The economic reality of US threats

Published: October 3, 2011

A Pak-US war is an empty threat, given the interests of China and India plus the economic condition of America.

There has been a wave of American threats of war against Pakistan if the latter does not take action against the Haqqani network reportedly operating from the Pak-Afghan border. There is, thus, widespread concern among already economically miserable and politically devastated Pakistanis if an open US-Pak war is about to take place or the current threats are another jugglery of the US to put forward a new do-more agenda.

This distress among Pakistanis is feeding upon the ongoing discourse on local and international print and electronic media, and the latter are doing their jobs pretty well to fatten the fear. Let’s see if the war ground can really be extended to Pakistani mainland, given the vulnerable interests of other fast growing economic players of the region, specifically China and India.

The 2011 report titled “Asia 2050: Realizing the Asian Century” by the Asian Development Bank notes that Asia is expected to contribute 50% of world’s total GDP in 2050 and 70% of the world’s added capital stock in 2030. On deeper investigation it is not difficult to find that China and India are the main contributors in this emerging Asian economic boom. The report notes that India’s GDP per capita will rise by more than three times, and that of China by more than double. Looking at the given statistics and explicit aspirations of India to become, as she says, the Asian tiger and the current international status of China, I believe that there are too dear and powerful stake holders to overlook for the US to extend this war into Pakistan’s mainland.

India is always perceived as an interested party in any warfare expedited against Pakistan. However, this time, India, which is living in the glassy economic walls, would not want to indulge with conventional war against Pakistan.

Indian defence minister has explicitly expressed the same a few days after the US allegations against Pakistani intelligence agencies. India has much more to lose economically than it had a couple of decades ago. Wars are not good for economic growth, which India has seen recently. The region is growing as a manufacturing hub for the world and India is the second largest country in this setup. The war in Pakistan’s mainland would immediately harm Indian economic interests, even if India does not engage itself directly.

So far Pakistan has been serving as a buffer between the US lead Afghan war and Indian Territory and the buffer is paying the war cost. If war is brought into Pakistan’s mainland, it will directly expose India with war’s economic side effects. If India wants to sustain its speed of growth it must demonstrate to the world, which is investing heavily in India since a couple decades, that the Indian market place is not vulnerable to any sort of war damages.

China, emerging as a powerful state in the world, has strategic economic interests in Pakistan. Pakistan provides access to rich Middle East market through Gawadar Port. China’s route to Middle East’s market will become inoperable in case of any expedition of US on Pakistan. Also, Pakistan provides a defence to China against India, which has burning territorial dispute on China-India border.

If the US lead war is extended into Pakistan’s mainland, the action would kill both advantages which China enjoys currently.  The presence of the US army in Pakistan will also create the US-India joint venture on the Chinese border, which is never acceptable to China in the long run. As a result, the world has recently witnessed China’s immediate response against US war threats to Pakistan and a following visit of Chinese Premier to Pakistan. China owns the veto power and economic muscle, which it will use to keep the presence of the US army away from its border.

How could I ignore to include the implications of current bailed-out economic position of the US?

Frankly speaking, America cannot afford to trigger a new war, at least at this point of time, when it is seeking capital investment from a third world country like India to create employment in American job market. Its economy cannot afford a new war except the war slogans in efforts to retain Obama’s vote bank until the upcoming elections in the US. The current administration has to take back their faces to their voters and this time, since Osama is apparently not available, they have chosen Pakistani shoulder to put off their burden.

Also, this is a good time to push another list of do-more in the same blow.

Shakeel.Sadiq.Jajja

Shakeel Sadiq Jajja

A PhD Management candidate at LUMS who follows national and international politics actively.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • Tanoli

    Good Job Mr.Jajja……keep it up!Recommend

  • Ankash

    Yes, I agree USA cannot afford another war with Pak.Since USA is bankrupt and on the verge of currency collapse any time this decade. And I think Pakistan should be mature enough at this time not exporting terror all around the world and India because it dents Pakistan image internationally. India and Pak can work together and improve their economy as both have learnt war only affects their economy and people to people ties.Recommend

  • Shakeel

    Ankash, while agreeing with the rest I disagree with the middle 33% of what you have said. What you are saying is based on the assumption that Pakistan exports terror, which completely misleading. There is no evidence of what you are presuming; don’t chase news only. Most of the time they are manufactured to suite ulterior objectives.Recommend

  • http://Boston Sundeep

    Ahem.. Projected per capita in PPP terms for both China and India in that report are $47000 and $41,150 respectively by 2050. Pakistan’s according to report is only 7900. That is an average person in India would be 5 times more richer than his counter part in Pakistan. That would have serious influence in their relative positions. It is projected that with 15 years that is by 2025-26, Indians would 2-3 times richer than Pakistanis. India could just wait out for these few years after which every other judgment on our bilateral issues would be in India’s favor.Recommend

  • MD

    A war with the US is simply unimaginable. A war with the US will plunge Pakistan into an internal chaos and a chaotic Pakistan is certainly not in the interest of India or for that matter, China. Therefore, author’s analysis, though far fetched, is mostly correct.
    But, the writer has forgotten an important aspect of this whole drama. Neither the US nor Pakistan are interested in going to war with each other. In the present circumstances, a war is simply inconceivable for both. Recommend

  • Shakeel

    @Tanoli: Thanks Ayaz.Recommend

  • A Rahman

    Though I agree with the conclusion you have drawn, i.e. an open US – Pak was at present is not a viable option for any of the player involved, I must say that u have ignored the possibility of a ‘small scale war’ in form of US surgical strikes in Pakistan.Recommend

  • ks

    US will not go to war with Pakistan However it will turn off all kinds of aid to Pakistan. Pakistan lives on aid from USA. China simply is unwilling and in no position to give that kind of aid to Pakistan. Pakistan have very uncertain future.Recommend

  • malik

    When a sick guy is in death bed, there is no need to go and stab him with a knife. All you have to do is to cut off the oxygen tube.
    Only the naive will believe that US intends to go on a conventional war with Pakistan. All US has to do is to close down the embassies and stop the visas. The remittances will stop and the country will be on its knees in a week. Recommend

  • Ali Tanoli

    @ Mr Jajja,
    Very well written man Bravo. CioRecommend

  • Doctor

    @ Author – well thank you for this real politik analysis. It still doesn’t change the fact that Pakistan needs to give up its addiction to terrorism. Just because no one will opt for conventional war against Pakistan does not mean that Pakistan can’t be bled to death. The IMF is already closing the doors on Pakistan. US aid is drying up. The Chinese have already shown they will not give Pakistan further aid. Arab countries don’t care. Pakistan’s only option is to make peace with Afghanistan and India and stop meddling in both country’s affairs through “strategic depth”. Trade is the only thing that can save Pakistan otherwise the country will get poorer and poorer. More capital will flow out and more talented people will move out leaving Pakistan to fester like a cesspool.

    @ Shakeel – brother, please stop being delusional. There is evidence all over the world of Pakistan exporting terror.

    @ Malik – totally correct.Recommend

  • BBSRorissa

    The economic importance of Pakistan to China is exaggerated. It is far for expensive to transport oil or any other product to China through Gwadar.

    Given Pakistan’s miserable infrastructure, transit through Gwadar all the way to Gilgit is horribly expensive.

    Then it has to be transported all the way from western China to its coast, through rugged mountainous terrain. The densely populated regions of China are in the eastern coast, including all the major cities of Shanghai, Shenzhen, Harbin, Guangzhou, Hong Kong, Beijing, Tianjin, Macau, etc.

    By far the cheapest route is through the South China sea directly to China’s eastern cities.

    Gwadar is China’s leverage against India, a port that Chinese warships can access, to thwart India’s growing navy. A US-Pakistani war would break the backbone of the US economy. It would accelerate the decline in American global influence. China would like nothing better than that to happen.

    Turmoil in Pakistan would threaten India not just economically, but also from the security standpoint. War would bring the nation together under the aegis of Islam. That will have serious consequences for Indian occupied Kashmir.

    A US-Pakistan war might actually serve China well. After all, the Chinese rulers are masters at the game of realpolitik.Recommend

  • http://www.tarpley.net Moise

    US is war economy. War is coming since Keynesians think it is a good booster of GDP growth. Recommend

  • Abdul

    Though highly unlikely, a US-Pak war could still just “happen” as when temperature is raised between big establishments, there is no single button to reset that to normal and there are several ifs and buts in between. It should be assumed that US has not raised this temperature in oblivion of high risk of events roll.
    So lets assume it does happen, a US-Pak open fight, what it means for both Nations and the region? I fully agree that China will suffer least while India will suffer most and Iran will gain.
    US will have to fight a real full scale war in Pak which will be felt and burden across Atlantic.
    Its first after WW2. Its magnitude and scale is not comparable with wars in Vietnam and Iraq etc. (Lets not discuss nukes and far reaching missiles). Pakistan would be reduced to what is Afghanistan today. While America the world knows as a super power, will be no more and will become a passive market similar to Brazil.
    India will endup having an Afghanistan next door, only several times larger and much more hostile to India then Afghans are to Pakistan due to obvious reasons.
    Iran will surely gain as Israel will lose it prime supporter as well as US will not be able to do adventures in any other country for a long long time.
    All this is with the assumption that nukes remains absent in all show of madness as analyzing post mushrooms scenario is beyond scope of any rational analysis.Recommend

  • malik

    @Abdul:

    Somalia was devastated with just a stroke of pen – Sanctions.

    Pakistan is not an oil rich country. Come out of your life of self-deception and false grandeur. Recommend

  • Awais Khan

    A war is not an option for both countries, but the stalemate in relationships will affect Pakistan more.Recommend

  • Saleem

    @malik:
    Ok Pakistan is like Somalia and India is like Sweden. I know still upper cast Hindus will not feel happy and at peace with Pakistan.Recommend

  • Tariq Hussain

    Just stop the foreign aid flowing into PAK and close all the US Consulates and declare Pakistan a Terrorist state. This is just enough to bring Pakistan back to understand what it means to support Terrorism in other countries. The economic and diplomatic sanctions will be much more effective than many bunker buster bombs. In addition in a couple of years, a generation will be lost with no educational opportunities in US, Canada, UK and Europe.

    THRecommend

  • Obaid

    One factor that this article hasn’t taken into account is the profitability of the US Defence and Arms Industry. US Arms Industry has historically been one of their most profitable industries which has been one of the major reasons why US has been entering into successive wars starting all the way from Vietnam in 1955 so as to generate immense profits. Keeping this industry going is important to the US economy because like I said it generates huge profits for them. They need to enter wars to use up the weapons that they manufacture so that they continue producing more weapons. Currently US Defence budget stands at 700 billion dollars. So as far as the point raised by the author about how the US does not have enough resources to enter a war, that is potentially countered by this fact (which I didn’t make up if any of you are thinking that. I saw this in a documentary called “Manufacturing Enemies”)Recommend

  • ukmuslim

    india has flourishing economy and the war will affect it… blah blah blah

    china is developing fast and the war will affect it… blah blah blah

    usa is getting economically weak and the war will affect it… blah blah blah

    what a nonsense… have you utter a word about what will happen to pakistan and why it should avoid the war
    its like neighbours has to take care of not catching fire in your own house… else their homes will be affected… seems like a typical mentalityRecommend

  • ukmuslim

    i am in more favor of economic snactions and international isolation.

    war will not serve the purpose, making realise pakistan.Recommend

  • Abhi

    Nice analysis, but USA is already at war with Pak through drone strikes.Recommend

  • True Believer

    Our nation is becoming more and more like a suicide-bomber. We want to destroy ourselves and take the US, India, Afghanistan and Iran with us.Recommend

  • Anoop

    No person with wisdom and knowledge about how the Geo-Politics work will say US will declare war against Pakistan.

    Why will the US use the war card if it can hurt Pakistan without losing a single soldier?

    US will most probably Sanction Pakistan, impose trade embargoes and stop International Institutions from giving Aid to Pakistan. Pakistan being the way it is, will be hurt.

    I dont see Sanctions, but definitely some covert sanctions. Suddenly IMF and WB will not be so receptive to Pakistani concerns. Recommend

  • FAK

    Being a Pakistani, I’m all for sanctions against my country.
    We have everything, yet we beg for foreign aid. Only when we start to starve will we learn to be independent in its truest sense.Recommend