FRIENDS FORSAKE PAKISTAN

By

SUSHANT SAREEN

Pakistan is once again on the edge of a precipice. The economy is in tatters. Inflation is hitting the roof. Businesses are closing down and investment has dried up. Power riots are becoming the order of the day. There is no money to import fuel. Large parts of the country are facing food shortages because of production and distribution bottlenecks. There is massive flight of capital. The country's credit rating has plummeted to below junk bond status. To avoid sovereign default and restore the confidence of international financial markets, Pakistan has no option left but to approach the IMF. But accepting IMF prescriptions will by definition mean that things will get worse before they get better, if at all. The immensely painful stabilisation and structural adjustment measures which an IMF program normally entails will increase economic distress, which is already close to breaking point. In short everything that can go wrong with the economy is going wrong.

To make matters worse, the economic meltdown has come at a time when Pakistan is in a virtual civil war like situation with the army desperately trying to regain control over vast swathes of territory that have fallen to Islamist insurgents. The security situation, which is unlikely to improve anytime soon, is further dragging the economy down. This in turn is severely restricting the Pakistani government's ability to provide even a small measure of relief to the distressed people, much less make the structural adjustments needed to put Pakistan on a self-sustaining economic growth path.

The roots of the terrible mess that Pakistan finds itself in routinely lie in the unviable and unsustainable economic model that Pakistan has adopted. Loans are treated as disposable income to be frittered away on consumption, secure in the belief that when the time comes to repay the loans someone will surely come and bail Pakistan out. After all, the prospect of a 'failed' nuclear-weapon state that is likely to end up being Talibanised is the rest of world's worst nightmare come true. Pakistan's success in leveraging the horrendous repercussions of its failure has created an economy that thrives on living beyond its means. What is more, to ensure that somebody keeps footing the bills, Pakistan has mastered the art of fitting into the security and strategic calculus of its patrons. For instance, these days one often hears Pakistani politicians and opinion makers saying that if the world wants Pakistan to fight the War on Terror then it must pay Pakistan for it.

The only time when the Pakistani economy gallops is when foreign aid floods the country. And this usually happens when a military government is in power in Islamabad – the 1960's when Ayub Khan was in power and Pakistan joined SEATO and CENTO, 1980's with Ziaul Haque in the saddle and Pakistan became the staging post for the Jihad against Soviet occupation of Afghanistan and then in the first decade of the third millennium when Pervez Musharraf signed up Pakistan as a frontline state in the War on Terror.

But as soon as there is a transition from a military government to a civilian government, the economy goes into a tailspin. The political governments are of course not responsible for the crisis; they inherit the crisis and end up carrying the can of the economic follies committed by the military regimes. The harsh measures that the civilian governments are forced to take to save the country from bankruptcy impose crushing economic hardships upon the people. Quite naturally, the rising levels of economic distress under the civilian governments are compared unfavourably with the boom under the military dictators. An impression gains ground that the politicians are incompetent and incapable of improving the economic condition of the people. The fledgling democratic process gets badly undermined and people once again start to yearn for another military strongman, something that should be of concern all those countries that profess wanting to see democracy succeed in Pakistan.

In the past Pakistan invariably fell back upon its traditional friends, allies and patrons – China, Saudi Arabia, US and UAE – to bail it out. But this time around, there is no oil facility coming from the Saudis, the Chinese have refused to provide any balance of payment support, the UAE has preferred to join the 'Friends of Pakistan' forum and extend support from this platform, and the US has stringent political and strategic demands tied to aid. Apart from the US, a cold shoulder from the other countries would be understandable if they were facing a deep economic crisis themselves. But this is not the case. The Saudis are sitting on a mountain of petro-dollars, the Chinese are finding it difficult to handle their nearly US$ 2 Trillion of foreign exchange reserves, and the UAE is in no major difficulty. And yet they are keeping Pakistan hanging out on a limb. Why?

A charitable explanation would be that Pakistan's 'friends' are letting it know that the time for free lunches is over and that unless Pakistan is willing to undertake rescuing reform and restructuring of the economy there will be no more blank cheques forthcoming. But since international relations are more often than not guided by political and strategic interests and pressures, there could be something more at play than a mere refusal to continuously pick up the tab for a profligate friend.

Saudis are probably killing two birds with one stone by not opening up their coffers for Pakistan. At one level, by not helping the PPP-led government the Saudis are going to increase the stock of Nawaz Sharif, their political favorite in Pakistan. At the same time, the Saudis are becoming willing partners of the US plan to squeeze Pakistan real hard on the economic front and use this leverage to make Pakistan deliver on the strategic and security front. There is also a possibility that the Saudis want something from Pakistan which Pakistan is chary of giving.

As for the Chinese, they normally use aid as a tool to gain strategic advantage and are not known to give freebies. In the past, China charged Pakistan a price, sometimes exorbitant and at other times concessional, for whatever defence and nuclear technology it transferred. Despite getting paid for everything it supplied Pakistan, China gained Pakistan's deep gratitude. But more importantly, by propping up Pakistan as a counter-weight to India, the Chinese were able to encircle India and embroil it in the neighborhood to an extent that India found it difficult to get into a position to stand up to, much less challenge, China's pre-eminence in Asia.

But today, when Pakistan is arguably facing the most serious economic and security threat to its survival as a modern nation state, there is no succor coming from China. Is it because a stable and strong Pakistan is no longer a strategic necessity for China? Could China be calculating that its interests are better served by a severely destabilized Pakistan? After all the country that will face the brunt of the fallout of an imploding Pakistan is India. What is more, Pakistan's collapse will be a strategic nightmare for China's real strategic adversary – the US. China will of course continue to promise Pakistan the world – nuclear power plants, fighter jet project, investments, a communications satellite – and will even deliver on some of these promises (no doubt, making money in the process) in order to keep its options on Pakistan open and keep alive the impression that China is Pakistan's all-weather friend. But in the end, all this will not add up to anything because it does not address the fundamental problem confronting Pakistan – a belief that the rest of the world owes it a living.

Pakistan undoubtedly needs a massive infusion of funds to avoid bankruptcy. However, all the money given to Pakistan will go down the drain if there is only tinkering with the current economic system. Conditionalities forcing Pakistan to raise some revenue from here and cut some expenditure there are not going to make Pakistan stand on its feet and rid it of the addiction to foreign aid. What is required is a complete overhaul of the economic system. The problem is, to use the words of JK Galbraith, "The rich and privileged, when also corrupt and incompetent, do not accept rescuing reform".

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    <1385 Words>                    31^st October, 2008

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IT'S NOT INDIA, STUPID

By

SUSHANT SAREEN

    If the most inveterate haters and baiters of India in Pakistan are to be believed then India's external intelligence agency, RAW, has pulled off a coup that few in India or rest of the world are even aware off. Apparently, the RAW is not only directing, financing, training and equipping the al Qaeda and Tehrik-e-Taliban Pakistan (TTP) led Islamist insurgency inside Pakistan, it has also managed to recruit luminaries of the TTP like Baitullah Mehsud, Mullah Fazlullah and Maulvi Faqir Mohammad to destabilise Pakistan.

But the most remarkable achievement of RAW is that despite knowing that the TTP is working at India's behest, the Jamaat Islami (JI) – in particular its chief Qazi Husain Ahmad – and other Islamist political organizations are neither willing to condemn these 'Indian agents' by name nor support the war being waged by the Pakistan Army against these Indian-sponsored Islamist insurgents. On the contrary, by demanding a cessation of hostilities against the insurgents and pleading for a dialogue and negotiated settlement with these Indian-sponsored guerrillas and saboteurs, Pakistan's Islamist politicians and jihadist ex-servicemen are wittingly becoming agents of RAW themselves.

Clearly, allegations of Indian involvement in the Islamist insurgency are utter nonsense. To the extent that Pakistani state agencies point a finger at India simply to build up public opinion against the insurgents, it is understandable. But when political Islamists in Pakistan blame India for acts of terrorism by the Taliban, it flies in the face of all reason, logic, rationality, or even common sense. Subscribing to conspiracy theories is an obsessive compulsive disorder that most right-wing and radical parties in Pakistan suffer. And these days the neurosis has scaled new highs. A classic case is that of the JI chief Qazi Husain Ahmed who first says that Indian and US meddling is destabilising Pakistan and then in the same breath says the military operation against the insurgents is not in Pakistan's national interest. Not that this is something new. Some years back when sectarian violence wracked Balochistan, the immediate reaction after every incident was to blame India for the violence. Subsequent investigations invariably revealed the involvement of Pakistan-based sectarian mafias like Lashkar-e-Jhangvi and Sipah-e-Sahaba, which were anything but proxies of RAW.

Under normal circumstances it would be easy to dismiss the canard being spread against India as the raving and ranting of jaundiced minds. Unfortunately, after having worked themselves into a psychosis in which they see enemies even where none exist, many Pakistanis are increasingly lending credence to these ridiculous allegations. The unpalatable truth, however, is that Pakistan is really paying the price for its policy of using the jihadists as instruments of foreign policy. Undoubtedly, many people in India think that Pakistan is getting just desserts for its policy of exporting jihad. But the last thing that India would like to see is a severely destabilised Pakistan, much less a Talibanised Pakistan. If anything, India would be more than happy to see the Pakistan army slay the demons and monsters it created for use against India. But perhaps this is the precisely the reason why the political Islamists oppose any army action against the insurgents. Therefore, rather than India, it is the self-appointed guardians of Pakistan's Islamist ideology who are doing everything possible to ruin their country by supporting the culture of religious militancy that has been assiduously built up over nearly three decades.

The overt and covert defenders and supporters of the Taliban in Pakistan talk with forked tongues when they say that they are opposed to the bombing of military and government installations, barber and music shops, and civilian targets like the Marriott Hotel. Invariably, the condemnation is qualified by saying that there's no evidence that it is really the Taliban who are behind these actions. After all, they argue quite fallaciously, no Muslim can ever commit such heinous crimes. Even after the Taliban claim responsibility for acts of terrorism, their defenders in the media raise doubts by asking how anyone can be sure that it was actually the Taliban who claimed responsibility! The most exacting standards of proof are demanded against Islamists, but the foreign hand theory or wild allegations against the Pakistan army are gobbled up unquestioningly.

To say that the funds and armaments for the militants are being supplied by India is nothing but a denial of reality. Pakistan's involvement in dirty wars in the region has spawned a flourishing market for arms and drugs in the country. There is no dearth of weapons inside Pakistan. The funding comes partly from the drugs trade, partly from charities and partly from crimes like kidnapping, extortion and dacoity and runs into billions of rupees. All this is well documented in the Pakistani press, which has also reported that former military officials have joined ranks with the insurgents and are directing their war effort against the Pakistan army.

Interestingly, the apologists for Taliban have never satisfactorily answered questions regarding the source of funds, weapons and sophisticated tactics and training of terrorist organisations like Jaish-e-Mohammad, Lashkar-e-Taiba, Harkatul Jihad Islami. Whenever the Lashkar-Taiba chief, Hafiz Saeed, was asked his source of weapons, he would glibly answer that all their weapons were sourced from inside India. If this was true in the case of India, then why is the same not true for Pakistan which has been awash with assault weapons of all types. On the issue of border crossings, Pakistan argues that if, despite all the measures that it has taken, infiltration still takes place then the ISAF forces are free to use all means at their disposal to tackle this problem on their side of the border. But then how come the same logic does not apply to the movement of militants into Pakistan from Afghanistan.

Perhaps the most disingenuous argument made by the Taliban apologists in Pakistan is that there was no problem in the insurgency affected areas before 9/11, the suicide attacks are a reaction to the pro-American policies of the Pakistan government and that the threat of talibanisation is a fiction created to justify the military operation against the Islamists. This is akin to a chain-smoker saying that he has been a smoker for two decades and didn't have lung cancer for so many years, so how come he has got it now! Like cancer, the symptoms of radicalism were there for all to see. But because no clinical examination was done to confirm the disease, it was assumed that it was not present. Had the problem been acknowledged in the early stages, perhaps it would not have spread as much as it has today. Unfortunately, or fortunately, 9/11 and the events that followed made the Pakistani establishment aware of the cancer of religious extremism that was spreading through its body politic and threatened to consume it.

The military operation is the surgery that Pakistan desperately needs to get rid of the cancer of radicalism and religious extremism. Of course, once the infected mass of radicalism is removed, Pakistan will need chemotherapy and perhaps some radiation to remove all remnants of the disease. The convulsions and pain that the country will undergo is part of the healing Pakistan needs before it is able to confidently walk hand in hand with the international community. But if Pakistan does not undergo this treatment, it is certain that the state of Pakistan, as the world knows it, will die.

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    <1230 Words>                    22^nd October, 2008

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BUBBLES DON'T ALWAYS BURST

By

SUSHANT SAREEN

The international financial bubble has got punctured but the spectre of global financial meltdown that haunted the entire world economy has faded to a great extent after the bailout packages totalling nearly $3 trillion announced by the US and European governments. The institutional and governmental response to the crisis may prevent any global 'Great Depression' or widespread economic dislocation and distress, but this does not mean that the financial markets and consequently, the real sector are going to bounce back anytime soon, certainly not for a couple of years. If anything, the global financial crisis is likely to cause a lot more pain than has been inflicted so far.

Until now only some iconic financial companies have either folded up or have been taken over by more stable companies, and a few thousand people have lost their jobs. A lot more of the same is going to happen as the financial markets make the necessary corrections and go through the painful process of adjustment, stabilisation and restructuring. To be sure, during this period there will be a slowdown, perhaps even a prolonged recession, and this will have an adverse impact on the international business environment.

In the end, the international financial system may emerge stronger. More importantly, the sort of voodoo financial instruments and innovations that brought matters to the brink of collapse will become history, as will the unrestrained and unreal speculation and hedonism propelled by the availability of easy and limitless supply of other peoples' money.

    While the bubble lasted, it brought in unprecedented prosperity in large parts of the world. The availability of easy and cheap money allowed millions of people to buy houses, which fuelled the construction boom, which in turn led to massive growth in employment and investment in basic goods industries like steel and cement. Many entrepreneurs built huge fortunes on the back of cheap credit. Trade and travel grew in pace with the flow of capital around the world. The bubble, built on asset price inflation and some very innovative (even if whacky) financial jugglery, kept growing until it became unsustainable. Only, it had grown so big that it could not be allowed to burst.

There is quite clearly a certain critical mass in the bubble size beyond which they might get deflated but will not burst, simply because if they burst, these black holes will annihilate everything with them. Take China for example. No one can really make any sense of Chinese pricing of goods, and many have predicted that China will one day have to pay the cost for its voodoo pricing. But clearly, today the Chinese bubble has grown so big that it can't burst. The case of the current global financial crisis is no different.

Tomes will be written as to how and why things came to such a pass. There is, however, a beguilingly simple and non-technical explanation: That the economic decisions were being taken business graduates or MBAs. Professor Mrinal Dutt Chaudhry of Delhi School of Economics described an MBA course as nothing more than 'structured common sense'. Somewhere along the line, the financial geniuses with fancy MBA degrees started indulging in financial innovations and practises that can only be described as unstructured nonsense elegantly packaged with attractive jargon which was really nothing more than mumbo jumbo. And once they started running amok, the famed 'animal spirits' took over. Since the entire structure was a pyramid, the party couldn't last forever. It was only a matter of time before the people who would normally never qualify for fat loans they had got, started defaulting. The end result is that the entire global financial system came perilously close to a complete meltdown.

The governments have, to a large extent, addressed the crisis of confidence that threatened to snowball into a run on the financial system by committing to inject enormous funds – almost equal to the worst estimates of exposure of the failed financial corporations. And they got together as so widespread was the imprudence of the financial institutions that it was no longer the problem of only one country, namely the US. Almost every country in the world has a stake in the system and unless all countries acted in concert it would not have been possible to contain the domino effect that the financial contagion would create, devastating the global economy.

As things stand, unless there is another massive shock (a credit card debt default?), the current crisis seems to have bottomed out. Of course, the immensely painful transition to a more prudent, and perhaps, conservative financial system (both because of stricter regulatory mechanisms and part nationalisation of most financial giants) is yet to come. People will lose jobs, brokerage houses will close down, credit will get squeezed as will international capital flows and investments, smaller builders will go bankrupt, lifestyles will be tempered down (no more weekend holidays in Singapore or Dubai), speculation in stocks, commodities and property will have a huge cost attached to it and the Rs 1 Cr salary packages will become a thing of the past, as will the trend of treating the golf course as an extension of the board room. There will however remain the danger that once things settle down after a few years, new financial innovations that promote profligacy will once again be introduced to meet the needs of an ever-changing global economy.

Finally, there are two unmistakable lessons from the current crisis: One, at the end of the day, there will always be a bailout if the crisis is so big that it effects the entire world; and Second, the domination of Europe and US over the international financial system is so overwhelming that even the emerging economies like the BRIC group and cash-rich middle-east Shiekhdoms are so helplessly dependent that they will have no option but to continue hitching their lot with the West. The Ahmedinijads, Karats and Chavezs' of this world can continue to rave and rant and create their oil bourses to challenge Western domination, but when push comes to shove the Dollar and the Euro will together continue to rule the world.

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    <1025 Words>                    15^th October, 2008

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RESPOND TO ZARDARI

By

SUSHANT SAREEN

    Pakistan President, Asif Zardari, must love to set the cat among the right-wing, Islamist pigeons in his country. After wounding them by proclaiming that the world was a safer place because of George W Bush's leadership, he has now gone ahead and rubbed salt in those wounds by saying that "India has never been a threat to Pakistan" and using the word 'terrorists' to describe the so-called 'freedom-fighters' in Kashmir. Despite the subsequent clarification issued by his spin-doctors, and discounting for the proclivity of South Asian politicians' to either use words and phrases in complete disregard to their connotations, or say things they don't mean, the fact remains that Mr Zardari's comments are a part of a continuum in the paradigm shift he appears to be trying to effect in Pakistan's relations with India. The question is whether he can actually deliver on his vision. Equally important, is India even aware of the 'mission impossible' that Mr Zardari has embarked upon? And if it is, then how far is India willing to go in the search for peace with Pakistan?

    Even if it is only in the context of trade between the two countries that Mr Zardari does not see India as a threat, this in itself is a big step forward in the way the Pakistani leadership perceives India. Until now the right-wing business lobby inside Pakistan has demanded a protectionist trade policy vis-a-vis India by voicing the fear that Indian trade and industry will swamp Pakistan and drive indigenous industry out of business. And if the economic argument didn't sell, there was always the bogey of Kashmir that came handy to stall any progress on opening trade and investment relations with India. 'No trade with India until the solution of Kashmir' was the clarion call of the right-wing politicians who were funded liberally by the local businessmen and industrialists. But with Pakistan staring at an economic meltdown, the economic reality is sinking in. Under these circumstances, opening the doors to Indian investment, trade, travel and tourism will certainly serve as a shot in the arm for Pakistan's ailing economy.

    At one level, Mr Zardari's remarks to the Wall Street Journal need to be seen as an expression of his supreme confidence in the ability of Pakistani businessmen to compete with India and benefit from cooperation and competition with Indian businesses. At another level, it is an acceptance of the need to change the traditional policy of settling disputes with India. In other words, Mr Zardari is refuting the old strategy of cutting one's nose to spite the face of the adversary. In its place he is favouring a policy that seeks to develop vested interests in peace on both sides of the Radcliffe line. Instead of bad-mouthing India and adopting a needlessly hawkish line to win brownie points from the hardliners, Mr Zardari is trying to carve a peace constituency that will help to make difficult decisions more palatable for the governments and peoples of India and Pakistan.

    President Zardari is quite right in his assessment that a large part of Pakistan's economic, security, and social problems can be sorted out if relations with India normalise. Not only will this reduce the now almost unaffordable defence expenditure that Pakistan is incurring to maintain a strategic parity with India, it will also allow the Pakistani security forces to concentrate on the real threat to Pakistan's existence as a modern nation state, i.e. the internal threat. At the same time, trade with India will allow Pakistani industry to import capital goods and raw materials at much more competitive rates that they do from any other country. Pakistan will also be able to exploit the Indian market which will allow Pakistani industry the economies of scale. Opening up travel and tourism will see a flood of Indians, many of whom will come on nostalgic trips, some will come for pilgrimage, and others will come as tourists. And if Indians, who are seen as 'enemies of Pakistan' in rest of the world don't feel threatened travelling to Pakistan, the signals this will send to the rest of the world will be extremely beneficial for Pakistan. What is more, the benefit to Pakistan's economy from the money that Indians will spend on staying and shopping will give a fillip to the local economy.

    Therefore, President Zardari's remarks and his approach towards India more than anything else designed to promote Pakistan's national interest. But expectedly enough, in the sort of psychotic, reactive mindset that prevails inside Pakistan his interview with the Wall Street Journal has been deliberately and self-servingly misread and misinterpreted by the hardliners and right-wingers inside Pakistan.

    Be that as it may, it is extremely important that India too reciprocates the desire for normal relations that Mr Zardari is expressing so daringly. For India to continue to voice doubts on Mr Zardari's ability to deliver or doubt his control over the Pakistani military-bureaucratic establishment is not only silly, it is also counter-productive. If India expects to deal with Mr Zardari only after he has proved that he is in command, then it is making a big mistake. If anything, by dealing with Mr Zardari India will help him consolidate rather than the other way round. India must understand that there will be influential sections within Pakistan which remain unreconstructed as far as relations with India are concerned. They will continue to sponsor trouble in India. While India will expect Asif Zardari to rein in this element, at the same time India must work overtime with Mr Zardari to create a situation that isolates and pushes the hardliners to the fringe.

This does not mean that either India or Pakistan have to resile from their national positions on sovereign disputes like Kashmir. It only means that despite these disputes neither side will be bloody minded about them and will continue to cooperate and normalise their bilateral relations. Sovereign disputes exist even among friendly countries. The US and Europe have clashed many times on issues of trade. China and US continue to trade and prosper despite strategic differences and territorial issues like Taiwan. The UK and Ireland have a problem on Northern Ireland, but this didn't stop them from developing normal and friendly relations. France and US had a major disagreement on the Iraq war and passions ran so high that the Americans renamed French Fries as 'freedom fries', but the political leadership of the two countries didn't give in to baser instincts and break off their ties.

The trick is to create a situation in which interests of countries are better served in their working together and friendly relations outweigh any benefit of hostility in relationship. When such a relationship develops, disputes are settled through negotiations and dialogue and in a spirit of give and take and by accommodation of each others' interest. Mr Zardari's overtures to India need to be seen in this light. He has taken the position that Pakistan's enlightened self-interest is served by friendly relations with India rather than a debilitating and destabilising hostile relationship. It is now incumbent upon India to reach out and help Mr Zardari in this venture.

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    <1200 Words>                    10^th October, 2008

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ISI - CHANGE OF FACE OR SOMETHING MORE

By

SUSHANT SAREEN

    A reshuffle in the top brass of the Pakistan army should normally not be a cause for any comment, much less excitement. However, the international and domestic backdrop against which the current reshuffle has taken place – four corps commanders changed (including that of the X Corps or coup Corps in Rawalpindi), a new boss for the ISI and a reshuffle within the ISI – makes it appear to be anything but a 'routine transfer and posting of senior officers', as described by the Pakistan army spokesman.

At one level, the reshuffle stamps the authority of the Gen Ashfaq Kayani on the Pakistan army. He has now placed his own people in the most pivotal positions of the army and eased out officials who were either not in sync with his thinking and style, or were identified too closely with the Musharraf regime. On another level, the changes made in the army are a sign that the political and military leadership are working in tandem because such a high level reshuffle cannot take place without the concurrence and approval of the prime minister and the president. At the very least, the civilians are deferring to Gen. Kayani's wishes on changes within the army and not trying to impose their own favourites on the army chief.

In the past, the civilians had often tried to limit the influence of the army chief by appointing their men as ISI chief or in other important positions. In her first term as prime minister, Benazir Bhutto appointed Lt Gen Kallue as the ISI chief and, Nawaz Sharif in his second term as prime minister had appointed Lt Gen. Ziauddin as DG, ISI. This was naturally construed as a sign of lack of trust in the intentions of then army chief, who in turn circumvented this by relying on the Military Intelligence rather than on the ISI. Even otherwise, merely the appointment of the ISI chief was not enough to ensure that the organisation would not act in a hostile manner towards the government of the day. While the ISI chief might be subservient to the civilian leadership, the armed forces officers in the organisation often looked upon the army chief as their ultimate boss. This not only reduced the effectiveness of the ISI chief, it also damaged the chain of command in the organisation, which was then be used by some officers to carry on with their own private agendas and wars.

To the extent that the appointment of Lt Gen Ahmad Shuja Pasha as the new ISI chief signals that the civilian government and the military are not going to work at cross-purposes in the war on terror, it needs to be welcomed. There is a possibility that the change of guard might lead to a change in the way the ISI and the army have been conducting operations against the Islamist insurgents in both Afghanistan and Pakistan. Lt. Gen. Pasha's predecessor, Lt. Gen. Nadeem Taj, was thought to be continuing with what President Asif Zardari has called the 'running with the hare and hunting with the hound policy of the Musharraf era'. This double-game which was exposed after the bombing of the Indian embassy in Kabul had led to the Americans publicly demanding a sweeping reform in the ISI. Lt. Gen. Pasha's elevation is therefore also a gesture to signal to the Americans that Pakistan is serious about weeding out rogue elements from the ISI.

According to an AP report, Lt. Gen. Pasha acknowledges the price Pakistan was paying for its past sponsorship of radical Islam and is reported to have told a media briefing that "We pumped in millions of dollars for establishing it, and now we are up against it". Pasha is believed to be a hawk in the war against the Islamists. In an article in the New Yorker, Steve Coll quotes Shuja Nawaz, the chronicler of the Pakistan army, as saying that Pasha had revealed to him "an internal debate within the Army about the need to reorient the Army toward counterinsurgency in order to fight the Taliban." Although this debate is continuing, it is to be expected that Pasha's appointment could tilt the balance in favour of the faction in the army that wants to exterminate the Islamist threat. Shuja Nawaz also suspects that with the backing of Gen. Kayani, Pasha "will be able to exercise much greater control down to the contractor level of I.S.I., which is the operational level where former military officers and other contractors in the spy agency have the closest interactions with Islamist clients."

The change of face in the ISI is of course extremely important; but it will serve no purpose if this change is not accompanied by a change in the outlook, character, attitude, threat perception and method of functioning of the personnel manning the organisation at both the policy and the operational level. In other words, unless there is a complete overhaul of the ISI, and the army breaks away from its jihadi ethos, merely a change at the top will make no difference. Pasha will ultimately be judged by his performance as an administrator who not only ensures that orders get implemented and black sheep in the organisation are weeded out. And this is the easier part.

The bigger problem that Lt. Gen. Pasha will face in reforming the ISI is that the moment he tries to break the long standing links between the ISI and the Islamists, the ISI will lose a lot of its influence among Islamists. It was the patronage and sponsorship of the Islamists that enabled the ISI to develop such close links with the jihadists and have a terrific network of informants. If now the ISI jettisons its association with the Islamists, it will have a devastating impact on its ability to penetrate these networks and get information about their activities. It is also possible that there will be some resistance at the operational level from personnel who have been very closely involved with the jihadists and have in fact been reverse indoctrinated by them. In fact, there are reports that much of the military strategy of the Islamists is today being directed by former ISI officials who have now joined the ranks of the combatants fighting the Pakistan army and the NATO troops.

These officials are familiar with the tactics and capabilities of the Pakistan army and know of ways to counter any offensive by the Pakistan army. This makes it an imperative for the army, as indeed the ISI, to reorient and alter its tactics if it wants to succeed against the insurgents. However, this is not something that can be done overnight and merely through a change of guard. More importantly, if the ISI and the army continues to differentiate between 'good' jihadis and 'bad' jihadis – striking deals with the former and battling against the latter – Pakistan will never be able to win the war against home-grown and officially nurtured terrorists.

The Pakistan army and the ISI will also have to use all its resources and influence to also create a national environment against the Islamists. Many of the journalists who have been on the pay-roll of the Pakistani intelligence agencies and played a stellar role in promoting an extremist ideology will now have to be instructed to make a U-turn.

Clearly then, Pasha and his boss, Gen. Kayani, are in a rather unenviable position and face the monumental task of rescuing Pakistan. Whether or not they are up to this huge responsibility is something that will be known only in the months ahead. Until then, it would be premature to sing hosannas for the reshuffle in the top brass of the Pakistan army.

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    <1290 Words>                    3^rd October, 2008

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