Pablo Martinez Monsivais/AP
Pakistani President Asif Ali Zardari

Financial Slowdown Pushes Pakistan Closer to the Edge

October 21, 2008 07:00 AM
by Christopher Coats
Coupled with regional violence and an unpopular relationship with the West, a global economic crisis moves Pakistan and its embattled president toward the precipice.

Faltering Economy Takes Hold

An unstable existence and unsure future for Pakistan's President Asif Ali Zardari have been exacerbated by a global financial crisis that has left his country's credit rating downgraded for the second time in a year, after a decade of growth.

Reportedly forced to issue IOUs to cover government expenses, and the threat of government seizures of banks and other financial institutions, Zardari is reportedly heading toward a "perfect storm of political instability and economic turmoil" according to Newsweek.

Compounded by security issues on the domestic front, including U.S. pressure to step up an offensive against Taliban and al-Qaida forces in the north, and a spike in violence aimed at his administration, the economic downturn has made many doubt the future of Zadaris's government.

Culminating in a forced evacuation of United Nations’ staff families last month, the increasingly volatile state of one of the world’s few nuclear powers has some observers worried that the new president may not be able to balance local needs with the strain of pressure from the West.

In an effort to calm U.S. fears that Pakistan was backing away from efforts to combat terrorism, Zardari sent his new prime minister, Yousaf Raza Gilani, to Washington, D.C., earlier this year. The visit coincided with a renewed offensive against Taliban forces in the northwestern border region of Bajaur.

This week, Zardari announced that he would extend the offensive into the northern tribal region by deporting over 50,000 Afghans currently residing along the border.

However, at home, Zardari’s working relationship with the United States has been cited as the catalyst for a spike in attacks on domestic targets, including the massive bombing at a Marriott in Islamabad in September.

Similarly, Zardari’s sharp rhetoric in the Western press against anti-Indian fighters in the disputed southern region of Kashmir has earned him increased scorn. Following an interview with The Wall Street Journal, in which Zardari called the fighters “terrorists,” protestors in Kashmir broke curfew and burned the new president in effigy.

Further complicating Pakistan’s increased attention to the Taliban, recent talks between the group and Afghanistan, organized by Saudi Arabia, hinted at a move toward a possible peace agreement.

Emerging early this week, reports from the talks told of a desire by the Taliban to split with al-Qaida and seek peace with Afghanistan.

Although exact details remain unclear, the possible agreement is especially relevant to Pakistan for both its national security and its place in the region, as any previous such meeting would have likely involved the country.

Further inflaming the situation, a recent meeting with Republican vice presidential candidate Sarah Palin in New York earned Zardari a fatwa—in this case, an official religious scolding—according to a cleric in Pakistan.

Background: A lack of control leads to unease

One of the largest concerns and causes for strain on the working relationship between the United States and its closest ally in the “War on Terror” in western Asia stems from doubts of control and influence over the nation’s spy services.

Long suspected of providing aid, guidance and “covert support” to the Taliban and, by association, al-Qaida, Pakistan’s Inter-Services Intelligence (ISI) has been a frequent target of Western criticism and is largely believed to be beyond the reach of even the country’s president.

While the ISI has been praised for its work in rounding up militants following the attacks of Sept. 11, 2001, The Economist reported that the ISI has never ceased to use the Taliban to expand its reach into Afghanistan and the disputed region of Kashmir.

Zardari’s authority over his armed forces has also been called into question after a series of armed exchanges between U.S. and Pakistani forces across the country’s northern border.

Opinion & Analysis: In need of clarity

The Guardian’s James Denselow wrote that the United States is in need of a more cohesive and organized plan for how to approach Pakistan and argues that the existing policy has always been too “long-sighted” to ever achieve immediate and necessary objectives. This approach has shown “inconsistency,” Denselow argues, and allowed the Taliban to grow stronger, resulting in little real advancement.

Reference: FATA


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