Crisis in Pakistan

More to worry about than Musharraf
ISLAMABAD From The Economist print edition

PAKISTAN is sliding. Taliban commanders are taking over more of the country’s ungoverned north-west by the day. From there they launch attacks into Afghanistan, killing NATO soldiers and countless Afghans. America, hitherto a remarkably forgiving ally, appears to think Pakistan’s Inter-Services Intelligence (ISI) is assisting them. India certainly thinks so. Tensions between South Asia’s nuclear-armed rivals are rising.

After a suicide-bomb attack on the Indian embassy in Kabul last month—which India blamed on the ISI—its national security adviser, M.K. Narayanan, warned that India might have to “retaliate in kind”.

The economy is hell-bound. Inflation is running at 25% a year. The stockmarket in Karachi has lost 35% of its value since April. During blackouts, Pakistani businessmen trade tales of capital flight. Foreign-exchange reserves—once emblematic of economic recovery—now barely cover three months of imports.

The government, a coalition led by the Pakistan People Party (PPP), has been paralyzed since its formation in February. It has no plan for the north-west and appears to have given little thought to arresting the economy’s decline.

Indeed, the government does not even have a permanent finance minister. He and half his colleagues were withdrawn from the cabinet in May by the PPP’s biggest coalition partner, Nawaz Sharif’s Pakistan Muslim League (N). It was protesting against the government’s failure to reinstate 60 judges, who were sacked by Pervez Musharraf last November lest they object to his (apparently illegal) re-election as president. Mr Sharif trusts that, if reinstated, these judges would force Mr Musharraf to quit. For good measure, he has also demanded that parliament impeach the president. And he may have his way. After showdown talks on August 6th and 7th Mr Sharif and the PPP’s leader, Asif Zardari, reached a provisional agreement to impeach the president and restore the judges.

Both moves would be popular. Having ruled Pakistan more or less outright for almost a decade, Mr Musharraf is blamed for many of its troubles. According to a poll for the International Republican Institute, an American NGO, 83% of Pakistanis want him out and the judges reinstated. Mr Sharif’s principled stand on these issues—for so it is considered, despite the disregard he showed for the rule of law during his own two riotous spells in power—has boosted his ratings. He has also benefited from the absence of Benazir Bhutto, Mr Zardari’s charismatic wife, who was murdered in December. This left Mr Sharif, a champion of Punjab, Pakistan’s most populous state, as the country’s closest approximation to a national leader. The poll found that 82% of Pakistanis liked him—compared with 36% in 2006, when Mr Sharif was less popular than Ms Bhutto and Mr Musharraf.

Support for the PPP-led government, which came to power amid euphoria, has dived. Its few efforts at policymaking—including a doomed effort to put the army-run ISI into civilian hands— have mostly been hapless. Under Mr Zardari, the PPP seems rudderless and divided; a third of its elected members are said to be ready to rebel. Many Pakistanis considered his refusal to meet Mr Sharif’s demands about the judges and President Musharraf as feckless. Having now apparently agreed to them, Mr Zardari might seem to have handed another victory to Mr Sharif.

It may not be so. Mr Zardari is no friend of Mr Musharraf or the army: he has accused the ISI of killing his wife. But he is wary of Mr Sharif’s demands, for two reasons. First, he fears the restored judges would make trouble for him. For example, they might review an amnesty from corruption charges that Mr Musharraf gave to Mr Zardari and Ms Bhutto last year. In addition, Mr Zardari rightly considers that ousting Mr Musharraf would primarily help the PPP’s historic and, no doubt, future rival, PML(N). In particular, the president’s political allies in the Pakistan Muslim League (Q) party, would then be expected to rejoin Mr Sharif’s party—whence Mr Musharraf plucked them, after he toppled Mr Sharif in a 1999 coup.

This may have tempted Mr Zardari to consider another strategy: let Mr Musharraf stay put; let the PML(N) quit the government; and let the president’s men, of the PML(Q), join it instead. But this would make Mr Zardari even more unpopular. Mr Sharif would hope to benefit; but little good might this do him. He is currently barred from standing for election, having been convicted of crimes—including hijacking—in the aftermath of Mr Musharraf’s coup. By acquiring some friendly judges, Mr Sharif may hope to overturn this ban. He will certainly not escape it if Mr Zardari sides with Mr Musharraf.

In short, Mr Sharif, like Mr Zardari, is reluctant to bring an end to an alliance for which he has no love. Indeed, in this week’s negotiations, he made an important concession: he agreed to impeach Mr Musharraf before restoring the judges. A successful impeachment would require constitutional change, and therefore support from two-thirds of parliament. It is unclear that the government has this.

Reports of Mr Musharraf’s impending exit—encouraged by the sporty president’s decision to delay his departure to the Beijing Olympics on August 6th—may therefore be exaggerated. On the other hand, whether Mr Musharraf goes or not, it is certain that the government will continue wrangling. And at a time of national crises, this is an appalling prospect.

At least, as its budget deficit rises above 7%, Pakistan will have aid. On July 29th the US Senate’s Foreign Relations Committee voted to triple America’s non-military assistance, to $1.5 billion a year. Saudi Arabia is expected to defer payment on a $5.9 billion oil bill. But aid is not enough. After 18 months of political turmoil and worsening terrorism, Pakistan needs stability to restore the confidence of foreign investors. This will take a while.

From the Pushtun north-west, the news just gets worse. An unloved truce between the government and several Taliban commanders, including the most powerful, Baitullah Mehsud, has mostly broken down. In Swat, 250km (155 miles) from Islamabad, where a mini-jihad erupted last year, 150 people are reported to have been killed in a week’s fighting between soldiers and militants. On August 5th a spokesmen for Mr Mehsud threatened to bring the jihad to Karachi, Pakistan’s biggest city and home to many poor Pushtuns.

The army operates more or less freely on the frontier but is reluctant to touch Mr Mehsud. With a forbidding fief in the never-conquered tribal area of South Waziristan, a well-armed militia and suicide-bombers at his disposal, he is a daunting foe. He also holds about 100 soldiers and civil servants hostage. But the army’s diffidence is increasingly being taken as evidence that, despite Mr Musharraf’s protestations to the contrary, Pakistan never abandoned its policy of harboring terrorists at home and sponsoring them abroad. Afghanistan and India maintain this. America, which is reported to have traced the Indian embassy bombing to the ISI, might be tempted to concur.

It hardly matters. America appears to have no option but to pour cash into Pakistan, and hope some good comes of it. Afghanistan will not be stable while Pakistan is in chaos. Foreign intervention would be unthinkable. America’s Senate has recognized this. No doubt, so has the ISI.