Cost of conflict

Can Pakistan afford to keep hurting India?

It is one of the subcontinent’s most heartbreaking tragedies. Commentators on this side of Radcliffe’s meandering line have long bemoaned the Lost Decade in Jammu and Kashmir, the years the people of the state have been forced to sacrifice in dodging the crossfire. Across the border too, that telling phrase, the Lost Decade, is being uttered with startling regularity in a vibrant debate on the precarious state of Pakistan’s economy, on the factors contributing to its slippery slide to bankruptcy and on to the gates of the International Monetary Fund. It would be tempting, then, to link the historic, albeit token, cut in Islamabad’s defence budget announced on Monday with an acknowledgement of what a leading Pakistani columnist has termed ‘‘the price Pakistan is paying for hurting India in Kashmir’’. It would, however, also be naive.

In inflicting upon his government the psychological blow of actually chipping away at the defence outlay, Pakistan’s Foreign Minister Shaukat Aziz was perhaps more keen to extricate his country out of its ‘‘single tranche’’ status than to take stock of the cost of confrontation. With Pakistan scheduled to complete a one-year loan programme with the IMF this autumn, Aziz’s efforts at fiscal discipline are aimed more at securing a subsequent three-year loan. For a military dictatorship that seized power bloodlessly in October 1999 and won great popular support for its avowed ambitions to reform the country’s economy, these are tough times. GDP growth is down drastically; foreign exchange reserves are still hovering at a measly $1 billion; the long- and medium-term foreign debt is estimated to be almost 50 per cent of GDP, feeding fears of default. To make matters worse, farm incomes are down after a furious drought, which has in turn depressed consumer spending. But Aziz and his bosses would consider themselves lucky if their travails were limited to masterminding — or merely implementing on the IMF’s directive — structural reforms. The possibility of Pakistan ceding economic sovereignty to the IMF could give rise to an unlikely anti-government coalition: jehadis distressed at the thought of the country’s defence budget being periodically scrutinised by economists in Washington, politicians seeking an emotive issue to re-engage with the electorate, and sundry members of the intelligentsia enraged over foreign prescriptions. It is to these ‘‘ladies and gentlemen’’ that Aziz probably addressed his assurance that ‘‘Pakistan’s sovereignty and credible deterrence will never be compromised’’.

Call it yet another of life’s little cruelties, but the challenge for Pervez Musharraf and co. does not end at assuaging the feelings of these ladies and gentlemen — that is, if they are in fact desirous of urgently turning around the economy. Cosmetic cuts in the defence budget can certainly not account for ‘‘the price Pakistan is paying for hurting India in Kashmir’’. Pakistan for many years now has argued that its unfinished business with India be accorded priority over economic imperatives. This question of priorities must be reconsidered now that economic stagnation looms ever larger. Or else Pakistan’s Lost Decade will simply stretch beyond a mere 10 years and a bit.