Investing in Pakistan

America needs to learn to support the people rather than unpopular governments if it is to maintain its global influence

“But I don’t want to go among mad people,” said Alice.

“Oh you can’t help that,” said the cat. “We’re all mad here. I’m mad. You’re mad.”

“How do you know I’m mad?” asked Alice.

“You must be,” said the cat, “or you wouldn’t have come.”

Recently, some serious potential investors asked me to explain Pakistan’s political stability and the chances of reducing, if not eliminating, terrorism. They like our investment policies but balk at terrorism, instability and lack of continuity of policies.

My response was that political instability is the norm in Pakistan. In fact, what you call ‘instability’ is our stability, so anyone who wishes to invest in Pakistan has to accept it and find ways in which to function. Remember Lord Rothschild’s famous dictum: “The time to make money is when there is blood on the streets”. Terrible, no doubt, but true: ‘blood’ needn’t necessarily mean spilling blood but also corruption, nepotism and poor governance that are also rife throughout the land at every level of governments and the private sector as well. Most of our banks and businessmen are not entrepreneurs but operators. They have learned well from early and current western practices, but without the camouflage.

Corruption, no doubt, is terrible and eats at the vitals of a state, but in reality it is our system too. Without corruption little would get done. It is so in many Third World countries and in some first world countries too, but with some sophistication. To get decisions you have to “put wheels on your files” as they say, by greasing palms from top to bottom and add bribes to project costs. Remember many old millionaires of America and Europe made their money dealing in contraband during the Great Depression of the 1930s and during the many wars. Famous Europeans that have statues built in their honour enriched themselves by stealing the wealth of countries they conquered and colonised. Ordinary clerks and colonels of the East India Company and British officers retired obscenely wealthy.

Prime Minister Nawaz Sharif seems to be in denial but remains in office because at this point in time his exit doesn’t suit the United States, China, the army and the judiciary

Sadly, those unburdened by principles and morality and know how to exploit instability, greed and corruption ‘succeed’. Those who do not ‘fail’ and are called “stupid”. Obviously, because money knows no morality or principles, only how to beget itself any old how. That was and is at the root of the global economic crisis of October 2008. It is to keep greed in check that countries regulate businesses and banks assiduously, or are supposed to. Regulation breaks down when there is blatant conflict of interest, when the regulated become regulator and later back to being the regulated – poacher, gamekeeper and poacher in turns.

The political situation in Pakistan is always fluid. The current government has so far weathered the sit-ins of two political parties led by Imran Khan and Tahirul Qadri in Islamabad. These gentlemen are so far but triggers of protest, catalysts and agents of change, not of government but of a corrupt and corruption begetting system. The protests have not ended and are likely to gather steam. When a government is perpetually involved in survival it hardly has time to do anything worthwhile. When the leaders of such governments are also busy making money illegally, the situation gets worse, for they try and gather as much money as quickly as possible knowing that their shelf life could be severely limited. But it’s great for business without principles. Such governments are perpetually involved in survival not because all its opponents are bad but because their legitimacy comes with stigma. A legitimate government is accepted even by those who don’t like it. Legitimate governments strengthen their legitimacy by delivering to the people and putting the interests of their countries first.

The demand of both protesting parties is that Prime Minister Nawaz Sharif resigns as he came to power after rigged elections and thus his government’s legitimacy is questionable, that electoral reforms take place and another election be held soon after. Dr Qadri, however, has also presented an alternative system to run Pakistan based on devolution that has attracted considerable attention in quarters that matter and many people. Others balk at Dr Qadri because they regard him as yet another mullah.

To support the demand for devolution Altaf Hussain, leader of the MQM that has strength in Karachi and Hyderabad and is a secular, anti-feudal party, has also demanded the formation of new provinces, which means that the demand for more provinces is finding traction. My fear is that if they don’t get delivery this demand could well morph into a demand for independence, which could have a domino effect. In that sense, Pakistan is once again at flashpoint.

Imran Khan is holding huge rallies in different cities, some of them the largest in Pakistan’s history, the biggest being in Lahore and Karachi, and is continuing. So too is Dr Qadri. Imran’s Islamabad rally on November 30 promises to be huge and has put government in mindless defensive mode.

More importantly, Imran Khan has asked the government to form a committee to inquire into the quantum of fraud in the elections comprising not just Supreme Court judges but members of two military intelligence agencies as well. The army chief had agreed to this, he says. If the committee is not announced by November 30, he also says, then his protests will start “damaging” the government, which so far he contends have done it no damage. Blood on the streets?

Prime Minister Nawaz Sharif seems to be in denial but remains in office because at this point in time his exit doesn’t suit the United States, China, the army and the judiciary. But if there is trouble on the streets and blood is spilled, this could change. The terrorism, murder, corruption and electoral rigging charges against him could be brought to bear. If his government goes, the perception in Pakistan – rightly or wrongly, time will tell – is that things will start improving. God knows best.

Army chief General Raheel Sharif went to Washington to discuss various issues, including the NATO drawdown from Afghanistan, national and regional stability, the fight against terrorism and the Pakistan Army rebuilding and training the Afghan army. Let us see. If the US comes to believe that its targets cannot be achieved with Mr Nawaz Sharif in office, the thinking will change. But, as I said, God knows best.

The military operation in North Waziristan has eliminated many terrorists but many more have been given refuge in Afghanistan from where they strike back at Pakistan, which is a big problem. The Pakistan army should have blocked this obvious escape route but for some reason it did not. Of course there was non-cooperation from the Afghan government. Others would suspect that it deliberately doesn’t want to eliminate the terrorists entirely because it sees them as a future guerrilla force against external enemies, but frankly this thinking is outdated.

During his visit to Pakistan, Afghan President Ashraf Ghani said that we “should bury the hatchet” and “forget the past” and forge a new positive relationship

Now, with the change of government in Afghanistan, things could also be changing. New Afghan President Ashraf Ghani paid a state visit first to China and then to Pakistan where business, infrastructure building, the fight against terrorism and Pakistan helping build the Afghan army was discussed. It seems that an embryonic tripartite agreement on these issues is in the works. It should be a four-way agreement to work because if the United States feels it is outside the loop it could sabotage anything to prevent China’s primacy in Afghanistan. Afghanistan rejecting India to build its army will remove suspicions on the Pakistani side and bring the two countries closer if they are to prosper.

During his visit to Pakistan, Afghan President Ashraf Ghani said that we “should bury the hatchet” and “forget the past” and forge a new positive relationship. He reserved his most important meeting with Pakistan’s army chief, which should tell you something.

Also very important is an understanding between Afghanistan, Pakistan and China not to let terrorists use the territories of Afghanistan and Pakistan as a safe haven from where attacks against China can be launched. China’s ETIM militants have now got a base in Kunar in Afghanistan and go through the northern parts of Pakistan to launch attacks in Xinjiang and the rest of China, though there are other routes too through Central Asia. Some feel that America indirectly approves of this as it wishes to destabilise China and thwart its economic progress and keep Pakistan and Afghanistan dependent on it. The breaking away of Xinjiang, they think, to become another Central Asian Republic would destabilise China. But once China, Pakistan and Afghanistan come to a firm agreement of cooperation to fight terrorism and in economic fields, they will all make considerable progress. Terrorism is a menace that suits other countries for their own ideological, doctrinaire and strategic reasons. Pakistan and China signing a defence and intelligence sharing agreement points to a shift in the old South Asia paradigm.

Karachi suffers not only from terrorism but also from violence by criminal gangs and Mafias dealing in land grabbing, gun running, drugs and kidnapping for ransom and what have you. A joint operation by police and the paramilitary Rangers was launched against them a year ago but has met limited success. There are also south Punjab-based sectarian terrorists that carry out killings of the Shi’a and other minorities.

Conventional wisdom has it that unless the army launches an all-out operation throughout the country to rid it of terrorists and criminal gangs, instability will continue to run rampant. The army has said that its anti-terrorist operation in North Waziristan will not be the end and it also intends to root out terrorism throughout Pakistan. It won’t be easy with a political government with little imagination that is always counting its votes for the next elections little realising that at the rate we are going there may not be another election for a long time and in the style of the past.

The word ‘Taliban’ has become generic. There are a number of Pakistani terrorist groups that call themselves ‘Taliban’. They are a polyglot not under one command but network and cooperate to different degrees. The main one is Tehreek-e-Taliban Pakistan or TTP under Mullah Fazlullah, who has a base in Afghanistan. It is obvious that he couldn’t have a safe base there without the cooperation of the Afghan government and at the very least with the knowledge of America, if not its agreement. But now, with the change in the Afghan government it seems that there may be a change in policy.

Right now, stability in the conventional sense seems to be a far cry, if not a pipedream. But never lose hope.