And the future of Pakistan
There are three characteristics of the American approach that have to be kept in mind to analyse their foreign policy. First is the philosophy that American has no permanent friends or allies, only interests. Second is their dual track policy of compete and collaborate at the same time. And third is to change direction quickly without wasting time. Although Americans take a long view of the future with a horizon of 30 to 50 years, the above three characteristics define their overall approach. Sometimes these could have an adverse effect on American interests. For instance, as soon as President Obama took oath of office, he announced complete withdrawal of forces from Iraq and Afghanistan. They did execute this strategy in Iraq but in Afghanistan the defence establishment prevailed and a residual force of 30,000, including contractors, will remain for the next 10 years after incoming President Ashraf Ghani signed the Bilateral Security Agreement (BSA).
What are the emerging trends in foreign policy that will have an effect on balance of power? Long time US ally Europe was growing too strong with Germany dominating the policy direction. For the last three or four years, German consulates have been collecting information from various regions to be more independent and get out of the shadow of USA in their foreign policy. Rise of Europe would be at the cost of US, which was a concern for them. The Ukraine crisis is largely an American initiative which has been grudgingly accepted by Germany and others. This crisis has created a growing gulf with Russia, which is a major energy supplier to Europe, meeting almost 30 per cent of their demand. America will be a net energy exporter by 2020 and wants to replace Russia as a source of energy for Europe.
There is another advantage in taking away energy market share from Russia as it would mean an economic strain for her as it comprises almost 50 per cent of her export earnings. The foreign reserves of Russia have gone down by almost $100 billion in the last six months from a high of over $550 billion to $454 billion at the end of September. This only covers six months of imports. On the other hand, sanctions imposed on Russia have depressed the value of the rubble, creating inflationary pressures. Another fact impacting Russia’s economy is declining oil prices, which reached a 25 month low of $81 per barrel this week, with expectations of touching $60 in the next two months. Cooling down of the Chinese economy, which is expected to grow at 6.1 per cent, as compared to over seven per cent during the last decade, has impacted the demand for fossil fuels and other commodities. American expectations are that since the popularity of President Putin is built on economic growth, any decline will have a severe impact on it. It is a huge challenge for Russia to diversify earnings to move towards services, technology and manufacturing export.
America has been promoting Japan to become a counter weight to China in South East Asia. Probability is high that China might counter this move by encouraging unification of Korea, which has been a traditional rival of Japan
China, on the other hand, grew on the basis of its purchasing power parity, because of its status as the factory floor of the world. But this situation is not sustainable in the long term as the cost of manufacturing has already risen with rise in salaries. It can no longer claim to be the lowest cost manufacturer in the world. Vietnam and India are taking away some of it because of their lower cost factor. China has struggled to invigorate innovation and research, like South Korea, to introduce its own brands. There is no Chinese brand that can claim to be a world leader based on quality and innovation. Lenovo, Huawei and Ali Baba are well placed to achieve the status of leaders. But so far they are struggling because of lack of original research. To overcome this deficiency, China is aggressively pursuing top talent in the world to come and work there but it is too early to gauge the success of this strategy. Another hurdle for China is to reduce the impact of rising cost through productivity gains. They have to invest in infrastructure to reduce the cost of non-manufacturing inputs like cheap high speed internet, cheaper energy, shorter routes of delivery, faster processing payment, etc. The decline in the Chinese economy could cause social unrest and is a concern from the national security point of view.
America has been promoting Japan to become a counter weight to China in South East Asia. Probability is high that China might counter this move by encouraging unification of Korea, which has been a traditional rival of Japan. They also share a common history of Japanese atrocities during the Second World War.
India is the new preferred partner of USA in South Asia. But India seems to prefer to play a balancing role between the three competing powers seeking her attention i.e., China, Russia and USA. During the Chinese President’s recent `visit to India, MOUs to the tune of $35 billion were signed. But just few weeks before that India and Japan agreed to increase their security and economic cooperation. India is also maintaining warm relations with its long term ally Russia and supported its position in the Ukraine crisis. India is more interested in reinvigorating the non-align movement than becoming too close to any one partner. New Delhi apparently wants to replace China as a preferred factory floor for USA and European companies. It has a big advantage of labour cost of – 92 cents as compared to $3.4 of a Chinese worker. Its main hurdle in attracting investment is its dilapidated infrastructure. PM Modi’s foreign visits include infrastructure as top item on the agenda and he plans to go about it in piece meal. His first focus is to develop an economic corridor between Delhi and Mumbai. Any future plans will be developed based on the success of it.
India is also courting China along with Iran and Afghanistan to create a detour of the Silk Road, passing through Kazakhstan, to be linked to the Persian Gulf via Iran’s Chahbahar port. Pakistan is mistaken to assume that Gwadar is too important for China as an economic corridor. Gwadar may hold naval importance for China but deteriorating law and order situation in Pakistan is a worry for them to be used as a viable trade route.
India is also courting China along with Iran and Afghanistan to create a detour of the Silk Road, passing through Kazakhstan, to be linked to the Persian Gulf via Iran’s Chahbahar port
It also seems that the west is eager to formalise its nuclear deal with Iran. There are many reasons for it. West considers Shi’a Islam to be moderate and quite close to the Catholicism. Iran has also historically competed with Arabs for prominence and dominance in the Middle East. Rise of IS in Iraq/Syria is also pushing the two to come together. From Iran’s perspective, western markets and technology are important but they also consider them as a security risk for its future. To compensate for it, it is courting Russia and China to become part of their regional security dynamic. Iran and India have traditionally been quite close to each other and will work together to achieve the regional objective.
President Erdogan has pushed Turkey away from the west and its future as a member of NATO is also uncertain. Turkey is competing with Iran to dominate the emerging new order in Middle East. Turkey is in the same position it was in during the First World War, when it hesitated to decide whether to support Germany, Russia or allied powers. It finally decided to side with Germany, which turned out to be a wrong move while that decision put Russia in the allied camp.
Western strategy to counter the rise of Middle Eastern radicalism is to resolve the long standing issue of Palestine. Two years ago in an op-ed I suggested that west is working on a long term plan to resolve the issue through a two state solution and Europe will take the lead with American blessing. In last two months, many European powers recognised Palestine, including Sweden and Britain. Some Eastern European countries already recognise it. Next in line will be major powers including Germany, France, Italy and Spain. This will create enough momentum to develop world opinion favourable for it. One idea gaining traction is merging the West Bank, 67 borders, with Jordan to create a viable state. Palestinians already form a majority in Jordan so it should not have any political problem and will enable it to become a constitutional monarchy.
What is the future of Pakistan? Frankly, Pakistan’s foreign policy is in dire straits. There is no clear policy and objective. It is more rhetoric than substance. We have issues with three of our four neighbours. Afghans consider us the sole source of all their troubles. Iran is not happy about terrorists acts committed against pilgrims coming back via the land route. India is our arch rival with many border issues pending. We should not give up Kashmir even if we have to wait a thousand years, but it should not become the whole of our relationship with a large neighbour. China is losing hope that we can contain terrorism and extremism inside our borders, which is causing it constant headache in Xinjiang province. We need to get our act together and hold national debate on what our foreign policy priorities should be.
Foreign policy, like any other social science, is not exact. Errors of judgment can occur but it is important to consider all possible scenarios and then formulate a course. We need to learn how to compete and collaborate at the same time just like Chinese, Indians, Russians and Americans are doing.