In the last 60 days, the world has turned upside down. For some, it has been a terrible tragedy. For Pakistan, it has created a tremendous opportunity. The situation, internally, with Afghanistan, with America, and with the economy, has not been this bright in many years. It is up to Pakistan to take advantage of it.
The stakes are very high. If the conditions can be laid for a decade of rapid economic growth, say 7% per year, then the economy will double in size over the next ten years. Poverty will be slashed more effectively than any charity program could ever do. The government tax base will be able to fully fund education for the entire youth. Substantial expansion of the health systems and infrastructure will be possible. And the country will be well on the road to becoming a fully developed society in two or three more decades.
Internally, the battle between secular and religious forces for the domination of the country has been clarified by the huge defeat of the religious parties. They have lost the support and backing of the Taliban regime, with which they shared a symbiotic relationship. Their irresponsible decision to back the Taliban has been clearly exposed to the rest of society as a self-indulgent fantasy that would have led to Pakistan’s destruction if the government had given in to their demands. And the failure of the parties to generate street enthusiasm unmasked their extremely limited appeal to the rest of Pakistan.
Future Pakistani governments will now have a freer hand to do what is best for the country, without being paralyzed by the thought of offending the mullahs.
In Afghanistan, the situation remains fluid and uncertain. However, the recent power-sharing accord signed in Germany looks rather favorable to Pakistan. A Pashtun, Hamid Karzai, who is known to be pro-Western, has been selected to head the interim government. He is probably the most favorable candidate that Pakistan could have hoped for, and does not have the deep anti-Pakistan sentiments of some elements of the Northern Alliance. A UN backed peacekeeping force will probably move into Kabul in the next month.
If a stable Afghan government takes hold then Pakistan has potentially three major benefits. First, the refugees can finally go home. Pakistan has hosted over two million Afghans, many since the early days of the Soviet war over 20 years ago. Secondly, the international donors will be spending over 1 billion dollars per year in Afghanistan on reconstruction work for the next seven years, and much of that money will go to purchase goods made in Pakistan (cement, clothing, wheat, etc.). Finally, if a stable Afghanistan really does develop, then look to see the possibility of Central Asian oil flowing to tankers in Karachi through a pipeline through Afghanistan. This is at least three years or more down the road, and only if stability can be maintained, as a pipeline is an extraordinarily vulnerable target to attack.
The American relationship has been reborn. There is natural fear that America will discard Pakistan once it has Bin Laden in its grasp, but even the Americans realize that would be a big mistake. Long-term stability and development in the Pakistan/Afghanistan region is the best insurance against having to repeat this war in another five years. In addition, Bush will be President for another seven years, and he will not forget, on a personal level, that Pakistan helped him when the chips were down. If he does, we will remind him.
So far, there has been a tremendous response from the US. All the sanctions have been lifted. This means that the US has completely accepted a Muslim nation being openly nuclear-armed. This has been a key goal of Pakistan’s foreign policy for 15 years. The financial aid has been turned back on. Over 600 million dollars has been disbursed as part of a 1 billion-dollar aid package for this year. In addition, increased market access for Pakistani exports is in the works. More importantly, the US now openly supports IMF packages for Pakistan and debt reduction at the Paris Club lender’s meeting next week. The overall result is a substantial improvement in Pakistan’s geopolitical standing in the international community. It has gone from pariah to golden-boy in a few weeks.
Finally, the economic outlook has brightened. Dollar reserves are surging and the rupee has rallied 10% against the dollar since 9/11. Increased market access for textiles in Europe are worth about 1 billion dollars per year. The industrial sector last year showed 7% growth, and should continue to repeat that over the coming decade. If the rains don’t fail again, substantial increase in agriculture will also occur. Shaukat Aziz, the Finance Minister, has done an excellent job handling the economy. It is very well positioned to take advantage of these opportunities. Pakistan has a great chance to finally succeed in bringing prosperity and dignity to the majority of its citizens. To fail now would be criminal.
Comments can reach the author at Nali@socal.rr.com