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Pakistan in Peril? The State of the Nation's Democracy, Economy, and Relationship with the US

17:34March 26, 2024

In this episode of Need to Know, we focus on Pakistan's political and economic situation, as well as its relationship with the United States. Michael Kugelman, Deputy Director of the Wilson Center's IndoPacific program, covers topics such as the health of democracy in the wake of the recent election, the country's ongoing economic crisis, and the value of US support for democracy and human rights. Kugelman highlights the challenges and complexities facing Pakistan and provides insights into the current state of affairs.


  • Pakistan's democracy is facing challenges, with increasing crackdowns on the opposition and concerns about electoral irregularities.
  • The country is dealing with a severe economic crisis and is seeking a loan from the IMF to stabilize its economy.
  • US support for democracy and human rights in Pakistan is important, but the State Department plays a more significant role in shaping policy towards the country.
  • The security situation in Pakistan is concerning, with an upsurge in terrorism and tensions with Afghanistan.
  • The proposed gas pipeline to Iran could create tension in US-Pakistan relations, as it may violate US sanctions on Iran.
  • The new government in Pakistan faces challenges in addressing the economic crisis and maintaining a stable relationship with the military.

Episode Transcript

  • This transcript has been lightly edited for clarity.

    John Milewski: Welcome to the Need to Know podcast from the Wilson Center, a podcast for policymakers available to everyone. Always informative Nonpartizan and relevant. We go beyond the headlines to understand the trendlines in foreign policy. Welcome back to another episode of Need to Know. I'm your host, Jonh Milewski. This week we turn our attention to Pakistan, a nation that's been dealing with a rolling economic crisis and with almost chronic political instability and upheaval, and that just this this week repelled an attack on a Chinese funded port in Balochistan.

    Earlier in the week, the House subcommittee on Middle East, North Africa and Central Asia conducted a hearing on the future of democracy in Pakistan and its relationship with the United States. So we thought this was a perfect opportunity to check in with our man on the Pakistan beat, Michael Kugelman. Michael, welcome. Thanks for joining us.

    Michael Kugelman:

    I think it's good to be back here with you, John.


    I should also give your credentials to our viewers and listeners. Michael is deputy director of the Wilson Center's Indo Pacific Program, previously known as the Asia Program. Just went through a recent rebranding. He's also the director of the South Asia Institute. So, Michael, at the hearing, Secretary Lew, in his testimony when asked about the state of Pakistan's recent election, use, the term that it fell short when talking about the status of democracy and referenced things like attacks or other things that created irregularities.

    Using that as a jumping off point. Give us your update on the health of democracy in Pakistan as represented by the most recent election.


    So I would say that the health of Pakistan's democracy is not very good. And that had been the case in the months leading up to the election. We had seen an increasing crackdown on the opposition and those supportive of it. We'd seen significant numbers of supporters of Imran Khan's party and its and others linked to it arrested, detained, jailed.

    And unfortunately, this is not new in Pakistan. It's history. Frequently you have this pattern of the state cracking down on opposition groups and those that it doesn't want to see come to power in elections in the months before elections. So this is not unprecedented what we've seen over the last few months. But the intensity of what we're of what we've seen, I think, has has stood out in terms of the numbers of people being arrested.

    They're higher than what we've seen in the past. And I think that's a reflection of a pretty bitter confrontation that's been in play for many months between Khan, the former prime minister and head of the opposition and the army and the Army leadership. The election itself was striking in that the Khan's party actually did much better than many predicted because it had faced significant challenges.

    It wasn't able to field the candidates because so many were in jail. Khan himself has been in jail, and yet independents linked to the party were able to gain the most seats of any party. And that's significant too, in that one of the big things that happened before the election, which also I think reflects how democracy is really struggling in Pakistan, is that there was a legal decision that deprived Khan's party of using its electoral symbol, which is significant in a country where you have high levels of literacy.

    So you couldn't even have opposition, you couldn't even have PTI party candidates run as PTI candidates. They had to run as independents linked to PTI. So this is all very concerning. And yet the party ended up doing much better than expected. But then there were things that happened on Election Day itself. And for me, what really stands out the most and which this was not really mentioned in the hearing, was that you had a very long period at the end of Election Day where the election commission in Pakistan went silent.

    There was a very long delay in announcing results and many thought that did tricky things. Not good things were happening during that period of quiet.


    And I guess observers weren't given full access as well, adding to the notion that perhaps everything didn't happen on the up and up.


    Yes, exactly. That's correct. I mean, there weren't huge numbers of observers in the for this election, but there were some there. And yes, there was concern about a lack of transparency and related matters.


    Michael, on the Hill, there's a proposed piece of legislation, a resolution, in fact, that would affirm U.S. support for democracy and human rights. Does this matter beyond symbolism?


    I mean, it matters in the sense that for a number of years we have seen that Capitol Hill has been a place where there's been a fair amount of criticism of Pakistan and its policies. And what's notable about, you know, this this resolution that you're mentioning and some others related to it is that there is concern expressed about the state of democracy in Pakistan.

    But there's this this broader positive theme of this this notion of wanting to see democracy, supporting the idea of democracy and wanting to see more of it. So that's significant. But I do think that aside from that, we shouldn't put too much place too much importance in this resolution. Others, just because, you know, as you well know, you know, the Congress does not actually make foreign policy.

    It plays a critical role in policy, particularly when it comes to two laws and in the context of Pakistan making decisions about aid and so on. But the State Department is essentially in the driver's seat of policy toward toward Pakistan. And I don't think that any of this any of these resolutions that we're seeing on the Hill will necessarily have an impact about how the State Department plans to go about its relationship with Pakistan, especially because I think there are some differences, quite frankly, between how the State Department looks at the relationship and how a number of members of Congress want the relationship to evolve.


    Where Congress might help in their control of the purse strings is with the economy. And when you open the hood on Pakistan's economy, it's not a pretty picture, right, that all a lot of the numbers are just really awful. What can be done there in the short term that can lead to a longer term, a more stable and more vibrant economy?


    Well, I think I mean, even today, you know, we could talk about serious economic problems in Pakistan, but, you know, the U.S. has actually been one of the major donors, one of the bilateral donors to Pakistan. So there's no shortage of economic assistance coming from the United States. But I think that at this point, Pakistan's biggest immediate term priority is to get a new loan from the IMF.

    And, you know, here there is there's support on the executive side from the State Department and others for this this this idea of Pakistan needing to negotiate with IMF to get a badly needed package. And I think there's a fair amount of support for that across the board. But I think that at the end of the day, there is a recognition both within the State Department and elsewhere, including on Capitol Hill, that for Pakistan to have a more sustainable economy over the long term, there's a number of steps that have to be taken by Pakistan directed at economic reform.


    And, you know, these are things that only Pakistan can do. This is not something that can be that can be done by, you know, providing more funding and providing more assistance. Absolutely. I think that there is significant amount of support, again, both on Capitol Hill and in the executive branch for deeper economic cooperation between the U.S. and Pakistan.

    But at the end of the day, it's Pakistan that needs that's needs that needs to make these moves, including some that'll be a bit problematical physically, perhaps in Pakistan toward reforms that lead to a more stable economy over the longer term.


    Let's turn. I mean, all of this stuff is inter-related, but let's turn our attention to the security situation. Terrorism continues to be a problem within the country. The country is on the top ten on climate risk index. We're talking about a nuclear power. I don't want to be alarmist when I bring that up. It seems like every time I talk to you, I ask you, you know, is the nuclear arsenal secure?

    But talk to us about the security picture.


    And the security picture is concerning because for a number of years until relatively recently, we had seen a significant decrease in terrorism. But what we've seen over the last few years, and not coincidentally, since the Taliban retook power in Afghanistan, we've seen an upsurge in terrorism. One reason for that is that the main group perpetrating attacks in Pakistan is the Pakistani Taliban, known as the TTP, which has a strong base in Afghanistan, is closely allied with the Taliban in Afghanistan.

    So this group has been strengthened and emboldened and inspired by the Taliban's return in Afghanistan. It's made it easier for the TTP to carry out attacks in Pakistan, including, as you note, several just in the last few days alone. And it's interesting that some days back we learned that Pakistan's military had staged cross-border anti-terrorism operations in Afghanistan, targeting TTP.

    And I think that things have gotten to a point where it looks like Pakistan is going to take some pretty drastic steps. They've tried to deal with this terrorism challenge through a variety of means, talks with the TTP. They've also tried to build a fence along the border to make it difficult for terrorists to come into Afghanistan.

    They've also conducted their own anti-terrorism operations on the Pakistani side of the border, and none of it's worked. So it looks like at this point the Army has decided to go into Afghanistan when it feels necessary. And this is obviously something that has not been received positively by the Taliban leadership in Afghanistan, which means that on top of all the other challenges that you've noted, Pakistan also now has to worry about the risk of a severe crisis with Afghanistan and with the Taliban, which ironically had long been a partner of Pakistan.

    When you had the US led war in Afghanistan, the tables were turned. At that point you had Pakistan being used as a base for Afghan Taliban militants to carry out attacks in Afghanistan. So it's very ironic, but the tables have turned. But ultimately, obviously, it's the Pakistani people that lose out the most from this because this upsurge in terrorism is very concerning.


    Ironic and complex. The complexity on this on all of this is really staggering. And let me ladle on some more. You talk about the willingness, the seeming willingness on the Hill and from the U.S. perspective, to work with Pakistan, particularly on economic matters. This proposed gas line, the pipeline to Iran, where apparently that the building of the pipeline alone would not be a violation of U.S. sanctions on Iran, But buying them its fuel to put through that pipeline would be and would require a waiver from the U.S..

    And is this a complicated issue that creates tension in the U.S. Pakistan relationship?


    It could be, yes. If Pakistan does go through with the pipeline. Now, keep in mind, this is something that Pakistan and Iran have talked about for years. They've talked about building this pipeline for many years. And Iran claims that it's built. It's part of the pipeline and its side of the border. And then it's just waiting for Pakistan.

    The delay on Pakistan's side has essentially been because it hasn't been able to come up with the financing for this. But also it has been concerned about the risk of of sanctions from the U.S. So I don't think, you know, we could we shouldn't necessarily assume that this time it's really going to happen, that Pakistan is really going to follow through.

    Given just how bad the economy is in Pakistan, the last thing it would want is to have a new crisis in relations with the U.S. because as we discussed before, the U.S. is a critical economic partner for Pakistan, not just in terms of a donor, a provider of aid, but also as an export destination. Pakistan is the top.

    Pardon me. The U.S. is the top destination for Pakistan's exports and has been for many years. So Pakistan has to be very careful. But at the same time, from an energy security perspective, this pipeline would be very helpful for Pakistan. It's an energy deficient country. And the cost of the gas that we'd get from this pipeline would be, you know, a really good price point.

    So Pakistan is in a tough spot. U.S. officials, we heard Donald Lew at the at the hearing the other day say that there has not been a request from Pakistan for for a sanctions waiver. That request would have to come in, in my view, for Pakistan to go forward with this. But, you know, given the state of relations between the U.S. and Iran right now, I don't think that the Biden administration would be in the mood to to make many exceptions, so to speak.

    But then again, though, Pakistan last year started importing oil from Russia and it got some there is some sort of arrangement that was worked out with the U.S. for that at per Pakistani officials. I think that Pakistan might hope that it would somehow be able to work something out with the U.S. where the it could actually go through with this deal and not risk sanctions.

    But, you know, it was it was also very clear at the hearing that the U.S. does not want Pakistan to build this pipeline. It wants to work with Pakistan to find alternative ways to meet its energy needs. So it could be a tension point for a relationship that actually has been fairly tension free over in recent months.


    The new government. How stable is it and what its what its its relationship with the military, which is always a factor?


    Well, I mean, this new government is a controversial one in that it's essentially the same government. It's a coalition led by the same parties that were in power previously and that was an unpopular government because it was widely perceived by the public to have failed to address a worsening economic crisis. So it comes in at a disadvantage right there.

    Also, you know, it's the product of an election that was extremely controversial. As we discussed. Imran Khan's party got the most seats are independents link to it, got the most seats, but it didn't get enough seats to win an outright majority. Supporters of Khan's party think that there was so much rigging that in fact there were there were actually the party should have gotten many more seats, in fact, enough to get an outright majority.

    That wasn't the case. So as a result, Khan's party did not have enough seats to form a coalition. And instead, you had these other parties, rivals of Khan's party, form a coalition. And so there's a lot of anger among the Pakistani public because the opposition has a lot of public support right now. Now, the good thing for the government is it does have close relations with the army.

    And this is always very important given that the army is so politically powerful in Pakistan. So if you have the backing of the military, you're going to be in a pretty good place, at least initially. But the pattern we've seen in Pakistani politics over the years, including what happened when Imran Khan was prime minister, you know, you have a you have a political you have a prime minister that comes to power.

    Relations are good with the military, but then they run into problems down the road. So I think that's that certainly is a is a risk there. But I think from an economic perspective, given Pakistan's need for economic assistance, you don't want to see that happen. You want the relationship between the civilians and the military to stay stable and the right foot so that you don't have more political tensions, which I think could be problematic in terms of perceptions of investors and, you know, volatility.

    That's not that's not a good optic to have out there if you're looking to draw in more assistance and more FDI and so on.


    Final question. You know, when people like me are trying to learn more about Pakistan, we turn to experts like you. Where do experts like you turn to for information?


    Well, you know, I think that in this day and age, there are so many places to look at. I think the bigger question is where not to look, what not to depend on. And I think in that regard, social media is very important. But there's a particularly in the context of Pakistan. There is a lot there are a lot of suspicious accounts that put up information highly partisan don't know where it's coming from.

    So quite frankly, I go to contacts that I trust in Pakistan, whether they're journalists or analysts like me. Those in the business community I think can be very helpful in providing information about economic trends and so on. So I think that that's just and especially as a country specialist, as a regional specialist, you have to depend on voices on the ground that you trust and that are credible.


    Yeah, I'm glad you brought up where not to look. Right. I purposely have avoided conspiracy theories because I don't like to give them oxygen, but it's been part of the discussion and it was part of the hearings on the Hill. It's almost unavoidable in this moment. We live in, but we're not to look. Good advice, good cautionary advice.

    Thanks, Michael, as always, for all of your insights.


    Thank you. Great to be with you, as always.


    So for those of you interested in learning more, I can point you to Wilson Center Morgan If you use that programs tab at the top of the page, you can go to the Pacific program and find more from Michael and also the South Asia Institute. And next week, we'll be back with another episode of Need to Know. So until then, for all of us at the Wilson Center, I'm John Milewski.

    Thanks for your time and interest.


Indo-Pacific Program

The Indo-Pacific Program promotes policy debate and intellectual discussions on US interests in the Asia-Pacific as well as political, economic, security, and social issues relating to the world’s most populous and economically dynamic region.   Read more