Pakistan's bumper $6-billion bailout from Saudi Arabia raises major questions about what Riyadh wants in return

The Jamal Khashoggi affair could not have come at a more opportune moment for Pakistan's government led by Prime Minister Imran Khan

Vinay Kaura October 29, 2018 09:59:24 IST
Pakistan's bumper $6-billion bailout from Saudi Arabia raises major questions about what Riyadh wants in return

Timing is everything in politics, both domestic and international. If the CBI bubble burst at the most inopportune moment for Prime Minister Narendra Modi — at a time when five Indian states are going to Assembly polls whose outcome will have a critical bearing on the 2019 General Election, the Jamal Khashoggi affair could not have come at a more opportune moment for Pakistan's new government led by Prime Minister Imran Khan. It may be recalled that Islamabad is struggling with a severe balance of payment crisis.

Besides anti-Indianism and Islamic fundamentalism, opportunism also serves as a backbone of the Pakistani State. The country's ruling elite has perfected the art of taking advantage of another country's vulnerabilities. And after Khashoggi's assassination, the Saudi regime is experiencing one of the most vulnerable moments in its entire lifespan.

Several persons and countries have been affected by Khashoggi's cold-blooded murder: Imran is one such person, and Pakistan is one such country. Before Khashoggi's messy murder weakened Saudi Arabia, the Pakistani prime minister went on his maiden foreign visit to Riyadh in September. There was speculation that the Saudis would accept his request for help in meeting a financial crisis at home, but nothing of substance materialised. However, within as a few weeks, the circumstances for the Saudi regime changed dramatically.

Pakistans bumper 6billion bailout from Saudi Arabia raises major questions about what Riyadh wants in return

File image of Pakistan prime minister Imran Khan. Twitter @ImranKhanPTI

Khashoggi, a Saudi citizen who was also an American resident and a Washington Post columnist, had recently fallen out with the Saudi establishment following expressing dissent against the policies being pursued by the Saudi crown prince Mohammed bin Salman, the Kingdom's de facto ruler. A few weeks ago, Khashoggi disappeared in the Saudi consulate in Istanbul and did not reemerge from the building.

As international pressure mounted, Riyadh was forced to confirm that Khashoggi was murdered inside the consulate. To the utter surprise, discomfort and embarrassment of the Saudi royal family, the Khashoggi saga has since continued to unravel. Hundreds of millions of dollars spent by the Saudi royal on public relations seem to have gone down the drain; the monarchy is yet to learn how to protect its global reputation. Even Republican senators who once supported the Saudis, have been left revolted by the atrocity. Although few expect King Salman to sideline his favourite son anytime soon, he is likely to be relieved of some of the portfolios. In response to the killing, many political leaders, business executives, and media outlets cancelled their trips to Saudi Arabia to attend the economic forum, also known as "Davos in the Desert".

Imran was also scheduled to visit Riyadh for the investment conference in what would be his second visit in a month as he is desperately seeking financial aid from 'friendly' countries to minimise what are sure to be agonisingly stern conditions placed by the IMF on Pakistan as part of the bailout. The bigger the bailout from the IMF, the greater the impact on the political survivability of the PTI and Imran. But then the Khashoggi episode took place and the international reaction stunned the Saudis. Imran and his group of advisors immediately sensed the importance of undertaking a trip to Riyadh as the international heavyweights turned their backs on Saudi Arabia. And the outcome was $6 billion, which will finance half of Pakistan's current needs of $12 billion.

Imran was able to secure the bailout deal when Pakistan needed it most, and at a time, when none of its friends were really keen to provide such assistance. But, the prime minister is not unaware of the implications of this deal. The international leaders who did not visit Riyadh cited principles that can be considered dear to any democratic nation: Rule of law and freedom of expression. He may sidestep the issue of moral liability on the principle of realpolitik. In other words, much that is immoral in general, is permitted when a country's economic survival is at stake. All approaches to political morality conceived without practical applications in mind are generally troubled.

Imran's advocates are already celebrating his "tactically smart participation" in the Saudi investment conference. The surprise infusion of financial liquidity could mean a fantastic boost for the PTI government and the Pakistani economy. But he lost an historic opportunity to subject Pakistan to "shock therapy" which nonetheless entail huge political risks and economic uncertainty. But what about the questions being asked about Riyadh's expectations from Islamabad? Will it be involvement in war in Yemen, which has been destroyed by two years of the Saudi-UAE joint bombing campaign against the Shia Houthi militia?

The Yemen conflict is rightly viewed as part of the regional geopolitical rivalry between Iran and Saudi Arabia along with its regional allies. Has Pakistan been asked to get involved in the Yemen crisis? This is what the PTI’s spin doctors seem to suggest. But when Pakistan finds it so incapable to help resolve the Afghan conflict where it has more leverage with one of the protagonists, it is anybody’s guess what role Islamabad is going to play in the resolution of the Yemen crisis. The only role the Saudis may find appropriate for Pakistan is its military strength. So, the hidden cost of the Saudi bailout, in all likelihood, is the despatch of Pakistani troops to Saudi Arabia. All Pakistani political parties, including the ruling PTI, have been staunchly against sending of Pakistani troops into the war in Yemen.

Turkish president Recep Tayyip Erdogan has already claimed that the Saudis had planned Khashoggi’s assassination. Since Pakistan enjoys very close relations with Turkey, Imran cannot afford to antagonise Erdogan with the celebration of his mercenary bailout deal with Riyadh. He has sent Pakistani president Arif Alvi to Turkey on his first official visit. Although the ostensible reason for Alvi's visit is to attend the opening ceremony of Istanbul’s new airport, he will be expected to explain the rationale behind Pakistan-Saudi deal.

Ethical and moral considerations are alien to Pakistani policymakers whose singular role in international politics is to oppose India.

Besides the bailout deal, the lifting of the ban on the Jamaat-ud Dawa (JuD) and Falah-i-Insaniyat Foundation (FIF), offshoots of the banned Lashkar-e-Taiba (LeT), explains the nature of opaque and irrational decision-making in Pakistan. These groups were outlawed in February via a presidential ordinance. Even though this move came ahead of what turned out to be a fateful Financial Action Task Force (FATF) meeting in Paris, it was a good decision to ban terror groups active in Pakistan that have been blacklisted by a UN Security Council committee on sanctions against terrorist groups. After the lapse of the presidential ordinance, they are no longer proscribed groups in Pakistan.

Pakistan's journey to democracy has been quite haphazard and erratic. Only the last two democratically-elected governments were given a chance to complete a five-year term. That despite the fact that elected governments also failed to deliver on the governance front and continued with the same economic and foreign policies of military dictatorships that ruined Pakistan.

Former Pakistani Senator Farhatullah Babar brilliantly summed up the Saudi deal when he tweeted that "Remember, trade-offs that are mercenary in character intrinsically unsustainable, will haunt Pakistan for long." Therefore, it remains an open question as to whose vulnerabilities will be exploited by whom. But the charge that Pakistan is ultimately dependent on foreign aid and external loans cannot be brushed aside. Since $6 billion are not sufficient, Imran will visit China in the first week of November in an effort to obtain fresh loans to prop up the economy.

The bailouts sought by Pakistan will further encourage and normalise economic mismanagement and strategic myopia among Pakistan’s ruling circles. No regime has shown the guts to implement much-needed reforms in governing practices and strategic vision which can make Pakistan a viable, functioning political entity. As long as the military remains the dominant influence on policy, Pakistan's economic decline cannot be arrested. Imran can make "Naya Pakistan" only when anti-India geopolitics is no longer the overriding preoccupation of the Pakistani State.

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