Pakistan is the net gainer

D R PENDSE

AMERICANS feel humiliated that despite their might and organisation, some obscure terrorist groups hailing from ‘faraway backward lands’ could so successfully attack the World Trade Centre and the Pentagon and kill thousands of its citizens. There are many in the world who, for various reasons, are secretly jealous of the US and hate the US lifestyle. In their view, the US was deservedly taught a lesson.

The ‘faraway backward land’ is Afghanistan. It is perhaps the most backward country on earth outside Africa. About three-fourth of the world’s opium is grown in Afghanistan and consumed all over the world. A lot of money laundering is obviously involved. The terrorists too need a lot of money to mount such meticulous projects successfully within countries like the US. International money laundering is now worth over $ 1 trillion a year.

As a neighbour, Pakistan has been a pain in the neck for India for quite some time. Its economy has been in a shambles with foreign exchange loans of well over $ 35 billion awaiting repayments, and with exchange reserves at less than $ 2 billion. In the attacks in the US, Pakistan quickly smelt a life-time opportunity of twisting the US arm to extract all that its economy needed and much more. The US seems to have responded and offered on a platter all that Pakistan wished for. The most outstanding publicly known example of this is of course the lifting of the economic sanctions against Pakistan. (Sorry, the technical word is waiving.)

The waiver of sanctions means that the overdue foreign loans of over $ 35 billion will be for all practical purposes written off and shipments of defence supplies to Pakistan will resume. To the smiling Pakistan, the message from the waiver must have been clear: Live recklessly; behave arrogantly; drive the economy to the fringe of bankruptcy, and one day with the help of a little shrewdness, deep pocketed needy countries can be asked to come and clean up the whole mess for you and place you once more on the top of the world, free to engage in another long era of economic and financial laxity.

With such massive foreign aid being received after the waiver of the sanctions, Pakistan’s rickety defence apparatus, mostly of US origin, will once again be state of the art; well stocked with modern US spares and parts and once again ready to strike against any of Pakistan’s chosen adversaries. The Afghan connection may go on the backburner after some time; but not the newly acquired guns. An utterly dirty sight for India. Borrowing from Mao’s profound statement about friends and enemies, one is tempted to muse: Anything that is a benefit to your adversary is a loss to you. Anything that is a benefit to a friend of your adversary is also a loss to you. Larger the benefit, larger the loss.

Wars and recessions rarely go hand in hand. The war will soon mark the end of the US economic slowdown. It is futile to think however that American citizens are going to engage themselves in any prolonged war directly for very long. They will not mind financing wars which will be fought by the people of third countries and which will help the US’s defence industry.

Seen in this grim perspective, we were unnecessarily enthusiastic in offering help, unconditionally and without even being asked for it, in such important matters as sharing maps, giving refuelling facilities and the rest of it. If this sort of help was valuable to anybody, could we not have driven any mileage out of it in our long journey to prosperity? Nor do I see these ardent pronouncements winning many friends for us in the long run. We were equally hasty in increasing the cap for FII investment to be on par with that for FDI investment. Much of the FII investment can become hot exactly when we don’t want it to be; but much of the FDI investment is in permanent cold assets within the country. Did we gloss over these facts? What has this liberalisation to do with the attacks in the US any way? Why are we pressing this panic button when we also boast of our comfortable exchange reserves position?

The dice is thus being loaded heavily against us in India. Maybe, some of the loading is no fault of ours. But it does underline the need to be brutally vigilant in this world that has no friends but only interests.