The cost of Pakistan's obsession with strategic depth is evident not just by the turmoil of terror in the country but also virtual bankruptcy of the state with Minister of State for Finance, the charming Hina Rabbani Khar indicating that the country has lost $35 billion since 2001-02 in economic costs imposed by terror.
With GDP growth slated to be just over 3 percent and despite inflation anticipated below the double digit, there is likely to be more economic distress ahead. The costs of caring for the internally displaced are being partly recovered through a special 5 percent tax on annual income of over Rs 1 million Pakistani Rupees and 30 percent tax imposed on corporate bonuses.
With full scale offensives in Swat, Bannu and extending to Mohmand, the Army is also preparing to launch attacks in South and North Waziristan. There is reason to believe that Pakistan is in a state of civil war. For it is evident that the Taliban is quickly extending its reach to Lahore and Karachi the hub of Punjab and Sindh. With Peshawar now a virtual war zone, the American consulate has been shifted to Islamabad and normal business activity stands suspended. While it may blame the current crisis on imposition by the US, the principal cause remains that of its obsession with strategic depth which has resulted in creating the hydra headed monster, the Taliban. Strategic depth is also leading Pakistan to deny transit rights to Indian goods to Afghanistan.
The inability of Pakistan to generate internal revenues for the country is a major cause of concern for this would imply its increased dependency on international aid and assistance. With the spread of militancy beyond the NWFP and FATA areas, the country would be in dire need of greater support with the revenues falling substantially and internal generation not keeping with pace with security requirements as well as the ever increasing internal displaced populace. To what extent the situation reverses remains to be seen but a country growing at maximum 4 percent and inflation at 10 percent would need extensive support from the international community. This would naturally have an adverse impact on the fight against terrorism.
Ironically India can provide the answer to Pakistan' counter terror as well as economic woes, but the strategic establishment in Islamabad may not be amenable to accepting this reality. The Afghan Trade and transit treaty offers the country an effective option for revenue generation which would be beneficial to both Pakistan and Afghanistan trading from India. This would be a precursor to gas pipelines such as the IPI and proposals in the North as TAPI which would generate substantial revenues for both the countries in the years ahead.
The principal factor militating against Pakistan's refusal to grant trade and transit rights to India to Afghanistan is the fear of encirclement and so called need for strategic depth. Moreover the powerful business and trading lobby in Pakistan along with the transport sector mostly controlled by the former army officers and establishments as the Fauji foundation would hate to allow cheap flow of goods from India to Afghanistan with the money from such rights going directly into the government treasury rather than their own coffers. But a holistic rather than an India centric view would provide Pakistani enough incentives to agree to the trade and transit treaty with Afghanistan. In this globalised World the concept of encirclement is pass', for in a sense every country including the US is perhaps encircled by the Chinese through an adverse trade balance, thus an enlightened view may be in order.
Indeed as President Zardari and Prime Minister Manmohan Singh shake hands in Russia on 16 January, this aspect could well be on their minds. However will the military brass in Rawalpindi's GHQ abandon its outdated precepts and adopt an enlightened approach for the economic well being of hundreds of displaced in the country remains to be seen? Even the United States administration despite its forceful advocacy has not been successful in making Pakistani army chiefs change their minds in the past. Perhaps it is time that the international community steps in and sells this idea linking aid and assistance to the same. This could well be the much elusive long term turning point in the Af-Pak imbroglio which we are all looking for.