Bracing for the New Year Challenges

While a new year always brings new hopes and aspirations, this is indeed a sobering start of 2021 with a multitude of challenges. At the dawn of the new year, countries across the globe are struggling to contain the spread of the second wave of deadly corona virus that has resulted in thousands of deaths all over the world. Although Pakistan did fairly well in containing the first wave of Covid-19, it is entering the new year amidst the second wave of the virus with a deadly new strain. While the fight against corona virus remained the major challenge during the previous year, it also set in motion various other developments at the political and security front that will continue to confront the country. Of a long list of tenacious challenges facing the country, following three challenges would require immediate focus in the coming months; i.e. sliding economy at the domestic front, and India and Afghanistan at the foreign policy level. A realistic assessment of these challenges will be the necessary first step in finding suitable solutions. 

In 2021 the first and foremost challenge would be to not only control but to reverse the adverse impact of Covid-19 on the country’s economy. The pandemic has impeded the global economic activity and negatively affected the growth rate and sustainable development process. While there is a silver lining as many countries in the developed world have already started the vaccination process, it is estimated that economic recovery will take longer than expected. Pakistan is pinning its hopes on the Chinese vaccine, which, according to some estimates, will be widely available only in the second quarter of 2021. Lack of resources will add to the slower roll-out.  In the meantime, it will require emergency steps for economic recovery to stay afloat this year. Contrary to Islamabad’s official projection of GDP growth rate at 2.1 per cent, the IMF has lowered Pakistan’s projected growth rate to 1 per cent of GDP with unemployment rate growing up to 5.1 per cent during the current fiscal year. This grim picture indicates a likely return to the IMF program, which will follow the imposition of crushing taxes as recommended at the time of negotiations of the initial $6 billion Extended Fund Facility (EFF). Pakistan has got a temporary relief in recent talks with the IMF because of the second wave of the COVID-19, a long-term solution will require an overhaul of the tax collection methods and realistic economic reforms centred around providing relief to common people. Needless to say, this will not be possible without improved governance and stringent accountability measures. 

At the foreign front, India-China conflict in the Himalayas exacerbated the regional tensions resulting in misdirected Indian anger towards Pakistan and more polarized regional positions. Unable to take any action against China, India’s political and military leadership threatened to attack Pakistan and take Gilgit Baltistan. Pakistan took a firm stand against potential Indian attack on the pretext of a false flag operation in Kashmir and also shared a dossier with the international community of the Indian involvement in terrorist activities inside Pakistan. Pakistan’s stance got boost with the publication of the EU Disinfo lab’s damning report on Indian disinformation campaign against Pakistan. While it managed to create some pressure, it was largely viewed with suspicion by the international community. Notwithstanding usual scepticism, this is an unprecedented set of information that has raised questions on India’s credibility. The challenge, however, would be to keep the momentum in the coming months and follow it up with necessary details at relevant forums with perseverance and consistent diplomacy. Allowing it to die down due to inaction or misplaced priorities would dent Pakistan’s credibility. 

Thirdly, slow yet steady developments in the Afghan peace process notwithstanding resurgence of violence across the country, 2021 will be a pivotal year for Pakistan and Afghanistan. With the announcement of a breakthrough between the government of Afghanistan and the Taliban in the Intra-Afghan Dialogue, the peace process stands at a critical juncture. Whether Afghanistan moves towards peace or slides into another spell of civil war would have direct implications for Pakistan. Withdrawal of international forces is bound to create space for militant groups other than Taliban who would try to extend their survival by creating more violence. Sustenance of the fragile peace would be the real challenge for all parties involved. Pakistan has adopted a cautious approach and abandoned the policy of direct involvement by not positioning itself with any party, therefore, the ultimate solution lies only in Kabul and failure to seize this opportunity would be catastrophic for the entire region. 

While dealing with these challenges should be a priority, other developments in the periphery should not be ignored; such as shifting alliances in the Middle East, growing strategic competition in the Asia-Pacific and beyond that will have grave implications for Islamabad. With the arrival of Biden administration in the United States, the new year also offers an opportunity to evaluate relations with Washington DC and to make them broad based and long term. While India and Afghanistan will continue to be the important factors in determining Pakistan’s future role in the region, first few months of 2021 would be important in expanding the nature of the relationship from security to cooperation.