News Desk |
Dr. Farrukh Saleem has written often about the fourth generation war that Pakistan is facing. GVS Managing editor, Najma Minhas, spoke with him to understand what he meant by this and how it was affecting the country’s economy. Dr. Farrukh Saleem is a game theorist by training, has a doctorate from the New York State University and is currently an Anchor on Channel 92.
Najma Minhas: Recently, you have been talking about Pakistan being in the midst of a fourth-generation warfare. Can you explain what you mean by this?
Dr. Farrukh Saleem: In the early eighties, the Indian army gave birth to what’s now known as the Sundarji Doctrine. The Sundarji Doctrine was all about splitting Pakistan into two halves. By 2001 the Sunderji Doctrine died under the weight of what’s known as Operation Parakram. The Indian army then came up with what’s known as the Cold Start Doctrine.
The aim of the Cold Start Doctrine was not to have deep penetration into Pakistan. Rather it was to mobilize the Indian army to capture small Pakistani territories and then to negotiate with Pakistan.
The Cold Start Doctrine was countered by Pakistan in the form of tactical weapons that are known as Hatf-IX. Both Cold Start and operation Sunderji Doctrine died. My presumption is that the architects of those doctrines came up with new weapons. Ones that do not involve missiles, tanks or artillery.
The design was to bring down the Pakistani economy; such that the economy does not have sufficient resources that can be diverted to the defense sector.
So the first generation warfare was all about lines and column wars. Second generation warfare involved rifles and gunpowder. Third generation was tanks, artilleries, and air force. Now fourth, which is sometimes referred to as fifth generation warfare is the use of the economy to bring down a country. Or to persuade a country to change its behavior based on economic pressures.
Najma: What evidence do you find to substantiate the economic warfare argument.
Dr. Farrukh: If you look at Pakistan’s economy, there have been some historical landmarks. Pakistan, for instance, has never imported goods and services worth 52 billion dollars in the past seventy years. In the financial year, 2016-17 the trade deficit (exports minus imports) for instance was thirty-two billion dollars, which has also never happened in the past seventy years of Pakistan’s financial history. So some of these items that have never happened before are all of a sudden coming out, in addition, debt is being used as a weapon of war. The way Pakistan is accumulating debt; I mean if you go back not too far away, to 1971 the entire national debt was only 30 billion Pakistani Rupees.
In the past forty-six years, it’s gone from thirty billion to twenty-five thousand billion. So, over the past eight to ten years you see a distinct pattern whereby accumulation of debt has really speeded up. The use of trade deficit as a weapon of war or using debt as a weapon of war, you get a window of looking into what the fourth or the fifth generation war will be.
Najma: You started off by saying that India has had these various warfare strategies against Pakistan and you’ve ended up by saying we’ve got very lax import policy and we have a huge amount of debt. Now India can’t make us have a lax import policy or a huge debt right? That’s something we have to do ourselves as a country. Are you suggesting there are local participants in the bigger Indian objective?
Dr. Farrukh: The fourth or the fifth war cannot be fought without having penetrated the internal economic infrastructure of a country. It’s not just restricted to India; there could be other forces at play as well.
Najma: Do you have in mind certain foreign countries that you think might be involved in this?
Dr. Farrukh: There are other countries that have used their economy as a weapon in the past. The US, for instance, used it against Russia. The Soviet Union at a point in time had more than seven thousand nuclear weapons, but its economy was brought down and then the country was split into fifteen different republics. The US has also used its economy as a weapon, although unsuccessfully, against Iran, North Korea and against Cuba at one point in time as well. So, there is a certain pattern. There are countries that have used their economy as a weapon against their adversaries.
Najma: Are you supporting the economic hit man view, which a lot of politicians in the recent months, have started talking about? Is that the direction you’re going towards?
Dr. Farrukh: Yes, I think this book came out in the early 2000s and John Perkins himself was used as a tool to achieve the objective. Then, later on, he documented all of his, shall I say, flaws, that he allowed himself to become a tool. So, there is certain documentation to that effect.
Financial projection of power is done through the IMF or the World Bank. These institutions are not just financial institutions per se; they are tools that are used by their political owners, for their own projection of financial power. If we look at the distribution of votes for instance at the IMF, the US itself I believe has eight hundred and thirty-one thousand, four hundred and seven votes (831,407). So when one of its representatives raises his hand its eight hundred and thirty-one thousand, four hundred votes going up. And that’s only one of the instruments to project their own financial power.
Najma: Going forward next year, what do you see as Pakistan’s biggest concerns in terms of the Pakistani economy? What would your top two concerns be?
Dr. Farrukh: Top two would be twin deficit Pakistan has. The first deficit is the trade deficit that we discussed earlier. Trade deficit would eventually end up becoming a balance of payment crisis. What that means is that if our trade deficit is at 32 billion and let’s say that we’re expecting 18 to 19 billion inflows from Pakistanis working abroad, we’re still left with a double-digit; a very heavy current account deficit that would have to be financed.
If we are unable to finance that, there would be a severe balance of payments crisis. We will not be able to pay for some of our necessities like oil, cooking oil, edibles, and machinery that are being imported. We wouldn’t have the dollars to pay for them and we would be forced to go to the IMF for a rescue package.
Once we do that, the IMF and the political masters that really own the IMF will have the upper hand; imposing certain restrictions on our foreign policies and some of our policies within Pakistan. Then the next is the fiscal deficit we have from our expenditures and revenues not matching.
Najma: What percentage would you put on that probability of us going to the IMF and do you see it happening before or after the general election?
Dr. Farrukh: Mathematically if we look at the sum of imports in the month of August or September, we imported goods or services worth about five and a half billion dollars and looking at the accumulated foreign exchange reserve with the state bank, fourteen fifteen billion dollars. I would say that in the next three to four months the probability that we would need another rescue package would be very high.
Najma: Taking the argument forward. I am thinking of going to the US next year for a holiday. Should I be buying dollars now? Do you see a large disorderly fall? What do you see happening to the exchange rate?
Dr. Farrukh: The IMF has officially stated that the Pakistani rupee is overvalued by a factor of twenty-seven percent.
If we would have to go back to the IMF, assuming that we would have to go back to the IMF, one of the very first prerequisites that they have put forward for countries going to them for a rescue package is a massive devaluation. Whether the devaluation comes in just one go or it takes place in three or four different phases, but the devaluation would be in the range between ten to twenty percent.
Najma: And you see this happening over the course of the next one year?
Dr. Farrukh: Less than one year, yeah.
Najma: Do you think all this is going to get delayed until after the general election? I mean if we continue with this setup as it is present, do you see this actually happening? It’s not the best way to go into any general election anywhere in the world.
Dr. Farrukh: Well in parts of the Pakistani government there will be attempts to delay it. But I think the way that our trade figures are headed, the government would probably be forced to go to the IMF even prior to the general elections.
Najma: The twin deficit concerns that you’ve expressed, do you think the government has those as their concerns as well?
Dr. Farrukh: Decision makers or decision making at the federal level at least is focused on self-survival techniques rather than focused on Pakistan’s economy.
We have a finance minister who’s already been indicted. He does not have much time to focus on how to reduce the import bill, how to escalate our exports or how to focus on reducing the current account deficit.
I think there is a severe lack of decision making at the federal level. Personal interests are getting priority over national interests or even over party interests. There’s an absolute lack of decision-making going forward.