Vijay Diwas always reminds us of glorious stories of valour and a decisive victory achieved by the Armed Forces of India along with the creation of a new nation, Bangladesh. What is seldom spoken about is how Pakistan managed to survive post this disaster in 1971 and even notched up its anti-India Policies. In a nutshell it has been described as aid, loans and grants. Let’s look a bit deeper and see how Pakistan survived.
The first thing Pakistan had to do was break the narrative of a defeat and to ensure its population was safeguarded against humiliation. Over the years we realise that the state changed the course of its own history to showcase Indian deceit and the backstabbing done by the Bengali’s which led to the break up of Pakistan.
The biggest explanation given for this narrative is the lack of major operations on its eastern front by India during the war, being portrayed as Pakistan being saved. Most recently, General Qamar Javed Bajwa made reference to the 1971 war in his final public address as army chief, where he applauded the army’s bravery and termed the war a “political failure” as opposed to a “military one” — a rather futile distinction given the military was at the political helm at the time.
Economic crisis post 1971
Pakistan faced its worst economic crisis after the 1971 War. Poverty rose to 55 per cent in 1971-72 and the country was in a dire state. The oil crisis of 1973 increased Pakistan’s import bill even further and combined with flooding and agricultural disasters of the 70s created situations of inflation on similar lines as we see today. The trade balance deficits tripled in six years from $337 million in 1970-71 to $1,184 million in 1976-77.
At the helm of affairs was Zulfiqar Ali Bhutto. He was successful internally to remove the army and its involvement in the running of Pakistan, but he could not control his infamous spats with the provinces. Baluchistan, where periodic insurgent events have occurred, flared up and in 1974 he ran back to the army for help, bringing back the power of the “establishment”. His famous words, “we will eat grass, even go hungry, but we will get one of our own (nuclear bomb)”, to counter the Indian Smiling Buddha Test was a rallying cry in Pakistan. The people, as he said were very close to eating grass in those days.
Pakistan as a country has always hoped for miracles and miracles it has found, beginning with the Soviet Invasion of Afghanistan in 1979. The US assistance increased ten folds, from around $60 million in economic and development assistance in 1979 to more than $600 million per year in the mid-1980s. From 1980 to 1990, a total of $5.29 billion in aid was provided that included $3.1 billion in economic assistance and $2.19 billion in military assistance.
Pakistan as a country has always hoped for miracles and miracles it has found, beginning with the Soviet Invasion of Afghanistan in 1979.
This aid resulted in a huge jump in the economic structure in Pakistan. In 1979, Pakistan GDP was $19.7 billion and in just one year, it increased to a whopping $30.9 billion. The per capita income grew by 47 per cent in one year, and the GDP recorded a steady growth of five to seven per cent throughout the 1980s. Magic of the American hand supporting Pakistan.
Together with the American interest in Afghanistan, there was also the Saudis worried about the 1979 Islamic Revolution in Iran and feared it spreading within Pakistan. The revolution triggered Saudi’s intent to control Sunnism in Pakistan, while the Soviet-Afghan war gave them a mechanism to do so through the funding of Ahl-e-Hadith and Deobandi madrassas.
The number of madrassas in Pakistan tripled between the mid 1970s and mid 1990 bringing along an age of Islamism that we see today. The Military Dictator Zia ul Haq, who was known for his Islamism, saw the birth of Islamisation of Pakistan. One could say his thoughts along with the want of Saudi money was a great catalyst for the Islamic dominance of Pakistan.
Afghan war and more
Pakistan’s run ended with the end of the Afghan war and the breakup of the Soviet Union. There was little left for the front line state to sell as its own relevance. This combined with the Gulf crisis, resulted in a decline in remittances. The defence spending of over 9 per cent during the regime of General Zia ul Haq, left no room for development. By 1994, Pakistan’s external debt soared to $49.5 billion, almost 73 per cent of GDP.
The yearn to beat India has always been at the forefront of Pakistani thought and when India did its nuclear tests so did Pakistan, which brought about economic sanctions and triggered massive capital flight. By the turn of the century, the external debt soared to $63 billion, almost 81.2 per cent of the GDP. By the time of 1999, post the Kargil fiasco, the military government in Pakistan under General Parvez Musharraf was looking for another miracle to happen. Sure enough, the terror attack on 9/11 in the US precipitated the Global War on Terror (GWoT).
The yearn to beat India has always been at the forefront of Pakistani thought and when India did its nuclear tests so did Pakistan, which brought about economic sanctions and triggered massive capital flight.
After 9/11, Pakistan was the highest recipient of the US aid programme till 2010. However, the bulk of the aid has been for security-related purposes. It provided almost US$62.2 billion from 2002 to 2007. In spite of the political crisis at the end of the first decade of the new century, in 2009 the US Congress, as part of its renewed commitment to Pakistan to fight the GWoT approved the Enhanced Partnership for Pakistan Act (commonly known as the Kerry-Lugar-Berman bill).
The bill aimed to separate the security and development plan from unpredictable geopolitical and military events. Another $7.5 billion over five years (FY2010 to FY2014) was authorised to improve Pakistan’s governance, support its economic growth, and invest in its people. In addition, between 2008 to 2010, the IMF disbursed credit worth US$5.2 billion to tide over the 2008 economic crisis.
The strains in Pakistan-US relations started showing signs once Pakistan was put under the grey list by the Financial Action Task Force (FATF) in 2008. The relationship got further strained on the revelation that Pakistan was hiding Osama bin Laden, the Al Qaeda chief, at Abbottabad. The Chinese President Xi Jinping’s flagship Belt and Road Initiative (BRI) project launched in 2013, was seen as a panacea to Pakistani’s woes.
The pullback in the Pakistan-US relationship started in late 2018 when President Trump requested Islamabad facilitate US talks with the Afghan Taliban. The Pakistanis as usual double crossed, and the Taliban connect with Pakistan as a middleman was shifted to Qatar. Pakistan has lost $38 billion due to FATF grey listing. The Pakistan defence budget allocation of PKR1.37 trillion ($8.78 billion) for FY 2021–22 is a 6.2% increase over the original FY2020–21 defence expenditure of PKR1.29 trillion. It is about 16% of the government’s total expenditure for FY2021–22. Tells you a lot about the focus of the country.
Even today the Pakistanis hope for another geopolitical event in the region to exert its relevance. The recent war in Ukraine gave just another small opportunity for the Pakistanis to show up in the books of the US. The Americans wanted ammunition for the Soviet origin weaponry that Ukraine was using and as it turned out the Pakistanis were still manufacturing it for their Chinese copies in their service today. The Americans bought roughly $500 million worth of supplies and the Pakistanis promptly sought spares for the F-16s for $450 million.
When incidents like this take place, one wonders who is using whom in the game between Pakistan and US. Recent news now states that the Pakistanis are talking to the Ukrainians to take up the upgradation of the Ukrainian T 80 D tank. For Pakistan crisis especially a war is an opportunity. Sadly, for them this war is in Europe or else the “dollar ki barsat” (dollar rain) would have once again been theirs for the taking.
In conclusion, short of major event where the US once again blindly jumps into the hands of Pakistanis, the relevance of this nation with its decadent leadership whose endless needs are ahead of the needs of its people, doesn’t seem to be getting a way out. The Pakistanis today are in a crisis mode with their “investment” in Afghanistan will cost them more than what they received in “aid”.