Pakistan’s economic woes and extraordinary solutions

Pakistan’s military has continuously played a vital role in resolving economic fallout amid extreme circumstances

Shahid Farooq Abbasi April 02, 2022

Apart from protecting the ideological and physical frontiers of the state from external coercion, Pakistan’s military establishment has continuously played a very vital role in resolving country’s economic fallout amid extreme circumstances of Covid-19 and the dangling threat of international financial penalties resulting from the accumulated and sustained institutional failure. The military has evolved into a thinking apparatus of National Security and has developed capacities in crises management. While warfighting and military strategy remains its mainstay, its organisational capacity and agility has turned it into a problem solving machine. The ineptitude and lack of capacity displayed by political leadership over a period of past few years has burdened the military to get involved into domain of civil functioning, especially during crises.

During the pandemic, while the entire world was shattered under the looming crises, Pakistan’s military took lead to strategise and put to effect a novel idea of National Command and Operation Centre (NCOC). Military’s organisational and administrative skill was put to good use, and a state-of-the-art quick but enduring solution surfaced. It not only contributed to the distribution of food and medical equipment to the poor but also carried out large-scale awareness campaigns about the Covid-19. Due to such an effective and synergised efforts, Pakistan has not only tackled Covid-19 aftermaths very efficiently but also averted an impending economic tragedy.

No wonder Pakistan model of NCOC was keenly studied and appreciated by international organisations. Bill Gates, during his visit to Pakistan, appreciated NCOC for such a momentous effort. Similar strategy was put into motion while dealing with locust threat by creating National Locust Control Center (NLCC) and after great effort the threat was averted.

In 1993, the Government of Pakistani struck a secret deal with a Canadian company Barrick Gold Corporation to extract Gold and Copper from Balochistan’s Chaghi district known as the Reko Diq agreement. Later on, it was established that the agreement with the Canadian company was inked without fulfilling the prerequisite legal requirements. Supreme Court of Pakistan directed the federal government to annul the agreement. The company meanwhile referred the issue to the International Center for Settlement of Investment Disputes (ICSID) over the non-compliance of Pakistan with the agreement and demanded $11.5 billion fine against the Pakistan.

Such a colossal amount was enough to bankrupt an already cash-starved Pakistan. It is a common knowledge that the military went into overdrive to manage and mitigate the damage. After strenuous efforts, the threat was not only averted but the agreement renegotiated. Pakistan not only managed to get the $11.5 billion fine waived but also persuaded the same company to invest around $10 billion in Balochistan. Experts say that the new contract would provide eight thousand new employment opportunities for the people of Balochistan.

In 2008, PPP government had awarded Karkey Karadeniz Elektrik Uretin (KKEU) with a rental power project. But it failed to generate 231 megawatt of electricity as was required under the pact, even though $9 million had been paid to the company in advance as capacity charges. In 2013, KKEU moved the ICSID, seeking compensation for the losses incurred by its vessels in terms of damage or devaluation for not being allowed to leave Karachi port for almost 16 months. The Turkish company later won the case in 2017 and Pakistan was fined $1.2 billion. Thankfully, in 2019, state institutions through the military’s diplomatic wisdom resolved the dispute and saved $1.2 billion in penalties.

The dispute over the ownership of Chamalang Coal Mines with an estimated worth of $12 billion was also resolved due to the mediation of Pakistan Army. In January 2006, the General Officer Commanding of Quettabased 41 Division began an initiative to resolve the conflict by gathering warring parties together. The Marris, Lunis, and the contractors were to put total trust in the Army’s mediation. Since the issue is resolved, 1.5 million tons of coal have been excavated which has generated $37 million in revenues for Pakistan. By 2007, the mines have generated 55,000 jobs for the people of Balochistan, Punjab and Sindh.

The military diplomacy of Pakistan is also playing a significant part in the smooth running of CPEC projects worth around $62 billion, the project that is believed to be the lifeline of Pakistan’s economy. Army personnel have been scarifying their lives for the security of the project and Pakistan’s Army chief on several occasions underlined that he would make sure that the corridor is developed as per the plan of the government. For this purpose, a Special Security Division (SSD) has been raised for the protection and security of the flagship project. Military engineers are busy in building segments of this corridor, where the road does not exist and the Army has taken upon itself the entire responsibility for its security.

Besides this, the Frontier Works Organization (FWO) has already completed 556 kilometers of the 870-kilometer road network in Balochistan as part of the Western Route of CPEC. As many as 12 units of FWO were also deployed on the Balochistan projects and FWO is indomitable to timely complete the difficult but challenging task despite logistic concerns in the wake of aloofness of area and rough terrain conditions.

Pakistan Army has long been involved in national-building tasks including the building of roads such as the Karakorum Highway; repairing dams; cleaning irrigation canals; holding census; and conducting elections. Further to this, military diplomacy and its negotiation abilities played a pivotal role in taking Pakistan out of economic turmoil at numerous instances.

Pakistan Army’s organisational strength, its agility and its hardworking office cadre have helped it shoulder national-level responsibilities with a smiling face. Pakistan Army prides itself in extending help to the Government of Pakistan, whenever the need arises; and irrespective of odds, it has surmounted many strategic challenges to build a better Pakistan.


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