Turmoil in South Asia
Plus, Armenia and Azerbaijan take steps towards a comprehensive peace treaty
Hello! I hope you had a good week and have a great weekend ahead. This week, we’re looking at the political crisis in Pakistan and the economic crisis in Sri Lanka. Pakistani Prime Minister Imran Khan has vowed to fight on as his government faces a no-confidence vote on April 3. And, in the ‘pearl of the Indian Ocean’ — Sri Lanka — a mix of external factors and some poor decision-making has led to an economic collapse.
And then, besides key updates from the Russia-Ukraine War, we’re also looking at why Russia is accusing Azerbaijan of violating the 2020 ceasefire agreement with Armenia (and if the two rivals in the South Caucasus can move towards a peace treaty), the Arab-Israel Summit and if South Ossetia will join the Russian Federation.
Let’s get started.
This day that year
2004: Google launched its Gmail email service. As of January 2020, it has around 1.8 billion total active users. It reportedly blocks 10 million malicious emails every minute.
1979: Ruhollah Khomeini, also known as Ayatollah Khomeini, declared Iran to be an Islamic republic following a referendum, marking the end of the Iranian Revolution.
Khan’s battle
No Pakistani prime minister has ever completed a full term in office. That stunning pattern is likely to continue. Pakistani Prime Minister Imran Khan’s coalition government is set to face a no-confidence vote in the National Assembly (Lower House of Parliament) on April 3. The opposition requires 172 votes to remove Khan from office, and they claim to have the support of 177. At this stage, it’s highly likely that Khan would lose the vote and only some political miracle can save his government from collapsing.
After decades of not tasting political success, Khan’s Pakistan Tehreek-e-Insaf (PTI) emerged as the single-largest party in the 2018 general election. However, it didn’t get a majority and had to get support of small parties (some of them having less than a dozen seats) to form the government. But the opposition claims that it was the Pakistan Army — the most powerful institution within the country — that helped PTI in the election and supported his government throughout. Let’s remember that the nation has had a number of successful (and unsuccessful) coup d’états and the generals have exerted direct and indirect influence on the country’s political system since as early as the 1950s.
Now, after three and a half years of his government, it seems that the Pakistani army has withdrawn its blessings given to Khan. This is because, according to experts, Khan crossed the red line when he sparred with the army over crucial appointments over the past year. The Pakistani army doesn’t like it when the civilian leadership tries to assert itself in certain domains and make appointments that are unfavourable. It’s seen by them as politicians meddling with its structure and hierarchy. So, with the army pulling its backing, the opposition looks unrestrained in its efforts to bring down Khan’s government.
The opposition has, however, used Pakistan's economic situation to attack Khan. The inflation rate has been in double digits for a majority of Khan’s time as the country’s chief executive. As mentioned in last week’s edition, inflation is the biggest concern for the Pakistani people, according to a recent opinion poll.
‘Foreign conspiracy’ Khan is fighting back though. The cricketer-turned-politician isn’t resigning and has vowed to fight till the last ball is bowled, in cricketing parlance. During a show of strength rally on March 27, Khan alleged that there’s a ‘foreign conspiracy’ behind the efforts seeking his ouster. Khan said he had a foreign “threat letter” (as proof of the conspiracy) but didn’t provide any details. When the veracity of the letter and Khan’s allegations were questioned, he put out the details in the public domain during a televised address to the nation on March 31. Khan alleged that the United States was the country behind a “threat letter” (which he didn’t show) and had threatened him to step aside. He also alluded that opposition leaders were working in coordination with the Americans to get him removed through the no-confidence vote. The US has denied these allegations.
Khan has clearly sought to use the letter — irrespective of whether it’s real or not, or through potentially exaggerated claims — to invoke nationalism ahead of the no-confidence vote. “Sunday (March 31; no-confidence vote day) will be a defining day in the country’s political history,” Khan said, asking citizens to identify “traitors” who would vote against him.
The 69-year-old’s address was meant to build the case that he wasn’t bowing to American pressure, and on the contrary, the opposition leaders were “stooges” of the US. He added that during the vote, lawmakers would be effectively deciding what they support: “independent foreign policy or slavery of the superpowers”.
All this is risky. Last month, Human Rights Watch, an international rights group, had raised concern that Pakistan’s political situation “risks spiralling into a dangerous confrontation”.
Because of these actions, opposition parties have declared Khan a “security threat” and “dangerous” for the country’s existence and economy. They are accusing Khan of trying to build a false narrative to save his sinking ship.
What next? Political instability in Pakistan will only increase from hereon. I’ll leave you with questions to which we don’t have answers to. Who will replace Khan? With no party having a majority in parliament, what sort of coalition will have to be cobbled up? How long will the new government survive? Will the next prime minister — whoever that may be — call a snap election or will they make efforts to run the government until 2023 when the next general election is supposed to happen? Will this ouster only embolden Khan and his party? And, what role will the Pakistan army play hereon?
Things are moving very quickly. So, there’s a chance that what I’ve written here might have become stale by the time you read it.
I highly recommend this long Asia Stream podcast episode on this topic (from last week) by Nikkei Asia. Listen in here.
Trouble in Sri Lanka
Hundreds, perhaps thousands, of people tried to storm Sri Lankan President Gotabaya Rajapaksa’s residence on March 31, calling for his resignation as the country spirals into its worst economic crisis. The crowd was heard chanting: “Go home Gota (Gotabaya), go home!” and “Gota is a dictator”. The police responded by imposing a brief curfew, and firing tear gas and water cannons to disperse the crowd.
Already facing irregular blackouts – sometimes for half a day – because the government doesn’t hold enough foreign exchange for key imports such as fuel, the country has turned off its street lights to save electricity. A few days ago, the military was called to oversee the distribution of fuel to the people and school examinations were cancelled because of paper shortage. Now the situation has gotten worse: the country of nearly 22 million people is facing a shortage of food and essentials.
Food inflation stands at 30.2 percent and retail inflation is at 18.7 percent. The country had foreign exchange reserves of $2.31 billion in February, Reuters reported, and it needs to repay debt of around $4 billion in the remainder of this year. The island nation is on the verge of default.
Who did this? Emerging from a long civil war that concluded in 2009, Sri Lanka’s economy depends heavily on tourism. That sector took a major hit in 2019-20 following the Easter bombings that lead to more than 260 deaths, including foreign tourists. But just as the tourism sector was bouncing back, the COVID-19 pandemic disrupted things again. So, it’s true that the terrorist attack in 2019 and the pandemic have contributed to the current situation. But there’s wide consensus that this economic crisis is of the Sri Lankan leadership’s own making.
Experts point out that Sri Lanka was for far too long relying on international financial markets to take care of maturing debt. But when those avenues closed, the country had to use its own reserves to keep paying back the debt. That triggered restrictions on imports. But now the reserves are also running dry.
Plus, there were some actions such as the sudden ban on chemical fertilisers imports last year (it was later withdrawn after protests) which affected the agricultural sector. The ban was intended to orient Sri Lankan farmers towards full adoption of organic farming. But farmers were simply not ready for it. A combination of the fertiliser import ban and bad weather led to harvest failure — sending inflation through the roof.
As mentioned earlier, protesters are asking President Rajapaksa to quit. But the ire is directed at the entire Rajapaksa family. Gotabaya, the president, is the brother of current Prime Minister Mahinda Rajapaksa (also the former president). Their brothers Basil and Chamal are the country’s finance and irrigation ministers, respectively. Mahinda’s son Namal is also a cabinet minister and Chamal’s son Shasheendra is a junior minister.
Read more: How four powerful brothers broke an island nation [Opinion piece by Bloomberg’s Ruth Pollard]
What next? The government is trying to secure a rescue plan from the International Monetary Fund (IMF) and the World Bank. In early March, the country’s central bank devalued the Sri Lankan Rupee by up to 15 percent. This was seen as a prerequisite for getting IMF’s help. For now, the IMF has recommended raising income tax and Value Added Tax (VAT) rates and minimising tax exemptions, and revenue administration reforms.
Colombo is in talks with New Delhi for an additional $1.5 billion credit line over and above the $1 billion support India has provided Sri Lanka to pay for essential imports such as rice, wheat flour, pulses, medicines and sugar. Earlier this year, India had extended Sri Lanka a $400-million currency swap and a $500-million credit line for fuel imports. As early as January this year, the Rajapaksa government had appealed to China to restructure its debt burden and is now seeking $2.5 billion credit support from Beijing.
Why are India and China scrambling to help Sri Lanka? Sri Lanka is situated just off the Indian coast making it strategically very important for India. But the island is also a key aspect of China’s Belt and Road Initiative. None of them want instability on the island, but they’re also trying to outcompete the other to keep Sri Lanka in their sphere of influence.
With no quick fix available, it’s likely that the economic crisis in Sri Lanka could worsen in the coming days.
Updates: Russian invasion of Ukraine
Moving the goalpost? When Russia invaded Ukraine on February 24, Russian President Vladimir Putin said the objective of his so-called “special military operation” was to “demilitarise” and “denazify” Ukraine. That’s why the Russian military tried taking capital Kyiv, bombed the southern port towns and even the city of Lviv in the western part of the country. But now, after more than a month of warfare, it’s clear that the Russian forces have faced massive casualties, have been unable to take effective control of any major Ukrainian city and their advance has seemingly stalled. But the Russian military has claimed that it has largely achieved the main objective of the first phase of its operation. Russian Colonel-General Sergei Rudskoi claimed that his forces had “considerably reduced” the combat capabilities of the Ukrainian military, and thus, Russian soldiers could now “focus on the main efforts to achieve the main goal, liberation of Donbas”. So, was the assault on Kyiv a smokescreen or a diversionary tactic? Or, is it that the goalpost has now been moved after meeting stiff resistance? Is this the off-ramp Putin is looking for?
Biden’s remark: In the previous edition, we talked about US President Biden visiting Poland. During an address there, Biden said that Putin “cannot remain in power”. This was widely seen as the American president overtly calling for a regime change in Moscow. And it’s obviously a pretty serious thing to say, especially in the middle of a war. The White House, however, later downplayed Biden’s remark. “The President’s point was that Putin cannot be allowed to exercise power over his neighbours or the region,” CNN quoted a White House official as saying. “He was not discussing Putin's power in Russia, or regime change.”
French President Emmanuel Macron warned against usage of inflammatory language and Britain also distanced itself from Biden's comments. Biden, however, has defended his unscripted remarks. “I was expressing the moral outrage I felt ... I had just come from being with those families. But I want to be clear that I wasn’t then, nor am I now, articulating a policy change.”
Abramovich suffered suspected poisoning: Russian billionaire Roman Abramovich and two Ukrainian peace negotiators reportedly suffered symptoms of suspected poisoning — suffered sore eyes and peeling skin — earlier this month. All have recovered. According to a report by the Wall Street Journal, the alleged poisoning was carried out by hardliners within the Kremlin who may have wanted to sabotage the negotiations. But, an unnamed American official Reuters spoke to, played down the suggestions. Though Abramovich has been sanctioned by the European Union and the United Kingdom, he is believed to have played some role in early negotiations between Russia and Ukraine.
Ukrainian neutrality: Ukrainian President Volodymyr Zelenskyy has reiterated that his country is willing to become neutral (not align itself with any other nation militarily) and maintain its non-nuclear status in exchange of security guarantees, if that would help end the war with Russia. Ukraine was willing to make a “compromise” on the disputed Donbas region too, Zelenskyy said. However, he said that the neutral status will have to be approved by Ukrainians in a national referendum.
Pin it on the map
Time for some head scratching: This satellite image shows a region (demarcated by, or within the yellow lines at the centre) sandwiched between three countries. But it’s actually part of a fourth country, as an exclave. The country it’s a part of and its rival neighbour that separates the two, were in the news this week.
The answer is at the bottom.
What else?
Will Azerbaijan and Armenia talk peace?
Russia said earlier this week that Azerbaijan had violated the 2020 ceasefire agreement signed with rival neighbour Armenia (brokered by Russia) by sending its soldiers into a zone policed by Russian peacekeepers in the disputed region of Nagorno-Karabakh. Moscow claimed that Azerbaijan used Turkish-made drones to target Karabakh troops near Farukh and Parukh. Azerbaijan later withdrew its forces, Russia said. Azerbaijan has denied this.
In the early 1990s, ethnic Armenian separatists in Nagorno-Karabakh had broken away from Azerbaijan. In 2020, Azerbaijan and Armenia were engaged in a war over the dispute enclave. Yerevan was forced to cede large parts of the region to Baku as part of the ceasefire agreement brokered by Moscow. Russia, which has security interests in the region, also deployed a peacekeeping force there as part of the deal.
Amid these tensions, Azerbaijan said it’s ready for peace talks with Armenia. This came after Armenia urged its neighbour to negotiate a comprehensive peace treaty. Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev may meet in Brussels, Belgium next week to lay the groundwork for these peace talks.
Arab-Israel Summit
Foreign ministers of Bahrain, Egypt, Israel, Morocco, the United Arab Emirates and the United States met at a resort hotel in the Negev Desert. The meeting, the first of its kind, did not yield any concrete declared results. But it may have led to thaw between some of the nations involved in the process. The idea would be to increase the group’s cohesiveness amid the war in Ukraine and at a time when negotiations over the revival of the 2015 Iran nuclear deal are believed to be at an advanced stage. All of these countries consider Iran to be a rival. Such a meeting involving Arab nations and Israel, a Jewish state, would have been unimaginable just a few years ago. The Abraham Accords have changed that.
South Ossetia joining Russia?
Meanwhile, the leader of South Ossetia – a small breakaway region of Georgia — has said that plans are being worked out to determine whether it wants to join the Russian Federation. Russia had fought a limited war with Georgia in 2008 as a result of which the regions of South Ossetia and Abkhazia got their current status. Russia and some other nations recognise South Ossetia as independent states, but most nations consider these territories to be a part of Georgia. Russia continues to have military bases in South Ossetia.
Interesting stuff
“It’s a mistake to think that realists see no interest in resolving conflicts when one can. Properly understood, there is a hard-nosed realist case for resolving conflicts whenever possible.” Stephen Walt, American political scientist and the Robert and Renée Belfer professor of international relations at Harvard University, makes a realist case in Foreign Policy for a peace deal between Russia and Ukraine. Read the full piece here.
“It is too early to ring the alarm bells on the detrimental effect that Pakistan’s relationship with Russia will have on the Indo-Russian equation, given that this equation seems to already have weathered more twisted geopolitical conundrums so far and continues to do so.” Observer Research Foundation’s Rhea Sinha and Saaransh Mishra argue that India has no reason to be fazed by the growing relations between Russia and Pakistan. Read it here.
‘Pin it on the map’ answer: Nakhchivan Autonomous Republic, a landlocked exclave of Azerbaijan. The region has a population of about 450,000. Azerbaijan’s rival Armenia is to its north and east, and Iran to its south and southwest. It’s also connected to Turkey through a narrow corridor to its northwest. The region retains administrative autonomy but uses the same state symbols as Azerbaijan. Under the 2020 ceasefire agreement, Armenia guaranteed safety to transportation connecting Nakhchivan and the rest of Azerbaijan. Azerbaijan and Armenia were in the news this week for reasons mentioned earlier in this newsletter.
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