The supply of F16 jets to the Ukrainian military for purposefully altering the balance in the air war by the USA is just one instance of fact that the superpower leading the West and the capitalist system is a receding one. Doing much of the work proverbially through ‘contract employees’ as against ‘permanent employees’ (practically the only permanent employee is Israel, with a few noble exceptions around the globe!). That receding from the scene explains much of the developing geopolitical makeup of the world taking place, the economic outreach of the superpower in question; consequent economic doctrine, coupled with military doctrine. Last and not least, what is in store for the previously ‘permanent’ employees, now being hired on ‘contract’?
From the Pakistani standpoint, the question of economic doctrine takes precedence on the count that previous engagements have been complete packages; right from a controlled exchange rate to the payment of ammunition as part of the deal. Without going into the details of how Pakistan was recruited into the SEATO and CENTO engagements, the World Bank and IMF packages ensured that the Dollar would not fly unhindered, as has been the case now. Similarly, the Pakistani defence procurements were paid and there was no issue of open-market purchases, needing precious foreign exchange.
For good or for bad; the current establishment-backed configuration with political uncertainty at high peak or a genuine return to democracy, important economic decisions, especially with reference to a trade-based development strategy, are imperatives for all the concerned decision makers. Pakistanis, whether they are key decision makers, political leaders, community leaders, men in uniform or anyone else, not the least the ambitious middle class, needs to look beyond their noses and take the country out of the quagmire they helped develop
To couple that up, the status quo was maintained to ensure the ‘Capitalist Surplus” justified for the growth of industrial families. To buck up that status quo, a compliant banking system was evolved, which was not the lender to the poor or working class, rather tailored to cater to the capitalist ‘running finance’. Similarly, to cultivate a crop of business managers well versed in cutthroat capitalist culture, institutions like IBA were set up across the country to supply the needful to the business houses. The role of the state was visualized as the agency which keeps the law and order intact by baton charging the protesting mouths and stomachs, and keeps the prices as low as possible.
The first test to that system was the 1965 War, which was partly due to the delusion of an over-confident establishment. What followed was an increased ‘threat paradigm’ which forced the state to wade through the arms embargo with open-market purchases. The MiGs and Mirages paid for, when Sabres were clandestinely bought on ‘Iranian vouchers’, drastically disturbed the industry-led calculations of the economic planners. The failure in achieving goals set for the third plan period ending 1970, led to the Pakistani economy’s first bout of ‘stagflation’ (the terminology gained currency much later in the 1990s). The resultant political unrest imploded the system in the form of an independent federating unit declaring separation from the centre. What was left was to endure other experiments in economic planning.
That period was characterized by Pakistan remaining in the Western Bloc, yet trying to tread an independent path. That ‘flirtation’ soon gave way to renewed engagement with the Pentagon. The coup by Zia ended the dream of balanced foreign engagement. Pakistan got into the alliance without the formal umbrella of a CENTO-like arrangement. An engagement, which has stayed in one way or another. However, the rules of business have changed radically, especially after the 9/11 incidents.
To explain that, it is necessary that the internal mechanics at work in the US system are understood. The 9/11 incidents triggered two successive wars in West Asia and the Middle East. The wars also created dissent in the USA against what the electorate regarded as unnecessary foreign engagements.
The rationale within the USA for that dissent rested in the fact that the economy took the full load of the war effort in the form of a worsening balance-sheet of the incumbent US Administration of that time in the form of inflating ‘internal debts’. The impact on an otherwise business friendly economy could well be imagined.
It was no coincidence that the vote for Democrats for successive terms in 2008 and 2012 were in fact an antiwar reform-oriented vote. The USA, coming out of the ashes of the Afghanistan and Iraq engagements, was much against current wars and getting into new engagements.
The succeeding Republican Trump administration could not turn the tide against the reform vote, despite all the rhetoric. In the case of the Yemen war, much was sublet to the Saudi and Emirati war machines. The only symbolic anti-Iran gesture on part of the USA war machine were the weekly or monthly long haul flights of B-52 bombers taking off from NATO designated airfields in the UK or Germany; dutifully escorted by the Israeli and Saudi air arms, when flying over the Gulf and Middle East. Despite the high tempers between Iran and the USA in the aftermath of the Soleimani strike; the USA choose to de-escalate after the Iranian symbolic onslaught on the US base of Ain al Assad in Central Iraq near Fallujah.
The incumbent Democrats under Biden are following the same mode. The signs of that de-escalation can be found in Saudi disillusionment with the USA in the military and economic domains. It is teaming up with China, mending fences with Iran; to the point where Crown Prince Muhammad Bin Salman is quoted sending his regards to the Iranian Supreme Leader, means a new world order; with Pakistan no exception to that.
Consequently, what has been observed since the Obama and Trump days and now under Biden, Pakistan is expected to mind its proverbial ‘kitchen’ itself. As evident, there are no efforts on part of the IMF or the USA to ensure that the exchange rates in Pakistan remain stable. Rather it is the other way round. While the USA is interested in military alliances on a case-to-case basis, and the Pakistani counterparts are literal ‘head over heels’ over any such offer, even if the engagements like the one witnessed in Ukraine are without any CSF type of arrangement.
Here comes the task of how the policymakers, economic managers and background players make the most of the available options. The beaten track option of following the capitalist world as per the Pentagon plans does not hold promise, given the dire economic straits Pakistan is into now with no visible respite over how the economy can be micromanaged. In a scenario which started during the hybrid years of 2018-2022 when the exchange rate of a stagflation-ridden economy was gambled for a free fall, which resulted in serious economic distress, both at the macro and micro level; any further dependence on the same rules of business can cause even more devastation.
Pakistan needs to identify more with the emerging economic bloc, led and cajoled by China than to have photo ops with the USA. One dividend can be mending fences. The MBS-Khamenei rapprochement can be a reference point for the Pakistani planners in mending fences with neighbours. If Pakistan can generate enough foreign exchange from regional trade; eastward or westward, SAARC or ECO; it can come out of the woods with economic and political stability within and along the international borders.
The stakes for the background powers are high; whether they look at things with their respective tunnelled vision or are willing to look beyond. Here it is imperative that regional developments like BRICS are made a reference point for joining new economic and even strategic configurations. The general perception aided by political hotchpotch and energy shortage has created scepticism that Pakistan needs to say goodbye to the Western bloc or at least make a balance.
For good or for bad; the current establishment-backed configuration with political uncertainty at high peak or a genuine return to democracy, important economic decisions, especially with reference to a trade-based development strategy, are imperatives for all the concerned decision makers. Pakistanis, whether they are key decision makers, political leaders, community leaders, men in uniform or anyone else, not the least the ambitious middle class, needs to look beyond their noses and take the country out of the quagmire they helped develop.
