Event

In a reversal of his campaign pledge, President Trump announced that the US will maintain a military presence in Afghanistan for an undetermined time and might add an extra 4,000 troops (to the current 8,400). Also, the US threatened to withdraw military support to Pakistan unless it “does more against terrorism and stops being a safe haven for terrorists”. Islamabad quickly denounced it as “the country is itself a major victim of terrorism in the region” and got an explicit vocal support from the Chinese government. Islamabad underscored as well that sticking to the military option in Afghanistan was a failed option for the US as the past 16 years have showed.   

Impact on country risk

The long-established US-Pakistan bilateral relation matters for regional stability but might suffer under Trump’s term. In fact, it had already been deteriorating since May 2011, when Bin laden was killed on Pakistani soil. Since then, the US has sporadically accused its ally for its ambivalent Taliban policy by turning a blind eye on Afghan Taliban militants while being at war against Pakistani Talibans. Hence, financial assistance has more than halved compared with 2013. The new US administration insists on making military assistance more conditional to Pakistan’s fight against terrorism. This should have little or no impact at all on Islamabad, and should only bring it closer to its Chinese ally. Especially now the Pakistani government has weakened since PM Sharif had to step down last July for corruption charges and uncertain 2018 general elections are ahead. Over the past years, China has indeed become the country’s strongest financial ally, through loans and foreign exchange supply, and might have to fill the gap if the US further cuts its aid. Moreover, Pakistan is highly reliant on China for its economic growth as a result of the huge ten-year USD 55 billion ‘China-Pakistan economic corridor’. Therefore, though the relation with the US is there to stay for geopolitical reasons, it might weaken further and make future US pressures vain. In consequence, terrorism and the Taliban issue are increasingly likely to lead to two blocks, US-Indian and Chinese-Pakistani, facing each other. This is unwelcome for Pakistan’s civilian government which, in practice, shares the rule with a powerful army and might lose more political weight in a new environment where China replaces the US as the top ally. Also, Afghanistan will stay a bone of contention between Pakistan and India as the latter has been invited by the US to be more involved there, which is an unacceptable prospect for Islamabad. In those conditions, prospects of improved stability and peaceful solutions in the region are very poor whereas one should see Pakistan follow China’s rising leadership in potential peace talks.

Analyst: Raphaël Cecchi, r.cecchi@credendo.com