Cover Story: Bang For Bang! What Now

Pakistan claims it has evened the score by conducting nuclear tests. The situation now calls for extraordinary statesmanship to avert a dangerous confrontation.

The Chagai hills in Pakistan's Baluchistan province is among the country's most backward regions. Its tree cover is as sparse as the population of nomadic shepherds that wanders through it. But from May 11 onwards, the day India conducted three of its five nuclear tests in Pokhran, the desolate mountains became a hive of intense activity. Trucks poured in droves and helicopters whizzed around transporting an army of men and machinery. They had orders from Prime Minister Nawaz Sharif to, as he said later, "give India a fitting response". In the subcontinent's nuclear parlance, that simply meant: bang for bang.

On May 28, just 17 days after India's tests sent seismographs across the world into a drunken scrawl, the earth was made to tremble and shake again. Pakistan had proven that its nuclear weapons capability was, as everyone had for long believed, just a screwdriver turn away. Since India had conducted five tests, Pakistan had to reply in equal measure. It may not have matched India's tests in its explosive yield, but with nuclear bombs that hardly matters: one million versus three million dead in a few seconds of a strike -- such casualty figures are deterrent enough.

If Prime Minister Atal Bihari Vajpayee chose brevity to announce India's nuclear blasts, on this count Sharif was not interested in a tit for tat. He went on national television a few hours after the blasts and in an emotive speech in Urdu told his countrymen and the world -- through awful translators -- of Pakistan's rationale for conducting the test. Outside, the rejoicing on the streets of Islamabad were similar to those in Delhi when India conducted its tests -- with a difference. Instead of crackers being burst, gunshots rent the air. "I didn't think I would ever welcome a nuclear test but I would say it is the nation's finest hour," says Ehsan Rashid, 70, a professor of economics and former director of the Karachi-based Applied Economics Research Centre.

Pride and Prejudice: Even as Pakistan spoke peace, it was nuclear-tipping the Ghauri

It was as if after 50 years, a nation had rediscovered its identity. "If we had to regain our national pride, we had to test. The issue had been brought to a boiling point by India. Now we have restored the strategic imbalance that India had created. We feel secure now," says Lt-General (Retd) Kamal Matinuddin, former director-general of the Institute of Strategic Studies, Islamabad. Others were more blunt. Zia Chaudhary, an agricultural goods trader who spends his time shuttling between Germany and Karachi, says, "The impact this will have on the economy is secondary. The prime thing is revenge. Dushman ko dikhana to tha (We had to prove it to the enemy)."

It was this kind of jingoism that left Sharif with no option but to test, despite five calls by US President Bill Clinton in the past fortnight. Public pressure to match the Indian tests, built up by politicians across the spectrum, had reached such a frenzied pitch that the question was not if but when Sharif would authorise a test. What hastened the decision was what Sharif called the world's "lacklustre" threat of sanctions that was having no impact on India. Also, Sharif was disappointed with the incentives the US was offering, including lifting its embargo to sell military weapons to Pakistan.

Following Home Minister L.K. Advani's tough statements over Kashmir, there was a fear that India may actually launch an attack on Pakistan. That concern went to bizarre limits. On May 27, the Indian Army's Signals Intelligence Directorate intercepted a coded telegram alerting the Pakistan High Commission in Delhi that Islamabad had "credible information" India was all set to carry out a pre-dawn attack on its nuclear installations. India forcefully denied it. But after the tests, Pakistan President Rafiq Mohammed Tarar declared a state of emergency and suspended the constitution, citing "external threats".

Tinderbox: Unless the jingoism ends, the tension will continue to escalate

India's reaction to the tests was muted. Vajpayee told Parliament: "This has validated our policies and programmes." Strategic experts welcomed the end of nuclear ambiguity in the subcontinent. "It was no surprise. Now a nuclear parity has been achieved and, in the long term, such a deterrence would bring stability to the region," says J.N. Dixit, former foreign secretary.

While the rest of the world, led by the US, was charting out a new strategy on how to cope with an overtly nuclear South Asia, Sharif was moving quickly to stave off the expected economic crisis. He had indicated emotionally in his broadcast that as part of the austerity measures he would even move his office out of the new marble secretariat to humbler surroundings. "If the nation will take only one meal a day, I assure you my children will do the same," he added. But Sharif knows he will have to come up with much more concrete steps to keep his nation afloat.

Can it survive sanctions?
Pakistan's economy is in trouble, but it has a few tricks up its sleeve

If India can survive sanctions, why can't we? That sums up the attitude of most Pakistanis. However, there are some major differences that make Pakistan's economy far more vulnerable. For one, Pakistan's foreign debt stands at $36 billion (Rs 1,44,000 crore) or 72 per cent of its GDP. India's debt, though much higher at $91 billion (Rs 3,64,000 crore), constitutes only 25 per cent of its GDP. Nor is India as dependent on borrowings from multilateral agencies such as the IMF. Last year, the IMF agreed to lend Pakistan $1.6 billion (Rs 6,400 crore) to tide over its balance of payment crisis. India has not borrowed from the IMF for the past five years.

Pakistan's real worry is that it receives close to $3.5 billion (Rs 14,000 crore) annually in the form of soft loans and grants -- equivalent to almost half the government's domestic revenue receipts. If the IMF begins to make disapproving noises, Pakistan's credibility -- already low among commercial lenders -- may result in a crisis of confidence. The real fear is that there will be a major run on the Pakistani rupee which, unlike the Indian currency, is fully convertible. Once that happens, it may lead to a flight of capital out of the country, especially expatriate investments which now total close to $10 billion (Rs 40,000 crore). With barely $1.3 billion (Rs 5,200 crore) in foreign exchange reserves, Pakistan could go bankrupt if panic withdrawals began. The Government declared a state of emergency mainly to prevent a major financial crisis and used its new powers to freeze foreign currency accounts.

However, key economists in the country are far from despondent. "It's amazing that other countries believe that sanctions would lead to an economic collapse. Many of them are just a slap on the wrists," says Mahbub-ul-Haq, former finance minister of Pakistan. His point: sanctions usually apply to new projects on aid. But 90 per cent of the funding goes to old projects and will not be affected. Also, the IMF loan has already been negotiated for three years and unless Pakistan defaults on payment, the agency cannot penalise it or withdraw. That's why Finance Minister Sartaj Aziz said the country could "live with sanctions".

More significant are the steps Haq and others are proposing in order to break out of the foreign debt trap. One plan: they would simply stop paying out in foreign currency and tell debtors that they would deposit the money in Pakistani rupees till the sanctions are lifted. As Haq says: "If the bank owes you $100, you lose sleep. But if you owe the bank $100 billion, then they are going to worry a lot more." Such statements have created panic among foreign banks because they fear other Third World countries may try the same trick.

The real problems are going to come from within. How will Pakistan crank up its indifferent economic growth which has fallen from an average of 6 per cent in the early '90s to around 3 per cent now. Sharif, the businessman turned prime minister, is aware of the challenge. Collection of taxes is seen as a major way out. Pakistan, as one economist jokes, must be the only country in the world that has not been able to book a single tax-evader in the 50 years of its existence. Now, an estimated $140 billion (Rs 5,60,000 crore) in taxes, constituting 6 per cent of the GDP, is holed up either by default or by evasion. So, if the prime minister carries out his threat of jailing evaders, money could pour into the government's kitty and partially stave off the impending economic crisis.

A missile race?
The real fear is that Pakistan may step up its proxy war in Kashmir

After Pakistan's tests, the problem of izzat (respect) is over," says Raja Ramanna, the father of India's nuclear bomb. But he warns, "If we get into an arms race it would be disastrous." With both sides deciding to weaponise their nuclear capability, there would be a scramble to achieve minimum deterrence levels in the number of bombs and missiles. But strategic experts argue the nuclear theology that dictated the earlier mindless race between the Soviet Union and the US doesn't hold. "They built such weapons by the thousands. Ours will be only in double digits," says Sreedhar, senior fellow at the Institute for Defence Studies and Analyses (IDSA), Delhi. Now, one strike is considered damage enough.

Do the tests change the way the armies of the two nation look at each other? "They should create a greater sense of responsibility in both countries," says General V.P. Malik, India's chief of army staff. This means, he says, neither country should provoke each other. The same voice of caution is being expressed from across the border. In Islamabad, General Mirza Aslam Beg, Pakistan's former chief of army staff, says, "Let's not waste our resources on a race any more. What we should do is just sit down and talk -- we haven't been doing that and that's why the misgivings. We must search for peace."

Given the precarious state of its finances, Pakistan is under greater pressure to cut back on defence expenditure. While India's defence spending has settled at 2.5 per cent of its GDP, Pakistan's military spending remains between 6-7 per cent. Pakistan routinely allocates 30-40 per cent of its federal government expenditures on defence. "What arms race are you talking about ?" asks strategic analysts K. Subrahmanyam. "Can Pakistan boost its funding beyond these figures, especially now with the sanctions?"

The imposition of sanctions by the US is going to affect the Pakistani armed forces. Till date, because of a US embargo, Pakistan was purchasing its spares through commercial channels which will now be blocked. Will the Chinese step in? They can't do much about spares. And analysts don't expect them to do anything "spectacular" to help on other fronts.

The real danger is that Pakistan, believing that the risk of a conventional war with India has receded after the open demonstration of nuclear capability, may intensify its proxy war in the Kashmir valley. Major-General (Retd) Afsir Karim, an Indian counter-terrorism expert, believes that the Pakistan Army will choose to play its role from behind the scenes. "There may be a show of unity now," he says, "but there are deep divisions in the army. Many officers have been influenced by the fundamentalist Jamaat-e-Islami ideology." Any intensification of Pakistan's proxy war could have serious consequences. As former vice-chief of the Indian Army Lt-Gen K.K. Hazari points out, it becomes difficult to contain the momentum of conventional conflicts. He says both India and Pakistan must work out "strategic concepts of war in a nuclear age". They must, he warns, have a clear understanding of thresholds "beyond which the other side may consider unleashing a nuclear war". Otherwise, it could be disastrous.

Where do India and Pakistan go from here? Strategic experts on both sides of the border are dreaming of what they call an entente cordiale between the two nations. Given the nationalistic fervour that has swept through both countries after the tests, there is a feeling that the two prime ministers could strike deals that their predecessors could not. Given Vajpayee's unquestionable credentials on India's security, and the fact that Sharif's flagging popularity has risen meteor-like after the Pakistani blasts, the two leaders could seize the opportunity and work towards a stable South Asia. Even Gohar Ayub Khan, Pakistan's foreign minister and India's most trenchant critic, realises this and now says cautiously, "We still believe in the spirit of talks, but talks can only be held when there is trust and confidence between the two governments."

Sharif has been more forthright. In his broadcast to the nation shortly after Pakistan exploded the bombs, he called for resumption of talks between the two countries. Vajpayee too has indicated his willingness to enter into a comprehensive dialogue on the nuclear question and has even offered a "no-first-strike" pact with Pakistan. Analysts suggest the two prime ministers should seize the initiative and move rapidly to convince the world that the sub-continent now has a stable deterrent system. Dixit says, "What is needed is a conscious effort to build a national consensus on the issue and the total abnegation of jingoism."

WAY TO GO

A Stop hostile propaganda and aggression across the Line of Control in Kashmir.

A Enter into a no-first-use pledge, a commitment not to attack each other first with nuclear weapons.

A Work together to ensure neither side uses N-weapons by accident or error.

A Evolve a joint policy to press for elimination of N-weapons globally.

A Hold talks to resolve outstanding issues like Kashmir.

This is critical because the world, especially the US and its allies, is not going to forgive the two countries for, as Matinuddin puts it, "blowing up the CTBT efforts to bits". The US game plan appears to make the latest nuclear outbreak as only a subcontinental affair and keep the world focused on what its officials have begun calling "the nuclear danger zone". As Francine Frankel, director of the Centre for the Advance Study of India, University of Pennsylvania, says, "The declaration of independence against western pressure by the two nations has upset calculations. The feeling is that the situation is extremely dangerous and it has become the most unstable region in the world." India now fears that there is a move to isolate the subcontinent and paint the region as irresponsible and push for sterner non-proliferation measures.

The Indian game plan is to push the focus right back to rewriting the non-proliferation rules as well as the issue of global disarmament. IDSA Director Jasjit Singh says, "We must capture the groundswell building in favour of global disarmament and take up with renewed vigour the call for total elimination of nuclear weapons." With the review conference on the Non-Proliferation Treaty coming up next year along with that of the CTBT, nations like Mexico, South Africa and Canada are already speaking out against the refusal of nuclear weapons states to address the disarmament issue. In his speech to Parliament on May 27, Vajpayee called for "opening negotiations" for a Nuclear Weapons Convention. The choice of the term, similar to the Chemical Weapons Convention which is in force, is a reminder to the world that if it can outlaw chemical weapons through a universal regime, a similar step in the case of nuclear weapons is also possible.

It is not going to be an easy battle to get the world's biggest powers to come around to the emerging South Asian viewpoint. But it is this region that gave the world the game of chess. And it's now time to prove that we have not lost the art of playing it well.

Bomb Chums
How Pakistan did it

Though Pakistan denies it, experts are agreed that China, and to a lesser extent Germany, can claim paternity of the Pakistani bomb. Materials smuggled in from Germany helped Pakistan set up its ultracentrifuge (whose design was "stolen" from the Dutch by Abdul Qadeer Khan in the '70s) at Kahuta. As late as May 25, German weekly Der Spiegel reported that Bonn had identified 29 Pakistani companies seeking sensitive nuclear technology China contributed by providing the Pakistanis a tried and tested design of a weapon in the early '80s. More recently, it helped in the construction of a 70 MW research reactor that will provide Islamabad the more useful weapons-grade plutonium required to make compact weapons. China has also provided Pakistan missiles to deliver the bomb. Pakistan cannot do without external help, and for the present China seems a more than willing ally.

-- Manoj Joshi