At the end of 2004 we concluded our review of Musharraf’s Pakistan with a forecast for 2005. This is what we predicted. “ The economy will grow without significantly denting poverty. Relations with India will improve without breakthroughs on Kashmir. Political rapprochement at home will be primarily aimed at divide and rule rather than any genuine power-sharing. The religious parties will huff and puff but won’t be able to bring General Musharraf down. His personal security will remain the chink in his armour. He will not anticipate major problems or find solutions like a statesman or visionary leader… we may expect his policies to remain long on tactical retreats and dubious advances in response to changing situations but short on strategic vision in anticipation of irrevocably changed longer term realities.”
So how has General Musharraf actually fared? What is the outlook for 2006?
The Economy GDP growth is targeted at about 6% which reflects continuing confidence in the government’s economic policies. Cotton production, a critical factor, too, is good at 13 million bales. Trade is buoyant, with exports and imports rising 22% and 55% respectively until end-December. The currency is stable, the stock market is flourishing, and forex reserves of US$11.5 billion coupled with home remittances of nearly US$2 billion so far are good signs. Tax collection is up 16%. Total external debt is about US$34 billion, no more than before. The IMF has not returned to throttle us with conditionalities.
For Good:
For Bad : 9% (official) inflation is pinching people. Pervasive unemployment and underemployment exist. Income equality has not improved. No dent has been made in reducing poverty. The trade deficit so far is about US$5.5 billion, which exceeds the end-June 07 target of US$5 billion, spelling balance of payments. Thanks to the botched-up PTCL privatization, direct foreign investment is only US$800 million so far, which is far short of the US$3.5 billion target for the year and pathetic by emerging market standards. We are also poised to spend more than US$3 billion on arms. Foreign debt will jump 10% to US$38 billion on account of earthquake relief.
The Political Scene General Musharraf’s foreign policies are yielding fruit. A thaw in Indo-Pak relations has enabled Indians, Pakistanis and Kashmiris greater access to one another, with trade liberalization yielding benefits to consumers and plugging food inflation. Good relations with the international community, particularly the US, have also yielded $6.3 billion in pledges for quake relief. The print and electronic media is still relatively free.
For Good:
For Bad: General Musharraf has inexplicably sown the seeds of uncertainty and instability. His inability to settle the dispute with the Bugtis, followed by military action against the Marris, has alienated Balochistan. His decision to build the Kalabagh Dam has agitated Sindh and stirred Pakhtun nationalists. The rise of Talibanism in Waziristan is a bad omen. These policies have brought the army and Punjab into disrepute. New fissures have developed in the ruling Muslim League. His U-turn on the local bodies system shows a lack of confidence in his originally envisaged system. The fact that there is still no succession principle built into his system means that if something were to happen to him every significant appointment, policy and undertaking would be up for grabs. His continuing inability or unwillingness to substitute the military’s traditional partnership with the religious parties with one with the mainstream liberal PPP confirms the weaknesses and contradictions in his system. How can he sustain a liberal and moderate agenda at home and a pragmatic foreign policy abroad without the right partners? Selective repression in the media and mishandling of human rights issues, especially those pertaining to women, has tainted his reputation and harmed the country’s “image”.
Civil Society The “cultural” environment under Musharraf is less suffocating than before. The government is not insensitive to crimes against women and minorities. Fundamentalist religious edicts and fatwas are generally ignored. The courts are shedding their neo-conservatism. Al-Qaeda terrorism and jihadi fervour has diminished while pro-West sentiment is rising in view of international earthquake relief.
For Good:
For Bad : “Enlightened moderation” doesn’t exist in practice. Madrassah reform hasn’t started. Education revamp is mired in bureaucratic wrangling and niggardly resource allocation. Police reform and speedy justice are nowhere in sight.
OUTLOOK for 2006 The uncertainty and agitation triggered by General Musharraf’s anti-province policies will destabilize his regime and undermine confidence in the political system and the economy. The developing rifts and forward blocs in the PMLQ will hurt his prospects. Public frustration with lack of dispute resolution with India will lead to a question mark over his India policy. Lack of political rapprochement with the mainstream PPP will compel it to join hands with the religious parties and sub-nationalists to create difficulties for him. Personal risk will remain high. Dubious advances and tactical retreats will not cover him with glory. The country’s “image’ will continue to take a beating despite expensive media manipulators.