A Landscape Where Fear Dominates

ISLAMABAD — There are many ways to describe Pakistan’s descent toward default.

Version 1: Struggling to maintain its sovereignty in an unfriendly region, Pakistan is sandwiched between escalating war in Afghanistan and renewed fighting in Kashmir. It is forced to confront a menacing and belligerent India by maintaining an expensive military establishment. The price of supporting 130 million people with an inadequate resource base is social fragmentation born of scarcity and occasional violence born of frustration. Nuclear development is a logical response to the dangers that confront the state; international sanctions, imposed as a result of nuclear testing, impose unfortunate corollary costs.

This is generally the view of Pakistan’s governments.

Version 2: Pakistan is a significant force in south and southwest Asia. It is a protagonist in the Kashmir insurgency and a major player in the Afghan war. Bellicose in rhetoric and unrealistic in its regional designs, its governments mismanage resources, spend far too much on the military, resist social investment, squander opportunities for change and do not take the business of governing seriously enough. Nuclear development is a sure way to raise the state’s security risks without solving the country’s problems; sanctions simply add to existing economic gloom.

This is often the view of observers, near and far.

Version 3: Pakistan is an unsafe place to live. Its borders are insecure, and armed sectarian and subnational groups threaten not only communities across the country, but the state as a whole. Its governments prefer policy pronouncements to concrete investments in its people. Basic necessities are too expensive and costs are spiraling out of control. The system of law and order provides neither security nor justice, and the palpable threat of war, now potentially nuclearized, and with the added costs of sanctions, shadows even the most mundane daily tasks.

This is the view that matters: It is the view of many Pakistanis.

The common element in these depictions is fear: that the state is inadequate to the tasks it faces, that the economy has outspent itself, that the demands of personal and national security coexist only to conflict. As the threat of default looms--last week, the International Monetary Fund and bilateral donors struggled to craft a rescue package that can save Pakistan from more fiscal despair--the jeremiads so often uttered by Pakistan’s political classes and external creditors alike may, some fear, be coming true.

For more than 50 years, Pakistan has lived on the edge. With equal measures of shrewdness and bluster, it has managed to stay ahead of the creditors who so often dog its steps. When bills required payment, external debt took priority: rescheduling, structural adjustment loans, promises of reform, every diplomatic currency was used to forestall the costs of often misguided policies. The results are crippling external and domestic debt, a stagnant economy and a political system coping unhappily with unfulfilled expectations, diminishing aspirations and intermittent alienation.

Robbing Peter to pay Paul is not good policy. Without investing in education and health care, the country does not have trained workers who can help the country enter the world economy of the next century. Without viable energy policies, industrialization can never keep pace with the increasing responsibilities of urbanization. Without reasonable tax policies that take into account shifting concentrations of wealth and poverty, planning presumes a fictional economy. Without moving out of the debt cycle, the state’s role in securing its future has become tenuous. Without imaginative social policies, governments cannot sustain the loyalties of their citizens.

Pakistan’s cumulative crises of economy and governance have now come to a head, not because its citizenry has rebelled (which might be understandable), but because its foreign and domestic policies finally collided. An example: The day Pakistan tested its nuclear device in May, the government suspended fundamental rights under a state of emergency, as if it were not clear whether enemies were within or without.

This clash was not inevitable. Insecurity on the part of politicians, who seek military sanction far more than constituency support for their political rule, combined with corruption at the highest levels conspired to weaken government and state alike. Politicians from all parties bicker about details, but often echo military preferences as if they were received wisdom. Such was the brief justification for nuclear testing, and persistent engagements in neighboring wars.

But blind adherence to presumed dictate holds hidden dangers. Faced with unresponsive governments, many Pakistanis believe that the military leadership defends democracy more than politicians do, and that it understands the imperatives of social spending far more than political leaders do. Many are willing to sacrifice the current experiment with democratic form to military intervention, in hopes of achieving the substance of democracy instead. This is hardly an enviable negotiating posture for the government; it is a worse choice for Pakistan’s citizens, and testifies to the decline of irresponsible governance to little or no governance at all.

Creditors, donors and diplomatic interlocutors historically have underscored these confusions with a mixture of paternalism and patronage. Supporting sitting governments, they watched corruption flourish and their own funds, for social-welfare schemes and power generation plants alike, disappear into a sea of missing money and worse, lost opportunities. When in doubt, they looked the other way: While decrying mounting debt, they provided loans and concessions for military hardware, whose upkeep they now strongly criticize, and ignored a developing nuclear enterprise, while mouthing mantras of nonproliferation. Some agreed with Pakistan’s persistent contention that Kashmir is the flash point for nuclear engagement with India, only to discover instead that nuclear testing has become a catalyst for Kashmir’s continuing conflagration.

Hence: today’s crises. Pakistan’s economic frailties predated sanctions imposed as a result of nuclear testing--indeed, sanctions provided a renewed excuse for reform--but no creditor wants a nuclearized, defaulting Pakistan. Moreover, the government’s recalcitrance in agreeing to nonproliferation guarantees--the price for many creditors, and a relatively inexpensive concession--speaks volumes about the insecurities of its rule, the fragility of partisan politics and the capacity of the state to negotiate for its own future.

Multilateral and bilateral negotiations can only succeed under four concurrent conditions: first, unanimity among creditors to sustain nuclear conditionalities, combined with strong bids for regional peace; second, insistence that military spending be curbed, as Pakistan’s own economists have stressed for years; third, strong economic accountability to protect Pakistanis from the enticements of official corruption, and, most important, a clear understanding that national interests override single-party preferences, that multipartisanship reigns over long-term economic policy-making, and cheap political shots are silenced to protect the needs of Pakistan’s citizens.

These conditions require wide consultations within the country and willingness by all parties to share the burden of rebuilding a political edifice that all have damaged. Otherwise, to no one’s benefit, Pakistan’s fears will continue to dominate its political and economic landscape, and its hopes will be thwarted for some time to come.