Playing with fire

TO diagnose Saudi Arabia’s fear instincts, one would have to travel back to 1979. That year saw the Iranian revolution, and Ayatollah Khomeini’s subsequent talk of ‘exporting’ the revolution which has left Saudi Arabia with an exaggerated fear of Shia expansionism.

That same year, hundreds of armed extremists seized the Grand Mosque at Makkah. Shortly afterwards, two brigades, roughly 10,000 Pakistani troops, were deployed to Saudi Arabia under a bilateral joint military agreement aimed at protecting the Saudi monarchy.

One part of Saudi Arabia’s anxiety stems from its perception of a growing Shia footprint which now includes the Bashar al Assad regime in Syria, the Hezbollah militia’s strength in Lebanon, the Maliki government in Iraq, and the three years of Shia led pro-democracy protests in Bahrain.

Saudi Arabia is also suspicious of its own Shia population in the Eastern Province, where it fears the radical Hezbollah al-Hejaz is active.

At the same time, it is nervous about any domestic unrest that may be inspired by the Arab Spring uprisings. This nervousness was apparent when it announced a generous financial support package for its own population in 2011.

It is particularly wary of the mobilising capacity of the Muslim Brotherhood, whose political Islamism and grassroots activism are anathema to the House of Saud, whose grip on power comes from keeping religion under its own tight control and patronage.

And even as Egypt’s military junta has ousted the Brotherhood’s government (and received billions of dollars in Saudi largesse), it has stoked much Islamist resentment in the Arab world.

In the clearest sign of this fear, Saudi Arabia has recently declared the Brotherhood as a terrorist organisation and passed new anti-terror laws that Amnesty International regards as a tool to crush peaceful expression.

Saudi Arabia also faces a radical Islamist threat from Al Qaeda in the Arabian Peninsula which is now lodged in Yemen. It is entirely plausible that AQAP has been making every effort to penetrate Saudi Arabia’s state institutions and security forces.

Saudi Arabia promoted the Syrian rebellion against Bashar al Assad. That proxy war has reached a stalemate. The rebellion has been hijacked by jihadist groups who have turned on each other.

The fighting is out of anybody’s control and now Riyadh fears the fire may spread. Many Saudi fighters who had joined the rebellion could become the link between underground Saudi Islamist groups and jihadist groups fighting in Syria. In a royal decree announced last month, Saudi Arabia has banned its citizens from participating in the Syrian civil war.

A prolonged conflict in Syria could also spill over into Egypt where an Islamist movement against the military junta is in early stages. That would further complicate the Kingdom’s threat matrix.

The recent quiet sidelining of Prince Bandar bin Sultan, head of Saudi intelligence (and the mastermind of the campaign to overthrow Assad), is the clearest sign of this reordering of threat priorities. He is no longer to be in charge of Saudi policy on Syria which will now be handled by Interior Minister Prince Mohamad bin Nayef. Nayef’s skill set? Counterterrorism work against Al Qaeda.

Saudi Arabia may yearn for an early end to the war and the establishment of a transitional government in Syria, but is this objective realistic? Would Assad’s ouster necessarily end this war? Are the Russians going to stand by and watch the demise of their only ally in the Arab world? How will they likely respond to anti-Assad rebels receiving shoulder-fired anti-tank and anti-aircraft (and possibly even heavier) weapons, that Pakistan has been showcasing at its IDEAS defence exhibitions?

How will Iran respond as these weapons arrive in Jordan for subsequent issuance to selected rebel groups? There may well be an end user agreement; but do we really intend to monitor and enforce it? Are our trainers and other mercenaries also expected to arrive in Syria? And as the situation further complicates, will our friends in the Gulf expect other quid pro quo?

Some reports indicate that the Saudis are considering a standby force ready to put down Islamist and Shia uprisings whenever and wherever they may appear in the Gulf.

Such questions need to be pondered by our policymakers before further entangling us in this crisis. The parliament is the forum for such debates and policy appraisals.

Our representatives may also want to revisit the reasons why recently the US had hesitated to arm the rebels. They may similarly want to evaluate other risks and repercussions of this engagement. It’s time to open the windows and let in that fresh air.

2014 – Dawn Media Group

Contours of the threat

THE only certainty one can be sure of, they say, is change. And even as we look into an uncertain future, we can see some key trends. Then we look at the forces that are driving those trends and slowly a pattern begins to emerge. These visions make the future look less hazy. Here’s some of what we see:

Pakistan is facing a long war and this is not a war that will produce a victor and a vanquished anytime soon.

Pakistan is fighting a creed. This war is not so much with the Taliban as much as against the Talibanisation of our society — the Tehreek-i-Taliban Pakistan (TTP) representing only the extreme end in that spectrum.

The right-wing narrative is beginning to sound more and more ludicrous. False premises — that this is ‘America’s war’, that drone strikes are a key cause of terrorism and the Taliban are ‘misguided brothers’ — led to flawed prescriptions: block Nato supplies and negotiate with the Taliban. That narrative may well be at risk of becoming unhinged. It is difficult to decide which is more outrageous: Interior Minister Chaudhry Nisar suggesting a ‘cricket match with the Taliban’; or Pakistan Tehreek-i-Insaf chief Imran Khan suggesting that the majority of Taliban are ‘peace-loving’ and the TTP therefore should be allowed to open an office in Peshawar.

The relatively liberal parties are displaying clearer thinking, and a realisation that they may have a story that will better resonate with their constituencies. Expect them to keep churning the wheel to their advantage.

The parties of the right, arranged like dominoes, cannot stray too far from their long-held positions without appearing to be ‘switching sides’. Eventually if they do come round, they will find themselves in a squeeze zone, encroaching on the turf of the liberal parties whose story would be more original and spun to a greater degree of sophistication.

A continuous low to medium intensity conflict is foreseen. This is the ‘steady state’ that the talk-fight-talk-fight sequence appears to be heading towards.

The TTP will mostly strike military targets. The TTP as an Al Qaeda affiliate has been tutored in propaganda by the likes of Abu Yahya al Libi, Al Qaeda’s erstwhile chief information officer. Al-Libi was killed by a predator drone but not before he taught the current TTP chief Mullah Fazlullah that attacking military targets will raise the militants’ prestige without greatly alienating the right-wing civilian population. Only when a strong message needs to be sent to the civilian leadership will the TTP strike a civilian or political target.

The ‘cat and mouse’ game will continue without a decisive outcome. The TTP fighters will escape into Afghanistan when the fighting season ends or if they come under unbearable heat. Other fighters may melt away into the plains and settled areas and remain hidden for a while. This way, the TTP will pose a continuous and sustained challenge. Some factions seek to destroy the state and military, others seek to unravel it through breakdown and desertions and yet others, notably the TTP Mohmand, wish to seize the state intact. Quite likely that some factions will at times break ranks. Meanwhile, on its part, the military has already demonstrated its newer methods and technology and we can expect to see increasing sophistication in surveillance and targeting in the months and years ahead.

Right-wing and religious forces will harness the TTP threat to their advantage and insert themselves as interlocutors in the process. From this position they can leverage their strength and extract maximum concessions from a beleaguered state. As the TTP held the gun to our heads, the Council of Islamic Ideology was recently able to put pressure on us to change laws restricting polygamy and child marriages.

The situation ironically places liberal parties in an enviable position giving them an opportunity to craft a more sensible and sellable narrative with which to win back followers lost to the right.

To contain any such successful thrust from the liberal parties, the TTP will use the threat of violence as it did in the general election last year when it did not allow them to campaign or hold political rallies.

Pakistan will remain part of Al Qaeda’s larger battlefield which includes Afghanistan, Iraq, Syria, Yemen, North Africa and parts of Central Asia. The TTP will not only draw ‘franchise benefits’ but also fully leverage the ‘strategic depth’ available to it in Afghanistan’s Pakhtun territories.

This may yet be a simplified model but one that lets us construct more elaborate scenarios with these building blocks. Such scenarios can help us gain an understanding of the shape of things to come and hopefully prepare pre-emptive policy responses.

2014 – Dawn Media Group

What’s the plan?

EVEN when times get as bad as this, there are a few things that don’t worry me. I am not worried that we face a formidable challenger in the TTP, which is lodged in an even more challenging terrain. Neither am I worried that any military operation here will push their fighters into Afghanistan.

I’m not in denial, yet it doesn’t worry me that heavily armed Taliban groups now sit on the outskirts of Karachi or that they can direct events inside the city from their suburban nests. I am also not worried that assorted jihadi groups and their sympathisers are embedded within our urban centres and even infest our state institutions.

I am also able to shrug off the reality that half of the Coalition forces have already left Afghanistan and by December the remaining would also be gone. At the back of my mind I also know that there will be no reconciliation between the Afghan government and the Taliban. I am aware that this will mean that conditions will worsen in the Pakhtun areas of Afghanistan and that a further two million refugees can be expected to arrive.

I am also not excessively worried about the growing extremism in our society. It is a difficult situation, I am aware, but it is not the difficult situation that worries me.

What worries me is that there does not appear to be a plan. What worries me is that the government, the rulers and the civilian institutions of the state are not seized of how deep this cancer is. What worries me is the absence of clear thinking, and of a credible road map that proposes to chart a course out of this difficult situation.

Giving peace a chance? I will not spend time arguing with generic clichés. But ‘peace’ is not merely the absence of violence. Except in the international relations theory of deterrence — of balance of power — where heavily armed states will not go to war for fear of mutually assured destruction.

In the context of individual nation states, peace is said to prevail when the rule of law prevails, when the writ of the state is supreme and when the state holds a monopoly over violence. Our conditions are far from this. Neither are these conditions likely to result from the current negotiations.

Nobody expects these talks to lead anywhere or to yield any information — about TTP’s demands, its whereabouts, or its fault lines — that was not already known. On the other hand the talks have accorded a degree of legitimacy to a terrorist group and to its toxic ‘cause’. They have provided it a platform on nightly prime time television to disseminate poisonous narratives. Putting this genie back in the bottle may not be as easy.

I have reasonable certainty that there will soon be a series of military operations against TTP groups. How will these be qualitatively different from previous operations? How effective would they be and how precisely will they target the enemy? How will TTP fighters be prevented from fleeing to Afghanistan? What is the plan to capture those who do slip across the Durand Line? Is the necessary coordination being done with Nato and the Afghan security forces? Are there enterprising warlords on the other side who may be up for a bounty hunt? And indeed how does the military address widespread concerns about the efficacy of its conventional forces fighting an asymmetric war?

Considering that the cost of failure may be nearly as high as the cost of inaction, we can only gain from seeking more clarity on such questions. This clarity will also instil more confidence in the public — part of which is still sceptical about the military option.

Even then, any military operation in Fata will address only part of the problem. The other part lies in the settled areas and in the cities where very little pre-emptive action is presently visible. A case in point is Karachi where, in the ongoing operation being conducted by multiple provincial and federal agencies, only 60-70 Taliban fighters have been arrested in the last six months. It is hoped that together with the main bastion in Fata, a simultaneous and broad sweep will scoop up all the snake pits in the cities.

There is also the question of resourcing the war. The budgetary allocations are still not visible. In such a situation, who will take any plan seriously? A good plan, it is said, is like a road map. It shows the final destination and the best way to get you there. And a good plan today is better than a perfect plan tomorrow.

2014 – Dawn Media Group

Regional connectivity

IT is easy to be wise after the event. And one such wisdom has it that our blocking India’s commercial access to Iran and Afghanistan was bad strategy. We have lost out on benefits that would have come from improved commercial and political ties among the regional states.

Decades of shunning economic interaction with a large next door neighbour, while linking everything to the dispute over Kashmir was also bad policy. India’s economic growth rate in recent years has galloped and we found ourselves fenced out from an economy with which all other trading nations were lining up to do business with.

Similarly, trying to cultivate proxies in Afghanistan has not paid any dividends. That adventure has gone horribly wrong.

These inelegant strategies resulted from a strategy formulation process that, as one of its flaws, did not take economics into account.

The IPI gas pipeline was one initiative that would have given the regional countries a stake in the other’s peace and stability while easing the energy constraint to economic growth. However, while that could not progress as a result of exogenous factors beyond our control, the others are clearly a result of our own bad choices.

In any event, the net result has been regional isolation. In a world where countries now trade mostly within their regions, we barely have any economic interaction in ours except for the Afghan transit trade.

The gradual opening up with India is a breath of fresh air. It has the potential to become a growth driver for Pakistan’s economy.

Another key strategy piece to advance regional trade is the Gwadar port.

However, six years since its inauguration this port has still not earned its first million dollars. In fact Gwadar’s true calling is to become the region’s break-bulk hub. Presently, this business goes to ports and associated economic free zones in the United Arab Emirates. But Gwadar trumps these ports because its hinterland extends much deeper — into Central Asia. Why hasn’t the government been able to attract break bulk operators to Gwadar? A business plan to make this happen should be an utmost urgency.

Further down, on the same shoreline is Iran’s Chahbahar port. Blocked of overland access, India, Iran and Afghanistan reached a trilateral understanding in 2003 agreeing to develop a north-south corridor that would link Chahbabar with Afghanistan. India helped upgrade the port and in 2005, built the Afghanistan segment of the highway linking to the Afghanistan ring road. This meant that all major cities of Afghanistan could now connect with Chahbahar (in addition to Bandar Abbas).

The development fuelled Pakistan’s paranoia of ‘encirclement’. When construction crews working on the site came under relentless attacks from Taliban insurgents and a number of Indian engineers and Afghan workers were killed, the stakes went up. Shortly afterwards, Pakistan’s Baloch regions experienced unrest with insurgents specially targeting energy infrastructure. The mutual mistrust deepened and the antagonism widened to include Iran and Afghanistan as well.

In 2009 the highway — Route 606 as it is known — was inaugurated and today is open and busy during daytime though not totally safe, so vehicles have to travel in convoys and with armed escorts.

The 3000-km Afghanistan ring road itself is a giant carousel with exits that branch out to Iran (at Chahbahar and Herat), to Turkmenistan, Uzbekistan and Tajikistan and to Pakistan (taking you to the Khyber Pass, the next one to Miramshah and the third one to Quetta). The proposed Trans Afghanistan pipeline or Tapi is planned to transport gas and its 1200 km journey from Daulatabad to Quetta will follow the alignment along the ring road.

A common regional vision needs to be developed within a regional matrix. It needs to serve the interests of the people that inhabit this region. All the regional countries stand to reap a substantial peace dividend if they can lower mistrust and mutual suspicions.

This will immediately reduce the levels of conflict and we will see trade, traffic and energy flow across national borders. Major initiatives can include extending land access, opening borders, building logistic infrastructure, and entering currency swap and free trade agreements.

Pakistan can gain substantially by connecting the Gwadar port to the Afghanistan ring road and get the port operating at capacity. It would also stand to gain from allowing overland access to the regional countries. A virtuous spiral of peace, economic activity and prosperity can be created that will heal wounds that have been festering for decades. And in this Pakistan has the most to gain.

2014 – Dawn Media Group

Digital snooping

IMAGINE viewing the digital log of your daily life. Your day started with the alarm going off on your smart phone. You squinted at the text message from the boss informing you about shifting of the meeting venue. As you were brushing your teeth you flicked the city traffic channel on your digital set top box. As you drove to work, your GPS tracked the route you took. Your debit card has logged the time of your coffee break downstairs.

Among other such mundane items, your day’s digital log also contains your browsing history (even though you took care to delete it from your computer), the Google searches you conducted and all those who called you.

Broadband internet was introduced 14 years ago. Smart phones followed a few years later. Then came 3G and now with 4G, the slope of the technology curve — and rate of innovation — keeps getting steeper. And with that, the rate of diffusion of new devices and applications has become mind-numbing. Each time you log in, download, view a photo, you are leaving a digital fingerprint. What many of us may not realise is how commercially valuable this data is.

Today technology companies are positioning themselves for what will be the grand finale of all marketing battles. Unlike the past when customer numbers and market share were contested, the coming battle is about whose operating system emerges dominant ie whose rules everyone else will play by. Google, Apple, Microsoft and Facebook are the frontrunners in a race. The ‘also ran’ list includes IBM, Hewlett Packard and Bell Labs (UNIX) who have now fallen behind.

What is certain is that operating systems will gradually eclipse more and more of our lives. An increasing range of items and gadgets — which may include cars, kitchen appliances, home-lighting, even eyeglasses that can self-adjust in shade and power — are going to run on operating systems in future.

What these companies are vying for is not simply to become the master of one box or one device, but to become the operating system of our lives. That will be a position from which they can manage, monitor (and ultimately monetise parts of) the data flow of everything we do.

Google reads your emails before you do, technically that is, when its robots crawl through the content and serves up ads that it thinks are most relevant to the content of the message.

But it appears your daily digital log has more than just commercial value. Whistleblower Edward Snowden gave us a glimpse of how the US National Security Agency (NSA) has been hacking into servers to collect whatever it could lay its hands on. From breaking into the computer network of Brazil’s state-run oil company Petrobras, to monitoring German Chancellor Angela Merkel’s mobile phone, to sweeping up millions of French telephone records.

The documents Snowden passed onto the Guardian and the Washington Post also describe a secret project called PRISM, which is the cover name for collection of user data from Google, Yahoo, Microsoft, Apple and five other US-based companies.

Because obtaining this data directly from the servers of the Silicon Valley giants would involve cumbersome US legal procedures, the NSA (and its British counterpart) under another project code named MUSCULAR is pirating telephone traffic and internet data from interception points — that are outside US jurisdiction — such as undersea fibre optic cables.

Once acquired, the raw data is dumped into NSA’s massive data centre in Utah. The documents show that Pakistan is one of the two countries (Iran being the other) from which the largest amount of data has been taken in. Quite surely, US spooks have been listening in to Al Qaeda chatter as well as keeping an eye out for a nuclear warhead going astray.

If what Snowden informs us is correct, then all your and my daily digital logs for the past several years may be available with NSA. As NSA’s robots crawl through the data, they look for any unusual pattern. So for example, if you were using a disposable mobile phone and switching on only long enough to make brief calls and afterwards switching off the phone, then that pattern would certainly mark you for special scrutiny. As technology improves, NSA would doubtless also be able to predict future behaviour and emerging patterns. Given the already hysterical levels of anti American frenzy in this country, it is important to remain steady when digesting this information. With the copious amount of data it has collected, NSA’s search engines and crawlers can pull out the digital log on any target — politician, government official, diplomat or private citizen. And whereas an “arms race” with NSA cannot be won, not even by Google, a complete review of our government and military communications procedures would be in order.

2014 – Dawn Media Group

Pakistan’s declining competitiveness

WHEN the rupee started to weaken earlier this year, the government responded by intervening in the currency markets.

Speculators knew that the government with limited reserves could not play the game for long. That is when the State Bank pulled the second lever; it began to raise interest rates.

When there was no let up in the capital flight the government put a lid on the amount of cash that could be taken out. But still the rupee continued to slide so the government decided to approach the UAE government for the remaining $800 million proceeds from the PTCL privatisation to build reserves.

Then recently it offered twin amnesties to black money and to tax evaders. The naive hope is that this money — instead of being ‘dollarised’ — will be invested in manufacturing ventures.

Managing exchange rates is a firefighting measure. At best you deal with symptoms of the real malaise and delay the inevitable. At a fundamental level, Pakistan’s economic competitiveness has been in steady decline over the years.

Today the country ranks 133rd out of 148 surveyed. This means that most goods are now not viable for production in Pakistan and the few that are, are fast losing their shine. This applies to not just manufactured goods but many of our farm products as well.

In a free trade world, this situation places Pakistan at a major disadvantage. A free trade agreement with China has brought an influx of Chinese goods but very little has gone in the opposite direction. Going forward, the situation for Pakistan looks set to worsen.

Two factors have brought us to this pass. One is the failure to develop indigenous energy resources. Today a substantial part of our import bill is fuel. The second and far more serious has been our failure to develop efficient, world beating industries in some key sectors (with few exceptions like cement, fertiliser and textile spinning).

The path taken by Japan and other high-performing Asian ‘Tiger’ economies, all of which were energy deficient, required them to first accumulate capital, then deploy that capital efficiently in a few sectors and finally pursue rapid technological catch-up with the West.

This was done on the back of a high standard of national education and a high domestic savings rate. In Pakistan these factors were not present.

A third ingredient was central planning, which in laissez faire capitalist economies plays a limited but vital role. Once a national economic vision is spelt out, the Five Year Plan is the instrument that helps direct scarce economic resources and necessary interventions supported with enabling policies towards sectors that have to be built.

In our case, the Five Year Plans were of academic value and even that process was later all but abdicated.

Usually a developing economy would build its industrial backbone on the basis of two primary investments. A steel mill that would help kick-start a downstream engineering industry, and a hydrocracker that would make available petrochemical feedstock and spawn the development of a chemical industry. This could be thought of as the hardware.

The national innovative capacity is the ability of a country to produce and commercialise a flow of innovative technology over the long term. This can be thought of as the software.

Empirical studies have found that innovative capacities of economies are very closely correlated with both competitiveness and with GDP.

Pakistan’s steel mill never really got going and the hydrocracker plant never progressed beyond the feasibility study phase. No government bothered to develop or even articulate a credible innovation strategy.

Research and academic institutions remained weak and under-resourced with little linkage to industry. Pakistani firms also do not spend much on R&D, preferring instead to buy licensed technologies or turnkey industrial solutions.

So at this stage can anything be done? The difficulty is that after decades of inaction and decay we are left with very little strategic space to work with. The upside is that Pakistan’s large domestic market still makes this an attractive place to do business.

To start, one needs to ask the question: which three or four industrial sectors can we become world leaders in? This is a contentious exercise because it will also identify certain sectors that may not receive much economic resources. This is because large-scale resources will need to be diverted towards the selected sectors.

Any strategic process creates winners and losers. Big push export strategies would need to be implemented in these three or four industrial sectors in addition to the large domestic market so the necessary scale effects can be achieved. With this in mind, a series of interventions will need to be planned.

The other and somewhat less daunting challenge would be to develop indigenous energy resources.

A politically neutral approach that tries to give everything to everyone would be disingenuous. All that will produce is a patchwork of non-strategic policies often at cross purposes with each other. These statutory regulatory orders or SROs as they are known promote a culture of crony capitalism and do not make for long-term policy stability.

As usual, the hardest part is the politics.

Selecting winners and losers, resisting pressure from vested interest when their privilege gets taken away, refusing to backtrack once a decision is made, preventing mission creep, ie saying ‘NO’ to pressure for inclusion of more and more sectors to the list, implementing the necessary reforms, bringing the full force of law to deal with violent religiously inspired groups that impose an economic cost on business activity and shatter confidence.

The commodity most needed is political will, and as of now, that is the commodity that is in short supply.

2013 – Dawn Media Group