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Instability in Pakistan: Impacts of the Global Economic Crisis

As part of its ongoing study series focusing on the security implications of the global economic downturn, the Center for National Policy hosted a discussion on the effects of the crisis on Pakistan's stability with Ambassador Teresita Schaffer from the Center for Strategic and International Studies and Stephen Cohen, a senior fellow with the Brookings Institution. In the discussion, moderated by NPR's Tom Gjelten, both Schaffer and Cohen highlighted some of their general impressions on the current and future stability of Pakistan.

Ambassador Schaffer began by describing the current situation in Pakistan as a "crisis of the state" as militant groups attempt to take over territory and institutions are having difficulty fighting back. She also noted that the millions of internally displaced civilians, fleeing the fighting in the Swat Valley and surrounding areas, are creating additional potential for unrest. On top of these security concerns, she noted a number of economic issues which are adding to the precariousness of the situation in Pakistan.

First, she described the long-term decline in investment in Pakistani civil society, namely in education and health care. These issues are compounded by the country's booming population growth, which in turn affects water and power shortages. Next, she discussed the fluctuations in commodity and energy prices, along with inflation, which forced Pakistan to turn to the IMF for aid in the form of an austerity package. Additionally, she pointed out the country's trade deficit and dependency on remittances, two issues that are creating further economic problems for Pakistan. On the topic of economic aid, Ambassador Schaffer stated that she believes it is part of the solution for Pakistan, pointing to her support of the Kerry-Lugar Bill, under the stipulation that the money is well spent. She defined "well spent" as using the money in three productive ways: (1) towards education and health care with proper monitoring, (2) to entice foreign investors by minimizing the danger in rural areas and (3) to boost international trade through the financial aid. She ended her remarks by insisting that with police reform, and therefore improved law and order, foreign investment would be able to increase.
   
Like Ambassador Schaffer, Stephen Cohen discussed Pakistan's economy as an important factor for the country's overall stability. Mr. Cohen suggested that following the advent of globalization, Pakistan had failed to capitalize on the new ideas and goods that came with it; in turn, therefore, globalization actually had a negative affect on Pakistan. Mr. Cohen also outlined some scenarios which, if the occur, could weaken the Pakistani government and the country's security. Included in his list was concern over the possibility of military intervention in the civilian governance, as well as the possibility that the army could eventually be infiltrated by Islamic extremists. Mr. Cohen also discussed the possibility that a weakened central government may eventually become unable to exercise its authority throughout the county, which would result in regional separatism. Other possible futures that Mr. Cohen illustrated were: (1) though unlikely, potentially an increase in democracy; (2) another major crisis with India; and (3) the rise of a charismatic, authoritarian leader. Mr. Cohen saw Pakistan's economic factors as just one part of the problem of defining Pakistan's identity in to the future. Formulating an overarching identity in the country, according to Cohen, is exceedingly difficult given that Pakistan's identity is tied with that of India and also because there are so many factional groups within the state.
   
In response to questions from the audience, Ambassador Schaffer argued that India could potentially have a positive economic impact on Pakistan through increased trade. According to Schaffer, while Pakistan may be wary of Indian goods flooding its markets, India realizes that it is in its interest for Pakistan to remain stable and in good economic standing. Ambassador Schaffer closed the discussion by asserting that Pakistan cannot rely solely on foreign aid and investment but that Pakistanis must take primary responsibility for solving their political problems.

Mr. Cohen was asked to what extent the use of excessive military force on Pakistan, particularly U.S. drone attacks, is of concern in this administration.  Cohen referred to President Obama's speech in Cairo, indicating that although it was "well-received" by the Pakistani people, the U.S. must support continued efforts to reach out to the Pakistani state and its people, for the sake of Pakistan's existence as a nation, and not solely as a military ally of America.

Another question raised by an audience member asked whether it was likely that Pakistan would sign the Comprehensive Test Ban Treaty (CTBT). Ambassador Schaffer pointed out that the Obama administration was first trying to get the treaty ratified in the United States. Once this was done, it would undoubtedly seek India's and Pakistan's and India's signatures. This would represent a difficult choice for India.  Pakistan would not look seriously at the CTBT unless India signed. Mr. Cohen followed up, stating that Pakistan bitterly resented not having been offered a deal comparable to the U.S.-India nuclear agreement. It might be necessary at some future point to discuss moving toward a Pakistani agreement.  Ambassador Schaffer added that there is an opportunity now to think about how both India and Pakistan can be included in the nonproliferation system, noting that the Obama administration should be sure to recognize the significant nuclear developments of the past decade.