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South Asia Roundup | Churn in Pak Politics; Sri Lanka Presidential Polls Near; IMF Leaves Footprints

author Devirupa Mitra
Sep 16, 2024
This is the first edition of The Wire’s weekly briefing on key developments across the six South Asian nations shaping India’s regional interests.

New Delhi: As Sri Lanka entered the final stretch of its presidential election campaign, Pakistan’s political turbulence intensified, shifting from the midnight arrests of opposition lawmakers to manoeuvring for a secretive package of constitutional amendments seemingly aimed at curbing judicial power – offering a glimpse into the charged internal politics sweeping across South Asia.

In The Wire’s new weekly briefing on key developments across the six South Asian nations shaping India’s regional interests, we will journey from the heated rhetoric of Sri Lanka’s elections to the relatively calm waters of the Maldives and to Bhutan, touch on the latest statements from Nepal’s prime minister and observe Bangladesh’s transition, all while keeping an eye on Afghanistan.

Transition woes in Bangladesh

Following a series of attacks on mazars, Md Yunus, chief adviser of the Bangladesh interim government, announced on September 14 that strict legal action will be taken against any hate speech as well as attacks on religious places and Sufi shrines.

Following a meeting with the Crime Reporters’ Association of Bangladesh, the Dhaka Metropolitan Police commissioner stated that it was unnecessary to arrest individuals named in FIRs related to deaths during the student-led quota reform movement before conducting an investigation.

Approximately 50 journalists have reportedly been charged with murder in a series of FIRs, raising concern within the Bangladeshi media.

Strong-arming the PTI in Pakistan

On the night of September 9, which was a day after Pakistan’s opposition Tehreek-e-Insaaf (PTI) party held a show-of-strength rally on the outskirts of Islamabad, security agencies swooped down to arrest at least three PTI office bearers, including chairman Gohar Ali Khan, from across the Pakistani capital, while many others took refuge inside Parliament House.

They were taken in on charges related to a new law on public gatherings.

Even as commentators labelled it a reprisal for the May 9 crackdown, there was more to come. The PTI’s Ali Amin Gandapur, chief minister of Khyber Pakhtunkhwa province, was incommunicado for eight hours to anyone who was trying to contact him on September 9.

Newspaper reports initially used euphemisms to describe his questioning by “government officials”. However, Pakistani defence minister Khwaja Asif revealed that the elected head of the Khyber Pakhtunkhwa provincial government had spent the night at the “Kohsar complex” during a tirade in parliament against him over another issue later in the week.

At the “Kohsar complex”, the sector headquarters of the Pakistani military’s Inter-Services Intelligence in Islamabad, the chief minister “spent the whole night asking for forgiveness”, according to Asif.

There has been no refutation from Gandapur as of the publication of this article.

Then, at about 3 am on September 10, policemen in plain clothes raided Parliament House after they switched off its power supply and whisked away the PTI lawmakers who had taken shelter there.

Even in Pakistan, this was unprecedented and led to a polarised National Assembly uniting to unanimously condemn the action.

Confronted with mounting outrage, the National Assembly speaker suspended parliamentary security officials for “not resisting” the entry of the policemen and transferred civic officials responsible for disconnecting the power. A committee was set up to investigate the “unauthorised movements”.

Pakistan’s information minister claimed that no arrests were made within the parliamentary premises. However, after the speaker issued production orders, at least ten PTI lawmakers were brought to the National Assembly by federal police on September 12.

While politicians were still reeling from the parliament raid, the Shahbaz Sharif government appeared focused on advancing an unimaginatively named “constitutional package”, which was perceived as being aimed at increasing the establishment’s influence over higher judicial appointments.

Sharif and his ministers were holding multiple meetings daily with politicians to secure the necessary numbers – 224 in the National Assembly and 64 in the Senate – to pass the amendment. With 211 seats in the lower house and 96 in the upper house, the government needs support from some opposition alliance parties to achieve the required majority.

What was particularly astonishing, according to Pakistani media, was the government’s complete silence about the contents of the “package”. However, broad hints suggested it would significantly increase government control over the appointment and transfer of judges in the high courts and the Supreme Court.

The package also proposes a fixed three-year tenure for the chief justice of Pakistan, which could explain the government’s urgency in pushing the legislation through before the current chief justice’s term ends next month.

Even more shockingly, according to senior Pakistani journalist Azaz Syed, the amendment would extend the service term of all officers in the military and civilian bureaucracy by three years.

“This will also enable all officers of the Air Force, Army, and Navy (including the chiefs) to have three additional years added to their service,” Syed posted on his X account.

Working weekend

The legislative package was originally set to be tabled on September 14 but was later postponed to 11 am on the next day, an unusual move given that both chambers of parliament rarely convene over weekends.

But the day ended on an anticlimactic note.

Amid reports that the government of Pakistan was short of just one vote to secure a deal, the spotlight in Islamabad fell on Jamiat Ulema-e-Islam-Fazl leader Maulana Fazlur Rehman. After hosting separate delegations from both the government and PTI on Sunday, Rehman expressed his reservations about the proposed amendment to extend the tenure of judges.

After multiple delays throughout the day, the National Assembly finally convened just before midnight. However, the speaker adjourned the session within a minute, announcing it would reconvene at 12:30 pm on Monday.

Meanwhile, the Senate did not meet at all, with its session also rescheduled for 12:30 pm today. After the National Assembly met on Monday afternoon, it was clear that the momentum had dissipated.

The IMF’s footprints in South Asia

The only sign of good news for the Sharif government last week was the announcement that the International Monetary Fund (IMF) would discuss Pakistan’s $7 billion bailout at its board meeting on September 25.

The IMF spokesperson said at its press briefing on September 12 that “this is following Pakistan obtaining necessary financing assurances from its development partners”.

The announcement came as a relief to Islamabad since it was already two months since the IMF had signed a staff-level agreement with Pakistan.

Sharif promptly expressed gratitude to China, the United Arab Emirates and Saudi Arabia for their assistance in securing the necessary loans.

The path had not been easy, as Pakistan had to obtain $600 million from the Standard Chartered Bank at a steep 11% interest rate – the highest cost of borrowing in its long history of obtaining external loans.

This step was reportedly crucial to meeting the conditions for the IMF’s multi-billion-dollar bailout package.

Last week’s IMF briefing featured even more South Asia-related updates.

A team from the IMF will travel to Bangladesh later this month for a “fact-finding mission” and to assess any potential financing needs. A day before the announcement, head of Bangladesh’s interim government Muhammad Yunus said that Dhaka was seeking $5 billion from major lenders, including $1 billion from the IMF.

On Sri Lanka, the IMF spokesperson said the island nation had made a “lot of progress” but that it was “not out of the woods yet”. Stating that Sri Lanka remained exposed to significant economic risks, she stated, “Sustaining the momentum of reforms is essential”.

In a country heading into an election in less than a week – and after enduring a crippling economic crisis – the IMF’s words echoed across the electoral battlefield.

President Ranil Wickremesinghe, running as an independent candidate, was quick to assert on September 15 that the lending authority “supports” his economic direction and warned that voting for his opponents would result in having to negotiate a new arrangement, which he claimed would be unworkable.

No clear direct winner in Sri Lanka presidential elections

As per the latest opinion poll released last week, the Marxist Janatha Vimukthi Peramuna’s Anura Kumara Dissanayake, who is the candidate of the National People’s Power Alliance, led with 36%, followed by the opposition Sajith Premadasa of the Samagi Jana Balawegay at 32%.

The Institute for Health Policy’s (IHP) Sri Lanka Opinion Tracker Survey pegged support for Wickremesinghe at 28% and Namal Rajapaksa of the Sri Lanka Podujana Peramuna at 3%.

The IHP’s survey, which was polled in August, showed an increase in Wickremesinghe’s support over the months, while there was a small decrease in support for the other three presidential aspirants listed on the ballot.

In the Sri Lankan electoral system, the winner has to secure more than 50% of the vote. According to IHP executive director Ravi Rannan-Eliya, polling showed “a tightening race in which no candidate will get close to half the vote on the first count”.

“While this indicates that no candidate has succeeded in exciting a majority of voters, it also means that it is increasingly likely that the 2024 election will be the first presidential poll decided on a count of second and third preferences,” he posted.

Premadasa was the most supported candidate among Muslims and Tamils, with 71% and 55% backing him, respectively.

Dissanayake, however, had the strongest support among young voters, the August poll survey claimed.

The largest party in the Tamil National Alliance, the Ilankai Tamil Arasu Kachchi (ITAK), had publicly backed Premadasa, but factionalism among Tamil politicians made it uncertain whether there will be bulk voting for one candidate.

While some ITAK leaders even canvassed for a ‘common’ Tamil candidate, other senior office-bearers insisted that the decision to back the SJB candidate remained unchanged.

Meanwhile, just days before the September 21 election, the Sri Lankan cabinet approved a reduction in personal income tax across various brackets, with cuts ranging from 6% to 25%.

Juggling giants and debt

Across the Arabian Sea from Sri Lanka, the Maldives saw President Mohamed Muizzu navigate the delicate balance between India and China as he sought to inject significant capital to quell concerns of a potential default.

Despite a surge in tourist arrivals, bolstered by the return of Chinese visitors to the Indian Ocean archipelago, the country’s foreign exchange reserves have been steadily dwindling due to external debt obligations.

On September 11, international rating agency Moody’s downgraded the Maldives’ long-term local and foreign currency issuer rating from CAA1 to CAA2 on the grounds that its “default risks have risen materially”.

Further, Moody’s also downgraded the long-term foreign currency-backed senior unsecured rating for Maldives Sukuk Issuance Limited to CAA2.

Last month, Fitch also expressed apprehension that the Maldives may not be able to pay back a $500 million sukuk – a form of sharia-compliant debt – due in 2026.

Maldivian foreign currency reserves stood at $437 million at the end of August, which will cover only about one-and-a-half months of imports. To avoid default, the Maldives needs “$114 million this year, $557 million in 2025 and a staggering $1.07 billion in 2026”.

A Maldivian presidential spokesperson told the Financial Times that the government was working to increase its foreign currency reserves “including exploring green bonds and potential currency swap agreements”.

Two days after the Moody’s downgrade, China and the Maldives signed an MoU for a “framework of cooperation” to promote the “settlement of current account transactions and direct investments in local currencies”.

During a visit to Sri Lanka, foreign minister Moosa Zameer said that his country will not approach the IMF, highlighting that the Maldives has “bilateral partners who are very sensitive to our needs and our situation”.

Against this backdrop, Muizzu’s imminent state visit to India is not surprising at all. Zameer said that after “some rough patches” with India, the “misunderstandings” between the two countries had been resolved.

Turning to other updates from the region

The opposition Communist Party of Nepal (Maoist Centre) announced that it will no longer obstruct proceedings in the lower house of parliament. They had been stalling sessions after a ruling CPN-UML lawmaker claimed on August 28 that the “violence” during the Maoist insurgency had set back Nepal’s hydroelectric infrastructure by damaging power systems.

The Maoist party had demanded the removal of the term “violence” from parliamentary records, which the speaker refused, leading the government to ultimately decide on September 15 to prorogue the house.

Australia’s recent move to cap the intake of international students has caused concerns in Bhutan, which has had a large section of its youth move to the southern continent in search of employment prospects.

Essential commodity prices were also a major focus across the region, with fluctuations all linked to Indian exports. Nepal might experience a sugar shortage during the upcoming festive season as state supply agencies responsible for importing the sweetener started their efforts late and are now working to bring in sugar from India through a government-to-government arrangement.

The Maldives is apparently facing a shortage of onions from India, which has spiked prices. Bangladesh consumers saw a decline in the price of Indian onions over the weekend after India’s directorate general of foreign trade on September 13 removed the restriction of a minimum export price of $550 per metric tonne.

Bangladesh’s ban on export of hilsa fish to India has fuelled a new illicit trade. On Sunday afternoon, four gun-toting commandos of Border Guards Bangladesh posed for photos with a with a haul of the silvery-finned freshwater fish—850 kilograms in total, valued at around Rs 6.67 lakh. As per a media report, this was the third time that Bangladesh has intercepted contraband hilsa bound for India in last five days.

Afghanistan and Turkmenistan held a ceremony at their border to mark the resumption of work at a long-delayed Turkmenistan-Afghanistan-Pakistan-India, or TAPI, pipeline. Taliban prime minister Mohammad Hassan Akhund was at the event, while Turkmen President Serdar Berdimuhamedov joined in through video link. There are still, however, questions on the viability of the project, with main consumer countries India and Pakistan not showing any active signs of being part of it.

Pakistan removed its special representative on Afghanistan, ambassador Asif Durrani, at a time when relations between Islamabad and the Taliban-controlled Kabul were at one of their lowest points. Contrary to expectations, attacks by the Tehreek-i-Taliban Pakistan (TTP), which has sanctuaries in Afghanistan, have increased into Pakistan since the fall of Kabul.

Earlier Khyber Pakhtunkwa chief minister Gandapur, who had already strained relations with the military through the PTI rally on September 8, announced his intention to speak directly with the Taliban to persuade them not to shelter the TTP. This move received support from the PTI’s founder, Imran Khan, who is currently imprisoned.

Despite Gandapur’s meeting with the Taliban-appointed Afghan consul general in Peshawar, the PTI leader faced widespread criticism from Pakistan’s foreign office and defence minister Khawaja Asif for breaching the principles of federalism.

The first visit of a high-level delegation of US administration officials after the ouster from power of Sheikh Hasina was welcomed in Bangladesh with hopes of “recalibration” in ties. The United States had been critical of Hasina’s record on human rights and had questioned the credibility of the last parliamentary elections. A development assistance grant of $202.5 million was signed for projects in the area of “good governance; social, human and economic opportunity; and resilience”.

A significant portion of Bhutan’s diesel vehicles experienced frequent breakdowns. Two laboratory tests confirmed fuel contamination, with suspicion leaning towards fuel sourced from India.

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