A nice summary of what brought us to where we are.
How Pakistan Lost Its Sovereignty | pkpolitics.com
By M. Ziauddin
Pakistan lost economic sovereignty bit by bit over a period of 62 years.
Pakistan lost it:
-When immediately after independence, in September 1947, Quaid-e-Azam sought $2 billion economic assistance from United States.
-When Prime Minister liaquat Ali Khan and Prime Minister Khawaja Nazim uddin renewed the request,- particularly when the letter by Liaquat Ali was delivered to the State Department two days after his assassination.
-When, in 1952, Pakistan imported one million tons of wheat from the United States and transported it from the port on camel carts, with “Thank you America” hanging from the necks of the camels.
(India had earlier imported two million tons of wheat, at much better terms but made no such show of American philanthropy.)
-When Foreign Minister Zafar ullah Khan led Pakistan into SEATO without cabinet approval and Prime Minister Mohammad Ali Bogra complained to the Secretary of State, Foster Dulles that the amount of aid offered was not commensurate with the risk taken by Pakistan.
“I thought that Pakistan was joining for ideological reasons and not for certain amount of US dollars,” Dulles curtly told the Prime Minister of Pakistan.
-When as Commander-in-Chief, General Mohammad Ayub Khan discreetly negotiated leasing of Badbair base near Peshawar to the US and even the Air Chief Asghar Khan was not taken into confidence.
No agreement was signed, no exchange of notes took place.
“I have the honor to propose that this note and Your Excellency’s note in reply ( sent the same day) to that effect shall constitute an agreement between two governments,” Foreign Minister Manzoor Qadir said in a letter to the US ambassador, dated July 29, 1959 conveying Pakistan government’s consent to provide ten years lease of the facility. (See annexure)
- When few years later Ayub sought to renegotiate the basing facility triggering a crisis whose magnitude has remained hidden from the people of the “ostrich state,” till to-date.
-When at the height of tension on the Badbair facility, the U.S. Ambassador William McConaughy wrote to President Johnson:” I give not one fig for Pakistan except as its interests are ours.”
-When Ayub told McConaughy that: ”Pakistan would be willing if necessary to be a U.S. satellite if it protects Pakistan from India but would never agree to be an Indian satellite.”
-When Pakistan sought a loan from the United States and the U.S. National Security Advisor forwarded it to President Johnson with remarks: “Here is another gimme. What Can I do if I am responsible for half the beggars in the world?”
-When in 1978, Citi Bank refused to accept Pakistan government’s sovereign guarantee for $300 million loan and advised that government of Iran should underwrite it.
-When Zia-ul-haq set up Zakat fund, with seed money of $200 million from Saudi Arabia and United Arab Emirate (UAE).
-When in 1979, Chief of President Carter’s nuclear task force Gerard Smith told Agha Shahi: ”You are entering the valley of death,” but at the first prospect of resumption of the US aid after the Soviet invasion of Afghanistan, Zia asked the U.S. National Security Advisor, Peter McPherson” Why do n’t you ask for bases in Pakistan?”
-When in 1982 the US doled $3.02 billion to Pakistan over the next five years by way of economic and military aid in return for our help in its war against the USSR in Afghanistan.
-When in 1989, U.S. Senator John Glenn called for linking USAID to Pakistan’s nuclear program and said:” Where in the region do we have the greatest influence?….Pakistan is world’s third largest recipient of United States economic and military aid, which strengthens our potential diplomatic leverage should we decide to exercise it. Our direct bilateral aid to India is token by comparison.”
-When Pakistan was humiliated by world economic sanctions first because of Kargil to be followed by nuclear testing and then the October 1999 military takeover. In fact by the end of the decade of 1990s Pakistan had become the most sanctioned country after Libya.
- When it begged and received nine debt relief agreements—two soon after Bhutto took over, then once soon after General Zia came to power to be followed by another one soon after his death. And twice during the decade of 1990s before the sanctions were imposed. And twice during Musharraf’s regime—once in 2000 ( a very stingy one) and next in late 2002 ( a most generous one to date).
-When Finance Minister Shaukat Aziz told the head of a donor country’s delegation at the Paris Club meeting in 2002 that he would not be able to go back if Pakistan did not get the debt relief.
- When Musharraf begged and received at least about $12 billion in hard cash from the US of which he spent $8 billion on purchasing armament for defense against India. Of the rest $4 billion nobody knows what happened.
-When the US recently agreed to dole out to Pakistan $1.5 billion in economic assistance annually over the next five years. This is in addition to about a billion dollar it is expected to get annually by way of military assistance as well as by way of compensation for fighting America’s proxy war against Taliban.
It was in the military regime of General Zia that 1987 the current expenditure exceeded total domestic revenue ( in 1987-88) and a part of the current expenditure was also financed by borrowing.
Again it was at the end of 11 –years of military rule that for the time (1989-90)t in Pakistan’s history debt repayment came first in the federal budget relegating defense and development to the second and third positions.)
It came to the lot of Zia’s military government to negotiate Pakistan’s first standby loan and request a medium-term package. IMF procrastinated and it was only in 1982 after the Soviet invasion of Afghanistan that Pakistan was granted a medium-term package, which was abandoned after the first tranche because by that time Pakistan had started getting the unencumbered US five-year aid package.
The subsequent three packages were concluded with IMF during 1988-99 but it can not be a coincidence that all three packages were negotiated by unelected governments while their implementation became the lot of the elected governments.
The first package was negotiated by caretaker Finance Minister late Dr. Mahboob-ul-haq but signed by Benazir government on December 28, 1988.
The second package was negotiated by the caretaker government of Moin Qureshi but signed by second Benazir Bhutto government in April 1994.
Shahid Javed Burki, caretaker Finance Minister in Meraj Khalid government negotiated the third package, signed by second Nawaz government in 1997.
When the medium-term Extended Fund Facility (EFF) was negotiated in October 1997, several finance ministry officials were aghast at some of the IMF conditions agreed by Pakistan. It was said jokingly that the Pakistani team had negotiated with Pakistan, on behalf of IMF rather than vice versa.
The package was disrupted when in May 1998 Pakistan carried out nuclear tests and an embargo on aid was imposed.
Can you substantiate that ?