The Process of CPEC – Confidence, Corruption, Elections, China
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Issue Courtesy: CLAWS | Date : 04 Aug , 2017

PM Nawaz Sharif was forced to resign one year before his stipulated five- year term in light of the Supreme Court verdict indicting him for disproportionate foreign assets revealed as part of the Panama Papers Expose. Articles 62 & 63 of the Pakistani Constitution[i] have been invoked which were inserted at the time of President Zia-ul-Haq. This article argues that his ouster has four dimensions.

The first is the confidence across various stakeholders of the Pakistani State. The Military is confident after Zarb-e-Azb & Radd-ul-Fasaad that the worst of internal terrorism is behind them notwithstanding the fact that the TTP and its factions have not been eradicated. The opposition parties of PTI led by Imran Khan and PPP led by Bilawal Bhutto are confident at the prospects of their own ascent into the space vacated by Nawaz Sharif. The ruling party PML (N) is confident that the interim arrangement will weather the storm upon the Sharif family[ii]and the party.

The second dimension to the problem is the problem of corruption. Corruption is a complex problem which does not present itself to righteous indignation among the usual critics of the Pakistani military. There are speculations that the whole case has been used by the Pakistan military[iii] to discredit Nawaz Sharif and strengthen its control again. The International community has long held the political and economic corruption of the Pakistani military as the main obstacle to the fight against terrorism. Thus the PM’s indictment by the Supreme Court leaves the military’s critics outflanked in terms of protesting the Army’s role in more assertive ways. Corruption is a societal problem and the point cannot be labored enough that the solution requires a comprehensive solution. This solution has remained outside the bounds of states in South Asia. Corruption like nationalism is a potent problem which can be used either way. Just as the issue of nationalism is never wrong per se but dangerously hubristic when used politically, the issue of corruption is never right per se but dangerously pervasive when used apolitically. Thus, whether corruption is endemic or exogenic is a question which requires years of analysis, proportionate thought and tackling. The SC in its rightful wisdom has deemed it sufficient to dismiss the PM. Therefore, the SC has also displayed the institutional confidence mentioned earlier in the article.

The third issue is the electoral politics and interim arrangement. Will this gap period in democracy simply be a blip till 2018 elections or will this trigger another round of vendetta cut throat politics strengthening the military ultimately. The confidence among the opposition is high. The former minister Hina Rabbani Khar said in an interview[iv] that the Pakistan is on its way to a completely different trajectory from the past. She said that there is a consensus among the elite that ‘internal’ terrorism needs to be combated and role of the military needs to be reduced in the security and foreign policy of Pakistan. The reason for this confidence seems to be the National Action Plan (NAP) which was formulated after an all-party meeting in the aftermath[v] of the Peshawar school attack. The continuing attacks and open threats issued by LeJ and JuA post Zarb-e-Azb and during the ongoing Radd-ul-Fasaad are also facts to be considered[vi]. A systemic attack on the ideology of terrorism remains a pipedream.

The fourth and final issue is the Chinese investment which has ingrained itself across the spectrum in the Pakistani state. The CPEC has bolstered the confidence of institutions in Pakistan. Alternative source of capital has led to optimism among the military and political parties. The US’ conditionality of progress on terrorism is welcome from an Indian point of view but the CPEC and China is the kind of relationship the Pakistani elite is banking on. The IMF released a report[vii] which said that the benefits of CPEC would accrue in the long term,  but instituting reforms in the short term and increasing the distribution network for power generated in hydro-electric projects was vitally important.

“The first challenge[viii] is to ramp up export revenue and build foreign exchange buffers, which “will be important to cushion the period of increased BoP outflows”. Ramping up exports will require “improving competitiveness and the business climate” in order to realise the potential benefits from the increased energy supplies and transport infrastructure that the corridor projects will create.

The second big challenge[ix] is bringing “full cost recovery” in power distribution. “Routing the increased generation capacity through a loss-making distribution sector could result in faster accumulation of circular debt and fiscal costs, as well as undermine long-term financial sustainability of the new energy projects,” the report adds.

The benefits would have to be distributed outside traditional centers like Lahore & Karachi as well. The absorptive capacity of the Pakistani state will be tested. However, the China factor has started to show political dividends with all stakeholders warming to CPEC and thus growing in confidence. PML(N) itself will surely invoke CPEC ahead of the elections next year.

What does this mean for India?

In the near term, India needs to capitalize on this growing confidence of the Pakistani state actors to canvass for good relations with India among the politicians. The Pakistani military will look to intensify its India and J&K policies with an interim government ruling the country. The Pakistan military will be hoping for favorable parties to eventually control the civilian space. Imran Khan’s PTI with its base in KP has had certain common cause with the ideologies of the Pakistan deep state. India needs to engage politicians in Pakistan to encourage institutional mechanisms. The backroom machinations of the Pakistan state are beyond the scope of Indian influence. Indian policy needs to use this time to gather western support on anti-terrorist policies in Af-Pak and highlight the depth of China-Pakistan partnership. India needs to increase cooperation with US and Afghanistan on Policy. Indian focus needs to urgently remain on fighting LeT, JeM, HM, Afghan Taliban and the Haqqani Network and the ideology that supports it. India needs to impress on the Trump administration the urgency of an American South Asia policy after the review is completed. This policy needs to combat the narrative that Afghanistan and Pakistan are ungovernable. The unity government in Afghanistan has held under severe pressure and the Pakistani military can eradicate terror if it chooses to do so. The Pakistani political class is behind the military in fight against terror but hold no say in identifying terror groups. The anti-India and anti-Afghan terror groups are linked to the ISI and the Pakistan military holds veto over their fate.

Finally, the personality of Nawaz Sharif has been linked to many India-Pakistan peace processes of the past so his ouster is a setback to hopes of a Modi-Sharif understanding. This however does not deter from his legacy of making positive statements of an Indo-Pak peace. These statements are always taken with a pinch of salt. They are welcome nonetheless since Indo-Pak is no ordinary relationship. If the opposition fails to capitalize either, the Pak military will continue to enjoy the fruits of division among the Pakistani political class. The Pak SC has chosen to follow the process in this particular case. It remains now for all stakeholders in Pakistan to privilege process over ideological outcomes as a matter of strategy. A democratically elected mandate in 2018 will be the litmus test for the latest display of institutionalization in Pakistan. It is for India to decide how it views the latest development- Soft Coup, Military Control or Institutional Process. This choice in turn depends on how long Pakistan can support institutional processes continuously in the shadow of the military and on the back of Chinese support to the political economy.









[viii] Ibid.

[ix] Ibid.


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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Prateek Kapil

is an Associate Fellow at CLAWS.

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