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EghtesadOnline: When U.S. President Donald Trump accused Pakistan on Monday of continuing to provide a “safe haven to agents of chaos, violence and terror” it evoked memories of general lawlessness across the country in the years after 9/11 that drove investors from South Asia’s second-largest economy.

While militants the U.S. identifies as terrorists find refuge in Pakistan, safety within the nation has improved dramatically after it launched a costly, now four-year long military crackdown on domestic insurgent and criminal groups, driving recent economic optimism. In the last fiscal year, foreign investment rose to $2.4 billion, the highest since 2009, while the stock market’s benchmark index has increased 130 percent in four years, Bloomberg reported. 

It’s a far cry from a few years ago at the height of a gang war in the infamous Karachi neighborhood of Lyari, when criminals armed with rocket launchers fired on a police patrol of two armored vehicles. One rocket ripped into the lead vehicle, blowing up and disabling the engine, as gunmen sprayed the police officers with bullets. 

Mohamed Bashir, a bearded 47-year-old cop and front line veteran of Pakistan’s urban warfare, said the gang “had more modern weapons than the police force.” Lyari’s police used to let off 3,500 rounds in one patrol on a busy day and pick up bodies near piles of garbage, Bashir said over tea in a dingy restaurant near the port of Pakistan’s commercial hub. Now paramilitary forces patrol Karachi’s streets and attacks of magnitude are rare.

However, the crackdown has been so successful it has given the military more powers and may be difficult to roll back, even as costs begin to strain the national budget.

Trump Accusation

While Islamabad has the capacity to target militants in Pakistan -- and protect billions in Chinese infrastructure projects -- Trump reiterated, as he pledged more troops for neighboring Afghanistan, a long-held claim that the nation allows other groups to attack Afghanistan and arch-rival India. The U.S. this month designated Hizbul Mujahideen, a pro-Pakistani Kashmiri group, as a terrorist organization, which Pakistan called “saddening.”

Yet Pakistani politicians and the military bristle at the suggestion that they too haven’t paid a price in the war against terror. No country has sacrificed or done more to counter terrorism, Pakistan’s foreign ministry said in a statement late Tuesday. One defining moment came in December 2014, when more than 100 school children in Peshawar were massacred by the Pakistani Taliban, prompting a renewed push against insurgents.

Pakistan’s assistance to the U.S. in Afghanistan has also led to a “heavy human and economic cost,” Imran Khan, the leader of Pakistan’s second-largest opposition party and a former cricket star, said Tuesday on Twitter. “Our economy suffered over $100 billion in losses.”

At the same time, connections to militants are undeniable. “Pakistan has some very strong, immutable strategic interests that dictate maintaining ties to militant groups like the Taliban and the Haqqani Network,” said Michael Kugelman, a senior associate for South Asia at the Washington-based Woodrow Wilson Center.

The military’s expansion has come at a huge drain to Pakistan’s treasury at a time when many macro indicators are flashing red. And because its own security situation impacts that of both Afghanistan and India, Pakistan’s ability to fight crime and terrorism over the long haul could impact U.S. efforts in both neighboring nations.

Rising Costs

The armed forces, which gobble about one-quarter of Pakistan’s 3.8 trillion rupees ($36 billion) annual budget, saw a 9 percent increase in defense spending this fiscal year along with a 10 percent pay increase. Pakistan’s current account deficit more than doubled to $12 billion last year, while foreign reserves have fallen by a quarter to $14.3 billion since a peak last October.

The growing military remit will increase costs and the government is unlikely to challenge it, said Shuja Nawaz, a distinguished fellow at the South Asia Center of the Washington-based Atlantic Council.

Politicians fear irking Pakistan’s military, a powerful parallel government that has ruled the nation for much of its 70 years. Speculation is rife over the army’s involvement in the ousting of former Prime Minister Nawaz Sharif after the Supreme Court in July barred him from office.

With overt and covert anti-terror funds from the U.S. also drying up, “Pakistan will need to do more with less,” said Nawaz, who has written a book about the nation’s military.

“This will be a major challenge in a military where budgeting has not been well-developed or encouraged as a necessary management tool for the officer class,” he said. “There is almost no forward budgetary planning in this area. Nor does the civil government demand it from the military.”

Major General Asif Ghafoor, the military’s spokesman, didn’t immediately respond to a request for comment.


Policing Reforms

The military also needs to increase protection for China-Pakistan Economic Corridor projects worth more than $50 billion, creating a special 15,000-strong force for that reason. There are plans to double that number as CPEC stretches southwest into volatile Balochistan, according to people with direct knowledge of the plans, who asked not to be identified as they aren’t authorized to speak publicly.

Police spending has also increased. In Lahore, the provincial Punjab government boasts of a forensic science lab and new $120 million state-of-the-art police command and control room. On one shift, 140 officers -- many of whom are IT graduates -- man phone lines and monitor crystal-clear images displayed on large screens from the 8,000 CCTV cameras dotting the city.

“This is an investment, not an expenditure,” Shehbaz Sharif, chief minister of Pakistan’s most populous province and younger brother of the deposed prime minister, said in a June interview in Lahore.

Despite rising costs, security has improved and there’s little appetite among politicians and businesses to roll back the army’s grip.

But the police admit they can’t control Pakistan’s cities on their own.

The paramilitary Rangers secured Punjab after a series of bombings across the country in February and have helped quell crime in Sindh province’s Karachi. In interviews, politicians including Shehbaz and Sindh Governor Mohammad Zubair declined to give timelines for when police could take back full security duties from the army.

Falling Casualties

Yet despite casualties from attacks falling 43 percent last year, bombings still occur at a regular pace in major cities such as Lahore and low-level criminality remains high. 

Part of the problem is police are corrupt, poorly trained and often controlled by local politicians. Most constables can’t make a case that can withstand court scrutiny, said three senior officers, who asked not to be identified so they could discuss critical policing issues.

Azad Khan, a police deputy inspector general in Karachi, said police in the city are heavily politicized, with even mid-level officer appointments decided by Sindh’s provincial government under a British colonial policing act dating back to 1861. 

Complicating things, roughly half Karachi’s police are guarding VIPs, rather than patrolling or tackling crime, he said. Although there’s been improvements, they are still not ready for the military to withdraw.

“Are the police capable of handling Karachi without the Rangers?” Khan said. “I would say no.”


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