With Chinese support, Pakistan can ignore Donald Trump on Afghanistan

NEW DELHI (BLOOMBERG) - A key plank of US President Donald Trump's new strategy to turn around the 16-year conflict in Afghanistan will probably falter for a reason few of his voters would realise: China.

On Monday (Aug 21), Mr Trump outlined an open-ended commitment to the conflict in Afghanistan that pledged more troops and diplomatic outreach to the Taliban. Importantly, Mr Trump publicly tried to pressure Pakistan to end safe havens for terrorists who are striking at Afghanistan.

A day later, US Secretary of State Rex Tillerson followed up Mr Trump's comments, adding that Pakistan "must adopt a different approach". But this aspect of the Afghan strategy is likely to founder because of China's increasingly close economic ties with Pakistan, which reduces American leverage.

With more than US$50 billion (S$68 billion) in planned infrastructure projects and strong diplomatic support for its positions, American threats to withdraw billions in military aid are becoming less worrying for the powerful army, which dominates foreign policy.

With China's role increasing, Pakistan's forces have fewer incentives to stop covertly supporting insurgent groups that strike inside Afghanistan and arch-rival India, while targeting outfits that threaten its own domestic security.

"China is the shield now behind which Pakistan can be expected to continue to play its double game," said international relations professor Harsh Pant at King's College London. "The more aid America will cut, Pakistan will be expecting China to fill the vacuum."

Pakistan has long denied it harbours terrorists. But despite rising frustration from US lawmakers over designated terrorist groups such as the Haqqani Network - who strike Afghanistan allegedly from inside Pakistan - China's support for its ally means Pakistan does not need to alter course.

In the last four fiscal years, China has directly invested US$2.8 billion in Pakistan compared with the US$533 million inflows from the US, according to Pakistan's central bank.

Chinese banks have also helped Pakistan plug its widening deficits. Pakistan received  US$848 million in loans from China in the six months through December 2016 to finance the country's "growing current account gap", according to the central bank.

Pakistan's foreign ministry released a defiant statement after Mr Trump's speech saying China's Foreign Minister Wang Yi "lauded Pakistan's contributions and great sacrifices made in the fight against terrorism" and the "international community should fully recognise these efforts".

Later that evening, the foreign ministry released another statement calling Mr Trump's comments part of a "false narrative". It also said Mr Trump's strategy will likely fail as US military action has not brought peace to Afghanistan in 16 years and probably won't "in the future".

"China is at the moment supporting and helping Pakistan's economic development and neutralising part of the American argument" pressuring Islamabad, said political analyst Hasan Askari Rizvi, who is based in Lahore. 

 
 

Amounts paid out to Pakistan under a US coalition support fund have fallen 62 per cent from US$1.44 billion in 2013, with hundreds of millions blocked in the past year as American officials said Pakistan was not doing enough to root out groups like the Haqqanis.

Threats to withdraw US military aid entirely are not going to have much impact, since the US needs Pakistan for its broader efforts in South Asia, Mr Rizvi said. Even if Washington chooses to get tough on Islamabad, "Pakistan can survive even without any American assistance".

On Wednesday, Pakistan's army chief Qamar Javed Bajwa told US Ambassador David Hale that the military is not looking for funding, but wants recognition of its contribution in the fight against terrorism. At the same time, Pakistan's government stressed it does not want to alienate the US.

We won't "turn our back on the rest of the world on the back of Chinese support", said Mr Miftah Ismail, an economic adviser to Prime Minister Shahid Khaqan Abbasi. "We want to be friends with every country and America has a role to play."

Some hope China might use its clout to end regional instability. In an interview this month, Afghanistan's ambassador to Pakistan Omar Zakhilwal said he hopes Beijing will use its influence to push for a permanent peace deal.

"China could only be genuinely interested in peace in Afghanistan for its investments in Pakistan," Mr Zakhilwal said. "Instability in any of these countries does not serve China's interest."

And China has huge interests in Pakistan. The China-Pakistan Economic Corridor (CPEC) projects form the cornerstone of Chinese President Xi Jinping's Belt and Road Initiative. And the Chinese funded port of Gwadar gives Beijing a deep sea port in the Arabian Sea, close to mutual rival India - with whom China is currently engaged in a Himalayan border dispute.

There are also about 20,000 Chinese workers in Pakistan, double the number two years ago, and Pakistan's military is firmly behind CPEC, said one senior Chinese official, who asked not to be named as they are not authorised to speak to the media.

"Pakistan's pivot towards China, particularly under the CPEC initiative, has been clear for some time," said senior economist Bilal Khan at Standard Chartered in Karachi. "It remains unclear what the future US-Pakistan economic relationship could look like."

After being spurned by Mr Trump's criticism, Pakistan is even less likely to agree to a US-directed policy, even if it is accompanied by threats.

"It's nothing new for US leaders to vow to get Pakistan to change its ways," said Mr Michael Kugelman, a senior associate for South Asia at the Washington-based Woodrow Wilson Centre. "What remains to be seen is how Trump intends to compel Pakistan to alter its behaviour."

He added: "In all likelihood, Pakistan is unlikely to change its ways regardless of what threat or punishment Trump comes out with."