereby providing a fillip to the local economy. Once the
economy starts to gain momentum, the riyals would be gradually
taken out with the government accepting them as payment for taxes or
train tickets.
Given the unprecedented economic shock unfolding due to Covid-19,
out-of-the-box solutions are required before the alarm bells becomes
deafening. Singular focus on run-of-the-mill policies is not the answer.
Policymakers need to come up with creative policies.
The writer teaches economics and public policy at Habib University.
aqdas.afzal@gmail.com
Published in Dawn, July 19th, 2020