ByKomal Khan Courtesy Pakistan Today

Pakistan joined those countries where de-dollarisation was followed by regime change

The geopolitical and geoeconomic competition in theIndo-Pacific is specified by the intense US-China competition to secure their national interests, however, at the cost of national security and stability of the other states in the Indo-Pacific. The ongoing political crises in the Indo-Pacific neighbouring states of Afghanistan, Myanmar, and more recently Pakistan and Sri Lanka, can be identified as the resurgence of ‘fait accomplis’ as a viable tactic of strategic competition adopted by the USA to construct a shared networking and deterrence at the expense of China’s preference in the Indo-Pacific.

Fait accomplis make gains unilaterally, imposing a change to the status quo without the adversary’s consent. Fait accomplis can be military or non-military, coercive or non-coercive in practice. These are basically crisis-bargaining compulsions that induce decision paralyses in states that are targeted. Biden’s Free and Open Indo-Pacific Strategy, announced by the White House on February 11, is one such compulsion that is based on the policy of integrated deterrence and shared networking as ‘fait accomplis’ for the Indo-Pacific states with the objective of constructing creative collaborations that anchor the USA firmly in the Indo-Pacific.- Advertisement –

The recent constitutional crisis accompanied with regime change in Pakistan may be analysed as resurgence of the ‘fait accompli’ once again since 9/11 under the creative collaboration policy of the Biden Administration. Washington’s alleged intervention in Pakistan’s sovereignty by funding the regime change against Khan’s government in Pakistan by investing in rival democratic institutions has been claimed by outgoing Prime Minister Imran Khan. Nonetheless, it is a fact that the no-confidence movement against a democratic government in Pakistan was also carried out in the name of democracy.  Moreover, Khan’s claims have been based on a lettergate which is under probe and is allegedly claimed to be from the Biden administration, enforcing the USA’s regional and global interests in a growing multilateral world order; however, at the cost of Pakistan’s sovereignty.

Pakistan’s multilateral approach has been evident in Khan’s foreign policy which has seen an unwelcoming response from the USA. Pakistan’s growing ties with Russia are seen as a major cause of regime change in Pakistan. The event of Khan’s visit to Russia despite pressure from the USA and its coincidence with the Russian invasion of Ukraine has also been recognized as the immediate happening linked to the ouster of Prime Minister Khan from government, which has been described by Maria Zakharova, the spokesperson of the Russian foreign ministry, as  ‘punishment to the disobedient Khan.’

Describing retreat in the USA’s relationship with Pakistan, which served as its ally during and in the post-Cold War decade; former JCSC Committee chairman Adm Mike Mullen holds the USA responsible for distancing itself from Pakistan in the last decade which made Pakistan fall into China’s strategic camp. Cashing in on the realisation, at the event of the Islamabad Security Dialogue, Pakistan’s COAS Gen Qamar Javed Bajwa proposed ‘counter investment’ as the only mechanism by which the USA culd counter the intense Chinese influence in Pakistan. This proposal exhibits the state’s intention to partner with the USA in its ‘Indo-Pacific economic framework’ while benefitting from the Chinese camp simultaneously. On the other hand, the National Security Policy by the Khan administration also underlines the openness of Pakistan for such regional creative collaborations, but in the economic domain, while preserving neutrality in the US-China Indo-Pacific competition.

Furthermore, Pakistan’s partnership in the de-dollarization drive supported by China, Russia and Turkey is another major cause of the regime change in Pakistan. Pakistan initially signed the Currency Swap Agreement with China back in 2011; however its extension by the State Bank in 2018 under the CPEC dynamics with the rationale of easing the dollar pressure over Pakistan’s stock exchange proved to be a major development attracting US concern. Since then, there has been significant increase in the bilateral currency swap value from Rs 475 billion in 2020 to Rs 731.7 billion in 2021. Pakistan had also signed a currency swap agreement with Turkey back in 2011, while another with Iran has been in process since 2018.

The Indo-Pacific is witnessing a revision by China’s extending influence there. Relating Graham Allison’s analysis of the USA’s decline in world affairs to Indo-Pacific dynamics, his argument is based on the facts stated by the CIA factbook and the IMF that it is China which provides the most critical links in the supply chain. Hence China has been legitimising its influence through geo-economic partnerships which the USA aims to counter via resilient allies, partnerships and regime change in the other states of the Indo-Pacific as manifestations of ‘fait accompli’, with Pakistan being a significant one.

Pakistan is not the only partner in the de-dollarization initiatives. On Dec 11, 2017,Thailand, Indonesia, Malaysia also entered into a local currency settlement framework that was further extended in 2021. Followed by Pakistan, Sri Lanka has also signed a #1.5 billion currency swap deal with China in March 2021; consequently falling victim to a constitutional crisis and regime change against Mahinda Rajapakshaled by an opposition coalition;hence, presenting a case similar to that of Pakistan. De-dollarization movements have a history of consequential regime change, with the toppling of Saddam’s regime in Iraq being a significant one.

Hence, Asia in general and the Indo-Pacific in particular present an emerging de-dollarization axis.   The United States Department of Defence Indo-Pacific strategy 2019, and the Indo-Pacific Strategy February 2022 identify Indo-Pacific as the primary consequential region for the USA’s future and the established world order based on the facts that the region accounts for 60 percent of world GDP, two-thirds of the world economy, and two- thirds of global economic growth. It supports three million US jobs, and provides $900 billion in FDI to the USA.The  Indo-Pacific holds seven of the largest militaries in the world.- Advertisement –

While analyzing China’s grand narrative of its inexorable rise and the USA’s irreversible decline, Graham Allison states that as per the current trajectory, China’s GDP would stand at twice the size of the USA’s and thrice by 2040, based on reports of China’s quadrennial add up of economy that is equivalent to India’s entire GDP. The USA is accustomed to the correlation between GDP and its impact on world order which is significantly different.

It accounted for half of the world’s GDP post World War II, a quarter of the global GDP during the Cold War, and 1/7th today. With a transformational increase in China’s GDP from $191 billion in 1980 to $14.7 trillion today, China is rightly countered by the USA as the potential stakeholder in world order.

The Indo-Pacific is witnessing a revision by China’s extending influence there. Relating Graham Allison’s analysis of the USA’s decline in world affairs to Indo-Pacific dynamics, his argument is based on the facts stated by the CIA factbook and the IMF that it is China which provides the most critical links in the supply chain. Hence China has been legitimising its influence through geo-economic partnerships which the USA aims to counter via resilient allies, partnerships and regime change in the other states of the Indo-Pacific as manifestations of ‘fait accompli’, with Pakistan being a significant one.