History Matters: Why we must acknowledge the claims of the Palestinians
By Joseph Levine, Boston Review, Sep/Oct 2008
Source
Excerpt:
"I have often been involved in arguments about the Israeli-Palestinian conflict that focus on its history. Usually, the defender of current Israeli behavior urges the importance of appreciating all that Israel has been through and why it exists in the first place. I respond by reviewing the dispossession of 1948, terror attacks on Arab villages in the ’50s, Israeli provocations over the DMZ on the Golan Heights in the ’50s and ’60s, and on and on. Eventually and invariably, the defender of Israeli behavior insists that we not be so distracted by the history, that we need to focus on resolving the current conflict, not rehearsing the past. And thus we are struck by a larger question: is the history of Israeli-Palestinian relations important in our attempts to solve the present problem?
I would answer affirmatively. Understanding the history is crucial—not all the details, of course, but the fundamental themes. It is not hard to identify the major elements of the two conflicting narratives of the Israeli-Palestinian conflict. In fact, sixty years after Israel’s founding, the two points of view were crystallized in the competing responses to the event: celebrations of Israeli Independence Day on the one hand, and remembrances of the Catastrophe (Nakba) on the other.
In the mainstream Zionist narrative—which includes liberal supporters—the State of Israel is the realization of legitimate Jewish nationalism. That project, having been sanctioned by the international community through both the League of Nations Mandate for Palestine (awarded to Great Britain with the understanding that the British would carry out their commitment described in the famous Balfour Declaration) and the UN partition resolution, was rejected by the Arab world. Because of this violent rejection, Israel has been forced to maintain a strong military and fight many wars as well as remain vigilant against constant terrorist attacks from its enemies. The liberal version here will admit that the settlement enterprise in the West Bank and Gaza was a mistake, and that often the Israeli government acts unwisely and unjustly. But the basic parameters of the narrative remain.
On the Palestinian side (which includes many Jews who fall outside the mainstream Zionist camp), the fundamental theme is that Zionist settlement in Palestine was a colonial enterprise, which flourished behind the guns of a major world power that did not have the right to dispose of this land, and that in order to erect an exclusivist Jewish state, the Zionists, once they achieved sufficient power, threw out most of the indigenous population and treated those that remained as second-class citizens. By and large, the Zionist enterprise is seen as similar to the European colonization of North America and Australia.
These are obviously broad-stroke descriptions, but they will do for now. With regard to these conflicting historical narratives, I have two points to make: first, there is a fact of the matter about their relative accuracy, and second, that it matters."
See the full text here.
Sunday, November 16, 2008
Uri Avnery: "Not You! You!!!"
This is a useful read. I think we can also add Darfur and Burma to the former category (of Tibet). What's interesting though is that the criteria that Uri Avnery presents, about having a popular leader and "exotic" culture and "sexy" people, are not necessarily true for these two countries. But they still became a rallying cry in the US and international media. Care to guess why?!
The insights in this piece also throw light on the uneven Pakistani reaction to the humanitarian crises in Kashmir and Parachinar recently. At around the same time, both of these regions suffered economic blockade and escalation in violence. In the case of Kashmir, we cried out, hands off! (with active support from security and media apparatus of the state). But for Parachinar, it was such a suffocating silence that reminded one of Josh's "woh habs hai ke loo ki dua mangte hain log".
"Not You! You!!!" - Tibet and Palestine
By Uri Avnery, CounterPunch, April 7, 2008
Source
"Hey! Take your hands off me! Not you! You!!!"--the voice of a young woman in the darkened cinema, an old joke.
"Hey! Take your hands off Tibet!" the international chorus is crying out, "But not from Chechnya! Not from the Basque homeland! And certainly not from Palestine!" And that is not a joke.
* * *
LIKE EVERYBODY else, I support the right of the Tibetan people to independence, or at least autonomy. Like everybody else, I condemn the actions of the Chinese government there. But unlike everybody else, I am not ready to join in the demonstrations.
Why? Because I have an uneasy feeling that somebody is washing my brain, that what is going on is an exercise in hypocrisy.
I don't mind a bit of manipulation. After all, it is not by accident that the riots started in Tibet on the eve of the Olympic Games in Beijing. That's alright. A people fighting for their freedom have the right to use any opportunity that presents itself to further their struggle.
I support the Tibetans in spite of it being obvious that the Americans are exploiting the struggle for their own purposes. Clearly, the CIA has planned and organized the riots, and the American media are leading the world-wide campaign. It is a part of the hidden struggle between the US, the reigning super-power, and China, the rising super-power - a new version of the "Great Game" that was played in central Asia in the 19th century by the British Empire and Russia. Tibet is a token in this game.
I am even ready to ignore the fact that the gentle Tibetans have carried out a murderous pogrom against innocent Chinese, killing women and men and burning homes and shops. Such detestable excesses do happen during a liberation struggle.
No, what is really bugging me is the hypocrisy of the world media. They storm and thunder about Tibet. In thousands of editorials and talk-shows they heap curses and invective on the evil China. It seems as if the Tibetans are the only people on earth whose right to independence is being denied by brutal force, that if only Beijing would take its dirty hands off the saffron-robed monks, everything would be alright in this, the best of all possible worlds.
* * *
THERE IS no doubt that the Tibetan people are entitled to rule their own country, to nurture their unique culture, to promote their religious institutions and to prevent foreign settlers from submerging them.
But are not the Kurds in Turkey, Iraq, Iran and Syria entitled to the same? The inhabitants of Western Sahara, whose territory is occupied by Morocco? The Basques in Spain? The Corsicans off the coast of France? And the list is long.
Why do the world's media adopt one independence struggle, but often cynically ignore another independence struggle? What makes the blood of one Tibetan redder than the blood of a thousand Africans in East Congo?
Again and again I try to find a satisfactory answer to this enigma. In vain.
Immanuel Kant demanded of us: "Act as if the principle by which you act were about to be turned into a universal law of nature." (Being a German philosopher, he expressed it in much more convoluted language.) Does the attitude towards the Tibetan problem conform to this rule? Does it reflect our attitude towards the struggle for independence of all other oppressed peoples?
Not at all.
* * *
WHAT, THEN, causes the international media to discriminate between the various liberation struggles that are going on throughout the world?
Here are some of the relevant considerations:
- Do the people seeking independence have an especially exotic culture?
- Are they an attractive people, i.e. "sexy" in the view of the media?
- Is the struggle headed by a charismatic personality who is liked by the media?
- It the oppressing government disliked by the media?
- Does the oppressing government belong to the pro-American camp? This is an important factor, since the United States dominates a large part of the international media, and its news agencies and TV networks largely define the agenda and the terminology of the news coverage.
- Are economic interests involved in the conflict?
- Does the oppressed people have gifted spokespersons, who are able to attract attention and manipulate the media?
* * *
FROM THESE points of view, there is nobody like the Tibetans. They enjoy ideal conditions.
Fringed by the Himalayas, they are located in one of the most beautiful landscapes on earth. For centuries, just to get there was an adventure. Their unique religion arouses curiosity and sympathy. Its non-violence is very attractive and elastic enough to cover even the ugliest atrocities, like the recent pogrom. The exiled leader, the Dalai Lama, is a romantic figure, a media rock-star. The Chinese regime is hated by many - by capitalists because it is a Communist dictatorship, by Communists because it has become capitalist. It promotes a crass and ugly materialism, the very opposite of the spiritual Buddhist monks, who spend their time in prayer and meditation.
When China builds a railway to the Tibetan capital over a thousand inhospitable kilometers, the West does not admire the engineering feat, but sees (quite rightly) an iron monster that brings hundreds of thousands of Han-Chinese settlers to the occupied territory.
And of course, China is a rising power, whose economic success threatens America's hegemony in the world. A large part of the ailing American economy already belongs directly or indirectly to China. The huge American Empire is sinking hopelessly into debt, and China may soon be the biggest lender. American manufacturing industry is moving to China, taking millions of jobs with it.
Compared to these factors, what have the Basques, for example, to offer? Like the Tibetans, they inhabit a contiguous territory, most of it in Spain, some of it in France. They, too, are an ancient people with their own language and culture. But these are not exotic and do not attract special notice. No prayer wheels. No robed monks.
The Basques do not have a romantic leader, like Nelson Mandela or the Dalai Lama. The Spanish state, which arose from the ruins of Franco's detested dictatorship, enjoys great popularity around the world. Spain belongs to the European Union, which is more or less in the American camp, sometimes more, sometimes less.
The armed struggle of the Basque underground is abhorred by many and is considered "terrorism", especially after Spain has accorded the Basques a far-reaching autonomy. In these circumstances, the Basques have no chance at all of gaining world support for independence.
The Chechnyans should have been in a better position. They, too, are a separate people, who have for a long time been oppressed by the Czars of the Russian Empire, including Stalin and Putin. But alas, they are Muslims - and in the Western world, Islamophobia now occupies the place that had for centuries been reserved for anti-Semitism. Islam has turned into a synonym for terrorism, it is seen as a religion of blood and murder. Soon it will be revealed that Muslims slaughter Christian children and use their blood for baking Pitta. (In reality it is, of course, the religion of dozens of vastly different peoples, from Indonesia to Morocco and from Kosova to Zanzibar.
The US does not fear Moscow as it fears Beijing. Unlike China, Russia does not look like a country that could dominate the 21st century. The West has no interest in renewing the Cold War, as it has in renewing the Crusades against Islam. The poor Chechnyans, who have no charismatic leader or outstanding spokespersons, have been banished from the headlines. For all the world cares, Putin can hit them as much as he wants, kill thousands and obliterate whole towns.
That does not prevent Putin from supporting the demands of Abkhazia and South Ossetia for separation from Georgia, a country which infuriates Russia.
* * *
IF IMMANUEL KANT knew what's going on in Kosova, he would be scratching his head.
The province demanded its independence from Serbia, and I, for one, supported that with all my heart. This is a separate people, with a different culture (Albanian) and its own religion (Islam). After the popular Serbian leader, Slobodan Milosevic, tried to drive them out of their country, the world rose and provided moral and material support for their struggle for independence.
The Albanian Kosovars make up 90% of the citizens of the new state, which has a population of two million. The other 10% are Serbs, who want no part of the new Kosova. They want the areas they live in to be annexed to Serbia. According to Kant's maxim, are they entitled to this?
I would propose a pragmatic moral principle: Every population that inhabits a defined territory and has a clear national character is entitled to independence. A state that wants to keep such a population must see to it that they feel comfortable, that they receive their full rights, enjoy equality and have an autonomy that satisfies their aspirations. In short: that they have no reason to desire separation.
That applies to the French in Canada, the Scots in Britain, the Kurds in Turkey and elsewhere, the various ethnic groups in Africa, the indigenous peoples in Latin America, the Tamils in Sri Lanka and many others. Each has a right to choose between full equality, autonomy and independence.
* * *
THIS LEADS us, of course, to the Palestinian issue.
In the competition for the sympathy of the world media, the Palestinians are unlucky. According to all the objective standards, they have a right to full independence, exactly like the Tibetans. They inhabit a defined territory, they are a specific nation, a clear border exists between them and Israel. One must really have a crooked mind to deny these facts.
But the Palestinians are suffering from several cruel strokes of fate: The people that oppress them claim for themselves the crown of ultimate victimhood. The whole world sympathizes with the Israelis because the Jews were the victims of the most horrific crime of the Western world. That creates a strange situation: the oppressor is more popular than the victim. Anyone who supports the Palestinians is automatically suspected of anti-Semitism and Holocaust denial.
Also, the great majority of the Palestinians are Muslims (nobody pays attention to the Palestinian Christians). Since Islam arouses fear and abhorrence in the West, the Palestinian struggle has automatically become a part of that shapeless, sinister threat, "international terrorism". And since the murders of Yasser Arafat and Sheik Ahmed Yassin, the Palestinians have no particularly impressive leader - neither in Fatah nor in Hamas.
The world media are shedding tears for the Tibetan people, whose land is taken from them by Chinese settlers. Who cares about the Palestinians, whose land is taken from them by our settlers?
In the world-wide tumult about Tibet, the Israeli spokespersons compare themselves - strange as it sounds - to the poor Tibetans, not to the evil Chinese. Many think this quite logical.
If Kant were dug up tomorrow and asked about the Palestinians, he would probably answer: "Give them what you think should be given to everybody, and don't wake me up again to ask silly questions."
Uri Avnery is an Israeli writer and peace activist with Gush Shalom. He is a contributor to CounterPunch's book
The insights in this piece also throw light on the uneven Pakistani reaction to the humanitarian crises in Kashmir and Parachinar recently. At around the same time, both of these regions suffered economic blockade and escalation in violence. In the case of Kashmir, we cried out, hands off! (with active support from security and media apparatus of the state). But for Parachinar, it was such a suffocating silence that reminded one of Josh's "woh habs hai ke loo ki dua mangte hain log".
"Not You! You!!!" - Tibet and Palestine
By Uri Avnery, CounterPunch, April 7, 2008
Source
"Hey! Take your hands off me! Not you! You!!!"--the voice of a young woman in the darkened cinema, an old joke.
"Hey! Take your hands off Tibet!" the international chorus is crying out, "But not from Chechnya! Not from the Basque homeland! And certainly not from Palestine!" And that is not a joke.
* * *
LIKE EVERYBODY else, I support the right of the Tibetan people to independence, or at least autonomy. Like everybody else, I condemn the actions of the Chinese government there. But unlike everybody else, I am not ready to join in the demonstrations.
Why? Because I have an uneasy feeling that somebody is washing my brain, that what is going on is an exercise in hypocrisy.
I don't mind a bit of manipulation. After all, it is not by accident that the riots started in Tibet on the eve of the Olympic Games in Beijing. That's alright. A people fighting for their freedom have the right to use any opportunity that presents itself to further their struggle.
I support the Tibetans in spite of it being obvious that the Americans are exploiting the struggle for their own purposes. Clearly, the CIA has planned and organized the riots, and the American media are leading the world-wide campaign. It is a part of the hidden struggle between the US, the reigning super-power, and China, the rising super-power - a new version of the "Great Game" that was played in central Asia in the 19th century by the British Empire and Russia. Tibet is a token in this game.
I am even ready to ignore the fact that the gentle Tibetans have carried out a murderous pogrom against innocent Chinese, killing women and men and burning homes and shops. Such detestable excesses do happen during a liberation struggle.
No, what is really bugging me is the hypocrisy of the world media. They storm and thunder about Tibet. In thousands of editorials and talk-shows they heap curses and invective on the evil China. It seems as if the Tibetans are the only people on earth whose right to independence is being denied by brutal force, that if only Beijing would take its dirty hands off the saffron-robed monks, everything would be alright in this, the best of all possible worlds.
* * *
THERE IS no doubt that the Tibetan people are entitled to rule their own country, to nurture their unique culture, to promote their religious institutions and to prevent foreign settlers from submerging them.
But are not the Kurds in Turkey, Iraq, Iran and Syria entitled to the same? The inhabitants of Western Sahara, whose territory is occupied by Morocco? The Basques in Spain? The Corsicans off the coast of France? And the list is long.
Why do the world's media adopt one independence struggle, but often cynically ignore another independence struggle? What makes the blood of one Tibetan redder than the blood of a thousand Africans in East Congo?
Again and again I try to find a satisfactory answer to this enigma. In vain.
Immanuel Kant demanded of us: "Act as if the principle by which you act were about to be turned into a universal law of nature." (Being a German philosopher, he expressed it in much more convoluted language.) Does the attitude towards the Tibetan problem conform to this rule? Does it reflect our attitude towards the struggle for independence of all other oppressed peoples?
Not at all.
* * *
WHAT, THEN, causes the international media to discriminate between the various liberation struggles that are going on throughout the world?
Here are some of the relevant considerations:
- Do the people seeking independence have an especially exotic culture?
- Are they an attractive people, i.e. "sexy" in the view of the media?
- Is the struggle headed by a charismatic personality who is liked by the media?
- It the oppressing government disliked by the media?
- Does the oppressing government belong to the pro-American camp? This is an important factor, since the United States dominates a large part of the international media, and its news agencies and TV networks largely define the agenda and the terminology of the news coverage.
- Are economic interests involved in the conflict?
- Does the oppressed people have gifted spokespersons, who are able to attract attention and manipulate the media?
* * *
FROM THESE points of view, there is nobody like the Tibetans. They enjoy ideal conditions.
Fringed by the Himalayas, they are located in one of the most beautiful landscapes on earth. For centuries, just to get there was an adventure. Their unique religion arouses curiosity and sympathy. Its non-violence is very attractive and elastic enough to cover even the ugliest atrocities, like the recent pogrom. The exiled leader, the Dalai Lama, is a romantic figure, a media rock-star. The Chinese regime is hated by many - by capitalists because it is a Communist dictatorship, by Communists because it has become capitalist. It promotes a crass and ugly materialism, the very opposite of the spiritual Buddhist monks, who spend their time in prayer and meditation.
When China builds a railway to the Tibetan capital over a thousand inhospitable kilometers, the West does not admire the engineering feat, but sees (quite rightly) an iron monster that brings hundreds of thousands of Han-Chinese settlers to the occupied territory.
And of course, China is a rising power, whose economic success threatens America's hegemony in the world. A large part of the ailing American economy already belongs directly or indirectly to China. The huge American Empire is sinking hopelessly into debt, and China may soon be the biggest lender. American manufacturing industry is moving to China, taking millions of jobs with it.
Compared to these factors, what have the Basques, for example, to offer? Like the Tibetans, they inhabit a contiguous territory, most of it in Spain, some of it in France. They, too, are an ancient people with their own language and culture. But these are not exotic and do not attract special notice. No prayer wheels. No robed monks.
The Basques do not have a romantic leader, like Nelson Mandela or the Dalai Lama. The Spanish state, which arose from the ruins of Franco's detested dictatorship, enjoys great popularity around the world. Spain belongs to the European Union, which is more or less in the American camp, sometimes more, sometimes less.
The armed struggle of the Basque underground is abhorred by many and is considered "terrorism", especially after Spain has accorded the Basques a far-reaching autonomy. In these circumstances, the Basques have no chance at all of gaining world support for independence.
The Chechnyans should have been in a better position. They, too, are a separate people, who have for a long time been oppressed by the Czars of the Russian Empire, including Stalin and Putin. But alas, they are Muslims - and in the Western world, Islamophobia now occupies the place that had for centuries been reserved for anti-Semitism. Islam has turned into a synonym for terrorism, it is seen as a religion of blood and murder. Soon it will be revealed that Muslims slaughter Christian children and use their blood for baking Pitta. (In reality it is, of course, the religion of dozens of vastly different peoples, from Indonesia to Morocco and from Kosova to Zanzibar.
The US does not fear Moscow as it fears Beijing. Unlike China, Russia does not look like a country that could dominate the 21st century. The West has no interest in renewing the Cold War, as it has in renewing the Crusades against Islam. The poor Chechnyans, who have no charismatic leader or outstanding spokespersons, have been banished from the headlines. For all the world cares, Putin can hit them as much as he wants, kill thousands and obliterate whole towns.
That does not prevent Putin from supporting the demands of Abkhazia and South Ossetia for separation from Georgia, a country which infuriates Russia.
* * *
IF IMMANUEL KANT knew what's going on in Kosova, he would be scratching his head.
The province demanded its independence from Serbia, and I, for one, supported that with all my heart. This is a separate people, with a different culture (Albanian) and its own religion (Islam). After the popular Serbian leader, Slobodan Milosevic, tried to drive them out of their country, the world rose and provided moral and material support for their struggle for independence.
The Albanian Kosovars make up 90% of the citizens of the new state, which has a population of two million. The other 10% are Serbs, who want no part of the new Kosova. They want the areas they live in to be annexed to Serbia. According to Kant's maxim, are they entitled to this?
I would propose a pragmatic moral principle: Every population that inhabits a defined territory and has a clear national character is entitled to independence. A state that wants to keep such a population must see to it that they feel comfortable, that they receive their full rights, enjoy equality and have an autonomy that satisfies their aspirations. In short: that they have no reason to desire separation.
That applies to the French in Canada, the Scots in Britain, the Kurds in Turkey and elsewhere, the various ethnic groups in Africa, the indigenous peoples in Latin America, the Tamils in Sri Lanka and many others. Each has a right to choose between full equality, autonomy and independence.
* * *
THIS LEADS us, of course, to the Palestinian issue.
In the competition for the sympathy of the world media, the Palestinians are unlucky. According to all the objective standards, they have a right to full independence, exactly like the Tibetans. They inhabit a defined territory, they are a specific nation, a clear border exists between them and Israel. One must really have a crooked mind to deny these facts.
But the Palestinians are suffering from several cruel strokes of fate: The people that oppress them claim for themselves the crown of ultimate victimhood. The whole world sympathizes with the Israelis because the Jews were the victims of the most horrific crime of the Western world. That creates a strange situation: the oppressor is more popular than the victim. Anyone who supports the Palestinians is automatically suspected of anti-Semitism and Holocaust denial.
Also, the great majority of the Palestinians are Muslims (nobody pays attention to the Palestinian Christians). Since Islam arouses fear and abhorrence in the West, the Palestinian struggle has automatically become a part of that shapeless, sinister threat, "international terrorism". And since the murders of Yasser Arafat and Sheik Ahmed Yassin, the Palestinians have no particularly impressive leader - neither in Fatah nor in Hamas.
The world media are shedding tears for the Tibetan people, whose land is taken from them by Chinese settlers. Who cares about the Palestinians, whose land is taken from them by our settlers?
In the world-wide tumult about Tibet, the Israeli spokespersons compare themselves - strange as it sounds - to the poor Tibetans, not to the evil Chinese. Many think this quite logical.
If Kant were dug up tomorrow and asked about the Palestinians, he would probably answer: "Give them what you think should be given to everybody, and don't wake me up again to ask silly questions."
Uri Avnery is an Israeli writer and peace activist with Gush Shalom. He is a contributor to CounterPunch's book
Why do we love to hate the IMF?
An interesting read.
Why do we love to hate the IMF?
By M. Ziauddin, Dawn, November 15, 2008
Source
I PUT this question to a number of knowledgeable people. Most blamed the IMF conditionalities. According to one economic writer, regimes in Pakistan without exception prefer nice and easy money that can easily be diverted to their comforts.
In the opinion of a former top banker who negotiated the last two Fund programmes on behalf of Pakistan Islamabad has no option left now but to go to the lender of last resort. He advised the president to stop listening to sycophants who, he said, are not telling the president the truth. A former IMF staffer echoed the same sentiments and said time was running out.
One senior economic journalist said it is the Fund not the government which is reluctant to have anything to do with Pakistan because of its past experience with the country and also because of what he described as the very low financial credibility of the current political leadership.
A banker shot back: what do you personally believe?
Well, I confess I have yet to come across a real IMF success story. And in the case of Pakistan at least Fund programmes, more often than not, have acted more like the proverbial touch of Midas. The one-size-fits-all IMF prescriptions are supposed to entail all-round but equitable hardship during the implementation phase lasting three to five years.
As the Fund-prescribed reforms bite into subsidies and increase the user costs of social services, the poor undergo a lot of hardship. The rich on the other hand are obliged to endure their share of hardship by paying their taxes honestly, without any exemptions or exceptions, with evasion and avoidance holes plugged and pilferage of utilities stopped completely. Meanwhile, expenditure is to be kept on a tight leash.
Since Pakistan’s policymakers and official economic managers both belong to the ruling elite comprising the civil-military bureaucracy, big business and the feudal aristocracy, they readily comply with that part of the Fund programme reforms which involve increasing the hardship of the poor — slashing subsidies, spiking prices and hiking tax rates.
But they drag their feet on Fund conditionalities that demand extracting equitable hardships from the rich — cut in defence budgets, broadening of the tax base, rationalisation of profit margins and eradication of rent-seeking practices. And by the time the second tranche is due the programme is abandoned on one excuse or the other.
That the Pakistani ruling elite takes the Fund management on a ride every time the country finds itself cornered into an IMF programme is no more a secret. But the Fund has never been able to do anything about it because it is not geared for such a role. And there are reasons for this sorry state of affairs.
From the managing director of the IMF down to its lowly officer cadre they are all appointed on a quota basis rather than on merit. To make the recruitment policy even more meritless the civil services of member countries are offered the quota jobs. That is the reason why the Fund has never been known to have come up with anything more creative than its now infamous one-size-fits-all prescription to solve economic problems that differ in nature from recipient to recipient. That is also the reason why the Fund had no clue about what was going on in the global financial market until banks in the rich countries started collapsing.
Secondly, the US has been known to have used the Fund on occasions to promote its own global political agenda. So, depending on what the US wanted at a particular juncture the Fund has either been too generous with Pakistan or has tightened the screws without any economic rhyme or reason.
Take for example the three-year Poverty Reduction and Growth Facility (PRGF) which was signed in December 2001 but abandoned after two years with claims that Pakistan had at last broken the begging bowl. But in fact by that time the 9/11-related free lunch had been served and the ruling elite found it in its self-interest to ease out of the PRGF before the next generation of reforms affecting the rich was due.
We did the same in the early 1980s as well. As soon as the first Afghan war-related dollars started flowing in a very generous IMF programme (the Extended Fund Facility) was abandoned after the first tranche was released in return for denying the poor their two square meals.
And the two Fund-sponsored reschedulings of the 1970s and the two Standby Agreements (SBAs) of the 1990s could not be completed because the economy on all these four occasions had gone into a tailspin as a consequence of Fund-imposed recession, high unemployment and rising inflation.
Pakistan has never ever completed an IMF programme. Even the one that is touted as successfully completed — the SBA of 2000 — achieved that distinction only after a number of waivers, mostly concerning taxation and expenditure, were allowed.And paradoxically every time a Fund programme (there have been as many as seven in the last 35 years) was curtailed after making the life of the poor more difficult and that of the rich more cushy, the national economy slid farther down the pole.
And where did all the US billions that came in, first in the 1980s and then in the current decade, go? Well, most of it was used for purchasing sophisticated weapons systems and the rest was pocketed by the ruling elite, especially big business, mostly stock brokers this time.
The writer is Dawn’s special correspondent in London.
Why do we love to hate the IMF?
By M. Ziauddin, Dawn, November 15, 2008
Source
I PUT this question to a number of knowledgeable people. Most blamed the IMF conditionalities. According to one economic writer, regimes in Pakistan without exception prefer nice and easy money that can easily be diverted to their comforts.
In the opinion of a former top banker who negotiated the last two Fund programmes on behalf of Pakistan Islamabad has no option left now but to go to the lender of last resort. He advised the president to stop listening to sycophants who, he said, are not telling the president the truth. A former IMF staffer echoed the same sentiments and said time was running out.
One senior economic journalist said it is the Fund not the government which is reluctant to have anything to do with Pakistan because of its past experience with the country and also because of what he described as the very low financial credibility of the current political leadership.
A banker shot back: what do you personally believe?
Well, I confess I have yet to come across a real IMF success story. And in the case of Pakistan at least Fund programmes, more often than not, have acted more like the proverbial touch of Midas. The one-size-fits-all IMF prescriptions are supposed to entail all-round but equitable hardship during the implementation phase lasting three to five years.
As the Fund-prescribed reforms bite into subsidies and increase the user costs of social services, the poor undergo a lot of hardship. The rich on the other hand are obliged to endure their share of hardship by paying their taxes honestly, without any exemptions or exceptions, with evasion and avoidance holes plugged and pilferage of utilities stopped completely. Meanwhile, expenditure is to be kept on a tight leash.
Since Pakistan’s policymakers and official economic managers both belong to the ruling elite comprising the civil-military bureaucracy, big business and the feudal aristocracy, they readily comply with that part of the Fund programme reforms which involve increasing the hardship of the poor — slashing subsidies, spiking prices and hiking tax rates.
But they drag their feet on Fund conditionalities that demand extracting equitable hardships from the rich — cut in defence budgets, broadening of the tax base, rationalisation of profit margins and eradication of rent-seeking practices. And by the time the second tranche is due the programme is abandoned on one excuse or the other.
That the Pakistani ruling elite takes the Fund management on a ride every time the country finds itself cornered into an IMF programme is no more a secret. But the Fund has never been able to do anything about it because it is not geared for such a role. And there are reasons for this sorry state of affairs.
From the managing director of the IMF down to its lowly officer cadre they are all appointed on a quota basis rather than on merit. To make the recruitment policy even more meritless the civil services of member countries are offered the quota jobs. That is the reason why the Fund has never been known to have come up with anything more creative than its now infamous one-size-fits-all prescription to solve economic problems that differ in nature from recipient to recipient. That is also the reason why the Fund had no clue about what was going on in the global financial market until banks in the rich countries started collapsing.
Secondly, the US has been known to have used the Fund on occasions to promote its own global political agenda. So, depending on what the US wanted at a particular juncture the Fund has either been too generous with Pakistan or has tightened the screws without any economic rhyme or reason.
Take for example the three-year Poverty Reduction and Growth Facility (PRGF) which was signed in December 2001 but abandoned after two years with claims that Pakistan had at last broken the begging bowl. But in fact by that time the 9/11-related free lunch had been served and the ruling elite found it in its self-interest to ease out of the PRGF before the next generation of reforms affecting the rich was due.
We did the same in the early 1980s as well. As soon as the first Afghan war-related dollars started flowing in a very generous IMF programme (the Extended Fund Facility) was abandoned after the first tranche was released in return for denying the poor their two square meals.
And the two Fund-sponsored reschedulings of the 1970s and the two Standby Agreements (SBAs) of the 1990s could not be completed because the economy on all these four occasions had gone into a tailspin as a consequence of Fund-imposed recession, high unemployment and rising inflation.
Pakistan has never ever completed an IMF programme. Even the one that is touted as successfully completed — the SBA of 2000 — achieved that distinction only after a number of waivers, mostly concerning taxation and expenditure, were allowed.And paradoxically every time a Fund programme (there have been as many as seven in the last 35 years) was curtailed after making the life of the poor more difficult and that of the rich more cushy, the national economy slid farther down the pole.
And where did all the US billions that came in, first in the 1980s and then in the current decade, go? Well, most of it was used for purchasing sophisticated weapons systems and the rest was pocketed by the ruling elite, especially big business, mostly stock brokers this time.
The writer is Dawn’s special correspondent in London.
Thursday, October 30, 2008
Pakistan Scrambles to Aid Earthquake Survivors in Balochistan
Kids in Pakistan quake zone beg for food
By Ashraf Khan, AP, October 30, 2008
Source
WAM, Pakistan – Children begged for food from trucks passing through Pakistan's quake zone Thursday as the death toll rose to 215 and survivors prepared for another frigid night camped out amid wrecked mountain villages.
Provincial government minister Zamrak Khan said 215 people died and hospitals were still treating dozens of people who were seriously injured in the 6.4-magnitude quake that struck before dawn Wednesday.
Soldiers and foreign aid groups distributed blankets, warm clothes and tents, in Baluchistan province, near the Afghan border, but many among the estimated 15,000 homeless complained of receiving little help.
"The earthquake destroyed our houses, but now the government's slow response is killing us," said Moosa Kaleem, sitting with his wife and four children in the town of Ziarat. "We cannot spend another night in this chilling weather, especially the kids."
A poorly managed aid effort in Baluchistan could add to anti-government sentiment as the country's new leaders battle violence by Islamist extremists and try to fix mounting economic problems.
The region is home to a separatist movement but has been spared the level of militant influence and violence seen in other tribal areas along the Afghan border.
Members of hard-line Islamist political parties and groups, including one listed by the United States as a terrorist organization, were among the first to aid quake victims.
The same groups helped out in the aftermath of a quake that killed 80,000 people in Kashmir and northern Pakistan in 2005, something analysts say gave them added legitimacy.
Aid groups said emergency shelter and warm clothing were urgently needed. Temperatures are close to freezing in the worst-affected areas more than 6,561 feet above sea level.
Dozens of children lined main roads in the region running after trucks in the hope of being thrown food.
"I am hungry, my mother is hungry," said 9-year-old Zarin Gull. "We must get food. We last ate yesterday evening."
The need for shelter was specially acute because many people, whose homes were untouched or only partially damaged, were choosing to sleep outdoors for fear of aftershocks.
Local officials and lawmakers repeatedly called on the central government and international community to provide more help.
"It is a complete emergency here. Nobody has anything to eat and drink," said Ziarat Mayor Dilawar Kakar. "We need a lot of resources to reconstruct, and stabilize these trauma stricken people."
The U.N. World Food Program pledged to supply two months worth of emergency rations for those displaced by the disaster, while the Red Cross was distributing 2,500 tents.
In the hillside hamlet of Kawas, soldiers distributed blankets, tents and sleeping bags to an impatient crowd of 500 people and helped load two dozen trucks with supplies destined for other areas.
In the capital Islamabad, Farooq Ahmad Khan, chairman of the National Disaster Management Authority, said Pakistan had not issued an appeal for foreign assistance, but any help would be accepted.
Pakistan is prone to seismic upheavals since it sits atop an area of collision between the Eurasian and Indian tectonic plates, the same force responsible for the birth of the Himalayan mountains.
---------
Also see,
Pakistan Scrambles to Aid Earthquake Survivors
WSJ, October 30, 2008
Source
WAM, Pakistan -- Authorities scrambled to help earthquake survivors in the frigid mountains of southwestern Pakistan on Thursday, as the death toll from the temblor rose to 215.
The 6.4-magnitude quake hit an area of Pakistan's Baluchistan province near the Afghan border before dawn Wednesday, demolishing an estimated 2,000 homes in a string of villages.
"Oh God, what have you done?" wailed one woman as she surveyed the ruins of hard-hit Wam village. The woman, who didn't give her name, said she had lost two brothers, two sons and a sister-in-law.
More than 24 hours after the quake struck the impoverished region, residents and emergency workers mounted a final search for survivors or bodies buried in the rubble.
With reports still coming in from outlying areas, provincial government minister Zamrak Khan said the number of dead had risen to 215 and that hospitals were still treating dozens of seriously injured people.
The army airlifted supplies and medical teams into the hard-hit Ziarat district, where an estimated 15,000 people were left homeless in the region, which is some 26,561 feet above sea level.
Officials said several thousand people spent Wednesday night in tent camps erected by the military. But soldiers were unable to reach all outlying areas before temperatures plunged to around the freezing.
In the hillside hamlet of Kawas, soldiers distributed blankets, tents, jackets and sleeping bags to an impatient crowd of 500 people and helped load two dozen trucks with supplies destined for other areas.
Dozens of people had slept in the open near the rubble of their simple mud and stone houses. "We passed the night shivering and with the children crying. There were five of us wrapped in one blanket," said Ala Uddin, a 30-year-old farmer camped with about 15 relatives in an apple orchard.
The International Committee of the Red Cross said it was distributing some 2,500 tents while a medical team with one ton of supplies was helping at overcrowded hospitals.
"Overall, we think the situation is under control though there is urgent need for shelter and blankets because it is freezing up there," Red Cross spokesman Marco Succi said. The need for shelter was high because many people were too scared to sleep even in undamaged homes as aftershocks continued to rattle the region, he said.
The latest earthquake comes at a precarious time for Pakistan, with the civilian government battling al Qaeda and Taliban attacks as well as a looming economic crisis.
At least three hard-line Islamic organizations were quick to aid quake survivors, according to an Associated Press reporter who toured the area. Among them was Jamaat-ud-Dawa, designated a terrorist group by the U.S. government for links to Muslim separatists fighting in India's portion of the disputed Himalayan region of Kashmir.
In October 2005, the group set up relief camps for survivors of a 7.6-magnitude quake that devastated Kashmir and northern Pakistan, killing about 80,000 people and leaving hundreds of thousands homeless.
Countries including the U.S. and Germany have offered to help with the latest disaster. However, officials say they can cope without a big international aid effort.
- AP
Monday, October 27, 2008
American involvement in Pakistan
A proxy occupation force?
Shireen Mazari, The News, October 22, 2008
Source
Excerpts:
"Coming back to the Pakistani state and its concessions to the U.S., while a complete picture is probably not possible, one does not require an in-camera briefing to make some general assessments as to what has been conceded by Pakistan post-9/11 to the U.S. But a reminder would be timely right now when we are seeing a resumption of the silence on continued U.S. attacks in FATA against our citizens and our sovereignty.
Certainly, in the early days of our entering the U.S.-led "war on terror," we offered certain strategic bases of which Jacobabad has since been returned apparently over two years ago (or so one is informed, but there is always the trust factor that is not totally there for us ordinary citizens). In any case, since our initial giving on this count, we have clearly given some base-like facilities to the U.S. around Warsak, although, ostensibly, here there are only "trainers" for the FC and other Pakistani units involved in anti-terror operations. But as we all know, even the presence of a few U.S. trainers requires a whole base-like infrastructure in terms of food (they do not trust the local variety), entertainment, logistics, communications (heaven forbid that they have to rely on ours), security, and so on. So, even if informally, we have a base presence in the Warsak area now. As for the Shamsi base in Balochistan where there are Predators, one can safely assume that the U.S. would find it tempting to target Iran from this prime location (westward of Khuzdar). It is time we took back this base which is undermining our own regional security parameters.
Beyond bases, Pakistan also agreed to information/intelligence sharing and so all the equipment at airports, ports, and so on, through which information is gathered is shared with the Americans. But it seems there is little reciprocity from the U.S. side on this count. What is unclear, and I wonder if we will ever know truly, the compromises made by Pakistan on renditions and the handing over of Pakistani citizens to the U.S.. What we do know is that some agreement on this count was also put in place, with some individuals actually making money as a result – to Pakistan's eternal shame. It would also appear that this agreement continues since Zardari, despite grandiose statements, did not even mention Dr Afia Siddiqui's name while in the U.S. recently.
It also appears that we allowed, and continue to do so, 24-hour overflights for U.S. and NATO tactical operations over/through Pakistani airspace. Such instructions have been given to our air traffic controllers. In addition, over briefings given in the past, we were told that all Predator/missile attacks the U.S. undertook were initially done with permission from Pakistan. But now it appears they have stopped seeking that permission. In fact, the Libbi strike was also carried out without Pakistani permission so we do not know when the U.S. altered policy and chose not to inform, let alone seek Pakistani permission for attacks on Pakistani territory.
What we do know is that there was no agreement on ground attacks by U.S. forces. Tut since the present government has been in power a question mark hangs over this aspect of so-called cooperation with the U.S. Especially since, after Zardari declared in New York, that Pakistani forces had not fired on U.S. intruders, there has been not even a murmur of protest at the increasing U.S. violations against Pakistani sovereignty and Pakistani citizens. In fact, so emboldened have the U.S. and NATO become that, for the first time, in a reversal of the earlier stance, the NATO command has declared support for U.S. intrusions into Pakistan! So, an intelligent conclusion would be that our new government has added to the concessions made by Musharraf."
Shireen Mazari, The News, October 22, 2008
Source
Excerpts:
"Coming back to the Pakistani state and its concessions to the U.S., while a complete picture is probably not possible, one does not require an in-camera briefing to make some general assessments as to what has been conceded by Pakistan post-9/11 to the U.S. But a reminder would be timely right now when we are seeing a resumption of the silence on continued U.S. attacks in FATA against our citizens and our sovereignty.
Certainly, in the early days of our entering the U.S.-led "war on terror," we offered certain strategic bases of which Jacobabad has since been returned apparently over two years ago (or so one is informed, but there is always the trust factor that is not totally there for us ordinary citizens). In any case, since our initial giving on this count, we have clearly given some base-like facilities to the U.S. around Warsak, although, ostensibly, here there are only "trainers" for the FC and other Pakistani units involved in anti-terror operations. But as we all know, even the presence of a few U.S. trainers requires a whole base-like infrastructure in terms of food (they do not trust the local variety), entertainment, logistics, communications (heaven forbid that they have to rely on ours), security, and so on. So, even if informally, we have a base presence in the Warsak area now. As for the Shamsi base in Balochistan where there are Predators, one can safely assume that the U.S. would find it tempting to target Iran from this prime location (westward of Khuzdar). It is time we took back this base which is undermining our own regional security parameters.
Beyond bases, Pakistan also agreed to information/intelligence sharing and so all the equipment at airports, ports, and so on, through which information is gathered is shared with the Americans. But it seems there is little reciprocity from the U.S. side on this count. What is unclear, and I wonder if we will ever know truly, the compromises made by Pakistan on renditions and the handing over of Pakistani citizens to the U.S.. What we do know is that some agreement on this count was also put in place, with some individuals actually making money as a result – to Pakistan's eternal shame. It would also appear that this agreement continues since Zardari, despite grandiose statements, did not even mention Dr Afia Siddiqui's name while in the U.S. recently.
It also appears that we allowed, and continue to do so, 24-hour overflights for U.S. and NATO tactical operations over/through Pakistani airspace. Such instructions have been given to our air traffic controllers. In addition, over briefings given in the past, we were told that all Predator/missile attacks the U.S. undertook were initially done with permission from Pakistan. But now it appears they have stopped seeking that permission. In fact, the Libbi strike was also carried out without Pakistani permission so we do not know when the U.S. altered policy and chose not to inform, let alone seek Pakistani permission for attacks on Pakistani territory.
What we do know is that there was no agreement on ground attacks by U.S. forces. Tut since the present government has been in power a question mark hangs over this aspect of so-called cooperation with the U.S. Especially since, after Zardari declared in New York, that Pakistani forces had not fired on U.S. intruders, there has been not even a murmur of protest at the increasing U.S. violations against Pakistani sovereignty and Pakistani citizens. In fact, so emboldened have the U.S. and NATO become that, for the first time, in a reversal of the earlier stance, the NATO command has declared support for U.S. intrusions into Pakistan! So, an intelligent conclusion would be that our new government has added to the concessions made by Musharraf."
Addressing Baloch Grievances
Balochistan matters
Dawn Editorial, October 28, 2008
Source
THE Shaheed Benazir Bhutto Reconciliatory Committee on Balochistan that was formed last April is finally showing signs of stirring. On Sunday, it revealed a roadmap incorporating among other things a plan to work on reconciliation, reconstruction of national institutions in the province and the reallocation of resources. A jirga is scheduled for later this week to discuss the strategy that has President’s Zardari’s approval. It is to be hoped that there are no delays and its composition will be inclusive of all opinion. The government, in all sincerity, should attempt to implement the proposals aimed at dispelling Baloch grievances and bringing back the alienated people of the province into the national mainstream. True, there is some doubt on this score considering that some very concrete proposals made by a parliamentary committee in 2005 to address Balochistan’s woes fell by the wayside. But unlike the previous political dispensation, this government is the outcome of a popular mandate and there is greater pressure on it to turn in a better performance.
This is the right time to strive — and to be seen as doing so — for Balochistan’s uplift. The ceasefire declared by Baloch militants last month has largely held while the army has scaled back its operations. It may be difficult to effect a reconciliation among the various aggrieved segments of society at the moment, especially in view of the thousands of ordinary civilians who were made to feel the military’s wrath during an intense operation against the militants. But it is imperative that the path leading to reconciliation is paved with positive actions involving major development in the province, greater provincial autonomy, more equitable resource-sharing and job opportunities for the Baloch many of whom feel that outsiders are being given preference in employment.
Promises have to be translated into reality to make the Baloch have a real sense of ownership in their province. These include making the necessary constitutional amendments envisaged by the roadmap and promised earlier by the prime minister who said after the February polls that the Concurrent List would be abolished within a year to allow the provinces more autonomy in their affairs. It is equally important to give a fair hearing to Balochistan’s demand for more equitable resource distribution. It is incumbent on the new National Finance Commission to ensure that the next award guarantees satisfactory gains for the province which has long wanted factors such as poverty and under-development to be among the main criteria for distribution. Balochistan, along with the other smaller provinces, has strongly felt the injustice of a population-based formula that has favoured Punjab, and it is about time its voice was heard in this regard. Failing to do so would mean a return to militancy in the province and the consequent weakening of the state.
Dawn Editorial, October 28, 2008
Source
THE Shaheed Benazir Bhutto Reconciliatory Committee on Balochistan that was formed last April is finally showing signs of stirring. On Sunday, it revealed a roadmap incorporating among other things a plan to work on reconciliation, reconstruction of national institutions in the province and the reallocation of resources. A jirga is scheduled for later this week to discuss the strategy that has President’s Zardari’s approval. It is to be hoped that there are no delays and its composition will be inclusive of all opinion. The government, in all sincerity, should attempt to implement the proposals aimed at dispelling Baloch grievances and bringing back the alienated people of the province into the national mainstream. True, there is some doubt on this score considering that some very concrete proposals made by a parliamentary committee in 2005 to address Balochistan’s woes fell by the wayside. But unlike the previous political dispensation, this government is the outcome of a popular mandate and there is greater pressure on it to turn in a better performance.
This is the right time to strive — and to be seen as doing so — for Balochistan’s uplift. The ceasefire declared by Baloch militants last month has largely held while the army has scaled back its operations. It may be difficult to effect a reconciliation among the various aggrieved segments of society at the moment, especially in view of the thousands of ordinary civilians who were made to feel the military’s wrath during an intense operation against the militants. But it is imperative that the path leading to reconciliation is paved with positive actions involving major development in the province, greater provincial autonomy, more equitable resource-sharing and job opportunities for the Baloch many of whom feel that outsiders are being given preference in employment.
Promises have to be translated into reality to make the Baloch have a real sense of ownership in their province. These include making the necessary constitutional amendments envisaged by the roadmap and promised earlier by the prime minister who said after the February polls that the Concurrent List would be abolished within a year to allow the provinces more autonomy in their affairs. It is equally important to give a fair hearing to Balochistan’s demand for more equitable resource distribution. It is incumbent on the new National Finance Commission to ensure that the next award guarantees satisfactory gains for the province which has long wanted factors such as poverty and under-development to be among the main criteria for distribution. Balochistan, along with the other smaller provinces, has strongly felt the injustice of a population-based formula that has favoured Punjab, and it is about time its voice was heard in this regard. Failing to do so would mean a return to militancy in the province and the consequent weakening of the state.
Pakistan wary of IMF demands
Pakistan wary of IMF demands
By Syed Fazl-e-Haider, Asia Times, October 28, 2008
Source
QUETTA, Pakistan - Pakistan officials in talks with the International Monetary Fund (IMF) for a rescue package aimed at helping the country resolve balance of payments difficulties will face harsh demands rather than negotiating points, according to local analysts.
The United States is using the Washington-based and largely US-financed IMF as a tool to impose its own terms and conditions related to the "war on terror", in which Pakistan has been declared by the US as a major theater of war, the analysts said.
An IMF-assisted program is seen as essential before Islamabad, which failed last week to win financial support from China, can secure assistance from other donor countries and international financial institutions.
Islamabad has come out strongly against the US launching air strikes and ground operations against Taliban militants in Pakistani territory. Army chief General Ashfaq Parvez Kiani recently said that Pakistan would not allow any incursion by the United States or other allies inside its territory and vowed to protect Pakistan's borders at all costs.
Islamabad wants to handle the terrorist threat by itself within its borders and is seeking to deter the US from mounting cross-border raids on al-Qaeda and Taliban targets.
"The IMF does not negotiate but dictates its terms and this time the US has in fact pressurized Pakistan to turn to the IMF by not giving much-needed cash to the country in the meeting last month of the Friends of Pakistan," economist Shahid Hasan Siddiqi said on a private TV channel.
The United States and Britain jointly launched an initiative to form Friends of Pakistan last month as alarm grew over the country's gradual economic meltdown, with fears increasing that financial chaos may allow terrorists to deepen their roots in Pakistan. The "Friends" delegation included representatives from the United States, Australia, Canada, Italy, Germany, Saudi Arabia, China, the United Kingdom, the United Arab Emirates (UAE) and Turkey. The group's first working session will be held in Abu Dhabi in the UAE next month.
Islamabad claims it has not yet formally asked the IMF for a loan facility, but that it would borrow money from the IMF as its last option on its own terms and conditions.
The government "should negotiate safely with the IMF and not succumb to their tough conditions", Agence France-Presse on Sunday quoted leading Pakistani investor Aqeel Karim Dhedhi as saying.
While talks with the IMF continue this week, the government is trying to build public opinion in favor of an IMF program. An IMF-assisted plan may require Islamabad to cut defense, development and other current spending and raise taxes, which could hurt the poor. The government has already decided to bring non-taxpayer sectors into the tax net and to increase the tax-to-gross domestic product ratio to 15% from the present 10.5%.
The IMF has not asked Pakistan to cut military spending by a third, although it has urged the country to take a number of painful economic measures, Dawn newspaper reported at the weekend, citing an unnamed senior Pakistani diplomat. The US did, however, want Pakistan to "refocus its military strategy on fighting the militants" instead of devoting most of its resources on confronting India, the diplomat was quoted as saying.
Zardari recently returned from China without a commitment for much-needed aid. Pakistan is struggling to combat inflation, which has risen past 25% and is heading towards 30% and a collapsing currency. The central bank, meanwhile, holds barely enough foreign currency to cover five weeks of imports. Owing to the fast depleting foreign exchange reserves, local traders have canceled import orders worth as much as 5.5 billion rupees (US$67 million).
Worsening external liquidity may imperil the country's ability to meet about $3 billion in upcoming debt obligations, as foreign reserves held by the central bank have slumped to $4 billion from a record high of $16.5 billion last October. The country's total foreign exchange reserves (held by the central bank and commercial banks) plunged by $426 million to $7.3 billion during the week ended October 18.
Smuggling of US dollars to Afghanistan is helping to drive down the value of Pakistan's currency, the rupee, which has tumbled to a historic low of more than 82 against the dollar. In Peshawar, the provincial capital of North-West Frontier Province, adjoining Afghanistan, and an important center for exchanging currencies with as much as $4 million to $5 million smuggled to Afghanistan each day, the rupee has fallen to 86 to the dollar.
Not all the smuggled funds are for immediate use in Afghanistan, with large amounts being transferred to Dubai in the UAE, according to a recent Business Recorder report. The government has blamed the present decline in the currency on the policy of its predecessor administration under prime minister Shaukat Aziz, saying it maintained an artificially high rate of 60 and 62 rupees to the dollar.
Islamabad needs foreign capital inflows in the shape of loans, grants and investment to cover the ballooning gap in its current account. About $4 billion is needed immediately, while the balance of payments financing gap for the year to June 30, 2009, is projected at about $7 billion.
Slow foreign inflows and rising imports have already widened the current account deficit by 74% to $3.9 billion during the first quarter of the current fiscal year (July-September) against $2.27 billion during the corresponding period last year. The trade deficit rose 52.65% to $5.55 billion in the three months to September, from $3.63 billion a year earlier, according to the Federal Bureau of Statistics.
The current global financial crisis has limited Pakistan’s options as many donor nations, including the United States, are embroiled with their own financial crises.
The IMF at the weekend announced an outline $16.5 billion loan agreement with Ukraine, after Iceland secured a $2 billion IMF loan last week. Hungary is also seeking an IMF deal as it reels from the impact of the global financial crisis.
Syed Fazl-e-Haider , sfazlehaider05@yahoo.com, is a Quetta-based development analyst in Pakistan. He is the author of six books, including The Economic Development of Balochistan, published in May 2004 .
By Syed Fazl-e-Haider, Asia Times, October 28, 2008
Source
QUETTA, Pakistan - Pakistan officials in talks with the International Monetary Fund (IMF) for a rescue package aimed at helping the country resolve balance of payments difficulties will face harsh demands rather than negotiating points, according to local analysts.
The United States is using the Washington-based and largely US-financed IMF as a tool to impose its own terms and conditions related to the "war on terror", in which Pakistan has been declared by the US as a major theater of war, the analysts said.
An IMF-assisted program is seen as essential before Islamabad, which failed last week to win financial support from China, can secure assistance from other donor countries and international financial institutions.
Islamabad has come out strongly against the US launching air strikes and ground operations against Taliban militants in Pakistani territory. Army chief General Ashfaq Parvez Kiani recently said that Pakistan would not allow any incursion by the United States or other allies inside its territory and vowed to protect Pakistan's borders at all costs.
Islamabad wants to handle the terrorist threat by itself within its borders and is seeking to deter the US from mounting cross-border raids on al-Qaeda and Taliban targets.
"The IMF does not negotiate but dictates its terms and this time the US has in fact pressurized Pakistan to turn to the IMF by not giving much-needed cash to the country in the meeting last month of the Friends of Pakistan," economist Shahid Hasan Siddiqi said on a private TV channel.
The United States and Britain jointly launched an initiative to form Friends of Pakistan last month as alarm grew over the country's gradual economic meltdown, with fears increasing that financial chaos may allow terrorists to deepen their roots in Pakistan. The "Friends" delegation included representatives from the United States, Australia, Canada, Italy, Germany, Saudi Arabia, China, the United Kingdom, the United Arab Emirates (UAE) and Turkey. The group's first working session will be held in Abu Dhabi in the UAE next month.
Islamabad claims it has not yet formally asked the IMF for a loan facility, but that it would borrow money from the IMF as its last option on its own terms and conditions.
The government "should negotiate safely with the IMF and not succumb to their tough conditions", Agence France-Presse on Sunday quoted leading Pakistani investor Aqeel Karim Dhedhi as saying.
While talks with the IMF continue this week, the government is trying to build public opinion in favor of an IMF program. An IMF-assisted plan may require Islamabad to cut defense, development and other current spending and raise taxes, which could hurt the poor. The government has already decided to bring non-taxpayer sectors into the tax net and to increase the tax-to-gross domestic product ratio to 15% from the present 10.5%.
The IMF has not asked Pakistan to cut military spending by a third, although it has urged the country to take a number of painful economic measures, Dawn newspaper reported at the weekend, citing an unnamed senior Pakistani diplomat. The US did, however, want Pakistan to "refocus its military strategy on fighting the militants" instead of devoting most of its resources on confronting India, the diplomat was quoted as saying.
Zardari recently returned from China without a commitment for much-needed aid. Pakistan is struggling to combat inflation, which has risen past 25% and is heading towards 30% and a collapsing currency. The central bank, meanwhile, holds barely enough foreign currency to cover five weeks of imports. Owing to the fast depleting foreign exchange reserves, local traders have canceled import orders worth as much as 5.5 billion rupees (US$67 million).
Worsening external liquidity may imperil the country's ability to meet about $3 billion in upcoming debt obligations, as foreign reserves held by the central bank have slumped to $4 billion from a record high of $16.5 billion last October. The country's total foreign exchange reserves (held by the central bank and commercial banks) plunged by $426 million to $7.3 billion during the week ended October 18.
Smuggling of US dollars to Afghanistan is helping to drive down the value of Pakistan's currency, the rupee, which has tumbled to a historic low of more than 82 against the dollar. In Peshawar, the provincial capital of North-West Frontier Province, adjoining Afghanistan, and an important center for exchanging currencies with as much as $4 million to $5 million smuggled to Afghanistan each day, the rupee has fallen to 86 to the dollar.
Not all the smuggled funds are for immediate use in Afghanistan, with large amounts being transferred to Dubai in the UAE, according to a recent Business Recorder report. The government has blamed the present decline in the currency on the policy of its predecessor administration under prime minister Shaukat Aziz, saying it maintained an artificially high rate of 60 and 62 rupees to the dollar.
Islamabad needs foreign capital inflows in the shape of loans, grants and investment to cover the ballooning gap in its current account. About $4 billion is needed immediately, while the balance of payments financing gap for the year to June 30, 2009, is projected at about $7 billion.
Slow foreign inflows and rising imports have already widened the current account deficit by 74% to $3.9 billion during the first quarter of the current fiscal year (July-September) against $2.27 billion during the corresponding period last year. The trade deficit rose 52.65% to $5.55 billion in the three months to September, from $3.63 billion a year earlier, according to the Federal Bureau of Statistics.
The current global financial crisis has limited Pakistan’s options as many donor nations, including the United States, are embroiled with their own financial crises.
The IMF at the weekend announced an outline $16.5 billion loan agreement with Ukraine, after Iceland secured a $2 billion IMF loan last week. Hungary is also seeking an IMF deal as it reels from the impact of the global financial crisis.
Syed Fazl-e-Haider , sfazlehaider05@yahoo.com, is a Quetta-based development analyst in Pakistan. He is the author of six books, including The Economic Development of Balochistan, published in May 2004 .
Saturday, October 25, 2008
Pakistan's deep crises
See my comments on this in a previous post, here
Time and Money Running Out for Pakistan
By Omar Waraich, Time, October 22, 2008
Source
Time and Money Running Out for Pakistan
By Omar Waraich, Time, October 22, 2008
Source
You wouldn't want to be the President of Pakistan: Even as the military finds itself embroiled in a war against militants that much of the country's elected leadership (and even more of the electorate) opposes, it's hard even to keep the lights on as the limits of the country's electricity supply mean daily blackouts in major cities. The economy, meanwhile, is in a perilous state, with inflation running rampant, the currency having lost a third of its value, and foreign currency reserves reduced to the point that they can finance no more than six weeks of imports. Pakistan, in fact, is in danger of defaulting on its substantial foreign debt if it can't get help either from its friends or from the IMF — and the price of such help will be politically unpopular: a stepped up effort against the Taliban and, perhaps, some tough domestic economic reforms.
No wonder, then, that the forthcoming U.S. National Intelligence Estimate (NIE) on Pakistan reportedly makes "bleak" reading. The NIE represents the consensus of the 16 U.S. intelligence agencies, and according to a McClatchy newspapers report, an official familiar with the contents of the document that will brief the next President says it warns that Pakistan has "no money, no energy, no government". Washington's primary concern remains al-Qaeda, which John Kringen, the CIA's director for intelligence, recently described as being "resurgent" and "well-settled" in Pakistan's tribal areas. But the presence of Bin Laden's group is enabled by an indigenous militant insurgency — the Pakistan Taliban — and Pakistani leaders remain divided over how to respond to this challenge.
President Asif Ali Zardari and his seven month-old civilian government have given priority to combating militancy, and having abandoned failed negotiations with the Pakistan Taliban, the army is currently fighting militants in the notorious arms manufacturing town of Darra Adam Khel, the scenic Swat Valley, and most visibly in the Bajaur tribal area. Although the U.S. NIE reportedly criticizes the Pakistan army for a "reluctance" to launch an all-out confrontation with the militants, military spokesmen point out that the Pakistan army has lost over 1,500 troops since it began confronting militants on its own soil. And they see the tide turning in their favor in the ten-week-old military operation in Bajaur, where they say the Taliban last week offered negotiations — a sign, say government officials, that the militants' resolve is weakening. "It was the first time that the government rejected an offer of peace," says Mehmood Shah, a former chief secretary for Pakistan's tribal areas.
Pakistani officials are also encouraged by the emergence of tribal militias who have turned on the Taliban. "We cleared them out of our area in a week," says Akhunzada Chettan, a lawmaker from a part of Bajaur, and there have been similar successes in Dir and, reportedly, Lakki Marwat. These developments are significant, officials say, because in the past the tribes had feared that the army would fail to protect them.
Although the current offensive in Bajaur and other areas has been applauded by Washington, Prime Minister Asif Zardari is having a harder time convincing his own people of the wisdom of waging war on the militants. While some had hoped that last month's horrific terror attack on the Marriott Hotel in Islamabad would rally the nation to fight militancy, instead divisions have only deepened. Recent opinion polls still find a majority of Pakistanis opposed to their government's support for Washington's "war on terror" — despite their anger at the recent wave of suicide bombings, these Pakistanis believe the attacks are a consequence of Pakistan waging "America's war".
Zardari had hoped that holding a parliamentary debate on how to respond to militancy would help make the campaign "Pakistan's war" and give the military political support for its actions. But after more than two weeks of behind-closed-doors deliberations, parliament unanimously adopted a resolution urging a resumption of dialogue with the militants, and an end to military operations "as early as possible". Although the parliamentary debate reflected the power plays of a political culture in which parties rarely put the national interest above their own, it also reveals a profound difference in perspective even within the ruling coalition — Zardari's allies in the religious Jamiat Ulema-e-Islam party demanded an end to military operations against the militants.
"The military wants political back up, and the government is supporting them, but I do not expect all the parties to unite," says military analyst Hasan Askari-Rizvi. "The political leaders seem too interested in settling scores against each other."
The absence of a consensus on fighting the militants compounds Zardari's difficulties in tackling the economic crisis he inherited — a crisis that, in turn, threatens to deepen the militant challenge. Rising world oil and food prices have sent the inflation rate soaring to 25% (and as much as four times that on basic foodstuffs), while the political uncertainty over the past 18 months fueled extensive capital flight that has weakened the rupee and depleted forex reserves. A failure to increase the capacity of electricity production now plunges Pakistan's main cities into darkness for up to ten hours a day, with longer periods in rural areas. Industrial output has shrunk with employers now laying off employees they can no longer afford to keep. And Pakistanis have begun to take their anger to the streets. In parts of Lahore on Monday, scores of protesters laid siege to the local office of the electricity utility, ransacking the building and burning their electricity bills. The mounting economic crisis is likely to fuel social unrest — "The general mood is one of despair," says Yousuf Nazar, a leading economic commentator. And despair and anger among Pakistan's poor are likely to swell the ranks of the militants.
The bleak economic situation has prompted Pakistan to desperately seek aid from such long-term allies as Saudi Arabia, Britain, the U.S. and China. Despite Zardari flying to those countries in recent weeks to make his case, he has yet to secure the loans needed to avoid a default on Pakistan's debt. Pakistani officials insist that they have no intention of defaulting, and the Pakistani rupee rose this week amid signs that the International Monetary Fund might step in to rescue this frontline state in the war on terror. The IMF confirmed Wednesday that it would soon enter discussions with Pakistan over ways to assist its economy. But help from the international community will almost surely be conditional on a more robust effort against the militants — an option that raises political problems for Zardari — and also on economic reforms that might prove unpopular. There are clear and challenging downsides to any of the choices available to Pakistan's leadership right now. And playing for time may not be an option in the face of that dwindling pile of foreign exchange reserves.
Wednesday, October 22, 2008
Lebanese Shiite cleric opposes US-Iraq pact
Lebanese Shiite cleric opposes US-Iraq pact
AP, October 21, 2008
Source
BEIRUT, Lebanon: Lebanon's top Shiite cleric criticized Tuesday a proposed U.S.-Iraqi security pact, saying the Baghdad government has no right to "legitimize" the presence of foreign troops.
Iraqi-born Grand Ayatollah Mohammed Hussein Fadlallah says any security pact should call for an imminent and unconditional withdrawal of U.S. forces from Iraq.
Fadlallah's edict came in response to questions by some Shiite members of Iraq's parliament who asked the cleric to give his opinion about the proposed security pact.
The cleric was born in the Iraqi Shiite holy city of Najaf and wields some influence among Iraq's Shiite majority. He is one of the founders of Iraqi Prime Minister Nouri al-Maliki's Dawa Party.
"No authority, establishment or an official or nonofficial organization has the legitimacy to impose occupation on its people, legitimize it or extend its stay in Iraq," Fadlallah said in the edict released by his office.
The agreement provides for American troops to leave Baghdad and other Iraqi cities by the end of June and fully withdraw from the country by the end of 2011 unless the government asks them to stay.
It would also give Iraq limited authority to prosecute U.S. soldiers and contractors for crimes committed off-base and off-duty, limit U.S. authority to search homes and detain people and give Iraqis more say in the conduct of American military operations.
Fadlallah said that any pact should call for an "unconditional withdrawal of occupation forces from Iraq," and put a "fixed and imminent timetable for a complete American withdrawal from Iraq."
He added that no U.S. bases or centers should be allowed to stay adding that any American presence would have to be based on normal diplomatic missions.
Fadlallah added that the withdrawal of foreign forces from Iraq should not be linked to the improvement of the security situation in the country because the Americans can cause security problems in order to extend the stay of their forces.
---
See IS comments on this issue, Thousands in Iraq protest security pact with US.
Also see,
Iraq Cabinet seeks changes in security pact with US, LA Times, October 21, 2008
Cleric in Iran issues fatwa against US-Iraqi pact, AP, October 21, 2008
Gates gives warning on US-Iraq pact, Aljazeera, October 21, 2008
Will Iraq finally end the colonial era?, By Rami G. Khouri, Daily Star, October 22, 2008
AP, October 21, 2008
Source
BEIRUT, Lebanon: Lebanon's top Shiite cleric criticized Tuesday a proposed U.S.-Iraqi security pact, saying the Baghdad government has no right to "legitimize" the presence of foreign troops.
Iraqi-born Grand Ayatollah Mohammed Hussein Fadlallah says any security pact should call for an imminent and unconditional withdrawal of U.S. forces from Iraq.
Fadlallah's edict came in response to questions by some Shiite members of Iraq's parliament who asked the cleric to give his opinion about the proposed security pact.
The cleric was born in the Iraqi Shiite holy city of Najaf and wields some influence among Iraq's Shiite majority. He is one of the founders of Iraqi Prime Minister Nouri al-Maliki's Dawa Party.
"No authority, establishment or an official or nonofficial organization has the legitimacy to impose occupation on its people, legitimize it or extend its stay in Iraq," Fadlallah said in the edict released by his office.
The agreement provides for American troops to leave Baghdad and other Iraqi cities by the end of June and fully withdraw from the country by the end of 2011 unless the government asks them to stay.
It would also give Iraq limited authority to prosecute U.S. soldiers and contractors for crimes committed off-base and off-duty, limit U.S. authority to search homes and detain people and give Iraqis more say in the conduct of American military operations.
Fadlallah said that any pact should call for an "unconditional withdrawal of occupation forces from Iraq," and put a "fixed and imminent timetable for a complete American withdrawal from Iraq."
He added that no U.S. bases or centers should be allowed to stay adding that any American presence would have to be based on normal diplomatic missions.
Fadlallah added that the withdrawal of foreign forces from Iraq should not be linked to the improvement of the security situation in the country because the Americans can cause security problems in order to extend the stay of their forces.
---
See IS comments on this issue, Thousands in Iraq protest security pact with US.
Also see,
Iraq Cabinet seeks changes in security pact with US, LA Times, October 21, 2008
Cleric in Iran issues fatwa against US-Iraqi pact, AP, October 21, 2008
Gates gives warning on US-Iraq pact, Aljazeera, October 21, 2008
Will Iraq finally end the colonial era?, By Rami G. Khouri, Daily Star, October 22, 2008
Tuesday, October 21, 2008
CSM: Pakistan eyes 'peace pipeline' for region
Pakistan eyes 'peace pipeline' for region
It hopes a deal to ship Iranian gas to India via Pakistan can boost its energy supply, regional ties.
By Shahan Mufti, CSM, October 20, 2008
Source
GWADAR, PAKISTAN - Along the scenic coast in Pakistan's gas-rich Balochistan Province, a weathered roadside shop advertises "fuel available at every price."
Inside, heady fumes fill a room stacked with cylinders of compressed gas and barrels full of gasoline – fuel smuggled from Iran through the rugged border region 50 miles west of this Pakistani city, explains Balach Abdullah, the owner.
From here, the fuel makes its way as far as Karachi, Pakistan's largest city.
The Pakistani government is hoping to turn this clandestine exchange into a major energy and trade route.
The Iran-Pakistan-India (IPI) pipeline proposal is a $7.5 billion project that would transport gas from the western Iranian Pars gas field to India through Pakistan along a 1,500-mile route.
The pipeline would be a triumph for Pakistan. The country hopes to make itself a major energy player linking the gas in Central Asia and the oil in the Middle East to the fast-growing economies of China and India.
But geopolitical considerations, among others, have so far blocked the proposal from becoming a reality.
The United States, which this month signed a nuclear trade deal with India, opposes the plan that would bind its main rival, Iran, with key allies in the region. Proponents of the deal counter that it could improve security by boosting relations in the often volatile region – and have even dubbed the proposal the "Peace Pipeline."
"Washington has minced no words saying that they are completely opposed to the pipeline deal," says Tariq Fatimi, a former Pakistani ambassador to the United States who is now a consultant with a Pakistani energy exploration company.
Now that India has signed a nuclear deal with the US, he says, it would be more inclined to support American policy in the region, which might mean pulling back from such deals with Iran.
Despite the US nuclear deal, India has not pulled out of IPI discussions. Iran and Pakistan also remain supportive of the deal. Two days after the US-India nuclear deal was finalized, Iranian Foreign Minister Manouchehr Mottaki met his Pakistani counterpart in Islamabad and confirmed that the two countries would now begin work of the pipeline bilaterally.
"India may join the project whenever it is ready for this," the Iranian foreign minister said.
A 'Peace Pipeline'
Ismat Sabir, editor of the trade magazine Energy Update in Karachi says it would be "a win-win situation for everyone."
The three large Asian countries could become comfortably interdependent she explains, which would encourage trust in a region where neighborly relations have often been hostile.
"Iran will sell its gas over land to a major consumer, Pakistan will get some hefty transit fees, and India will finally start to meet its energy demands," she continues.
US urged to reconsider its position
In a report released this month, The Pakistan Policy Working Group, an independent and bipartisan group of top US experts on Pakistan in Washington, also suggested that the US "reconsider [its] opposition to the proposed Iran-Pakistan-India pipeline project" as a way of easing regional tensions, especially between India and Pakistan.
The report also points out that the pipeline is tied in with the precarious security situation in Balochistan Province, which borders Iran and Afghanistan.
An armed separatist rebellion has brewed in Pakistan's largest and least populated province for decades, and has intensified since 2006, when the Pakistani Army assassinated the high-profile Balochi leader, Akbar Khan Bugti.
In the latest incident of this low-intensity conflict, over the weekend a Balochi separatist group claimed responsibility for a bombing that killed three people in the Dera Bugti district, home to the country's largest gas reserves.
Iranian-Pakistani trade growing
In the past few months Iran and Pakistan have been warming diplomatically along the border that separates the two countries. In recent months a flurry of agreements have brought the two countries closer as they promise to transform the Balochistan region into an active transport, trade, and energy hub.
Over the summer, Iran and Pakistan signed four agreements that unveiled a new ground transport route and enhanced cooperation in the mining sector in the area rich in minerals.
Pakistani Foreign Minister Shah Mehmood Qureshi also announced last week that Pakistan would import 1,000 megawatts of electricity across the border from Iran, as his country suffers from one of the worst energy shortages in its history.
Already the illicit trade of Iranian gas in Balochistan, run by Mr. Abdullah and other merchants dotting the thinly populated southern coast of Pakistan with their makeshift filling stations, attest to the country's demand for energy. It also illustrates the porous nature of Pakistan's 600-mile border with Iran, as well as a history of close relations among the ethnic Balochis who live on either side.
Over the summer Iranian President Mahmoud Ahmadinejad visited Islamabad and New Delhi to finalize the pipeline deal at a time when the prospects of India's civil nuclear energy appeared to be dwindling. Disagreements among the three countries over gas pricing and delivery points have also been a stumbling block to negotiations.
Representatives from all three governments had met at venues from Spain to Saudi Arabia to discuss the final details of the plan, including pricing and delivery points.
Despite its recent nuclear deal with the US, India, which imports 70 percent of its required energy, will "need the nuclear deal, the IPI gas pipeline and more," according to Abbas Bilgarami, who works in the local oil and gas industry.
As a result, India might find itself growing closer to the US, Pakistan, and Iran, he says.
"The compulsions imposed on this region," by the US in its security concerns here "will have to be reconsidered," says Mr. Bilgarami. "The regional vision is still very strong."
It hopes a deal to ship Iranian gas to India via Pakistan can boost its energy supply, regional ties.
By Shahan Mufti, CSM, October 20, 2008
Source
GWADAR, PAKISTAN - Along the scenic coast in Pakistan's gas-rich Balochistan Province, a weathered roadside shop advertises "fuel available at every price."
Inside, heady fumes fill a room stacked with cylinders of compressed gas and barrels full of gasoline – fuel smuggled from Iran through the rugged border region 50 miles west of this Pakistani city, explains Balach Abdullah, the owner.
From here, the fuel makes its way as far as Karachi, Pakistan's largest city.
The Pakistani government is hoping to turn this clandestine exchange into a major energy and trade route.
The Iran-Pakistan-India (IPI) pipeline proposal is a $7.5 billion project that would transport gas from the western Iranian Pars gas field to India through Pakistan along a 1,500-mile route.
The pipeline would be a triumph for Pakistan. The country hopes to make itself a major energy player linking the gas in Central Asia and the oil in the Middle East to the fast-growing economies of China and India.
But geopolitical considerations, among others, have so far blocked the proposal from becoming a reality.
The United States, which this month signed a nuclear trade deal with India, opposes the plan that would bind its main rival, Iran, with key allies in the region. Proponents of the deal counter that it could improve security by boosting relations in the often volatile region – and have even dubbed the proposal the "Peace Pipeline."
"Washington has minced no words saying that they are completely opposed to the pipeline deal," says Tariq Fatimi, a former Pakistani ambassador to the United States who is now a consultant with a Pakistani energy exploration company.
Now that India has signed a nuclear deal with the US, he says, it would be more inclined to support American policy in the region, which might mean pulling back from such deals with Iran.
Despite the US nuclear deal, India has not pulled out of IPI discussions. Iran and Pakistan also remain supportive of the deal. Two days after the US-India nuclear deal was finalized, Iranian Foreign Minister Manouchehr Mottaki met his Pakistani counterpart in Islamabad and confirmed that the two countries would now begin work of the pipeline bilaterally.
"India may join the project whenever it is ready for this," the Iranian foreign minister said.
A 'Peace Pipeline'
Ismat Sabir, editor of the trade magazine Energy Update in Karachi says it would be "a win-win situation for everyone."
The three large Asian countries could become comfortably interdependent she explains, which would encourage trust in a region where neighborly relations have often been hostile.
"Iran will sell its gas over land to a major consumer, Pakistan will get some hefty transit fees, and India will finally start to meet its energy demands," she continues.
US urged to reconsider its position
In a report released this month, The Pakistan Policy Working Group, an independent and bipartisan group of top US experts on Pakistan in Washington, also suggested that the US "reconsider [its] opposition to the proposed Iran-Pakistan-India pipeline project" as a way of easing regional tensions, especially between India and Pakistan.
The report also points out that the pipeline is tied in with the precarious security situation in Balochistan Province, which borders Iran and Afghanistan.
An armed separatist rebellion has brewed in Pakistan's largest and least populated province for decades, and has intensified since 2006, when the Pakistani Army assassinated the high-profile Balochi leader, Akbar Khan Bugti.
In the latest incident of this low-intensity conflict, over the weekend a Balochi separatist group claimed responsibility for a bombing that killed three people in the Dera Bugti district, home to the country's largest gas reserves.
Iranian-Pakistani trade growing
In the past few months Iran and Pakistan have been warming diplomatically along the border that separates the two countries. In recent months a flurry of agreements have brought the two countries closer as they promise to transform the Balochistan region into an active transport, trade, and energy hub.
Over the summer, Iran and Pakistan signed four agreements that unveiled a new ground transport route and enhanced cooperation in the mining sector in the area rich in minerals.
Pakistani Foreign Minister Shah Mehmood Qureshi also announced last week that Pakistan would import 1,000 megawatts of electricity across the border from Iran, as his country suffers from one of the worst energy shortages in its history.
Already the illicit trade of Iranian gas in Balochistan, run by Mr. Abdullah and other merchants dotting the thinly populated southern coast of Pakistan with their makeshift filling stations, attest to the country's demand for energy. It also illustrates the porous nature of Pakistan's 600-mile border with Iran, as well as a history of close relations among the ethnic Balochis who live on either side.
Over the summer Iranian President Mahmoud Ahmadinejad visited Islamabad and New Delhi to finalize the pipeline deal at a time when the prospects of India's civil nuclear energy appeared to be dwindling. Disagreements among the three countries over gas pricing and delivery points have also been a stumbling block to negotiations.
Representatives from all three governments had met at venues from Spain to Saudi Arabia to discuss the final details of the plan, including pricing and delivery points.
Despite its recent nuclear deal with the US, India, which imports 70 percent of its required energy, will "need the nuclear deal, the IPI gas pipeline and more," according to Abbas Bilgarami, who works in the local oil and gas industry.
As a result, India might find itself growing closer to the US, Pakistan, and Iran, he says.
"The compulsions imposed on this region," by the US in its security concerns here "will have to be reconsidered," says Mr. Bilgarami. "The regional vision is still very strong."
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