War, peace, death — and the Taliban
With multiple sources seemingly confirming the death of Mullah Mansoor, the titular leader of the Taliban, a welter of questions are asked and unanswered — for now. Some may be answered in coming days, others not for weeks or months. What is clear is that Mansoor and a man he was with were killed in a drone strike inside Pakistan. He was returning to Quetta from Iran and had a valid Iranian visa in the name of Wali Muhammad, s/o Shah Muhammad, and was carrying a Pakistani passport and ID card. Considering the fact that the vehicle the two men were in was reduced to a gutted shell, one might reasonably wonder at the survival of any documentation.
The strike was admittedly authorised by President Obama and was not carried out by the CIA but by the American Army, unusual in itself. The fact that the strike was outside tribal areas was not only unusual but unique, the Osama bin Laden raid excepted. Members of the Pakistan government were notified after the strike, and took 24 hours to craft a response, which was along the well-trodden path of a condemnation of American violation of Pakistan sovereignty.
Mullah Mansoor was a target once it became clear that the rumours that accompanied his accession to the position held by the long-dead Mullah Omar that he was peaceably inclined, were false. He had actively opposed the peace process in his 10 months at the top, and was widely credited with undermining the work of the Quadrilateral Coordination Group (QCG), which in the last week reiterated that a politically-negotiated settlement was “the only viable option for lasting peace in Afghanistan”. His death is going to add nothing to the possibility of the Taliban, Afghan or any other iteration, of coming to the negotiating table. The collateral damage is the likely demise of the QCG. He was also the probable architect of the current spring offensive in Afghanistan that has seen scores dead and injured — mostly civilians.
How Mullah Mansoor came to lead the Taliban is yet unclear, and at the time of his death, he was still consolidating his grip on an organisation that many within felt should be led by a descendant of Mullah Omar, despite a strong aversion to the creation of ‘dynasties’ within the Taliban more widely. So who now? In terms of profile, Sirajuddin Haqqani who was one of Mansoor’s two deputies is being bruited about. It was he that finagled some Taliban commanders into allegiance with Mansoor, against that is the perception by some commanders that he is “too close to Pakistan” — meaning under the sway or influence thereof — which may not chime with their plans for a complete takeover of the whole of Afghanistan rather than the 50-or-so per cent they control now.
The other potential casualty of the Mansoor strike is the never-easy relationship between Pakistan and the US. It is alleged that there was an unspoken agreement that while the peace process was still alive — the QCG — Taliban leaders would move freely between Pakistan and Afghanistan. But did that agreement extend to movements between Pakistan and Iran?
It may be perceived that the US has played a double game, a move not unknown on the Pakistan side, presumably as a signal that the gloves are off and there are to be no further blind eyes turned to the many contradictions and ambiguities that there are in Pakistani relations with the various Taliban groups. If so, then American exceptionalism will be extended to targets as they see fit, with Pakistan being informed post-hoc and strikes deeper into Pakistan not impossible to envisage. The Quetta Shura, now deep in discussions about succession, is unlikely to be sleeping in the same beds night-on-night. Is the death of Mullah Mansoor a game changer? Probably not as the die was already cast for the Taliban, which will continue to fight for control of Afghanistan — with or without the support of Pakistan.
Monetary policy statement
Many analysts felt that the benchmark interest rate had bottomed out, but the announcement on May 21 by the central bank, snipping it by another quarter of a percentage point, surprised everyone. In its monetary policy statement, the State Bank of Pakistan (SBP) dedicated quite a lot of text to rising inflation and the continued upward pressure on the Consumer Price Index as oil prices start to rise. Hence, a cut in the interest rate, while minute, still comes across as contradictory. The announcement surprised the stock market, which saw banking shares plunge at the start of trading on May 23 after they had rallied over the past few weeks on account of rising inflation, and left most searching for a reason for the cut in the interest rate.
The monetary policy statement painted a rosy picture, where expansion in industrial and services sector would “salvage some of the lost momentum” due to agricultural slowdown. It mentioned increase in foreign exchange reserves and improved trade deficit, but also pointed out the increase in oil prices. These oil prices, the fall of which has already aided Pakistan, have risen almost 70 per cent since they bottomed out. With exports continuing to fall, the trade deficit is likely to worsen from now on, putting pressure on Pakistan’s foreign exchange reserves. The SBP may have managed to convey good news so far, but the next few months are going to be crucial — especially as the IMF programme ends and inflation starts to rise. With such an outlook, the decrease in the interest rate makes little sense. Some believe that the rate has been cut since the government has to retire its debt this year and wants the cost of it to go down further. There is also a feeling that the rate has been cut to spur some sort of growth — the target of which has been missed again — using a monetary tool as fiscal constraints are holding the government back. But all these are conjectures. The one thing we can be sure of is that the decision has surprised everyone and is meant as a short-term tool to achieve what the government wants. The SBP’s autonomy definitely comes under some doubt here.