In Pakistan, Things Will Only Get Worse

For those who lost loved ones in the Sept. 11, 2001 attacks, the death in Pakistan of terrorist mastermind Osama bin Laden may bring a sense of closure—or at least comfort. President Barack Obama is enjoying renewed legitimacy for Operation Geronimo, winning praise from Democrats, Republicans, and world leaders. For Pakistan, though, the raid on Abbottabad has in one swoop left the country significantly worse off geopolitically, economically, and politically, opening an ugly can of worms that likely won't be resealed soon.

Geopolitically, Pakistan could once again fly completely off balance. On Sunday, President Obama confirmed in a 60 Minutes interview what everyone has been speculating: Bin Laden must have had "some sort of support network" in Pakistan. Senator Dianne Feinstein (D-Calif.), chairwoman of the Senate Intelligence Committee, on May 9 accused Pakistan of "complicity" in harboring bin Laden. The U.S. relationship with Pakistan is "becoming increasingly problematic," she said. Republicans are just as critical. Representative Ted Poe (R-Tex.), along with a few other Republican co-sponsors, has offered a bill to cut off U.S. aid unless the Pakistani government proves that it had no "information regarding bin Laden's whereabouts on or after Sept 11." On May 5, Representative Kay Granger (R-Tex.), chairwoman of the House Appropriations subcommittee that allocates foreign aid, said taxpayers would be "appalled" to know that some of their money is earmarked for a government that may have harbored bin Laden.

Sure, Secretary of State Hillary Clinton and Senate Foreign Relations Committee Chairman John Kerry (D-Mass.) insist that because the U.S. still has a "fragile" but key partnership with the Pakistani people, aid will continue. But will they show such restraint if say, bin Laden's widows or personal files from his compound confirm suspicions about the involvement of even a few members of Pakistan's establishment? No amount of lobbying in Capitol Hill will likely change the U.S. perception of Pakistani duplicity, despite the efforts of Washington firm Locke Lord Strategies.

Is China Pakistan's Only Friend?

Closer to home, Pakistan's relations with India will worsen. Many Indian officials have said recent events confirm that Pakistan's government cannot be trusted with investigating the Mumbai attacks and other acts of terrorism. Prime Minister Manmohan Singh's sincere attempts to mend relations will now go nowhere. (So much for the cricket diplomacy of March's World Cup semifinal.) Pakistan's only real friend at the moment may be China, whose Foreign Ministry last week actually praised Pakistan's "vigorous" efforts against terrorism and vowed to "continuously and firmly support Pakistan" in executing antiterror strategies.

Economically, Pakistan stands to lose more as retaliatory attacks by the Taliban for bin Laden's death will worsen security conditions. (This will come on top of recurring bouts of ethnic and sectarian violence.) The mere expectation of more attacks will likely hinder foreign investment and exacerbate general economic problems caused by high food prices and an energy crisis. On May 10, Pakistan's Finance Ministry revised its gross domestic product growth target, from 4.5 percent to a meager 2.4 percent, for 2010-11, although this partly reflects the ongoing effects of last year's floods.

If Washington follows through on demands to cut or even reduce aid, what will become of Pakistan's aid-dependent economy, already stunted by chronically high defense spending? Officials from Pakistan and the International Monetary Fund are now discussing the next tranche of a $11.3 billion dollar bailout package. Progress could be limited. Pakistan is still debating whether it can fulfill IMF conditions for the loan, including a reformed general sales tax.

Government Attacked on All Sides

Politically, bin Laden's death on Pakistani soil has renewed local attacks on government legitimacy. Some have called for the resignation of Pakistani President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani. Civil society is demanding to know why the government was unaware of bin Laden's presence. Others question how the government could allow the U.S. to infringe on Pakistan's sovereignty. Local Islamist-led protests have increased against both the Pakistan and U.S. governments, particularly after al-Qaeda's "general leadership" urged people to "rise up" last Tuesday and another round of U.S. drone strikes killed 17 suspected militants in North Waziristan on Friday.

Civil society has also cast doubt on the military, historically viewed as the country's only strong institution. A rare chance for the civilian government to attain a measure of leverage over—or at least balance with—the army has been squandered. Were army officials really in the dark about bin Laden's hideout, notwithstanding that it was located barely a mile from the Pakistan Military Academy? Perhaps we'll just have to wait for WikiLeaks's next revelations to learn the truth. In the meantime, some call for Lt-Gen. Ahmed Shuja Pasha, head of Pakistan’s Inter-Services Intelligence agency, to be held accountable.

Unfortunately, it seems that bin Laden will continue to plague Pakistan—even in death—for the foreseeable future. This could also prove to be yet another token of the resilience of Pakistan's people, who in the past year have survived massive floods, recurring militant attacks, political instability, and economic crises. Perhaps they can somehow figure out how to reseal the can of worms. Or better yet, chuck it altogether.

Before it's here, it's on the Bloomberg Terminal.