Pakistan's TBTF-Factor
Hello everybody!
Sorry, have so much to do this weekend, lack the time for ‘more comprehensive’ updates’ - whether about ‘Ukraine’ or about ‘India-Pakistan’.
That said, two readers have asked/commented about certain topics that are both ‘related’ and I find ‘easy’ to explain. Thus, here a ‘quick and dirty’ reply in this regards.
The readers in question wrote:
1.) What is the motivation for "The West" to prefer Pakistan over India with regards to arms sales? Surely India is a far more attractive partner to sell weapons to than Pakistan (larger economy, not likely to collaborate with China when it comes to intelligence and weapon sharing and not supporting jihadists globally)
2.) Nowhere do you seriously talk about the danger of nuclear escalation. India fights with one hand tied behind its back because of that.
Very good observations: thanks a lot!
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Up front (because that’s the core essence of the following story): Pakistan is bankrupt.
It’s finanically bankrupt. It’s so bankrupt it’s actually a wonder it’s still around. And that for decades already. At earlier times - especially during the late 1980s and early 1990s, when Pakistan was about to conclude the development of its nuclear weapons - the country was ‘credited’ by Saudi Arabia (primarily in form of a free supply of crude oil; reportedly, this was worth US$1-2 billion a year, and aiming to ‘help create an Islamist Nuke’). Subsequently, People’s Republic of China and then Qatar took over… however, Islamabad is wasting so much money for corruption, sponsoring terror, and arms it can’t afford - and so much ignoring its economic development - that it’s surviving only thanks to extensive crediting.
Meanwhile, it can’t service its debt.
Therefore, about a year ago, it requested a US$1.4 loan from Beijing. When ‘even’ the PRC turned down, then Islamabad requested a loan from the International Monetary Fund (IMF).
After months of wrangling, and despite fierce (and well-supported) Indian argumentation, yesterday, the IMF granted a loan of US$ 1 billion to Islamabad.
…and that in the middle of a ‘war’, and after that loan was held back for months, primarily because everybody knows: Pakistan simply can’t pay it back (last year, its debts were ‘breaking all the records’).
The question is thus: why is the IMF as ‘stupid’ as to keep Pakistan financially afloat, considering the country is out of condition to service its debts - plus officially breeding jihadists and running ‘Jihad Import-Export’ business, all over the World?
And why is that ‘government’ in Islamabad still supported by ‘the West’?
And: is that related or not-related to India’s behaviour?
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Me and my questions…
I am not going to say I 'know the answer/s’. Especially not I know them ‘1000% sure'. On the contrary.
But...
Well, it so happens that over the years I have seen at least 'excerpts' from several 'threat assessments' related to Pakistan (essentially, 'intelligence assessments about "what if"'). And the essence of these can be summarised with 'TBTF'.
TBTF stands for 'too big to fail'. Usually, it's used for major US corporations: those that are so big that if they fail, entire economy collapses - like back in 2008....
In the case of Pakistan, the TBTF-factor is that country's nukes: all the threat assessements for Pakistan I know say, many of these nukes are most likely non-operational (so much so: the first test of a Pakistani nuke actually failed, and China had to rush and send several of its own, so the Pakistanis could arrange ‘successful’ nuclear tests). However, these nukes exist and one can never be sure…
Foremost, all the same threat assessments also say that if Pakistan is not kept afloat (financially), it is near-certain to fall apart. That the country is going to be ripped apart by an internal struggle between different crooks making it establishment and jihadists they have created.
In Washington D.C., for example, this is causing such concerns that at least since sometimes in the early 2000s, the Pentagon developed a contingency plan for some sort of a military intervention: an assault on the Pakistan’s nuclear storage sites, aiming to secure these in the case the country starts falling apart.
To make sure: no, I’m not ‘working for Mossad, CIA, BND, MI6’ or whatever (or, if you still think so: well, who am I to try explaining you something else?). Actually, I’m far from being the only one to have seen or been informed about such assessments. A number of other, far better informed people have experienced exactly the same. If my memory is of any use, back in 2004-2010 ‘or so’, there were even several related studies made in the USA - one of which was (just for example) discussed in the article here.
More recent features are ‘just repeating’ the same conclusion.
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Now ask yourself: if Pakistan falls apart, who's going to control Pakistan’s nukes?
ISI? ISI's jihadists? …and if the latter, then please: what jihadists exactly…?
Me thinks: nobody knows. Nobody knows what faction within the Pakistan’s ‘establishment’ (foremost: within the ISI) would side with what of jihadist gangs they’ve created, and thus nobody can say who would have his finger on the ‘button’, or if the ‘group’ in question would have or not have the ability to ‘just’ (mis)use the fissile material and make such stuff like dirty bombs… or whatever else.…
Therefore, the IMF had very few options left but, 'better we pay for the evil we know, than...'
It’s similar with India: yes, New Delhi must always keep in mind it’s confronted by a ‘mad dog’: a nation that’s self-destructing for the purpose of ‘fighting jihad’ (primarily against India, though in many other places around the Globe, too).
It is the same with Russia and all nuclear powers. It is too terrifying to imagine what could happen if they fall apart. So better leave them some room to breathe and even reluctantly support them despite the damage they cause.
France has a bitter experience with Pakistan due to the 2002 Karachi bus bombing. The background was France selling to Pakistan some submarines. As usual and allowed by French law, the deal included commission money to Pakistanis intermediaries. Aka the French state paid Pakistanis officials to sweeten the deal. Of course since we are civilized, this is totally not corruption.
Then the bombing happened. A bus carrying French engineer working on the deal was targeted by a suicide bombing : 14 dead (11 French, 2 Pakistanis + the attacker) and over 40 wounded. It was initially blamed on al-Qaeda but latter that thesis was eventually formally dismissed in 2009.
Instead, investigation by French authorities discovered not only the commission scheme but also a kickback system : some of the money given by the French state to Pakistanis officials via Pakistanis intermediaries was funnelled back to French politicians and among others things, served to fund UPR party dissident candidat Edouard Balladur run for the 1995 presidential election.
It appeared that President Jacque Chirac (the official UPR candidate who the election, also involved in multiple corruption and illegal funding scandal), decided to stop the commission/corruption scheme. Causing the anger of some Pakistanis intermediaries unhappy to not get all the money they expected. Thus motivating the bombing as retaliation.
The French justice all but openley blamed the Pakistanis intel service for the bombing.
Fun fact #1 : the sub-marine deal was part of a greater weapon deal involving KSA since Pakistan obvious did not have the money. KSA brought some French Frigate. The corruption scheme had a Saudi side as well.
Fun fact #2 : the corruption scheme involved Nicolas Sarkozy, the future French president. It also involved people latter blame in ... Sarkozy illegal presidential run funding by Gaddafi. You know the guy Sarkozy eagerly sought to kill as soon as he became president ...
Fun fact #3 : the French joint public-private venture company involved in the deal still exist and is now called "Naval Group". The French states holds 62% of its share and Thales 35%, with the rest to minor holders. It still hold total monopoly over French naval weaponry production and export. And it still consistently involved in corruption scandal :
https://www.letemps.ch/monde/europe/soupconne-de-corruption-le-groupe-d-armement-thales-a-ete-perquisitionne-en-france-aux-pays-bas-et-en-espagne
Fun fact #4 : Since Thales' Naval group hold monopoly over all naval military production in France, it was the company involved in the Mistral affair : As part of the ceasefire deal clossing the 2008 Russian invasion of Georgia, a French president named ... Sarkozy ... offered to Putin to sell him 2 Mistral class helicopter carrier with transfert of technology to Russia. The deal was stalled by Sarkozy successor, François Hollande in 2015 following public outcry and Western allies pressure caused by Putin's invasion of Ukraine.
Fun fact #5 : France had to payback Russia while the Mistral were sold to Sisi's Egypt. Who has had much money as Pakistan ... So it was actually brought by ... KSA and then given to Egypt. Side note but under Hollande, there were multiple *suspicious deals involving Egypt. For exemple one of them involved the French military intel monitoring the Egypt-Libyan border. To do so, the service subcontracted a newly French created PMC led by ... the previous military intel directors. It also graciously offered for free the planes and the Equipements to the said company. Said company who was latter joined by ... the very military intel directors who oversaw the deal. This was back when both France and Egypt started to support the would be Gaddafi 2.0 : Haftar.
Fun fact #6 : Soon after, KSA became tired of constantly paying French weaponry for others states while having all the trouble in the world to get it for itself + maybe to getting back their part of the kickbacks. So much that it decided to momentarily cut all discussions with France for French weaponry export as long is it was forced to deal with massive companies such as Naval Group rather the actual producer of the weapons the Saudi sought to buy. Obviously they were getting tired to pay lots of money to French people who had nothing to do with the actual production but were in position to stall the deals until they get money. The Saudis pressure eventually partially succeeded. In 2018 they forced France's Naval Group to create a joint venture with a Saudi counterpart SAMI (Saudi Arabian Military Industries Company).
Sorry I did not meant to go on such a long rant. But when you start to pay attention to all the dubious deals in the defence sector, it immediately becomes a rabbit-hole.
This makes a lot of sense to me. The TBTF is certainly something we include in our analysis of a country with nukes. Add to it the «Better the devil you know» and you end up supporting anything to upkeep status quo. However I always think the worst service Barack Obama did the US was not to let the banks crash in 2008/2009. That created a situation where the banks could and did continue after some very minor adjustments. (Yes I know Bush was president part of the time, but Obama (and McCain) agreed. So here we are in 2025 and Goldman Sachs and the others are doing their stuff. A bankruptcy of the banking system would have opened for a cleansing and a possible better rebuild. So instead of burning the financial industry in 2009 we get Trump burning the society in 2025. Because there are so many problems. And I have no doubt what hurts the general population most. And what will cost more to rebuild. Ok, is it the same with Pakistan and similar for Russia? (Because it is the same idea that has made the West (Europe at least) refrain from intervening. Oh… the nukes… oh a collapse would lead to Islamist groups or whatever taking control…) I think I will risk the alternative. These various very nasty groups will definitely do a lot of harm. Especially locally. And they will spread it around. So there will be hurts. Serious bad hurts. But isn’t that the situation today? There is ruling class in Pakistan and Russia that earns money on the nuclear threats. We cannot risk their nation going up in flames. Because…. But I don’t think these groups will be able to maintain and use their nukes for long, if at all. Rather they will sit with expensive toys that degrades quicker than they can say Insallah. Also their main interest will be grabbing and maintaining the power locally. Not something nukes are suited for. So while some might be afraid of that I am not. (But as said they will do harm. And they can definitely do more harm as terrorists also without nukes.) This in my opinion is true also for Russia. If that country breaks down, which seems inevitable in a decade or two there will be lot of nastiness. But not nukes. And if they break down both the shadow they cast internationally and the system they use to terrorize their own population breaks down. Fuck the TBTF.