USA vs Pakistan: American Oligarchs Plundering Game of the World

Cricketer-turned-politician Imran Khan has recently been removed from his prime ministerial post in an American induced no-confidence vote in the Pakistani parliament by a slim margin of 174 votes out of the 342-member legislative body.

The vote came after a dramatic week in which the Supreme Court of Pakistan deemed unconstitutional a move by the deputy speaker, a member of Khan’s party, to block the no-confidence motion.

While Khan is the first Prime Minister to be removed by the parliament in such a way, his removal continues the tradition of holders of the post not finishing their terms, with the list coming to nineteen and counting.

While opposition supporters and other sections of the international media are framing Khan’s dismissal as a victory for democracy and rule of law, the reality is that this action is likely to have deleterious effects on Pakistan’s fragile democracy that will be more apparent in the months and years to come.

Imran Khan was already a national celebrity in Pakistan before entering politics in 1996, having a glamorous twenty-year career in cricket which ended with him as captain of Pakistan’s first World Cup-winning cricket team.

Khan spent the next 15 years on the margins of Pakistan’s political scene, before emerging as a potent third political force in 2011. His party, the Tehreek-e-Insaaf, became a viable electoral entity in competition with the two major parties, the PPP and PMLN, both ruled in a dynastic fashion and dominated by feudal constituents.

Khan is known for his brand of populist street politics, anti-corruption rhetoric and Islamic-themed public messaging. He was a trenchant critic of Pakistan’s involvement in the US War on Terror and occupation of Afghanistan, and regularly held rallies condemning the Obama administration’s use of drone strikes in the tribal areas of Pakistan as a violation of sovereignty and human rights.

In 2018, Khan assumed the post of Prime Minister after his party formed a coalition government in an election contested by the opposition of having been rigged. The reality is that no civilian government can assume power in the country without the active hand of Pakistan’s military and intelligence establishment, the most powerful institution in the country.

Upon assuming power, Khan faced an unprecedented de-legitimization campaign in the Western press, accusing him of being a loose cannon and a pawn for the military.

Claiming he would usher in a progressive era of ‘New Pakistan’, Khan was confronted with an unprecedented series of challenges in his three and a half years. His own inexperience, a weak coalition government, strident opposition and entrenched systemic corruption meant his odds of delivering on his lofty campaign promises were slim from the outset.

The most immediate issue was the currency crisis, with Pakistan’s foreign reserves having been so depleted that Khan was forced to appeal to ally states and the IMF for resources to stabilize Pakistan’s economy.

Policy-wise, his tenure was a mixed bag. Khan’s government introduced much-needed programs on social welfare and the environment, and his measured pandemic response earned international praise. He was criticized for crackdowns on press freedom and for certain cabinet selections, as well as his silence on China’s persecution of the Uighurs.

The inability to curb the rapid inflation and rising prices on food and essentials, a global phenomenon but particularly acute in Pakistan, is what the coalition of opposition parties seized upon late last year when they launched their bid to remove Khan.

The specter of the US relations looms large on Pakistan politics. As the vote neared end of March, Khan announced at a public rally that a foreign hand is behind the drive by the opposition. He claimed that the Biden administration was directly threatening Pakistan with dire consequences if the no-confidence vote was not passed.

He pointed to an ambassadorial meeting with Assistant Secretary of State for South and Central Asian Affairs, Donald Lu, in which this threat was communicated through official channels to his government. His party supporters also point to a flurry of meetings at the US embassy of defecting members of his party close in the announcement of the no-confidence vote as further evidence of conspiracy, which the Biden administration denies and the opposition rubbishes.

Despite fraternal relations of Khan with the Trump administration, Biden’s office has yet to be so accommodating, having not even shared a phone call with the premier. This cold shoulder treatment continued even during the US’ withdrawal from Afghanistan.

Khan made an ill-timed visit to Russia to meet with Putin at the eve of the launch of their Ukrainian invasion. According to Khan, this visit and the previous efforts of his administration to initiate an independent foreign policy outside of the US orbit, so incensed the Biden administration that they were leveraging their diplomatic pressure to ensure the no-confidence vote passed. In the background, the military establishment appears to have cooled their own relations with Khan and are trying to salvage the strategic relationship with the US.

Trying to prove such an active conspiracy is difficult yet the possibility of foreign interference cannot be discounted. The US has a long history of involvement in Pakistan’s internal affairs, from steady support to its military generals to drone strikes inside its tribal areas to the Abbottabad operation. Most notably, the US is widely believed to have actively supported the opposition movement to the popular Prime Minister Zulfiqar Ali Bhutto, leading to his removal by the military in 1977 and eventual judicial murder.

Though Khan is no longer prime minister, his narrative of a foreign conspiracy appears to have resonated with a wide section of the public and support base is growing. The opposition, now in charge, faces the unenviable task of steadying Pakistan’s economic ship while simultaneously being accused of being an ‘imported government’ by Khan.

What would have been more beneficial for Pakistan’s democracy rather than this destabilizing status quo would have been for Khan to finish his prime ministerial term by the stated date of October 2023 and then have the public determine his fate in a general election. Basic trust in continuity in the democratic process would have at least been established.

His removal based on the flimsy pretext of poor economic performance is a new low and ensures future leaders will always be on slippery ground, at the mercy of being displaced by a constellation of forces, inside and outside the country, as has been the case in Pakistan’s history. What more, the fragmented dynamics of Pakistan’s political party representation means that it is unlikely for any party in the future, either Khan’s party or its rivals,  to be able to form a strong clear parliamentary majority in the center  unless without heavy rigging, leading to rickety coalitions headed by leaders at constant risk of being dismissed.

Political backrooms deals with the United States have replaced the choices of voters and reduced elections to further insignificance. The no-confidence motion, far from being a check on non-performing leaders in charge, only weakens Pakistan’s democratic setup that badly needs stability and trust on the ballot. 

Now let’s look behind the scene.

The parliament of Pakistan recently ousted Prime Minister Imran Khan in a no-confidence vote. The reasons for the former cricket star’s political downfall are not entirely clear. His economic policies were a mixed bag at best, but he deserves credit for one thing: he’d taken a bold stand against international investment agreements that give transnational corporations excessive power over national governments.

In fact, Khan had begun a process of terminating 23 bilateral investment treaties(BITs) that allow corporations to sue governments in unaccountable supranational tribunals. Instead, he believed such disputes should be handled through local arbitration.

Khan had learned the hard way how these so-called “investor protection” agreements can tie the hands of government officials, limiting their ability to act in the public interest. In 2019, a year after Khan became Prime Minister, a tribunal (three private judges behind closed doors, to be clear) of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ordered Pakistan to pay an Australian mining company $6 billion in compensation for denying a mining permit on environmental grounds.

A similar suit by the same company, Tethyan Copper — a subsidiary of Canadian giant Barrick Gold, through a different tribunal under the International Chamber of Commerce brought the total amount Pakistan owed Tethyan to $11 billion.

The ICSID ruling concluded that Pakistan had violated a BIT with Australia by failing to provide Tethyan “fair and equitable treatment,” a vaguely worded obligation that corporate plaintiffs love to exploit. The tribunal also decided that denying the license for Tethyan’s Reko Diq gold and copper project was tantamount to “indirect expropriation” — never mind the fact that the Supreme Court of Pakistan had ruled the permit invalid because the company had violated national mining and contract laws.

ICSID’s response was to order Pakistan to draw billions of dollars from its public coffers to compensate Tethyan for their lost expected future profits. The company had only invested about $150 million in the project.

Khan’s government went to great lengths to reverse the decision, highlighting that the $6 billion ICSID award alone represented about 2 percent of its GDP, or 40 percent of its cash reserves in foreign currency. The government argued that international tribunals must realize that their decisions have an impact on state policies, including poverty alleviation. But the U.S. District Court, responsible for enforcing the ICSID ruling, declared that Pakistan’s hopes of annulling the award were nothing more than “wishful thinking.”

The ruling against Pakistan under this investor-state dispute settlement system is even more unfair as it came just after the IMF had approved a $6 billion loan to the country that imposes harsh austerity measures on public spending. To overcome this financial straitjacket, Pakistan had no choice but to give in to this concerted attack by financial institutions and international courts and the world’s second-largest gold mining company.

On March 20, Barrick Gold announced that it had reached a settlement with Pakistan that will allow the company to resume their controversial Reko Diq mining project in the province of Balochistan. This is a disturbing example of international investment treaties’ chilling effect on environmentally responsible policies and public interest regulations.

Other countries facing similar corporate lawsuits must pay special attention to this case. Mexico, for example, is being sued by the U.S. mining company Odyssey Marine Exploration for $3.54 billion. Filed before the ICSID in 2019 under the terms of NAFTA, the suit challenges Mexican authorities’ decision to deny a seabed mining permit to extract phosphate (used for fertilizers) in the Gulf of Ulloa, off the coast of Baja California Sur. The Puerto Chale Fishing Cooperative had strongly opposed the project, on the grounds that their members’ livelihoods depend on the marine areas and seafloor that Odyssey is intent on dredging.

After the company retaliated by bringing a claim to ICSID, the Fishing Cooperative and the Center for International Environmental Law (CIEL) attempted to submit an amicus curiae brief to share their concerns. They also argued that the decision by Mexico’s Ministry of Environment and Natural Resources (Semarnat) to deny the exploitation permit was consistent with the precautionary principle recognized in national and international law. The ICSID tribunal refused to admit the brief. (https://bit.ly/3umy8dL)

In their recent report “A Sea of Trouble: Seabed Mining and International Arbitration in Mexico,” Jen Moore of the Institute for Policy Studies and Ellen Moore of Earthworks explain that such refusals are common in this arbitration system designed to favor transnational corporations. The majority of the panel, made up of highly paid corporate lawyers, essentially asserted that the cooperative’s contribution was “irrelevant.”

One of the three arbitrators, Phillippe Sands, did express a dissenting opinion. Not only should the cooperative be heard, Sands argued, but that the failure to admit its concerns exposes the failings of the arbitration system, with potentially far-reaching impacts on environmental protection policies in Mexico.

With Khan’s ouster in Pakistan, it’s unclear what will happen to his government’s efforts to withdraw from Bilateral Investment Treaties and the invest-state dispute settlement regime. But resisting this anti-democratic system should not be a partisan issue. All governments should have the authority to adopt economic measures in the public interest — without the threat of American holdup of expensive corporate lawsuits.