12 steps to shock-and-awe Pakistan's economy

12 steps to shock-and-awe Pakistan's economy
R Vaidyanathan

December 11, 2008
I did not anticipate the huge response my inbox received for the article slamming Pakistan. Many of those who wrote in have sought concrete steps to tackle the Terror Central.

The terror attack on world citizens at Mumbai has created revulsion and outrage all over the world. It is imperative that India seize the opportunity provided to destabilise Pakistan.

A stable Pakistan is not in the interest of world peace, leave alone India. Army controls the country and owns its economy.

A significant portion of its GDP is due to army-controlled entities (See: Military Inc - Inside Pakistan's Military Economy, by Ayesha Siddiqa; OUP; 2007). One can easily say that Pakistan economy and its Army/ISI are synonymous.

Unless this elementary fact is internalised, we are not going anywhere. This implies we should stop talking of a stable Pakistan since a stable Pakistan means multiple attacks on many more cities of India by that rogue organisation ISI, which is the core of the Pakistan Army and the heart of Pakistan's economy.

Let us not even assume that Zardari is in control. Poor man -- he did not trust his own investigators to probe his wife's assassination -- he wanted Scotland Yard to do the job. Now he blabbers that if his investigators are satisfied, then he will initiate action against terrorists sitting inside Pakistan.

Periodically, the Pakistan Army likes to present some useful idiots (as Lenin would have called them) as elected representatives and we swoon over such events.

India should take the following steps to destabilise the economy of Pakistan:

1. Identify the major export items of Pakistan (like Basmati rice, carpets, etc) and provide zero export tax or even subsidise them for export from India. Hurt Pakistan on the export front.

2. Identify the major countries providing arms to Pakistan and arm twist them. Tell Brazil and Germany (currently planning to supply massive defense items to Pakistan) that it will impact their ability to invest in India. Tell Germany that retail license to Metro will be off and other existing projects will be in jeopardy.

3. Incidentally, after the arrival of Coke and Pepsi in China, the human rights violations of China are not talked about much by US government organs. Think it is a coincidence? Unless we use our markets to arm-twist arms exporters to Pakistan, we will not achieve our objectives.

4. Tell American companies that for every 5% increase in FDI limit for them, their government needs to reduce equipping Pakistan by $5 billion. That is real politics, not whining. Let us remember that funds are in desperate search of emerging markets and not the other way about. Let us also remember that international economics is politics by another name.

5. Create assets to print/distribute their currency widely inside their country. To some extent, Telgi types can be used to outsource this activity. Or just drop their notes in remote areas.

6. Pressurise IMF to add additional conditionality to the loans given to them or at least do not vote for their loans.

7. Create assets within Pakistan to destabilise Karachi stock market - it is already in a shambles.

8. Cricket and Bollywood are the opium of the Indian middle classes. Both have been adequately manipulated/ controlled by the D-company since the eighties. Chase the D-company money in cricket/ Bollywood and punish by burning D-assets in India instead of trying to have them auctioned by the IT department when nobody comes to bid for it.

9. Provide for capital punishment to those who fund terror and help in that. We have the division in the finance ministry to monitor money laundering, etc. It is important that terror financing is taken seriously and fully integrated into money laundering monitoring systems and this division is provided with much larger budget and human resources. And it should coordinate with RAW.

10. Encourage and allow scientists/ academicians/ elites of Pakistan to opt for Indian passport and widely publicise that fact since it will hurt their self-respect and dignity. There will be a long queue to get Indian passports -- many will jump to get our passport -- since they will not be stopped at international airports. It is rumoured that Adnan Sami wants one. Do not give passports to all -- make it a prized possession. Let it hurt the army- and ISI-controlled country. This one step will destroy their identity and self-confidence.

11. Discourage companies from India from investing in Pakistan, particularly IT companies, till Pakistan stops exporting its own IT (international terrorism).

12. In all these, it is important that we do not bring in the domestic religious issues. The target is the terror central, namely Pakistan, and if there are elements helping them here then they also should be punished -- irrespective of religious labels. If Pakistan is dismantled and the idea of Pakistan is gone, many of our domestic issues will also be sorted out.

Will the Indian elite go for the jugular or just light more candles and scream at the formless/ nameless political class before TV cameras?

It is going to be a long haul and may be in a decade or so, we can find a solution to our existential crisis of being attacked by barbarians from the West. We need to combine strategy and patience and completely throw to the dustbin the 'Gujral Doctrine' by that mumbling prime minister about treating younger brothers with equanimity. The doctrine essentially suggests that if we are slapped on both the cheeks we should feel bad that we do not have a third cheek to show.

He, according to security experts, seems to have dismantled our human intelligent assets inside Pakistan, which has resulted in the gory death of thousands of Indian citizens in the last few years.

Such is our strategic thinking in this complex world since our political class is not adequately briefed and the elite don't think through issues. Better to be simple in our talks and vicious in our actions rather than the other way.

Hopefully, this November attack will create a new vibrant India capable of taking care of its own interests.

The author is professor of finance and control, Indian Institute of Management-Bangalore, and can be contacted at vaidya@iimb.ernet.in. The views are personal and do not reflect those of his organisation.