Chinese consulate attack puts Pakistan between a rock and a hard place
By James M. Dorsey
Two attacks in Pakistan, including a brazen assault on the
Chinese consulate in Karachi, are likely to complicate prime minister Imran
Khan’s efforts to renegotiate China’s massive, controversial Belt and Road investments
as well as an International Monetary Fund (IMF) bailout and ensure that
Pakistan is shielded from blacklisting by an international anti-money
laundering and terrorism finance watchdog.
The attack
on the consulate by three members of the Balochistan Liberation Army,
a militant nationalist group seeking what it terms self-determination for the
troubled, resource-rich, sparsely populated Pakistani province that constitutes
the heartland of China’s US$45 billion investment and the crown jewel of its
infrastructure and energy generation-driven Belt and Road initiative.
The attack, together with an
unrelated suicide bombing by unidentified militants that killed 26 people and
wounded 55 others in a market in the province of Khyber Pakhtunkhwa,
comes at an awkward moment for Mr. Khan.
With Pakistan teetering on the edge of a financial crisis,
Mr. Khan has been seeking financial aid from friendly countries like China,
Saudi Arabia and the United Arab Emirates as well as a bailout from the IMF.
Responding to widespread criticism of Chinese investment
terms that go beyond Baloch grievances, Mr. Khan is seeking to renegotiate the
Chinese terms as well as the priorities of what both countries have dubbed the
China Pakistan Economic Corridor (CPEC) that will link the crucial Baloch port
of Gwadar with China’s troubled north-western province of Xinjiang, the scene
of a brutal crackdown on Turkic Muslims.
Mr. Khan last month bought
some relief by attending Saudi Crown Prince Mohammed bin Salman’s showcase
investors conference in Riyadh, dubbed Davos in the Desert, that was
being shunned by numerous CEOs of Western financial institutions, tech
entrepreneurs and media moguls as well as senior Western government officials
because of the killing of Saudi journalist Jamal Khashoggi.
In talks with King Salman and the crown prince, Saudi Arabia
promised to deposit US$3 billion in Pakistan’s
central bank as balance of payments support and to defer up to US$3 billion in
payments for oil imports for a year. The kingdom this week deposited
US$1 billion in Pakistan’s central bank as Mr.
Khan was visiting the UAE.
However, Mr. Khan’s visit to Beijing earlier this month was
less conclusive. Despite lofty words and the signing of a raft of agreements,
Mr. Khan’s visit failed
to produce any immediate cash relief with China insisting that more
talks were needed.
China
signalled its irritation at Mr. Khan’s declared intention to
pressure China to change the emphasis of CPEC by sending only its
transportation minister to receive the prime minister upon his arrival.
Amid criticism of CPEC by Baloch activists who charge that
the province’s local population has no stake in the project and members of the
business community who chafe at China importing materials needed for projects
from China rather than purchasing them locally and largely employing Chinese
rather than Pakistani nationals, Mr. Khan only elicited vague promises for his
demand that the focus of CPEC on issues such as job creation, manufacturing and
agriculture be fast forwarded.
China’s refusal to immediately bail Pakistan out has forced
Mr. Khan to turn to the IMF for help. The IMF, backed by the United States, has
set tough conditions for a bailout, including complete
disclosure of Chinese financial support.
US Secretary of State Mike Pompeo warned in July that any potential
IMF bailout should not provide funds to pay off Chinese lenders. US
Pakistani relations dived this week with President
Donald J. Trump and Mr. Khan trading barbs on Twitter.
The attack on the consulate coupled with Saudi Arabia’s
financial support is likely to fuel long-standing Chinese concerns that
Pakistan has yet to get a grip on political violence in the country. Chinese Foreign
Ministry spokesman Geng Shuang said in response to the attack that China
had asked Pakistan to step up security. Pakistan has a 15,000-man
force dedicated to protecting Chinese nationals and assets.
China also fears that Balochistan could become a launching
pad for potential
US-Saudi efforts to destabilize Iran by stirring unrest among the Islamic
republic’s ethnic minorities.
The attack together with the Khyber Pakhtunkhwa bombing not
only signals a recent spike in political violence in Pakistan but also comes
against the backdrop of increased
incidents involving Iran’s Kurdish, Iranian Arab and Baloch minorities.
Earlier this month, Pakistan said it had rescued
five of 12 abducted Iranian border guards, saying efforts to recover
the other captives are ongoing. An anti-Iran Sunni Muslim militant
organization, Jaish al-Adl or Army of Justice, kidnapped the guards a month ago
in the south-eastern Iranian border city of Mirjaveh and took them to the
Pakistani side of the porous frontier between the two countries.
The attack on the consulate as well as the bombing in Khyber
Pakhtunkhwa are likely to increase pressure from the Financial Action Task
Force (FATF), an international anti-money laundering and terrorism finance
watchdog, and its Asian counterpart, the Asia Pacific Group (APG) to strengthen
Pakistani compliance with international best practices.
An APG delegation expressed its
dissatisfaction with Pakistani compliance in October and said it
would report its findings to FATF by the end of this month. FATF
put Pakistan on a grey list in February, a prelude to blacklisting
if the country fails to clean up its act. Blacklisting could potentially derail
Pakistan’s request for IMF assistance.
In sum, this week’s attacks put Pakistan between a rock and
a hard place. Countering militancy has proven difficult, if not impossible,
given the deep-seated links between government, political parties and
militants, a
web that includes Mr. Khan and many of his associates.
Dr.
James M. Dorsey is a senior fellow at the S. Rajaratnam School of International
Studies, co-director of the University of Würzburg’s Institute for Fan Culture,
and co-host of the New Books in Middle Eastern Studies podcast.
James is the author of The Turbulent World
of Middle East Soccer blog, a book with the same title and a co-authored
volume, Comparative Political Transitions between Southeast Asia and
the Middle East and North Africa as well as Shifting
Sands, Essays on Sports and Politics in the Middle East and North Africa
and just published China
and the Middle East: Venturing into the Maelstrom
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