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Sensemaker: Pakistan in peril

Thursday 9 March 2023

Sensemaker: Pakistan in peril

What just happened

Long stories short

  • Russia fired more than 80 missiles, including six hypersonic missiles, at targets across Ukraine, knocking out power and killing at least five people.
  • The Vatican signed an agreement to return three Parthenon fragments to Greece.
  • Mae Muller, 25, was named Britain’s Eurovision entry for this year’s competition in Liverpool. 

Pakistan in peril

Imran Khan, the former prime minister of Pakistan, narrowly avoided arrest this week after police stormed his Lahore home but couldn’t locate him. Tipped to triumph in Pakistan’s autumn general election, Khan, accused of unlawfully selling state gifts, faces a lengthy political ban and possible jail time.

So what? Political tensions in Pakistan are high after Khan survived an assassination attempt in November. If he is arrested, there are fears the country – which is also on the brink of an economic default – will descend into anarchy. 

By the numbers

0 – prime ministers have completed a full five-year term in Pakistan’s 75-year history

23 –  times Pakistan has borrowed from the International Monetary Fund since 1988

165 – Pakistan’s total nuclear warheads

61 – per cent, Khan’s approval rating (against 32 per cent for Prime Minister Shehbaz Sharif)

Khan denies wrongdoing and says the charges are politically motivated. The former premier has called on his supporters to march on the capital Islamabad to push his demands for early elections. A rally in Lahore yesterday had to be called off after police tear-gassed Khan’s supporters – at least one person died and dozens were injured. 

Follow the money. Pakistan’s big problem is the economy. The country has suffered from decades of gross macroeconomic mismanagement, endemic corruption and a failure to diversify the country’s industry away from textiles and agriculture. Which means

  • inflation has soared to 41 per cent;
  • the country has less than one month’s worth of foreign exchange reserves left for imports;
  • thousands of shipping containers are being abandoned at its ports – some containing life-saving medicines – as the country can’t afford to unload them;
  • white-collar workers, including doctors and lawyers, have taken up second jobs to support their families;
  • malls and markets must now close by 8.30pm to save power, while 
  • major companies, from Suzuki to GlaxoSmithKline, have halted operations in Pakistan due to raw material shortages.

Those who can flee the country are doing so; some are desperate. A Pakistani international hockey player drowned after her boat capsized off the coast of Italy last week. Her sister told the BBC she had been trying to reach Italy to get medical treatment for her three year-old son. 

Relief at hand? Pakistan approached the International Monetary Fund for a bailout and a negotiating team arrived in Islamabad in January. But a deal still hasn’t been signed. The tax increases and austerity measures needed to lower Pakistan’s expenses and secure any IMF deal do not sit well with the country’s electorate – and Sharif’s Pakistan Muslim League-Nawaz (PML-N) doesn’t want to boost Khan’s support any further.

And another thing… The political and economic crises coincided with a major leadership transition in Pakistan’s army, one of the largest armed forces in the world and historically the country’s power broker. As a result of the power vacuum:

  • The Tehreek-i-Taliban (TTP) has regrouped with the aid of their allies, the Afghan Taliban, launching over 150 attacks across Pakistan last year.
  • In January, the TTP killed over 100 people, mainly policemen, in a suicide bombing at a mosque in the city of Peshawar. It was the deadliest terrorist attack in Pakistan in nearly a decade.
  • A pro-independence insurgency in the southwestern province of Balochistan has reignited, with militants launching a series of deadly attacks.

Analysts warn Pakistan’s leaders are too distracted by their own political struggles and hamstrung by the economic crisis to launch an effective counter-insurgency campaign. The country could again become a base for international terror groups.

Not forgetting. One-third of Pakistan was submerged during the worst flooding in the country’s history last summer, displacing more than 30 million people and causing over $40 billion in damages. Millions of Pakistanis remain displaced or are living near stagnant, contaminated flood waters that haven’t yet subsided.

Pakistan is one of the world’s most vulnerable countries to climate change. It is in no position to face the floods. 

CAPITAL ECONOMY, BUSINESS AND FINANCE

Epstein’s long shadow
America’s biggest bank, JPMorgan Chase, is suing Jes Staley, one of its former top executives, over his ties to Jeffrey Epstein, the financier and convicted sex offender who died in custody in 2019. Staley is accused of failing to disclose he “personally observed” Epstein abusing women; the bank says Staley himself has been accused of sexual assault. Staley, who later became chief executive of Barclays, has denied knowledge of Epstein’s crimes and his lawyer declined to comment, according to reports. JPMorgan, which kept Epstein as a client until 2013, is facing two civil lawsuits alleging the bank helped facilitate his crimes. The bank wants to put Staley on the hook for damages should it be found liable – though it continues to insist the allegations lack merit.

TECHNOLOGY AI, SCIENCE AND NEW THING

Project Clover
TikTok plans to move the data of its 150 million European users beyond the reaches of the Chinese government, to Ireland and Norway. The Chinese-owned video-sharing app has faced a string of bans and restrictions in recent weeks, including a proposed bill that could see it wiped out of the US market altogether (read more in our Tech States Sensemaker). TikTok is trying to fight back with an initiative it’s calling “Project Clover”. The plan is to move user data into local siloes, specifically to data centres in Dublin and Hamar. The premise is a similar gambit to “Project Texas”, where the company has set aside $1.5 billion to move its US data operations to US-based cloud company, Oracle. The hope is that TikTok can assuage fear about its use as a surveillance tool for the Chinese state by hiving off its data and telling policymakers that it cannot be accessed. The cost to TikTok is enormous – and it may not be enough to save it if legislation like the US Restrict Act is passed anyway. 

The 100-year life health, education AND GOVERNMENT

Ten more years 
Sam Altman, the chief executive of OpenAI, has already changed the tech world with ChatGPT. Now, he wants to help humans live longer. The MIT Technology Review revealed in an interview with the 37 year-old that he is bankrolling a company aiming to add 10 years to the human lifespan. In 2022, San Francisco-based Retro Biosciences picked up $180 million in investment from an anonymous investor. It turns out that was all Altman. Joe Betts-LaCroix, Retro’s CEO and scientist, has set his sights on cellular reprogramming (making cells younger with genetic engineering) and drugs that mimic the regenerative effects of blood replacement. A reminder: Altman may be at the forefront of generative AI but he has strong competition in the longevity start-up space. The Saudi government has said it will push billions of dollars into the field and there is $3 billion behind Altos labs – supposedly some of that cash is from Jeff Bezos.

Our planet CLIMATE AND geopolitics

Green grid
Analysis by the UK Climate Change Committee says a fossil-free electricity system by 2035 is achievable – but accuses the government of being “asleep at the wheel” in terms of a strategy to get there. The CCC’s recipe for success includes: solar and wind meeting 70 per cent of demand; 20 per cent from biomass; while the remaining 10 could come from “flexible low-carbon” solutions such as batteries and compressed air storage. In weeks when wind and sun don’t deliver, gaps will need to be filled with gas (combined with carbon capture) or hydrogen power. But as the country electrifies, demand could grow by half by 2035. To meet that, the report recommends an overhaul of the planning system and more incentives to invest. FWIW, industry agrees: the CBI, Aldersgate Group and the Institute of Directors all recently called for a policy to mimic the US’s raft of green subsidies.

CULTURE soCIETY, IDENTITY AND BELONGING

Georgia has a dream
Massive protests hit Tbilisi this week, with riot police using water cannons and tear gas against people carrying EU flags. Why? Georgia’s ruling party introduced a bill that would have labelled media organisations and NGOs with overseas funding as “foreign agents” – widely seen as inspired by a similar law imposed in Putin’s Russia. Georgia’s opposition said the bill would control civil society and restrict freedom of speech, turning Georgia away from the European Union (it applied for membership last March) and back into Putin’s orbit. Georgia’s president called the draft law “something dictated by Moscow”. The protests worked – the ruling Georgian Dream party said it abandoned the draft law “unconditionally”. But people remain suspicious. They have promised to keep protesting until Georgia’s pro-Western course is “guaranteed”. 

Thanks for reading. Please tell your friends to sign up, send us ideas and let us know what you think. Email sensemaker@tortoisemedia.com.

Joe Wallen
@joerwallen

Additional reporting by Jess Winch, Phoebe Davis, Nina Kuryata, Luke Gbedemah and Barney Macintyre.

Photographs Getty Images

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