All democratic countries have a military but in case of Pakistan, it’s the military that has a country – the axiom has often been used to summarise the power play in Islamabad. The sad truth is that it continues to hold true in the modern-day context of ‘naya Pakistan’. The situation is particularly precarious as its military continues to flourish at the expense of its economy.
The case in point is the Reko Diq mine which has some of the world’s largest deposits of copper and gold. Situated at the foot of an extinct volcano near Pakistan’s border with Afghanistan and Iran in Balochistan province, the mine is at the heart of a recent ruling by a World Bank arbitration court which has slapped a fine of US $ 5.8 billion on the Islamic Republic.
In 2011, Pakistan unlawfully denied a mining licence to Tethyan Copper Company (TCC) which had earlier entered into an agreement with the Pakistan government and invested, by its own account, US $ 220 million in the venture. The World Bank’s International Centre for Settlement of Investment Disputes (ICSD) ruled against Pakistan in 2017 but only recently determined the quantum of fine owed to Tethyan – a joint venture between Chile’s Antofagasta Plc and Canada’s Barrick Gold.
Although the case dates back to 2011, in the present context, the ruling reflects negatively on Pakistan which is trying its best to woo foreign investors. The arbitration court’s ruling comes at a time when Pakistan Prime Minister Imran Khan is gallivanting the globe in search of aid to shore up the country’s cash-strapped economy.
To put things in perspective, the fine levied on Islamabad is equivalent to the promised bailout by the International Monetary Fund (IMF). Pakistan’s forex reserves as of June 21, 2019 stood at a meagre US $ 7.28 billion.
Reko Diq: Pakistan Military’s machinations
Even as Balochistan government rejected the mining licence to TCC, it granted 11 exploration licences to hastily establish Pakistani and Chinese companies with no experience of prior mining, raising eyebrows.
The World Bank arbitration court’s ruling has become a hurdle for Pakistan PM Imran Khan to attract much needed foreign investment. Multiple sources confirmed to news agency Reuters that Pakistan’s powerful armed forces have become the most important authority on the future of the mine which Pakistan and people of Balochistan see as a national asset. Pakistan’s military also sees Reko Diq as a way to assert control on Balochistan’s – a province that has witnessed heavy insurgency – financial wellbeing
The news report says Pakistan’s military will be in a position to decide who gets to invest in the mine. Also, an engineering firm Frontier Works Organisation (FWO), which is reportedly controlled by Pakistan’s army, is placing itself to be a member of any consortium involved. An official from the Balochistan government who was quoted by the report said the decision was taken by the by GHQ in Rawalpindi – Pakistan’s military’s highest decisions making office.
However, Pakistan’s military spokesman’s office quoted by the report said, “Military may only participate in government’s plan of development of Reko Diq, as per national requirements.”
The spokesperson did not rule out the possibility of FWO participating in the development of Reko Diq.
Pakistan military-industrial complex: the cash-guzzler ::
After debt servicing which eats into almost 30 per cent of the country’s budget every year, Pakistan’s military is the next biggest source of expenditure which is given 18 to 23 per cent of the country’s annual Budget. This is other than US $ 1.5 billion that the military generates from its 50 commercial entities. Under Imran Khan’s government, the military has moved into oil and gas exploration and mining.
The military continues to be a major cash-guzzler that continues to drag the recovery of its fragile economy – which has received multiple bailouts from the International Monetary Fund (IMF).
Earlier this month, Imran Khan announced the formation of a National Development Council to oversee Pakistan’s economic growth strategy and unsurprisingly the Pakistan Army chief General Qamar Javed Bajwa is present on it– cementing the military’s position in any future decision making on economic matters in the country.