Deakin Speaking

Tensions between India and Pakistan are escalating as troops from each country have again clashed across the Kashmir Line of Control, with two Indian soldiers being killed. India claims Pakistani soldiers took advantage of misty conditions yesterday to cross the 1949 Line of Control dividing Kashmir into Indian and Pakistan controlled areas about 220 kilometres north of the city of Jammu.

The clash was the sixth in the past week and followed 75 incidents along the Line of Control in 2012. Pakistan lodged a protest against India just days ago, after one of its own soldiers was killed in what it claimed was an Indian incursion across the Line of Control.

Relations between India and Pakistan had been slowly improving following attacks by Pakistani militants against the Indian parliament in 2001 and in Mumbai in 2008. The Pakistani cricket team is currently touring in India, indicating a degree of bilateral normalisation.

For the past six weeks a high-level US team has been in Pakistan trying to negotiate a resumption of the convoys which travel through the country and provide Coalition forces in Afghanistan with about 30% of their non-lethal supplies.

Pakistan decided unilaterally to stop the convoys following the killing of 24 Pakistani soldiers at a border post by Coalition fighter planes in November last year.

One of the major sticking points in the negotiations is the fee Pakistan wants to impose on each container truck travelling through the country. Prior to the halt, Islamabad used to charge US$250 per truck; they are now asking for $3000.

The deep freeze

Debt crisis is indeed a burning current issue in the whole world.   A true glimpse of this reality is provided by the ongoing violent protests against a series of fiscal austerity reforms in Greece.  The worsening debt crisis of Greece is expected to trigger a contagion of sovereign debt crises in several other European countries.
 
It is interesting to note that the nature and the economic  aftermath of the current debt crisis of Greece and 1998 debt crisis of Pakistan have remarkable similarities ─ For example, the debt-gross domestic product ratio of Pakistan as well as Greece exceeded 100% during their respective debt crises,  national external debt has been acting as a drag on the national economies of Pakistan, and Greece, and now both Greece and Pakistan desperately need fiscal consolidation as well as economic growth for resolving their respective external debt crisis.

It is reasonably widely accepted that Osama bin Laden was able to stay in the Pakistan town of Abbottabad because he had the protection of Pakistan’s military, in particular its powerful Inter Services Intelligence organisation. It would have been all but impossible for bin Laden to have stayed in one place in Pakistan without the ISI knowing, implying it at least tolerated his presence. More likely, the ISI’s involvement was more active than mere tolerance.

The question is, then, no longer whether bin Laden had the active support of the ISI but why Pakistan’s premier intelligence organisation – from a country which is long-time ally of the United States – would host the US’s number one enemy on its soil. At risk is not just the defence relationship with the US but, more importantly, the major strategic deterrent to Pakistan’s principle enemy, India. It also risks the important, $7.5 billion, US aid budget to Pakistan.