The future of Pakistan and the U.S.: A Conversation with Michael Kugelman

February 2018 | Interviewed by Arthur Sanders Montandon

(Irfan0552007/CC BY-SA 3.0)

Fletcher Security Review: Although the United States and Pakistan have publicly been partners in their counterterrorism efforts, the two countries have pursued distinct, and at times conflicting, definitions of what constitutes terrorism and how to counter it. As you mentioned in an Axios article, mutual frustration and mistrust between the American and Pakistani governments have, in the past, led Washington to cut aid to Pakistan and led Islamabad to deny the U.S. military access to supply routes within its borders. Considering the current delicate state of U.S.-Pakistani relations following President Donald Trump’s announcement to halt U.S. aid to Pakistan until Islamabad improves its counterterrorism efforts, are we entering uncharted, dangerous terrain in the bilateral relations or are we treading on familiar territory?  

Michael Kugelman: It may seem hard to believe, given all the doomsday rhetoric in both capitals about how the U.S.-Pakistan relationship could be on its last legs, but in reality, we haven’t entered uncharted territory at all. In fact, I’d argue that the relationship was in worse shape in 2011 and 2012. Back then, a series of crises — including the raid on Osama Bin Laden’s compound in Abbottabad, Pakistan — plunged bilateral ties to a new low. There was a vicious cycle of provocations and retaliations that had many people wondering if the relationship would survive, and it did. The trajectory of U.S.-Pakistan relations will depend a lot on how far the United States is willing to go with its pressure tactics. If it’s willing to take steps beyond freezing aid—an age-old tactic—then we could enter uncharted territory. Short of aid freezes and brief periods of sanctions, the United States really hasn’t ever tried to tighten the screws on Pakistan in a big way. If it does, then we can start talking about unprecedented developments for the relationship.

FSR: Despite the seemingly ambiguous commitment of Pakistan, and particularly of its intelligence community in countering and targeting Taliban agents operating in Afghanistan and at home, Pakistan remains a fundamental actor in the fight against insurgents in Afghanistan.What tools, tactics, and policies can the U.S. government pursue to incentivize or induce Pakistan to become a more reliable partner in countering terrorism in South Asia?

MK: This is a critical question to pose at a time when the Trump administration appears intent on compelling Pakistan to change its approach to terrorism. There are basically two views when it comes to addressing this issue. One is that there’s not much the United States can do at all, because it has sent billions of dollars and weapons galore to Pakistan for decades, and Pakistan hasn’t changed its approach. If Washington hasn’t succeeded in the past, why would it succeed now? The other view is that it’s not that U.S. tactics haven’t worked, it’s just that the United States hasn’t tried the right tactics. If the carrots — aid provision, efforts at persuasion — haven’t worked, and if the sticks — aid freezes, sanctions — haven’t worked — then it’s time to take bigger and sharper sticks out of the toolkit. The Trump administration clearly supports the second view.

I’m not sure, however, that tougher tactics will work, and for several reasons. First, using pressure and coercion is not guaranteed to induce compliance. There’s reason to believe that if pushed too hard, Pakistanis would respond by tightening rather than easing their embrace of militants — the very opposite outcome from what the US government hopes to achieve. Second, Pakistan has calculated that its core national interests require maintaining ties to the very terrorists that the United States wants Pakistan to turn over or eliminate. Pakistan views, or projects the view, that its bitter enemy India is an existential threat. Pakistan is smaller and weaker than India and has lost three wars to India. It cannot compete with India in a conventional war. For this reason, it looks to non-state actors like the Afghan Taliban, Haqqani Network, Lashkar-e-Taiba, and Jaish-e-Mohammed as asymmetric assets to push back against India in Afghanistan—where New Delhi enjoys close relations with Kabul—and in India itself. Pressure, aid freezes, threats, truculent tweets—none of this will dislodge deeply entrenched Pakistani interests.

The question is this: What would the circumstances need to be for Pakistan to conclude that the costs of providing support to militants are too prohibitive? Raining airstrikes down on militant facilities in Pakistan? Declaring Pakistan a state sponsor of terror? It’s hard to say, but this much is true: the U.S. government, for all its bluster, is unlikely to take the harshest of steps. Because if it does, there’s a very good chance that Pakistan will deploy its only powerful tool of leverage: shutting down supply routes on its soil for U.S. troops based in Afghanistan.

If Pakistan closes down the supply routes, an already difficult U.S. war effort in Afghanistan would grow even more challenging. The United States would need to turn to its only alternative supply route — the one it used after Pakistan shut down the one on its soil for a period of time in 2011 and 2012 when bilateral relations were in crisis — in Central Asia. It is more circuitous and expensive than the one in Pakistan. It is also in Russia’s backyard, which means Moscow may try to hamper U.S. access to it. The bottom line is if Pakistan closes down its supply routes, the United States will have a major problem on its hands without a good solution.

FSR: If U.S.-Pakistani relations continue to deteriorate, what potential effects will this have on the broader region and on America’s effort to stabilize Afghanistan in particular?   

MK: The most immediate consequence of a deteriorating relationship is the likelihood of the supply lines closure, which would badly compromise U.S. war efforts in Afghanistan and therefore imperil the ability of the United States to provide a modicum of stability to Afghanistan. Another effect of a U.S.-Pakistan relationship plunged into deep crisis is that Pakistan’s security establishment could increase its support to the Afghan Taliban and Haqqani network, empowering them to intensify their assault on U.S. forces and to stage ever-more bloody attacks in Afghanistan’s urban spaces. After a spate of Taliban attacks in Kabul several weeks back, a number of commentators in Afghanistan and the United States have suggested that this was Pakistan’s way of reacting to U.S. pressure on Pakistan: scale up support to the bad guys to make the Americans look bad in Afghanistan. The possibility of Pakistan responding to increasing U.S. pressure and worsening ties by exacerbating instability in Afghanistan certainly can’t be ruled out in the future.

A U.S.-Pakistan relationship in crisis could also have deleterious impacts for India. Pakistan, well aware of America’s rapidly expanding relationship with New Delhi—a relationship that enjoys bipartisan support in Washington—may choose to increase its support to Lashkar-e-Taiba and Jaish-e-Mohammed, boosting their capacity to stage attacks in India. Pakistan’s security establishment has kept a tight leash on Lashkar-e-Taiba in recent years, mainly in deference to Washington. But if U.S.-Pakistan relations are in crisis, then the gloves could come off and Islamabad could relax its hold on the leash.

FSR: Pakistan’s energy infrastructure is notoriously problematic. In your 2015 essay “Easing an Energy Crisis That Won’t End,” you wrote that China’s recent investment of $35 billion in energy projects in Pakistan will not be enough to solve the country’s chronic issues recurring power outages, inefficient infrastructure-induced debt, and wasteful transmission and distribution mechanisms that waste up to 20% of the energy produced in the country. You pointed out that the root cause of this is not only insufficient energy supply, but bad governance. Non-state armed groups, such as the Pakistani Taliban in April 2013 and Balochi insurgents in January 2015, have targeted Pakistan’s energy installations to further deteriorate the government’s ability to provide basic goods to its population.

Since the essay was published, what has been the Pakistani government’s energy policy and how do you evaluate it? What are the effects of Pakistan’s energy crisis on the country’s stability and security environment?

MK:  The Pakistani government, which has been on the defensive for several years due to anti-government protests and corruption allegations, deserves some credit here. The ruling Pakistan Muslim League Party-Nawaz (PML-N) was swept into power in 2013 with a mandate to fix an energy crisis that had become so acute that you had power outages of up to 15 hours a day in some areas in the summer months. The crisis had major negative impacts — such as electricity-less factories having to shut down and lay off their employees — on the economy. Today, the energy crisis is still there, but it has eased at least modestly. The daily outages are not as long, and perhaps most importantly the debt within the energy sector — which had ballooned to several billion dollars at one point several years ago — has been reduced after the government acquired money from commercial banks to finance the debt.

The verdict is split, however, on why Pakistan has arrived at this better point. The government and its supporters will point to effective policy — such as adding more electricity to the grid through a series of newly inaugurated power plants. Detractors, however, will suggest that external factors — like cheaper global oil prices and robust flows of remittances into Pakistan—have been more responsible for helping ease the crisis. Ultimately, the truth may be somewhere in between. The bottom line, however, is that the root causes of the energy crisis remain entrenched. These include poorly functioning infrastructure that lead to transmission and distribution losses in excess of 20 percent, distorted pricing regimes that result in people not paying their energy bills and not getting penalized for it, and above all institutional dysfunction that involves too many ineffective government agencies being saddled with energy-related responsibilities. It’s just a matter of time before the energy crisis flares up in a big way once again.

In a volatile country like Pakistan, energy insecurity can have troubling implications for stability. On small-scale levels, this can include violent protests in cities when the power goes out on very hot days. On broader levels, militants can try to exploit energy vulnerabilities. As you note, two prime sources of anti-state violence — Islamist militants and separatist insurgents — have frequently attacked power grids, knowing that taking out a single grid station can plunge large parts of the country into darkness. The good news is we haven’t seen these types of attacks as frequently since 2015. A big reason for that is the effectiveness of a Pakistani military counterterrorism offensive against anti-state terror groups, particularly the Pakistani Taliban, which was launched in 2014.

Still, a low-grade separatist insurgency continues to fester in Baluchistan, and separatists will continue to target energy infrastructure when they sense good opportunities. The Baluchistan insurgency is in itself a strong case study of the tight links between energy insecurity and instability. The insurgency is fueled, in great part, by what locals perceive to be the inequitable exploitation of Baluchistan’s abundant natural gas riches. The Baluch accuse the state, often with the connivance of private companies, of extracting natural gas without ensuring that sufficient amounts remain for local use. It’s a very similar dynamic to the Naxalite insurgency in India, where communities in eastern India — mainly Chhattisgarh state — accuse the government of preying on coal resources while ignoring the needs of local residents.

A similar dynamic could well play out in Pakistan in the coming years. In the southern province of Sindh, 175 billion tons of coal reserves lie untouched. For years, Pakistan has tried to figure out how to extract them, but it’s lacked the right technology. Now, with China investing deeply in Pakistan as part of its China-Pakistan Economic Corridor (CPEC) project, Beijing is trying to help Pakistan reach those coal riches. This may not sit well in Thar, a poor, bone-dry region in a province that houses small networks of Sindh nationalists, some of whom advocate separation from Pakistan. I’m not saying we could see a Baluchistan-like insurgency — separatist sentiment in Sindh pales in comparison to Baluchistan — but if Pakistan, with China’s help, were to start moving on the Thar coal riches, there could certainly be a rise in tensions within local communities.

FSR: If billionaire investments do not suffice to solve the energy crisis, how can the international community, and particularly the United States, assist Pakistan to improve its energy problem?

MK: There are certainly measures that the international donor community can take, but ultimately they can only be tactical and not long-term fixes. Above all, international support can — as it has in the past — help pay for critical repairs to old and poorly maintained energy infrastructure. This can go a long way toward decreasing Pakistan’s supply-demand gap by reducing line losses and making the generation, transmission, and distribution sides more efficient. But at the end of the day, I’d argue that only Pakistan can address its energy problems in a lasting, meaningful way. It will need to bring more order to the institutional aspects of the energy sector so that you don’t have so many different energy-focused entities working at cross purposes. In an ideal world, you’d establish a central energy ministry — which Pakistan has never had — to oversee policy and management. Pakistan will also need to achieve a less expensive, more diverse energy mix, so that it doesn’t overly rely on pricey hydrocarbon imports from the Middle East, as it does today.